MB 72 | April 2010 by Macau Business

RICH HITCH Supply shortage hits high-end property market

ISSN 1812-6855

FLAK FLIES

Cash row looms over Viva Macau

Macau gets tough on casino growth in push for more non-gaming revenue

Macau MOP 35 Hong Kong HK$ 40 Mainland China RMB 35

PENSION PUZZLE

Ageing city faces a balancing act PERKING UP

Edmund elevated to his new office

PLASTIC FANTASTIC

Demand surge for China credit cards

April 2010

CASE OF THE MONTH

SOCIETY

50 Growing old Pensions balancing act

28 Crash landing Flak flies over Viva Macau 30 Not plane sailing Passenger pain 31 Loan danger Battle over Viva millions

53 Skills for success Training for the future

FINANCE

HOSPITALITY

POLITICS

MB FILES

32 Card clamour RMB credit card buzz

38 40 42 45 47

Elevating Edmund Ho gets new office Perks of the job Regulating top officials A new home Policy Address spotlight Sovereign solutions Gaming dependency No time to breathe Alexis Tamâ&#x20AC;&#x2122;s plate full

HUMAN RESOURCES

54 Right move Sofitel boss Michel Molliet

57 Construction and real estate Your guide to Business and Industry

PROPERTY

66 68 71 74

Hot properties Scramble for luxury Winning bet Property fund soars Lap of luxury Looking good at One Central Home truths A market dissected

April 2010

GAMING 76 78 80 84 88 105 107 110 113 115 117

The billions race Table turners Casino stockwatch Spreading the bets Push for non-gaming dollar Door closed Capping the casinos Ho slams crime claims US regulators under fire End of the line Row over legal work China online Mastering the mainland Poker passion Baccarat challenger Scamming it Casino cheats unmasked A cheatâ&#x20AC;&#x2122;s tale Spilling the beans Catching a thief Casinos fight back

ESSENTIAL

89 Beauty & Grooming Your guide to indulgence

ARTS AND CULTURE 118 Reel deal Film festival hits town

ENTERTAINMENT

123 Party On Casino staff get the night

THE FROZEN SPY 127 No-one is safe

OPINION

10 25 34 49 109 126

In praise of bravery A silent obsession Chinaâ&#x20AC;&#x2122;s bad debtor Gesture politics The unknown promise of internet freedom The service revolution

April 2010

In praise of bravery Some political decisions are as brave as they are risky, especially in a place as complex and unique as Macau. The recent decision by the Culture Council – announced by the president of the Cultural Affairs Bureau, Ng Vai Meng, and supported by the secretary of Culture, Cheong U - to annul the controversial Central Library project, is both brave and risky, but also totally correct. An earlier decision by a team led by the former president of the Cultural Affairs Bureau Heidi Ho, to hand the project over to an architect who worked for the company that handled the preliminary study that would then lead to the public tender, was most controversial. First, it undermined the tender, but it also went against the most basic principles of incompatibility and it could have damaged the winning architect’s reputation, as well as that of the company administered by respected engineer and legislator Chui Sai Peng. Considering, of course, that the architect had no idea that her boss was involved in the preliminary study and that the boss had no idea that his employee was a candidate in the tender. However, Heidi Ho chose to, how shall we say, forget – and not for the first time - some of the most basic common sense norms of behaviour. April 2010

The Culture Council’s decision was brave because it rejects what seems to have become an unspoken rule in Macau: do not interfere with past decisions regardless of how stupid they were. By revoking the decision and restarting the whole process, the Culture Council and the secretary have scored important points for the new chief executive who has promised a more transparent government. All in all, it is a decision that we salute!

A predictable debacle

The Viva Macau debacle was entirely predictable and is further proof that a succession of bad decisions were made during the first 10 years of the SAR. Air Macau bears direct responsibility for the failure of Viva Macau, by preventing the healthy growth of its sub-concessionaire. But should we have expected a different outcome? Since Air Macau was nearly forced to let go of its monopoly, can we blame them for not wanting to make things easier for Viva Macau? The monopoly came out of a foolish decision by the former Portuguese administration which, in 1995, seemed understandable at the time, because

We find it strange that Viva Macau is surprised with the government’s decision to no longer tolerate the frequent blemishes they create on Macau’s international image. Their problems are nothing new, nor are its defective management

there was apparently no other way of attracting investors. On the other hand, Viva Macau accepted such pre-conditions as the interdiction of flying to any of Air Macau’s destinations in exchange for not paying any royalties. If Viva Macau had had any long term vision at the time, instead of just wanting to save a few patacas, perhaps this sad outcome could have been avoided. We believe Viva Macau has good reason to complain about a certain lack of good will from Nam Kwong – which apparently seems to have forgotten when it nearly went bankrupt - and quite a few other unlucky circumstances it found itself in. Still, we find it strange that they are surprised with the government’s decision to no longer tolerate the

frequent blemishes they have made on Macau’s international image. Viva Macau’s problems are nothing new, nor are its defective management practices. As for the veiled threat that it can’t pay back the MOP200 million loan, this can only be a joke. We have many doubts regarding this subject, but one stands out: if Viva Macau had two companies ready to invest in it, with signed agreements and all – one of them worth US$30 million - why let things reach this point of nearly no return? After all, the problem was not just the nonpayment of fuel bills. Apparently, there were unpaid wages and, more than once, the company paid expenses with cashfilled envelopes. Unfortunately, and not for the first time, the previous government was displaying the worst of behavior. By deciding not to liberalise the skies and choosing instead to benefit an unsuitable airline, the government ended up being the main culprit. The fact that Viva Macau – a brand new company with little to justify its existence except for having money to invest and some good will - had family ties with former Chief Executive Edmund Ho Hau Wah that could lead to hasty and perhaps unfair conclusions, leaves the main decisions makers in a rather uncomfortable position. There is a growing need to prevent such situations from happening, because more often than not, they are interpreted – perhaps unfairly - as the sorts of contracts only possible if one or more shareholders have family ties with the person who green lights the whole business. A few days ago, the Macau International Airport Company

(CAM) chairman announced the company’s results. Let’s forget the fact that we still don’t understand why CAM even exists, since the airport should be directly managed by a company which wins a fair and open public tender. It is also difficult to understand why the government decides to provide a third entity to earn money when the whole process should only have two parties, the owner and administrator (in other words the government) and the entity it decides to award the management of the airport to. I’m sure the scientific explanation is: this is Macau. Deng Jun spoke to reporters after a meeting of CAM’s administrators, where the next objectives where set in terms of infrastructure management, namely the new runway and the airport main building’s extension. Macau is full of surprises, so we won’t be shocked if the government approves the airport’s extension and invests in land reclamation, only to move the airport to, oh I don’t know, Mountain Island, and then sells the new lots of reclaimed land to real estate developers. For now, we simply want to sound an alert that identical land situations must not happen again. We’re still waiting for clarification on the transfer of airport lots to private hands. If transparency is finally a realistic demand – and rightly so - then we must fight for it at all costs. It is a courageous decision by the new government and we fully support it.

Finger pointing

Americans – and we apologise for the generalisation - are quick to point fingers. And they don’t need a lot of proof. They are an enlightened people, God bless them. As such, they need only their own absolute conviction April 2010

of guilt in order to publicly lynch someone. It’s a habit which must have been passed on from the State Department to part of the great American public. This all pervasive tendency can be the only explanation for New Jersey’s decision to classify Pansy Ho Chiu King as an undesirable partner for MGM. Their logic goes like this: Pansy is Stanley Ho Hung Sun’s daughter, and Stanley Ho is based on many never proven rumors - accused of dangerous liaisons. Therefore, Pansy Ho has dangerous liaisons. This reasoning by the New Jersey Gaming Commission, completely trashes one of the most basic rights guaranteed by democratic societies, of which the USA is said to be the champion the right to justice. By inverting the burden of proof, Pansy Ho – or her father for that matter – have no right to be considered innocent until proven so in a court of law. This is the Inquisition, New Jersey-style: burn them at the stake, just in case. Subjectivity affects us all equally. English-owned Reuters

I have little doubt that Reuters mistake was not due to lobbies or hidden agendas, but I can’t say the same regarding the New Jersey decision

news agency has accused an American company, Las Vegas Sands, of having ties with organised crime. The accusation arose from the fact that an individual had certain interests in a company that owned part of another company that had a share in one of LVS´ VIP rooms. As a publisher, I have first hand knowledge of the frustrating process of having a team of reporters work on an investigative story for months and get no conclusive proof in the end. The lesson is clear, no conclusive proof and

the story doesn’t see the light of day. First of all, the individual only bought a share in the junket company after she started working with LVS. Secondly – and this must not be forgotten - the individual was never formally charged with any offence nor detained after being spoken to by the police. So, without a formal accusation and, more importantly, without any charges or convictions, what right is there to publicly “burn” the image of a company that might have been linked to a suspicious fellow? Investigative journalism does not appear on the opinion pages, which are set aside for subjective commentary and “escape” the rules that condition the former. The worst thing is that cases like this are quickly becoming the norm. I have little doubt that Reuters´ mistake was not due to lobbies or hidden agendas, but I can’t say the same regarding the New Jersey decision - a jurisdiction that is not exactly a paradigm of honesty and transparency. Without a shadow of a doubt, their decision was the result of huge backstage movements.

It’s your daily business

April 2010

VOL.1 Nº72

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April 2010

14 MARCH Winner Ms. Rebecca Wong Macau

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April 2010

Official Show Publication

Convenience stores

We Deliver Decision Makers

Newsstands and Supermarkets (Macau Peninsula)

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43 Av. Infante D. Henrique 643 Av. da Praia Grande 3 Av. Dr. Mário Soares 221 Alm. Ribeiro 271 Alm. Ribeiro 317 Alm. Ribeiro 327 Alm. Ribeiro 7b Lrg. do Senado 17 Lrg. do Senado 31 Lrg. do Senado 13 Rua de S. Domingos Rua de Horta e Costa 27A Cheng Chong Kie Rua de Coelho de Amaral Av. do Dr. Rodrgo Rodrigues 30C Rua de Entre Campos 54 Rua da Barca Iong Vai Bldg. 5 Estrada de Adolfo Loureiro 73 Rua de Almirante Costa Cabral Av. do Ouvidor Arriaga Rua do Francisco Xavier Pereira Rua do Almirante Costa Cabral Av. do Sidónio Pais Alm. Dr. Carlos d’Assumpção Mei Kui Koung Cheong (Phase I) Vai Choi Garden Block C KIOSK - Mandarin Oriental Hotel Newsstands and Supermarkets (Taipa)

BOOKSHOPS

Rua de Bragança (Mei Keng Garden Blk. 1 Taipa) Est. Gov. Albano de Oliveira (Mercearia Fruta Man Yip Taipa) Av. Dr. Sun Yat Sen (Mercearia Fruta Man Yip Taipa) Rua de Seng Tou (Supermercado Pou Ip Taipa) Av. Dr. Sun Yat Sen (Seng Cheong Supermarket Taipa) Hyper Gourmet - Ocean Garden

BOOKSHOPS Portuguese Bookshop- Largo do Senado BOOKACHINO- NAPE, Macau TIMES Bookshop- Shop 2526, 2200 The Grand Canal Shoppes Venetian Macao Culture Plaza Bookshop - Rua do Campo BLOOM Bookshop- Weng Seng Bldg.

Aberdeen Marina Holdings Ltd. Ah Lo Magazine Co. Bookazine Ltd - Canton House Bookazine Ltd - Far East Finance Bookazine Ltd - Jardine House Bookazine Ltd - Prince’s Building Bookazine Ltd - Shui On Bookazine Ltd - Tsim Sha Tsui Chaip Coin Co Ltd Cham Kee Cosmos Book Co Cosmos Nathan Road The Commercial Press - Jordan The Commercial Press - King Road The Commercial Press - Sha Tin The Commerical The Commercial Press - Yee Woo Nobletime Ltd (c) DFS - Int’t FC (c) DFS - Prince’s Building Exchange Mall Great Food Hall Hong Kong Book Centre - City Plaza Hong Kong Book Centre - On Lok Yuen Hits Media Centre Jumbo Grade - City Plaza II Jumbo Grade - Grand Century Jumbo Grade - Int’l Finance Ctr Jumbo Grade - Pacific Place II Jumbo Magazine House Kelly & Welsh Ltd Kelly & Walsh - Exchange Square Kwong’s Mandarin Hotel Mannings New Mall - Discovery Bay Page One - Time Square Page One - Central Page One - Kowloon Tong Page One - TST Park’n Shop Swindon - 370 Ocean Centre Swindon - Lock Road Tung Son Magazines Co Variety Worldpac Ltd Y.M.C.A. of Hong Kong Dymocks

Restaurants

April 2010

SMEs borrow more

Crossed lines

Hutchinson shows interest in the fixed line network, while Smartone hesitates

martone has revealed that a fixedline telecommunications license is not in its Macau plans.The move comes amidst negative turnover in its mobile business. However, Hutchinson Macau was quick to show its interest saying it wants to converge its fixed and mobile services in Macau. Listed on the Hong Kong Stock Exchange, Smartone announced interim losses of about HK$19 million (MOP19.2 million) in its Macau operations for the last two quarters of 2009.

Speeding depreciation

The company explained that Smartone Macau replaced its single net solutions provider in order to launch its third generation (3G) mobile services, which also led to the removal of some new equipment, resulting in an accelerated depreciation and losses which reached HK$51 million (MOP51.5 million). Excluding the impact of this and the impairment loss in respect to fixed assets, its operating profits also dropped 35 percent to US$32 million (MOP251 million) – compared to the US$49 million (MOP384 million) posted in the first two quarters of the last fiscal year. April 2010

Smartone Executive Director, Douglas Li, guaranteed the company isn’t considering applying for a license for a fixed-line network at the moment. In about a year CTM’s exclusive contract with the territory expires.

New SME lending by Macau banks increased at a fast pace in the second half of last year. In the second half of 2009, new SME credit approved totaled MOP8.9 billion, 43.7 percent up on the first half of 2009 or 72.0 percent up on the same period last year. At the end-December 2009, the outstanding value of total SME loans reached MOP20.7 billion, representing growth of 5.7 percent from end-June 2009 or 4.2 percent from a year earlier. When compared with end-June 2009, SME loans to construction and public works, restaurants, hotels and similar activities and wholesale and retail trade increased at respective rates of 17, 10.6 and 5.0 percent, while manufacturing dropped 24.6 percent. These sectors accounted for 75.0 percent of the total SME loans outstanding.

Hutchinson reacts

However, Hutchinson Telecom Macau has already shown an interest in the possibility of entering the fixed-line market. Company Executive Director Ho Wai Ming said: “We want to converge our telecommunications mobile and fixed line services in Macau.” He also showed his support for the government’s new policies for the telecommunications sector. Ho later explained the company is interested in “all businesses pertaining to telecommunication services”, but will have to analyse the government’s offer. Ho noted that data transmission tariffs in Macau still have room to decrease and added that 3G subscribers from 3Macau more than doubled in 2009 and should grow another 10 percent as the company continues to improve the speed of data transmission. by Kahon Chan

Court nixes TCM appeal The Court of Second Instance has rejected an appeal filed by bus operator Sociedade de Transportes Colectivos de Macau (TCM) to suspend the validity of a chief executive’s decision that disqualified the company from participating in an open auction to operate public bus services starting from October 2010. TCM, one of the two public bus concessionaires and with 20 years of service in Macau under its belt, has already filed another appeal to the court. Meanwhile, in the wake of the ruling, the Traffic Affairs Bureau announced it will go ahead as planned with an open auction. TCM was disqualified from the open auction after allegedly submitting its proposal four minutes late.

April 2010

GDP on the up M

acau’s Gross Domestic Product (GDP) is expected to register a double-digit rate increase in the first half of 2010. Secretary for Economy and Finance, Francis Tam Pak Yuen said: “We are going to have a double-digit GDP growth in the first half of 2010, but the rate of increase in the second half of the year depends on the international economy.”

Tam was speaking to lawmakers, on the last day of debate on the 2010 Policy Address for Economy and Finance areas. Questioned by legislators about the lack of concrete projections for Macau’s economic performance in 2010, Tam said the government doesn’t work that way. He also said the government is preparing a law to provide a deposit protection scheme of at least 80 percent

for bank deposits. A temporary measure adopted by the government in 2007 to provide full cover for all deposits will expire at the end of this year. Meanwhile, Macau’s percapita GDP for 2009 rose by 2.2 percent year-on-year in real terms to MOP311,131. The overall 2009 GDP grew by 1.3 percent in real terms to MOP169.34 billion. GDP for the first half of last year contracted by 13.4 percent year-on-year in real terms, attributable to a decrease in gross gaming revenues, total visitor spending and gross fixed capital formation, as well as a further decline in merchandise exports. A surge in the exports of gaming services put the economy back on the growth track in the third quarter, bringing a substantial rise of 27.4 percent in the last quarter, leading the economy to expand by 17.9 percent year-on-year in real terms in the second half of 2009. The rate of economic growth for the second and third quarters was revised upward from -15.3 percent and 8.2 percent to -14.8 percent and 8.8 percent respectively in real terms.

24-hour opening for Delta Bridge

Macau and Guangdong get closer

The Hong Kong-Zhuhai-Macau bridge border posts will be open round-the clock. However, 24-hour opening may not occur right away after the bridge’s inauguration, scheduled for 2016. An agreement inked by Guangdong, Hong Kong and Macau said the three parties would choose the best date for 24-hour operations to start, the South China Morning Post reported. The agreement also specifies the rights and responsibilities of each government concerning the construction, operation, maintenance and management of the bridge’s main structure.

The governments of Macau and Guangdong are drafting a cooperation framework agreement to push forward their relationship. Alexis Tam Chon Weng, Macau’s top government spokesperson, said the agreement is expected to be ready before the end of 2010, so it can be included in the mainland’s 12th Five-Year Plan (2011-2015). The agreement will cover transportation, the economy, infrastructure, juridicial cooperation and the development of Hengqin Island, among others and a special task force has been set up for the job. Tam added that during the first half of 2010 Macau and Hong Kong will also discuss ways to improve cooperation.

April 2010

Macau’s forex reserves up again The preliminary estimate of Macau’s foreign exchange reserves amounted to MOP149.8 billion at the end of February 2010. The reserves rose by 1.5 percent from MOP147.5 billion in the previous month, the Monetary Authority of Macau announced. When compared with a year earlier, the reserves increased by MOP18.2 billion or 13.8 percent. Macau’s foreign exchange reserves at end-February 2010 represented 30 times the currency in circulation. The trade-weighted effective exchange rate index for the pataca, a gauge of the domestic currency’s exchange rates against the currencies of Macau’s major trading partners, rose by 0.85 points month-to-month but fell by 2.97 points year-on-year to 90.28 in February 2010.

Len Ainsworth takes G2E Asia Visionary Award

Gaming machine pioneer Len Ainsworth will be honoured with the G2E Asia Visionary Award during Global Gaming Expo Asia (G2E Asia) 2010. The 2010 G2E Asia Visionary Award, presented in partnership with Macau Business magazine, recognises Ainsworth’s contribution to the gaming industry. He will receive the award during the June 9 keynote address at G2E Asia 2010 held between June 8-10 at the Venetian Macao. Ainsworth is currently executive chairman of Ainsworth Game Technology, which supplies gaming machines to 40 countries around the world. He has pioneered many of the major design and technological innovations over the past 50 years, He also founded the company that became Aristocrat Technologies, the largest producer of casino-style gaming machines and gaming machine systems in Australia, and the second largest in the world. Past awardees of the G2E Asia Visionary Award include Tan Sri Lim Goh Tong, founder of Genting Group, and Stanley Ho Hung Sun, chairman of Sociedade de Jogos de Macau. April 2010

Credit card rise The number of personal credit cards in circulation in Macau increased 2.23 percent by the end of December 2009 from the previous quarter, to 359,241. Compared with a year earlier, the number of RMB credit cards has surged 88.98 percent while MOP cards and HK$ cards grew 5.79 and 2.36 percent respectively. The recent introduction of MOP/RMB dual currency credit cards by local banks largely accounted for the marked increase in RMB cards. By the end of December 2009, the delinquency ratio – that is the ratio of delinquent amounts overdue for more than three months to credit card receivables, was 1.18 percent. In the fourth quarter of 2009, credit card turnover rose by 14.24 percent quarterto-quarter to MOP1.84 billion. Credit card repayments, which include interest payments and fees, grew 5.21 percent from last quarter to MOP1.77 billion.

BNU profits down Banco Nacional Ultramarino (BNU) made a profit of MOP320.1 million in 2009, a year-on-year decrease of 9.65 percent. The decrease was due to lower interbank interest rates and a drop on credit demand due to the international financial crisis, a bank source told the Portuguese news agency Lusa. In 2010, BNU’s profits are expected to rise again, due to Macau’s strong economic recovery, according to the same source. BNU has a total of 14 branches in Macau and around 430 employees.

Casino tycoons get richer

Photo: Luís Almoster | MSPagency.org

Most casino tycoons with a footprint in Macau saw their wealth increase from 2009 to 2010, according to the new Forbes World’s Billionaires list.

Be our guest Improved economic conditions saw a total of 664,403 guests check into Macau’s hotels and guest-houses in January 2010, up by 26.6 percent year-onyear. The majority came from the mainland - 53.4 percent – with Hong Kong making up 19 percent. The average occupancy rate soared by 16 percentage points year-on-year to 81.6 percent, with 4-star hotels leading at 87.8 percent. The average length of stay of the guests increased by 0.1 night to 1.5 nights. At the end of January 2010, the total number of available guest rooms in the hotel sector increased by 1,548 (8.8%) year-on-year to 19,086 rooms.

CTM earnings up Macau’s biggest telecom firm’s EBITDA increased by 4.2 percent in 2009 to MOP 1,133 million, “with strong cost control more than offsetting economic pressure over revenues,’’ according to Portugal Telecom’s annual report. Portugal Telecom is one of CTM’s main shareholders, with a 28 percent stake. CTM’s revenues decreased by 0.1 percent year-on-year to MOP2,439 million in 2009, benefiting from an improved trend against a backdrop of economic recovery in the fourth quarter of 2009. In the mobile division, customers increased by 19.5 percent year-on-year reaching 525,000 by the end of 2009. In 2009, CTM’s mobile average revenue per user decreased by 26.0 percent to MOP104.3, as a result of customer growth in the period.

Consumer moans down Consumer watchdogs handled 4,875 cases last year, 41 percent fewer than in 2008. Of them, 1,236 were complaints, 3,547 were enquiries and the rest were suggestions. The Consumer Council said the number of complaints dropped by 77 percent mainly due to a decrease in collective complaint cases and consumers seeking advice prior to making purchases. Compared to 2008, complaints about telecommunication services dropped by nearly 50 percent but still marked the top category with 133. Tourist complaints made up 8.5 percent of the total. “Enquiries accounted for over 70 percent of all cases received showing that consumers are attaching more importance to consumer rights and seek advice more often,’’ the council said. Enquiries mainly focused on beauty treatment packages, prepayment consumption, home renovations and quality of electrical appliances.

Sheldon Adelson took the lead, with a stunning increase in his net worth. The Las Vegas Sands chairman and CEO is now the world’s 73rd richest man, with an estimated fortune of US$9.3 billion (MOP74.3 billion). In 2009, he stood in 178th position, with US$3.4 billion Australian James Packer, Melco Crown’s cochairman, is ranked 258th, with an estimated fortune of US$3.5 billion. In 2009, he was 261st, with US$2.5 billion. Kirk Kerkorian, MGM Mirage founder and major investor, saw his fortune drop from US$5.0 billion in 2009 to US$3.1 billion. He fell from 98th position to the 307th spot on Forbes’ list. The magazine puts “Stanley Ho and family” in position 488, with an estimated net worth of US$2 billion. A year before, Ho was number 701 on the list, with a fortune of US$1 billion. April 2010

Profits up at CEM

Photo: Luís Almoster | MSPagency.org

Companhia de Electricidade de Macau – CEM, Macau’s only electricity utility, has posted net profits of MOP520 million for last year, a 3 percent year-on-year increase. 2009 results show that total gross consumption reached 3,654 GWh, an increase of about 5 percent compared to the previous year. “Lower fuel oil prices enabled production costs at the Coloane power plant to become very competitive and hence local generation volume has increased by more than 22 perent compared to 2008,’’ the company said. CEM also executed several investment projects mainly in transmission and distribution to cope with the rapid economic development of Macau. The total investment in these was MOP806 million in 2009, an increase of 14 percent compared to 2008.

Macau equals quality Macau has been ranked 7th in a league table of places in Asia which offer the best living environment for Asian expatriates. The latest Location Ratings for expatriate living conditions published by ECA International

placed the city 57th in the world. Globally, Singapore continues to offer the best living environment for Asian expatriates, according to this research - the 11th year in a row the Lion City has held pole position. The ratings are based on the analysis of 400 locations

globally based on categories including climate, health services, housing and utilities, isolation, social network and leisure facilities, infrastructure, personal safety, political tensions and air quality. “Singapore’s high quality infrastructure and health facilities,

Gaming workers earn less In December 2009 the average earnings - excluding bonuses and allowances - for full-time employees in the gaming industry dropped by 3.4 percent year-on-year to MOP15,100. The average earnings for dealers fell by 4.9 percent compared to December 2008 to MOP 13,270, and those for count clerks, cage cashiers, pit bosses, casino floorpersons, betting service operators, and others stood at MOP18,400, down by 5.7 percent, according to the latest Statistics and Census Service’s Survey on Manpower Needs and Wages of the Gaming Sector. The average earnings for casino and slot machine attendants, security guards, and surveillance room operators, for example registered a year-on-year increase of 4.7 percent to MOP 10,060. The survey excluded junket promoters and junket associates. At the end of 2009, the gaming sector had 44,020 employees, up slightly by 0.4 percent year-on-year - 18,274 were dealers, up slightly by 0.4 percent year-on-year and 12,040 were hard and soft count clerks, cage cashiers, pit bosses, casino floorpersons, betting service operators, and others up by 1.4 percent. Employee turnover rate and recruitment rate in the gaming sector were 4.1 percent and 4.9 percent respectively in the fourth quarter of 2009.

April 2010

Sinosky ups investment Sinosky Energy (Holdings) Co. Ltd will increase investment in Macau. Company chairman Chang Kuo Tien said they will pump MOP12 billion into land reclamation works 60 kilometres off Coloane to build a liquefied natural gas storage plant. The project is awaiting approval from the Macau and Beijing authorities and will take three to four years to complete. Chang added that Sinosky will also sign an agreement with the mainland to directly extract natural gas from the gas field. Sinosky Energy suffered losses of MOP9.2 million in 2009, leading to accumulated losses of over MOP21 million. Sinosky Energy is a joint venture between Macau Natural Gas Co. Ltd and China Petroleum and Chemical Corporation (SINOPEC). It was granted the monopoly to import and transmit natural gas to Macau in 2006.

Gaming electricity shock The consumption of electricity by the gaming sector surged by 78.2 percent to 1,046 million kWh in 2009. Macau’s overall consumption of electricity increased by 4.6 percent year-on-year to 3,463 million kWh, according to official data. In 2009, generation of electricity increased by 21.1 percent, to 1,466 million kWh, whereas imports of electricity went down by 3.6 percent, to 2,227 million kWh. Consumption of gasoline rose by 8.5 percent year-on-year, to 68.93 million litres.

combined with low health risks, air pollution, crime rates and a cosmopolitan population help make the city an easy place for people to live in,” said Lee Quane, Regional Director, Asia, ECA International. Hong Kong was ranked 8th in the world and 5th in Asia. Shanghai

tops the list of mainland Chinese locations in the survey – it was classified 77th in the world and 12th in Asia. Baghdad (254) remains the least favourable location to live in, followed by Kabul (253) and Karachi (252).

Profits shrink for builder China State Construction International’s net profit for last year increased 25.2 percent from 2008 to HK$612 million. However, the Macau business dropped 15.7 percent to HK$224.6 million, reported The Standard. The company saw Hong Kong and mainland construction business posting increases of 89.9 percent and 41.1 percent, respectively, to HK$257.3 million and HK$379 million. China State Construction International posted losses for its construction business in the UAE and India, but the company said it is expecting growth in the future in those markets.

Casino tycoons get richer

Steve Wynn is at 616th with a net worth of US$1.6 billion. In 2009, he was the 468th richest man on the planet, with a fortune of US$1.5 billion. However, following his divorce, he handed out a big chunk of his wealth to his former wife, Elaine. Lui Che-woo, Galaxy’s president, closes the ranking regarding Macau’s gaming tycoons. He returned to he list after being absent in 2009, ranking 721st with a fortune of US$1.4 billion. Mexican tycoon Carlos Slim Helu is the new world’s richest man, according to the list, with an estimated fortune of US$53.5 billion, up $18.5 billion in 12 months. Carlos Slim Helu took the lead spot from Bill Gates (now worth US$53 billion), who was second, followed by investor Warren Buffett (US$47 billion).

April 2010

Jobless rate goes south

Zero tolerance O

fficials have laid down a hard line on non-resident worker quota fraud in the wake of a major police investigation.Â A review is to be carried out into all requests to hire non-resident workers and a blacklist of companies who violate the imported labour quota regime to be set up. Secretary for the Economy and Finances, Francis Tam was reacting to a fraud case exposed some weeks ago by the judiciary police which allegedly involves more than 100 companies. â&#x20AC;&#x153;The government will confer more importance to the events that have recently come to light pertaining to the falsification of documents by certain companies to enable them to hire non-resident workers,â&#x20AC;? said Tam. In the last plenary meeting of the Legislative Assembly, New

April 2010

Democratic Macau Association legislator Au Kam San, said the Commission Against Corruption should investigate the alleged fraud. The alleged racket involves a group creating ghost companies to obtain imported labour quotas to be sold on to mainland residents for more than MOP30,000. Tam insisted the government will never tolerate the illegal use of imported labour resources and said he had already notified the Human Resources Bureau and the Labour Affairs Services Bureau, demanding a more thorough evaluation of the hiring requests. The Secretary also said a thorough investigation of any suspect cases will be implemented in future, and, if any cases of false declarations or illegal use of non-resident workers are found, those involved will be placed on a blacklist.

The unemployment rate in Macau between December 2009 - February 2010 was 2.9 percent, down by 0.1 percentage point over the previous period of November 2009 to January 2010. The underemployment rate was 1.8 percent, up by 0.1 percentage point, official data reveals. In December 2009 - February 2010, number of the unemployed decreased by about 300 from the previous period to 9,200, with 8.6 percent being fresh labour force entrants searching for their first job. The total labour force was 322,000 and the labour force participation rate stood at 71 percent, with the employed population increasing by 1,300 over the previous period to 313,000. Employment of the retail trade increased from the previous period, while that of the restaurants and similar activities registered a decrease.

Still cutting back Almost 500 imported workers were sacked in January, according to official data. At the end of January 2010, there were 74,429 imported workers working in Macau, a 17.5 percent year-on-year drop, according to the Labour Affairs Bureau. The majority of imported workers in Macau came from the mainland (41,264), followed by The Philippines (10,817) and Vietnam (6,591). The hospitality and food and beverage sectors employed the most (16,166). Domestic workers were the second biggest group (14.367).

Keith Morrison Author and educationist - kmorrison.iium@gmail.com

A silent obsession Macau is addicted to noise and something needs to be done about the pushers In 1955 the Nobel laureate Heinrich Böll wrote a delightful satire on self-obsessed radio personalities, in which a radio technician splices together into a single tape the silences created when interviewees pause for breath. Ironically, his collective recording only lasts for three minutes; as he says, ‘people aren’t silent very often’. Silence can indicate all sorts of things: surrender, downtrodden obedience, despair, or maintenance of selfrespect. Silence – the refusal to speak – can bring trouble: in military circles it is ‘dumb insolence’; in law courts it is ‘mute of malice’. Both are punishable. There is the silence of the abuse of power: bosses in Macau fire people without giving reasons or feeling answerable to anyone. They simply keep silent. Accountability? Where? Silence is powerful yet dangerous. The Englishman Thomas More was executed for keeping silent about King Henry VIII’s affairs of state, marriage and religion. His judges were unswayed by the legal maxim ‘qui tacet consentire’: silence gives consent. Silence, in withholding consent and refusing to speak out – ‘a most eloquent silence’ – lost him his head. Silence speaks. On the other hand, silence is very positive. As Lao Tzu wrote: ‘silence is a source of great strength’. We need silence. Mahler and Brahms needed a silent forest hut, and Britten a garden hut, to compose monumental music. Monks and mystics practise silent meditation. Libraries have a rule of silence. For young lovers and long-standing partners, silence is natural. Silence, creativity and wisdom are close allies. Silence creates the necessary space for thinking. Why does Macau have few, if any, great artists, writers, musicians, or thinkers? Why do so many expatriates, used to silence, leave Macau? Maybe it’s because they have no silent, creative spaces. Silence is restorative, creative, golden. Consider, then, the headbattering, inescapable and oppressive noise all over Macau. Is there anywhere in Macau that is really silent? I don’t mean ‘quiet’; I mean ‘silent’.

