Estate agents tout HK for cheaper homes E
state agents are promoting housing in Hong Kong in an effort to soak up demand by Macau property investors frustrated by the ever-higher prices and limited supply on this side of the Pearl River estuary. Estate agents are trying to drum up sales of unfinished flats in Hong Kong that promise higher returns on investment. Midland Realty (Macau) Ltd will take a party of Macau people to Hong Kong on
Saturday to show them what it calls “popular” housing projects. “Now prices of property in Hong Kong are gradually going down, and the rental yield for residential property is 3 percent or more, while in Macau it is under 3 percent,” adds Jane Liu Zee Ka of Ricacorp (Macau) Properties Ltd. More on page
Another month, another record for casinos
www.macaubusinessdaily.com
Year II
Number 488 Tuesday March 4, 2014
Publisher: Paulo A. Azevedo
Closing Editor: Michael Grimes
MOP 6.00
business daily 1
Friday April 19, 2013
Sands Cotai Central getting stage show Page 4
High costs dampen exports
Macau gambling revenue grew by 40.3 percent year-on-year in February to 38.00 billion patacas – a new monthly record and its fastest rate of expansion since October 2011 – according to government data released yesterday. Stocks of local gaming operators didn’t all react favourably to the news. Yesterday Business Daily reported Francis Tam Pak Yuen, Secretary for Economy and Finance, saying that concessionaires wouldn’t get all the tables they had asked for in their new multi billion U.S. dollar Cotai projects. Page
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Insurers say 2013 was a new industry high
Carson Yeung Macau, mainland, facing up to 7 years to review intelligence for money laundering after Kunming
The insurance industry’s premiums grew faster last year than they had for six years, according to the Macau Insurers Association. But the association said the insurance industry still had “much room for growth” as Macau’s insurance penetration rate remained low. The insurance penetration rate is gross premiums as a proportion of GDP. The association said the insurance penetration rate was 0.5 percent in the third quarter of last year.
Birmingham City Football Club boss Carson Yeung Ka Sing was found guilty by a Hong Kong court yesterday of five counts of money laundering. The high-profile trial cast a spotlight on the barberturned-businessman and also on the world of Macau VIP gambling. Mr Yeung, who had denied five charges of laundering HK$720 million (US$93 million) between January 2001 and December 2007, will be sentenced on Friday.
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The city’s top security chief pledged yesterday to improve communications between Macau and mainland officials following the brutal attack at Kunming station in Yunnan province that left up to 33 dead and 140 injured. The news came as it emerged that mainland police were reporting the arrest of three suspects they think are linked to the outrage. It’s been blamed on separatists from the semiautonomous region of Xinjiang. Page
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Banks want more govt deposits Page 7
Brought to you by
HSI - Movers March 3
Name
%Day
Lenovo Group Ltd
1.21
Hutchison Wh
1.05
China Unicom
0.97
Belle Internation
0.73
Sino Land Co Ltd
0.18
Hang Lung Propert
-2.32
China Merchants H
-2.36
Sun Hung Kai Prop
-2.67
Henderson Land D
-2.76
Hengan Internat
-2.79
Source: Bloomberg
I SSN 2226-8294
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2014-3-4
2014-3-5
2014-3-6
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22 business daily
March 4, 2014 Friday April 19, 2013
Macau
Insurers say 2013 was another record year Premiums grow but the insurance penetration rate is still low Tony Lai
tony.lai@macaubusinessdaily.com
T
he insurance industry’s premiums grew faster last year than they had for six years, according to the Macau Insurers Association. A written statement issued by the association, citing preliminary official data, says the combined gross premiums of insurers amounted to 6.78 billion patacas (US$847.5 million) last year, 25.9 percent more than the year before and the most ever. Monetary Authority of Macau data indicate that the annual rate of growth was the fastest since 2007,
when it was over 30 percent. The association said: “The earnings of Macau people have gradually increased as the city’s economy has grown rapidly, pushing up demand for Macau insurance products and services.” It added: “Despite uncertainty in the global economy in 2013, Macau’s economy maintained positive growth, driven by gaming revenue, which also propelled non-gaming development.” Secretary for the Economy and Finance Francis Tam Pak Yuen has said gross domestic product grew by 11 percent last year.
Gaming revenue amounted to 360.8 billion patacas. The association said the insurance industry still had “much room for growth” as Macau’s insurance penetration rate remained low. The insurance penetration rate is gross premiums as a proportion of GDP. The association said the insurance penetration rate was 0.5 percent in the third quarter of last year. “It is far lower than the level in developed countries or even middleincome countries,” the association said. The latest study by Swiss
Reinsurance Co Ltd found that in 2012 the average insurance penetration rate was 8.6 percent in industrialised countries and 6.5 percent globally. In Hong Kong the insurance penetration rate was 11 percent in 2012, data from the Office of the Commissioner of Insurance there show. The Macau Insurers Association said life insurance premiums had risen by 31.7 percent last year to 4.92 billion patacas. The association said non-life insurance premiums had risen by 12.7 percent to 1.86 billion patacas.
