Macau Business Daily, July 19, 2013 by Business Daily

MOP 6.00 Vitor Quintã

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Macau Cable TV debate rejected by legislators Page 5

China Telecom calls for even cheaper leased lines Page 6

Year II

Number 330

Friday July 19, 2013

Editor-in-chief Tiago Azevedo

Deputy editor-in-chief

One country, one car insurance by year-end

LVS at low risk 1 of AML fines, says Fitch Ratings

April 19, 2013

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Anti-corruption drive may hit hotels: consultant The central government’s campaign against lavish spending by public officials may harm hotels here, says the Hong Kong branch of consulting firm HVS Global Hospitality Services. Mainland hotels are already feeling the pinch, their occupancy rates having declined in the first quarter of this year, the consulting firm says in a review of the industry in Greater China. Page 2

HSI - Movers Name

%Day

HENGAN INTL

2.76

CHINA SHENHUA-H

2.52

COSCO PAC LTD

1.33

CHINA COAL ENE-H

1.22

SANDS CHINA LTD

0.89

CHINA RES POWER

-1.78

TINGYI HLDG CO

-1.85

CHINA RES ENTERP

-2.30

LENOVO GROUP LTD

-0.98

CHINA RES LAND

-3.34

Source: Bloomberg

Pansy Ho launches hotel management unit

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Shun Tak Holdings Ltd – a shipping and property conglomerate run by Macau casino investor Pansy Ho Chiu King – has launched a hotel management company. In April, speaking on the sidelines of the Pacific Asia Travel Association Annual Summit in Bangkok, Thailand, Ms Ho said Shun Tak was looking at “the possibility of building two or three hotels” on a Cotai plot it controls. Page 2

Govt’s GDP estimate too conservative: economist Economist Albano Martins says Macau’s gross domestic product is likely to grow between 9.7 percent and 10.5 percent in real terms this year. Mr Martins queried another estimate last Friday by the Secretary for Economy and Finance, Francis Tam Pak Yuen. Mr Tam said Macau’s GDP should post “a middle single-digit growth [rate]” for 2013. The government’s forecast is “too conservative”, Mr Martins told Business Daily. Page 7

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July 19, 2013

Macau

Conspicuous consumption blitz fails to worry hotels But a consultancy says the squeeze on big spending may constrict business here Tony Lai

tony.lai@macaubusinessdaily.com

KEY POINTS HVS expects squeeze on big spending to hurt Macau hotels Macau hoteliers say tightening to have little effect The average occupancy rate dropped in the first five months

he central government’s campaign against conspicuous consumption may harm hotels here, says the Hong Kong branch of consulting firm HVS Global Hospitality Services. Mainland hotels are already feeling the pinch, their occupancy rates having declined in the first quarter of this year, the consulting firm says in a review of the industry in Greater China published on Wednesday. “All top ten hotel markets posted year-on-year declines in occupancy,” the review says. The first-quarter occupancy rate in Beijing was 50.9 percent, 3.3 percent less than a year earlier. Chinese leader Xi Jinping announced this year a crackdown on corruption, and urged the political elite to refrain from flashy displays of wealth. Beijing has imposed a “frugal working style” on civil servants, barring them from spending public money on lavish banquets or fancy cars, and from accepting expensive gifts. “With austerity policies affecting mainland Chinese hotels, questions arise as to how long before Macau is impacted by the new policies throughout the rest of 2013,” the HVS review says. But people in Macau’s hotel industry expect few consequences here. Statistics and Census Service data show the city’s average hotel occupancy rate in the first five months fell to 79.4 percent this year from 81.9 percent last year. Upmarket hotels had the highest average occupancy rates, five-star hotels having an occupancy rate of

Room rates too hefty for some would-be guests, says HVS

High hotel room rates scare away some tourists, an academic says

80.1 percent and four-star hotels of 81.9 percent.

Ordinary consumption The president of the Macau Hoteliers and Innkeepers Association, Chan Chi Kit, attributes the fall in the average occupancy rate to the increase in the number of hotel rooms. Official data show Macau had over 28,000 hotel rooms in May, 16.4 percent more than a year earlier. Over 11.5 million people visited the city in the first five months, 3 percent more than a year earlier. “I don’t think there will be much impact from the austerity policy, as it will not change the consumption behaviour of the ordinary mainland traveller,” Mr Chan told Business Daily. “As long as the mainland economy can maintain growth of 7 percent to 8

percent, this will continue creating an efflux of Chinese travelling abroad, with some definitely coming to visit Macau,” he said. Macau Polytechnic Institute gaming and tourism professor Edmund Loi Hoi Ngan agrees with HVS’s assessment. “There might be some impact from the austerity measures, but it is difficult to evaluate the degree of influence,” Mr Loi said. But he said the campaign against conspicuous consumption would have fewer repercussions than a tighter grip on money laundering. Mr Chan also believes a crackdown on money laundering would hurt hoteliers more. “Some hotels here reserve more than half of their rooms, usually high-priced rooms, for VIP gamblers,” he said. The Financial Intelligence

Office said on July 8 that it was considering requiring travellers to declare the cash they were carrying at the border as a way to counter money laundering. That day the prices of Hong Konglisted shares in Macau’s six casino operators tumbled. Two days later, Secretary for Economy and Finance Francis Tam Pak Yuen said the cash declarations proposal had been made without any particular industry in mind. Mr Loi said the cost of hotel rooms was a deterrent to visitors. “The high room rates here scare some tourists away,” he said. HVS’s review says the average room rate was 1,476 patacas (US$184.50) in the first quarter, unchanged from a year earlier. In Hong Kong hotels, the average room rate was HK$1,472. HVS said in April that Zhuhai hotel rooms were on average about 1,000 patacas a night cheaper than Macau rooms. HVS’s latest review says: “Longhaul markets posted negative growth in overnight visitor arrivals, mainly affected by the increasing hotel room rates in Macau.” But Mr Chan of the Macau Hoteliers and Innkeepers Association remains bullish about the hotel industry. He said the average occupancy rate could remain at 80 percent all this year.

Pansy Ho sets up hotel unit Shun Tak subsidiary interested in developing own hospitality brands Michael Grimes

michael.grimes@macaubusinessdaily.com

hun Tak Holdings Ltd – a shipping and property conglomerate run by Macau casino investor Pansy Ho Chiu King – has launched a hotel management company. In April, speaking on the sidelines of the Pacific Asia Travel Association Annual Summit in Bangkok, Thailand, Ms Ho said Shun Tak was looking at “the possibility of building two or three hotels” on a Cotai plot it controls. The firm indicated yesterday it was also interested in hotel markets on the mainland and beyond, and in developing its own brands. It “foresees extensive opportunities in the burgeoning Asian tourism

landscape, especially for the increasingly affluent, discerning and mobile travellers in China,” Shun Tak said in a statement. The hotel unit, called Artyzen Hospitality Group Ltd, will be led by Rogier Verhoeven, an executive director of Shun Tak and hotelier, who has worked for the group since 2000. “The priority is to establish flagship hotels in strategic locations and key gateway cities,” said Mr Verhoeven. “Creating our own hotel brands now makes total sense as it naturally complements our existing businesses, with the various real estate and hotel investments in our

pipeline,” added Ms Ho. Shun Tak said Artyzen would seek to “differ from traditional hotel companies by creating a distinctively Asian” approach. Galaxy Entertainment Group Ltd – a rival Macau casino and hotel operator to MGM China Holdings Ltd, in which Ms Ho has a minority stake – makes great play of what it calls its ‘Asian Heart’ approach to customer service. In February Hong Kong-listed Shun Tak said in a filing it planned to issue up to US$1 billion (7.9 billion patacas) in U.S. dollar denominated bonds. At the time it said it wanted the money for “general corporate purpose”.

According to Shun Tak’s 2012 annual report, the firm is still “in discussion” with the government “on its plan to develop five-star hotels on the [Cotai] site”. One of the hotels planned for the project, which in total has a gross floor area of about 248,500 square metres (2.67 million sq feet) could be the “ultra-luxurious” Jumeirah Hotel, the report adds. The project, in a partnership with the Dubai-based hotel chain Jumeirah Group, was originally scheduled to open in 2013.  Shun Tak also said in another filing that it wants to build a hotel at Harbour Mile, a mixed development it plans on Macau peninsula.

July April19, 19,2013 2013

Macau

One country, one motor insurance policy by year-end Hengqin’s special status will bring privileges, including reduced bureaucracy, but not much room for SMEs Stephanie Lai

sw.lai@macaubusinessdaily.com

Ye Zhen

Growing investment

Hengqin New Area – the clue is in the name

he Macau and Guangdong governments expect to agree a deal on a single motor insurance policy for both sides of the border by year-end, the Monetary Authority of Macau has confirmed to Business Daily. Cars and drivers registered under the existing dual number plate scheme will be eligible for coverage. There will be a single monthly payment – covering premiums charged for both mainland and Macau – for the cross-border coverage, insurer China Taiping Insurance (Macau) Ltd additionally told the newspaper. In early July, Guangdong Insurance Regulatory Commission advised mainland media that a single insurance policy would be introduced on a trial basis in the province by year-end at the earliest. Hengqin will be the first place for the experiment. But neither the Monetary Authority of Macau nor the Administrative Committee of Hengqin New Area could say precisely when it will begin. “It is a policy with complicated details to sort out, so I cannot really ascertain you when the single insurance policy can come into practice,” vice director of Hengqin Administrative Committee Ye Zhen said on the sidelines of Hengqin trade symposium on Wednesday. “Guangdong’s Public Security Department is still leading the discussion on the policy with our transport and social security departments to sort out how to overcome the legal differences in insurance and transport management terms,” added Mr Ye. Currently, China Life Insurance (Overseas) Co Ltd and Taiping General Insurance Co Ltd and its Macau branch are working to develop the product for the policy,

Mr Ye noted. In an emailed reply to Business Daily, the Monetary Authority of Macau noted that it will “host a meeting shortly with Guangdong Insurance Regulatory Committee to seek a better resolution for several legal and technical problems”. The proposal reached by both administrations will be then submitted to Macau Insurers’ Association for consultation, the authority said. “In relation to the completion of Hong Kong-Zhuhai-Macau Bridge, Macau-registered vehicles might run in Hong Kong,” the body added. “We expect that the procedure [single insurance plan] will be completed six months before the bridge starts running,” the Monetary Authority added.

KEY POINTS Single insurance policy for cross-border vehicles this year Macau firms offered investment incentives for Hengqin’s industrial park Minimum 100 million yuan registered capital needed More than 220 billion yuan of investment for Hengqin so far

Jackson Chang, Director of Macau Trade and Investment Promotion Institute, announced at the symposium that from August to October, Macau investors interested in participating in the GuangdongMacau Cooperation Industrial Park on Hengqin would be able to apply for incentives.

High threshold The park, occupying about five square kilometres, is to focus on finance, tourism, cultural and creative industries, science and technology, say mainland officials. Interested investors will be required to inject a minimum 100 million yuan (130 million patacas) in registered capital. Financial services face the highest premium – payable to the Hengqin administration – for land costs. For this year, the standard charge ranges from 5,821 to 9,558 yuan per square metre. Leisure and tourism firms will be charged 1,685 to 3,057 yuan per square metre this year; while cultural, creative or technology businesses must pay 1,200 yuan per square metre. From 2014 onwards, the land bid cost for the industrial park will be adjusted every half a year, the Hengqin Administrative Committee announced. “We’ll assess the investment plan in November to December this year,” said Mr Chang. “The soonest that we can recommend the investment project to Hengqin administration will be in January next year,” Mr Chang added. “We are accepting applications from any firms that have been established in Macau for two years or more, or individuals that have Macau residency ID, both

Hengqin Island – designated as a form of special economic zone by China’s State Council in 2011 – has so far attracted more than 220 billion yuan (286 billion patacas) of investment, said Ye Zhen, vice director of Hengqin Administrative Committee. Most firms moving to the island next door to Macau are state companies, such as China National Offshore Oil Corp, China Resources and Transportation Group Ltd, Bank of China Ltd and Industrial and Commercial Bank of China Ltd. Non-mainland investors are mostly from Hong Kong and Macau, though the island received several inquiries from the United States, Australia, New Zealand, the United Kingdom and India, Mr Ye said. “Lately we’re discussing [details] with a Swiss company that wants to set up a medical service in the island,” he noted, though he declined to name the firm. Italian yacht builder Ferretti Group is also looking to invest in a marine project in the island’s Shizhimen Central Business District, the vice director said.

permanent and non-permanent,” he noted.