I am sick of hearing outdoor construction work bashing, banging, squeaking and cranking seven days a week until late into the night, whether it is legal or not. Is there anywhere in Macau where one can sit or sleep without hearing traffic? Is there any shop or shopping mall that does not have piped muzak, or anywhere that is free of noise from people, vehicles, phones, homes, machinery and commerce? Macau’s Environmental Protection Bureau received over 4,000 noise complaints in 2008. In Macau we have the surreal incongruity of gondoliers singing gloriously whilst surrounded by yelling tourists. We hear tour guides using microphones so loudly on coaches that passers-by can follow the commentary clearly. We see teachers using deafening microphones in small classrooms. No wonder the students don’t learn how to listen, as the noise is intolerable; it washes over them. We herald the opening of public events with blaring sound systems. Taxis blast their horns if they have to wait a nano-second at road junctions. We have a public reading room assaulted by traffic noise. We have people walking arm-in-arm and yet shouting to each other as though they live on the other side of the world. Macau is addicted to noise. There is no escape. The city is a noise pusher. I am fed up with hospitals, surgeries and offices with television noise. I will not go to restaurants where televisions compete for the loudest noise with customers shouting conversations at each other. Whether or not talking loudly is a local cultural phenomenon that I should respect is irrelevant; my ears can’t take it. I would rather plunge into a lake of molten phosphorus than be forced to hear people shouting into cell phones in lifts, ferries, shops, restaurants, public offices, on buses and on city streets. I would happily, calmly and with great relish, strangle them. I would love to know of a restaurant in Macau where I can have a meal with no ambient noise, no traffic noise, no construction noise, where music players, cell phones and electronic games have to be switched off or handed in on arrival, where there is no television or piped music, and where staff will remind you to lower your voice or leave. And what is happening from Macau’s government and businesses to reduce the dreadful noise pollution? Ironically, almost total silence; the promise of a tiny piece of noise legislation in a year’s time doesn’t hold out much. Ethical business in Macau must contribute to environmental improvement. April 2010

US points finger Macau generally respects human rights but some problems remain, according to the latest US State Department Human Rights report. The 2009 Human Rights Report says: “(There are) most notably limits on citizens’ ability to change their government, reports of official corruption, and trafficking in persons.’’ It identifies Macau as a transit and destination point for women trafficked for the purposes of commercial sexual exploitation. The report adds that “the need to translate laws and judgments into both Chinese and Portuguese and a shortage of local bilingual lawyers and magistrates”, besides a “severe shortage of judges” are hampering the development of the local legal system. The document also says that, last year, the police prevented “the entry of several persons who sought to participate in peaceful political activities, as well as persons participating in academic exchanges or journalism”, mostly from Hong Kong.

Doing the laundry The latest United States report on money laundering ranks Macau as one of the countries or territories of “primary concern”. A total of 60 countries or territories are in the same category, including Hong Kong, mainland China, Taiwan, Cayman Islands, Switzerland, Russia… and the United States. According to the 2010 edition of the “International Narcotics Control Strategy Report”, published by US State Department, “because of the large gaming sector patron flows from abroad, Macau could be used as a hub to launder and remit criminal proceeds.” The report adds that the primary source for money laundering in Macau “are financial fraud and illegal gambling. Criminal networks spanning across Macau’s border with mainland China account for much of the criminal activity,’’ the document says. The US State Department notes that “Macau has made considerable efforts” to tackle money laundering, but says it “still needs to make further improvements”. Among the suggestions presented are the enhancement of the ability to implement and enforce existing laws, especially in the in the gaming industry, “including appropriate oversight of VIP rooms and junket operators.”

April 2010

Macau less corrupt Macau is perceived as less corrupt, a poll of businessmen says. The survey result followings attempts by the government to clean up the territory and boost the powers of anti-graft busters. The annual poll by the Political and Economic Risk Consultancy (PERC), made available to AFP, put Macau economy in 6th position in a table of regional economies with a score of 4.96 out of the worst possible 10. In 2009, Macau was ranked 7th, with a score of 5.84. Indonesia remains the most corrupt country in Southeast Asia and graft is getting even worse. Indonesia also came last in 2009. Singapore remained top of the list with a score of 1.42, while Australia was second with 2.28 and Hong Kong third on 2.67. Hong Kong slipped a place from a year ago, with PERC saying questionable tactics by property developers likely dragged the territory’s score down. The United States - included for comparison purposes - was fourth with a score of 3.42, followed by Japan (3.49), Macau (4.96), South Korea (5.98), Taiwan (6.28), Malaysia (6.47) and China (6.52). PERC’s poll was conducted from December to February, and involved 2,147 mid-level and senior Asian and expatriate business executives.

Peer tax transparency The international fight against cross-border tax evasion has entered a new phase with the launch of the OECD Global Forum on Transparency and Exchange of Information for Tax Purposes of a peer review process. Macau’s review is scheduled for the first half of 2011. The process will cover 15 jurisdictions in 2010: Australia, Barbados, Bermuda, Botswana, Canada, Cayman Islands, Denmark, Germany, India, Ireland, Jamaica, Jersey, Mauritius, Monaco, Norway, Panama, Qatar, and Trinidad & Tobago. The reviews are a first step in a three-year process approved in February by the Global Forum. Mike Rawstron, chair of the Global Forum, said: “This is the most comprehensive, in-depth review on international tax co-operation ever.” The Global Forum brings together 91 countries and territories, including OECD and nonOECD countries.

Ao Man Long case reaches Hong Kong Two former directors of Hong Kong-based Swire SITA Waste Services are accused of bribing Macau’s former Secretary for Transport and Public Works, Ao Man Long. They are accused of handing bribes to Ao amounting to MOP29 million, the South China Morning Post reported. The case was brought to justice by the Independent Commission Against Corruption. Lionel John Krieger, 62, and James Tam Ping-Cheong, 56, have been jointly charged of conspiring to offer advantages and are scheduled to appear in the District Court on April 9. They appeared in court last month and were released on a bail of HK$500,000 each. The offences allegedly took place from January 2002 to December 2006 in Hong Kong, involving Companhia de Sistemas de Residuos (CRS), a Macau-based waste services company, of which Swire SITA Waste Services is an 80 percent shareholder. The duo is accused of conspiring with a CRS executive, Frederico Nolasco da Silva, to bribe Ao to help the company to get or renew public contracts. Ao Man Long was arrested in December 2006 and is currently serving a sentence of 28 and a half years on multiple counts of bribe-taking and money laundering, among other crimes.

More rules The Monetary Authority of Macau (AMCM) is preparing a set of guidelines on sale and offer of financial products. Monetary Authority of Macau chairman Anselmo Teng said: “We hope that it can be implemented as soon as possible this year.” After a solid year of endeavour and coordination, the Macau distributor institutions of Lehman minibonds have proactively proposed a repurchase arrangement, under which 99 percent of the affected investors have come to terms with the distributors,’’ Teng said. Meanwhile, the temporary measure adopted by the government at to provide full cover for all deposits will expire at the end of this year. “AMCM is proactively consulting market participants about a subsequent arrangement. We hope to arrive at a solution satisfactory to all parties concerned,’’ Teng said.

April 2010

Case of the Month

Crash landing At a time when the global airline industry doesn’t have to look for trouble, the focus has turned to Macau and the fall of budget airline Viva Macau. Claims and counter claims have been voiced over unpaid fuel bills and hundreds of millions in government money pumped into the stricken airline. The only sure thing is that they won’t be flying again any time soon by Kahon Chan

roubled low-cost airline Viva Macau has taken a nosedive in spectacular fashion, and there looks to be little possibility of a comeback despite what company executives say. The withdrawl of the airline’s subconcession agreement – effectively grounding the airline and leaving thousands of passengers stranded - came about according to Chan Weng Hong, the head of the Macau Civil Aviation Authority (MCAA), because Viva Macau was “extremely uncooperative”, “irresponsible” and “disloyal”, forcing the MCAA’s hand. The request to annul the sub-concession agreement was accepted by Air China and it served as the basis for the MCAA’s decision to terminate Viva Macau’s air operator certificate.

Fraudulent tickets

Chan said any tickets sold after that point would be considered fraudulent. April 2010

On March 28, Chan denied that the MCAA was to slow to act, when a day earlier he said that Viva’s closure was a “business decision”. “After all, we’re talking about a private company and the government has to provide us access to act. In the beginning, we believed that we should offer our help, since we sought a solution together, but even after we activated the Tourism Crisis Management Bureau (TCMB) mechanism, they were not willing to coordinate passengers or provide us any information,’’ he said. “We were forced to take this decision

as there was no other option available”. Viva Macau’s webpage was operating even after the company had lost its certification. Company president, Ngan In leng, was unreachable throughout D-Day on March 28. Telephone contact was made, but his phone was answered by his personal secretary who replied that Ngan was away on business in a confidential destination.

Silence broken

The company made no statement on the situation from March 27, when the fuel

A decorated man V

iva Macau’s president Ngan In Leng returned to Macau and into the eye of a storm on the afternoon of March 29. Ngan is the vice-president of the Chinese People Political Consultant Conference National Commission Economic Committee and he also received the Silver Lotus Medal in 2007 awarded by the Macau government. He has presided over Viva Macau since December 2005. Since December 2009, the company’s executive director has been Ho King Lung.

29 supply was cut, until the silence was broken on March 30 with a press release. In it Viva Macau thanked passengers for their patience and tolerance and gave information on getting refunds for 1,642 people whose flights were lost due to the chaos. It said its customers always come first, and, tellingly, that the company was “working to reinstate operations in the fastest possible timeframe’’.

Stranded passengers

João Manuel Costa Antunes, the coordinator of the TCMB, said that the bureau was still operating within the annual budget allocated for events such as helping stranded passengers, but he was unable to provide any numbers. However, he said that he believed the government would provide all the necessary funds. Government vice-spokesperson Victor Chan said they were still studying the possibility of suing sue Viva Macau in order to recuperate the money being spent because of the transporter.

Unfolding drama

The drama began to unfold on March 26, when the Macau fuel supplier refused to provide any services to Viva Macau due to the non-payment of bills. This caused the cancellation of scheduled flights to Tokyo and Jakarta during the same day. Those two flights, along with one more to Ho Chi Minh on the morning of March 27, went ahead with the government footing the bill, but two others scheduled for March 27 as well as five others scheduled for March 28 were cancelled prior to the MCAA’s decision to rescind the company’s license to operate. Despite blanket media coverage in Macau and Hong Kong, hundreds of passengers showed up at the airport to embark on the cancelled flights and the Tourism Bureau opened an assistance desk at 7pm on March 28.

Unpaid bills since 2008

Choi Kin, general manager of Nam Kwong Natural Gas, said that, since 2008 – when Viva was still receiving government aid - the company had been providing support to Viva Macau “against any commercial logic” on behalf of Macau’s reputation in the tourism world and to protect the public interest.

Details of the MOP200 million loan were made public, in January this year, revealing the financial difficulties that had been troubling Viva Macau since mid-2008

The carrier continued to violate the terms of the fuel supply agreement and supply stopped on March 26. Nam Kwong is still waiting for Viva Macau to settle all outstanding invoices, but Choi Kin provided no further details. According to the TCMB, 41 local residents stranded in Tokyo returned home during the afternoon of March 28 onboard Air Macau’s first flight, while 25 and 31 passengers were re-routed to alternative flights to Sydney and Hanoi, respectively. The bureau received 206 requests of assistance from 7pm on March 28 and some of these included more than one person. The help hotline received 349 calls from 6pm March 28 and transit visas were extended by 15 days and 30 days respectively for PRC passport holders and other passports.

Another Oasis?

The end of Viva Macau, while still not confirmed by the company, takes us back to the collapse of Oasis Hong Kong in May 2008. Like the vast majority of airlines that went under in that year, when fuel prices skyrocketed, Oasis stopped operating and issued a surprising statement in May 2008, thus initiating bankruptcy procedures. The operations certificate was cancelled by the Hong Kong authorities a month after the actual termination of operations and only after the search for a new investor failed.

Cracks emerge

Viva Macau was founded in 2005 by a group of foreign and local investors to operate medium haul flights, with the first flight, to Jakarta, in December 2006. It seemed to have comfortably survived the 2008 crisis, but the cracks slowly emerged in 2009, when legislator Au Kam San revealed that the company had obtained a loan in July the same year. Details of the MOP200 million loan were made public, in January this year, revealing the financial difficulties that had been troubling Viva Macau since mid-2008. No signs of collapse were evident, for example even as late as March 25 the company was issuing statements promoting its newly renovated website. April 2010

Case of the Month

Airport traffic to grow CAM-Macau International Airport Company Limited has forecasted that Macau International Airport will handle 4.35 million passengers in 2010, 55, 000 tonnes of cargo and deal with 43,500 aircraft movements. Last year, the airport had 4.25 million passengers, cargo volume of 52,400 tonnes and 40,601 aircraft movements. Since the beginning of the year until March 10, the airport handled 818,647 passengers and 9,387 tons of cargo, up 9 percent and 37 percent respectively compared to the same period of last year, while recording 7,357 aircraft movements. An increase was seen in the seat factor with 73 percent, up a 10 percent compared to same period of last year, while this spring holidays has a seat factor of 76 percent, with a 7 percent increase. Meanwhile, a report published in February by the Centre for Asia Pacific Aviation (CAPA) said: “Macau, one of Asia’s potential high growth aviation markets, is in need of a shake-up, having struggled since 2007 under a strategic, political and operational stalemate.’’ According to the report, North Asian aviation’s year of radical transformation in 2010 could provide a trigger for a renewal of Macau’s prospects. But, it adds, the city’s aviation sector risks lagging behind with changes ahead in Japan, Korea and China. CAPA says Air Macau is underutilising its considerable route portfolio and restricting Viva Macau’s growth.

Take off for Air Macau Recovery is on the way for Air Macau, says the company’s chief executive officer, Zhao Xiaohang. Zhao says “good profits” were made last year, but he declined to give figures. He said 2009 was a year of “improvement and recovery”, adding that the airline had implemented changes in the way it operates. Air Macau launched three flights a week between Macau and Tokyo last month. Japan is one of the markets ear-marked by the company.

April 2010

Not plane sailing Passengers flood stricken airline for refunds as aviation watchdogs and Viva executives remain at loggerheads

n the evening of March 29, the Macau Civil Aviation Authority (MCAA) was passed information that leading global leasing company AWAS - one of Viva Macau’s main aircraft suppliers - had scrapped the contract with the airline. The leasing outfit had requested the end of the local registration of two Boeing 767-300 that flew with Viva Macau’s colors, and two weeks before the whole fuel episode, Viva Macau had already lost one 767-200. All PR efforts from the company, including the statement made on March 29, seemed to crumble.

No take-off

Reg Macdonald, the company’s executive director, read the first open statement from Viva after its planes were prevented from taking off on the afternoon of March 26. In order to guarantee the fuel supply for that day – already cut by Nam Kwong - the air carrier declared that the company had paid the fuel costs for “all weekend flights” and waved its shareholders credit guarantees in front

of Nam Kwong, but negotiations still failed.

Surprise and denial

Macdonald said Viva Macau was deeply surprised to learn that its AOC (Air Operator Certificate) had been revoked without prior warning. A company statement went on: “Viva Macau is eager to communicate with all involved parties, as soon as possible, in order to solve the problem and continue our mission to bring the world to Macau”. Any plan to rapidly resume operations was promptly denied by the MCAA. Viva Macau would have to negotiate a new sub-concession contract with Air Macau and wait for the government’s approval before applying for a new AOC.

Quality assurances

Viva Macau’s technical quality evaluation will take much longer and the MCAA believes that, even if Viva tries to re-initiate flights, it won’t be possible in the near future. In response to Viva’s “profound surprise”, the MCAA re-affirmed that the AOC was legally revoked.

Loans battle looms

Viva Macau strikes back as government seeks its money back

eeply-troubled low-cost airline Viva Macau has said the revoking of its Air Operator Certificate (AOC) by the Macau Civil Aviation Authority (MCAA) is unprecedented. But the Secretary for Economy and Finance Francis Tam insists the move was lawful and correct and has demanded that the company pay back MOP40 million in official loans by July 2010, and a remaining MOP200 million by the end of 2011. If the deadlines aren’t met, says Tam, legal action will ensue.

Special support

Tam also says the government is not in the business of giving loans to private companies, which effectively is what Viva Macau has become as a result of

losing the sub-concession of Air Macau. Viva Macau enjoyed special support from the government to keep the existing flight network on track and to prevent suffering within the Macau civil aviation industry. The loans were given on five different occasions between October 2008 and December 2009 and, according to the secretary, they have nothing to do with funds that were earlier made available by the MCAA.

Viva Macau challenges government

Troubled airline Viva Macau is planning legal action against the Macau government over the revocation of its air operator certificate.

Viva says the government’s decision came just as the company was preparing to close a multi-million deal with a foreign investor. “We were supposed to sign the third contract with a foreign investor on Monday [March 29], and in three weeks we would have had [access] to 156 aircraft and US$30 million [MOP$240 million] of capital coming,” the airline’s founder and president Ngan In Leng said. “The government knew it, and yet it killed us on Sunday [March 28].” Now, Viva Macau is claiming from the government the MOP600 million injected in to the airline by its shareholders, plus loss of income and compensation for damage to the firm’s good name.

April 2010

Finance

he number of personal credit cards in circulation in Macau was 359,241 at the end of December 2009, and the 16,069 Renminbi (RMB) cards made up only 4.47 percent of the total. However, compared with a year earlier, the number of RMB cards has surged 88.98 percent, according to the latest report from the Monetary Authority of Macau (AMCM). The availability of RMB credit cards - as well as being able to open RMB accounts - is a consequence of the liberalisation of the banking sector following the agreement of Closer Economic Partnership Arrangement signed in 2003. “It is also regarded as an experiment to see how the markets respond to business being made more and more in RMB, from transactions between companies, to services and products provided by local institutions,” said a source from the exchange department of a local bank. “Even though the RMB credit card is a new product to the local market, no one was expecting the demand for such rapid growth,” a source close to the banking supervision body of Macau told Macau Business. The high demand is being seen as a sign of growing integration across the Pearl River Delta. “RMB is being widely accepted in Macau and Hong Kong. Since the liberalisation of RMB products, there has been a high demand for accounts and now credit cards,” he added.

Clamour for cards Demand for new Renminbi credit cards is growing faster than expected and local banks seem fascinated with the fresh business opportunity by Tiago Azevedo

Numerous benefits

As with any new product, RMB credit cards are moving from the introduction stage to the growth stage of the product life cycle. “It is new to market and has very successfully captured the attention and awareness of the customers in a comparatively short period of time, for a number of reasons,” said the communication department of Bank of China, Macau Branch. Factors contributing to the surge include the convenience of shopping with RMB credit cards in the mainland, especially without the hassle of carrying a lot of RMB bank notes around, and avoiding counterfeit bank notes. The growing number of frequent travellers between Macau and the mainland, the rising number of Macau resiApril 2010

dents residing in Zhuhai and the increasing number of RMB card issuers are all factors. “The recent introduction of MOP/ RMB dual currency credit cards by local banks largely accounted for the marked increase of RMB cards,” points out the AMCM. “This product is more convenient and the demand will continue to rise in the future,” predicts KT Lock, manager of the HSBC Credit Card Centre. All the sources we spoke to say that by using an RMB credit card in the mainland, Macau residents don’t need to be worried with the higher currency exchange rates and the handling fees normally charged by card

issuers for non-local transactions. “This is made possible because RMB credit cards are settled by the China UnionPay (CUP) network, which does not apply charges or handling fees for spending worldwide,” says the Bank of China (BOC). Also, the dual currency card offers a new mode for two-currency handling. The Bank of China product, as the first ever dual currency credit card in Macau, comprises both a MOP account and an RMB account. “Spending in Macau and overseas will be settled in MOP, whereas spending in the mainland will be settled in RMB. “Other than the fact that UnionPay

Photo: Luís Almoster | MSPagency.org

applies no exchange mark ups or handling fees on each transaction, preferential exchange rates will be used for cross border transactions with currencies other than MOP and RMB,” says the BOC.

Healthy competition

Due to the rapid expansion and great potential of RMB business, the demand for RMB cards should be anticipated to be high compared to other card networks. “Residents now have other options to choose from when they make their payments and growth will continue as travel and business become more popular between Macau and the mainland,” points out the source close to the regulatory body.

Given that more and more Macau residents are applying for and holding RMB credit cards, many domestic commercial banks see large business opportunities. This has seen local institutions prepare to battle for a bigger share in the Macau RMB credit card market. “For the moment, there are not many banks providing RMB credit cards, but the interest is there and more and more banks are going to follow that path,” says the source close to the government. “Marketing departments will develop fierce campaigns but in the end it will be healthy for the banking sector. There won’t be cut-throat competition,” he adds.

For the BOC, the competition experienced in Hong Kong is actually happening in Macau. “Though it is true that the market size of Macau is not comparable with that of Hong Kong, the demand for the product is not negligible. “Local banks therefore are highly initiated to develop and issue RMB card products in the future,” says the BOC. Other banks seem to be paying attention to the figures released by the AMCM and the offer of RMB credit cards will come as a natural move. “We can see that there is a high demand for this product and local institutions appear to all be interested in offering it to their clients,” adds KT Lock. April 2010

Yu Yongding currently President of China Society of World Economics, is a former member of the monetary policy committee of the Peoples’ Bank of China, and a former Director of the Chinese Academy of Sciences Institute of World Economics and Politics

China’s bad debtor Before the global financial crisis hit, critics of China’s economic imbalances – its twin fiscal and trade surpluses – mainly concentrated on the misallocation of resources that occurs when poor countries borrow from rich countries at high interest rates and lend the money to them at low interest rates. The great irony of the financial crisis is that the situation has become worse, not better. China’s foreign-exchange reserves, indeed, are facing a triple whammy: a decline in the US dollar’s purchasing power, a fall in the prices of US government securities, and possible inflation in the longer run. The bulk of China’s $2.3 trillion in foreign reserves are held not for the purpose of protection against negative external shocks, but as savings in the form of US Treasury notes. China thus needs to preserve the value of its savings. But there is no question whatsoever that the US dollar will go south in the long run – a depreciation that started in April 2002 and, after a short interval, resumed in March 2009. Unless the US economy improves its trade balance, the dollar will fall. But the US cannot improve its trade balance unless the dollar falls. Measured by the dollar index, therefore, capital losses on China’s foreign exchange reserves are inevitable. Due to the huge US budget deficit, the supply of American government bonds will increase astronomically in the years ahead. But there is no guarantee that demand for these Treasury notes among foreign investors – including

Despite China’s limited room for maneuver with regard to its stocks of foreign-exchange reserves, it should never give up its efforts to safeguard the value of its hard-earned wealth, which has been entrusted to the good will and supposedly responsible hands of the US government. As the stronger and more experienced party, the US can help to allay China’s fears about the safety of its national savings foreign governments – will be sufficient. So it is very likely that when the global economy has returned to a sort of normality and safe-haven demand has declined, the prices of US government securities will fall and their yields will rise. As a result, China’s dollar-denominated foreign-exchange reserves, which account for the largest share of all the foreign holdings of US government securities, will suffer interest-rate losses. Moreover, the US Federal Reserve is targeting a 4% annual inflation rate. This alone means that under normal circumstances the purchasing power of China’s April 2010

foreign-exchange reserves will automatically depreciate by 4% each year. Due to the extremely expansive US monetary policy that has been in place since the sub-prime crisis began two years ago, the real value of China’s foreign-exchange reserves has already been eroded, with or without inflation. China is like the shareholders of a company that has increased the supply of its shares in a stealthy way: the share price may not have fallen yet, but it will. Unless the Fed successfully implements an exit strategy from monetary expansion, which is doubtful, China will not be able to recover its losses. A less likely but more damaging scenario is that all the money dropped on the economy by US Federal Reserve Chairman Ben Bernanke will eventually stoke a bout of serious inflation. If this nightmare comes true, China’s packed savings in the form of US government securities (which now amounts to some $900 million in Treasury bills alone) will simply go down the drain. Despite China’s limited room for maneuver with regard to its stocks of foreign-exchange reserves, it should never give up its efforts to safeguard the value of its hard-earned wealth, which has been entrusted to the good will and supposedly responsible hands of the US government. As the stronger and more experienced party, the US can help to allay China’s fears about the safety of its national savings. For example, the US government should offer more financial instruments like Treasury Inflation-Protected Securities (TIPS), thereby allowing China to convert some of its holdings of US government securities into similar but safer assets. Furthermore, China should be allowed to convert part of its foreign-exchange reserves into assets denominated in the International Monetary Fund’s special drawing rights (SDRs). Of course, China should not rule out the possibility of adjusting the composition of its foreign-exchange reserves to mimic the composition of the SDR. Finally, if the US government cannot safeguard the value its securities, it should compensate China in one way or another. Only then can China and the world be certain that America’s irresponsible attitude – “the dollar is our currency, but your problem” – has become a thing of the past.

Economic Trends by José I. Duarte

GDP current Consumption Investment

Economic Activity

Government Trade balance: goods Trade balance: services GDP constant (2002)

Money and prices January (in MOP) February (in MOP) Credit (in MOP) Deposits (in MOP) IPC/Inflation rate AMCM base rate

2008 (in MOP)

169,343 41,601 31,580 13,739 - 39,274 121,695 169,342

million million million million million million million

2008

24,727

189,785 million (2008) 92,802 million (2008) 185,385 million (2008) 101.40 base - 2008 0.50 % (2008)

Labour force Median wage rate Unemployment

Construction

2008

549,200 337,000 8,000 3.0 %

(2008) (2008) MOP (2008) (2008)

2007

228,874 1,406,242 Cement (Apparent consumption) 276,710 Transactions/Commercial 2,976 Transaction/Residential 21,517 Started

Major sectors

Finished

Gaming

Gross revenue (in MOP) Casinos Tables Machines

Tourism Visitors Average expenditure Average stay Hotel rooms Occupation rate Average Hotel stay

m2 m2 tons million million

2007

120,383 31 4,017 11,856

- 2.4 5.7 - 39.0 12.6 - 5.1 9.1 - 2.4 % var

million (2008)

Population/Labour force Population

% var

million (2008) (2008) (2008)

2007

9.4 (2008) 2.3 (2008) 27.4 (2008) 2.1 (2008) 1.16 -% var

2.1 (2008)

4.2 (2008) 2.5 (2008) - 0.1 (2008) % var

- 57.4 40.7 - 56.9 - 1.9 - 27.7

% var

9.6 3 (2008) - 8.2 (2008) - 10.6 (2008) % var

Latest (in MOP)

48,918 10,796 8,230 4,870 - 11,509 36,531 48,918

million million million million million million million

Latest

30,608 million 212,153 million 101,061 million 207,246 million 102.14 base - 2005 0.50 % Latest

542,200 322,200 9,000

MOP

2.9 %

Latest

30,553 28,826 18,736 597 3,140

m2 m2 tons million million

Latest

14,048 33 4,770 14,363

19.4 6.9 - 34.8 12.7 5.5 4.7 19.4

Latest

- 5.1 21,753,000 2,047,000 5.6 (2008) 1,729 MOP (2008) 1,807 MOP -1.10 days (2007) 1.10 days 8.3 (2008) 17,490 (2008) 19,216 - 2.90 (2008) 71.60 % (2008) 78.3 % 1.44 nights (2008) 0.10 (2008) 1.46 nights

Q4 Q4 Q4 Q4 Q4 Q4 Q4

Notes

% var

23.8 11.8 10.1 11.8 0.12 --

December December December December January Feb, var

Notes

% var

- 1.3 - 4.5 4.6 - 0.2

% var

77.0 66.7 5.0 1342.8 949.4 % var

million

Notes

% var

62.4 2 18.7 21.1

Q3 Q4 Q4 Dec, var

Notes January January January January January

Notes

January Q4, var, ytd Q4, ytd Q4, ytd

Notes

% var

6.8 1.0 -9.9 1.8 0.1

January Q4 Q4 November

%var - % change on homologous period; var - absolute variation; ytd - % change, year-to-date; x - discontinuous series April 2010 (*) Important note: The inflation base period has changed ( New base: April 2008 to March 2009 = 100) April 2010

Q4 Dec, var

Sources: DSEC (Direcção dos Serviços de Estátística e Censos), AMCM (Autoridade Monetária e Cambial de Macau), DICJ (Direcção de Inspecção e Coordenação de Jogos)

Output and expenditure

Economic Trends by José I. Duarte

Labour force 1

Table 1 - Employment growth

The employment and unemployment figures for the fourth quarter of 2009 are out. While the final figures for the whole year are yet to be made public, we can start gauging the effects on the labour market of the economic slowdown and the changes in the policies for imported labour.

(103)

350

Table 1

250

150 2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

For the first time since the handover we see a contraction in the total number of employed (Table 1). At its peak, on a yearly basis, in 2008, the total was 65 percent above the 2000 figure. That is a remarkable growth in just eight years, and a result that I think has no precedent, anywhere. Even after the recent reduction, the figures are still impressive: there are, at the end of the period, over 120,000 more employed workers than at the beginning. Table 2

Table 2 - Contributions to employment growth Mfg

(103)

Const

Trade

H&R

RE&Bus

Adm

Gam

Dom

Other

120 100 80 60 40 20 0

Table 3

2004 - 09

-20

Table 3 - Select sectors growth index 2000=100 (2004 for gambling)

Mfg

H&R

RE&Bus

Gam

Dom

350 300 250 200 150 100 50 0 2000

2004

April 2010

Table 2 shows the net absolute contributions of some select sectors for the overall growth. Note that the calculation uses 2004 as the base year. Since then, over 100,000 new jobs have been created. With almost 40,000 additional jobs over the period, gambling certainly dwarfs all the other sectors. Together with hotels and restaurants, these sectors account for half of all job creation. The significant contribution of construction - the third net contributor to job growth – has to be considered differently, as many of these jobs will naturally disappear with the completion of the corresponding buildings.

2009

Manufacturing stands out by losing 20,000 jobs in the same period, roughly half of the initial amount. Table 3 puts these changes in perspective. Taking 2000 as the base year (2004 for gambling), the relative growth was especially astonishing in, (you may be in for a surprise) the domestic work sector: its ranks almost tripled. Leaving construction aside, for the reasons referred to above, the clear leader is gaming, whose numbers have almost tripled in just the last five years. The other major contributors, also in relative terms, have been hospitality and real estate (here aggregated with other business services). No big surprises.

37 Labour force 2

Table 1 - Participation rate

As a result of what was said in the previous section, the labour resources of the region have become stretched.

(%)

Table 1

The participation rate for men stands at close to 78 percent of the male population and can hardly be increased. The participation rate of women has grown in just the last five years by about 12 percentage points. These are high values by international standards, for countries with high levels of income.

Table 2

50 2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

Table 2 - Employed population shares by age group 14 - 24

25 - 34

35 - 44

45 - 54

55 - 64

> 64

100% 90% 80% 70% 60% 50% 40% 30%

The age composition of the labour force is also changing, and fast. Overall figures for the employed are significantly affected by the migration flows in the last few years. But two general trends seem to be in the process of defining themselves. First, the labour force is aging. In less than a decade, the ratio of those aged below 45 to those aged over 45 went from about 3:1 to 1.7:1. The reduction of that ratio is even more pronounced in the case of the unemployed ranks. There the change has been from 3.15:1 to 1.4:1. These trends are likely to accentuate, as we are reaching the end of arrivals in the labour market resulting from the growth in births registered in the 1980’s. The number of youngsters reaching the labour market will start to decrease – something that starts to be apparent in the figures, at the end of the period – and the numbers of those reaching retirement age will increase. Table 3

20% 10% 0% 2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

Table 3 - Unemployed population shares by age group 14 - 24

25 - 34

35 - 44

45 - 54

Particular worrying is the fact that the number of unemployed over 45 has jumped from 25 to more than 40 percent of the total in the same period. The likelihood of them getting a new job decreases with time, in particular if coupled with low levels of qualifications, including here insufficient foreign language skills, which will often be the case.

55 - 64

100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

April 2010

Politics

Photos: Xinhuanet

Elevating Edmund

His climb to the top was hard-earned and relentless. Now the former chief executive is readying for a new challenge as vice-chairman of the CPPCC

he new vice-chairman of the National Committee of the Chinese People’s Political Consultative Conference (CPPCC), Edmund Ho Hau Wah, is getting his new office ready. As vice chairman of the CPPCC, Ho will have to attend quarterly meetings and travel to the mainland fairly regularly. The CPPCC provides high quality medical assistance, a secretary and a security detail. Ho’s place in China’s political elite was cemented on March 13 when he was

elected vice-chairman of the National Committee of the Chinese People’s Political Consultative Conference by majority vote from 97.3 percent of the delegates. Ho said cooperation between Macau, Hong Kong and Guangdong Province has become a strategic approach to national development. Ho is the second MSAR individual to occupy the role that Ma Man Kei, the veteran president of territory’s Commercial Association, also holds, but who due to health issues couldn’t take part in the

last CPPCC annual conference. The new CPPCC vice chairman, born in 1955, holds a bachelor’s degree in Business Administration from York University in Toronto, Canada, and is the son of one of the most influential leaders in Macau’s Chinese community in the 60s and 70s Ho Yin.