CRIME
JTM / Business Daily
Car concession – employee quizzed
A real recipe for trouble
Loan sharks give victim ‘bail’
Dealer detained over chip theft
The Judiciary Police has detained a Macau resident, aged 36, suspected of misappropriating HK$2.8 million from the sale of cars belonging to his employer. The car concessionaire complained to the police after checking accounts and noticing the disappearance of two cars from the company’s inventory. According to the police, the suspect sold one of the cars and kept the money. Later, he also kept deposit payments from four other clients. According to the authorities, during questioning the suspect said he needed the cash to cover losses he suffered while investing in the Hong Kong Stock Exchange.
Three restaurants on Travessa de São Domingos, in downtown Macau, were burgled on the same night. Only one of the restaurants reported cash losses – amounting to 600 patacas. In one case, the offenders broke through iron doors but were apparently foiled by secure glass windows in the interior. Another of the restaurants targeted had an unlocked wooden door.
A women aged 34 from mainland China was allegedly held against her will for failing to pay back money she borrowed for gambling. After initially evading her captors, she returned to them. A group of five suspects who had allegedly advanced her HK$200,000 let the women leave in order to try and borrow money from a friend. When that errand proved fruitless, the women went back to the apartment where she had been held. But a friend called the police who later freed her.
Macau’s Judiciary Police detained a casino dealer after a casino reported chips being stolen. According to the casino’s security services, a women aged in her 50s allegedly stole a total of six chips with a face value of HK$10,000 each on February 19,26 and 27. The suspect was detained and reportedly admitted to the police that she used and lost the chips while gambling because she suffers from an addiction to gambling.
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Macau
Hong Kong homes lure Macau property investors Estate agents highlight relatively low prices, sufficient supply, and high rental yields in their sales patter Stephanie Lai
sw.lai@macaubusinessdaily.com
E
state agents are touting housing in Hong Kong in an effort to soak up demand by Macau property investors frustrated by the ever-higher prices and limited supply on this side of the Pearl River estuary. Estate agents are trying to drum up sales of unfinished flats in Hong Kong that promise higher returns on investment. Midland Realty (Macau) Ltd will take a party of Macau people to Hong Kong on Saturday to show them what it calls “popular” housing projects. A Midland Realty advertisement in a Chinese-language newspaper in Macau says flats in Hong Kong bought off the plan are cheaper than flats in old tenements here. Midland Realty Macau chief executive Ronald Cheung Yat Fai told Business Daily that space in The
Visionary, a housing project in Tung Chung near Hong Kong airport, was selling for HK$7,000 (US$902) to HK$8,000 a square foot. Mr Cheung said that, in contrast, the average price for unfinished flats in Macau was over HK$9,000 a square foot. Financial Services Bureau data show the average price of unfinished flats in Macau was 104,766 patacas a square metre in January this year. The bureau began collecting data on sales of unfinished flats in May. Between May and December the average price was 117,474 patacas a square metre. “Also, unfinished flats in Macau are very scarce now,” said Mr Cheung, “and in that respect Hong Kong still has a relatively abundant supply.” He said a further attraction of
Hong Kong for Macau investors was the average annual rental yield of housing there, which was 3 percent to 4 percent.
Special offers Ricacorp (Macau) Properties Ltd said it had begun selling commercial property and unfinished housing in Hong Kong to Macau investors in the fourth quarter of last year. Managing director Jane Liu Zee Ka told Business Daily that between November and January Ricacorp Macau had sold 18 properties in Hong Kong to Macau buyers. Most of the properties were unfinished flats. “You could see the trend for local buyers to purchase Hong Kong property beginning to emerge in
Hotel occupancy down in Jan T
he average occupancy rate for Macau’s 28,000 hotel rooms was 81 percent in January – down by 3 percentage points yearon-year, according to data released by the Statistics and Census Service. The city saw a 5 percent yearon-year rise in the number of guests checking into local hotels and guesthouses in January, totalling 873,000 persons. But the average stay length of these visitors, mostly from mainland China and Hong Kong, still remained at 1.4 nights in the month
October last year, when some Hong Kong property developers were offering hefty discounts to promote sales of housing,” Ms Liu said. “Also, for some property bought off the plan, Hong Kong developers offer to pay half or all of the buyer’s stamp duty of 15 percent,” she said. “So that is also a way to lure buyers from overseas,” she said. “Now prices of property in Hong Kong are gradually going down, and the rental yield for residential property is 3 percent or more, while in Macau it is under 3 percent,” Ms Liu said, “So for long-term investment it fits the interests of local investor-buyers.” She expects estate agents to keep promoting Hong Kong property among Macau investors, as are all expanding their sales effort beyond Hong Kong.
- the same level as one year ago. A possible cause for the drop seen in the hotel occupancy rate for January is the rise in the number of hotel rooms operating in the month, which has increased by 7 percent year-on-year to a total of 28,000 rooms. Of the 28,000 rooms provided by 98 local hotels and guesthouses, 18,000 of them, or 66 percent, are from 5-star hotels. The 5-star hotels in the city received 530,000 guests in January and achieved the highest occupancy rate at 83 percent. The average hotel room rate for January was 1,543.88 patacas (US$193), 9.7 percent more than a year before, information from the Macau Hotel Association indicates. S.L.