SME barrier Alan Ho Hoi Ming, chairman of Macau Expo Group Ltd, said the investment requirement for the industrial park on Hengqin island is “too high for small and medium businesses” to get involved. Responding to the high land cost required for settling business in the industrial park, director of Exchange and Co-operation Bureau of the Hengqin Administrative Committee Liu Yang explained that the land cost was “following the current market trend” in the island, which has been seeing booming investment in the past three years. “Unless the small and medium businesses in Macau can join as a group to invest in the park, there is no way for us to get in,” Mr Ho remarked to Business Daily. His company has invested two million yuan to rent an office and recruit staff in order to open a branch of his conference and exhibitions business on the eastern side of Hengqin, away from the industrial park. It will be used for employee training and storage. “It’s really easier to invest outside the industrial park,” said Mr Ho. “As a small or medium-scale company you can only seek to rent a space from the bigger companies in the park. So we’ll wait and see who will settle in the park, and whether the administration can roll out more policy benefits for it in the future,” he added.

July 19, 2013

Macau

LVS at low risk of crippling regulatory fines: Fitch

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HOSPITALITY

Ratings agency more concerned tougher AML guidelines could deter VIP gamblers

Groupthink Macau began publishing data on visitors that avail of the individual visa scheme in the middle of 2010. Between then and this May, almost 85 million mainlanders visited the city as individuals, just over half of them day-trippers. Two-thirds came from just three provinces. Just one province, Guangdong, was the source of 54 percent, being the distant leader. Guangdong was the source of almost six times as many mainlanders that visited as individuals as the next-biggest sources, Fujian and Zhejiang. Only three other places were each the source of over 3 percent of the mainlanders that visited as individuals: Hunan, Shanghai and Jiangsu. Of the big cities, Shanghai was the main source, sending us 1.4 million, 54 percent more than the next-biggest metropolitan source, Beijing.

Michael Grimes

michael.grimes@macaubusinessdaily.com

here’s only a low risk of casino operator Las Vegas Sands Corp being exposed to large fines even if found liable in the future for any fault under anti-money-laundering laws, says Fitch Ratings. The research firm raises the issue in the latest edition of its U.S. Leveraged Finance Spotlight Series reports. Last year it emerged that LVS had faced a United States federal investigation linked to Ye Gon Zhenli, a Chinese national and high roller gambler who has played at an LVS venue in Las Vegas. It’s understood Mr Ye Gon is still in federal custody in the U.S. fighting an extradition request from Mexico on charges of drug trafficking, illegal possession of firearms, money laundering and directing a criminal organisation. LVS said in a statement to Business Daily on the Ye Gon case at the time: “We believe we have acted properly and have not committed any wrongdoing.” In January LVS’s majority-

owned Macau unit Sands China Ltd said it had hired three former agents from the Federal Bureau of Investigation to strengthen antimoney-laundering efforts in Macau and improve the background checks the company does on VIP customers and junket operators. “Fitch is more concerned that more stringent AML guidelines/ procedures may deter gaming activity, particularly on the VIP side,” said the ratings house in its latest appraisal of LVS. Francis Tam Pak Yuen, Macau’s Secretary for Economy and Finance, last week cited a general curbing of money laundering risk as a reason for considering a cash declaration policy for incoming visitors to the city. Under mainland law, Chinese citizens are limited to bringing 20,000 yuan (US$3,257) over the border per trip. Analysts said they didn’t anticipate such a policy – if enacted – hitting the casinos’ VIP trade, which is based on credit-funded betting. But the newly-installed Chinese

leadership appeared to signal its closer interest in Macau when in December last year it appointed Li Gang as deputy director of its Macau liaison office. Mr Li also sits on the Communist Party of China’s Central Commission for Discipline Inspection. Political analysts expect him to be China’s main representative in the city later this year, when the current director is due to retire. Fitch said; in a general appraisal of regulatory risk faced by LVS under AML laws and the U.S. Foreign Corrupt Practices Act: “In Fitch’s opinion, the most plausible risk stemming from allegations is an assessment of a fine(s), which LVS’s financial profile should be able to absorb, judging by FCPA/ AML case precedents.” The report noted that following LVS’s US$2.3 billion special dividend late last year, the firm’s available liquidity as of March 31 was U$3 billion, net of an estimated US$400 million in cage cash. Fitch stated: “AML fines paid by casinos are rare and typically nominal (less than US$1 million).”

Rare event

Only residents of certain places may avail of the individual visa scheme, and the uptake varies from place to place. Of the 22 provinces or cities covered by the statistics, only Tianjin, Shanghai, Beijing and Guangdong sent us more visitors that travelled as individuals than package tourists. Chongqing province, the next in the ranking, was close with 48.3 percent of the visitors. From then on the figures start decreasing fast, with half of all the regions here showing values below 20 percent. In the last four – Heilongjiang, Inner Mongolia, Shaanxi and Shanxi – the percentage of visitors with individual visas is almost irrelevant. The figure is below 3 percent in all of them. Overall, less than a quarter of all visitors in the period came under the individual visa scheme. J.I.D.

Proportion of mainlanders visiting as individuals that come from Shanghai and Beijing

No precedent of casinos facing crippling AML fines – Fitch

The ratings house said there were 11 cases since 1999 of casinos paying fines assessed by the U.S. Treasury’s Financial Crimes Enforcement Network, with Ameristar Casinos Inc and Isle of Capri Casinos Inc being the best known names on the list. The research company adds: “A more serious tail risk concern is the risk of LVS losing a gaming licence or concession in one of the jurisdictions in which it operates.” But it states: “…Fitch considers this a low-probability risk when taking into account the rarity of gaming licence revocations (unprecedented in Singapore and Macau), and LVS’s significant market share and invested capital in these more critical markets.” Fitch Ratings gives LVS a BB+ issuer default rating in its latest report. The research house says the credit rating reflects LVS’s “strong financial profile supported by manageable debt levels, significant cash balances, and a robust discretionary FCF [free cash flow] profile.” New York-listed LVS had a market capitalisation of US$45.29 billion at close of business on Wednesday U.S. time. Its shares were down 0.15 percent on the day, at US$54.91. Shares of Sands China closed in Hong Kong on Thursday up 0.89 percent at HK$39.80.

July 19, 2013

Macau

Call to end Macau Cable TV concession denied Legislator Au Kam San’s motion comes at ‘wrong time’, says Legislative Assembly Stephanie Lai

sw.lai@macaubusinessdaily.com

the government for not exercising the concession terms.” “So within this half year when the short-term solution is to come into practice, the government may need to spend a lot of money to enable Macau Cable TV to earn some profit,” he continued. “If the earnings generated in the period will become a basis for any compensation that Macau Cable TV likes to seek in future for its losses in the past 14 years, the amount involved might be a big one,” Mr Au added.

Wrong timing

an-democrat legislator Au Kam San’s call for a debate on ending Macau Cable TV Co Ltd’s concession early but with compensation, was turned down at the Legislative Assembly yesterday. Up to 70 percent of the city’s households face the risk of a television blackout later this year after the Court of Second Instance decided in June that the government had 90 days to stop public antennas from illegally relaying cable television signals. The judgement said not only was it illegal for the public antennas to relay copyrighted pay-tv signals, but also relaying signals for free-to-air channels via public antennas was also against the law. In his motion published on June 26 calling for a debate on the issue, Mr Au from the New Macau Association stated that Macau Cable TV’s exclusive concession has hurt the public interest. He said ending the contract would ensure that residents continue to receive television signals. “As the court has pointed out,

there is [was] no public tender for the cable TV concession, and some residents may not find the charges affordable,” Mr Au said in the assembly yesterday. “The rightfulness of the concession itself ought to be discussed.” To avert possible television signal blackout, Bureau of Telecommunications Regulation

director Lawrence Tou Veng Keong suggested in early July a short-term solution. The public antennas would broadcast copyrighted television channels provided by Macau Cable TV and the concessionaire would receive public money for its troubles. “There is also a big risk with this solution,” Mr Au argued. “Macau Cable TV has long been criticising

Of the 25 attending legislators yesterday, 19 voted against a debate on the subject. Most of those opposed said Mr Au’s motion showed “wrong timing”, as the government has already reached a short-term resolution with both Macau Cable TV and the public antenna companies to avert signal blackout. Rejecting the debate proposal, legislator Leonel Alves questioned the legitimacy of Mr Au’s suggestion of ending Macau Cable TV’s concession early, which is due to expire by April next year. “If the government cancels the contract, it will be the party violating the concession articles,” Mr Alves said. “Even if the two parties are to reach a compensation amount for ending the contract early, we don’t know how long they will take to reach a deal,” Mr Alves continued. “So why not wait until the contract expires? It is ending less than nine months anyway.”

July 19, 2013 April 19, 2013

Macau Brought to you by

Financial Monitor Widening deficit Macau’s manufacturing has been declining for several years, and the decline had as result the widening of the merchandise trade deficit. The overall coverage ratio – or the value of exports as a proportion of the value of imports – has narrowed to about 11 percent in the past couple of years from about 16 percent in 2010. The coverage ratio has been similar so far this year. The narrowing seems to have been stemmed, in relative terms. But this masks a continuing decline in domestic exports. The apparent stability is mostly the arithmetic effect of a rising share of re-exports, which overvalues, so to speak, the coverage ratio. In absolute terms, the trade deficit keeps widening. It increased by 48.9 percent in 2011 and 13 percent last year.

China Telecom calls for cheaper leased lines Firm expects competition in fixed-line services to be good news for mobile providers Tony Lai

tony.lai@macaubusinessdaily.com

hina Telecom (Macau) Co Ltd believes that Companhia de Telecomunicações de Macau SARL (CTM), the city’s largest telecoms provider, could further lower tariffs on leased lines. Samuel Chan, China Telecom’s assistant general manager here, said CTM has “more room for reducing” fees it charges for the use of its business lines. CTM announced early this month effective discounts on existing tariffs for these international private leased circuits. Under the revised charging system, existing customers of such lines will be entitled to a maximum 42 percent discount on monthly leasing fees. New commercial subscribers will enjoy at least 15 percent off existing rates. Companies providing mobile services, like China Telecom, have to use the leased line service to run their operations. CTM holds a monopoly

on the city’s fixed landline network. Speaking to reporters on the sidelines of the launch of a new China Telecom store, Mr Chan said he hoped prices for leased lines could be further reduced in Macau. “This could allow other companies to have more economic efficiency,” he said. “We would be able to provide services to our customers at better prices.” Another local operator – SmarTone Mobile Communications (Macau) Ltd – said in May that leased line prices here were six to eight times higher than in similar markets including Hong Kong. CTM’s chief executive Vandy Poon Fuk Hei told the media last month that they were “working” to reduce tariffs for local line services. The telco had submitted a proposal last November but the government said it expected prices to be further reduced. Mr Chan also said he was pleased to see another company, Companhia

de Telecomunicações de MTEL Ltda, entering the market to compete with CTM on providing leased line services. More competitors in the market will be good for mobile providers, he added. The government issued another licence to MTEL last month and the company has 18 months to ensure its network covers 30 percent of Macau’s households.

E-commerce to grow by 8 pct About one-third of our trade deficit is ‘made in China’, which is our main trade partner. The European Union comes next, with figures in excess of a quarter in all the three years. About 60 percent of the trade deficit is due to the deficits in trade with the mainland and the EU combined. Our next-biggest deficits are in our trade with Hong Kong, Japan, the United States and Taiwan. The deficits with all four of these places combined amount to less than the deficit in trade with the EU alone. The deficit with each of these four places is less than the deficit in trade with the rest of Asia combined and the deficit in trade with the rest of the world. J.I.D. The content of this column is the work of Business Daily’s journalists.

68.9 %

Rise in the merchandise trade deficit in the past two years

Lower overheads compared to traditional bricks and mortar firms makes online business a good medium for start ups, says expert Tony Lai

tony.lai@macaubusinessdaily.com

nline commerce can grow by eight percent this year as Internet use increases in the city, suggests businessman Felix Kwan. The general manager of ComWits Technology (Macau) Ltd said yesterday the popularity of e-commerce is rising with the launching of new smartphones and portable services. He was speaking on the sidelines of a forum organised by the E-Commerce Association of Macau. According to Mr Kwan – also a platform speaker at the event – the broadband Internet usage in the territory rose by over 60 percent from 2010 to 64.1 million hours last year. Latest official data also show the number of Internet users here surged by more than half in three years to

nearly 240,000 users by May this year. “Macau still has much room to develop [on e-commerce] like the promotion of many tourism services and products can be carried out [accessed] via the social media,” Mr Kwan told reporters. He explained that the sales volume via Internet here “can further rise in the next few years by more than eight percent” annually if online payment procedures can be further simplified by local and regional companies. The government could also offer help with e-commerce development, said Mr Kwan, adding the recent business start-up loan scheme for young entrepreneurs of up to 300,000 patacas (US$37,500) offered by the government was a “good incentive”.