Climbing the ladder

In 1986, Edmund Ho became a member of the CPPCC National Committee, the country’s top political advisory body, and

During the Portuguese administration Edmund Ho was also vice-president of the Legislative Assembly. On December 20, 1999, Ho became the first Chief Executive of the new Macau SAR, a position he held for two terms, the maximum allowed under the local legislation April 2010

39 in 1998 the vice-chairman of the Preparatory Committee for the Macau Special Administrative region, becoming one of those responsible for penning Macau’s Basic Law. During the Portuguese administration Edmund Ho was also vicepresident of the Legislative Assembly. On December 20, 1999, Ho became the first Chief Executive of the new Macau SAR, a position he held for two terms, the maximum allowed under the local legislation.

“We are honoured”

New Chief Executive Fernando Chui Sai On says he is “honoured” by Ho’s appointment as it recognises his “outstanding contribution” to the territory. “I’m honoured, and so are all the people in Macau,” Chui said. Chui underlined Ho’s role in “building social stability and sustainable economic growth in Macau”, adding that he had ensured an high degree of autonomy for the city within the “One Country, Two Systems” framework.

Making a difference HO IAT SENG

The man once talked about as a probable successor to Edmund Ho thinks the new vice-chairman of the CPPCC will broach the issues with a national perspective, insofar as the new position is at State leader level. Ho Iat Seng believes that Ho’s knowledge of the Basic Law and the principles of “one country, two systems” may contribute, not only to the development of relations with the MSAR, but also with Taiwan. And, “since he’s still young”, he may contribute greatly to China.

CHUI SAI PENG

The legislator considers that Ho may contribute immensely towards relations with Taiwan. Chui says Macau has developed an excellent rapport with Taiwan. He also believes that while former Hong Kong Chief Executive Tung Chee Hwa can contribute to the China-USA dialogue, Ho can provide a stronger link between China and the Portuguese-speaking countries.

BAI ZHI JIAN

The Director of the MSAR Liaison Office said Ho’s experience as chief executive in the NA and the CPPCC, makes this new step “natural”. Asked about his possible role in relations between the two sides of the Taiwan Strait, Bai would only say he would be very happy if the success of the principle “one country, two systems” in Macau could be used as a reference for Taiwan.

MA MAN KEI

Speaking through his son, Ma Iao Lai, Ma Man Kei said Ho’s election as vice-chairman was very positive due to his familiarity with mainland and Macau affairs. Ma Iao Lai also said that his father’s health has been improving.

April 2010

Politics

Perks of the job Edmund Ho Hau Wah is still in the office he used during his two terms as chief executive but a new one is currently being fitted out. A one-off decision by his successor will also see Ho get a personal assistant, a private car and other perks. The decision comes as discussions get underway on a possible law regulating the perks of former top officials by Tiago Azevedo

he debate surrounding privileges for former chief executives and holders of political posts has heated up, as a law imposing restrictions on government officials when they retire is being discussed. Some legislators believe it makes sense that former high-ranking officials be entitled to some privileges

because according to a law approved last year, they are barred from working in the private sector for a year following their departure from public service.

Early stages

As far as Macau Business has been able to ascertain, the government is prepar-

Edmund Ho Hau Wah new office is a two-storey building, with a large window and partially covered by wood panels, adjacent to the former chief executiveâ&#x20AC;&#x2122;s home in D. JoĂŁo Paulino Street April 2010

ing a law to regulate the conferring of certain privileges on former holders of the SARâ&#x20AC;&#x2122;s highest posts. According to sources close to the government, the work is at a very early stage, and opinions are being gathered and reports being prepared. However, given the need to resolve

Valuable commodity

The Chief Executive Decision 75/2010, published in the Official Gazette at the end of March, praised Ho’s contribution to the SAR and recognised his experience as valuable to the community. The government said that it is in the SAR’s interests to provide Ho with the best possible conditions to continue serving Macau and the country. The support comes in the form of

Since Chui took over as chief executive, Ho has remained in the office he used when he was in the top job. It is not clear when he will move out and Chui will move in an office and support staff, a private car with driver, a security detail, health coverage and VIP protocol treatment, as well as any other associated expenses. Yet, the conditions under which these privileges will be provided will need another chief executive decision to clarify them. What is clear so far is that all expenses will come out of the Chief Executive Office budget.

Moving time

The provision of an office and other priveleges for Ho has, in fact, been an open secret for some time. According to reports, the fitting out of Ho’s new office was underway before the decision was published. The office is in a building next to Ho’s house in D. João Paulino Road, and is designed to accomodate both Ho and his assistants. Since Chui took over as chief executive, Ho has remained in the office he used when he was in the top job. It is not clear when he will move out and Chui will move in.

Therefore, the current and future holders of the chief executive post, as well as other holders of high-ranking posts, will have to wait for a law to regulate the attribution of privileges after they leave public service. Despite the fact that the new law is being discussed, nothing concrete has been decided yet. According to another source, the solution may be a simple administrative regulation from the chief executive or a law.

Different priorities

According to a source contacted by Macau Business, the decision published in the Official Gazette only applies to Ho.

Photos: Luís Almoster | MSPagency.org

Edmund Ho Hau Wah’s situation – the only member of the previous government who has left the public service recently - Chief Executive Fernando Chui Sai On has had to make a one-off decision. Chui’s decision provides the former chief executive with the logistical support neccessary to carry out his new role as vice-president of the Chinese People Political Consultive Conference (CPPCC).

April 2010

Politics

Making a new home

In his maiden policy address the chief executive stressed his commitment to supporting the underprivileged and outlined bold plans to engage with Taiwan by Sonia Nunes

big issue in Fernando Chui Sai On’s unopposed election campaign was raising people’s quality of life, and he said it would be the first issue to be tackled by the Governing Policies Guideline (LAG). His predecessor Edmund Ho HauWah’s philosophy of a harmonious society being one where people “live with tranquillity and are happily employed”, has effectively been recuperated and retouched.

Beautiful home

In an emotively penned script – albeit read in Chui’s haApril 2010

bitual monotone - the chief executive talked of a collective aspiration to “transform Macau into a beautiful home” and described it as an “unrenounceable duty” of government to help the “more fragile communities, those which have silently and continuously contributed to the city’s socio-economic development”. This means the subsidy for the elderly will be raised to MOP5,000 and the cash handout and healthcare voucher schemes will continue. It also means that public

housing takes on a particular importance, though there are still some studies to be conducted. The government’s plan to add 19,000 public housing units by 2012 has been met with some doubts from legislators – but Chui guaranteed this committment will be met. “In the present year, and in the near future, the government will focus its attention and prioritise the construction of public housing,” he said. He went on to outline a planned “scientific evaluation” of the housing needs - demographic evolution available land triangle, to determine the actual number of public housing units needed.

Waiting lists

Other government intentions include the prioritisation of the situation of the candidates who have been on the waiting list for many years. Details on how they will do this are sketchy, but what is known is that a consultative committee will be established to address the matter, and the work of the Housing Institute will be amplified. The chief executive reiterated that part of the new landfills will be put aside for building public housing and that the residency for investment scheme will stop: “I will talk slowly, please write this plainly,” he told a post policy address press conference: “The government never said it would re-launch this policy.”

Domestic violence

On social affairs there are plans to create more kindergartens in Fai Chi Kei, Nape and Taipa as part of a strategy to tackle domestic violence and promote the protection of the rights of women and children. Overall social work serv-

Subsidy for the elderly will be raised to MOP5,000 and the cash handout and healthcare voucher schemes will continue

Photo: Luís Almoster | MSPagency.org

Strait ahead

remained tight-lipped on how such a dialogue between the two regions will be established, but said the formal mechanism of communication will be coordinated A formal communication by the chief-of-staff and government channel with Taiwan is well spokesperson, Alexis Tam. on the way, says the chief A Macau delegation to Taiwan will be ooperation with Taiwan was included for the “one of the measures” to take into account. very first time in the government’s guidelines. “The government will go ahead on all Chief Executive Fernando Chui Sai On fronts, developing all kinds of contacts reiterated Macau’s obligation to promote the and cooperation with Taiwan, taking in its “reunification” of China with Taiwan and is experiences of development,” Chui said. preparing to create a “formal mechanism of The chief sees Macau as “a platform communication” with the island. to facilitate the introduction of Taiwan’s But, again, Chui did not go into details. traditional goods into the mainland”. “The government will include affairs He also indicated that commerce, pertaining to Taiwan in the daily routine of its tourism, conventions and exhibitions, governing policy guidelines,” the chief executive culture and education and currency trading said. would be among the areas of cooperation Edmund Ho Hau Wah’s successor between the two places.

ices to help the disadvantaged and the elderly will also be extended. Chui repeated that the construction of the new hospital will begin soon. The cash handout and the healthcare voucher schemes will continue, but the government has ideas to gradually transform the cash handout scheme into a long-term central saving system with a double-tier social security system.

What about gaming?

Interestingly, there were only three references to the caApril 2010

Politics

sino industry: That the dimensions and speed of the growth of the gaming industry will be controlled by the government; that opportunities for the effective training and recycling of casino workers merits the admin-

stration’s closest attention; and, lastly, that there will be preventive initiatives and answers to the problem of compulsive gambling. The chief executive did not explain how this control would be exerted.

In the Governing Policies Guidelines pertaining to the Secretary for the Economy and Finances, there was also no further information – merely a note that the first audit of Macau’s six gaming conces-

Waiting game Macau people have taken a cautious attitude towards Fernando Chui Sai On’s first set of policy guidelines by Kahon Chan

ore than 40 percent of a middle-aged range of people failed to get excited about Chief Executive Fernando Chui Sai On’s maiden policy address last month, according to a poll by the Associations of Macau Residents General Union (UGAMM). The survey found his policy revelations to be neither good nor bad, but rather “average”, with housing, transport, economic development, and democratisation being the least satisfactory areas. Housing was considered both the most important issue and the one dealt with least well by the chief executive. The UGAMM study polled 918 residents in street polls in mid-March, and 83 percent polled were between 18 and 44. Among those interviewed, 42.59 percent classified the policy address as “average”, while 27.35 percent deemed the policy guidelines “satisfactory”, and 14.38 percent “unsatisfactory”. Respondents were asked to choose April 2010

two of the most pressing issues in the policy guidelines. The five top choices were public housing (28.87 percent), economic development (24.07 percent), cultural affairs and education (23.64 percent), health (18.08 percent), and social security (17.54 percent) – all of which, with the exception of public housing, were also picked as the most satisfactorily dealt with by those polled, each scoring from 18 to 21 percent. Chui’s plans for the political democratisation of Macau got the nod from 13.51 percent of those interviewed. Measures against corruption and urban planning scored lowest on the list of concerns, with only 8.17 percent and 6.54 percent, respectively, picking them out as the most pressing issues. Likewise with judicial reform which got just 9.15 percent. Public housing led the “unsatisfactory” list among the various issues

sionaires and sub-concessionaires will begin at the end of 2010. It was also spelled out that slot machines will be removed from residential areas “within a certain time frame”.

covered by the address as the prime choice of a quarter of those queried. Housing was closely followed by policies on transport (22.33 percent), economic development (18.95 percent) and the political democratisation process (14.27 percent). Only 7.41 percent of those interviewed chose health as the least satisfactory chapter of the current policy guidelines. Questioned on the apparent public division over the economic development plan outlined in the speech, the survey organisers said they believed the residents were happy with the state of the economy but not with the government planning in this area. The poll organisers consider that the results show that residents found policy guidelines to be “adequate”, but not very novel. Caution seemed to be the order of the day, the report said. The report also appealed to the government to carry out its promises on housing, to put more effort into other problems concerning livelihood, and also to outline the economic, social and urban planning policies with more vision and an all-encompassing mentality, keeping an eye on the future to achieve healthy sustainable development based on the city’s role as a tourism and leisure destination.

Sovereign solution The government’s over-reliance on gaming and a lack of moves to create a sovereign fund for investments in China and further afield, have come under attack in a respected academic report by Kahon Chan

he Macau Government has been criticised for their inefficient efforts to diversify the casino town’s economy through the use of a sovereign fund in the image of Dubai Holdings or Singapore’s Temasek. A report by academics at the Centre for Macau Studies at the Macau University (UM), published by Social Sciences Academic Press (China) fires the broadside. The Macau Economy and Society Annual Report (2009-2010) - also known as Macau’s Blue Book - includes a revision of local politics, the economy and social issues, as well as a general report.

Of the book’s 36 contributors, 28 are academics and the rest impresarios and politicians.

Pessimistic outlook

In a thesis entitled “Establishing a Sovereignty Fund to Facilitate Diversity in Macau’s Economy”, Lin Guang Zhi, academic and director of the Centre for Macau Studies, and Zheng Cheng Wen, director of the Financial Institute at the Guangdong Academy of Social Sciences, are pessimistic about Macau’s efforts in diversifying the city’s economy. They say Macau’s over-reliance on the gaming industry dwarfs other sec-

tors and makes attempts to diversify look symbolic or unrealistic. The scholars say Macau should learn from the experience of Dubai, Kuwait and Singapore, and create a Macau investment company to participate in China’s extraordinary economic development, as well as in other parts of the world. They say Macau could use 20 percent of its reserve in foreign monetary currency – about US$3 billion (MOP23.5 billion) – as social capital to establish

April 2010

Politics

a Macau Investment Company, with the possibility of future cash injections. Though government owned, the company would be managed by investment sector professionals from all over the world and its board would be composed of highly qualified members, visionary and experienced, the academic experts argue.

the global market. Second, it could invest in the mainland’s special economic regions, especially the Hengqin Island projects. And, lastly, the company could invest in the research and development of new energies, medical drugs, and materials in the mainland, “taking in China’s strategic industrial transformation”.

Getting into Asia’s other casinos

No threats

The thesis also lists three areas where Macau taxpayer’s money could be made to grow. First, the company could buy casino stocks and/or shares in tourism resort operators in the Asia Pacific region to reinforce the influence Macau has on

Can’t get no, job satisfaction Macau employees’ satisfaction with their jobs is decreasing, according to a Macau University of Science and Technology survey. The overall employee satisfaction index fell by 2.1 percent from 3.22 percent last year. The survey showed an increase of 1.7 percent in employee confidence, to 2.95, still below the “general level” of 3. The Macao Employee Confidence and Satisfaction Index was launched in 2007. A total of 1,033 people 16 years old or above and with a full-time job were interviewed.

April 2010

The academics also observe that Macau’s capital wouldn’t create “threats to the economic safety” like that of other foreign investors, since it may be seen as merely sharing Macau’s gaming earnings with the mainland, gaining in the process a political and social weight relevant to Macau.

The way people live, produce and distribute wealth in Macau would be noticeably changed if such a fund could generate profits for the government completely independently from the casinos. Hao Yu Fan, dean of the Faculty for Social and Human Sciences at the UM, and director of the Center for Macau Studies, agrees. “We are thinking about how to generate more revenue from taxes in Macau. “There’s no contradiction between improving the gaming sector and diversifying the economy. We are merely searching for other businesses to complement the gaming industry,” says Hao.

Criticism of past decade

Hao’s general report in the “Blue Book” was also quite critical of the way Macau has been governed over the past decade. The scholar points to a growing disparity in earnings and says that the quality of life, as “perceived by the Macau people”, does not follow the per capita GDP. Hao appeals to the new government to establish better communication with the public and to distribute the benefits fairly, instead of just distributing subsidies and cash handouts. The “Blue Book” also covers other issues, including advice on real estate offerings, on lessons learned from the 2009 elections, on changes in the role played by the associations, on the delay of the legal reform, as well as expressing some concerns over regional cooperation.

Retail employs more The number of people employed by the wholesale and retail trade increased by 12.3 percent year-on-year at the end of the fourth quarter of 2009. A total of 29,211 paid employees were working in this area, with 17,754 of them working in retail trade, according to official figures. In December 2009, average earnings (excluding bonuses and allowances) for full-time employees rose by 5.7 percent year-on-year to MOP9,090, with sales representatives and salespersons earning MOP12,070 and MOP7,510 respectively on average. At the end of December 2009, wholesale and retail trade reported 3,380 vacancies, up substantially by 95.6 percent year-on-year. In the fourth quarter of 2009, the employee turnover rate in wholesale and retail trade was 7.1 percent, up by 1.8 percentage points respectively year-on-year.

No time to breathe As Fernando Chui Sai On’s chief-of-cabinet, government spokesperson, and liaison contact with Taiwan’s representative in Macau, Alexis Tam Chong Weng is going to be a busy man. So, has he taken on too much? by Kahon Chan

ost people knew little of Chief Executive Fernando Chui Sai On’s right hand man Alexis Tam Chong Weng before last December. According to information available on Google, Tam gained a bachelor’s degree in business management at Taiwan’s Chengchi National University in 1985, and a post-graduate degree in strategic management at the Catholic University in Lisbon. His Macau civil service career began in the late 1980´s and in 1992, a government scholarship took him to Glasgow University in Scotland where he completed an MBA. Prior to landing his present job, Tam was part of the first batch of department heads, as director of the Higher Education Support Bureau (GAES).

Jobs, jobs, jobs

Last November, he accepted Chui’s invitation to become chief-of-cabinet. In February, he became the top government spokesperson, and during the recent Policy Address, he was named as the liaison contact with Taiwan’s office in the city. Speculation was also around that he might be nominated for other positions, particularly a post in the cultural bureau as culture is known to be one of his keen interests. But for now the above is plenty to be going on with. General director of The Association for the Protection of Macau’s Historical and Cultural Heritage, Cheang Kuok Keong declined to say if Tam would be apt for such a role, but underlined the man’s capabilities.

Bureau expansion

Tam first came to prominence when he accused the New Macau Association of turning up for meeting with his boss without an appointment. In the end, the legislators managed to meet with the Chief Executive a couple of weeks ago.

“I know him and I would say he’s a more open and communicative member of the government, but I believe such confidence is due to the familiarity between Chui and Tam after working for more than ten years together in the same office. “One cannot say this confidence is based on his capabilities,” Au Kam San told Hoje Macau daily, adding: “I cannot picture him fulfilling so many roles, unless the position of chief-of-cabinet of the chief executive is not a demanding position.” Curiously, both Cheang and Au question the need to establish a bureau with the same rank as an institute for the

new system of a government spokesperson, which seems redundant and expensive and, in Au’s own words, “bureaus are popping up like cancer tumours”. They ask that if government structures have expanded to such a degree in terms of power and size, is it appropriate to delegate so many tasks to a single individual?

Teamwork

“It’s an honour to be invited for such important functions by the chief executive and I believe he only did it because he trusts in my abilities,” he told Hoje Macau daily. April 2010

Politics

“I hope to do good work and I’m confident I will, since I have in the past been in contact with Taiwan’s Economic and Cultural Centre. I’m dealing with the issue with ease,” said Tam. “As a matter of fact, is not only Alexis Tam who’s here to work, because we are a team and all are very capable,” he added. Tam is reluctant to compare himself with his predecessor Ho Weng On: “Please, do not ask me that. I’m not in a position to answer such a question and it would be unfair to both parties. “A comparison cannot be made because times have changed. My responsibility is to do my job and I think many people know of my capabilities.” Tam also revealed that a meeting had already been scheduled with the Taiwan Economic and Cultural Centre to begin discussions on cooperation in areas such as tourism and commerce.

Different strategy

Sunny Chan, associate professor at the Public Management School of the Macau Polytechnic Institute, backs the

April 2010

“It’s an honour to be invited for such important functions by the chief executive and I believe he only did it because he trusts in my abilities” Alexis Tam

multiple functions attributed to Alexis Tam because both roles call for instructions from the chief executive and previous knowledge of decisions by the administration. “It’s a different strategy from Chui Sai On. While Edmund Ho Hau Wau

(the former chief executive) preferred to deal personally with the media, it might be better to have a buffer – a spokesperson – between the media and the head of government,” said Chan. “Tam should also hand down the daily operations of the chief executive’s office to his subordinates.” While Eilo Yu, assistant professor at the University of Macau, agrees that Tam is the natural choice for the new jobs, he has some concerns over the long term relations between Macau and Taiwan, as well as other governments. “Apparently it’s insufficient to place the role of intermediary in the care of any one secretary because relations with Taiwan are both economic and political. “It’s alright if it is a provisional measure, but it’s questionable if one person is able to deal with so many problems at the same time. It’s also a question of risk management: what if one person is sick or unable to work? “This appointment clearly shows the enormous trust Chui has in Tam, but we must return to the basic premise: is it advantageous?” asks Yu.

José I. Duarte Economist, Macau Business Senior Analyst - jid@macaubusiness.com

Gesture politics The new chief executive has presented his first policy address. As the questioning of secretaries in charge of the various portfolios continues, here are my first impressions. On some significant issues, it has been hard to distinguish this performance from those of previous years. If the new chief intends to give his mandate a distinct character, he has chosen not to unveil it yet. It can be reasonably argued that it might have been advisable to do so. One can hope this to be more than just a Take 2 of the preceding administration, and no one would fault Fernando Chui Sai On having such an ambition. As such, there are no obvious advantages to postponing the change of course in some policies or approaches. Let me give an example. The cheques to all the residents and the individual health vouchers will be kept. (Not forever, we are cautioned, lest we may become addicted to them!) Both represent populism at its worst and convey the wrong political message about both the functions of the government and the standards of policymaking the citizens should expect and demand. In a way, this is no more than a costly marketing exercise through which the government tries to buy our complacency. It does not solve any real problems facing the city or its citizens; nor does it help to frame, in any reasonable way, a solution to them. It is gesture politics. The longer these measures last, the more they will start to look like the best the government can achieve in addressing social problems. This will mean a government progressively restricted to the role of paymaster general for the community chest, the budget, dispensing indulgences to these, and those, and others. Whoever makes enough noise… And what about economic policy? The rationale behind the ceiling imposed on the number of new gambling tables seems vague, to say the least. The stated intention - requested by society, or so it is implied - clearly contradicts the goals made public by the operators currently involved in the building of new facilities. Their expectations, one has to presume, were probably not just the result of wishful thinking or some dream. That issue aside, the crucial question of how the new tables will be allocated among the existing operators has not been clarified, adding to the uncertainty about its effects. Moreover, that ceiling is implicitly associated with the need to stimulate or support economic diversification. That seems unlikely. Under the current de facto labour imports policy, with or without a ceiling, one can expect an increasing concentration of a scarcer qualified pool of labour in the casinos and their satellite activities; and, consequently, a further reduction in the likelihood of any meaningful diversification of the economy. Without a properly coordinated and implemented labour policy this measure seems just another gesture to appease some. It is likely to create more problems than those it claims to address.

This kind of ambiguity also marks one of the few real novelties in this address: the announcement of a consultation process on the evolution of the political system. Its vagueness and the lack of any other commitments or statements on the issue, may suggest that the intent is less to achieve something than to give the impression that things are moving without, however actually upsetting the status quo. Time will tell. None of this is too surprising. It is just somewhat disappointing that an opportunity was missed to start changing course and that building firmer policy making foundations keeps being delayed. The main operational mode still seems to be the tactical management of interests and current pressures. That is certainly a task for the government - but cannot or should not be the main, if not the only, one. Not enough is being invested in increasing the meaningful involvement of broader social sectors in civic affairs and on the setting up of less arbitrary and casuistic approaches to the formulation of policies. April 2010

Society

An ageing population and growing expectations on the back of a booming economy have left the government with a difficult balancing act on old-age pensions

Growing

old

growing elderly population and massive economic changes have left Macau’s 20-year-old retirement system in need of an overhaul, and the government knows it. Since 2007, officials have been working on a so-called “double-tier social security system” which will involve a combination of an amended form of the current old-age pension, and a new non-mandatory central savings scheme. It will be launched in July. This will allow people “to take advantage of a more efficient, sustainable and enlarged coverage retirement system”, says the Secretary for Economy and Finance, Francis Tam Pak Yuen.

Growing old

The ultimate goal is a mandatory provident fund, but no timeline has been laid down. Fung Ping Kuen, president of the Social Security Fund says a stage-bystage approach will be taken to this, taking into account economic realities. At present only 11.3 percent of Macau’s population are over 60, placing April 2010

it 67th among a list of 196 jurisdictions, according to the United Nations. The city’s median age is 37.9 years. However, by 2050, Macau will boast the oldest population in the world, when almost half its residents - 44 percent – will be at least 60, says the UN. Of these, around a third are expected to be over 80. Over the next four decades the oldage dependency ratio is projected to worsen substantially. By 2050, Macau will have the second highest level in the world – two people of working age for every one elderly person - only behind Japan. Macau’s retirement age is 65, but people can keep working and an amendment to the law in 2008 makes it possible for early retirement at 60.

Pensions for all

A non-mandatory central savings scheme is the cornerstone of the new retirement system. At its launch in July, it was revealed that each permanent resident of 22 and over will be given an account with

by Emanuel Graça

MOP10,000 in it from the government. Tam said around 300,000 people will immediately benefit from the scheme. If the economic boom continues, yearly cash infusions from the government may continue. Chief Executive Fernando Chui Sai On’s team is also looking at gradually transferring the money delivered to residents through the cash handout scheme to the central savings system. But the main target is to persuade both employees and employers to make regular contributions to the employees’ scheme accounts, even although this will not be compulsory. The money accumulated in each account will only be retrievable after its owner reaches 65. For now, details on the return rate are unknown. The scheme is to be managed by the Social Security Fund, which also manages the current old-age pensions.

Two-thirds still not covered

The scheme is designed to give retirement benefits to people whose companies don’t offer a private retirement scheme.

Photos: Luís Almoster | MSPagency.org

By 2050, Macau will boast the oldest population in the world, when almost half its residents - 44 percent – will be at least 60, says the UN. Of these, around a third are expected to be over 80 As at the end of 2009, pension fund management institutions were managing total assets amounting to MOP5.16 billion, a year-on-year increase of 23 percent, which would benefit 74,600 employees, according to figures provided by the president of Monetary Authority of Macau, Anselmo Teng Lin Seng. Macau’s 21,600-plus civil servants also have their own provident fund scheme, to which both civil servants and the government make monthly contributions at pre-defined rates. This means more than two-thirds of Macau’s labour force - which stood at 322,000 in the period between December 2009 and February 2010 – doesn’t have any retirement benefit plan.

Not much, but...

For now, the closest thing in Macau to a comprehensive retirement benefit plan is the pension provided by the existing

social security regime. However, the aim of the age pension is more than just to provide a safety net to older people unable to support themselves financially in their retirement. Its primary objective is the alleviation of poverty. Residents aged at least 65, or those who have a disability or other reasons that prevent them from seeking gainful employment, can get a MOP1,700 subsidy each month. With the amendments announced by the government, which are already under analysis by the Legislative Assembly, the old-age pension’s value is expected to increase, but no figures have been announced. The New Macau Association has a proposal. Recently, the group - which elected three lawmakers in the 2009 elections - handed in a petition to the government, urging for a 55 percent in-

crease in age pensions to 2,640 patacas a month in order to reach the minimum subsistence index in Macau. The law amendments also want to increase the number of elderly receiving an old-age pension. In 2006, only onethird of Macau’s senior population was receiving such a subsidy. About 24,000 people 65 or over were excluded because they had made no contributions during their working life. With or without law amendments, the number of beneficiaries from the oldage pension is expected to boom. This is because the percentage of Macau’s labour force contributing to the social security regime has been rising over the last years. It stood at 58.4 percent in 2000, increasing to 74.1 percent in 2006.

How does it work?

Today, all employers must register their employees in the social security April 2010

Society

regime. Also, 30 categories of selfemployed workers are also covered. Imported workers are not included as beneficiaries. In 2007, the social security regime received contributions from 203,874 workers - including casual workers and civil servants - as well as voluntary contributions from 12,061 people and contributions from 12,190 self-employed workers. In that year, disbursements for all welfare benefits offered by the scheme totalled around MOP309 million.

One of the issues worrying the government is how to ensure the social security regime’s long-term sustainability to cope with an increasingly large number of age pensions

One of the issues worrying the government is how to ensure the social security regime’s long-term sustainability to cope with an increasingly large number of age pensions. Currently, each employee pays a monthly contribution of MOP15, while the employer pays MOP30 per month. Historically, the government has been the regime’s main contributor, allocating around one percent of total budget revenue to it, plus ad-hoc transfers from gambling tax revenues. Overall, the government contribution represents more than 80 percent of social security revenues. In future, the ratio won’t change much, according to lawmaker Cheang Chi Keong, who heads the Legislative Assembly’s third standing committee, currently discussing the social security regime’s reform. Cheang said it is likely that the monthly contributions by employers and employees will be raised in order to ensure the long-term operation of the regime, but the increase will not be too much because the government will still be the main contributor.

Money needed

One thing is for sure, more money will have to be poured into the social security regime, according to a report by Watson Wyatt Worldwide sponsored by the government. If not, its assets, which stood at MOP3.801 billion at the end of 2008, will completely run out by 2036. To prevent the elderly losing their old-age pensions, the new social security regime bill will make sure the government is obliged to continue to pay beneficiaries their pensions, even if the social security regime goes bankrupt – a demand imposed by lawmakers. For Chief Executive Fernando Chui Sai On, the restructuring of the retirement system may well be his first major political test since he took office in December 2009. An issue that directly affects the populations’ livelihood, there are high expectations. How Chui will balance the demands for greater retirement protection without pushing the employees and employers contributions too much, while not increasing government spending and ensuring the system’s long-term sustainability, remains to be seen. April 2010

Human Resources

Skilling-up for success

As Macau continues to grow and prosper, training will be vital to its success. Here’s one expert view on how the city can get it right by Zenon Arthur Siloran Udani

t the start of this year Macau had an employed population of 312,400, 74,900 non-resident employees and 9,900 unemployed. Of those employed, 76,100 had a tertiary education and 170,400, a secondary education. The ranks of the unemployed included 5,600 who completed a secondary education, and 2,300 a primary education. Their chances of finding work would depend on the creation of jobs that match their skills, and training to prepare them for jobs outside their usual domain. As the Macau economy continues to improve and recover from the effects of the global financial crisis, corporate gains have yet to translate to more jobs and better salaries. Jobs for human resources management graduates, for example, are scarce. The hiring of HR staff has been frozen in some companies and a few HR departments have been downsized. Most HR employees are overworked. Besides, entry level salaries for fresh graduates are generally lower than two years ago.

ity industry, has increased the need for better training and development (T&D) programs. People taking over supervisory and managerial positions have to be prepared and empowered for their new roles. Traditionally, bigger companies like SJM, CEM, BNU, Air Macau, and CTM were at the forefront of corporate training and development in the region. However, over the past five years, both the quantity and quality of T&D activities in Macau have augmented due to the entry of major foreign corporations in the hotel, gaming and service industries. Profitable hotel and gaming companies have grown their T&D staff. At the height of corporate training activities when business is good, these companies could employ up to 20 T&D specialists and administrative staff members, servicing thousands of employees. Training staff in the hospitality industry usually work on a 24/7 basis to meet the demand of shift work.

Training and development in Macau

Five-star hotels offer a wider range of T&D courses for their employees. Galaxy Entertainment Group, Sands and Venetian Macao, Wynn Macau,

The government’s move to localise the labour force, especially in the hospital-

Cultural diversity

SJM, and MGM are at the forefront of T&D endeavors. Customer service, job skills training, managerial and supervisory development, leadership skills, language courses, and occupational health and safety are popular programs in these organisations. Growing cultural diversity in the workplace has also increased the demand for programs on relationship and team building skills. In the gaming industry, employees go through more industry-specific training such as those designed for dealers, security officers, supervisors and managers. Seminars on the psychology of gambling, understanding behaviors of gamblers and anti-money laundering law are designed specifically.

Future directions

The growth of T&D in Macau has been both encouraged and hampered by an economy that is overly dependent on the gaming industry. The presence of more multinational companies in the region has given the sector a big boost. Serious attempts to diversify into the MICE (meetings, incentives, conventions and exhibitions) sector have opened more possibilities for the T&D profession. The next five years should see more T&D programs for small and medium-size businesses and non-gaming companies. Best T&D practices among the multinational companies in Macau should be shared with local companies. Moreover, setting up an association of T&D professionals in the region would help. The government needs to adopt an integrated HRD policy and strategy that would effectively address the T&D needs of local human resources, identify and promote effective training interventions, and provide better job opportunities for locals. The quality of government-sponsored or initiated training programs should also be enhanced by ensuring that program design and implementation match the expectations of potential employers. Identifying centres of excellence for public training programs and more government funding could further enhance the growth and effectiveness of T&D in the region. April 2010

Photos: Ant贸nio Falc茫o | bloomland.cn

Hospitality

April 2010

The right move Sofitel made a strategic decision to switch from Shanghai to Macau, and it’s a move they have not regretted by Catarina Morgado

year ago Michel Molliet became vice-president of Sofitel Greater China. At the time, based in Shanghai, Molliet and his support team were responsible for implementing brand development, overseeing performance, and managing relations with hotel owners. Molliet decided to move the Sofitel Greater China vice-presidency to Macau and continue to oversee 23 properties in Greater China. “I could have picked any big city in China, but I picked Macau, because when you’re moving a hotel it is very important to choose the one facility where you have a good relationship with the owners. “Macau is a great place so I had no problem whatsoever in convincing my team to change from Shanghai, since the quality of life here is very good and everything is very accessible. “At the same time I could offer the owner of this hotel a more qualified team, with experienced people, bringing professionalism to the facility,” Molliet says. For Macau it also means getting a lot of attention, mostly from business partners, and this definitely helps this hotel and it means business is getting better, he says.