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Macau Moody’s upgrades Macau’s credit rating Moody’s Investors Service yesterday said it had upgraded the credit rating of the Macao Special Administrative Region government to ‘Aa2’ from ‘Aa3’ with a ‘stable’ outlook. The credit rating body stated: “The upgrade is supported by the SAR’s continued rapid economic growth, the continued large fiscal surpluses [averaging 23.5 percent of GDP during the past five years] and increasing fiscal reserves of its government, and its very strong balance of payments and external financial position.” Moody’s said no default events – on bonds or loans – have been recorded since 1983.
Gaming growth at fastest since 2011 Chinese gamblers kept going strongly even after Lunar New Year Michael Grimes
michael.grimes@macaubusinessdaily.com
M
acau gambling revenue grew by 40.3 percent year-onyear in February to 38.00 billion patacas – a new monthly record and its fastest rate of expansion since October 2011 – according to government data released yesterday. Even when the revenue figures for January and February are consolidated and compared with the equivalent two months in 2013 – a way of smoothing the effects of Chinese New Year, which this year started on January 31 but extended into early February – the year-on year growth is not far off double that achieved in Jan-Feb 2013. Industry sources told Business Daily that the strong performance in the first week of this February – when the holiday was in full swing and minimum bets on the mass floors were HK$1,000 or even higher – was reprised in the fourth week. The pick up appeared to surprise even seasoned gaming analysts. As late as February 23, they were anticipating impressive year-on-year growth – but in the low thirties of percent. Union Gaming Research Macau – which chooses to wait for the official numbers from the local gaming regulator the Gaming Inspection and Coordination Bureau – said in a note yesterday: “…it appears that the last week of February must have been particularly strong”. Stocks of local gaming operators didn’t all react favourably to the news. The market share leader by revenue in January – Sands China Ltd – slipped 1.39 percent in Hong Kong trading, to HK$64.00. Number three by share – Galaxy Entertainment Group Ltd – fell 2.18 percent to HK$76.15, and number four by share of revenue – Melco Crown Entertainment Ltd –
dropped 0.81 percent to HK$109.80. SJM Holdings Ltd – number two by revenue share – fared better, rising 2.01 percent on the day, to HK$25.40, while Wynn Macau Ltd in fifth spot, gained 0.80 percent to close at HK$37.70. Sixth-placed MGM China Holdings Ltd added 0.45 percent to end at HK$33.25. Yesterday Business Daily reported Francis Tam Pak Yuen, Secretary for Economy and Finance, saying that concessionaires wouldn’t get all the tables they had asked for in their new multi billion U.S. dollar Cotai projects – at least not before the expiry of the current concessions in 2020 and 2022. That may have had a dampening effect on the mood of some investors. But Union Gaming said yesterday in relation to Cotai projects: “..we continue to believe that all operators will receive enough tables to generate adequate returns on investment (which could also be augmented by reallocating some number of tables from existing properties).”
Market Share Per Operator (2013-2014)
Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb
SJM
26% 27% 26% 23% 25% 24% 24% 25% 26% 23% 24% 23% 22%
Sands China 21% 21% 22% 21% 21% 23% 23% 22% 20% 22% 23% 22% 25% Galaxy
19% 18% 18% 19% 19% 20% 17% 19% 21% 19% 18% 20% 21%
Wynn
12% 11% 9% 12% 10% 10% 12% 11% 10% 11% 11% 9% 11%
MPEL
13% 14% 16% 14% 15% 13% 14% 14% 13% 14% 14% 14% 12%
MGM
10% 9% 9% 11% 11% 10% 10% 10% 9% 11% 10% 11% 9%
Total
100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100%
* Figures are rounded to the nearest unit, therefore they may not add exactly to the rounded total
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New Chinese show for Sands Cotai
S
ands China Ltd says it is to host a new theatre show at its Sands Cotai Central resort – probably from 2015. It made the announcement at the Beijing Grand National Theatre on Friday, according to a company press release. The new show will be Monkey King – a Mythical Theatre Show. The ceremony was attended by Edward Tracy, Sands China president and chief executive, and Xu Feng, chairman of the show’s production company Beijing Hua Yan Group (both pictured). In May last year, Sands China’s parent Las Vegas Sands Corp, announced plans to use an area at Sands Cotai Central previously earmarked for
a theatre as a table games zone with approximately 100 tables. In February 2012, LVS closed its Cirque du Soleil show ZAiA at the Venetian Theatre at The Venetian Macao across the road. That followed disappointing performance at the box office. LVS had said in filings it had spent US$100 million (799 million patacas) for the purpose-built theatre. Its 2011 annual report added there would be “a one-time charge of approximately US$45 million during the first quarter of 2012 related to the closure of the show”.
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Macau BIHL has HK$61 mln half-year loss Birmingham International Holdings – owner of English football club Birmingham City – reported a consolidated loss of HK$61.47 million (US$7.9 million) for the six months to December 31. The firm had net current liabilities of approximately HK$228.41 million and a “capital deficiency” of HK$169.90 million, it told the Hong Kong Stock Exchange. “These conditions indicate the existence of a material uncertainty which may cast significant doubt on the group’s ability to continue as a going concern,” it added. Last month BIHL said it was selling a 12 percent stake in the club for HK$45 million to Beijing Liangzhu International Media & Advertising Co.