First-time businessmen aged between 21 and 44 can start applying for this interest-free loan from next month. Mr Kwan added that selling products via Internet platforms like Amazon and Taobao and social media like Facebook, can help business start-ups save “up to 70 percent” on costs – particularly on promotion expenses. But he said the maximum 300,000 patacas available as a government loan for young entrepreneurs would only serve as additional operational capital. Any e-commerce starters should do research on their products, develop a good personal network and not limit their market only to Macau, said Mr Kwan.

July April19, 19,2013 2013

Macau

Economist says govt’s GDP forecast too conservative Albano Martins says economic growth is likely to be 10 percent this year Staff Reporter

newsdesk@macaubusinessdaily.com

conomist Albano Martins says Macau’s gross domestic product is likely to grow by between 9.7 percent and 10.5 percent in real terms this year. Mr Martins rejects the estimate made last Friday by Secretary for Economy and Finance Francis Tam Pak Yuen. Mr Tam said he expected “ middle single-digit growth” in GDP this year. The government forecast was “too conservative”, Mr Martins told Business Daily. He said it would turn out to be accurate only if, for instance, gross fixed capital formation, a gauge of investment spending, did not grow at all. Gross fixed capital formation rose by 24 percent in nominal terms in the first quarter. Mr Martins considers investment an important driver of GDP. He expects private consumption to keep growing as internal demand increases. In its latest Monetary and Financial Stability Review, released

Albano Martins says investment will push up GDP growth

this week, the Monetary Authority of Macau says real GDP will grow by less than 10 percent this year. The review gives no estimate. The report says a number of tourism projects in Cotai and big infrastructure projects will continue to underpin investment spending. But it says gross fixed capital

Corporate Lions Clubs’ US$7.8 mln for Special Olympics Lions Clubs International Foundation is pledging US$7.8 million (62.3 million patacas) to the Special Olympics. The movement supports the involvement in mainstream society and wellbeing of people with intellectual disabilities. Chinese basketball star Yao Ming (pictured centre) was among those on stage for the announcement during the 96th annual Lions Clubs International convention in Hamburg, Germany. Four million athletes compete in 53,000 Special Olympics events in 170 countries every year. The Special Olympics – not to be confused with the Paralympics – were founded in 1963 with support from the Kennedy family in the United States. The latest Macau event was the Special Olympics Asia Pacific Golf Masters, held from April 22 to 27. Teams from Australia, China, Chinese Taipei, Hong Kong, India, Macau, Malaysia, South Korea and the United Kingdom were among those taking part. The event was in partnership with the Charity Association of Macau Business Readers, a community organisation set up by our sister publication Macau Business magazine.

Planète Femmes at Sofitel Macau A photographic exhibition called Planète Femmes runs at Sofitel Macau at the Ponte 16 casino resort from now until October 20. It chronicles the lives of women across the world. The photographs are the result of an international competition by Foundation Alliance française. Alliance française aims to promote French language and culture around the world. More than 200 members of Alliance française in 80 countries participated, with the winners having the opportunity to display their photographs in Paris. Arnaud Barthélémy, French consul general in Hong Kong and Macau and Eric Sautedé, vice president of Alliance française de Macao, attended the launch of the exhibition. It coincides with the fifth anniversary of the opening of Sofitel Macau, which is managed by the French hotel group Accor SA. Sofitel says it is the only French luxury hotel brand with a presence on five continents. It has 120 properties in almost 40 countries, and an inventory of more than 30,000 rooms.

formation growth will still decelerate this year. The annual rate of GDP growth in the first quarter was 10.8 percent. GDP data for the second quarter are to be released on August 30. Mr Martins said his own estimate might turn out to be conservative. “My forecasts are based on the

information currently available,” he said. He assumes that gross gaming revenue will rise by about 14 percent this year.

VIP woes Last year, gaming revenue rose by 13.5 percent. Gaming revenue was 171.4 billion patacas (US$21.4 billion) in the first half of this year, 15.3 percent more than in the equivalent period of last year. Mr Martins said gaming revenue was likely to increase strongly in the third quarter, in part because of the low base for comparison a year ago. Union Gaming Research expects gaming revenue to grow by about 16 percent this year. Wells Fargo Securities has a similar forecast, while Morgan Stanley Asia expects growth of 17 percent. Mr Tam said last Friday that gross gaming revenue growth would be about 10 percent this year. The Monetary Authority review says gaming revenue growth will “experience a visible slowdown” in the second half, after six months of “better-than-expected” growth. “VIP gaming has been losing its market share to mass-market gaming, slowing overall gaming services growth,” the review says. High-roller revenue was 11.2 percent greater in the second quarter than a year earlier. Union Gaming said in a note released on Wednesday that in the second quarter VIP revenue had accounted for less than 70 percent of total marketwide gross gaming revenue for the fourth consecutive quarter.

July 19, 2013 April 19, 2013

Greater China CNPC eyes Petrobras assets in S. America China National Petroleum Corp, the country’s largest oil producer, is considering buying Petroleo Brasileiro SA assets in South America, three people with knowledge of the matter said. The assets in Colombia and Peru could be worth about a combined US$2 billion and CNPC may face competition from other South American producers, said two of the people, who asked not to be identified because the information is private. Petrobras, the most indebted publicly traded oil company, has been shedding assets to help finance projects in Brazil’s deep waters. CNPC has been the most acquisitive Asian energy company this year, according to data compiled by Bloomberg.

GSK finance head ban from travelling Chinese authorities investigating the alleged bribery of doctors and officials by GlaxoSmithKline Plc have stopped the drugmaker’s head of finance for China, a British citizen, from leaving the country, a company spokesman said late on Wednesday. The travel restriction on Steve Nechelput was imposed at the end of June, but he has continued to work and remains free to move around China. Mr Nechelput has not been questioned, arrested or detained by police, the spokesman said. GSK has hired auditors Ernst & Young to carry out an independent review of its systems in China in the wake of the scandal, according to a person familiar with the situation.

U.S. blames Beijing for trade talks halt The United States blamed China yesterday for a breakdown in trade talks aimed at eliminating tariffs on a new generation of technology products and everyday consumer electronics like speakers and flat-panel displays. “The United States is extremely disappointed that it became necessary to suspend negotiations to expand the Information Technology Agreement,” U.S. Trade Representative Michael Froman said in a statement. “Unfortunately, a diverse group of members participating in the negotiations determined that China’s current position makes progress impossible at this stage,” he said.

Former Soros employee starts hedge fund company Zhang Xinliang, a former employee of billionaire investor George Soros’s family office, started his own Hong Kongbased hedge-fund company, Magnolia Capital Management Ltd. Magnolia was licensed by the city’s Securities and Futures Commission on April 18, according to information posted on the regulator’s website. Mr Zhang started Magnolia with Wang Xiao, according to the SFC. Wang previously worked for Morgan Stanley, Bain Capital LLC and Coatue Management LLC, the New York-based hedge fund founded by Philippe Laffont.

Mainland home prices jump in June Big cities post record gains as new home prices rose in all but one city

hina’s June new home prices rose in all but one city, led by the biggest metropolitan centres and underscoring Premier Li Keqiang’s struggle to rein in speculative investment even as the economy cools. Prices climbed in 69 of the 70 cities the government tracked last month from a year earlier, the National Bureau of Statistics said in a statement yesterday, matching the data in May. The southern business city of Guangzhou posted the biggest increase with a 16 percent advance from a year earlier. Prices climbed 13 percent in Beijing and 12 percent in Shanghai. All three cities had their biggest gains since the government changed its methodology for the data in January 2011. “With the economy slowing down and other industries weakening, investors don’t have many choices but seek out property investment for good returns,” Yao Wei, China economist at Societe Generale SA in Hong Kong, said yesterday. “Many of the government measures have targeted the supply, which actually pushed home prices up further.” China in March stepped up a three-year campaign to cool home prices, with only the capital city of Beijing issuing the toughest measures among 35 provincial cities. Beijing became the only region to raise the minimum down payment on second homes from 60 percent and to enforce

a 20 percent capital-gains tax on existing homes.

Slowing growth China’s economic growth slowed to 7.5 percent in the second quarter from last year, the government’s data showed on Tuesday. The ruling Communist Party made progress last month in reining in credit growth as officials seek to put the nation’s expansion on a more sustainable footing. The only decline in new home prices last month was in the eastern city of Wenzhou, where they fell 2.8 percent from a year earlier, according to the data. Chinese stocks fell for a second

KEY POINTS Guangzhou new home prices up 16 pct y-o-y Prices climbed in 69 of 70 cities Measures targeted at supply push up prices – analyst Stocks fall as property developers retreat

Guangzhou posted the biggest increase last month

day, led by real estate companies and commodity producers, amid concern increasing home prices will limit room for the government to spur economic growth. The Shanghai Composite Index dropped 1.1 percent to 2,023.40 at the close, extending Wednesday’s 1 percent loss. The CSI 300 Index declined 1.6 percent to 2,245.33. A gauge tracking developers slid 1.7 percent. Existing home prices rose 14 percent in Beijing last month from a year earlier and increased 10 percent in Shanghai and Guangzhou, according to the data.

New direction Private data also showed rising housing values. Home prices jumped 7.4 percent from a year earlier last month, the biggest gain since an eight-month series of declines ended in December, according to SouFun Holdings Ltd, the nation’s biggest real estate website owner.

Taiwan must ease rules to be offsho

SinoPac says Taiwanese market could offer more advantages than S

aiwan should remove restrictions on mainland China’s companies and its currency so the island can become an offshore hub for the yuan, SinoPac Financial Holdings Co Ltd said. The island should allow the free entry and exit of the yuan and lift a ban on Chinese companies selling bonds denominated in the currency in Taiwan, said Stan Siao, president of SinoPac, the first Taiwan lender to draw a mainland investor. “We aren’t a financial centre yet,” Mr Siao, whose company is selling a 20 percent stake in Bank SinoPac to Industrial & Commercial Bank of China Ltd, said in an interview in Taipei yesterday. “For us to become one, a certain mind-set has to be changed.” Taiwan is competing with Singapore and London to become a hub for the yuan as China seeks to internationalise its currency. The island’s banks began taking yuan deposits domestically in February, and Taiwan’s first renminbi debt sale followed the same month. Foreign-currency bond transactions are subject to a yield tax of as much as 15 percent in Taiwan, and Chinese issuers, which accounted for more than 60 percent of Dim Sum debt sales in Hong Kong last year, are barred from the market.

“In the past the two sides were enemies so of course they made a lot of rules and protections,” SinoPac chief financial officer Michael Chang said. “Now that they want to develop relations, they are removing them. We hope they can remove them faster.”

Bond underwriter China signed a three-year currency swap agreement in June with the Bank of England for 200 billion yuan (US$32.6 billion) to foster yuan trading in London. German central bank board member Joachim Nagel said on July 3 Frankfurt is trying to establish itself as a centre for offshore yuan trading in Europe. The People’s Bank of China in May appointed ICBC as yuan-clearing bank for Singapore. Like China, Taiwan maintains capital controls, restricting the convertibility of the Taiwan dollar. Mr Siao said loosening controls over the flow of yuan in Taiwan would make it a more attractive market. SinoPac, an underwriter for Taipeibased CTBC Bank Co’s 1 billion-yuan bond sale in February, said the island must attract both issuers and foreign investors to its market in order to benefit from its advantages over Singapore and Hong Kong.

We aren’t a financial centre yet. For us to become one, a certain mind-set has to be changed Stan Siao, president, SinoPac Financial Holdings

“We have thousands and thousands of Taiwanese making yuan, paying in yuan, and spending yuan in China,” Mr Siao said. “There’s a very good chance for Taiwan.” The lender has about 10 percent of the island’s market for yuan deposits, loans and products, compared with about 3.5 percent in the local dollar market, according to Chang. “Because we were an early mover, our renminbi business is doing much better than local currency,” he said.