Macau details

Prior to joining Sofitel, as an executive to head its management team in Greater China, Molliet served as vice president of hotel operations at The Venetian Resort Hotel Macou. The town and its peculiarities are not new to Molliet. “There are different types of hotels categories in Macau. There are mega hotelcCasino resorts, most of them are on the other side of the river in Taipa, and their massive facilities are a destination itself. “Then there is the category of smaller hotel casinos just like Sofitel in Ponte 16 and, finally, the category of independent hotels, that don’t have an international branding supporting them. “This means that the market in Macau is really well defined and that customers who seek our particular hotel category know exactly what they’re after’’ he says. Sofitel Macau at Ponte 16 opened in 2008, and 2009 was a year for growing.

For the future

Customer interest in the brand is helping Sofitel Macau in Ponte 16 meet its 2010 goals. “Most of the hotels in Macau are directly linked to casinos and since advertising April 2010

Hospitality

Michel Molliet: I could have picked any big city in China, but I picked Macau, because when you’re moving a hotel it is very important to choose the one facility where you have a good relationship with the owners casinos is not allowed in the mainland, this might be a huge disadvantage for the Macau market. “However, althouht Sofitel shareg the same infrastructure as Casino Ponte 16, we have an independent management and corporate policy, so actually we are able to advertise our hotel in China and eventually the Ponte 16 Casino takes some profit from that. “This one of the business opportunities we’re really working on’’ he says. Macau, however, is far from being a

paradise for the hospitality industry, he adds. “Diversification is one of the things Macau is lackiof. It must not focus only on the casinos revenues but also on diversifying tourism by suggesting other entertainment programs and most of all by giving the city more transportation solutions. “Urban planning has got to be part of the package. But still Macau has come a long way, so the path ahead is surely very interesting and positive’’ Molliet says.

Opening soon Sofitel Haikou and Sofitel Lianyungang Suning Galaxy are two new management contracts signed in China for the Sofitel Luxury Hotels group. Sofitel Haikou is located in the heart of the Haikou business centre, also considered as the financial centre of Hainan Island, and Sofitel Lianyungang Suning Galaxy will be on Hai Lan Road, the city’s main highway, just 5 minutes from the financial district and the main shopping streets. Over the course of 2010 Sofitel will also open up two new facilities: Sofitel Dongguan Humen Oriental and Sofitel Guangzhou Sunrich April 2010

Business&Industry

Sky’s the limit

Macau is hot again. With the city’s economy showing strong signs of recovery from the financial crisis of 2008, the construction and real estate sectors are back on track. As infrastructure projects such as the Hong Kong-Zhuhai-Macau Bridge and the light rail system get underway, and with the reactivation of suspended construction projects on the Cotai Strip, it seems we can look forward to long term growth. However, there are still problems that need to be tackled, such as the slow pace of construction licensing approval and a lack of transparency in the sector.

numbers

6,588

Building units bought and sold in the fourth quarter of 2009. The majority of them (4,548 units) were residential units amounting to MOP8.83 billion.

25,631

Average transaction price per square metre of usable area, in MOP, of residential units in Macau in the fourth quarter of 2009. The most expensive units were sold in NAPE.

72%

Home ownership rate in Macau in recent years. This represents a fast increase over the past 20 years. In 1987/1988, the home ownership rate stood at 44.8 percent.

Number of construction approvals granted by the government in 2009, to provide a total of 710 units, 589 of which were residential.

1,510

Number of companies operating in the construction sector as of the end of 2008, with the number of workers engaged estimated at around 26,200.

April 2010

Hot issues

Co-ops: The next big thing? S

ands China is gearing up to launch the sale of its Four Seasons apartment hotel tower in a cooperative form of ownership. “We had a problem in the Four Seasons apartment hotel tower. The building is built and we have model rooms and are ready to sell,” said company boss Sheldon Adelson at the Deutsche Bank 2010 Hospitality and Gaming Conference. “We have 70 reservations, but for some political reason, which I can’t explain logically, they [the Macau government] won’t let us sell them as condos. But they do now let us sell them as co-ops,” Adelson added. Despite his comments, the company may still face government opposition. Several times, senior officials have stressed that the Four Seasons apartment hotel tower should not have a residential purpose. However, another question remains: are Asian customers ready to buy residential units through co-ops? They are quite common in the United States. A housing cooperative – usually a corporation – owns the building and each shareholder is granted the right to occupy one housing unit. The big issue here is that a shareholder in a co-op does not own real estate, but a share of the legal entity which does. In Chinese culture, home ownership is of major importance and it is unclear

how successful co-ops will be in this part of the world. Sands China acknowledged these difficulties and tried unsuccessfully to convince the government to allow the company to proceed with strata-title sales of the apartment hotel. “Co-ops cause us a little bit of concern because they are not quite understood in Asia,” said Michael Leven, Sands China’s parent company, Las Vegas Sands president and COO last year. Meanwhile, there is no legislation in Macau to regulate how co-ops are operated and the rights and obligations of shareholders, which could add extra trouble to the deal. The Sands China co-ops will be closely monitored by rivals. Both Melco Crown and Galaxy’s projects in Cotai include apartment hotels and the companies are eager to cash-in some to repay debts.

Four to watch One Grantai: On the mid-level of Tai Tam Hill with panoramic views of the Cotai Strip. The developer is Sai Kei Hou Yuen (Kuok Chai) Real Estate Development Ltd and the construction management is under Hsin Chong Construction (Macau) Ltd. The project comprises six high-rise blocks, with a total of 856 deluxe units. The Buckingham: In Taipa, on Rua de Nam Keng, next to The Manhattan. The developer is Wai Heng Group and the main contractor is Vui Xin Construction Co. Ltd. It comprises a 50-storey tower, with a total of 196 units. Windsor Arch: In Taipa, near the Macau Jockey Club. The developer is Sun Kian Ip Group and the main contractor is China State Construction International Holdings Limited. It comprises ten 41-storey residential buildings, with a total of 1,540 units. One Central: Adjacent to Nam Van Lake and on the Macau Peninsula waterfront, it was completed last year. The developers are Shun Tak Holdings Limited and Hong Kong Land Limited. One Central Residences consists of seven residential blocks of 32 to 38 storeys, offering 796 units.

The renewal of Macau’s old neighbourhoods will open up opportunities for local developers. However, it is still not clear when the renovations will start and to what extent. A special committee was appointed in 2006 to gauge public opinion, as well as produce analyses and make recommendations to the government. At present, the committee is debating draft laws for the renewal program for the old districts.

Macau’s office market still lags behind the residential market. Last year, the market saw some consolidation, however office rents declined by 12.9 percent yearon-year. In 2010, experts predict to see demand for office space to grow, although the pace of expansion is expected to be slow since the local economy is still recovering from the international financial crisis. Tight office supply will continue to lend support to Macau’s rents, offering business opportunities in this area.

In November 2009, the State Council approved the Macau government’s 3.61 km2 land reclamation project, which will increase the region’s land area by more than 12 percent. The new project is set to create more public facilities and green spaces, along with allocating plots of land for public housing and the development of business parks. However, details remain sketchy on the land reclamation project.

Macau’s construction companies face some weaknesses such as the lack of scale compared with their regional competitors and a lack of geographic diversification. This puts them at a disadvantage in accessing financial, technical and human resources. Besides this, most companies are not diversified at all in terms of the end markets they serve, making them vulnerable to unfavourable forces especially in the residential market. There is also a lack of transparency in the sector that affects the companies’ image. A future threat is rising raw material prices.

HOW THEY DO IT

Another brick in… the stock market Want to invest in Macau property but you lack the expertise. No problem! There is already one fund and one investment company, both listed on the London Stock Exchange’s Alternative Investment Market (AIM) specialising in investing in the sector. It’s a simple matter of buying their stocks! Speymill Macau’s portfolio includes the grade-A office block AIA Tower and the “Lorcha”, a residential development. The company owns several other residential and commercial units in the Inner Harbour, Nam Van District and Coloane. Speymill’s portfolio was valued at

US$285.8 million as of 30 June 2009 (MOP2.3 billion). Macau Property Opportunities Fund Limited (MPO) is a closed-end investment fund registered in Guernsey managed by Sniper Capital Limited. MPO bought the whole of One Central’s Tower 6 in late 2006, subsequently acquiring some other units in adjacent towers. To-date, its portfolio comprises five key properties spanning residential, retail and industrial sectors in Macau and Zhuhai. As of the end of 2009, MPO’s portfolio was valued at US$309 million (MOP2.5 billion).

April 2010

need to know

Public land granting

There are several schemes that can be used by the government to grant public land for private use: land concessions, land swaps, transfer and usage change. However, exactly how the government makes decisions regarding the processing of land use is an issue that lacks transparency. In the first decade of the Macau Special Administrative Region, Edmund Ho Hau Wah’s government opted mostly for land concessions without public tenders, making Macau’s land concession regime far from easy to understand. Many experts have criticised the concession awards, saying they did not meet the value of the land. The issue has jumped to the top of the public opinion agenda since former Secretary for Transport and Public Works Ao Man Long was arrested due to a corruption scandal in late 2006, but we are still waiting for reform. The government insists it is working on what is a complex issue, but there is no official deadline to push forward the amendments.

Contractors

Construction is usually done or coordinated by general contractors, who take full responsibility for the complete job. Although general contractors may do a portion of the work with their own crews, they often subcontract most of the work to other contractors. Speciality trade contractors usually do the work of only one trade, such as painting or electrical work. They obtain orders for their work from general contractors, architects, or property owners.

Public land auctions

Green building

Public land auctions are not common practice in Macau. Since the handover, only three pieces of public land have been auctioned. The last auction happened in January 2008, when Tin Wai Investment Company was awarded two lots of land in Patane. The company offered MOP555 million and MOP867.9 million respectively, for the 1,704 and 2,967 square-metre lots amounting to no less than 10 times the basic asking price.

Green building is still far from becoming a trend in Macau, where environmental standards for construction are still low. However, demand is growing in Asia. Green buildings adopt a threepronged approach: energy efficiency (both in material selection and actual energy use), healthy living including indoor air quality, and careful resource management. The final goal is to reduce the overall impact on the environment and health.

The watchdogs

There are three official bodies involved in the construction and real estate sectors in Macau, all under the Secretary for Transport and Public Works. The most important is the Lands, Public Works and Transport Bureau (DSSOPT), a technical body that handles the construction licensing and land concession requests. The Lands Committee is a consultative body responsible for advising the government on granting land for private use. Finally, the Housing Bureau’s main functions are to execute public housing policies for Macau and to provide assistance and support for the management of common parts of buildings.

April 2010

expert view

A two-faced real estate market

Macau’s property market is driven both by internal demand and by foreign investors. However, the weight of each component depends on the timing and on the product. At the height of Macau’s economic boom, investors from abroad accounted for up to 30-40 percent of all buyers. Last year, the figures fell down to around 12 percent. Luxury units do appeal especially to foreign investors. For One Central, experts believe almost two thirds of the purchasers were from outside of Macau.

Pre-selling

Several new residential projects were launched in 2009, such as Celebrity Lodge, Grand Eurheight, The Residencia Macau, Verde I & II, and One Central Residences. They were all well received by the market. For the three years to 2012, there will be a total of around 8,000 residential units entering the market. However, many of the newly completed units, estimated to be around 70 percent, were pre-sold during their construction period. This means the effective number of new units available for sale is quite reduced.

Auditors’ registration

Auditors and audit firms must apply for the professional license to the Committee for the Registry of Auditors and Accountants (CRAC). Only those auditors and audit firms registered with and on the list organised by CRAC, are allowed to engage in the activities of the profession, and are permitted to use the name or include in the company name the terms or expressions “Certified Public Accountant”, “Certified Practising Accountants”, “Public Accountant”, “Registered Auditor”, “Registered Auditors & Associates”,”PA” or “CPA”, or terms and expressions with similar meanings in Portuguese or Chinese.

Lack of regulation

Unlike many other jurisdictions, Macau has no special regulations on the real estate agency business and agents do not need to apply for a license. In 2008, the government held a public consultation to push forward such legislation, but still there is nothing on the statute books. This lack of supervision has lead to problems like complaints of misrepresentation, incorrect information and misuse of the initial deposit. In Hong Kong, the Estate Agents Authority (EEA), a statutory body established in November 1997, regulates the practice of estate agencies in the territory, promotes integrity and competence within the industry, and facilitates training for estate agency practitioners to enhance their standards and status. The EAA organises qualifying examinations, issues licences to individuals and companies, handles complaints against licensees, conducts compliance inspections and meters out disciplinary sanctions to practitioners.

Back on track

he numbers are out. Property experts estimate Macau’s real estate prices will grow as much as 10-15 percent this year. “We are quite optimistic about the market for 2010,” says Jeff Wong, Jones Lang LaSalle’s Head of Residential in Macau. Wong says there are several factors behind his optimism. Firstly, there is still a high level of global liquidity, coupled with low interest rates. Secondly, the local economic conditions are much better than in 2009, a trend which is expected to extend into 2010. Thirdly, the government’s four percent interest rate subsidy scheme and mortgage guarantee programme, which were quite successful in 2009, are still available to locals in search of a house. Other factors that will also impact positively on the local property market are the construction of Hong KongZhuhai-Macau Bridge and of the light railway transit system. The same can be said about the resumption of some of the suspended projects on the Cotai Strip. In the long term, the regional integration of Macau, especially with Hengqin Island, is also an important driver to follow. Meanwhile, Wong stresses that the suspension of the fixed-asset investment residency policy since 2007, has not greatly affected foreign investors’ willingness to invest in Macau. He says a Macau ID card is not the top priority; return is. A bigger problem is what Wong refers to as “missing layers” in the residential market. Most residential buildings in Macau were built more than 15 years ago or after 2003, leaving a gap in between. “When local people want to move house and move up the housing ladder, from older to newer units, they face bigger gaps than in other markets,” he warns. April 2010

interview

More transparency, please Although optimistic about the sector’s future, Tommy Lau, president of the Macau Association of Building Contractors and Developers says there is a need for the DSSOPT to speed up land concessions and construction license approvals

hat do you expect for the property sector in 2010? Obviously, the local economy has gradually recovered from the impact of the financial crisis. All the positive policies announced by the government have already been implemented and we can see that the retail business is doing pretty well and that the number of visitors to Macau is increasing. Everything looks positive. So, I would say there will be a moderate gain in regards to the property market, but it will not be as great [as in previous years] since, somehow, we are still at a recovery stage. It all depends on the effectiveness of the government

policies to push ahead the economy. Many developers have complained that following the arrest of former Secretary for Transport and Public Works Ao Man Long, in December 2006, the approval of new land concessions and construction licenses was almost frozen. Have you seen any change in this situation? I have heard the Chief Executive and the Secretary for Transport and Public Works saying that more infrastructure investment will be implemented. After the second quarter, we should see some positive improvements in that regard. I can foresee that there will be more work available for

local contractors. With regards to new land concessions, I am quite optimistic. But are you finally seeing new construction approvals coming out of the Land, Public Works and Transport bureau (DSSOPT)? Well, we have still been having problems. I am looking forward to a positive change in that regard. A lot of changes have to be made. At least, what I can see is that new infrastructure projects will be soon underway. Since Ao Man Long was arrested there has been a public outcry for the Land Law

The threat of public housing to be amended. However, no major changes have been introduced. Is this essential to bringing more transparency to the construction sector? I think all the developers would be happy to see a more transparent policy implemented by the Macau government. What I have heard is that the Land Law will be amended soon and we welcome it. The most important thing is that the approval procedures in DSSOPT are speeded up; otherwise a lot of developers will just stand still, looking for work. And buyers will complain they don’t have enough choice in the market. Have the developers already cleared up the bad image that affected the sector after Ao Man Long’s corruption scandal? I don’t agree that the developers were portrayed as the “bad guys”. Only a few were involved in that scandal. In general, local developers are working hard on their projects and on serving the community. In recent years, the general execution of big developments in Macau was mostly handed out to companies with their headquarters based outside of Macau. Would you like to see more local developers in

charge of such projects? We have to think this way: for the execution of those projects which local contractors already possess the capacity to carry out, the Macau government should do its best to give us a chance to participate in them. Other than that, if it is something we don’t have the capacity to do, we should have an open mind and let those companies who are more suitable pick up the job, whether they are from the mainland or abroad. The Macau community will benefit from the proper execution of projects by the right people. This year the DSSOPT introduced a new system for “tenders by invitation” for public works contracts, which obliges developers to register on a database. What is your opinion of this system? I think it is pretty fair. Contractors on the database, unless suspended, may be invited to tender for public works contracts only in the works categories and groups for which they have been previously approved. This will improve tender process efficiency because judges only have to bear in mind the price differences. The procedures and the bidding analysis will be simpler and fairer. It’s good. However, this system only applies to very small projects.

Not enough men at work Macau lacks construction workers and things will get worse soon, says Tommy Lau. “Manpower will be a very serious problem in the coming months. In the second quarter, the lack of human resources will get worse,” he predicts. “If all the mega-projects [in Cotai] are restarted, then there will be a huge demand for construction workers. And a common complaint among developers will be that they won’t be able to find enough people,” says Lau. This means more imported labour will be needed. According to Las Vegas Sands, a total of 10,000 to 12,000 construction workers will be employed by the company after the restart of its stalled hotel-casino projects on the Cotai Strip. Although no official schedule has been released yet, it is believed work will restart soon. Meanwhile, it is hard to get a full picture of the total existing number of local construction workers since there is no official data and most of them are contracted by the day. In the fourth quarter of 2009, the average daily wage of construction workers was MOP529, up by 1.1 percent quarter-to-quarter.

Macau building contractor’s representative Tommy Lau has warned of inherent risks for the private property sector if the government pushes ahead with an aggressive public housing policy. “If there is a huge amount of public housing pushed into the market in a very short period of time, the pressure will be a bit heavy,” the president of the Macau Association of Building Contractors and Developers warns.

No objection Lau stresses developers are not objecting to more public housing, however he suggests it has to be done carefully. For now the government has set as a target the introduction of a total of 19,000 public units into the market by 2012 – fewer than 2,000 are already completed. Macau public housing is divided into two types economic housing and social housing. The former is for sale while the latter is for rent. Lau’s comments come after a report published in March advised the government to take a gradual approach to building public housing, saying moving too quickly would damage the private property market.

Biggest hit According to the “Macau Public Housing Policy Study” report, rents and prices of existing flats, particularly those at the middle to lower end, would probably suffer the biggest hit. The report was commissioned by the Macau Association of Building Contractors and Developers and carried out by the Hong Kong Centre for Economic Research at the University of Hong Kong and the Faculty of Business Administration at the University of Macau. It recommended that Macau’s social housing stock should increase “gradually” and added that the pricing of economic housing should be switched from construction based to market price based.

Price discounts This means that the economic housing should be sold at prices that represent a certain discount on prices in the private sector. Meanwhile, the government should increase cash subsidies to families applying for public housing, providing the beneficiaries with more choices and giving the private housing market more room for development, the report added. Finally, the research team did not agree with the addition of new resale restrictions on public housing – currently economic housing units can only be sold after six years. The report says more restrictions would “negatively” affect the development of the housing ladder in Macau.

opinion

Rose Neng Lai Associate Professor in Finance and Associate Dean (Research & Development) in the Faculty of Business Administration at the University of Macau. She is currently a Visiting Fellow at the Clare Hall of the University of Cambridge

Why prices won’t drop

he gaming industry has brought with it a new, dynamic age for the Macau economy and its property markets. Nevertheless, after a few years of growth, investors have started to wonder how the glamour can be sustained in such a competitive market. As expected, the revenue dropped with the 2008 global financial turmoil. What was surprising was that it did not drop by too much. In fact, it started picking up again towards the second quarter of 2009, thanks to the strong performance and stability and support of the mainland. Simple answer What does this mean? Simple answer: healthy economic growth relies very heavily on the mainland´s policies towards Macau, particularly whether it will allow for stringent or lenient policies for travelers to Macau. But this does not mean the Macau economy is unstable. Hong Kong and Macau are the two SARs under the “one country two systems” formula. Given their distinct functions, there is no reason why prosperity will not continue, as long as the mainland continues to prosper. There is no doubt that the high property prices will remain so, although different markets behave differently. It is unequivocal that the residential markets will continue attracting investors, and new supply is still minimal. The office market is also picking up fast. More first grade offices are being offered and there is more demand due to expansion of different new businesses, either because of the gaming and hospitality sector itself, or because of strong confidence in continued economic development due to the sector. Slower pace A slower pace is being observed in the retail market. The asking prices of some shops are ridiculously high by Macau standards. With a population of just half a million, retail revenue relies heavily on tourists who mostly go to the big shopping arcades in major hotels. Therefore, vacant shopping units are still frequently seen on the April 2010

streets. Yet, owners are not quick to lower prices. A big issue is the almost unaffordable housing prices that draw constant demands and cries for help from the government. In fact, the Macau government has already launched measures like enlarging the scale of public housing, providing mortgage subsidies and guarantees for first-home buyers, and providing rental subsidies for people waiting for public housing. Bubble or not Should the government provide massive public housing like Singapore? Housing bubbles are created when investor expectations are filled with noise due to overconfidence and undersupply. In Macau’s case, there is certainly undersupply, but not so much. Rather, the problem is one of a mismatch in the quality of housing with the income group. There is also a degree of overconfidence, but probably not too much. Surging property prices are a phenomenon that go together with economic growth. Even in a shaky economy like the UK, housing is still unaffordable in many major cities, despite the already tremendous drop in prices. No quick fix Echoing the “Research Report on the Macau Public Housing Policy” which I completed with the University of Hong Kong team, in order to strive for a healthy residential market, what the government should NOT do is adopt housing policies that will affect the housing market in general. Nor should they provide short term, ad hoc measures that induce more shocks onto the market, and grant benefits that even high-school graduates are eligible for. Another issue is that residential buildings in Macau often look much older than they are. A critical factor for sustaining healthy market growth is improving the quality so units are worth the price paid for them. In summary, given Macau’s limited land and economic characteristics, it is not surprising that the price gap between Macau and Hong Kong will continue to narrow.

Time to celebrate

Game changer

Six years ago the face of Macau was changed forever, with a splash of glamour and shimmering gold frontage, a new kid on the block was ready to turn the city upside down

t was May 18 2004, and something big was happening. A new hotel-casino opened its doors and changed Macau’s gaming and tourism scene forever. Sands Macao was the first foreignowned establishment of its kind in the city, blazing a path for its Las Vegas competitors. It set the standard with everything from its chtzpah to its indulgent décor and peerless customer service. Sands Macao, a concession of Venetian Macau Ltd, marked the start of a liberalized casino industry. It revolutionised hospitality and gaming in terms of games offered, service, credibility, reliability, hard-ware and soft-ware.

Epic tale

The figures alone tell an amazing success story. Sands covers about 1.5 million square feet of floor space and boasts 24 floors with 289 guest suites, including 51 superluxurious ‘Paiza Suites’. Amenities include a 60-foot heated rooftop swimming pool, over 600-seat theatre, an array of highly rated restaurants and bars, a spa,

ballroom, and a superb top-floor lounge appropriately dubbed the ‘VIEW’.

Millionaires

Since opening its doors on May 2004, the Sands Macao has paid out billions in slot machine and Caribbean Stud jackpots, and awarded over $150 million in cash prizes and nearly 30 Sands Rewards Club members became a millionaire through its innovative Sands Rewards Club loyalty program. Sands Macao has recently reach the highest Caribbean Stud Jackpots in Macau. For the first time in gaming history, Sands has recovered its investment in less than a year. As the original market innovator, Sands continues to evolve with new gaming and non-gaming products and services, such as high state of the art lounges, promotions, activities and entertainment.

New facilities

Sands Macao is the oldest of the new generation Casino Hotel in Macau, yet continuosly innovate, refurbish and

Sands Macao Hotel was awarded as “ Macau’s Leading Casino Hotel: Sands Macao Hotel” in 2009 by the the World Travel Awards which is the most comprehensive and most prestigious awards programme in the global travel industry. Sands Macao function rooms such as the poolside Reflection and Ballroom has been hosting various functions both private and public events, ranging from wedding parties, corporate functions, birthdays and more. The locals keep on coming back and using the facilities due to the food quality, taste and presentation and of course a package that comes along with it the service. Gastronomic highlights include an authentic all new Pérola boasting the heritage cuisine of both Portuguese and Macanese new gourmet at special value, if you are a sweet tooth why not try the largest Portuguese Egg Tart in Macau? The Copa Steak House rated the best steakhouse in Hong Kong and Macau and boast the largest steak in Asia at 1.7kg (60oz)! Other outlets offers attractive dining discounts such as Golden Court Dim Sum Menu for only $18 and 2004 prices at the 888 Gourmet Place buffet for only $108 for Lunch Buffet and a Buy 1 Get 1 Free for Dinner Buffet. All outlets Sands offers “wine buffet” a concept where you can discover the world through wines. Apart from this you may try out different wines to your liking.

What a view

Meanwhile, the VIEW ultra lounge is Macau’s hottest and newest with live jazz from 10pm every night. The well travalled “Big Small Trio” (Sean Higgins on Piano, Scott Dodd on Double Bass, and Nicholas McBride on Drums) and featured artist Ptah Brown on vocals can be seen and heard live from Tuesday to Sunday; while on Monday the sensational Blaine Whittaker on Saxophone and TEETH is there to entertain you. Although The View is well known as a night spot and well known for its after parties, the View also serves High Tea set in the afternoon. There are in fact a number of business executives who visit the View during the day due to its ambiance suited for business with a most convenient free wifi access. The Sands Theatre has also lined up a few shows, one of those is the upcoming concert of Michael Wong with the big band, followed by an after party at the View on the 16th April. Endless energetic shows can be found at Xanadu casino bar which is filled with celebrities, international talent and so much more. It is a time to celebrate with the Hotel Casino that changed it all. For more details about what is happening at Sands Macao call +853 8983 8222 or visit the website www.sands.com.mo

Sponsored feature

upgrade its facilities. Last year alone new facilities were opened in the second quarter of this year. These include the newest casino the Sands e-Lounge. The new Slots High Limit area, catered with endless customer service, have an exclusive frequent mystery jackpot. Not only all that, the VIP Lounge has taken “pampering yourself” to a whole new level, with a high state of the art technology, massage chair, wide screen TV, internet, 24 hours buffet, daily news paper. There are more to come, which includes the family access at Sands restaurants.

Property

Hot properties The lack of new luxury homes in Macau has sent buyers scrambling for new offers by Alan Tso

t’s been more than a year since Macau’s housing market saw the launch of a new luxury property. So when One Oasis – a high-end condominium project overlooking the Cotai Strip - launched its pre-sales in late March, it attracted a phenomenal response. The developer said the response exceeded even their own expectations.

Media blitz

Prior to the rolling out of a Macau and Hong Kong media blitz, several institutional investors from the mainland, Japan and overseas had already bought nearly 500 units – more than half of the total number of units at the property – at an average price of HK$4,000 per square foot. During the first week of its public pre-sales, another 200 units were sold at an average price of HK$4,300 per sq. foot.

In fact, the supply of luxury homes is not keeping pace with the growing demand. According to Centaline Property Agency, there are fewer than 10 units in the primary market at the waterfront property The Residencia, at an average price of HK$5,000 per square foot. In light of this pent-up demand, another two properties have also launched public sales recently. One is The Bayview, near the future landing point of the bridge linking Macau with Zhuhai and Hong Kong.

The other is The Riviera in the Inner Harbour, near the A-Ma Temple. The string of new launches will no doubt further heat up the local housing market. Prices have been climbing steadily since the second half of last year. The latest official statistics show that 1,297 homes were sold at a total value of MOP3.14 billion in January this year. This means the average value of transactions is about MOP2.4 million – the highest in more than a year. It is safe to say that home values in Macau will keep pushing upwards in the coming months.

Residential units sold as per record of stamp duty*:

Value of residential units sold as per record of stamp duty:

Pent-up demand

April 2010

YEAR

Month

2009

January

Value (10^6 MOP)

Month

2009

January

172

February

235

February

372

March

394

March

594

April

580

April

May

775

May

1,156

June

922

June

1,627

July

1,339

July

2,767

August

1,730

Top line homes

Needless to say, upon its scheduled completion in the first half of 2013, One Oasis is destined to become another landmark top-line property. Brisk sales at the new property illustrate the pent-up demand in the luxury housing market. Industry observers believe the market is able to digest more high-end properties after a year long hiatus.

NUMBER of Transactions

YEAR

August

2010

976

299

980

September

1,366

September

3,161

October

1,185

October

2,130

November

1,360

November

2,643

December

2,003

December

4,057

January

1,297

January

3,140

* Note: Data include transactions of residential units valued below three million patacas, which are exempt from the payment of stamp duty according to a new government scheme.

2010

Source: DSEC

Graph 1 Average transaction value of residential properties Value (10^3 MOP)

3000 2500 2000 1500 1000 500 0

Oct

Nov 2008

Dec

Jan

Feb

Mar

Apr

May

Jun

Jul 2009

Aug

Sep

Oct

Nov

Dec

Jan 2010

Graph 2 Average transaction price of residential units per m2 Value (MOP)

30000 25000 20000 15000

Property investment scheme offers residency to 50,000 â&#x20AC;&#x153;Aboutâ&#x20AC;? 50,000 people obtained their right to temporary residency in Macau through the property investment scheme, according to the Macau Trade and Investment Promotion Institute (IPIM). Among the beneficiaries were nationals of Guinea-Bissau, Gambia, Niger, Hong Kong, the United States and Canada. The scheme, launched in the late 1990s, was suspended in April 2007, but the 4,683 applications then on the waiting list were not affected by the decision. Chief Executive Fernando Chui Sai On said last month that the property investment scheme had already achieved its goals and was outdated. He added the government will study an overall makeover on the population and immigration policies.

10000 5000 0

2007

Q3 2008

2009

Source: DSEC

Graph 3. Proportion of buyers:

12%

Non-Residents

88%

Residents

Total number of buyers in residential transactions in the first month of 2010:

1,828

Graph 4. Proportion of buyers:

28% 72%

Non-Residents

Residents

Total value of residential transactions in the first month of 2010:

3,140

(10^6 MOP)

Mortgage lending boost The number of new mortgages approved in Macau increased notably in the fourth quarter of last year as delinquency ratios continued to decline. Statistics released by the Monetary Authority of Macau show that new residential mortgage loans (RMLs) approved by Macau banks increased by 6.2 percent quarteron-quarter to MOP6.6 billion. Of which, 85.5 percent were extended to residents. Meanwhile, the number of new commercial real estate loans (CRELs) approved increased considerably by 88 percent from the previous quarter to MOP6.3 billion. Of which, 91.5 percent were granted to residents. At the end of 2009, the delinquency ratio for RMLs stood at 0.19 percent, down 0.04 percentage points from three months earlier. The ratio for CRELs also fell 0.10 percentage points from endSeptember 2009 to 0.23 percent. April 2010

Property

Winning bet A couple of hiccups aside, the Macau Property Opportunities Fund has sailed through the global financial crisis, seeing its asset value increase. The company believes its investment choices have left them well positioned. A Hong Kong listing would make sense, they say, but investors will have the final say by Tiago Azevedo April 2010

very coin has two faces. Last year the world was submerged in an international financial crisis which now seems simply an unpleasant memory. Macau Property Opportunities Fund Limited (MPO), managed by Sniper Capital, had a small setback with the fall of their Adjusted Net Asset Value (NAV) and the reversal in the local property market, but it still stands strong. Today MPO, which is a closedend investment company listed on the Alternative Investment Market of the London Stock Exchange, has five assets – four in Macau and one in Zhuhai

Sights on Sniper

Sniper Capital was established in 2004 to capitalise on the many property development and investment opportunities. It specialises in property investment opportunities in niche, undervalued and developing markets. The company manages two funds: Macau Property Opportunities Fund, that looks to produce attractive total returns from carefully selected property developments in Macau and the Pearl River Delta region. The other is the South China Sniper Fund, which seeks investment opportunities in non-gaming segments such as tourism, hospitality, food and beverage, entertainment and leisure.

rose to US$262 million and the Adjusted NAV per share went up 10.7 percent. Moreover, according to this last report, the company’s portfolio saw an uplift of 12 percent, to a total value of US$309 million, which six months before was US$275 million. Taking all this into account, MPO believes it is entering the next era of growth.