Carson Yeung facing up to 7 years in jail English soccer club boss found guilty of money laundering
Carson Yeung at court last Friday
B
irmingham City Football Club boss Carson Yeung Ka Sing was found guilty by a Hong Kong court yesterday of five counts of money laundering. The high-profile trial cast a spotlight on the barberturned-businessman and also on the world of Macau VIP gambling. Mr Yeung, who had denied five charges of laundering HK$720 million (US$93 million) between January 2001 and December 2007, will be sentenced on Friday. He faces up to seven years in jail. In a trial lasting more than 50 days, the court was given an insight into the workings of Macau’s casino junket room system.
KEY POINTS Sentencing on Friday, facing up to seven years in jail Football club owner denied five charges of laundering HK$720 mln Judge says defendant was “not a witness of truth”
Mr Yeung accounted for some of his wealth as the winnings from gambling in the city. He said the reason he was issued with four cash cheques in one day by casino concessionaire Sociedade de Jogos de Macau SA, was that he had gambled with four different junkets on SJM premises.
Kong’s rich and famous, Mr Yeung had told the court he amassed his wealth through hairdressing, share trading, property purchases, gambling in Macau and other investments.
Luck questioned But Hong Kong prosecutors rejected claims by Mr Yeung’s defence that one tranche of payments – totalling HK$72.45 million – by SJM, was gambling winnings. Mr Yeung was not in Macau when he asked SJM to deposit 14 cash cheques into his bank accounts, prosecution accounting expert Roderick Sutton said in a court session in June. The court had also heard Mr Yeung first gambled in VIP rooms that had profit agreements with listed casino junket investor Neptune Group Ltd. But defence expert Ian Robinson also showed in court copies of five cheques for a total sum of HK$1.96 million drawn from Wynn International Marketing Ltd to Mr Yeung in 2008. Mr Robinson also displayed two capital receipts for HK$15 million issued by two casino VIP clubs in relation to Mr Yeung’s investment in the clubs. Mr Yeung is the controlling shareholder of English football club Birmingham City. A former hair stylist to Hong
I find the defendant not a witness of truth Douglas Yau, HK District Court Judge
Delivering his verdict to a packed courtroom, District Court Judge Douglas Yau said Mr Yeung had lied about how he made his money and exaggerated the amount of cash generated by his hair salon business and through gambling. “I find the defendant not a witness of truth. I find that he is someone who is prepared to, and did try to, lie whenever he saw the need to do so,” the judge said. Dressed in a dark suit and tie, Mr Yeung appeared calm but looked tired during the court proceedings and did not react when the verdict was read out.
Mr Yeung left the courtroom without commenting on the conviction. His lawyer, Graham Harris, declined to comment.
‘Strange’ business The judge said he found it “extremely strange” that some of Mr Yeung’s business dealings were conducted without a written agreement, even when the amount of money involved was huge. “Unless, of course, those engaged in such a transaction would rather there not be records,” Judge Yau said. Mr Yeung initially bought 29.91 percent of the shares in Birmingham City Football Club in 2007 and then acquired the rest of the shares for approximately 81.5 million pounds (1.09 billion patacas, or US$130 million) in 2009, through his company, Birmingham International Holdings Ltd. He stepped down as chairman and executive director of the listed company last month while he awaited a verdict. A week later, the indebted parent said it was selling a 12 percent share in its UK subsidiary for HK$45 million (US$5.8 million) to a Chinese advertising firm. Officials at Birmingham International declined to comment on the verdict when contacted on Monday. Officials at the football club were not available. M. G. with Reuters
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Macau Macau’s GDP grew 11 pct last year: Tam The city’s gross domestic product expanded by about 11 percent last year, according to preliminary data revealed by Secretary for Economy and Finance Francis Tam Pak Yuen on Friday. This means the city’s economic growth has accelerated from the 9.9 percent expansion seen in 2012. Mr Tam said he expects the economy will be “stable” this year thanks to large-scale infrastructure and investments. But Mr Tam admits: “The human resources now, both in terms of quantity and quality, [means it] is difficult to satisfy the development needs of the economy”.
High rents, lack of labour to dampen domestic exports Importers and exporters say January’s figures show the trends that trade will follow this year Tony Lai
tony.lai@macaubusinessdaily.com
E
xporters expect the manufacturing sector’s burden of high rents and insufficient workers to depress domestic exports further this year, in view of January’s decline of 7 percent. Official data published on Friday show that January’s domestic exports were worth 167.9 million patacas (US$21.01 million), having been worth 180.7 million patacas a year earlier. Exports of textiles and clothing fell by 13 percent to 87.5 million patacas. The vice-president of the Macau Importers and Exporters Association, Leong Kam Hong, told a business seminar: “As the local manufacturing sector continues to contract, domestic exports face a downward trend.” Manufacturing went into decline as the textiles industry contracted after quotas for international trade in textiles were abolished. The value of domestic exports fell to 2 billion patacas last year from 17.32 billion patacas in 2004. Mr Leong described himself as “not optimistic” about exports this year. He said the slowness of the recovery of the global economy could dampen demand abroad. The president of the Macau
Shippers Association, Liu Yuk Lun, said: “Most Macau factories have moved their manufacturing lines out of here, so there are not so many goods that need to be shipped abroad.” Mr Liu predicted: “The value of domestic exports will further contract this year, as they face soaring operating costs and further shortages of labour.” An indicator of the shortage of labour is the unemployment rate, which fell to 1.7 percent in the three months ended January 31, the lowest on record.