July April19, 19,2013 2013

Greater China China’s easy money flows abroad As credit squeeze hurts companies at home

“The government really has to think of a new direction for property policies, because its previous measures all have hit the wrong areas,” Mr Yao said. China may delay a planned n a tionwide pr op erty tax trial programme, Zhang Ming, a researcher at the Chinese Academy of Social Sciences’ Institute of World Economics and Politics, wrote in a commentary published in the Securities Daily yesterday. The value of home sales rose 24 percent in June from May, the biggest monthly gain this year, the statistics bureau reported this week. “Property is still a very important industry in China; we shouldn’t worry too much about further tightening,” Albert Lau, Shanghai-based China head and managing director at property broker Savills Plc, said this week. “We can’t afford to have weak exports and sluggish property at the same time and everything else will follow.”

s China’s cash squeeze claims victims across the nation – from a bailout-seeking shipyard to a solar-panel maker missing a bond payment – there are places where Chinese money remains cheap and plentiful, like Nigeria. China Development Bank Corp and Export-Import Bank of China are lending billions of yuan to some of the world’s riskiest regimes at interest rates hundreds of basis points below the cheapest commercial loans available at home. That lending in turn generates overseas contracts to build airports, roads and shopping malls for state-owned Chinese companies that are mired in debt. “As opportunities go down and risks go up at home, these policy banks have gained a lot of power and they want to sustain themselves,” Kevin Gallagher, author of the 2010 book “The Dragon in the Room” about Chinese investment in Latin America, said in a telephone interview. “The majority of the countries that are getting the finance are countries with bond spreads that are through the roof.” CDB, with a loan book more than three times the size of the World Bank’s, and China Eximbank are wholly owned by the state with a mandate to support Chinese foreign policy. Officials from the lenders accompany the nation’s leaders across the globe dispensing funds to forge ties from Costa Rica to Russia, helping secure supplies of oil, gas and minerals and creating work for some of China’s biggest state-owned enterprises.

Mexican credit

Bloomberg News

ore yuan hub

Last month in Latin America, President Xi Jinping pledged to lend US$3 billion to 10 Caribbean nations, CDB offered a US$900 million loan to build a refinery in Costa Rica, and Mexican oil company Petroleos Mexicanos received a US$1 billion line of credit from China Eximbank.

Separately, China Development Bank made a US$4.02 billion loan to Venezuela’s state-owned oil producer. In the four weeks since China’s seven-day repurchase rate, a gauge of interbank funding availability, rose to the highest level since 2003, the two Beijing-based banks financed a US$700 million airport and retail complex in Khartoum, Sudan; loaned Russian oil producer OAO Rosneft US$2 billion; provided US$334 million in funds for a Balkan highway; and gave a US$100 million line of credit to a Nigerian bank and another US$500 million to build four airport terminals in the west African nation. Hua Chunying, a spokeswoman for China’s foreign ministry, declined to comment on China’s international lending by policy banks. Calls to the policy banks’ press offices were unanswered.

rate and a 22-year repayment period, Nigerian Aviation Minister Stella Oduah said in Abuja. “It’s almost free money,” she said. Even China Eximbank itself, which is financed by bonds, can’t borrow money that cheaply. This month it sold 26 billion yuan in bonds carrying interest rates ranging from 4 percent to 4.15 percent, according to company documents. In the middle of a cash squeeze, the policy banks remain unscathed. On July 9, China Development Bank sold nine-month bonds at 4.37 percent – 163 basis points below the central bank’s one-year bank lending rate. A basis point is one-hundredth of a percentage point. “Policy banks are essentially buying business for Chinese construction firms overseas by effectively subsidising the substantial political risk in those countries,” said Patrick Chovanec, New Yorkbased chief strategist at Silvercrest Asset Management Group LLC and a former Tsinghua University professor. “The immediate effect doesn’t conflict with efforts to rein in domestic credit, so maybe that’s why you see overseas lending going full speed ahead.” Bloomberg News

‘Free money’ In many cases China is seeking to secure energy supplies. In Venezuela, Brazil, Ecuador and Russia, China Development Bank loans are paid for with oil shipments to China. In other cases, the loans bring business for Chinese companies. Nigerian trade and investment minister Olusegun Aganga, speaking to reporters on July 12 in Beijing, said China Eximbank’s loan to build the airport terminals was given at concessionary rates to create contracts for Chinese companies. The loan has a 2 percent interest

Policy banks are essentially buying business for Chinese construction firms overseas… Patrick Chovanec, Silvercrest Asset Management

Singapore, Hong Kong

U.S. seen losing to China as world economic leader But Washington still has more favourable global image: poll

Bank SinoPac on July 9 became the first Taiwanese lender to win approval from the China Banking Regulatory Commission to own a banking subsidiary registered on the mainland. Mr Siao said the unit, based in the eastern city of Nanjing, should expedite the growth of its China network. The bank plans to start retail operations in its second year if the first year proves to be profitable. Bloomberg News

eople around the world see the U.S. as a waning superpower with China poised to supplant it, according to international polling conducted for the Pew Research Centre. The polling shows people in many countries already view China as the leading economic power. Among the 39 countries surveyed, six – including the U.S. and Japan – had pluralities or majorities saying that China will never replace the U.S. “Regardless of which country is seen as the economic powerhouse today, many publics believe China will eventually replace the U.S. as the world’s leading superpower, if it has not already done so,” according to the report released yesterday by the Washington-based Pew Centre’s Global Attitudes Project. The Organisation for Economic Cooperation and Development in Paris said in a March 22 report

that China’s economy, now the world’s second-biggest, is on course to overtake the U.S. as the largest in about 2016, when adjusted for relative purchasing power. China has an economic gap to close if it is to do so. Its gross domestic product of US$8.23 trillion last year was about half the US$15.68 trillion of the U.S., according to International Monetary Fund data. That gap narrows when purchasing power is taken into account, putting China’s output at US$12.41 trillion, according to the IMF. Across the nations surveyed, Pew found that a median of 63 percent gave the U.S. a favourable rating, compared with 50 percent for China. Those surveyed in many nations voiced concern about China’s rise, the authors wrote. “Globally, people are more likely to consider the U.S. a partner to their country

than to see China in this way, although relatively few think of either nation as an enemy,” according to the report. China’s military power is viewed with trepidation by people in some regional neighbours including Japan, South Korea, Australia and the Philippines, according to the report. “By a wide margin, the Japanese give China its worst ratings – only 5 percent express a positive view,” according to the report. “Territorial disputes have increased tensions between these two historic rivals over the past few years, and 82 percent of Japanese describe these disputes as a big or very big problem.” The findings came from polling the Pew Research Center conducted in the 39 countries among 37,653 respondents from March 2 to May 1. The margin of error varies among the individual national polls. AFP

10 10

July 19, 2013 April 19, 2013

Asia

RBI strikes fresh blow to worst sales in six years Credit risk rising as Indian rupee declines

Bloomberg News/Reuters

The rupee led declines among emerging Asian currencies yesterday

upee-denominated bond sales were already having their slowest start to a month in almost six years before India wrecked prospects of a revival by unexpectedly raising interest rates. Companies have issued 6 billion rupees (US$100 million) of notes so far in July, the least since the same period of August 2007, according to data compiled by Bloomberg. Five-year interest costs for top-rated borrowers soared 70 basis points, the most since October 2008, to 9.48 percent on Wednesday from a threeyear low of 8.12 percent on May 29. Similar-maturity Chinese notes yield 4.76 percent. Rural Electrification Corp, the nation’s second-biggest lender to power projects by market value, said corporate offerings are likely to be less than planned this year, a blow to the government’s efforts to revive the

weakest growth in a decade. Rupee bond sales in the first half were the most on record as falling interest costs attracted companies. “The RBI’s latest moves have sent borrowers’ anticipations in a different direction altogether and companies will have to re-assess costs,” said Ajeet Kumar Agarwal, the New Delhi-based director of finance at Rural Electrification, this year’s third-biggest issuer of rupee debt. “It appears inevitable funding demand may be lower than what was expected at the start of the year.” India’s central bank announced late on Monday that it raised two money-market rates by 2 percentage points and plans to drain 120 billion rupees via open-market sales of government bonds, leaving Russia as the only one of the four-biggest emerging economies not to have reined in funds in its financial system.

End of boom a challenge, not a crisis: Bowen Standard & Poor’s reaffirms Australia’s top-notch AAA rating

Chris Bowen, Australian Treasurer

ustralian Treasurer Chris Bowen yesterday insisted an end to the Chinese resources boom was not a crisis for Australia’s mining-driven economy, but admitted it was a challenge.

Australia’s economy is facing a difficult transition from its reliance on commodities as China’s growth slows and the resources investment boom peaks. But on a day that ratings agency Standard & Poor’s maintained its top-notch AAA sovereign credit rating for Australia with a stable outlook, Mr Bowen said it was achievable with good governance. “This is not a crisis. But it is a challenge,” he told the national press club. “The reality is that China is entering a new phase of its economic growth. “What Chinese authorities are striving to achieve is stable, long-term

some economists said will lead to tightened liquidity conditions at a time of lacklustre economic growth. All 10 economists surveyed by Bloomberg News before the move had expected the central bank to keep its repurchase rate unchanged at a July 30 policy meeting, saying the rupee’s record plunge and elevated consumer inflation would prevent the RBI from adding to 75 basis points in cuts this year. “Investors and issuers have been pushed into an unanticipated and difficult position after the rupee’s decline,” said Bank of Baroda chairman S.S. Mundra. “What’s been more challenging to manage is the fact that it happened in a very short span of time, within which anticipations and expectations have taken a significant turn.” The rupee has recovered from its low earlier this month, trimming losses to 8 percent in 2013. It is still the worst performer among Asia’s major currencies after the yen. Credit risk has surged as the currency declined. “Companies may have to raise funds at a higher price now,” said R.V. Verma, the chairman and managing director of National Housing Bank, this year’s fifth-largest issuer. “Some companies may tolerate a higher price and borrow if they believe they can pass on the cost to the final buyer. As far as we’re concerned, we’ll wait for the market to improve.”

The rupee, which touched a record low of 61.2125 per dollar on July 8, has strengthened as much as 3.1 percent since. The rupee led the declines among emerging Asian currencies yesterday after U.S. Federal Reserve chairman Ben Bernanke confirmed market views that central bank expects to start tapering monetary stimulus this year. Mr Bernanke on Wednesday said the Fed still expects to start scaling back its monthly bond-buying of US$85 billion a month later this year although he left open the option of changing that plan if the economic outlook shifted.

Tighter funding

The RBI’s latest moves have sent borrowers’ anticipations in a different direction altogether and companies will have to re-assess costs Ajeet Kumar Agarwal, director, Rural Electrification

The Reserve Bank of India increased the marginal standing facility and the bank rate to 10.25 percent from 8.25 percent, in a move

single-digit growth. And that is the right approach. It’s in Australia’s national interests for China to go down this path.” Australia’s economy grew at a slower-than-expected rate in the first three months of the year, expanding 0.6 percent on-quarter and 2.5 percent on-year suggesting the decade-long mining investment boom was unwinding China’s gross domestic product expanded 7.5 percent in the April-June quarter, data showed on Monday, a second consecutive slowdown in growth as worries mount over the health of the world’s number two economy. Mr Bowen predicted continued volatility in prices for Australia’s key commodity exports such as iron ore and coal due to China’s easing coupled with increases in global supply, underscoring the need to diversify towards other sources of growth. “These transitions will occur inevitably,” said Mr Bowen, who inherited the Treasurer role last month after Wayne Swan resigned in the wake of Julia Gillard’s ouster

by new leader Kevin Rudd. “The question is: will they be smooth or bumpy? Will the Australian economy benefit from them or suffer?” he questioned. “Our challenge is in improving our productivity and competitiveness to assist in this transition. This is the key economic challenge for the next three years – and lies at the core of Labor’s positive plan to promote competitiveness to spur jobs and investment.” In reaffirming its AAA rating, Standard & Poor’s said the Australian economy benefited from “significant fiscal and monetary policy flexibility, economic resilience, and public policy stability”. “We believe these factors provide Australia with a strong ability to absorb large economic and financial shocks, as was demonstrated during the global recession in 2009,” the agency’s credit analyst Craig Michaels said. “Moderating these strengths are Australia’s high external imbalances, dependence on commodity exports, and high household debt.” AFP

11 11

July April19, 19,2013 2013

Asia

Japan should cut corporate levy: tax expert

S.Korea to restart two nuclear reactors

Country on unequal footing with overseas rivals, says tax panel member

apan should reduce its corporate tax rate by at least 5 percentage points to compete with Asian neighbours in attracting companies, a member of the government’s tax commission said. “Japan should house regional headquarters like Hong Kong or Singapore,” Eiji Tajika, an economics professor at Hitotsubashi University, said in an interview. Failure to cut corporate taxes would leave Japan on an unequal footing with overseas rivals, he said. Prime Minister Shinzo Abe said this month he wants to discuss cutting the corporate tax rate, which at 35.6 percent is one of the highest among developed nations. The issue may come to prominence when Mr Abe gets a mandate to push through his so- called third arrow of structural reforms after a projected victory for his party in an upper house election on July 21. “Abe needs to slash corporate tax rates if he wants to send a message

that he’s seriously committed to his growth strategy,” said Hiroaki Muto, a senior economist at Sumitomo Mitsui Asset Management in Tokyo. “Simply putting corporate tax cuts onto the political agenda will have a psychological impact on firms and help to spur their growth expectations and encourage investment.” Japan’s corporate tax rate compares with 25 percent in China and 17 percent in Singapore, according to the Ministry of Finance. The Organisation for Economic Cooperation and Development data show Japan has the second-highest rate of its member nations, after the U.S.