Photo: António Falcão | bloomland.cn

Opportunistic investments

– that, on completion, will range from luxury and entry-level accommodation to retail and logistics. According to the company’s report for the period ended June 30 2008, the Total Adjusted NAV dropped from US$296 million in 2008 to US$236 million one year later. Also, the Adjusted NAV per share fell 3.37 percent for the twelve-month period ending June 30, 2009. However, last year didn’t carry only bad news for MPO. Their interim report for the period ended December 31 shows that the company is back on track. In the second half of 2009, the report says, the Total Adjusted NAV

After going through the global financial crisis, Tom Ashworth, director of Sniper Capital and non-executive director of MPO, believes all the right choices have been made. In fact, the company says progress made on the development front fits well with Macau’s current economic climate, especially after the pace of growth in the territory slowed to a more sustainable level. Ashworth says Macau has unique conditions: “First of all, it is good value. Number two it has sustainable growth factors. The central government along with the chief executive have stated that they want to see diversification of the economy. “But it is always going to be a leisure-orientated destination. So, the key message about Macau is the sustainability of growth,” the Sniper Capital director tells Macau Business. He adds: “We take the view that the next 10 to 20 years it will be even more exciting. A massive infrastructure project like the light rail system is going to be implemented and the final link in the region is the bridge to Hong Kong and Zhuhai, which will ultimately link the Pearl River Delta.” Ashworth describes the fund as opportunistic: “We are not restricted to any segment, we look into all sec-

tors, everything we do depends on whether we think we can make money for our investors. “Back in 2006 when the fund launched it raised about US$200 million of equity from mainly European investors. We have now invested around 75 percent in five sites. And latest evaluation I think was about US$330 million of assets. So, obviously we have been generating uplift in the last three or four years,” he says.

In line with expectations

Looking at all segments gives MPO the opportunity to invest in different areas. Besides the site in Zhuhai – the first acquisition in the mainland that looks into the logistics sector – the fund has four assets in Macau. The most valuable is The Waterside in One Central, the only one that wasn’t developed by MPO. In the residential market, the fund has one site in Rua da Penha, a protected area. “There’s been a lot of planning around the project in Penha, protecting the façade. Recently, planning and demolition approval has come through to this project and we are now ready to start developing it,” says Ashworth. Another redevelopment project is in the North district, Rua do Laboratório, overlooking the border: “It is an area of big regeneration for the Macau community,” says the Sniper Capital director, adding that this project is going to be positioned as an affordable development, an entry-level, for younger people. Architectural planning approval for this project is expected in the second quarter of this year and the estimated completion date remains late 2011. The secret, confesses Ashworth, “is to think through who wants to live April 2010

Property

in these projects. A lot of mistakes have been made and are still being made by developers who are building in the wrong locations”.

Difficult market

The MPO non-executive director thinks that Macau is a difficult market. “You cannot simply come in here, like you can in more liquid markets in the world, and buy property. It is very, very complicated. “It’s Portuguese law, which you need a thorough understanding of, but most important you must have a local network. Without the help of a local network we would never have been able to execute our strategy. A lot of people have come into Macau and had their fingers burned because they haven’t understood the risks involved,” Ashworth points out. Their fourth project is near Leal Senado and is going to be a mix-use retail space. “Our intention is to develop that site into retail oriented space, with some food and beverage. At this stage of planning we have conceptually a restaurant on the roof with three stories of retail,” says the director. Both Penha and Senado are heritage sites meaning working with two government departments – planning and heritage. However, Ashworth says the projects are inline with their expectations. “From the beginning we knew that the length of approval would be longer, so we were already expecting to wait a little more than normal,” he adds. Ashworth says there is no reason to fear competition. In the luxury market, he emphasises what The Waterside in One Central has to offer, saying it will be unique. “All our market research over the last four years suggests that the demand for true luxury residences in Macau is definitely there. That is precisely what we are going to offer,” he says. The Sniper boss also says that MPO was not expecting a change in the policy that allows investors to obtain residence in Macau if they invest MOP1 million. “We understand that that was a legacy policy and at the end of the day Macau was just seeing people coming here to buy flats and leave them empty, which was unhealthy. I think it was a wise decision [to keep that policy suspended],” he says. MPO’s non-executive director says the company has thought about a Hong Kong listing but there are two basic reasons for it to be listed in London. “One is the historic connection and, secondly, we are bringing what we consider the world’s most exciting growth story to the European market. “It is true that we are an Asian based management. It would definitely make sense to have it listed in Hong Kong. But it depends on feedback from our investors and demand from the region. But it is something that we are looking at,” Ashworth says. April 2010

Photos: António Falcão | bloomland.cn

Hong Kong listing?

Lap of luxury The Waterside in One Central on the edge of Nam Van Lake is the jewel in the crown of Macau Property Opportunities Fund’s portfolio. Leasing has just started and prospects are looking good by Tiago Azevedo

he purchase of Tower 6 at One Central – now renamed The Waterside – was a unique move for Macau Property Opportunities Fund Limited (MPO). MPO was one of two institutional investors that bought a whole tower back in 2006 and according to Tom Ashworth, company non-executive director: “One Central was a case where Hongkong Land and Shun Tak branding was something very difficult to replicate. They are top-tier developers in the market place.” He explains that MPO will only buy from another developer in unique circumstances. “It’s probably not going to happen again for a long time, because our main focus is developing our own assets,” says Ashworth, who also director of Sniper Capital, the company that manages MPO. Besides the quality of the developers, MPO has taken the Waterside experience to a whole new level. Since the handover of the building in August 2009, the fund has put a lot of effort into interior enhancements and nothing has been left unattended. Apart from the beauty of an unobstructed 180-degree panoramic view and the proximity to Nam Van Lake, which offers a serene waterfront promenade, MPO is determined to offer “true tailored luxury apartments”.

Design and services

For The Waterside to become the ultimate experience in living, MPO has invited in famous Japanese designer Yasumichi Morita - whose work has successfully expanded from Tokyo to New York,

London, Hong Kong and Shanghai. The development only has 59 flats, but it will comprise three different environments – contemporary and classic for the standard units and grand deluxe (simplex and duplex) for the upper floors. The interior design will be adapted to the tenants’ tastes, but unfurnished apartments (there are only two per floor at 2,000 squarefeet each) are also on offer. All of the flats have three ensuites, a fully equipped kitchen and large internal areas, and above all, a great view that gives the impression of open space. In addition, there are also a wide range of services provided that go beyond housekeeping, which can go from setting up a birthday party to getting an in-house chef for a private dinner. The whole of this offer is complemented with a spacious clubhouse and multiple zones of comfort. “We feel that in terms of quality, position, location and also the superiority of the developers, Macau has never seen anything like this and it will take the local luxury market to a new level,” says Ashworth.

Looking good

Four years ago, MPO paid HK$4,500 per square-foot to acquire Tower 6, a site with a gross floor area of 201,000 square-feet, adding 25 individual units by the end of 2007. Their total commitment reached US$138 million, and the financing for the project was secured by an US$82 million loan facility arranged with a consortium April 2010

of international banks led by HSBC. “We know it was a very high price for Macau luxury at the time, which before that was probably around HK$3,700 per square-foot. But the reason was because there was nothing comparable to this quality. What was called luxury in Macau was probably mid-market in April 2010

Hong Kong,” the Sniper boss points-out.

Interesting inquiries

For now, the fund is focused on leasing apartments. “There are only 59 flats in this tower, so it is very niche. We believe we can add value by leasing out to senior expats.” However, MPO is open to different clients, be they

locals or from overseas. “A lot of people have not moved to Macau because they haven’t been able to find something that offers this kind of quality. This is their opportunity,” he says. The cost of renting an apartment in The Waterside will obviously differ depending on the package each clients take per month.

“The range of pricing is somewhere around HK$30,000 upwards,” says Ashworth. The leasing program began at the end of February. “It takes time to warmup. We will have a better idea of the campaign in the first couple of months, but we have had some very interesting inquiries so far,” he adds.

April 2010

Property

Home truths

A comprehensive study into Macauâ&#x20AC;&#x2122;s property market says flexibility and caution should be the watchwords as officials shape the future of public and private housing. But most of all, home ownership should be promoted by Kahon ChanÂ

April 2010

acau needs a more co-ordinated and diverse housing policy as it embarks on a new decade of prosperity, according to a wide-ranging new study. The University of Hong Kong and University of Macau Business Management faculty on behalf of The Macau Civil Contractors and

75 Real Estate Companies Association (MABCD), asked the Hong Kong Economic Investigation Centre to conduct the study. The team was led by Richard Wong, vice-president of the HKU, and Kwok Kwok Chuen, a former Hong Kong government economist. They found that the private sector has been unable

to meet market demand efficiently in previous years. Statistics show that the average size of newly built apartments has almost doubled from 84 square metres in 2000 to 163 in 2009 to meet the demands of foreign investors. However, the latest numbers also show that developers have begun to build smaller apartments - with the

mean area decreasing to 92 square metres in the first 11 months of 2009.

Political discontent

Observing that the completion of construction projects has remained low over the years, the report warns that if real estate prices continue to surge upward due to a supply deficit, a bubble could form leading to political discontent. The study urges officials to improve real estate management and regulation as soon as possible to meet the changing mentality of a new generation. However, the report was generally conservative in terms of public housing, particularly when 72 percent of Macau residents live in houses they own. The team underlined the need to provide for families with more urgent housing needs and noted that Macau must provide more social housing units due to a long waiting list.

Gradual and flexible approach

“To build a substantial quantity of public housing units in a short period of time will not only put the brakes on the market (especially the low cost and second-hand real estate market), but will also increase the concerns over quality,” the study says. This means new units should be added gradually. Moreover, the researchers say social housing should be sold based on market prices with a discount and without restriction on resale. This will facilitate the city’s housing structure in Macau. In other words, there should be flexibility in how people choose the house they want whenever possible. Kwok Kwok Chuen, a former analyst at the Standard Chartered Bank says:

“When we lease a social unit to a person, we may offer safe shelter, but he or she will remain poor unless he or she is given alternative investment opportunities, since many non-qualified workers tend to earn less and less as they become older. The incentive to own one’s house may, therefore, reduce the disparity in income and boost the sense of economic fulfilment when real estate is stimulated. “But society can never force everyone to own their own house as has been learned from the lessons of the ‘subprime’ crisis in the United States, and even Singapore, because there are always some families unable to subsist with the risks [of buying a house] for numerous reasons. “We must find an optimum level between house ownership and public housing provision, taking into account all factors,” says Kwok.

Qualified subsidies

To help people buy their own homes, the report recommends the government provide cash subsidies to qualified buyers. There should be annual quotas and transparent operations, instead of ad-hoc measures to deal with the real estate sector, so that buyers and private developers can plan their operations in advance and avoid the effects of a price surge. By paying a fixed subsidy, interest rates fluctuations are also prevented. Richard Wong, however, says he is aware most cities have taken the wrong option of building too many public housing units due to political pressure. “I think it best for any government not to build any houses, or if they must, build just a few and at a moderate pace,” he says. April 2010

Gaming

The billions race T

he first quarter of this year has been the most profitable ever for Macau casinos. In fact, more cash flooded into the gaming rooms in the first three months of 2010 than in the whole of 2004. Also, the latest data compiled on the concessionaires reveals that SJM continues to strengthen its market dominance. In January and February of this year gross revenues reached MOP40.9 billion – slightly more than in the MOP40.7 in the whole of 2004 – the year which marked the de facto liberalisation of the gaming industry.

Gross revenues for 2005 were slightly higher – at MOP47.1 billion – an amount expected to be overtaken in April this year. The same data shows that gross revenues in March 2010 topped the MOP 13.5 billion mark, 42 percent higher than the same period in 2009. The best monthly result in terms of gross revenue remains last January when MOP14 billion was recorded. Macau’s gross gaming revenues have grown by 57 percent compared to the values registered in the first quarter of 2009.

Gaming Results: Gross Revenue

In Million MOP (1HKD:1.03MOP)

13,937

14,000 12,000 10,000

The March numbers saw Stanley Ho Hung Sun’s SJM strengthening its market share – almost reaching the 35 percent mark – raking in MOP4.5 billion. The second largest slice of the pie was taken by Sands China, with a market share of 19 percent, followed by Wynn at 13.5 percent. The lower half of the operator’s market-share league table is populated by Melco-Crown with slightly less than 12 percent market share, followed by Galaxy with almost 12 percent, and MGM with a share just over the 8.5 percent mark.

11,268 9,531

8,000

8,340

8,799

9,570

12,600

12,215

13,400

13,500*

Feb 10

Mar 10

11,347

10,943

8,269

6,000 4,000 2,000 0

Mar 09

Apr 09

May 09

Jun 09

Jul 09

Aug 09

Sep 09

Oct 09

Nov 09

Dec 09

Jan 10

* Estimated April 2010

Gaming Results: Market Share Per Operator 2010

2009

Mar

Apr

May

Jun

July

Aug

Sep

Oct

Nov

Dec

Jan

Feb

Mar

SJM

29%

31%

30%

23%

26%

31%

32%

31%

30%

32%

35%

Sands China

27%

26%

21%

26%

22%

24%

20%

24%

21%

22%

20%

19%

Galaxy

10%

12%

10%

12%

13%

10%

12%

Wynn

16%

14%

18%

14%

15%

13%

14%

12%

17%

13%

15%

13.5%

Melco/PBL

10%

18%

16%

17%

13%

12%

16%

14%

12%

MGM

12%

11%

8.5%

TOTAL

100%

SJM

Sands China

Galaxy

Wynn

Melco/PBL

MGM

30 20 10 0

Mar 09

Apr 09

May 09

Jun 09

Jul 09

Aug 09

Sep 09

Oct 09

Nov 09

Dec 09

Jan 10

Feb 10

Mar 10

MGM hires banks for IPO

SJM slot parlour to go ahead

MGM Mirage has hired five banks for the Hong Kong listing of its Macau operations, scheduled for the second half of this year. The deal is expected to raise about US$500 million (MOP4 billion), sources with direct knowledge of the deal told Reuters. BNP Paribas, Bank of America-Merrill Lynch, HSBC, JP Morgan and Morgan Stanley are the banks involved. Meanwhile, Debtwire reported that the banks that placed Sands China’s IPO in Hong Kong last November, which earned commissions and fees totalling US$93 million, are now struggling to offload the US$1.75 billion financing they agreed to sell on Sands behalf. Citibank and Goldman Sachs led the IPO along with Barclays Capital, BNP Paribas, UBS AG, CLSA Ltd and GuocoCapital. The same syndicate – excluding CLSA and GuocoCapital – has been trying to allocate the new loan backing Venetian Orient Limited (VOL) for the stalled construction of parcels five and six of Sands China’s Cotai project. However, it is finding very few takers for the debt, three bankers close to the matter told Debtwire. A reason for this is the over supply of Sands-related loans already available in secondary markets at more attractive yields, two of the bankers said. Also, with Galaxy Entertainment Group is also planning to raise up to HK$ 8.8 billion in syndicated loans, banks have even less reason to snap up the debt, it is explained. MGM Mirage chief executive officer Jim Murren told Bloomberg: “I’m confident we’ll get the IPO done in the third quarter, probably in the August, September time frame.” The joint-venture with Pansy Ho Chiu King has already selected lead underwriters, added Murren, who declined to name them.

Despite saying it “stands firm” on moving slot-machine parlours out of residential areas, a plan to transform the Guangzhou Hotel in to the Inner Harbour has been given the government go-ahead. The project to transform the venue in a slot-machine parlour was presented by Sociedade de Jogos de Macau (SJM) in 2006. The Gaming Inspection and Coordination Bureau (DICJ) says the Guangzhou Hotel is one of the Inner Harbour redevelopment projects and partners with SJM’s Ponte 16 investment plan to stimulate businesses, hospitality and tourism in the area. According to DICJ’s director, Manuel Joaquim das Neves, no other locations in the Inner Harbour have been approved for opening slot machine venues.

Melco losses narrow Lawrence Ho’s Melco International Development saw net losses narrow to HK$1.45 billion in 2009. In 2008, the company posted a net loss of HK$2.35 billion. The company has a 33.45 percent stake in gaming operator Melco Crown. This year Melco Internationl Development expects results to improve because: “Core gaming and Macau business units reported improving results at the beginning of 2010 with City of Dream’s performance in the mass market improving significantly and Altira Macau showing strong return of rolling chip levels under a more profitable commission environment.” April 2010

Estimated

Gaming | Stock Watch

Table turners

A new policy to curb the number of gaming tables in Macau by 2013 is being watched closely for its effects on the share prices of casino operators by Ray Chan

ne of they key components of Chief Executive Fernando Chui Sai On’s maiden policy address was the government’s intention to cap the number of gaming tables in the city. Chui set a cap of 5,500 tables by 2013, not that many more than the 4,800 at present. The chief also stressed the need for a economic diversification. The move is sure to exert some influence on the performance of gaming stocks. Another highlight was the announcement that the government’s cash-sharing scheme was to continue, a move given a broad welcome. This brought to mind growing inflationary pressures since the introduction of new casino operators in 2002, with Las Vegas Sands the first to move here.

IPO looms for MGM

The largest Las Vegas casino operator MGM Mirage plans to sell shares in its Macau unit - MGM Grand Macau, in the third quarter this year, the company’s chairman and chief executive officer Jim Murren told Bloomberg. However, the company declared it was going to exit New Jersey, for the riches of Macau. MGM was forced to stop doing business in Atlantic City because the New Jersey casino regulator accused MGM Macau partner Pansy Ho Chiu King’s father, Stanley Ho Hung Sun – the chairman of SJM - of having extensive ties to organised crime. Ho has never been April 2010

charged with or convicted of any crime related activities.

Extended borrowings

On the parent company level, the refinancing issue has been around with MGM for quite a while. MGM Mirage eventually completed the sale of US$845 million in bonds and repaid loans and extended borrowings. The proceeds were used to repay US$820 million of its credit facility and fees. On March 10, the debtladen company was said to be reorganising its US$4 billion debt and considering a standalone bankruptcy plan as one of the options. It put itself up for sale to pay off the debt it took on in a US$5 billion leveraged buyout in 2004, and interested buyers have signaled to pay only about US$1.5 billion, according to Bloomberg and New York Times sources. MGM Grand Macau, is a 50-50 joint venture with Pansy Ho, Managing Director of the Hong Kong-listed conglomerate Shun Tak Holdings.

SJM raises shareholder dividend

Casino operator SJM Holdings Ltd reported that 2009 gaming revenue increased by 22 percent year-on-year to HK$34,066 million, net profit also climbed by 14 per cent to HK$907 million. Surprisingly, the dividend payout ratio increased by 50 percent to HK$9 cents per share from HK$6 cents per share last year.

However, the company’s earnings per share slightly declined to HK$18.1 cents from HK$18.4 cents in 2008, which is in line with peers such as Wynn Macau. The company has no gearing currently and holds about HK$ 8 billion cash and bank deposits, according to the newly released financial statement. Unlike its peers Galaxy and Sands Macao’s ambitious expansion plans in the Cotai area, SJM CEO Ambrose So said the company will be cautious on expansion plans for SJM’s Cotai development. At present, SJM, Macau’s biggest casino operator by revenue, operates 20 casinos, including its flagship Hotel Lisboa and Grand Lisboa Macau and has 1,700 gambling tables. Apart from the 2009 annual results, the issue of a successor to Stanley Ho’s empire has raised its head again. The Wall Street Journal’s Jonathan Cheng said: “Pansy Ho is widely seen as an heir apparent. For decades, no single person has wielded more influence in Macau than Mr Ho, whose four decade-long gambling monopoly in the former Portuguese colony made him a dominant figure in the city’s business and political life.”

No surprise on Wynn earnings

Wynn Macau’s net profit went up by 1.4 percent year-onyear to HK$2.068 million, while the company’s total revenue declined by 4.3 percent to HK$14,076 million from

HK$14,710 million in 2008. Casino revenue, which accounts for more than 90 per cent, also slid by 5 percent to HK$13,185 million in 2009. EPS (earnings per share) remained at HK$0.41 for 2009 and 2008. The Board has not recommended a final dividend payment for 2009 fiscal year ended December 31. Looking further into its financial position, the debtheavy company successfully lowered it gearing ratio (debt minus cash divided by total capital plus debt) from 91.3 percent to 63 percent, ita also raised HK$14.5 billion in an IPO last year. The net cash generated from financing activities was HK$13,126 million during 2009 compared to HK$4,639 million in 2008. Wynn Macau had an IPO in Hong Kong in October last year. The compnay indicated that the overall operating environment in 2009 remained unstable, due to seasonal

Ticker

influenza and visitor restrictions imposed by the Chinese Government.

Cost controls

The company will further curb on existing vendors and control its labor costs. The company told of its expansion of Encore at Wynn

Company name

Mar-1

Apr-1

M-o-M

HK$5.11

HK$4.16

22.8%

880 HK Equity

SJM Holdings Ltd.

1928 HK Equity

Sands China Ltd.

HK$12.80

HK$10.92

17.2%

200 HK Equity

Melco International Development

HK$3.51

HK$3.28

7.0%

1128 HK Equity

Wynn Macau Ltd.

HK$11.86

HK$10.12

17.2%

27 HK Equity

Galaxy Entertainment Ltd.

HK$3.60

HK$3.08

16.9%

Macau, adding 410 luxury suites and four villas and approximately 37 VIP table games and 24 mass market table games, according to its annual report.

Melco losses narrow

Lawrence Ho’s Melco International Devlopement made a

net loss of HK$1.45 billion in 2009; its EPS has narrowed to HK$1.18 from HK$1.92 from a year earlier. Morgan Stanley rated Melco as neutral rating and lowered the target price from HK$4.5 to HK$3.8. The company operates its flagship property, City of Dreams,

opened in June 2009. It has also rebranded its Crown Macau as Altria Macau which aims to attract high rollers. The company also has slot machine operator Mocha, and non-core businesses such as a Ski resort business in Heilongjiang, a northeastern province in China.

April 2010

Gaming “

Spreading the bets

Officials in the new government are keen to encourage Macau’s casino giants to add value to their undoubted strengths in raking in the gaming dollar, by promoting diversification to create more non-gaming revenues. But some fear the casinos aren’t doing enough by Emanuel Graça

how us the numbers”. That might well have been the question on many lips when Las Vegas Sands chairman and chief executive officer, Sheldon Adelson spoke at the CLSA Asia USA Forum in San Francisco last month. Addressing an audience of investors, Adelson insisted the company’s subsidiary in Macau, Sands China was posting non-gaming EBITDA percentages “of 25 to 30 percent (of overall operations) as the other guys are looking at single digits”. April 2010

In 2009, the company’s non-gaming net revenues in Macau represented only 12.5 percent of the total, a residual year-on-year drop of 0.06 percentage points. At the Venetian Macao, Sands China’s flagship integrated resort, approximately 81.4 percent and 78.8 percent of the gross revenue for the years ending December 31, 2009 and 2008, respectively, was derived from gaming activities, with the remainder derived from room revenue, food and beverage serv-

ices, and other non-gaming sources. In Las Vegas, Sands’ figures are quite the opposite. Approximately 62.7 percent and 64.9 percent of gross revenue for the same time period, was derived from non-gaming sources, while 37.3 percent and 35.1 percent, respectively, came from casinos.

Where are the MICE?

Sands China has promoted itself as more than a casino operator, gambling

81 on a strong MICE industry, witnessed by the company’s huge meeting and convention rooms at the Venetian. Adelson said: “We want to be in the integrated resort business, rather than a simple casino because, competitively, we win, they [the competition] lose.” However it is not clear how much Sands China is winning: Conventions represented less than two percent of the company’s net revenue last year, with the company registered a decrease in convention operations at the Venetian, as a result of the decline in global economic conditions. In 2009, Sands China hosted 15 trade shows, which attracted more than 320,000 visitors, according to company figures. In addition, it hosted 388 corporate groups, which brought an additional 60,000 delegates to Macau.

High expectations

Although it represents only a minor part of its business in Macau, Sands China expects to see its convention business expand in 2010.

City of Dreams expects more visitors City of Dreams expects a 20-25 percent increase in demand in the next six to seven months, the complex’s CEO, Greg Hawkins says. He predicts the opening of several new services and infrastructures this year, will mean City of Dreams should see a daily average of 40,000-45,000 visitors. Last month, City of Dreams opened “Kids’ City”, an area for children, where parents can leave their kids with qualified staff before heading to the casino. Later this year, they will open a disco and a resident show by Dragone Entertainment Group – “The House of Dancing Water”.

Beijing clamp stalls BOC Galaxy loan Tighter credit controls imposed by Beijing are stopping mainland banks lending to companies, banking sources told Reuters. The central government has raised banks’ reserves twice this year, affecting their ability to lend money. Bank of China (Macau) was tipped to underwrite a HK$8.8 billion loan for casino operator Galaxy Entertainment Group Ltd, but could not get credit approval in time to join at the top level although is expected to join the deal later, according to Reuters. “You would have thought the Chinese banks would have been in on any casino deal in Macau, particularly for the China-linked Galaxy name,” said a head of loans at an international bank in Hong Kong.

April 2010

Gaming

“Given current trade show and group booking trends, we are confident of strong growth in MICE visitation in 2010,” the company said ahead of its 2009 annual results. Sands China’s goal is to hold events at Venetian’s convention and meeting room complex during weekdays when demand is down at hotels and casinos. As things stand, the US casino operator has the higher percentage of nongaming revenues in Macau. The only other player in town also betting strong in diversification is Melco Crown, which saw non-casino operating revenues fall below six percent of

April 2010

overall operating revenues in 2009. However, the company’s big bet in the MICE business, Grand Hyatt Macau at the City of Dreams complex, only opened last September, offering a total of 15 individual function areas spanning more than 968,000 square feet (90,000 square metres). Wynn Macau’s, non-casino operating revenues were below seven percent of overall net revenues in 2009, according to the company’s official data. For Stanley Ho Hung Sun’s Sociedade de Jogos de Macau, the casino industry’s market leader, non-gaming revenues fell below one percent in the

first half of 2009. Overall, Macau is miles away from Las Vegas, where non-gaming revenues surpassed those of gaming a few years ago and now generate more EBITDA than casinos do.

Government plan

While the casinos might be more interested in reaping the rewards from punters, the government wants a change of attitude. Last month in his maiden Policy Address to lawmakers, Chief Executive Fernando Chui Sai On noted the importance of casinos but stressed economic diversification. A couple of days later, at a debate on the 2010 Policy Address, the Secretary for Economy and Finances, Francis Tam Pak Yuen elaborated on this idea. “It is hoped that the gaming operators won’t solely pursue development in their own business and an increase in the gaming tables. Macau’s future economic development is heading towards a world leisure and tourism hub and I hope that the gaming companies can contribute to this goal while achieving individual success at the same time,” Tam told lawmakers. The official plan is for gaming companies to include more MICE facilities in their projects, in order to promote economic diversification. A total of 1,485 MICE events were held in Macau in 2009, the first year data on the sector was compiled by the Statistics and Census Service. The events had an average duration of two days, attracting 660,881 people. Meanwhile, last month, the government created a commission dedicated to the development of the MICE industry, headed by Tam. It was also announced that a special bureau would be set up to support and promote the growth of the sector. According to experts in this area, Macau does have a competitive edge. “The territory is a market with huge potential for meetings and exhibitions: the destination, the amenities, the venues, the hotels… and it is easy to access,” said the president of the International Association of Professional Congress Organisers (IAPCO), Philippe Fournier, who was in Macau last month. Although believing regional competition in this sector will increase in the future, Fournier adds that the link

83 to mainland China offers Macau - and Hong Kong - an edge.

MGM gets Borgata approval MGM Mirage’s plan to sell its stake in the Borgata casino in Atlantic City has been approved by New Jersey regulators. The move came after Jersey’s Division of Gaming Enforcement(DGE) recommended last year that the state’s gambling commission find MGM’s Macau joint venture partner, Pansy Ho Chiu King, “unsuitable.” Her father, gaming tycoon Stanley Ho Hung Sun, was said to have links to organised crime. In a report made public last month, DGE wrote that Pansy Ho’s relationship and financial ties to her father, as well as “her associations with persons alleged to be associated with organised crime render her susceptible to influence by unsuitable persons.” The report also said MGM’s conduct in the Macau joint venture “raises concerns about its commitment to corporate regulatory integrity,” adding the company’s due diligence and compliance efforts were deficient. “The DGE’s report acknowledges there is no evidence that Pansy Ho has engaged in any wrongdoing or been accused of any illegal activity,” MGM Chief Executive Jim Murren said in a statement. The company owns the Borgata through a 50-50 joint venture with Boyd Gaming Corp. MGM will place its stake in the Borgata in a divestiture trust. The settlement mandates the sale of the trust property within a 30-month period. If the company has not found a buyer within 18 months, the trustee will then take over the sales process, having another 12 months to conclude a deal.

Newcomers

Deputy director of the Macau Government Tourist Office (MGTO), Maria Helena de Senna Fernandes, is more cautious: “We are still at the beginning of our MICE industry, the local sector has to improve a lot,” she said. However, Macau needs to take advantage of the global economic recovery to promote itself as a MICE destination, she added: “As the global economy revives, we should take this opportunity to strengthen our fundamentals and be well equipped with necessary training to grasp more business opportunities.” The government’s commitment to push forward the MICE industry has already passed the financial support process. The “Plan to Support Macau’s Tourism Industry” budgeted MOP21.83 million to support MICE events just for the first quarter of 2010. But the final goal is that the sector will operate independently, without the need for subsidies. At present around half of the MICE events held in Macau have some kind of official support, according to Chui Sai On. But some still doubt whether gaming operators are truly keen to invest in the sector. One such voice is lawmaker Vitor Cheung Lup Kwan, who accused the Venetian of having transformed its convention floor area into a “concert venue’’.

Bethlehem not for sale Las Vegas Sands Corp has dismissed reports that the company wants to sell Sands Casino Resort Bethlehem. The gaming operator said: “Recent rumours of the company’s supposed interest in selling its Sands Casino Resort Bethlehem property, or indefinitely delaying the completion of the hotel and other components of the development, are unfounded.’’ It added that it has already mobilised its development team in the region and could restart construction on the 300-room hotel tower within the next “several weeks”, or as soon as sub-contractors are lined up and activated.“We are looking forward to reviewing our table games application with the Gaming Control Board, and at the same time we have undertaken efforts which will result in construction resuming on the hotel portion of the development in the very near future,” said Las Vegas Sands chairman and chief executive officer Sheldon Adelson.

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Gaming

Door closed

A top-level official has pledged to control the growth of the casino industry however recent caps on table numbers have left some wondering if the numbers add up by Emanuel Graça

hey’ve all been mentioned in dispatches: Donald Trump, Richard Branson’s Virgin, Genting and, on a more persistent basis, Harrah’s Entertainment. But none of the above have entered Macau’s gaming market. Making that move has become a lot harder, if not impossible, since last month, after the Secretary for Economy and Finance, Francis Tam Pak Yuen, announced Macau will not authorise any new casinos projects. “The government is adjusting the gaming industry’s size to promote suitable deApril 2010

velopment,” Tam said. Speaking on the debate of the 2010 Policy Address for Economy and Finance areas, Tam added that in the next three years, the number of gaming tables in Macau will gradually increase from the 4,770 at the end of 2009 to a maximum of 5,500. He stressed that the goal is to promote an expansion rate of around 3 - 4 percent a year. No cap was announced for slot-machines.

Beijing call

Tam’s remarks came after Chief Executive Fernando Chui Sai On set the tone

for the future of gaming in Macau. In his maiden Policy Address, he pledged his government would control the size and growth rate of the industry. Chui added that he was even considering taking back undeveloped land from gaming operators if no proper plans are in place to build. “The existing scale (including the composition of gaming and non-gaming casino resort facilities and those projects which are still in progress) is ‘fair’ to Macau’s economy, at least at this stage,” says Ricardo Siu, associate professor of

economics and international finance at the University of Macau. “This takes into consideration such factors as infrastructure, the local labour force (both quantity and quality), and most importantly, the regulatory system and its enforcement,” he told Macau Business. Chui Sai On has Beijing by his side. The central government has made it clear several times that Macau’s casino sector is not to expand forever. Last month, before the new restrictions were announced, vice president Xi

85 Jinping stressed the territory needed to adjust, control and monitor its gaming industry in order to ensure its orderly development and economic diversification, pushing towards creating a strong leisure and tourism industry.

Déjà vu?

This is not the first time the Macau government has called for a stop to new casino projects. In April 2008 then Chief Executive, Edmund Ho Hau Wah announced the government would not authorise any new casino projects besides those that already been accepted. However, Ho didn’t reveal how many projects had already been accepted - information which remains publicly unavailable. At that time, Tam said the total number of casinos, including the accepted projects, would not surpass 40. Macau currently has 33 casinos.

Number gap

There are huge differences between the cap announced by Tam and the number of gaming tables that new projects already on the way are expected to bring in. Wynn’s Encore, scheduled to open this month, is expected to accommodate a total of 37 VIP gaming tables and 24 mass market tables. The Galaxy Macau project, due to open on the Cotai Strip in the first quarter of 2011, includes room for 600 gaming tables. Finally, Sands’ frozen construction projects in Cotai, which are set to restart soon and be completed by late-2011 (first phase), will host up to 670

gaming tables. This means these three projects will introduce more than 1,300 gaming tables to the market, a figure that certainly doesn’t match Tam’s figures. For the 5,500 cap to go ahead there are only two possibilities: casino operators will be obliged to scale down their new projects or they will have to remove some of the existing gaming tables.