Catering to tourists Neither Mr Liu nor Mr Leong would forecast a figure for domestic exports this year. Mr Leong believes domestic exports will not rebound much unless the government changes its policy and allows manufacturers to take on more migrant workers. The chairman of the Industrial Association of Macau, Ho Iat Seng, called last week for the government to give manufacturers greater support by buying more goods that are made in Macau. Statistics and Census Service data
show the value of re-exports – goods shipped into and out of Macau with no value added here – and the value of imports and were resilient in January. Re-exports were worth 827.8 million patacas, about the same as a year earlier.
7%
Y-o-y decline in local exports The value of imports rose by about one-quarter to 8.8 billion patacas. Imports of goods that tourists, particularly mainlanders, like to buy, increased. Meanwhile, imports of gold jewellery rose by 139 percent to 1.5 billion patacas. In the watches segment, imports rose by 124 percent to 801.6 million patacas. Imports of beauty and cosmetic products rose by 60 percent to 262 million patacas.
All this meant that the value of Macau’s external trade rose by 22 percent to 9.8 billion patacas. Mr Leong of the Macau Importers and Exporters Association said: “It is undeniable that the city has far more imports now than exports, but the overall value of trade has still grown in the past few years, meaning good business for us.” He expects imports to keep increasing this year because of “sound growth of gaming revenue, a further rise in visitor arrivals and a continuous increase in retail sales”.
Free trade He said exporters and importers were looking forward to taking any opportunities the free trade zone proposed for Macau, Hong Kong and parts of Guangdong might offer. But Mr Leong gave a warning that the gradual ending of the ultra-loose monetary policy in the United States may cause ups and downs in trade. Mr Liu of the Macau Shippers Association also expects imports to keep increasing this year – at a rate similar to the rates of increase last year and the year before.
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March 2014 Friday 4, April 19, 2013
Macau Non-resident workers numbered 140,000 by Jan The number of imported workers continues to rise this year. It reached 140,765 by the end of January, up by 2.1 percent – or nearly 3,000 workers – from December, latest figures from the Human Resources Office show. The increase is 26.1 percent if judged year-on-year. The construction sector and hotels and restaurants were the biggest employers last month. The construction sector recruited about 800 non-resident workers last month to bring the total number to 27,002. The number of non-residents working in hotels and restaurants rose by 850 people to nearly 39,800 in January.
Banks call for more deposits by govt Without more support from public capital, growth of local lenders limited and costs kept high, says industry leader Tony Lai
tony.lai@macaubusinessdaily.com
B
ankers say the government should keep more of its money with Macau lenders, and so help develop the city’s banking industry and its small- and medium-sized enterprises. “The Macau banking industry has limited sources of finance as Macau has no independent capital market,” the acting chairman of the Macau Association of Banks, Ip Sio Kai, told Business Daily after a Macau Chamber of Commerce seminar.
The Macau banking industry has limited sources of finance as Macau has no independent capital market Ip Sio Kai, acting chairman, Macau Association of Banks
“Most of the capital of Macau banks comes from deposits by customers or interbank borrowing from other banks in other jurisdictions,” he added. Mr Ip said the result was high costs, which limited the development of the local banks. For instance, the cost to Macau banks of Hong Kong dollar deposits was almost
double the cost to Hong Kong banks, he said. “So we suggest the government consider putting more public sector deposits in local banks,” he said. “This could provide a stable source of capital for the industry here,” Mr Ip said, “as well as lowering the cost of making loans to SMEs.” Data from the Monetary Authority of Macau show deposits in Macau banks by the public sector amounted to 73.6 billion patacas (US$9.2 billion) at end of last year, 61 percent more than a year earlier. But this sum made up only 10 percent of all deposits. Mr Ip, who is deputy general manager of Bank of
China Ltd Macau Branch, said the Macau authorities should consider a currency swap arrangement with the People’s Bank of China, the mainland’s central bank. “This could increase yuan liquidity in Macau,” he said, “making Macau’s financial system more stable.”
Mortgage blues A currency swap arrangement would mean the mainland borrowing an agreed amount of patacas and Macau borrowing an agreed amount of yuan. The purpose is to avoid the ill-effects of fluctuation in the exchange rate. Last year the pataca lost
2.7 percent of its value against the yuan, making imports from the mainland more expensive. The mainland is the city’s biggest source of imports. The mainland has a 400 billion yuan (520 billion pataca) currency swap arrangement with Hong Kong and a 350 billion yuan currency swap arrangement with the European Central Bank. The amount of business Macau banks do in yuan has increased in recent years. Mr Ip said the value of their yuan deposits had more than doubled last year to 85.8 billion yuan. Yuan deposits made up 16 percent of all deposits at the end of the year, he said.