Time needed Deputy Economy Minister Yasutoshi Nishimura said in an interview yesterday in Singapore that while the ruling party is trying to reduce Japan’s corporate levy, it may take about two years to implement any cut. National Tax Agency data show

that about 25 percent of companies filing tax returns declared a surplus in the fiscal year ended March 2011. Finance Minister Taro Aso said last month that corporate tax cuts are not effective as many companies don’t pay the levy, saying later in the month that tax relief for capital investment would be more beneficial for them. Mr Tajika disagrees with the finance minister on this issue. “Accelerated cost recovery of investments is ineffective under the current low interest rates,” Mr Tajika said, referring to tax breaks on capital spending. “Tax cuts shouldn’t just be for the manufacturing industry, they should be shared by every industry.” The government tax commission examines the tax system from a medium-to-long-term perspective and reports directly to the prime minister. A separate ruling party tax panel looks more closely at specific tax measures in terms of the government’s growth strategy. Bloomberg News

Japan’s corporate tax, one of the highest among developed nations

Myanmar risks getting old before becoming rich: OECD

“If the momentum for development created by the country’s opening and internal peace process is not seized, Myanmar could get old before it gets rich.” Myanmar President Thein Sein is seeking to create more jobs in one of Asia’s poorest countries after allowing greater political and economic freedom following decades of military rule. An untapped market and labour costs that the Japan External Trade Organisation says are the cheapest in the region have attracted companies such as Coca-Cola Co and Visa Inc. The OECD predicts that without structural change the economy can grow at an average of 6.3 percent from 2013 to 2017, below the government’s target of 7.7 percent

Chaebol boss indicted for tax evasion Seoul prosecutors indicted the head of CJ Group, a South Korean food and entertainment group, for tax evasion and embezzlement as part of a government drive to crack down on corporate crime. Lee Jay-hyun, the 53-year-old chairman of the group, was charged yesterday after an investigation that started in May, according to the prosecutors. The group is the country’s 14th-largest chaebol, the conglomerates that dominate South Korea’s economy. President Park Geun-hye pledged to crack down on tax evasion to help fund increased welfare spending and the country’s tax agency began 23 separate investigations in May. The government has targeted the heads of chaebol for tax evasion and embezzlement in previous years, including Samsung Group and Hyundai Group, the country’s two biggest. Mr Lee avoided 54.6 billion won (US$49 million) in taxes and misappropriated 96.3 billion won in company assets, the Seoul Central District Prosecutors’ Office said in a statement yesterday. Mr Lee had used a CJ Group unit to provide collateral and guarantees for property purchases in Japan, according to the statement.

35.6 %

yanmar may start ageing earlier than its neighbours, increasing the urgency for its leaders to implement policies that optimise economic growth, according to the Organisation for Economic Cooperation and Development. The Southeast Asian nation with an estimated 59 million people has a population structure like China’s in the 2000s, signalling it’s approaching the point where the share of workingage citizens starts declining, an OECD report showed. By contrast, Cambodia and Laos will probably see their proportion of workers continue to rise, it said. “Myanmar’s now comparatively young population will start ageing in the next two decades,” the OECD said in a report released yesterday.

South Korea will restart two nuclear reactors this week after the completion of regularly scheduled maintenance, the nuclear regulator and operator said yesterday, easing fears of power shortages in the hot Korean summer. Of the country’s total 23 nuclear reactors, six reactors will remain offline, including three units halted after parts were supplied using fake certificates in May. This week’s restart may ease some power shortage worries, but electricity supply remains a concern as peak summer demand is expected in early August, said an energy ministry official, who declined to be identified. South Korea’s nuclear sector has been hit by a scandal over forged certificates and substandard parts that first prompted the shutdown of two of its 23 reactors last November. Those two have since been restarted, but the nuclear operator and the energy official said it is not clear yet when the three reactors shut down in May will be restarted. The state-run Nuclear Safety & Security Commission said it has approved the restart of a 700-megawatt reactor in Wolsong, about 280 km from the capital Seoul, and a 650-megawatt reactor in Kori, about 320 km southeast of Seoul.

ArcelorMittal scraps India steel plant Myanmar’s population ageing faster than its neighbours

growth from now till 2015. The nation must invest in its manufacturing and services sectors to create jobs and raise incomes, it said. Myanmar also has to focus on attracting foreign investment, developing special economic zones, optimising the contribution of public enterprises to growth, and helping small enterprises to develop, the report said. The country’s gross national income per capita is 13 percent lower than Cambodia and 24 percent below Laos, it said. Reuters

The world’s largest steel company, ArcelorMittal, says it has abandoned plans to build a steel plant in eastern India because of problems acquiring land. Initially agreed in 2006, the company was to manufacture 12 million tonnes of steel a year in Orissa state. But farmers who oppose the purchase of their land have protested. Farmers complain that they are being forced to sell land at below market rate. The move comes a day after Korea’s Posco scrapped a US$5.3 billion plan for a steel plant in southern India. “ArcelorMittal has not been able to acquire the requisite land for the steel plant, nor has it been able to ensure captive iron ore security, which is a necessary requirement for the project,” the company said in a statement. “Therefore, taking into account the current economic climate, ArcelorMittal has concluded it will no longer be pursuing its plans for a steel plant in Keonjhar [in Orissa] at this stage.” The company said it was still pursuing two other projects in Jharkhand and Karnataka states.