No answers

Macau Business asked Tam’s bureau about the differences between the cap announced and the projected number of gaming tables for new casinos already under construction, but received no response. “We need a lot more clarity on the policy. It’s also unsettling for investors who may now be less willing to finance projects in Macau given the potential for policy changes like this,” says Sean Monaghan, managing director at AG Leisure Partners. “You can’t have this sort of cap unless you don’t want the mega projects to be built,” Monaghan told AFP, noting there is still a lot of room for growth in the sector, considering the potential of the mainland market. CLSA analyst Aaron Fischer also raised his eyebrow at the table cap. “I don’t know why the government would punish companies that are building projects that will attract the mass market and therefore have the potential to boost non-gaming revenue,” he said. Nonetheless, CLSA remains positive about Macau’s gaming industry, forecasting a 30 percent

Sands escalates green agenda Sands China is to install motor efficiency controllers on 96 escalators in Venetian Macao, Sands Macao and Four Seasons.Power Efficiency Corporation - a clean tech company focused on energy efficiency technologies for electric motors - has received an order from the casino operator for the purchase and installation of its 3-phase motor efficiency controllers. The controllers can save energy usage by up to 35 percent, according to the company. Steve Strasser, company chairman said: “This project will greatly increase awareness of our products in China and other parts of Asia.”

Sands ‘linked to alleged crime boss’ Questions have emerged over Las Vegas Sands Corp’s alleged links to a Macau-based businessman said to have ties to organised crime. Reuters news agency claims their examination of Hong Kong court records, US depositions from a former Sands executive and interviews with law enforcement officials in the United States and Macau have revealed a connection between Sands and Cheung Chi-tai, an investor in a junket company. According to Reuters, a Sands Macao patron also said that Cheung ran one of the VIP rooms at the property. In the report, Cheung is said to be connected to a plot to murder a Sands Macao dealer suspected of helping a patron cheat millions of patacas from the business. However, Cheung was not charged and did not appear in court “due to insufficient evidence,” the Hong Kong police told Reuters. The news agency’s report said that to the knowledge of Las Vegas Sands officials, Cheung is not listed as a director or shareholder with any gaming promoters the company uses in Macau. The operator also said it manages all its VIP rooms. According to the Las Vegas Review Journal, the allegations could have legal implications in Nevada for Las Vegas Sands: The state’s Foreign Gaming Act requires officials there to determine if professional relationships involving international business partners and locally based casino operators would damage Nevada’s reputation. Similar legal issues recently emerged in a case involving MGM Mirage and Pansy Ho Chiu King, leading to MGM’s decision to leave New Jersey.

April 2010

Gaming

growth in revenue for this year. “With supply expanding very slowly, we expect the industry to deliver above average returns for the next few years,” said Fisher.

Good news?...

Although a lot is still to be explained, the restrictions announced by the government are good news for the six local concessionaires, who definitively see the threat of new competitors vanishing. According to Sterne Agee analyst David Bain, the cap is especially positive for Sands China, Wynn and Melco Crown because it stops “lesser” casinos from flooding the market with tables.

Meanwhile, as the market continues to grow, the yield per table will also increase, he added in a note to investors. Sands China has welcomed the government’s decision, but was unclear on whether it is going to hurt its expansion projects. Company president Steve Jacobs said: “The Macau government is sincere in its efforts to diversify and it recognises the integral part sites 5 and 6 [of Sands China’s Cotai project] play with regards to growth in hospitality, business, and leisure tourism.” However, Sands China postponed a contract signing ceremony with a contractor to restart construction on sites

or gaming operators eyeing Macau, the restrictions announced by Fernando Chui Sai On’s government present a worst case scenario. This is especially true for Harrah’s Entertainment, which invested in a golf course in Cotai in 2007 to put the company’s footprint on Macau. However, earlier this year, the director of Macau’s Gaming Inspection and Coordination Bureau, Manuel Joaquim das Neves, once again dismissed the possibility of the government issuing more gaming concessions. “We do have an interest in Macau. We think Caesars is the best brand for that market,” Garry Loveman, CEO of Harrah’s, has told Reuters. “We’ve made it very clear we would April 2010

... or bad news?

The cap also raised doubts about the future of Sociedade de Jogos de Macau (SJM) and MGM Grand Paradise, because it is unknown how their expansion plans will be impacted. For SJM’s chief executive officer, Ambrose So Shu Fai, the 5,500 gaming tables cap is reasonable. So said it will help increase earnings per table – “we can always reshuffle our tables to boost efficiency” - but he noted that there was no extensive consultation on the cap with the gaming industry before its announcement. Stanley Ho Hung Sun’s second-incommand added that SJM’s project for the Cotai Strip – a James Bond-themed casino – won’t be affected by the cap, since the company will hold back its plans to expand into that area for now because: “we think that the critical mass hasn’t grown to such an extent that would warrant our investment there.” The company has no short-term expansion plans. MGM Grand Paradise submitted a land request for a plot in Cotai a long time ago but no approvals have been announced yet.

Cotai on hold?

Full house F

5 and 6 on the Cotai Strip which was scheduled for March 29. No reasons for the postponement were revealed and no new date for the ceremony has been announced.

like to see the Caesars Palace brand in Macau. We certainly recognise there are six licensees, and somehow or other it has to fit through that lens.” According to media reports, Harrah’s recently tried to buy out James Packer’s Crown 35 percent share in Melco Crown, a joint venture with Melco International, led by Lawrence Ho Yau Lung. Crown denied such negotiations. To enter Macau’s gaming market, Harrah’s could eventually resort to cooperating with one of the existing gaming operators or try to buy a share in the troubled Macau Studio City project. However, under the new expansion restrictions, it seems unlikely the government will approve more new joint-venture properties.

Wynn Macau may rethink its strategy. Currently, the company is awaiting final approval for its Cotai expansion. “If approved, it would allow us to construct an integrated casino and fivestar resort of up to approximately 6.9 million square feet, including space for gaming, accommodation, food and beverage, retail, leisure, landscaping areas and convention/meeting areas,” the company said in its annual report for 2009. Last October, after a meeting between Macau’s government and representatives of the six local gaming operators where a slowing down of the industry development was debated, Wynn signalled it could quit new projects if the plans to implement a gaming table cap went ahead. “If they limit the amount of tables there is no reason to build any more,” Steve Wynn, the company’s chief executive officer told Reuters at the time.

April 2010

Gaming

Ho slams underworld-link claims Just out of hospital and recovering at home, Macau’s longest-serving casino tycoon Stanley Ho has issued a strong rebuttal of allegations by US regulators that he is involved with organised crime

acau casino tycoon Stanley Ho Hung Sun has yet again denied allegations by United States gaming regulators that he has links to organised crime. Ho says there is “no foundation” to claims made by New Jersey State gambling regulators, who consider Macau’s

April 2010

longest-standing casino boss and his daughter Pansy as “unsuitable” partners. Despite not having read the document, Stanley Ho denies the allegations. SJM executive director Ambrose So also said he had not read the report but stressed that Stanley Ho has refuted such allegations on many occasions.

New Jersey casino regulators say they have evidence that Ho has extensive ties to organised crime in China. Their suspicions led MGM Mirage to agree to sell its half of Atlantic City’s top casino, rather than abandon the lucrative Macau market, where it has a joint casino venture with Pansy Ho Chiu King. The New Jersey Division of Gaming Enforcement [DGE] report claims Stanley Ho allows Chinese criminal organisations to “operate and prosper” inside his casinos, and also maintains that the tycoon’s daughter Pansy remains dependent on him and his money, and remains under his influence. Regulators claim 90 percent of the money Pansy Ho put up as part of the joint venture with MGM Mirage came from her father. They say Pansy Ho, who had no prior casino business experience, still holds senior positions in her father’s companies, despite having stated she was financially independent of her father. MGM Mirage has defended Pansy Ho, saying she has never been accused of any wrongdoing. “The DGE’s report acknowledges there is no evidence that Pansy Ho has engaged in any wrongdoing or been accused of any illegal activity,” said Jim Murren, MGM Mirage’s chairman and CEO. The DGE report also says that, in May last year, they gave MGM Mirage the option of cutting ties with Pansy Ho and their casino in China or selling the company’s 50 percent interest in the Borgata Hotel Casino & Spa. The company admits no wrongdoing and says it has a “spotless record” operating the MGM Grand Macau with Pansy Ho, and the DGE announced it had approved MGM’s withdrawal application and its plans to pull out of Atlantic City, which should happen in the next 30 months. In asserting Stanley Ho’s alleged ties to organised crime, the report cites numerous sources including a US Senate committee, several governmental and regulatory agencies, a private investigative firm hired by MGM Mirage in 2001, and an unidentified US law enforcement official. The octogenarian Macau tycoon has never been charged with or convicted of any offence connected to organised crime.

The Power of Beauty The most extravagant beauty treatments throughout History Notes, Tips and the Best Choices in the market for your face Why you should let Spas rule your world

breakdown By the Numbers

Life has its weird moments. Once you get to know the numbers, it gets even more odd!

1 month

Beauty hurts, looks great in pictures and…smells!

the time the average man spends out of his lifetime shaving his beard

280,401

number of breastaugmentation surgeries performed in 2003 by United States plastic surgeons.

1,000 hours

time the New Zealander sword-swallower Lucky Diamond Rich spent having his body fully tattooed

22 sq ft.

average area of an adult skin, the largest organ in the human body.

14th

position on the periodic table of the Silicon (Si) element

1920

The year automobile paint was invented and Michele Ménard took it as her biggest inspiration to modernise the nail polish women use today.

4 months

66,000,000 gallons the water capacity of the largest pool in the world, located in San Alfonso Del Mar resort in Chile. 90

the average life time for hair extensions before the special gluelike bond attached to natural hair begins to loosen and they fall off.

Most of the time, it really hurts being beautiful. All of those beauty processes, from plastic surgery to wearing high heels, involve real and non-fictional pain. But, as the saying goes, no pain, no gain! In this Essential issue, totally dedicated to Beauty, we’ve come up with some interesting, but nevertheless, painful discoveries about beauty treatments throughout history. Over the centuries, people (mostly women) have come up with the most outstanding and surreal habits in order to be beautiful, desirable and forever young. Exotic ingredients, some of them poisonous and deadly, were considered necessary at the time for the purpose of being beautiful. Today however, women and men have a more healthy relationship with their own bodies and especially with what nature has to offer. We don´t need to, and shouldn´t go so far anymore. There are beauty treatments and products capable of amazing results and without the suffering of the past. Once again we suggest the best products on the market and even take the time to learn how to prepare our faces before applying the many and varied specialist beauty treatments and trends! Also in this issue, you’ll find out all the best painless treatments, the most affordable and, believe us, the most effective methods for rejuvenating body, mind and soul, and all of it sponsored by Mother Nature! It was also surprising to find out that Cleopatra still sets the bar where beauty treatments are concerned. Gold in the bath tub is still in vogue and as expected, increasingly expensive. Less expensive, more accessible and booming are the new combined trendy spas and health clinics. After a delightful and relaxed conversation with one of Macau´s beauty industry experts, we are assured that the younger generation of consumers is more and more aware of the quality of the ingredients used in beauty treatments - beauty, not only for their own body, but also emphasizing the ecology and traditional values. Breaking out of tradition, and increasingly determined to assert their own sexuality, we discover what new trend is turning female “fraganistas” on ... sure we could have been more explicit, but still we believe our job is to sharpen your intuition and imagination!

Macho Man

Gentleman

Your female friends will love him. Your male friends will hate him. He will notice how good you look in that new Even when you’re going through a bad hair day, dress…depending on the cleavage. he will greet you with a compliment. Let’s be honest…most of the time He smells so good…you just might fall he smells like a horse! head over heels in love! He always has his hands on something…or More in touch with his own feelings, someone. sometimes more than you would like him to be! Are you sure he´s going to change his stained He won’t disappoint you ever! He will always t-shirt before dinner at your mother’s? be dressed up for the occasion. Gosh, he looks good with his shirt off! Gosh, that shirt looks good on him! “A man who is virile and sexually active “A man of good family, breeding, or social [stud]”, as defined in the dictionary position”, as defined in the dictionary. What you see is what you get! There’s more than meets the eye!

Beauty 10 commandments 1 You shall not wear way too much mascara. Long lashes, good! Clumps, bad!

not work. Consider if the lipstick disappears, but the liner doesn’t. Not a pretty picture!

2 You shall not forget that eyeliner can make or break your efforts.

7 You shall match foundation with your skin tones, not cover everything up. You are not a clown, for heavens sake!

3 You shall have fun when you choose eye shadow colors, but at least give them a little thought before you apply them. 4 You shall look into a mirror before you leave the house. A mirror never lies. 5 You shall not succumb to bad brows. Unless you have very long bangs, someone will notice if they are over-plucked or have gone untouched for the past 10 years. 6 You shall not let lip liner fight with lipstick. The trend of

wearing one color of lip liner and another for lipstick does

8 You shall not forget to apply a little foundation to the neck area as well. Again, you are not a clown! 9 You shall check it twice. As much as we would like it to, makeup seldom lasts the entire day. Be sure to check if something has disappeared or worse... smeared. 10 You shall take a good look at what you’re wearing

and ask for a second opinion if necessary! An outfit might look good in a music video, but chances are, it won’t on the street. 91

feature

A little something to ignite your senses…and your wallet!

King Midas’ touch Well known for their handmade Bath Ice Cream products, ME! Bath has come up with something really unique for the extravagant ultra-rich. This once in a lifetime experience bath, named Most Expensive Bath, uses the highest quality water desalinated Hawaiian deep seawater blended with water from the polar ice caps - mixed with the finest ingredients. It features rare and antioxidant-rich Sidr honey from the Hadramaut Mountains of the Southwestern Arabian Peninsula, moisturising pink salt found in the mountains of Peru, illipe butter harvested by hand from Bornean nuts and known to increase the elasticity of the skin, 100 percent organic jojoba oil to promote healthy skin, and kokum butter full of essential fatty acids.

As the finest ingredients do their magic, notes of white grapefruit, lotus flower and passion fruit, mingle in the air with the incense of sycamore wood. That’s not all, though… As if all of that wasn’t appealing enough for one’s senses, pure 24-karat gold rises to the surface of your very own Eden, adding an opulent property that firms the skin and gives the body a radiant glow! This made-to-order bath treatment is artisan crafted and formulated from a secret recipe that can only be achieved through a precise eight week process. So if, you’re really interested in getting dipped in 24-karat gold, be sure to give ME! Bath enough time to prepare everything. Once ready, it will be delivered in a

Health and beauty, the perfect mixture! Just take it from Mother Nature, she knows best! Milk Milk has never been something you just pour on your cereal in your coffee. Milk has been used to clean and nourish skin for centuries. It is incredibly beneficial for the skin in so many different ways. Milk´s various ingredients serve a multitude of skinimproving purposes, such as gentle cleansing, excellent exfoliation and giving a softer supple feeling. Taking a milk bath is one of the easiest ways to improve the look and feel of your skin almost instantly. If you have a bathtub and a carton of milk in your refrigerator, then you already have everything you need! Salt Just draw a hot bath, but not so hot as to make your skin red. Add a generous amount of bath salt, and take a nice long soak. Before you know it, you will feel your muscles and joints beginning to loosen up. Other health benefits include stimulating circulation, helping to fade bruising and minor scars, reducing the inflammation and pain of arthritis, relieving back and leg pain, and relaxing muscle spasms. If mixed with essential oils it can help promote even greater relaxation. Take your bath an hour or so before getting ready for bed…it’s heaven! beautifully handcrafted Sterling Silver masterpiece designed by the finest silver craftsmen from Israel. The price starts at MOP400,000 and the rest depends on whether you would like to have your ME! Bath experience at home or in a spa environment. Much of that cost reverts back to the Water for People charity, which provides clean water to people in third world nations.

Aloe Vera The jellylike substance within the spiky exterior is renowned for its healing properties. It is much prized externally for clearing skin blemishes and scars, and healing burns or sunburn. Internally it may be taken in tablet form for digestive complaints. Coconut It is used in countless ways, for eating, drinking, as an ingredient in cakes and as tropical Asia’s most prevalent cooking oil. Oil from mature fruit is massaged into the head for soft and shiny hair, while the thick white milk is traditionally used as a shampoo and the young thin milk as a conditioning rinse. Besides it smells so sweet!

Mint Grown everywhere in the world, mint is best known for its taste. It’s a blood cleansing plant because of its antiseptic and antibacterial benefits. To help clear the complexion, it is most commonly taken as a tea simply by infusing a few leaves in boiling water. It can also be mixed with a creme bath conditioner and rubbed into the scalp to combat dandruff and stimulate hair follicles for growth. Cucumber One of the beauty industry’s favourite fruits the cucumber is used predominantly for its cooling and revitalising properties. It is great for treating oily skin, as it tightens the pores whilst moisturising. Cucumber slices on the eyes refresh and moisturise and, for those who forgot their SPF, mashed cucumber soothes sunburnt skin. Chocolate Chocolates or chocolate spa products have anti-oxidants and mineral that promote good health inside and out. Oh yes! Chocolates contain a chemical called tryptophan that gives you that heady feeling when you eat then. Aside from this, chocolates contains other chemical elements that can provide you with a relaxing, feel good and giddy sensation all over, whether you eat them or apply them to your skin. Facial or body chocolate spa with cocoa butter can provide great softening effects besides helping to plump and firm your skin. Chocolate has antiaging benefits such as lightening or diminishing wrinkles, removing harmful radicals and leaving your skin looking fresh, glowing and younger-looking. Mud The most proven reason for taking take a mud bath is that it’s relaxing. Being cocooned and buoyed up in the warm, soft mixture simply sucks the stress out. The temperature makes you perspire, which cleans the pores. Health benefits are not proven, but a mud bath is claimed to improve the complexion, relieve joint and muscle pain and remove toxins. 93

Take Notes

Check out the right way to do your basic skin care

His job was to make the most tired of models or actresses look great on screen. As a make-up artist working in the Portuguese movie and television industry, Azores-born Rui Carreiro also produced two of Portugal’s major fashion events, Portugal Fashion and ModaLisboa.

Cleansed Face Whether you’re young or old, man or woman, you can do your skin a big favor by cleansing correctly. Cleansing is arguably the most important part of your basic skincare routine. Proper cleansing gets rid of old surface skin cells, dirt and dust, grime, make-up and bacteria, and keeps skin pores free of clogs and able to breathe freely. Cleansing also aids circulation and prepares the skin to receive topically applied nutrients and lipids.

Step by Step

Cleanse twice a day, no more. Unless you have exposed your skin to excessive dust, grime or pollution, twice-a-day cleansing is more than adequate for any skin type. Cleansing too often strips your skin of precious natural oils. Not cleansing regularly, particularly before you retire for the night, may lead to build-up and eruptions. Choose a cleanser that is appropriate for your skin type. Do not use soap on facial skin: it can be too harsh and drying and damages skin over time. Too rich a cleanser can clog pores, while too dry a cleanser can irritate the skin. A cleanser for dry skin should contain nourishing herbs and oils. One for oily skin should include herbs that balance oil production and support clarity. Sensitive

Tips

Keep your skin well hydrated

Once a week apply a facial moisturizer to enhance the level of water in your skin. Spread a thick layer of nourishing moisturizer or night cream over your face and leave it for about 10 minutes. In addition to the previous care, you can always use a regular serum that, besides having a firming effect, improves the skin´s brightness.

Protect yourself from the sun Sunlight is the major cause of premature aging. Use sunscreen all year round.

skin benefits from an ultragentle, fragrance-free, nonirritating cleanser.

Always cleanse with tepid water. Hot water dries and damages skin over time, and cold water won’t dissolve and take away embedded dirt and grime as well as lukewarm water does.

Apply the cleanser with your fingertips or a soft sponge, using gentle circular massaging strokes and moving upward on the face and neck. Do not scrub too much…gentle massaging strokes are enough to help improve circulation as well as loosen grime and old surface skin cells. Too much scrubbing will stretch skin and irritate it, especially the delicate skin around the eyes.

Cleanse your face, even if you don´t wear make-up.

Reduce tobacco

Tobacco smoke, besides giving a grayish tone to skin, cuts off the oxygen needed for skin cell regeneration.

Today, Rui is in Macau working as a hairstylist and fashion adviser for the Málo Clinic. Rested, relaxed, comfortable and healthy! This is the look we all seek in order to appear younger in front of the mirror, and it´s probably what gives us confidence enough to get on with our daily responsibilities.

Change skin By mildly abrading your skin with exfoliating agents, you will remove the surface layer of dead cells. Afterwards, fine lines will be less visible and your complexion will glow. Here are a few easy steps for exfoliating your face and improving your complexion.

Step by Step

Moisten your face with water before exfoliating.

Use a loofah, exfoliating gloves or a synthetic scrubbing sponge designed for the face. Apply an exfoliating cleanser specially designed for the face to the loofah or sponge. Some exfoliating cleansers contain up to 25 percent pumice, and these should never be used on the face.

Rub your face with the loofah or sponge using circular motions. Avoid scrubbing under the eyes, because the skin there is thin and easily damaged by abrasive cleansers and exfoliating sponges.

Adapt your skin to temperature differences

Excessive heat or cold can cause severe damage and dehydration. Change cream hydration along with the seasons. In winter, prefer an oily moisturizer and in the summer a smoother cream. Wear sunscreen with a sun protection factor (SPF) of at least 15, even if it’s cloudy or you don’t plan on spending a lot of time outdoors. If you sweat a lot or go swimming, reapply sunscreen every 2 to 3 hours (even if the bottle says the sunscreen is waterproof). Choose a sunscreen that blocks both UVA and UVB rays. Look for the words

Rinse thoroughly with tepid water. Hot water is harsh on skin, especially delicate face skin.

Apply a moisturizer containing alpha or beta hydroxy acids. These acids will continue the exfoliating process, because acids cause additional dead skin cells to slough off.

Try an exfoliating mask. Make one by mashing up a papaya and smearing it on your face. The enzymes help exfoliate the skin. Rinse off thoroughly after 15 minutes.

“broad spectrum protection” or “UVA protection” in addition to an SPF of 20 or greater. Select a sunscreen that says “nonacnegenic” or “noncomedogenic” on the label to help keep pores clear. The sun’s rays are strongest between 10:00 AM and 4:00 PM, so reapply sunscreen frequently and take breaks indoors if you can. If your shadow is longer than you are tall, then it’s a safer time to be in the sun (you should still wear sunscreen, though). Try using foundations, powders, creams and lipsticks with solar filter protection formulas! They are a good alternative for those who do not usually use sunscreen daily, as recommended by dermatologists.

World of Beauty

Beauty hurts sometimes … but are you really willing to suffer this much?

Bizarre beauty treatments have been around forever and they are constantly evolving. We pick some of the best…or worst!

Bloodsuckers

Despite the health risks, blood sucking leeches are still commonly used around the world as a way to detox the blood. The procedure first requires you to shave your body, then immerse yourself in turpentine. When the stinging stops, you can allow the leeches to feast on your blood. This therapy goes back to Ancient Egypt,when physicians and doctors used to consider it a miraculous cure-all. Today, it is sometimes used in plastic and reconstructive surgery to assist in the reattachment of severed body parts. Leeches have a little enzyme that gets released into your body when they are biting down. In general it leaves you bleeding for quite a while but then you’re just fine to go on with your life!

Head to toes

Perscentoelogy is one therapy that might be considered peculiar. It is a way of profiling an individual’s personality by reading the toes. It is said that a lot of things can be revealed by the lines on the toes. This is usually done together with other spa treatments.

Free as a bird

The Geisha Facial promises to cleanse, brighten, and exfoliate your face thanks to an amazing secret ingredient: bird poo! For centuries in Japan, both Kabuki actors and geisha’s used nightingale droppings, to clean off their thick white makeup and soothe their faces; apparently, guanine, which is found in the droppings, helped their complexion. The bird poo is sanitised through exposure to ultraviolet light, then finely milled, mixed with rice bran and ready to use!

Put your hand here, it’s pointy and it stings!

Cactus has been used for several purposes in the past but this time it is being used for spa treatments. The cactus massage makes use of a concoction of cactus blossom, pulque and cactus meringue and is applied using the cactus paddies. Once it has been lathered on the body it is kneaded just like in other types of massages. It flushes out toxins and moisturises the skin.

Fertilized hair

Remember that scene from the movie “There’s Something About Mary” when Cameron Diaz is having dinner with Ben Stiller and she has a “bad hair” moment? Well, don’t laugh so much the next time you see it, because actually some treatments use semen from Aberdeen Angus bulls! The semen is combined with the root of the protein-rich Katera plant, massaged into the hair after being shampooed, and then the client is put under heat so the treatment penetrates the hair. The semen is refrigerated before use, doesn’t smell and is said to leave you with wonderfully soft and thick hair!

Snake out

For us, this is probably the one that requires the most courage. Slithering snakes are used to create a therapeutic massage, however not to worry for all these snakes are non-venomous! Apparently larger snakes produce a calming, kneading sensation, while smaller garden varieties provide gentle caresses. So, are you willing to be snake bitten?

History’s best kept secrets…fortunately! British model Naomi Campbell rubs ground coffee beans over her thighs and then wraps them up in glad wrap just to keep her skin looking fabulous and cellulite free. The actress Gwyneth Paltrow caused a stir when she showed up to an event in a dress that exposed odd circles up and down her spine as a result of Chinese cupping acupuncture. Even Eva Longoria has been rumored to be using a placenta ingredient-based cream to keep her skin looking youthful and glowing. And we could go on and on giving you all kinds of examples. Showbiz is full of bizarre habits, and decadent and expensive experiences, but believe us, all of these experiences are nothing compared to what ancient times have in store. The following might “take Hollywood by storm”!

Ladies of the Middle East used to grind up lead – which causes metal poisoning – and apply it to their lashes, eyebrows and eyelids.

Venetian ladies

would achieve beautiful blonde hair highlights by pouring lion urine on their tresses before sitting out in the sun.

Arabian ladies loved sleek and shiny hair, so they used camel urine to dip their raven-black hair in.

Face painting with white lead powder was also popular in Elizabeth’s time. The beauty secret caused the premature demise of a number of 16th century lovelies. Great beauties from the time of Queen Elizabeth I owed the rich red color of their lips to bugs. The squashed remains of insects were rubbed on the mouth for a ruby-red luster.

Crocodile dung made into a paste with donkey’s milk kept Cleopatra’s skin looking lovely in the Egyptian heat. She used it as a face mask.

In ancient Babylonia, unwanted facial hair was sanded off with a rough pumice stone.

Women in Edwardian England would gladly swallow a slimy tapeworm to keep themselves slim and trim. The parasite digested most of the food the women ate, and it also destroyed their health. Eating arsenic was another way to achieve beauty discovered by Englishwomen. The deadly poison – used in the 19th century – gave the skin an interesting glow while at the same time shortening one’s life span. Roman ladies rubbed brown seaweed on their faces as rouge, which did them no harm. But the white powder made from lead they rubbed on their faces caused them a slow death by lead poisoning.

Ancient Italian ladies used to apply a deadly nightshade to enhance their eyes. The poison dilates the pupils and makes people’s peepers look enormous and glowing.

Interview

The beautiful interior decoration, the fabulous products and the amazing list of exotic treatments might impress us, but the heart and soul of spas are the people. People create the atmosphere and are the ones who lead us into the deep relaxation of revitalisation. To fully understand what is going on in the spa industry, we interview one of those special people: Tess Noeh, Therapy Director for Malo Clinic.

Inner Beauty

Could you tell us a little about yourself and your expertise in spas, and why you became interested in them? I started as a therapist 20 years ago. At that time I was searching for a job opportunity where I could practice healing techniques using traditional and holistic values. I decided to make spa my lifeâ&#x20AC;&#x2122;s work, and the combination of movement, good nutrition, spa therapies and a mind/body/ spirit approach to wellness became a passion. And luckily for me, the spa industry, which was just emerging at the time, was poised for explosive growth. Why have spas continued to grow and become popular over the past several years? I see some general trends that have come together to precipitate the popularity of spas. Firstly, the aging baby boomers. This demographic wants to maintain their youth and vigor. Spas are a perfect place to achieve these goals. Secondly stress. The non-stop bombardment of information and connectivity is creating a need for people to have places to decompress, de-stress, slow down and pay attention to their body, mind and spirit. Finally, a troubled health care system means people of all ages must become more responsible for their own wellness and health.

just a good therapist. The spa has become a hospitality experience, where the client checks-in and expects to get all the amenities of a 5-star hotel. The difference of course, is still the therapist touch, but finally there’s a more inviting process surrounding the final purpose. Over the years have you seen a change in the type of spa client? Younger people, men, families? Clients are younger, and also men are the new spa clients. In the past, most people that went to spas were looking for arthritic cures. Then, the baby boomers, decided to approach spas in a different way: in search of luxury and unique experiences because they realised they deserve it. So they were, and still are, in search of pampering. The X-Generation came along and brought a new perspective too. They are not looking for luxury, but a place to de-stress. They are brand-oriented, but at the same time more aware of the biodynamics, so they really are looking for results and the faster they get them, the better. Younger people have a whole new perspective. They are not so brand-oriented but instead they focus their attention on reliable ingredients, whether it´s ecological, natural, traditional and most of all an authentic experience that can harmonise body and soul. I believe that they are more aware that wellness is not only physical, but most of all a state of mind. Today, people are becoming wary of surgical and chemical problems and mistakes, and are looking for natural solutions. Wellness is a new important area. So, in the past people went for treatments to improve, but today the spa client going to the same spa is younger and is looking to prevent illness, and is going for preventative measures. People are also looking to combine spa treatments as part of their vacations. What are the benefits of spa treatments? De-stressing by getting away from life´s demands is the major benefit. There are many ways to de-stress and spas specialise in these. Massages are for many, the ultimate de-stresser. At spas people typically leave their outside world behind, they slow down and their bodies become more relaxed. A spa has nurturing staff and there is lovely food that doesn’t intoxicate but rather revitalises. I think that what spas do is help us get back to who we really are, and connecting at that level is always a very fulfilling experience. Can you tell us something about the new developments and trends in the spa industry? We are seeing a variety of trends in the spa industry. One of the most interesting is definetely the medical spas where medicine and spas are coming together. Another interesting fact about the industry is that spas are becoming more and more affordable and inclusive. The quality of service is also another strong business opportunity. In the past, the quality came down more to the individual therapist than to the facility, but the tables are turning on this. People are demanding more than

What should we expect from spas in the future? I think that medicine and spas coming together is a very exciting development. We are seeing prevention/ wellness as well as aesthetic/cosmetic medical spas now. Doctors and spa therapists working together is a very interesting perspective for the industry - comfortable medical settings with the best results possible. In addition the entire arena of complementary and alternative medicine is finding a home in the medical spa environment. Consumers are increasingly interested in being proactive when it comes to their health and well being. They increasingly need to take responsibility for their own health. I think that spas will eventually become a very important part of the solution to health problems in the world. What would be the perfect spa? The “perfect” spa would have natural thermal waters, the best treatments, including holistic, Ayurvedic, modern therapy, Thai, which would always be provided after a consultation to determine what is the most appropriate for each client. It would have the ability to offer something for everyone, with authentic therapists with therapeutic backgrounds. 99

REVIEW

Stars love it and so do we!

Alterna Caviar Anti-Aging Series Beloved by Hollywood celebrities, the top professional haircare brand Alterna, has finally dropped in on the Hong Kong market with a celestial grace. Using the highest quality ingredients, the most technologically-advanced methods of extraction and refinery, and the latest skin care science and technology together with numerous trademark technologies, caviar anti-aging series is a comprehensive line of products that addresses hair that has been damaged by daily stresses, environmental factors, chemical services and premature aging. Where to buy: Toni & Guy Hairdressing Macau Salon

Clinique Even Better Skin Tone Corrector

Dior Poudrier Dentelle

Better than ever before! This spoterasing serum for all skin types is light enough to layer under your favorite night cream or sunscreen. Clinique guiding dermatologist Dr. Orentreich says, “When skin is more even-toned, you look younger.” So here’s your second chance, to virtually undo the visible evidence of sun damage, dark patches, skin stresses, age spots, even the darkening that follows acne scarring. Gently create the brightness and clarity you thought were long gone.

Dance fever swept spring runways this year, from the sleek chignons at Zac Posen to Marc Jacobs’ gauzy pastel leggings. And now cosmetic companies are toeing the line, with ballet-pink palettes and ultrafeminine scents, like the peony-inspired Wish Pink.

Chanel Nude Blush This Chanel powder blusher imparts a flattering radiance to cheeks. With a remarkable silky texture for easy application and subtle shading, it accentuates cheekbones for a youthful look. Take some advice from us, softer tones around the eyes soften the expression and rejuvenate. This blend of peach, rose and nude hues gives a sun-kissed flush to all skin tones.

100

So androgynous! So 90´s! Boyfriend blazers, oversize cardigans, and pale skin: The ‘90s are officially back. But if it pains you to pay MOP5000 for pleated pants, a unisex scent lets you dabble in the androgynous trend without butching out your entire wardrobe. Sexy and addictive with leather, tobacco, and spice notes, these new fragrances are a modern, more assertive take on 1994’s iconic CK One. Sharing scents shows how different they can smell on men and women. Some perfumers have noted that the same sexual split on female skin, might emphasize some ingredients, but on a male it’s a completely different scent taking over. Well, one thing is for sure, just like a tuxedo jacket on bare skin, these androgynous eaux won’t dilute your sex appeal.