He said the value of external trade settled in yuan had grown by one-half to 149.2 billion yuan last year. Official figures show the combined annual profits of Macau banks increased by 35 percent last year to 8.4 billion patacas (US$1.05 billion), the most ever. Mr Ip said that fewer sales of housing meant that in the first 11 months of last year the value of mortgage lending business – one the main lines of business for Macau banks – had fallen by 25.9 percent from the equivalent period of 2012. Statistics and Census Service data show 12,046 homes were sold last year, 29 percent fewer than in 2012.
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Macau Copper at 3-month low as China slows
China‘s dilemma
Copper fell to the lowest in more than three months in New York after weakening manufacturing in China, the biggest consumer of the metal, and Russia’s threat to invade Ukraine prompted investors to sell alternative assets. An official Chinese manufacturing gauge released March 1 fell in February to an eight-month low of 50.2. A private index today from HSBC Holdings Plc and Markit Economics retreated to 48.5 from 49.5 for January. Levels above 50 signal expansion. Global equities retreated as the Swiss franc, government bonds and gold advanced.
Leadership has to balance quality of life with quantity of growth
Gap Inc seeks new berth in PRC Brand awareness is one of the uphill battles Gap Inc faces in China as the U.S. firm looks to increase its stake in the world’s second largest clothing market, where it lags rivals H&M , Japan’s Uniqlo, owned by Fast Retailing Co Ltd and Inditex SA’s Zara. Gap, which launched its first Old Navy store in Shanghai on Saturday, plans to open five stores of the value-end chain this year as well as adding 30 Gap stores to its current 81, Gap’s Greater China president Jeff Kirwan told Reuters on Saturday.
Google,Samsung lobby on Microsoft-Nokia deal Google Inc and Samsung Electronics Co Ltd have asked Chinese regulators to ensure that Microsoft Corp’s bid to acquire Nokia Oyj’s phone business did not lead to higher licensing fees on patents that remain with the Finnish company, Bloomberg reported yesterday. The companies joined Chinese mobile phone makers Huawei Technologies Co Ltd and ZTE Corp in voicing concerns about Microsoft gaining more power in the smartphone market, the report said, citing two government officials familiar with the matter. The companies have asked the regulators to set conditions on the deal, the officials said.
Toyota says China auto sales up Toyota Motor Corp and its local joint ventures sold about 51,900 automobiles in China in February, up 43.1 percent from a year earlier, the Japanese automaker said yesterday. That follows an 18.1 percent year-on-year increase in January and a 19.4 percent rise in December, reflecting a gradual recovery in sales which took a heavy beating from a surge anti-Japan sentiment following a flare-up in a territorial dispute between Beijing and Tokyo in late 2012. The company’s sales in the first two months of the year came to about 137,500 cars, up 26.4 percent from the same period a year earlier.
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hina’s Communist Party leadership faces a dilemma over where to set a growth goal for 2014 as President Xi Jinping wrestles with sustaining expansion while limiting debt risks, environmental damage and social unrest. The target, set at 7.5 percent last year, will be announced at this week’s meeting of the National People’s Congress in Beijing. In a Bloomberg News survey, 63 percent of economists predict the same number this year, while 33 percent see either a 7 percent goal or a range, such as 7 percent to 7.5 percent. China is pledging to shift away from growth at all costs as Shijiazhuang, Tianjin and Beijing choke on smog and an unprecedented build-up of debt threatens to trigger financial turbulence. At the same time, Xi also wants to avoid an excessively deep slowdown that saps confidence, after a manufacturing gauge sank yesterday the yuan turned volatile and an attack blamed on terrorists left dozens dead in Yunnan province. “The government will maintain the target because it wants to anchor expectations and signal confidence,” said Wang Tao, a Hong Kong-based economist at UBS AG. “A lower target would be more prudent and help to reinforce the message that the government wants what it calls ‘growth without negative consequences.’” Setting the goal at 7.5 percent, the government may feel obliged to “turn on the credit tap” if exports are weak and growth is suffering, Wang said. Gross domestic product increased 7.7 percent last year, the same pace as in 2012.