12 12

July 19, 2013 April 19, 2013

Markets Hang Seng Index NAME

PRICE

DAY %

VOLUME

34.2

-0.5813953

13893181

2.5

-0.7936508

5662052

BANK OF CHINA-H

3.17

198262758

BANK OF COMMUN-H

4.98

0.2012072

17926081

BANK EAST ASIA

27.8

-0.5366726

1517233

BELLE INTERNATIO

10.9

0.1838235

11447814

BOC HONG KONG HO

24.15

-1.02459

8655727

HANG LUNG PROPER

CATHAY PAC AIR

13.28

-0.8955224

1257000

CHEUNG KONG

AIA GROUP LTD ALUMINUM CORP-H

107.1

0.752587

3380187

CHINA COAL ENE-H

4.15

1.219512

27047032

CHINA CONST BA-H

5.52

0.5464481

301507284

NAME

PRICE

DAY %

VOLUME

10.92

0.5524862

11737780

PRICE

DAY %

VOLUME

68.85

-0.9352518

CITIC PACIFIC

8.63

-0.1157407

1968000

1351342

SANDS CHINA LTD

39.8

0.887199

CLP HLDGS LTD

63.7

0.0785546

1126058

7521327

SINO LAND CO

10.9

-0.7285974

CNOOC LTD

13.82

0.2902758

36428973

3207324

SUN HUNG KAI PRO

102.3

-0.09765625

COSCO PAC LTD

10.68

1.328273

2266106

2851122

SWIRE PACIFIC-A

92.85

-0.9071505

1420064

0.5025126

7100504

TENCENT HOLDINGS

327.8

-0.6666667

3217430

24.95

0.2008032

2700608

TINGYI HLDG CO

19.1

-1.849949

2966000

HANG SENG BK

116

-0.7698888

1101455

WANT WANT CHINA

10.5

-1.129944

12693963

HENDERSON LAND D

49.3

3070246

WHARF HLDG

64.85

0.5426357

2675131

2.756892

1956887

CHINA UNICOM HON

ESPRIT HLDGS

HENGAN INTL HONG KG CHINA GS

19.26

-0.310559

5038362

HONG KONG EXCHNG

120.6

-0.7407407

1621225

85.7

0.2339181

8567044

83.65

-0.5350773

4059523

4.92

-0.2028398

172496606

CHINA LIFE INS-H

18.44

-1.284797

25588899

CHINA MERCHANT

23.3

-0.4273504

1842529

HSBC HLDGS PLC

CHINA MOBILE

81.8

-0.1830384

9043778

HUTCHISON WHAMPO

CHINA OVERSEAS

21.2

-1.395349

19163705

IND & COMM BK-H

CHINA PETROLEU-H

5.58

0.3597122

78149792

LI & FUNG LTD

CHINA RES ENTERP

NAME POWER ASSETS HOL

MOVERS

-0.9009009

12322821

HIGH

21453.46

28.85

-1.02916

1189747

LOW

21244.75

52W (H) 23944.74

23.4

-2.296451

3897980

20.25

-3.341289

15142000

NEW WORLD DEV

11.18

5601909

CHINA RES POWER

17.66

-1.779755

51314821

PETROCHINA CO-H

9.24

0.5440696

54776611

CHINA SHENHUA-H

22.35

2.522936

26260382

PING AN INSURA-H

50.25

-0.7897335

7674862

PRICE

DAY %

VOLUME

25.75

7255300

3 21460

INDEX 21345.22

MTR CORP

CHINA RES LAND

(L) 18710.58984

21240

16-July

18-July

Hang Seng China Enterprise Index NAME

PRICE

DAY %

VOLUME

AGRICULTURAL-H

3.12

147935600

AIR CHINA LTD-H

5.29

-1.121495

7892000

CHINA PETROLEU-H

5.58

0.3597122

2.5

-0.7936508

5662052

CHINA RAIL CN-H

7.35

ANHUI CONCH-H

23.05

-1.495726

11304577

CHINA RAIL GR-H

BANK OF CHINA-H

3.17

198262758

ALUMINUM CORP-H

NAME

PRICE

DAY %

VOLUME

YANZHOU COAL-H

5.65

0.3552398

20775200

78149792

ZIJIN MINING-H

1.56

26710544

2.367688

25687000

ZOOMLION HEAVY-H

5.19

1.169591

6718700

3.84

2.4

26625000

ZTE CORP-H

11.58

CHINA SHENHUA-H

22.35

2.522936

26260382

CHINA PACIFIC-H

4.98

0.2012072

17926081

CHINA TELECOM-H

3.71

-0.536193

26807000

31.85

1.27186

2313100

DONGFENG MOTOR-H

9.57

-0.2085506

8334584

CHINA CITIC BK-H

3.64

1.111111

21517601

GUANGZHOU AUTO-H

7.44

-1.717305

4625504

CHINA COAL ENE-H

4.15

1.219512

27047032

HUANENG POWER-H

8.26

0.36452

32153500

CHINA COM CONS-H

5.69

1.426025

20920240

IND & COMM BK-H

4.92

-0.2028398

172496606

CHINA CONST BA-H

5.52

0.5464481

301507284

JIANGXI COPPER-H

12.74

-0.7788162

4112000

CHINA COSCO HO-H

3.36

-1.466276

2929375

PETROCHINA CO-H

9.24

0.5440696

54776611

BANK OF COMMUN-H BYD CO LTD-H

18.44

-1.284797

25588899

PICC PROPERTY &

8.77

0.3432494

12243505

CHINA LONGYUAN-H

8.21

0.2442002

10335415

PING AN INSURA-H

50.25

-0.7897335

7674862

CHINA MERCH BK-H

13.2

0.3039514

17772264

SHANDONG WEIG-H

7.75

2.377807

6302000

CHINA MINSHENG-H

8.17

-0.969697

31605271

SINOPHARM-H

CHINA NATL BDG-H

6.83

-1.443001

29799300

TSINGTAO BREW-H

16.14

3.727506

11961122

WEICHAI POWER-H

CHINA LIFE INS-H

CHINA OILFIELD-H

19.26

0.7322176

7162045

58.3

2.19106

1293000

23.75

-1.247401

NAME

MOVERS

5 9560

INDEX 9492.07 HIGH

9552.66

LOW

9381.57

52W (H) 12354.22 9380

(L) 8640.85 16-July

1702400

18-July

Shanghai Shenzhen CSI 300 PRICE

DAY %

VOLUME

PRICE

DAY %

VOLUME

PRICE

DAY %

VOLUME

AGRICULTURAL-A

2.52

-0.7874016

81118256

CITIC SECURITI-A

10.35

-2.725564

80981369

RISESUN REAL -A

15.02

-3.40836

11805197

AIR CHINA LTD-A

3.93

-1.503759

14076017

CSR CORP LTD -A

3.65

-3.693931

64193881

SAIC MOTOR-A

12.63

-2.244582

30831553

ALUMINUM CORP-A

3.17

-2.160494

12729876

DAQIN RAILWAY -A

5.79

-1.697793

23514323

SANAN OPTOELEC-A

20.99

0.962001

20603037

ANHUI CONCH-A

14.28

-0.7644197

18791336

DATANG INTL PO-A

5.31

-1.301115

11113563

SANY HEAVY INDUS

7.06

-2.216066

21046340

AVIC AIRCRAFT-A

9.9

13619178

EVERBRIG SEC -A

11.11

-1.855124

19527793

SHANDONG DONG-A

42.08

-1.865672

5680058

BANK OF BEIJIN-A

8.03

-1.351351

29833414

GD MIDEA HOLDI-A

12.44

-2.431373

13883380

SHANDONG GOLD-MI

21.35

-3.655235

18833770

BANK OF CHINA-A

2.66

-0.7462687

21673181

GD POWER DEVEL-A

2.28

-1.724138

61669187

SHANG PHARM -A

11.22

-0.3552398

6315351

BANK OF COMMUN-A

3.91

-1.012658

55373116

GEMDALE CORP-A

6.91

-2.949438

50524477

SHANG PUDONG-A

8.2

-2.95858

99044377

NAME

4.06

-0.7334963

14096122

GF SECURITIES-A

12.03

-2.115541

33422152

SHANGHAI ELECT-A

BEIJING SL -A

57.49

-4.580913

4428808

GREE ELECTRIC

24.52

-2.659786

18331596

SHANXI LU'AN -A

BAOSHAN IRON & S

3.31

-1.19403

2836612

11.47

-3.775168

15791422 34827758

BEIJING TONGRE-A

22.88

-0.435161

4840094

GUANGHUI ENERG-A

10.04

-1.181102

30156629

SHENZEN OVERSE-A

5.56

-0.8912656

BYD CO LTD -A

35.22

0.5711022

10570091

HAITONG SECURI-A

10.38

-2.899906

120774292

SICHUAN KELUN-A

57.21

-2.521724

1129946

CHINA AVIC ELE-A

23.86

-1.608247

6180934

HANGZHOU HIKVI-A

20.29

-2.872188

12679632

5.36

-0.7407407

41116050

CHINA CITIC BK-A

3.63

-1.089918

23876383

HENAN SHUAN-A

40.95

-1.253918

3700977

TASLY PHARMAC-A

47.56

1.689117

5222866

9.07

-1.839827

89040600

TSINGTAO BREW-A

39.16

0.9278351

1422469 7744320

SUNING COMMERC-A

CHINA CNR CORP-A

4.11

-2.606635

46135807

HONG YUAN SEC-A

CHINA COAL ENE-A

4.89

-0.6097561

11649134

HUATAI SECURIT-A

8.57

-2.057143

26654620

WANHUA CHEMIC-A

16.56

-0.7789095

CHINA CONST BA-A

4.34

-0.6864989

23010098

HUAXIA BANK CO

9.17

-1.185345

28783876

WEICHAI POWER-A

17.13

-2.670455

6994895

CHINA COSCO HO-A

2.86

-1.718213

10714756

IND & COMM BK-A

3.93

-0.5063291

65355361

WULIANGYE YIBIN

19.9

-1.093439

11408753

CHINA EAST AIR-A

2.41

-1.632653

16917904

INDUSTRIAL BAN-A

9.69

-4.059406

138495694

YANZHOU COAL-A

10389285

23.68

-1.742739

34660607

YUNNAN BAIYAO-A

35.03

6869585

CHINA EVERBRIG-A

2.79

-2.105263

70042369

INNER MONG BAO-A

CHINA INTERNAT-A

30.34

1.948925

4257454

INNER MONG YIL-A

9.73

-3.758655

100.08

0.6841046

1520262

ZHONGJIN GOLD

9.13

-3.283898

16425009

13.3

-1.772526

10357027

INNER MONGOLIA-A

3.95

-2.70936

37763640

ZIJIN MINING-A

2.46

-2.766798

38593738

CHINA MERCH BK-A

11.18

-1.929825

53560319

JIANGSU HENGRU-A

33.17

-1.834862

10252209

ZOOMLION HEAVY-A

5.31

-1.848429

41454709

CHINA MERCHANT-A

11.05

-1.952085

18957747

JIANGSU YANGHE-A

51.61

-0.5587669

2504939

13.69

50775008

CHINA MERCHANT-A

26.95

-2.425778

11083977

JIANGXI COPPER-A

16.14

-2.771084

8395695

CHINA MINSHENG-A

8.73

-3.429204

142644404

KANGMEI PHARMA-A

20.57

0.1460565

23161964

CHINA NATIONAL-A

10.3

-1.056676

35032631

KWEICHOW MOUTA-A

185.07

-0.9897282

2569977

14.73

-0.7412399

2924007

LUZHOU LAOJIAO-A

23.64

-1.786456

6359432

-0.9586579

14381333

METALLURGICAL-A

1.61

-1.226994

37748188

CHINA LIFE INS-A

CHINA OILFIELD-A CHINA PACIFIC-A

16.53

CHINA PETROLEU-A

4.4

-1.123596

66667540

NARI TECHNOLOG-A

15.23

0.06570302

13312273

CHINA RAILWAY-A

4.56

0.2197802

33353524

NINGBO PORT CO-A

2.05

-0.4854369

8536667

CHINA RAILWAY-A

2.52

-1.176471

33657702

OFFSHORE OIL-A

7.23

0.1385042

38400665

9546271

PETROCHINA CO-A

7.89

-0.3787879

19188355

9.82

-3.155819

80668722

-2.472368

25507755

CHINA SHENHUA-A

16.1

-1.105651

CHINA STATE -A

3.28

-1.501502

53957713

PING AN BANK-A

CHINA UNITED-A

3.07

-1.916933

85748124

PING AN INSURA-A

33.53

CHINA VANKE CO-A

10.12

-2.598653

73428323

POLY REAL ESTA-A

10.78

-2.08901

36374294

CHINA YANGTZE-A

7.08

16644221

QINGDAO HAIER-A

11.6

-2.027027

9051959

-1.872247

42058165

QINGHAI SALT-A

17.18

-3.483146

8462813

PRICE DAY %

VOLUME

NAME

CHONGQING CHAN-A

8.91

ZTE CORP-A

MOVERS

244

16 2330

INDEX 2245.328 HIGH

2322.14

LOW

2242.93

52W (H) 2791.303 (L) 2023.171

2240

16-July

18-July

FTSE Taiwan 50 Index NAME

PRICE DAY %

VOLUME

22.5

0.4464286

18303518

FORMOSA PLASTIC

74.9 -0.1333333

9774446

TAIWAN MOBILE CO

111

-1.185771

13873651

FOXCONN TECHNOLO

75.1 -0.5298013

2641663

TPK HOLDING CO L

392 -0.7594937

37.75

0.2656042

4126011

FUBON FINANCIAL

ASUSTEK COMPUTER

264

-3.119266

6634633

AU OPTRONICS COR

10.4

-4.587156

137623800

ACER INC ADVANCED SEMICON ASIA CEMENT CORP

CATCHER TECH

NAME

PRICE DAY %

40.55

0.6203474

54345849

TSMC

HON HAI PRECISIO

0.7751938

28554834

UNI-PRESIDENT

HOTAI MOTOR CO

396

-1.980198

483106

UNITED MICROELEC

0.4524887

105.5

-3.211009

VOLUME 3246957 7099307 44370397

65.8

0.7656968

12002757

13.35

104349891

28.3

145

-2.684564

9831795

HTC CORP

181

-6.459948

14688819

-1.906412

11314861

CATHAY FINANCIAL

44.45

43826165

HUA NAN FINANCIA

17.5

9036842

YUANTA FINANCIAL

16.15 -0.6153846

18789760

CHANG HWA BANK

17.4

8336574

LARGAN PRECISION

932

-3.519669

1997947

YULON MOTOR CO

49.95

CHENG SHIN RUBBE

96.6 -0.8213552

5320569

LITE-ON TECHNOLO

-1.886792

5744946

331

CHIMEI INNOLUX C CHINA DEVELOPMEN CHINA STEEL CORP

13.95

-6.688963

93898857

MEDIATEK INC

-2.647059

7754372

8.72 -0.3428571

52925819

MEGA FINANCIAL H

25 -0.3984064

27387672

25.95

1.367187

20192452

NAN YA PLASTICS

2.167183

20916739

60670629

PRESIDENT CHAIN

215

0.9389671

1497275

CHUNGHWA TELECOM

95.7

0.3144654

7299569

QUANTA COMPUTER

68.5

5219480

COMPAL ELECTRON

19.1 -0.7792208

16510443

SILICONWARE PREC

-1.345291

13192920

147 -0.6756757

14779640

CHINATRUST FINAN

DELTA ELECT INC

3363186

SINOPAC FINANCIA

15.05 -0.3311258

FAR EASTERN NEW

33.35

0.1501502

6648728

SYNNEX TECH INTL

40.15

0.7528231

7369993

FAR EASTONE TELE

81.9

1.236094

6173920

TAIWAN CEMENT

38.35

0.2614379

7283877

18.45

0.2717391

13077593

TAIWAN COOPERATI

17.2

11630680

FORMOSA CHEM & F

FIRST FINANCIAL

0.6369427

8861940

TAIWAN FERTILIZE

73.6

0.8219178

3179451

FORMOSA PETROCHE

81.1

0.2472188

1659112

TAIWAN GLASS IND

28.35

0.1766784

1003536

WISTRON CORP

MOVERS

1.731161

3127071

7 5710

INDEX 5641.27 HIGH

5708.91

LOW

5633.93

52W (H) 5896.71 5630

(L) 4719.96 16-July

18-July

13 13

July 19, April 19,2013 2013

Markets Gaming Stocks - Daily Performance (Hong Kong Stock Exchange) 61.0

39.2 39.0

22.00 21.85

60.8

38.8

21.70 60.6

38.6

Max 39.1

Average 38.868

Min 38.55

Last 38.95

38.4

21.55 Max 61

Average 60.833

Min 60.45

Last 61

60.4

Max 22

Average 21.856

Min 21.55

Last 21.85

18.6

39.8 39.7

20.4 20.3

18.5

39.6

20.2 18.4

39.5

Max 39.8

Average 39.652

Min 39.45

39.4

Last 39.8

Max 18.58

Average 18.522

Commodities PRICE

DAY %

YTD %

(H) 52W

Last 18.52

(L) 52W

WTI CRUDE FUTURE Aug13

106.45

-0.028174305

13.53455631

107.4499969

86.29000092

BRENT CRUDE FUTR Sep13

108.56

-0.046036277

2.154888492

114.3699951

96.65000153

GASOLINE RBOB FUT Aug13

310.85

-0.051445291

11.74419441

315.0899887

262.5799894

GAS OIL FUT (ICE) Sep13

926.25

0.243506494

2.038006059

980

832.5

3.64

0.303113805

1.39275766

4.525000095

3.354000092

308.05

0.302813233

2.782689934

320.449996

273.759985

NATURAL GAS FUTR Aug13 NY Harb ULSD Fut Aug13 METALS

Min 18.38

18.3

20.1 Max 20.4

Average 20.302

Min 20.05

Last 20.05

Gold Spot $/Oz

1278.12

-0.6498

-23.2111

1796.08

1180.57

Silver Spot $/Oz

19.3604

-2.3977

-35.7011

35.365

18.2208

Platinum Spot $/Oz

1408.47

-0.8825

-7.2001

1742.8

1294.18

Palladium Spot $/Oz

729.83

-0.246

4.3121

786.5

553.75

LME ALUMINUM 3MO ($)

1803.5

-0.633608815

-13.00048239

2200.199951

1758

LME COPPER 3MO ($)

6890

-1.543298085

-13.12570924

8422

6602

LME ZINC

1854

-1.800847458

-10.86538462

2230

1779

13970

1.452432825

-18.11254396

18920

13205 14.60000038

3MO ($)

LME NICKEL 3MO ($) AGRICULTURE ROUGH RICE (CBOT) Sep13

COUNTRY MAJOR

ASIA PACIFIC

CROSSES

AUD GBP CHF EUR JPY MOP HKD CNY INR THB SGD TWD PHP IDR AUDJPY EURCHF EURGBP EURCNY EURMOP EURJPY HKDMOP

PRICE

DAY %

YTD %

(H) 52W

(L) 52W

0.9167 1.5204 0.9425 1.3116 100.18 7.9903 7.7578 6.141 59.5775 31.06 1.266 29.971 43.368 10117 91.846 1.23611 0.86267 8.0529 10.4786 131.39 1.03