Van Cleef & Arpels Cologne Noire

Cartier L’Heure Mysterieuse EDT

Next best thing to a face lift… so they say

adies and Gentlemen, a new technology to get rid of wrinkles has arrived in the cosmetic world! Selphyl is the newest rejuvenation beauty treatment that uses the patient’s own blood cells to reverse aging. This new type of dermal filler uses the patient’s own blood and it stimulates cell proliferation, which promotes volume increase and skin rejuvenation. It can be used in any area, face or body, it’s natural and there are no side effects. And that, besides getting rid of the wrinkles, doctors say, is the beauty of it! The magic formula contains plasma, platelets and fibrin created from a simple blood draw and is made in the dermatologist or plastic surgeon’s office in less than 20 minutes. After the patient’s blood is drawn, a patented process separates the platelets and fibrin. The resulting product is then injected into the treatment area. Over the course of eight weeks it develops new collagen, new blood vessels and really uses the patient´s own cells and tissue to reverse the signs of aging. In addition to lasting longer, doctors say there’s no bruising, swelling, or lumping that’s associated with some traditional fillers. Plastic surgeons say with the economic downturn, less expensive, non-invasive treatments like this one are part of a growing trend.

Tom Ford White Suede

The best candidates for this treatment are those no older than around 65 because older patients can’t build collagen as fast and as easily as younger patients. The technology itself is not new, it’s been around for at least seven years for other purposes such as helping to heal sporting injuries.

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Your Choice

Most people think of massages and facials when they think of spas and spa treatments. Well, the truth is spas have a much wider variety of treatments that until recently were only available at a doctor’s office.

Face Treatments

Facials are skin-care treatments that include exfoliation, steam, moisturizers, masks, peels and massages. They remove the dry, dull skin cells from the skin’s surface, massage the muscles to increase circulation, remove clogged pores and completely hydrate the new, fresh layer of skin. Some facials target specific problem areas such as reducing puffiness and dark circles around the eyes. Others help with anti-aging, such as applying collagen to the skin to help it tighten the skin and reduce wrinkles.

Nail Treatments

Most spas offer both manicures and pedicures, nail treatments for both hands and feet. These same treatments can be found at any nail salon for less than spa prices, but spas often go the extra mile or two for manicures and pedicures than do typical nail salons. In addition to shaping and polishing nails, nail technicians at spas will also exfoliate the skin, soften the skin, apply paraffin treatments and perform warm cream and/or hot-stone massages.

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Body Treatments

Spas provide a variety of skin treatments for the entire body: aquatherapy, body polishes, body wraps and vichy showers. In aquatherapy, you soak in aqua-jet tubs with aromatherapy oils, moisturizers and exfoliates. These soaks improve circulation and exfoliate and hydrate the skin. Body polishes are body facials. The body is scrubbed to slough dead skin cells and smooth out the skin, and then moisturizers -usually creams - are massaged into the skin for hydration. Salt scrubs are the most common body polishes, where aestheticians use scrubs of sea salt for exfoliation. A salt scrub is often the first step in a body-wrap treatment. After the body has been exfoliated, the body is wrapped in either seaweed or mud to help extract impurities from the skin and improve overall skin texture. After removing the wrap, you rinse in a shower and then apply extra moisturizer. Vichy showers are sometimes used at the end of a body polish or a body wrap, but they can be experienced alone as well. These showers have five to seven shower heads that pour water on you while you lie on a cushioned table. They help promote blood circulation as well as skin hydration.

Medical Treatments

Not all spas offer these, but more and more are starting to offer skin treatments that used to only be available at a physician’s office. These treatments include microdermabrasion, CACI face-lifts, Botox injections, Restylane, Juvederm, laser hair removal and pulsed-light hair removal. Microdermabrasion is a noninvasive procedure that uses a spray of microcrystals to remove the outer layer of dead skin cells from the skin surface. CACI (computer-aided cosmetology instrument) face-lifts use an electronic device to tone facial muscles, smooths away wrinkles and fine lines, lift sagging skin, plump up lips and lift baggy eyes. Botox, Restylane and Juvederm are all cosmetic injections to help reduce signs of aging such as frown lines, crow’s feet and wrinkles. Both laser and pulsed-light hair removal permanently remove hair from all parts of the body. The pulsed-light hair removal system is a fairly new procedure that uses a beam of light to remove the hair instead of a laser. It works faster and is also more comfortable than laser hair removal.

SEX AND BEAUTY

Massages

Massages are probably the most popular spa treatments, with a variety of styles offered. A Swedish massage is the most common method. The therapist uses massage oil to ease massaging in long, smooth strokes and covers the parts of the body not being massaged with a sheet. Sometimes the oils incorporate aromatherapy to further aid in relaxation. Pregnancy massages are Swedish massages performed specifically to help ease muscle tension in a mom-to-be’s lower back, shoulders and legs. Deep-tissue massages use many of the same movements and techniques from Swedish massage but apply more intense pressure to release muscle tension and knots. Hot-stone massages also implement the same long stroke techniques of a Swedish massage, but therapists stroke the muscles with heated basalt stones. The heat from the stones improves circulation in the muscles and aids in injury healing. Sometimes therapists will leave the hot stones lying on the spine for therapeutic flow. A reflexology massage focuses primarily on the feet. The therapist will apply pressure to reflex points on the feet to release blockages in the body systems and improve circulation.

Hair Removal

Waxing is the most traditional hair-removal technique that spas offer. Aestheticians apply hot wax to the skin and then press a cloth strip into the wax. They then quickly pull off the strip along with the hairs captured by the wax. Waxing can remove hair from all areas of the body, including chest hair, back hair, eyebrows, leg hair, upper-lip hair and bikini areas. Some spas even offer full Brazilian waxes, where all of the hair from the genital area is removed. Sugaring is another hair-removal method similar to waxing. The only difference is instead of wax, a sticky paste of sugar cream is used. Threading is a technique from India and the Middle East that is becoming more popular in Western civilizations. The aesthetician will hold one end of a thread in her teeth and the other in her left hand. She loops the middle of the thread through the index and middle fingers on her right hand and then uses the loop to entrap hair and pull it. Unlike waxing and sugaring, threading can only remove facial hair.

Sex smells Whether it inspires romantic, innocent and delicate love or just the physical and animalistic brutality, the sex package will forever be the best way to sell whatever, wherever, whenever, especially and mostly in terms of beauty. Just grab a fashion magazine and take a good look at the first ten pages. What do you see? A wonderful dress, accessorized with an amazing bag and pair of shoes. Right? Wrong! Be honest and just say that the first thing that really stands out from the picture is the female figure and her glamorous pose that has sex written all over it. The universe of beauty product advertisements is full of examples, crossing sexy fashion trends, such as porno-chic or glam-trash, with libertine women and men as sexual agents on the advertising itself, to promises of sensuality episodes full of desire in just a few drops of elixir scents shaped inside adventurous 100ml or smaller bottles! In fact, this advertising influence is shaping not only bottles of beauty products, but also its users, by instigating our animalistic behalf. The pheromones influence on coupling is a scientific well study subject far from being a novelty, but searching for a signature scent that leaves your partner sniffing is own hand, after a body search, that’s news! Women and men, mostly on internet blogs are not afraid of confessing how these trends have got them…well, turned on, sort of speak. Smelling good can make you look pleasant in the most innocent way, but smelling great can make you look even more pleasant in a not so innocent way, depending the place where you decide to sprinkle a little. A little sprinkle here and there. And, Ooh a sprinkle on the inner thigh. Or maybe even more inner than that. Women are looking for that special lotion and perfume to try and change their inner smells and Men have found it to be an interesting approach. Whether or not, you’re willing to take your most inner smell to another new level, it’s all up to you. For us, it’s really just news about a new sexual trend! 103

Beauty & Grooming Grand Canal Shoppes, The Venetian Macao 5cm Abiste agnès b. Aigle Aimer Alqvimia Anteprima Apothecary Armani Exchange Arté Madrid Artini Ashworth Autore b+ab Bauhaus Belle Blancpain Blush Boucheron Boutique di Gondola Breil Brooks Brothers Butani BVLGARI Canudilo Caran d’Ache Carat Carl F. Bucherer Century Chai CHARRIOL Chevignon Choi Wai Jewellery Chopard Cirque du Soleil Boutique City Chain CK Calvin Klein Clarins Club Monaco Coach Corona Crocodile Damiani Davidoff Deicae Demandor Derain DG Lifestyle Store Diesel Dilys’ Don Gilato Dooney & Bourke Ecco Edelweiss Jewellery Elle Jewellery Elov Emphasis Jewellery Emporio Armani Emporio di Gondola Enzo EQ:IQ Expressions Fabio Caviglia Fables Fancl Fila Fiorucci Florsheim Folli Follie Fossil Francesco Biasia Franck Muller French Connection Furla Geox; Joy & Peace girls talk Giviea Glashütte Original Godiva Göessele Grossé Guess Accessory Guess Jeans H&B Medicine Shop Hatta Fine Jewelry Hearts On Fire Herborist Hogan Home of Swallows Hugo Boss Orange Label i.t innée

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Next month look for

guide to indulgence

Izod Izzue Jaquet Droz JC Versace Jean Scott Jipi Japa Just Gold Kaltendin Kego Kilara & Ceu Killah Lacoste Lancel Laneige Le Saunda Levi’s Links of London LLadró L’Occitane Luisa Cerano Luk Fook Jewellery Lush M Missoni Malo Clinic & Spa Manchester United Mango Marisfrolg Marjorie Bertagne Marlboro Classics Massimo Dutti Maud Frizon Paris Max&Co. Mercato Michel René Michele Mikimoto Millie’s Mirabell Miss Sixty Mocca Moiselle Montagut Montblanc Moreline Murano Murphy & Nye NaRaYa Natural Beauty Mix Nautica Next Nike Nine West Normana O’Che 1867 Omega Optica Boutique Optica Fashion Optical 88 Osim Oto Outdoor Fashion Passion Play Patchi Paul & Shark Piaget Piquadro Promod Q’ggle Rado Raffles Rayure Replay Rich Jade Richard Mille Rimowa Rockport S. Culture S.T. Dupont Samsonite Shiseido Sisley Sisley Paris Soft & Intimate Sparkling Color ST GE Staccato Stefanel Stella Luna Stone Market Sulwhasoo Swarovski Swatch Tasaki Thomas Sabo Tie Rack / Bric’s

2423 2613 2523b 2001 2433 2102a 2113 2017a 2402a 2306 2306a 2508a/ 2403 2701 2409 2210a 2425 2608a 2013c 2608 2622 2018 2636a 2630 3015 2215 2321 2619 2648 2509 2442 2650 2623 2508 2703 2621 2011 2405 2658 2438 2322 2607 2525a 2002 2639 2652 2702 2212 2128 2709 2211 2432a 2605 1020 2426c 2003a 1010 2005a 2019 2106 2120 2523a 2300b 2111a 2007 2013 2023b 2316 2216 2006a 2119b 2606a 2427 2117 1002 2708 2203 2300 1022 2527a 2017 2310 2630a 2527 K9 2612a 2319a 2421 2026 2402b 2617 2415 2426a 2101 2426b 2435

Tiffany & Co. TISSOT Tommy Hilfiger Tonino Lamborghini Tourneau Toywatch Triple Five Soul Triumph and Hom TSL Tumi U-Boat United Colors of Benetton Valente Venilla Suite Verri Vertu Vilebrequin What For Wolford Y Nan Yes Zara Zydo

2003 2411 2710 2646a 1003 2417 2436 2220 2022 2707 2426 2308 1021 2600 2703a 2006b 2623a 2205 2626 2625 2023 2313 2013b

Escapes

DFS Galleria, The Four Seasons

Armani Bally Burberry Cartier Celine Chanel Chaumet Chloe Chopard Clinique Debeers Dior Dior (Beauty Zone) Dunhill Estee Lauder Fendi Folli Follie Gucci Hermes IWC Jurlique Kiehl’s The City of Dreams Lancome L’Occitane Alfred Dunhill Level 1, The Boulevard Loewe Bally Level 1, The Boulevard Louis Vuitton Burberry Level 1, The Boulevard Omega Cartier Level 2, The Boulevard Prada Chopard Level 2, The Boulevard Ralph Lauren Chow Tai Fook Level 2, The Boulevard Salvatore Ferragamo Coach Level 1, The Boulevard Shiseido Hublot Level 2, The Boulevard Swarovski Hugo Boss Level 1, The Boulevard Tag Heuer i TO i Level 1 and 2, The Boulevard Tod’s Insider Level 1, The Boulevard Tumi IWC Level 2, The Boulevard Vacheron Constatin LeSportsac Level 1, The Boulevard Van Cleef & Arpels Longines Level 2, The Boulevard PENACHE Level 2, The Boulevard Shoppes at Four Seasons Ralph Lauren Level 1, The Boulevard Rock Shop Level 1, Hard Rock Hotel Abiste Salvatore Ferragamo Level 1, The Boulevard Alain Mikli Swarovski Level 1, The Boulevard Altea Milano Tag Heuer Level 2, The Boulevard Aquascutum The Bubble Shop Level 1, The Boulevard Armani Collezioni Timeless Level 2, The Boulevard Audemars Piguet Tumi Level 1, The Boulevard Autore Valentino Level 1, The Boulevard Bottega Veneta Vivienne Westwood Level 1, The Boulevard Brioni Butani The Esplanade, Wynn Macau Canali Cerruti 1881 Alfred Dunhill 16 Chic Elegance Bvlgari 3 Coach Chanel 5 Cole Haan Christian Dior 12 David Yurman Ermenegildo Zegna 17 Diamond SA Fendi 10 Diane Von Furstenberg Ferrari 21 Dilys’ Giorgio Armani 8 Ed Hardy / Christian Audigier Gucci 25 Gieves & Hawkes Hermes 18 Giuseppe Zanotti Hugo Boss 23 Givenchy Louis Vuitton 6 GoldVish S.A. Miu Miu 11 Guess by Marciano Cigar Imporium 4 H&B Medicine Shop Piaget 9 Hugo Boss Prada 27 Jimmy Choo Sundries 13 Juicy Couture The Signature Shop 4 Kate Spade Tiffany & Co. 7 Kent & Curwen Van Cleef & Arpels 24 Kenzo Versace 26 Kwanpen Vertu 22 La Perla Lancel Grand Lapa Hotel Mango Tree Marc by Marc Jacobs Bally 13 Marni Burberry 1 Max Mara Cartier 12 On Pedder Christian Dior 11 Optica Privé Cigar Imporium 17 Renaissance Arts Gallery Alfred Dunhill 10 Roberto Cavalli Class Emporio Armani 9 and Cesare Paciotti Ermenegildo Zegna 2 Samsonite Black Label Florinda Jewelry 16 Shamwari South African Diamonds Hermes 8 Shanghai Tang Hugo Boss Orange Label 5 Shiatzy Chen Louis Vuitton 4&5 Shimansky Omega 6 St. John Salvatore Ferragamo 7 Stefano Ricci Valentino 15 Stuart Weitzman tsesay Valentino Versace

1112 1123 1110 1125 1109 1117 1101/41 1123a 1101/43 1101/22 1101/42 1120 1101/23 1106 1101/20 1102 1101/37 1108 1116 1101/44 1101/26 1101/21 1101/28 1101/25 1121 1115 1101/45 1126 1111 1113 1101/29 1101/38 1101/33 1105 1101/31 1101/39 1101/40

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Gaming

105

End of the line

A special company set up to do gaming-related legal work for the government is to be wound up, but the move has left many asking “Why?” by Carlos Morais José

fficials are set to terminate the contract of a specially-created legal consultancy company which does gaming-industry related work for the governmebt. According to a source in the office of the Secretary for Finance and Economy Francis Tam, the government will end the contract with Soconsult on July 1 this year. Soconsult was created in 2009 to work exclusively with the government, and its employees are former legal consultants who worked for the government in the gaming area. The government decided that due to the huge amount of work that needed to be done and the expertise required, it would be best to set up a special company composed of experts already in place to handle it.

Best solution

Photo: Luís Almoster | MSPagency.org

According to a source closed to the process: “At the time, to hire a local lawyers office was not the best solution, since they have a number of conflicting interests in this area. “So, the remaining option was to create a company that would guarantee the government exclusivity in gaming affairs. On the other hand, it wouldn’t have been good to just let certain people join the private sector, especially because they had been involved in the negotiations between the government and the concessionaires.’’ If Soconsult had the time to handle other non-gaming matters, they could do so. The 2009 move meant the April 2010

106

Gaming

Business & Industry

Finance and Banking

April 2010

new company’s bosses had to leave public service - with severance pays of roughly MOP700,000 per head. Everything was approved by then Chief Executive Edmund Ho hau Wah by the end of 2008. The government would pay an annual fee of between MOP9 million and MOP10 million and payment would be made every six months (between MOP4.5 million and MOP5 million). The money would come from the Justice Department coffers and the deal was notarised in the Financial Bureau.

Start of problems

The problems started when the first payment - which should have been made in January 2009 – only arrived in September last year due to red tape. And sources say “distrust’’. Now, after removing Jorge Oliveira – the brains behind the city’s gaming legislation – from the Gaming Comission, Chief Executive Fernando Chui Sai On’s government has decided to terminate the relationship with Soconsult. The move could cost the government MOP20 million in payments. Soconsult has declined to comment, suggesting they were not aware of the government’s intentions to terminate the contract. A source from Francis Tam’s office has guaranteed that the government intends to follow whatever the contract says, thus inferring the MOP20 million will be paid. Other sources say that some within the government are against paying because “the quantity and quality of the services provided are not worthy of such a payment”.

Outsourcing the norm

Regarding the money paid to Soconsult – more than MOP9 million per year - a source said this was well within the usual behavior of the SAR government. “The calculation took into consideration the work of five people (around 85 percent of total expenses) and negative costs (15 percent for expenses with computers, office, etc).” The source added that, “It’s nothing out of the ordinary for Macau”.

Other departments outsource part of their workloads. Since 2002, the Gaming Inspection and Coordination Bureau (GICB) has hired companies to carry out training programs. In 2007 it paid nearly MOP4 million to PricewatersCoopers (PwC) and the firm has been working for the GICB since 2002. Another example comes from the civil construction area, where consultancy companies have been paid to provide services. In 2008 and 2009, for the supervision of a car park, a garden and a social housing building in Taipa, the company PAL Ásia Consultores/ Pengest Int was paid more than MOP19 million. From 2003 to 2008, local architect José Pereira Chan received more than MOP21 million to provide seven consultancy services related to the construction of buildings at the Macau University campus. AECOM also received MOP12 million for a single consultancy job. There are many other examples. The Bureau for Infrastructures Development alone has spent nearly MOP200 million in outsourcing services related to the Light Railway Transit system.

Cheaper

A source says that, taking into account the importance of the gaming sector in Macau, the amounts paid to Soconsult “are nothing special” and, in fact, when compared to the MOP2 million paid for a “Guide to Kindergarten Activities and Kindergarten Activity Resources”, Soconsult’s nine million seem benign. It now remains to be seen how the government will handle legal gaming affairs, without Jorge Oliveira and with the termination of the Soconsult contract. A source close to the government has said that, “we have the Commission, the Government’s own legal advisors and we can always order specific studies for the definition of official policy. “Regarding the task of writing the law, we do have a team with vast experience. It will be cheaper, that’s for sure”.

107

China online

It’s no easy task, but getting into the online gaming market in China will be well worth it for those with the right strategy by Luciana Leitão

hree things are needed to make a successful entry into the mainland’s online gaming market: a strong local partner, a less significant gambling component to your product and a base outside China, according to software developers and legal experts who spoke to Macau Business, during the I Gaming Exhibition, held in the MSAR recently. One developer who preferred not to disclose his name, says if you’re about to launch a game in the mainland you must deliver the screenshots and all the required documentation, and the sums behind your proposal - upfront.

A tailored model

But the model presented to the mainland cannot be the same as that used in the West. “When we come to designing a game - for example, slots variants - we have to overlay the design with some acceptable themes. For example, if it’s slot machine related, we cannot show a

cherry or a bell. That’s why we replaced these with some typical Chinese themes and graphics,’’ the developer said. In the end, according to the developer, it all comes down to the right connection: “What counts is the relationship with the government. Then at the very last stage they look at the game logic. It’s a typical Chinese business relationship, it’s all about personal relationships,’’ he explained.

Legal creativity

Sam Woelm, executive director of C Y Foundation, the company that operates online P2P (player-to-player) game tournaments for prizes across the mainland, says they try to find “creative ways” of working within the law to provide their product in the mainland. C Y Foundation thinks of imaginative ways to achieve the target of allowing players to trade their points for physical prizes. “For example, the players have to go through a step-by-step process to get the prize rather than tak-

ing points and directly getting it. It’s a bit more roundabout in order to follow the legal rules in China,’’ Woelm says. The firm also provides what are called soft-casual games, all legal in the mainland.

China crackdown

Despite China’s recent crackdown on online gambling, Woelm is not worried: “We have a very strong legal department and legal counsel outside the company. We’ve never run into any legal problems with the government. Also, I don’t think they’re going to make it much more strict than it is now. They’ve already tightened the screws in a lot of areas,” Woelm says. Having operated on and off in the mainland for three years, Woelm can’t stress enough the need for a good partner: “You also have to take the gambling component out of the software, because, even in games that are approved, the government sometimes wants to take the gambling out.” April 2010

108

Gaming

Operating legally in China

Cape Verde bets on Macau Cape Verde’s government has approved changes to its gaming-related legislation as the country strives to attract foreign investors from the gaming industry. The Portuguese-speaking country is counting on Macau and Portugal to help the small African archipelago train gaming inspectors, said the Cape Verdean minister for Economy, Fátima Fialho. Cape Verde’s first attempt to legalise casinos came in 2005. At that time, Macau entrepreneur David Chow Kam Fai presented a proposal to invest more than US$100 million (MOP800 million) in a casino and hotel complex in the country’s capital city, Praia. Although there was big interest from the government, Chow never went forward with the investment.

No Hainan gaming Hainan will not develop gaming tourism, says Tan Li, the vice governor of Hainan province. “Hainan will not follow Macau’s road, our target is to turn into an all-season garden for people across the world,” Li told Xinhua. Hainan became China’s largest special economic zone in 1988, enjoying preferential development policies. Beijing has pledged to make Hainan a top international tourist destination by 2020.

Sands eyes Japan Las Vegas Sands chief Sheldon Adelson flew to Japan last month for discussions on gaming with the local authorities. “I am going to be there [Japan] next week – it is not the first time,” Adelson said last month, during a presentation at CLSA AsiaUSA Forum, in the US. “We [already] made a number of presentations [in Japan] with my former management and with my current Asia development guy”, Adelson added. “It is a long process because Japanese change things very slowly. But what you should know is that there are 16,000 pachinko parlours in Japan,’’ he said. April 2010

Hwa-Min Hsu, founder of Ifafa - who supply regulatory compliant customised online gaming solutions to new and existing operators – says that if you want to operate in online gaming in the mainland, then the best option is to never be based there. All because the law is still unclear on what you are and are not allowed to do. Nevertheless, there are some “satellite businesses” operating legitimately in this field. “They’re helping the government to own the lottery, they are part of the supply chain; or they are suppliers of hardware, software and other equipment,’’ he says. Some businessmen might choose to act in grey areas of the law, but, according to Hwa-Min Hsu, “it’s a risk”. Hwa says even though you’re doing legitimate online business, the best solution is to have an operation outside China. At Ifafa they’re constantly hearing of people arrested in China and agencies disappearing. That’s why Ifafa is not based in China.

Legislation and crackdown

The Criminal Law of 1979 is still the main legal instrument on gambling in the mainland. It was amended in 1997 to introduce lotteries. From time to time, the government may publish regulations and notices that affect gambling, making it unclear for those who want to operate in the industry. Gambling is still illegal in the mainland, although some exceptions have been made to welfare and sports authorities to operate the lotteries. The money that comes out of these lotteries goes directly to the government. In the first half of 2009, the sports lottery made a profit of 31.65 billion yuan. As for online gambling, international operators have been lobbying Beijing to regulate this market,however, up to now, it remains illegal. Beijing recently announced a crackdown on online gambling in the wake of the discovery of huge illegal bookmaking operations. Some say that this crackdown might open the door to new legislation or, as Hwa-Min Hsu believes, to new groups of people trying to operate in the sector.

Peter Singer Professor of Bioethics at Princeton University and Laureate Professor at the University of Melbourne.

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The unknown promise of internet freedom Google has withdrawn from China, arguing that it is no longer willing to design its search engine to block information that the Chinese government does not wish its citizens to have. In liberal democracies around the world, this decision has generally been greeted with enthusiasm. But in one of those liberal democracies, Australia, the government recently said that it would legislate to block access to some Web sites. The prohibited material includes child pornography, bestiality, incest, graphic “high impact” images of violence, anything promoting or providing instruction on crime or violence, detailed descriptions of the use of proscribed drugs, and how-to information on suicide by Web sites supporting the right to die for the terminally or incurably ill. A readers’ poll in the Sydney Morning Herald showed 96% opposed to those proposed measures, and only 2% in support. More readers voted in this poll than in any previous poll shown on the newspaper’s Web site, and the result is the most one-sided. The Internet, like the steam engine, is a technological breakthrough that changed the world. Today, if you have an Internet connection, you have at your fingertips an amount of information previously available only to those with access to the world’s greatest libraries – indeed, in most respects what is available through the Internet dwarfs those libraries, and it is incomparably easier to find what you need. Remarkably, this came about with no central planning, no governing body, and no overall control, other than a system for allocating the names of Web sites and their addresses. That something so significant could spring up independently of governments and big business led many to believe that the Internet can bring the world a new type of freedom. It is as if an inherently decentralized and individualist technology had realized an anarchist vision that would have seemed utterly utopian if dreamed up by Peter Kropotkin in the nineteenth century. That may be why so many people believe so strongly that the Internet should be left completely unfettered. Perhaps because Google has been all about making information more widely available, its collaboration with China’s official Internet censors has been seen as a deep betrayal. The hope of Internet anarchists was that repressive governments would have only two options: accept the Internet with its limitless possibilities of spreading information, or restrict Internet access to the ruling elite and turn your back on the twenty-first century, as North Korea has done. Reality is more complex. The Chinese government was never going to cave in to Google’s demand that it abandon Internet censorship. The authorities will no doubt find ways of replacing the services that Google provided – at some cost, and maybe with some loss of efficiency, but the Internet will remain fettered in China. Nevertheless, the more important point is that Google is no longer lending its imprimatur to political censorship. Predictably, some accuse Google of seeking to impose its own values on a foreign culture. Nonsense. Google is entitled to choose how and with whom it does business. One could just as easily assert that during the period in which Google filtered its

results in China, China was imposing its values on Google. Google’s withdrawal is a decision in accordance with its own values. In my view, those values are more defensible than the values that lead to political censorship – and who knows how many Chinese would endorse the value of open access to information, too, if they had the chance? Even with censorship, the Internet is a force for change. Last month, when the governor of China’s Hubei province threatened a journalist and grabbed her recorder after she asked a question about a local scandal, journalists, lawyers, and academics used the Internet to object. A Web report critical of the governor’s behavior stayed up for 18 hours before censors ordered it taken down. By then, however, the news was already widely dispersed. Likewise, in Cuba, Yoani Sánchez’s blog Generation Y has broken barriers that conventional media could not. Although the Cuban government has blocked access to the Web site on which the blog is posted, it is available around the world in many languages, and distributed within Cuba on compact disks and flash drives.

Do you live in an isolated village and have unusual hobbies, special interests, or sexual preferences? You will find someone online with whom to share them. Can’t get to a doctor? You can check your symptoms online – but can you be sure that the medical Web site you are using is reliable? The new freedom of expression brought by the Internet goes far beyond politics. People relate to each other in new ways, posing questions about how we should respond to people when all that we know about them is what we have learned through a medium that permits all kinds of anonymity and deception. We discover new things about what people want to do and how they want to connect to each other. Do you live in an isolated village and have unusual hobbies, special interests, or sexual preferences? You will find someone online with whom to share them. Can’t get to a doctor? You can check your symptoms online – but can you be sure that the medical Web site you are using is reliable? Technology can be used for good or for bad, and it is too soon to reach a verdict on the Internet. (In the eighteenth century, who could have foreseen that the development of the steam engine would have an impact on earth’s climate?) Even if it does not fulfill the anarchist dream of ending repressive government, we are still only beginning to grasp the extent of what it will do to the way we live. April 2010

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Gaming

Poker passion It’s not a natural fit for Chinese players and will never trump the hand of baccarat, but poker is still having a go by Luciana Leitão

hree times a year at the Grand Lisboa, the Macau Poker Cup takes place. Its aim is to add a new kind of gambler to the Macau mix. Last month at the 33 tables in the Grand Lisboa’s Macau PokerStars room, professionals, semi-professionals and amateurs from 34 different countries were all gathered, mostly from the AsiaPacific region, says vice-president for table games, Timothy Gilbert. Over five days, 986 players competed in six events for a total of HK$ 4,074,600. Fred Leung, regional manager of PokerStars Macau, says last month’s event saw records tumble. In October 2009 there were 247 players and a prize pool of HK$ 2.3 million, while this year these numbers increased to 321 and HK$3 million. The main event was the Red Dragon and this year’s first prize went to Taiwan’s Raymond Wu, a professional with the PokerStars team. He walked away with HK$664,000 and is now Asia Player of the Year.

The winner

When he was 18 and studying in the United States, Wu became intrigued about the money other professional poker players made and started his research. “I started going around and searched for poker videos,” he says. He eventually began to play, mostly online and in the beginning, lost some money. “After reading books, I was getting better, my skill was getting good, I was learning, but had a lot of emotional issues when I lost,” Wu says, adding: “There were a lot of times when I would put US$50 and win US$2000, but because of one unfortunate event, I would literally lose that in one night.” He repeated this behaviour until, one day, after having won US$60,000 he lost the lot. “That was very devastating for me, and it was kind of a turning point in my career. I decided it couldn’t hapApril 2010

pen anymore,” he says. He needed to keep his emotions in check: “I would be numb in my losses. I knew I would go broke if I continued to do it, but I would do it anyway,” he says. In a life-changing moment – at least, for his poker career - he shaved his head and decided to change. He realised that to be a good poker player he had to be careful with the money he won. “That was my big challenge. But, of course, it’s easier said than done, especially when you’re in your early twenties.” Wu says that’s why to survive in the game, you have to learn certain tricks. “You have to think ahead. You have to insure your losses, you need a calm mind and a calm heart,” he says, and Buddhism has been the key to this calmness.

Moving to the tables

Online was his thing: “I thought live (at the table) was a bit slow,” he explains. However, after hearing about the first Asian Pacific Poker Tournament (APPT) in Macau, Wu decided he had to try it. He came in thinking he would find “old and outdated” players, but immediately found out that playing live was very different from gambling online. “There are a lot of different dynamics I wasn’t aware of and the pace was different,” Wu remembers. It took just two hours for him to lose and realise it was a whole different game played live. “On the tables, you need to be a lot more patient and more observant, because online you know what they’re trying to do. Live, you can’t go into a table and think like that. In every single country, there’s a different poker style. Patience is the key,” he says. Before joining the Macau PokerStars team – and getting their sponsorship backing – he considered himself a professional player because that’s how he made his income.

School, however, was almost never neglected: “When I first started playing poker at 18, I was still at high-school and my grades suffered, because I didn’t go there that much for about a year and a half,” Wu says. Eventually, his parents’ insistence pushed him through college, and he completed a degree in Psychology. He never wanted to do anything with it. Wu just wanted to play poker. In the beginning, his family didn’t agree with his choice of career, but, to over-

111 He scooped a pot of US$145,000. “The most I’ve lost in one night was US$60,000.”

Tournaments in Macau

Fred Leung says PokerStars Macau is a regionally based tournament. “Ninety percent are regional players [the rest are from Australia and Europe] and, from this universe, fewer than five percent are Macau residents,” he says. “It just needs more time. A lot of players are still playing other games, like baccarat, without giving poker a chance. I think in time they will,” says Leung. The purpose is to grow a poker culture in the region, and that is why there are six events for different wallet sizes. Due to the increasing number of players, they had to add one more day to the tournament

Important for hotel-casino

come their fear, he took his mother to his first few tournaments. She got the bug. Also, after realising he was taking care of his money, buying real estate and saving, his parents became much more supportive.

Poker in Macau

Poker in Macau and the mainland is very new, and would appear to give a great opportunity to the seasoned professional. The truth, according to Wu, who is

now 24, is very different: “These new players are not going to think that much in their play, so you’ll have to use a different style. Once you realise it, you’re better off. “If you go into a tournament in Los Angeles and into a tournament in Macau with the same mindset, you’ll be crushed.” Looking back at his professional career, Wu says the most he’s won in one night was in the Asian Poker Tournament in London.