Manufacturing slows A gauge of Chinese manufacturing fell in February to an eight-month low, a government report showed on March 1, while a private index yesterday from HSBC Holdings Plc and Markit Economics indicated a contraction worsened last month. Separately, a services index rebounded from a record low in February, according to official data yesterday. The Bloomberg News survey of 30 economists suggested that the government’s 2014 inflation target would be 3.5 percent, the same as last year. Social tensions in China span farmers dispossessed by land seizures, citizens angered by pollution, ethnic divides, and the gap between billionaire entrepreneurs and rural citizens, who last year had an average annual income of 8,896 yuan (US$1,448). In the March 1 attack in Kunming, scores of people at a railway station were stabbed in what the local government described as an assault orchestrated by Xinjiang separatist forces, the Xinhua News Agency reported. “It’s not really important to set a GDP target, the important thing is
8,896 yuan
average annual rural income per head, 2013
to make normal people’s life better,” An Qi, a 21-year-old tour guide, said last week in the city of Yueyang in the central province of Hunan. “Apart from money, there are many other things that are valuable for life, like a good living environment.” Her view contrasted with that of Beijing resident Yan Shuanghu, 57, who said that the economy was growing too slowly. “The National People’s Congress should focus on improving ordinary people’s incomes,” Yan said, snapping stems from green beans as he sat in the midday sun outside his son’s restaurant. “The situation is not good for lower levels of society.” The Shanghai Composite Index of stocks is down about 66 percent from a 2007 peak after slipping about 2 percent this year. The benchmark gauge rose 0.9 percent yesterday amid speculation lawmakers will announce economic reform measures. The yuan was little changed yesterday after tumbling the most on record against the dollar on Feb. 28 in anticipation that officials will widen the currency’s trading band. The latest meeting of the legislature, the first to be overseen by Xi and Premier Li Keqiang, comes as leaders pledge to give markets a
“decisive” role in the economy and alter incentives for local officials by assessing them on measures such as environmental protection and limiting debt, not just GDP growth. Investors will be watching the NPC meeting for clues to the next steps to fix local-government finances, charge market prices for natural resources, rein in shadow-banking risks, free up deposit rates and open up state businesses to private investment. A 7 percent growth target would be “more consistent with China’s longer-term development plan,” said Zhu Haibin, chief China economist at JPMorgan Chase & Co. in Hong Kong. “The argument about whether the target should be 7 percent or 7.5 percent is about how to assess the impacts of reforms -- whether reforms can help short-term growth or sacrifice it,” Zhu said.
New dynamics China’s top leaders are “still quite optimistic about the impacts on shortterm growth from reforms -- they believe reforms can bring some new growth dynamics,” Zhu added. In December, Chinese financial news provider Caixin reported that the GDP growth target had been set at 7.5 percent, saying that the decision was made at the central economic work conference that month. “Xi won’t lower the target because he wants to stabilize the job market and boost social stability,” said Shen Jianguang, a Hong Kong-based economist at Mizuho Securities Asia Ltd. who has worked for the International Monetary Fund and the European Central Bank. “Even though Xi has strong determination to push for structural changes, those have to take place in a stable social environment.”
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Analysts smell issues at China Fishery Purchase of Peruvian anchovy quota raises debt level David Yong
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hina Fishery Group Ltd – the biggest anchovy fishing quota holder in Peru following its acquisition of Oslo-listed Copeinca ASA – may be downgraded after the buyout sent its debt levels soaring. The Hong Kong-based company is seeking to refinance an approximately US$355 million bridge loan which part-funded the purchase and is due to be repaid at the end of the month, according to Moody’s Investors Service. Although yields on China Fishery’s bonds are falling, Moody’s put its B1 rating, four levels below investment-grade, on review for downgrade on Feb. 12, citing the lack of a binding deal with lenders. Asian companies including Thai Beverage Pcl and Global A&T Electronics Ltd. were downgraded by Moody’s and Standard & Poor’s last year as asset acquisitions resulted in debt and refinancing concerns. China Fishery, backed by private equity firm Carlyle Group LP, had US$578 million of debt at the end of 2013 which may have to be repaid within 12 months, according to an exchange filing. China Fishery is “making progress” on refinancing the bridge loan, Finance Director Chan Tak Hei said by phone from Hong Kong on Feb. 27, declining to elaborate citing disclosure rules. The company aims to complete the refinancing this month, according to a Feb. 11 stock exchange filing.
Copeinca, which has a secondary listing in Lima, produces fishmeal and fish oil from anchovies caught off South America’s coast. China Fishery bought the company in August in a deal which valued it at about US$782 million at the time. The purchase was funded by a one-for-one stock rights offering in April and a bridge loan from DBS Group Holdings Ltd. and Rabobank International.
Concerns remain Fitch Ratings Ltd said in a statement dated Feb. 23 the company’s liquidity situation remains “manageable.” China Fishery has sufficient commitments from lenders, S&P said on Feb. 12. “The company continues to generate cash flows and
therefore it’s less likely for the bridge-loan lenders to pull the credit line at this
KEY POINTS To refinance US$355 mln bridging loan US$578 mln of debt at end-2013 On review for Moody’s downgrade Revenue 34.4 pct up in Q1 ended Dec. 28
moment,” Lim Su Aik, an analyst at Fitch, said in a Feb. 27 interview in Singapore. “We remain concerned with its high leverage as a result of the Copeinca acquisition. This needs to be resolved.” The Copeinca deal pushed China Fishery’s net debt to more than three times its earnings before interest, tax, depreciation and amortisation, Fitch estimated in August. Fitch has kept its BB- rating outlook on the company at negative, since lowering it from stable in July 2013. The yield on China Fishery’s 9.75 percent notes due July 2019 rose six basis points to 10.11 percent as of 5:25 p.m. in Singapore. While that’s the biggest increase since Jan. 27, the yield has dropped 265 basis points in the past year, Bloomberg-