-0.4885 -0.1117 -0.3607 -0.2206 -0.5191 -0.005 -0.0064 -0.0977 -0.3861 0.0644 -0.2054 -0.2669 -0.0945 -0.7117 -0.049 -0.1343 0.1113 0.2384 0.2338 -0.2968 0

-11.6689 -6.0089 -2.8753 -0.561 -14.0547 -0.0889 -0.0928 1.459 -7.6917 -1.5454 -3.5229 -3.1297 -5.4487 -3.2025 -2.7426 -2.3161 -5.4772 2.044 0.4943 -13.5627 -0.0097

1.0625 1.6381 0.9972 1.3711 103.74 8.0111 7.7664 6.3964 61.2125 32 1.286 30.228 44.181 10205 105.433 1.265 0.88151 8.4957 10.9254 133.8 1.032

0.8999 1.4814 0.9022 1.2043 77.13 7.9818 7.7498 6.1203 51.3863 28.56 1.2152 28.913 40.54 9448 79.408 1.20066 0.77553 7.7018 9.6245 94.12 1.0289

15.31

0.196335079

-0.616682895

16.47500038

496.5

-1.09561753

-17.21550646

665

489.5

WHEAT FUTURE(CBT) Sep13

664.25

-0.112781955

-17.6889715

905.75

652.25

SOYBEAN FUTURE Nov13

1274.5

-0.701207635

-2.168489733

1409.75

1186.5

COFFEE 'C' FUTURE Sep13

128.5

0.429855412

-15.71006888

202.0500031

117.0999985

NAME

PRICE

DAY %

YTD %

(H) 52W

(L) 52W

15.92999935

ARISTOCRAT LEISU

4.39

0.2283105

39.36508

4.49

2.29

1556647

74.34999847

CROWN LTD

12.8

-1.538462

19.96251

13.75

8.28

1530643

CORN FUTURE

Dec13

SUGAR #11 (WORLD) Oct13

16.22

COTTON NO.2 FUTR Dec13

84.04

0.870646766 0.442213458

-19.14257228 6.731013462

22.8599987 89.55999756

World Stock Markets - Indices NAME

Macau Related Stocks VOLUME CRNCY

AMAX HOLDINGS LT

1.05

-3.669725

-25

1.72

0.75

57650

BOC HONG KONG HO

24.15

-1.02459

0.2074673

22.85

8655727

CENTURY LEGEND

0.315

18.86793

0.42

0.22

CHEUK NANG HLDGS

5.69

0.3527337

-5.008344

6.74

2.95

CHINA OVERSEAS

21.2

-1.395349

-8.22511

25.6

16.761

19163705

CHINESE ESTATES

13.68

1.333333

12.78364

14.12

8.253

4000

CHOW TAI FOOK JE

9.64

-0.8230453

-22.50804

13.4

7.44

7264892

EMPEROR ENTERTAI

2.59

-0.3846154

37.03704

3.07

1.34

120180

FUTURE BRIGHT

2.09

-2.336449

72.43853

2.76

0.964

6708000

COUNTRY

PRICE

DAY %

YTD %

(H) 52W

(L) 52W

DOW JONES INDUS. AVG

15470.52

0.120827

18.05826

15542.4

12471.49

NASDAQ COMPOSITE INDEX

3610

0.3195776

19.55568

3615.792969

2810.8

38.95

0.6459948

28.33608

44.95

16.98

6381202

FTSE 100 INDEX

6594.44

0.3425173

11.81167

6875.62

5478.02

HANG SENG BK

116

-0.7698888

-2.274639

132.8

104.2

1101455

DAX INDEX

8239.46

-0.1848639

8.23749

8557.86

6324.53

HOPEWELL HLDGS

24.8

-0.2012072

-25.41353

35.3

20.727

973000

HSBC HLDGS PLC

85.7

0.2339181

5.41205

90.7

61.1

8567044

HUTCHISON TELE H

4.36

-1.357466

22.47191

4.66

2.98

861952

LUK FOOK HLDGS I

21.7

-1.809955

-11.06557

30.05

16.28

1701025 2006000

GALAXY ENTERTAIN

NIKKEI 225

14808.5

1.323705

42.45545

15942.6

8328.019531

HANG SENG INDEX

21345.22

-0.1246966

-5.789398

23944.74

18710.58984

CSI 300 INDEX

2245.328

-1.643044

-11.00394

2791.303

2023.171

MELCO INTL DEVEL

15.06

0.5340454

67.14761

18.18

5.12

TAIWAN TAIEX INDEX

8194.88

-0.7757645

6.433923

8439.15

6922.73

MGM CHINA HOLDIN

21.85

-0.2283105

64.55445

9.509

3101188

KOSPI INDEX

1875.48

-0.6362948

-6.087482

2042.48

1758.99

MIDLAND HOLDINGS

3.05

-0.6514658

-17.56757

2.68

1724000

S&P/ASX 200 INDEX

4993.423

0.2356432

7.409687

5249.6

4084.4

NEPTUNE GROUP

0.169

-0.5882353

11.18421

0.23

0.114

2960000

4704.245

0.5395169

8.978137

5251.296

3964.808

NEW WORLD DEV

11.18

-6.988356

15.12

9.38

5601909

FTSE Bursa Malaysia KLCI

1791.53

0.1604553

6.073601

1826.22

1590.67

SANDS CHINA LTD

39.8

0.887199

17.23122

43.7

20.65

7521327

SHUN HO RESOURCE

1.46

4.285716

1.67

1.03

NZX ALL INDEX

976.191

-0.3440317

10.6726

998.487

767.748

SHUN TAK HOLDING

3.53

0.8571429

-15.75179

4.65

2.62

1338000

PHILIPPINES ALL SHARE IX

4051.34

1.109844

9.525872

4571.4

3410.76

SJM HOLDINGS LTD

18.52

0.7616975

4.351798

22.382

12.995

5572031

SMARTONE TELECOM

12.64

-10.22727

17.38

12.28

60500

WYNN MACAU LTD

20.05

-0.9876543

-4.295946

26.5

14.62

5764169

JAKARTA COMPOSITE INDEX

20.0

Currency Exchange Rates

NAME ENERGY

21.40

HSBC Dragon 300 Index Singapor

613

-0.65

-1.3

STOCK EXCH OF THAI INDEX

1481.66

1.617195

6.446444

1649.77

1172.92

HO CHI MINH STOCK INDEX

496.84

-0.1326633

20.08798

533.15

372.39

LAOS COMPOSITE INDEX

1266.61

0.5669051

4.267472

1455.82

996.61

Shanghai Shenzhen Composite index is listing the biggest companies by market capitalisation. All data supplied by Bloomberg unless otherwise indicated.

ASIA ENTERTAINME

4.17

-0.2392344

48.15168

4.7647

2.2076

89973

BALLY TECHNOLOGI

67.13

3.070782

50.14538

67.2

41.74

849886

BOC HONG KONG HO

3.18

3.583064

3.6

2.99

1000

GALAXY ENTERTAIN

5.02

-0.1988072

26.44836

5.77

2.25

55700 4733955

INTL GAME TECH

19.04

2.091153

34.36838

19.06

10.92

JONES LANG LASAL

94.99

0.4334955

13.16416

101.46

61.39

206609

LAS VEGAS SANDS

54.91

-0.145481

18.95581

60.54

32.6127

2615865

MELCO CROWN-ADR

23.69

0.466497

40.67696

25.2

9.13

2065199

MGM CHINA HOLDIN

2.55

37.83784

2.71

1.36

2700

MGM RESORTS INTE

15.69

-0.06369427

34.79381

15.95

8.83

6467676

SHFL ENTERTAINME

22.75

-0.2630425

56.89655

22.88

12.35

3010185

SJM HOLDINGS LTD

2.4

0.41841

5.373337

2.9481

1.7255

100

131.51

-0.7246924

16.90817

144.99

84.4902

859401

WYNN RESORTS LTD

AUD HKD

USD

14 14

July 19, 2013 April 19, 2013

Opinion

Is economics a science or a religion? Mark Buchanan

A theoretical physicist and a Bloomberg View columnist

s economics a science or a religion? Its practitioners like to think of it as akin to the former. The blind faith with which many do so suggests it has become too much like the latter, with potentially dire consequences for the real people the discipline is intended to help. The idea of economics as religion harks back to at least 2001, when economist Robert Nelson published a book on the subject. Nelson argued that the policy advice economists draw from their theories is never “value-neutral” but foists their values, dressed up to look like objective science, on the rest of us. Take, for example, free trade. In judging its desirability, economists weigh projected costs and benefits, an approach that superficially seems objective. Yet economists decide what enters the analysis and what gets ignored. Such things as savings in wages or transport lend themselves easily to measurement in monetary terms, while others, such as the social disruption of a community, do not. The mathematical calculations give the analysis a scientific wrapping, even when the content is just an expression of values. Similar biases influence policy considerations on everything from labour laws to climate change. As Nelson

put it, “the priesthood of a modern secular religion of economic progress” has pushed a narrow vision of economic “efficiency,” wholly undeterred by a history of disastrous outcomes.

Rational responses The economic zeal reached its peak several years back, when a number of economists openly celebrated what they called economic imperialism – the notion that the inherent superiority of their way of thinking would lead it to displace all other social sciences. Academics sought to bring the advanced calculus of rationality – with its assumption that everything can be explained by people’s perfectly rational responses to incentives – to the primitives in fields ranging from sociology to anthropology. The imperial adventure lost much of its momentum in the wake of the 2008 financial crisis. More attention has turned to the psychological, or behavioural, revolution, which has established that the rational ideal of economic theory isn’t even a good starting point as a crude caricature of the way real people act. We’re often goal-oriented, of course, but we seek those goals through imperfect heuristic rules and trial and error, learning as we go. If anything, rationality is the anomaly in human life.

Of equal significance is a growing acceptance of Nelson’s larger point: that economics is riddled with hidden value judgments that make its advice far from scientific. In one notable development, the Journal of Economic Perspectives published a paper by economists Daron Acemoglu and James Robinson that examines how value judgments – in this case, the dismissal of political repercussions – have undermined well-intentioned economic interventions. Most economists, for instance, see the weakening of trade unions in the U.S.

Economists would do well to derive their prescriptions from observations of how the world really works…

and other Western nations in the past few decades as a good thing, because unions’ monopoly power over wages impairs companies’ ability to adapt to the demands of the market. As Acemoglu and Robinson point out, however, unions do a lot more than influence the supply and cost of labour. In particular, they have historically played a prominent role in creating and supporting democracy, in limiting the political power of corporations, and in mitigating income inequality. Narrow policy analyses have repeatedly led economists to push for policies that have had unexpected consequences for the balance of political power. Acemoglu and Robinson cite the push to privatise industries in Russia in the 1990s. The idea was that private ownership, no matter how it came about, would ultimately benefit the entire economy. In practice, a rigged process gave rise to an illegitimate oligarchy and an increase in inequality that set the stage for the ascendance of President Vladimir Putin’s authoritarian regime.

Tragic flaw More recently, the gospel of economic efficiency helped lay the groundwork for the financial crisis, mostly by encouraging overconfidence in the wonders of financial

engineering. Theory-induced dreams of market discipline provided justification for stripping away entirely sensible regulations, such as barriers between commercial and investment banking, and for avoiding oversight of the booming trade in derivatives. One result was an extremely wealthy financial lobby that is still working hard to block reform. In all these cases, the tragic flaw lies in the heady confidence that comes with a one-size-fits-all theoretical framework. There’s a real danger in seeing economics as an objective science from which all values have been stripped. Nelson preferred an older, more modest perspective on economics espoused by Frank Knight, a founder of the University of Chicago’s freemarket school of thought. Knight expressed the view that truly careful social and economic analysis emphasises the limits to human knowledge and “the fatuousness of over-sanguine expectations” from economicpolicy designs, including those favouring free enterprise. In short, economists would do well to derive their prescriptions from observations of how the world really works, with a healthy respect for its complexity. Faith is no substitute for informed inquiry. Bloomberg View

editorial council Paulo A. Azevedo, Tiago Azevedo, José I. Duarte, Emanuel Graça, Mandy Kuok Founder & Publisher Paulo A. Azevedo | pazevedo@macaubusinessdaily.com Editor-in-Chief Tiago Azevedo DEputy Editor-in-Chief Vitor Quintã Associate editor Michael Grimes GROUP SENIOR ANALYST José I. Duarte Newsdesk Luciana Leitão, Stephanie Lai, Tony Lai EDITOR AT LARGE Alex Lee Creative Director José Manuel Cardoso WEB & IT Janne Louhikari Contributors James Chu, João Francisco Pinto, Larry So, Pedro Cortés, Ricardo Siu, Rose N. Lai, Zen Udani Photography Carmo Correia, Manuel Cardoso Assistant to the publisher Laurentina da Silva | ltinas@macaubusinessdaily.com office manager Elsa Vong | elsav@macaubusinessdaily.com Agencies Bloomberg, Reuters, AFP, Xinhua, Lusa, Project Syndicate Printed in Macau by Welfare Ltd.