Timothy Gilbert says the Macau Poker Cup in the Grand Lisboa is important for business. “It brings in a totally different clientele because poker players are another type of gambler,” he says. To promote poker in the casino, Macau PokerStars is the marketing vehicle used by Grand Lisboa. Through tournaments, the casino manages to attract more people to play live. “When the tournaments get busy, poker rooms are actually divided into two: the tournament side and the cash game side,” says Gilbert. When the tournaments finish, you immediately see a rise in the number of the poker players throughout the city. “Unfortunately, as more and more casinos are including poker, they divert from Grand Lisboa.” The timing of the tournaments at the Grand Lisboa is important too. “We try to alternate, we cannot have too many tournaments because it will take away the excitement,” Gilbert says. According to the vice-president of table games in Grand Lisboa, poker is going to grow, but it is not – and will not be - a great revenue generator for the house. For instance, at a baccarat table, on average the house wins 12 and a half percent, while at a poker table it’s only three to five percent. However Poker tournaments are still useful to bring people into the casino, adds Gilbert. April 2010

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April 2010

Gaming

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hen the first official report of gambling landed on a Chinese official’s desk in 2300 BC, it’s a pretty safe bet that the next report to come in on tablets of stone was one of cheating. Over time the techniques, scams, rackets - call them what you want - have changed and become more sophisticated, but the principle has remained the same: taking on and beating the house. And there’s no bigger house than Macau, the biggest gambling destination in the world by revenue. Some of today’s cheats cash out chips that are not theirs, others try to pass off counterfeit ones, while some use more far-fetched tricks at the baccarat or blackjack tables. But the daddy of all scams is the side bet, an unholy alliance between the junkets and players, which hurts casinos the most - and no-one knows exactly how much.

Rising rackets

Scamming it

Cheating, in whatever form, is part of the human condition, and in the high-stakes world of gambling the temptation to steal an illegal march on the casino is high. We investigate the latest scams out there by Luciana Leitão

There were 1,279 casino-related crimes in 2007, 1,506 in 2008 and 1,601 last year, of which theft and scamming were the most common. Last year, the Judiciary Police uncovered six casino crimes connected to triad societies, two more than in 2008. Leong Chi Wai, who heads the Judiciary Police gaming-related crime division told Macau Business that in 2009 alone, 125 cases of scamming were solved and 52 people were arrested. The cases involved a number of different gaming frauds and were, by and large, carried out by people from the mainland. Fake chips remain public enemy number one, but growing knowledge of how the rackets work means they are becoming less common: “It’s usually HK$1,000 chips which are cashedin when someone goes to pick up their winnings and the casino recognises the fakes,” says Leong. However, more and more frauds in casinos go way beyond counterfeit chips. For example, says Leong, gamblers often play on more than one table at a time and if they win at a table where they are not actually physically present, another person might try to claim their win. Larry Ho, senior vice president of the casino at Ponte 16, says another very common scam - which he insists he has not seen at his property - is ‘capping’, April 2010

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Gaming

when a second player puts a wager on top of another’s without him noticing. It is only when the results are opened, that the first player realises what has happened: “When he is caught, he can easily say it’s a mistake,” adds Ho.

Croupier scams

In baccarat, the most common scam is the so-called ‘false shuffle’, which enables players to memorise the order of the cards. The dealer intentionally fails to shuffle a deck, and the players know the next cards.

There are many ways for a dealer to help a player. For instance, Leong explains how the croupier might memorise the cards, then on his break go to the bathroom and send a text message to the players. “Usually this happens when secret societies train the croupier,” he adds, saying they only detected two cases last year. Many casinos have introduced shuffling machines to stop this scam. Gaming Inspection and Coordination Bureau (GICB) Director Manuel das Neves says scams that involve an

agreement between the croupier and the player are the most difficult to solve. “Some years ago we had a suspect, but he had to be caught red-handed for the court to accept it. Acting together, the Judiciary Police and the GICB, staked out the casino’s big and small tables for almost a month. “The suspect kept standing by the table; the croupier saw the results and made a signal to the him before opening up the lights for the winning bets. Only then did the scammer bet,” Neves remembers. Eventually the cheaters were caught. Sometimes, when buying chips the player might only pay HK$1,000 and the croupiers might give him two HK$1,000 chips. This is one of the most common frauds, says Neves. He says the first to suffer as a result of cheating are the gamblers, not the casinos, because they are deceiving fellow players. The government has no idea on how much money is lost but “it’s not significant, it is actually a very small percentage,’” claims Neves.

Side bets

The most untraceable and damaging scam usually takes place outside the casino - side betting. Leong explains: “The gambler bets HK$1,000 with the junket, but only puts HK$100 on the table. The deal is that, no matter the result, the player always wins HK$1,000. “Over the years only eight to 10 cases of this type have been solved by the Judiciary Police. They’re very difficult to uncover, especially because the money transactions are always done outside the casino.” However, the director of the GICB thinks there’s no reason to worry: “It’s true that it is almost impossible to catch the cheaters and that when this happens, there is money involved that escapes government taxes, but I don’t believe the volume is that big,” says Neves. He believes that for this scam to take place, there has to be maximum confidence between both parties involved, which isn’t always an easy state of affairs to ensure: “The risk is big for the junket that accepts this,” he says.

Beyond the floor

The possibility of gaming rackets extends beyond the walls of the city’s casinos. April 2010

115 Last month gaming websites and forums were abuzz about an overseas poker expert who was alleged to have been training students in Macau and who was accused of making off with the fees they paid. In January this year, another scam emerged. A 42 year-old unemployed Hong Kong man called the phone company, pretending to be a junket operator, stating he had lost his SIM card and needed to transfer all his personal information - that had been provided by the rest of his gang - to his new card. As soon as the original card was deactivated, he went to a casino VIP room and ordered MOP5.3 million worth of chips, in the name of the real owner of the phone number. According to casino rules, staff have to confirm with the junket that the real owner has given authorisation. In this case, the number was in possession of the rest of the members of the gang who answered the phone and gave the OK to the operation. According to the Public Prosecutor’s website, someone commits a fraud when they “have the intention of obtaining others’ money/wealth, by deceiving or entrapping” and may be punished by up to three years in prison or by paying a fine. The punishment may go up to five years, if the damage caused to the victim is big. If the cheat usually scams for a living or if the victim is severely affected, then they might be punished with up to ten years in prison. Of course, when one adds up theft or larceny, the penalty might rise significantly.

A cheat’s tale

If you Google gaming scams, he’s right there. And now one of the world’s highest profile casino cheats spills the beans on his life as a casino swindler by Luciana Leitão

t’s not a title most people would revel in, but American Richard Marcus considers himself one of the best cheats in the world and, since he retired from the “job” six years ago, he has been telling his story to anyone who wants to listen. Chance – by divine coincidence - determined his line of work. Marcus, 53, started dealing blackjack and baccarat in his teens after losing all his money in a Las Vegas casino. Then he met a man from New York who was recruiting cheats for his team of scammers: “I was interested as I had done some low-level scams as a kid. Scamming was already in my blood,” he tells Macau Business.

Marcus quickly thought of a scam to use on his baccarat table, which is nowadays called the ‘false shuffle’ and, he says, is widely used in Macau casinos. “After doing that scam in my casino for US$40,000 (HKD$310,616) profit, I quit my dealing job and became a full-time professional casino cheat - for 25 years.”

Shuffle scams The shuffle scam works when the dealer is in agreement with a team of players who have to keep track of the cards. The dealer intentionally fails to shuffle one or two of the decks and the players already know which cards will come out next. “It is now the most popular scam in Macau,” says Marcus.

In fact, claims Marcus, Macau casinos have suffered a lot from this scam, which has cost them HK$4 million. He claims both the Sands and Venetian got hit as soon as they opened. In Macau, Marcus used other moves, such as the Savannah Roulette scam. “By hiding US$5,000 chips under USD$5 chips on the 2 to 1 column, we won US$10,010 each time these bets won while losing just US$10 when they lost. “We did this by quickly switching out the losing bet containing the $5,000 chip and replacing it with $5 chips the instant the ball dropped,” he explains on his website. If he and his team were caught by the dealer, they April 2010

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Gaming would pretend to be drunk and claim they didn’t realise the ball had dropped. According to Marcus, he was never discovered, because the dealer never saw the US$5,000 chip. It may seem too simple, but according to Marcus, it always worked. Working as a cheat in Macau, Marcus has seen other scams in operation. “In Macau, the majority of casino scams are not done by people like me, they’re done by triads. The gangs get their dealer in the casino and at one point they’re going to steal big. Sometimes the dealer’s supervisor is involved in it,” he claims.

Beats robbing banks

Marcus almost always worked with a team: “Most of the other people that I played with started scamming because they lost a lot of money gambling and wanted to get it back quickly”, he says. “Some, however, just got into it because it was a way to make a lot of money with little risk.” Actually, says the professional cheat, even though what he did was a crime, in most places, the punishment is not very severe. “In one casino-cheating move, we walked away with more money than most bank robberies, which are much riskier and much more serious crimes with harsher penalties,” says the professional cheat. The best moves use a team of three or four people, but require military precision. “Everybody was trained to do one specific thing. For instance, one was called the mechanic: he was in charge of switching chips, moving chips around. Another was the claimer who sets up the casino for the move and claims the money when it is paid, while one or two people are the chip betters,” he says, explaining there was also a person – the role usually played by him - not involved in the move, who provided the protection. The scam would be called off if the person securing the protection noticed any suspicious behaviour by the casino. “The April 2010

117 protection was more important than getting the money,” Marcus says.

Vegas dream

Looking back on his career, Marcus claims Las Vegas was the easiest place to scam, and the hardest was London. “In Vegas, they have the attitude that they know everything and no-one else knows anything. It’s the oldest best-known gambling destination, and the casinos are so big. “On the contrary, casinos in London are small and people are very well trained,” he says. In fact, today Macau is similar to Vegas. They have the video systems, but no-one to interpret the moves.

Catching a thief From cameras to paid snitches, casinos try to cover all the angles to beat the cheats

by Luciana Leitão

mainland, it may be difficult to find them. They are in and out of Macau quickly.” Fake chips are now easily traced because they are implanted with microchips, says Leong.

Crime pays

During his career as a cheat, the most he made in one night was HK$120,000, the minimum was HK$10,000. In 2004, he stopped scamming and gambling: “I’d made enough money. I was already in my 40’s and I just had enough and wanted to write a book about it,” he says. He has no fears about disclosing his story, because he waited some years until his crimes lapsed before going public. He was never caught: “My moves were the best. Also, I was never greedy, I knew when to stop. In my teams, we had our own security.” He also claims to have had no problems with casinos or mafia wise-guys: “Well, in Europe that was never a problem. In Vegas, the mob got out of the casinos in the 60’s, before I started scamming. In Macau, the 60’s and 70’s was a particularly dangerous era, but now it is much like Vegas, not a big deal”, Marcus says. Apart from publishing five books about cheating, including American Roulette, a memoir of his own experiences as a jet-setting casino swindler, he does consultancy for casinos all over the world, helping to set up surveillance systems. That’s why now he has a good relationship with casinos: “Most of the operators I work with I’ve cheated, they’re happy to pay me to tell them what I’ve done.”

very time a casino scam is discovered, those tasked at stopping the racketeers learn a lesson and apply it. But the scammers are often one step ahead. Casinos usually work closely with the Judiciary Police and have regular meetings with private security companies to confirm what’s happening in other countries and prevent new tricks from being imported to Macau.

Surveillance

Surveillance cameras are a key component in keeping casinos safe: “Sometimes they detect them through cameras. When they notice suspicious behaviour, they distribute the image of the perpetrator to other casinos”, the head of the police gaming-related crime division, Leong Chi Wai says. “However, given that most people committing these crimes are from the

Machines help Over the years, certain scams have disappeared with the improvement of security systems. Scammers who used to count the cards and place bets have been scuppered by the use of dealing machines. For the director of the Gaming and Inspection Coordination Bureau (GICB), Manuel das Neves, cheating is very difficult today. “Now, the casinos have very good surveillance systems. Also, they hire former cheats to work for them. For instance, in a Sands case - a baccarat scam that netted HK$30 million in 2004, was discovered by a former cheat,” he recalls. Watch the snitch He believes human surveillance is best: “I’m watching you, he’s watching you and a third person is also watching and being watched. In the middle of this, there is always a snitch on the casino’s payroll.” Larry Ho, vice president of the casino at Ponte 16, says operators are well equipped against scammers, making it difficult for them to succeed.

Table thieves

part from organised and often well-thought-out casino scams, chips - or money - are often simply stolen from tables or women’s purses. Gaming crime detective Leong Chi Wai says people need to keep their wits about them: “People place their bags behind the tables or chairs and forget about them. It’s the perfect opportunity for a thief,” he says. Most thefts take place at the table and in many cases are simply opportunistic. However, there are records of thefts perpetrated by two or more people acting as a gang. “Usually, each year, there are records of two or three cases of this sort,” says Leong and they are normally carried out residents of the mainland and Hong Kong. L.L. April 2010

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Arts & Culture

The much-anticipated Macau International Film and Video Festival hits town this month and it promises an abundance of talent and choice

in Macao

by Jack Regan

the film industry and moving pictures in general are your thing – or you just like a good night out at the cinema – this is your month in Macau. The Macau International Film and Video Festival (MIFVF) takes place this month and there is a host of talent and entertaiment on offer, both from overseas and right on our doorstep.

Specially-selected

One of the highlights is the much-vaunted “Local Docu Power’’ project which will give people the chance to see what local artists have been producing. There will be screenings of local productions, followed by 12 specially selected international films to please cinema goers. These include the ‘Macao Indies’ which will be screened all-day on various dates across the programme.

Off the beaten track

If you want to be treated to selected movies that sometimes take a long time – or never actual make it to the commercial circuits – this festival is for you. It also gives you the chance to view the latest videos and documentaries locally and internationally made. The MIFVF, in its fourth year, will be at the Macau Cultural Centre (CCM)’s Small Auditorium.

Oscar winner

Au Revoir Taipei

Another highlight of the festival is Argentina’s “El secreto de sus ojos” (The Secret in Their Eyes) by Juan José Campanella. It was recently awarded an Oscar for “Best Foreign Language Film” at the Academy Awards in Los Angeles. It shows on April 11, at 9:30 pm, closing the MIFVF with a golden key. The film was also awarded top film prizes at the Goya Awards in Spain, and the Havana Film Festival in Cuba. “The Secret in Their Eyes” marks Campanella’s return to feature filmmaking and is a superbly honed police thriller, though one in which love is the central theme. With excellent performances by Ricardo Darin and Soledad Villamil as unconsummated lovers, Campanella uses flashbacks to establish an unresolved crime committed 25 years ago.

Blond Hair Girl

April 2010

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Tetro

The loved ones

Secret in eyes

The blue mansion.tif

Police Adjective

roulette city

Two in the Wave

Letters to Father Jacob

April 2010

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April

2010 Macau Int’l Environmental Co-operation Forum & Exhibition

Date: 8th – 10 th Venue: The Venetian Macao-Resort-Hotel Organiser: Government of the Macau SAR Tel: (853) 2871 0300 Fax: (853) 2859 0309 Website: www.macaomiecf.com E-mail: info@macaomiecf.com | miecf2010@ipim.gov.mo

APAC Investments Summit 2010

Date: 21st – 23rd Venue: Four Seasons Macau Organiser: Marcus Evans Address: 4 Battery Road, 13-01 Bank of China Building, Singapore, 049908 Tel: (65) 6720 0620 Fax: (65) 6720 0621 Website: www.apacinvestmentssummit.com E-mail: webenquiries@marcusevanscy.com

iGaming360

Date: 28th - 30 th Venue: Madrid Spain Organiser: Clarion Gaming Address: Earls Court Exhibition Centre, London, SW5 9TA, UK Tel: (44) 0 20 7370 8579 Website: www.igaming360.com E-mail: yeemay.huang@clariongaming.com May

GTI Asia Taipei

Date: 2nd – 4th Venue: Taipei World Trade Centre Organiser: Haw Ji Co., Ltd. Address: 2F, No. 17, PaoChing St., SongShan Dist., Taipei City 10585, Taiwan Tel: (886) 2 27607407 Fax: (886) 2 27623873 Website: www.gtiexpo.com.tw E-mail: robert@taiwanslot.com.tw

Global iGaming Summit & Expo (GIGSE)

Date: 12th – 13th Venue: TBC, Montreal, Canada Organiser: Clarion Gaming Address: Earls Court Exhibition Centre, London, SW5 9TA, UK Tel: (44) 0 20 7370 8567 Website: www.gigse.com E-mail: ewa.bakun@clariongaming.com

Asian Infrastructure & Property Development Summit

Date: 17th – 19 th Venue: The Four Seasons Hotel Macao Organiser: Marcus Evans Address: CP21, Suite 2101, Central Plaza, 34 Jalan Sultan Ismail, 50250 Kuala Lumpur, Malaysia Tel: (603) 3272 6635 Fax: (603) 2723 6601 Website: www.marcusevanskl.com E-mail: angelikab@marcusevans.com June

G2E Asia (Global Gaming Expo Asia 2010)

Date: 8th – 10 th Venue: The Venetian Macao-Resort-Hotel Organiser: AGA | Reed Exhibitions Address: 39/F, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong Tel: (852) 2824 0330 Fax: (852) 2824 0178 Website: www.g2easia.com E-mail: shermen.ho@reedexpo.com.hk

International Hotel Investment Forum 2010 Asia Pacific

Date: 14th – 16th Venue: The Venetian Macao-Resort-Hotel Organiser: Questex Asia Limited Address: 501 Cambridge House Taikoo Place, 979 King’s Road, Quary Bay, Hong Kong Tel: (852) 2559 2772 Fax: (852) 2559 7002 Website: www.ihif_asiapacific.com E-mail: jdu@questexasia.com

HA+D Expo (The Hospitality Architecture + Design Exhibition and Conference) Date: 17th – 18th Venue: The Venetian Macao-Resort-Hotel Organiser: Questex Asia Address: 501 Cambridge House Taikoo Place, 979 King’s Road, Quarry Bay, Hong Kong Tel: (852) 2559 2772 Fax: (852) 2559 7002 Website: http://hadexpo.questexevents.net/ E-mail: jdu@questexasia.com

Corruption and State of Law

Date: 14th – 15th Venue: TBC Organiser: Macau Lawyers’ Association Address: 11/F World Trade Centre, 918 Av. da Amizade, Macau Tel: (853) 2872 8121 Fax: (853) 2872 8127 Website: www.aam.org.mo E-mail: aam@macau.ctm.net April 2010

If you know of an event to be held in Macau that you believe should be listed with Macau Business, please drop us an e-mail:

editor@macaubusiness.com

In the subject bar, type in “List me as an event”.

TBA : To be advised

: A Macau Business partner event

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April 2010

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Tourism

Mandarin sale makes profit Mandarin Oriental made a net profit of US$83.3 million (MOP 666 million) last year, a year-on-year increase of 24 percent. The company’s results were boosted by a US$81 million gain on the sale of its 50 percent stake in the former Mandarin Oriental Hotel in Macau. The company continues to manage the hotel, which has been rebranded as the Grand Lapa Hotel for a period of up to two years. Profit levels fell at all of the group’s hotels as a result of lower occupancy and room rates. Mandarin Oriental plans to open a new hotel in Macau at the One Central complex in mid-2010.

L’arc Macau gets award L’Arc New World Hotel Macau was awarded the “Best Themed Hotels of China 2009” and its General Manager, Peter Ng, was named the “Best General Manager of China Hotel Industry 2009” at the 5th China Hotel Starlight Awards Presentation Ceremony organised by The Centre of Asia Hotel Forum. China Hotel Starlight Awards recognises the achievements of hotels and hoteliers. The awardwinners are decided by the consensus of a group of shrewd and seasoned hotel experts and appraisals of the Advisory Committee of Asia Hotel Forum, recommendations and nominations from members of the industry, and online voting.

MGM + CoD = free ride MGM Grand Macau and City of Dreams recently launched a new free shuttle service between the two properties. The service is available every 20 minutes from 11am till 9.45pm, on a daily basis.

Expensive at Encore Rooms at Encore, Wynn’s new allsuite boutique hotel, will be the most expensive in Macau. The 414-room hotel is due to open this month and reservations are now being accepted. Encore began taking bookings on March 30 and, according to The South China Morning Post, was asking HK$2,588 for a basic suite on its opening day. The asking rate rises to HK$3,688 for the following Saturday (April 24), compared with HK$2,298 at The Venetian Macao.

Macau visitor rates slip Preliminary figures released by the Pacific Asia Travel Association (PATA) indicate that the numbers of international visitors to the Asia Pacific region fell by an estimated three percent year-on-year in 2009. In Macau, the drop was five percent, according to PATA. Worse was Japan, were the fullyear arrivals numbers were down 19 percent. The mainland registered a three percent drop, while Taiwan (+14 percent) and Korea (+13 percent) posted increased visitor numbers. Hong Kong recorded a marginal 0.3 percent increase in arrivals for the year. Southeast Asia emerged as the only sub-region in the Asia Pacific to record a full-year gain in international arrivals during 2009.

Regional tourisn slip The number of visitors to Macau surged by 24.4 percent year-on-year to 2,057,566 in February this year. The increase was mainly attributable to the Lunar New Year holidays, according to the Statistics and Census Service. Same-day visitors (1,083,981) accounted for 52.7 percent of the total visitor arrivals, with 612,371 coming from the mainland. Mainland visitors soared by 38.1 percent yearon-year to 1,145,320, with 579,345 travelling to Macau under the Individual Visit Scheme, up by 25.7 percent from February 2009. The cumulative visitor arrivals totalled 4,104,122 for the first two months of 2010, up by 15 percent year-on-year. April 2010

Entertainment

Party on !

It’s here, the night out to top them all... by Catarina Morgado

party revolution is coming to Macau via Las Vegas, as the city’s premier nightclub - in conjunction with Macau Business - prepares to launch Industry Night. Born in Vegas, the mother of all parties will allow casino professionals from every operator to get together for a right old knees-up. Cubic Club are masterminding a new dawn for nightlife in Macau and owner John Choi says: “Las Vegas is the opposite to Macau, gaming couldn’t survive without the party, so we thought we’d look at that concept. “The idea is to create something different, something special, something innovative that will force Macau’s nightlife to evolve. The Industry Night concept has it all.

“The best thing about Industry Night is bringing all the casino professionals together in the same space, regardless of the competition that may exist between them, outside of the work environment. “When you work for a casino in Macau it is not very common to go out to a bar or nightclub in a rival casino. But at Industry Night that gap does not exist. “In addition, something really amazing will surely happen: people will avoid talking about the industry!” Choi says. Industry Nights are successful, not only in Las Vegas, but also in Vancouver, Dubai and elsewhere. Considered one of the finest clubs in the world, Cubic will launch Industry Night in association with Macau Business magazine. “Cubic’s high-standard environ-

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ment, its clientele, the careful selection of DJs, bands, dancers, plus the decor and service make it the right place for a party of reference, with a cosmopolitan allure,” said Paulo Azevedo, owner and founder of Macau Business magazine. “Macau is the place for the development of a high-quality entertainment industry. That’s why Macau Business is joining Cubic for this launch party. “In a positive way, Cubic is forcing the city’s nightlife sector to develop in the right direction by setting the bar high,” added Azevedo. After the launch party on April 26, Industry Night will continue. “Initially we will try to do this night once a month, but there is a prospect of launching it on a weekly basis. “We also want to see what happens in other bars and clubs. Maybe they’ll follow us and we can have more Industry Nights,” says Choi. The launch party is “by invitation only” but at subsequent nights all you have to do is show your casino staff identification to enter and get a complimentary drink. April 2010

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Lifestyle

Yep, if there's a day Macau Business team enjoys is the Aristocrat's golf day. Well, that and our own golf tournament, of course. A lot of fun while networking and showing the Australian slot manufacturer is in Macau to do more than business. Terry Jursa - MGM

Enrico Dovadola - MGM

Frank McFadden - SJM Kate Young, Berni Keefe, Andrea Mansfield

John Douglas - Venetian, Iain Carlyle - Venetian, Peter Manson - Venetian, Gary Woollard

Iain Carlyle - Venetian

Lindsay Stewart - SJM, Scott Millburn - COD April 2010

Luis Pereira - MB

Dave Punter - ATA

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The players

Justin Casey, Grant Bowie, Warren Jowett, Frank McFadden

Andy Crisafi, Nathan Carle, Lourens Verheem, Alastair Dick

Ian Wood - RGB, Trevor Ross - ATA, Ian Farnsworth - Galaxy

Greg McElhone - ATA, Steven Lim - RGB, Mazlan Bin - RGB

Tim Gilbert - SJM, Matt Wilson - ATA, Peter Johns - MGM, Matt Hurst - COD

Tim Shepherd - Silver Heritage, Paulo A. Azevedo - Macau Business, Martin Wright - Silver Heritage April 2010

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Anoop Singh Director of the IMF’s Asia and Pacific Department.

Catalyzing consumption and balancing growth China has weathered the Great Recession well. The world now waits to see if last year’s impressive domestic demand growth can be sustained, and if China can, in the words of Prime Minister Wen Jiabao, “give full play to the leading role of… consumer demand in driving economic growth.” The Chinese consumer has been held back for too long, and now must be put front and center in China’s growth model. China’s government is already moving ahead on multiple fronts to attain this goal as was clear from announcements at this week’s National People’s Congress. Of the many factors that have decreased the share of consumption in China’s economy, declining household disposable income has been central. That, in turn, has reflected the fall in labor income as a share of the economy, owing in part to structural changes that have moved workers out of agriculture (where the labor share of income is high) and into manufacturing (where capital commands a larger share of income). Concurrent with diminishing labor income, governmentimposed ceilings on bank deposits – the primary savings vehicle for most households – have held down household capital income. This fall in income has been magnified by rising household savings rates, driven by insufficient insurance for health care and old age, the high cost of education, growing income inequality, and demographic trends. So what to do? Recently, I attended an IMF-organized workshop in Beijing that brought together Chinese officials, academics, international analysts, and IMF staff to discuss how best to catalyze household consumption in China. Participants emphasized that changes would be needed in multiple areas, including improving the system of taxation and social insurance, further developing housing and the service economy, and eliminating a range of relative price distortions. One key idea was to lighten the tax burden on labor. Taking into account the personal-income tax and various social contributions, taxation of labor income in China is too high. To be sure, taxes are needed to finance social spending, but revenue sources other than taxes on labor income could do the job. China could usefully explore shifting part of the burden from labor toward property, capital gains, and inheritance taxes. Larger dividends paid to the budget from the highly profitable state-enterprise sector could also provide an alternative source of funds. Another route to improve consumption could be to offer households greater support. The global crisis has prompted China’s government to push ahead with its social-reform program. Important improvements have been made over the past year to expand the pension system’s coverage, move toward universal health care, and provide public funding for basic education. But more can be done to speed up the existing reform package, find ways to develop full coverage for catastrophic health events, and develop government-backed financing of tertiary education. Fixing the housing market could also help spur consumption. Distortions in the real-estate market are a April 2010

powerful motivation for saving, particularly among young people who struggle to meet the high down-payment needed to buy a first home. Part of the high cost of housing arises from an underdeveloped financial system, which makes housing one of the few alternatives to bank deposits as a store of value. Property or capital-gains taxes could help curb demand for housing as an investment vehicle. In addition, a comprehensive nationwide housing policy is urgently needed to ensure that housing remains affordable, particularly for those on limited incomes. Related to this is the need for improvements in the overall financial system. By developing markets for private pensions, commercial health insurance, and annuities, China could complement expanded government provision of social insurance and weaken the incentives that underlie high precautionary saving. Similarly, broadening the range of available savings instruments could raise household disposable income and increase consumption. A more developed financial system would provide alternatives to real estate as a store of value, thereby making home ownership more accessible. These issues will be examined carefully during the course of this year as the Chinese government and the IMF collaborate on a Financial Sector Assessment Program for China. Fostering a dynamic service economy will invariably boost consumption as well. In the coming years, a more fully-fledged service economy will be an essential ingredient to increase employment and lessen China’s reliance on manufacturing. But spurring faster growth in services is a complex undertaking. Entry barriers, particularly in service industries dominated by state-owned oligopolies, need to be lowered. Distortions in key prices that favor capital-intensive manufacturing need to be removed by raising the cost of land, energy, water, and capital. Changing the tax structure will also help. At present, industry is the primary source of tax revenue for the government, particularly at the local level, giving the state too little incentive to foster a service economy. Finally, a stronger renminbi ought to be an integral part of the package of reforms to boost consumption. A stronger currency would increase household income. It would also create a powerful incentive for companies to expand into the service economy, providing more jobs and more choices for Chinese consumers. If consumption can be successfully and sustainably boosted, I believe that China’s development will enter a new era, one in which economic growth continues at a rapid pace, generates higher employment, increases social welfare, places less demand on natural resources, and, ultimately, is of a much higher quality thereby underpinning more balanced global growth.

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Keeping it in the family The scientists

It’s amazing how colourful political speeches are and how fertile they are with fancy words that say a lot but often mean nothing. More or less since the handover, our politicians have adopted the words “software” and “hardware”. During the SAR’s first five years, there wasn’t a single question which did not require attention to improving the hardware or the need to introduce new software. In health we had the hardware and the policy would make sure the software would get better. Mountains of soft and hardware later, we are “aware” that we need to catch a flight to Thailand for a tooth extraction if we don’t want to leave the medical facility without a kidney. New hospital, new jargon. We are more advanced. Now, everything must be scientific. Public housing? Scientific studies. Labour imports? Scientific studies. Even the antismoking law was scientifically studied. All we want to know is, who is the Einstein exempting saunas from the ban? There are some mathematical calculations that serve only to prove the old relativity theory: that intelligence is relative or that financial interests might not be that relative…

The Viva Macau debacle is just one in a long line of blunders. The recent declarations of Air Macau’s CEO, Zhao Xiaohang, that Viva Macau’s subconcession will be available for other “qualified” carriers; will surely become part of humour’s folklore. For those with a short memory, Air Macau prevented Virgin Blue from getting a sub-concession. Apparently, it wasn’t a “qualified” air carrier. At least, not as “qualified” as Viva Macau, right? We just need to know what it takes to be “qualified” in Macau? Family connections with political decision makers?

Support structures

Some have it, some don’t. The government was kind. It injected money into Air Macau and did the same with Viva Macau. Frozen Spy knows that some media organisations also look forward to equivalent support. Since Edmund Ho Hau Wah gave Ou Mun newspaper the land to build its skyscraper, they now await their share. Hmm…they might as well take a long nap.

The worst drivers in the world? The title must go to Macau’s motorists. They drive on the right when they should drive on the left. They only signal when there’s no other alternative but to make a mandatory turn in a one-way street, and they never signal at a crossroads. They change lanes without signaling and only a handful are aware that an inverted triangle painted on the road means loss of priority and they must give way. Macau should be in the Guiness Book of Records for driving inability, and for the apparent lack of interest from the Traffic Police. For the Macau police, traffic means parking tickets. Mr Secretary Cheong Kuok Va, do us all a favor: drive yourself around Macau for just a few hours…

The democratic acid test

Professor Eilo Yu has good ideas and even better intentions. Talking to a local TV station, he said that Macau “would be a very good place to test democracy in Chinese territory”. A small place with a tiny population and already under the influence of a capitalist system, Macau would be easier to control. Surely, many people would accept the whole idea of a democratic laboratory. When it comes to testing new things, what the professor seems to forget is that Macau usually prefers to test more patriotic subjects. Like Article 23.

April 2010

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April 2010

index April 2010

7 Luck Casino

www.7Luck.com

Aristocrat

page 05

www.aristocratgaming.com

Bally Technologies

IFC

www.ballytech.com

BNU

page 17

www.bnu.com.mo

Camões Restaurant

page 83

www.camoesrestaurant.com

CEM

page 82

www.cem-macau.com

Conde Group

page 45

www.conde-group.com

Cubic

page 02

www.cubicmacau.com

Directel

page 114

www.yp.mo

G2E Asia

page 01

www.g2easia.com

International Ladies Club of Macau page 73

www.ilcm.org.mo

Macau Cultural Centre

IBC

www.ccm.gov.mo

Macau Daily Times

page 121

www.macaudailytimes.com

Macau Museum of Art

page 19

www.artmuseum.org.mo

Macau Post Office

page 81

www.macaupost.gov.mo

MGM Grand Macau

page 04

www.mgmgrandmacau.com

MGTO

page 87

www.macautourism.gov.mo

Morton’s The Steakhouse

page 79

www.mortons.com

MSS Recruitment

page 18

www.mss-recruitment.com

MSS Recruitment

page 24

www.mss-recruitment.com

MSS Recruitment

page 31

www.mss-recruitment.com

MSS Recruitment

page 39

www.mss-recruitment.com

MSS Recruitment

page 46

www.mss-recruitment.com

Our Dental Clinic

page 85

www.ooioc.com

PAGCOR

page 07

www.pagcor.ph

Sands China Ltd.

page 65

www.sandschinaltd.com

SJM

page 48

www.sjmholdings.com

Starworld Hotel

page 09

www.starworldmacau.com

Zung Fu Motors – Mercedes

page 03