Business Daily is a product of De Ficção – Multimedia Projects 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 Email newsdesk@macaubusinessdaily.com Advertising advertising@macaubusinessdaily.com Subscriptions sub@macaubusinessdaily.com

15 15

July April19, 19,2013 2013

Opinion Business

Bubbles forever

Leading reports from Asia’s best business newspapers

Robert J. Shiller

Professor of Economics at Yale University

wires Thanh Nien Daily

Vietnam’s Ministry of Finance said it has used up US$138.3 million or 98 percent of the fuel price stabilisation fund in the first half. Revealing details for the first time, the ministry said the fund only had around 55 billion dong (US$2.6 million) left at the end of June, after inheriting US$35.7 million from last year and accreting US$105.2 million this year. The fund gets 300 dong from retailers for every litre of fuel they sell, and is used to subsidise prices during periods of high global prices or when the government wants to keep prices low.

The Star Malaysia’s export growth is likely to remain weak but may gradually improve in the coming months, according to Standard Chartered Bank. In the first four months of 2013, Malaysia’s exports contracted 2.7 percent year-on-year compared with a 2.3 percent drop in the fourth quarter last year. The bank said a rebound in export growth posed significant upside risk to its GDP growth forecast of 4.7 percent in 2013, which was lower than the government estimation of at least 5 percent. “We expect domestic demand to remain the biggest growth driver,” it said.

China Daily Land prices in mainland China witnessed hefty rises in the second quarter of this year, as developers pinned their hopes on surging house prices, official data showed. According to the Ministry of Land and Resources, an abnormal price increase had been found in 115 land deals during the April-June period, with the premium rates averaged at 142 percent above the base price for bidding, up 22 percentage points from the previous quarter. Land prices in major cities stood at 3,226 yuan (US$520) per square-metre.

Jakarta Globe Indonesia’s central bank has tried to reassure investors and appealed for calm as the rupiah fell to an almost-four-year low against the U.S. dollar. Bank Indonesia governor Agus Martowardojo said in Jakarta that the market should not panic even though the rupiah has been trading beyond 10,000 to the U.S. dollar. “There is no need to worry about the exchange rate. It reflects healthy trade [with] balanced exports and imports and we expect a stronger economy and better management of inflation,” Mr Martowardojo said.

ou might think that we have been living in a post-bubble world since the collapse in 2006 of the biggest-ever worldwide realestate bubble and the end of a major worldwide stock-market bubble the following year. But talk of bubbles keeps reappearing – new or continuing housing bubbles in many countries, a new global stock-market bubble, a longterm bond-market bubble in the United States and other countries, an oil-price bubble, a gold bubble, and so on. Nevertheless, I was not expecting a bubble story when I visited Colombia last month. But, once again, people there told me about an ongoing real-estate bubble, and my driver showed me around the seaside resort town of Cartagena, pointing out, with a tone of amazement, several homes that had recently sold for millions of dollars. The Banco de la República, Colombia’s central bank, maintains a home price index for three main cities – Bogotá, Medellín, and Cali. The index has risen 69 percent in real (inflation-adjusted) terms since 2004, with most of the increase coming after 2007. That rate of price growth recalls the U.S. experience, with the S&P/Case-Shiller TenCity Home Price Index for the U.S. rising 131 percent in real terms from its bottom in 1997 to its peak in 2006. This raises the question: just what is a speculative bubble? The Oxford English Dictionary defines a bubble as “anything fragile, unsubstantial, empty, or worthless; a deceptive show. From 17th c. onwards often applied to delusive commercial or financial schemes.” The problem is that words like “show” and “scheme” suggest a deliberate creation, rather than a widespread social phenomenon that is not directed by any impresario. Maybe the word bubble is used too carelessly. Eugene Fama certainly thinks so. Fama, the most important proponent of the “efficient markets hypothesis,” denies that bubbles exist. As he put it in a 2010 interview with John Cassidy for The New Yorker, “I don’t even know what a bubble means. These words have become popular. I don’t think they have any meaning.”

Not rational In the second edition of my book Irrational Exuberance, I tried to give a better definition of a bubble. A “speculative bubble,” I wrote then, is “a situation in which news of price increases spurs investor enthusiasm, which spreads by psychological contagion from person to person, in the process amplifying

stories that might justify the price increase”. This attracts “a larger and larger class of investors, who, despite doubts about the real value of the investment, are drawn to it partly through envy of others’ successes and partly through a gambler’s excitement”.

Juan Manuel Santos, has brought down inflation and interest rates to developedcountry levels, while all but eliminating the threat posed by the FARC rebels, thereby injecting new vitality into the Colombian economy. That is a good enough story to drive a housing bubble.

Never ending story

Speculative bubbles are not so easily ended; indeed, they may deflate somewhat, as the story changes, and then reflate

That seems to be the core of the meaning of the word as it is most consistently used. Implicit in this definition is a suggestion about why it is so difficult for “smart money” to profit by betting against bubbles: the psychological contagion promotes a mindset that justifies the price increases, so that participation in the bubble might be called almost rational. But it is not rational. The story in every country is different, reflecting its own news, which does not always jibe with news in other countries. For example, the current story in Colombia appears to be that the country’s government, now under the well-regarded management of President

Because bubbles are essentially social-psychological phenomena, they are, by their very nature, difficult to control. Regulatory action since the financial crisis might diminish bubbles in the future. But public fear of bubbles may also enhance psychological contagion, fuelling even more self-fulfilling prophecies. One problem with the word bubble is that it creates a mental picture of an expanding soap bubble, which is destined to pop suddenly and irrevocably. But speculative bubbles are not so easily ended; indeed, they may deflate somewhat, as the story changes, and then reflate. It would seem more accurate to refer to these episodes as speculative epidemics. We know from influenza that a new epidemic

can suddenly appear just as an older one is fading, if a new form of the virus appears, or if some environmental factor increases the contagion rate. Similarly, a new speculative bubble can appear anywhere if a new story about the economy appears, and if it has enough narrative strength to spark a new contagion of investor thinking. This is what happened in the bull market of the 1920’s in the U.S., with the peak in 1929. We have distorted that history by thinking of bubbles as a period of dramatic price growth, followed by a sudden turning point and a major and definitive crash. In fact, a major boom in real stock prices in the U.S. after “Black Tuesday” brought them halfway back to 1929 levels by 1930. This was followed by a second crash, another boom from 1932 to 1937, and a third crash. Speculative bubbles do not end like a short story, novel, or play. There is no final denouement that brings all the strands of a narrative into an impressive final conclusion. In the real world, we never know when the story is over. © Project Syndicate

July 19, 2013

Closing Wynn Cotai: pre-construction costs up

Urban law: calls for transitional terms

Pre-construction costs on Wynn Cotai have exceeded initial estimates by more than five percent, casino concessionaire Wynn Macau Ltd said yesterday in a filing to the Hong Kong Stock Exchange. The firm stated: “… additional works are expected to bring the total cost of all the contractor works to approximately HK$1,592,870,000 (approximately US$204,214,000) by the end of July 2013.” In a January press release, Leighton Contractors (Asia) Ltd said it had been selected to design and build the resort and had “agreed the first component of works, worth A$222 million [US$203.5 million at current exchange rates]”.

Transitional provisions should be included in the urban planning bill to avoid any confusion on how the projects are handled, said four local associations. The Macau Association of Building Contractors and Developers, Macau General Association of Real Estate, Association of Property Agents and Realty Developers and Architects Association issued a statement yesterday. The group argues that the current regulation should still apply to projects that already have their street alignment maps approved. The Legislative Assembly aims to finish discussion on the draft law next month.

Greece approves scheme to fire public workers Passage required to unlock more bailout funds Myanmar to open market to foreign banks Myanmar’s government has signalled it could let foreign banks buy stakes in local lenders as it worries that resistance by domestic banks to joint ventures could hamper plans to attract investment and rebuild the financial system. The government is finalising regulations to allow foreign banks to begin operations through joint ventures, Deputy Finance Minister Maung Maung Thein said, although he noted some local banks did not want to do this. The government was also considering permitting foreign banks to buy stakes in local banks, he said in an interview at a banking conference held in Yangon this week, although he gave no timeline for either scenario. “Our country needs financing, so by letting foreign banks come in, or by letting them buy our equity, then foreign financial input will come in,” Maung Maung Thein said. Foreign involvement would help reform the out-dated banking system in Myanmar, Asia’s second-poorest country after Afghanistan, which has been looking to attract foreign investment since a quasi-civilian government took office in 2011 after half a century of military rule. More than 30 foreign banks have representative offices in Myanmar, including Standard Chartered Plc, Bangkok Bank Plc, Siam Commercial Bank Plc and the Australia and New Zealand Banking Group Ltd.

FIFA loses bid to block free TV access to World Cup matches Soccer’s global body FIFA lost a fight to block free TV access to World Cup matches after the European Union’s highest court said top matches involving national teams should be available to all viewers if governments insist. The EU Court of Justice also ruled that European body UEFA can’t prevent fans with access to a TV from watching their national teams in European Championship matches for free. The court in Luxembourg said yesterday it’s for EU countries alone “to determine the events which are of major importance” and available to anyone with a TV set. A ruling in FIFA’s favour could have ended decades of tradition in the U.K., where the World Cup, the most-watched sporting event, must be shown on free television channels including the British Broadcasting Corp. The European Commission, the EU’s executive arm, allowed the U.K. in 2007 to earmark all World Cup games and the final tournament of UEFA’s European Football Championship for free-to- air television broadcast. That and the approval of a similar decision by Belgium to limit World Cup games only to free TV, breach the associations’ property rights, FIFA and UEFA had argued.

Up to 5,000 Greeks protested outside the parliament

reece’s shaky coalition government scraped through a vote on a bill to sack public sector workers as thousands chanting anti-austerity slogans protested outside parliament. The vote was the first major test for Prime Minister Antonis Samaras’s two-party coalition since losing an ally over the abrupt shutdown of the state broadcaster last month, which left it with a scant five-seat majority in the 300-seat parliament. After midnight on Wednesday, 153 lawmakers out of the 293 present voted in favour of the bill, whose passage was required to unlock nearly 7 billion euros (US$9.2 billion) in aid from European Union and International Monetary Fund lenders. The bill includes deeply divisive plans for a transfer and layoff scheme for 25,000 public workers – mainly teachers and municipal police – that had triggered a week of almost daily marches, rallies and strikes in protest. About 5,000 Greeks flooded the street outside parliament as the vote neared, with some chanting: “We

will not succumb, the only option is to resist” and holding aloft black balloons – though turnout was much smaller than in protests last year. “After 12 years on the job, they fire us in one night,” Patra Hatziharalampous, a 52-year-old school guard in uniform said. “If they have any guts, they should say no to the bailout and take some of the bill’s articles back.” The reforms were passed hours before German Finance Minister Wolfgang Schaeuble – Europe’s leading proponent of austerity blamed by many Greeks for their woes – arrives in Athens for his first visit to Greece since the debt crisis began in 2009. A security cordon has been thrown around the Greek capital for Mr Schaeuble’s visit.

Tax cut Before the vote, Mr Samaras announced Greece’s first tax cut since its crisis began nearly four years ago, in a bid to placate protests and an increasingly restive public mood.

“We will not relax,” Mr Samaras said in a surprise television address to announce that value-added tax (VAT) in restaurants would be cut to 13 percent from 23 percent starting August 1. “We will continue climbing up the hill, we will reach the top, which is not far, and better days will come for our people.” Mr Samaras said the cut would help curb tax evasion, a major problem in the country and one of the reasons it slid into a debt crisis in 2009, but warned that if evasion persisted VAT would revert to 23 percent. “The crucial thing is that it was announced now and not after the summer,” said Thomas Gerakis, head of Marc Pollsters. “How it will benefit consumers remains to be seen.” Athens has been limping along on two bailouts worth over 240 billion euros (US$315 billion) since 2010, which it has secured at the price of wage cuts and tax rises that have triggered a six-year recession and sent unemployment to 27 percent. Reuters