compiled data showed. “We’re neutral on the 2019 bonds,” Amit Jain, a credit analyst in Bangalore at SJS Markets Ltd., said by e-mail on Feb. 27. “The company seems quite confident of refinancing the bridge loan by the end of March. But the leverage is still very high and we’d like to see the company realising the cost benefits from the Copeinca acquisition before we upgrade it.” China Fishery reported a 34.4 percent increase in revenue to US$145.2 million for the first quarter ended Dec. 28, 2013, after consolidating Copeinca’s business. Revenue from its contract supply unit, which accounted for 41 percent of the total, slumped 34 percent due mainly to lower sales volumes. “There are some red flags in the latest results, where the contract supply business generated the lowest firstquarter revenue compared to past years,” Fitch’s Lim said. “That’s something worth watching.” Shares in Singaporelisted China Fishery are little changed this year at 38.5 Singapore cents. The stock has slumped 75 percent since June 2010 when the Carlyle Asia Partners III LP fund invested about S$210 million (US$166 million) buying 113.5 million new shares at S$1.85 each, plus 26.7 million warrants. The fund’s equity holding rose to 202 million shares, or an 11 percent stake, after a rights offering last year. Bloomberg News
China may build world’s biggest ‘smog lab’ To research pollution control and mitigation methods
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he Chinese Academy of Sciences has proposed spending 500 million yuan (US$81 million) to build the world’s biggest smogresearch facility in Beijing to address air pollution, the Beijing News said. The centre will allow researchers to simulate smoggy conditions and study what causes pollution to stay over the city, the Beijing News reported yesterday, citing He Hong, the researcher in charge of the project. The National Development and Reform Commission hasn’t yet approved the project, He said. President Xi Jinping said last week pollution was Beijing’s biggest challenge as thick smog that blanketed northern China cleared after seven straight days at hazardous levels. The issue may feature in talks as Chinese leaders gather for an annual meeting of the national legislature this week. The concentration of PM2.5, which are fine particulates that pose the greatest risk to human health, was 205 micrograms per
cubic meter over the past 24 hours at 4 p.m. near Tiananmen Square in Beijing, the Beijing Municipal Environmental Monitoring Center said on its website. That’s more than eight times World Health Organization’s recommended 24hour exposure of no higher than 25. Air pollution adds pressure to the government’s determination to address environmental damage that’s accompanied three decades of double-digit economic growth. In efforts to ease smog, China’s National Energy Administration will promote upgrading fuel products, reducing coal usage and strengthening coal quality management to control pollution, according to a statement on the administration’s website on Feb. 26. It also plans to boost the use of natural gas this year and speed up solar, wind and geothermal use to diversify away from coal, according to the statement. Bloomberg News
500 mln yuan Likely cost of new smog research centre
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Yuan still on a roll: Cbank No change in fundamentals of economy, adds central lender
35%
appreciation since 2005 revaluation
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hina’s central bank yesterday downplayed the yuan’s recent fall, saying the world’s secondlargest economy is in a good shape and the currency’s decline did not reflect fundamentals. The yuan suffered its largest weekly fall in 20 years last week by losing 0.9 percent, an insignificant fall by the standards of other major currencies, but a milestone for the
yuan, whose value is strictly managed by China to avoid sharp changes. “The fundamentals of China’s economic growth are good,” Yi Gang, the deputy governor of the People’s Bank of China (PBOC) told reporters in the run-up to China’s annual parliament meeting. “Please do not worry. The fluctuation in the yuan is normal.” Traders said the abrupt fall in the
yuan was orchestrated by the PBOC in collusion with state-owned banks to squeeze investors who had placed large bets that the currency would continue to strengthen. The sudden reversal also had stoked fears among some investors that China’s economy was cooling faster than thought, leading authorities to deliberately suppress the yuan to keep exports competitive a notion
dismissed by some economists. China’s economic health has been clouded with uncertainty, as data has shown Chinese manufacturers struggling against a slowdown, whereas exporters did surprisingly well in January. Future economic growth is likely to be hindered by the government’s plans for reforms, and some analysts have interpreted the mixed bag of data as a sign that China’s economy is sliding into a long and inevitable slowdown. Yi warned against linking the yuan’s recent decline to the outlook for the economy. “We do not need to read too much into the recent fluctuation of the yuan exchange rate,” he said, adding that China is sticking to plans to make into a convertible currency, or one that can traded in global markets with few restrictions. “Two-way fluctuation in the yuan will be more frequent in future,” he said. Despite the PBOC’s assertions that it has sharply reduced intervention in the currency market, traders say the central bank regularly intervenes and had in fact stepped up intervention in the past month, with major stateowned Chinese banks selling yuan at the PBOC’s behest. The yuan’s sudden decline has stirred speculation that China is preparing to further widen the yuan’s daily trading band. The yuan can currently rise or fall one percent every day from a mid-point set by the PBOC. Some analysts doubt that a wider trading band would crimp the yuan’s strength for long. A high-yielding and low-risk currency, the yuan is a growing favourite among international investors. Since being revalued in 2005, it has gained 35 percent. But the inflows of hot money have become a worry for regulators, who are afraid that excess speculation will spur inflation and lead to asset bubbles. Reuters
Beijing Capital buys NZ waste business Pays US$800 mln to Australia’s Transpacific Industries Group Byron Kaye
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eijing Capital Group will buy New Zealand’s biggest waste management firm from Australia’s Transpacific Industries Group Ltd for almost US$800 million, enabling the Chinese state-owned company to acquire technology that could help combat chronic pollution in the capital and beyond. Demand for waste management is growing in China as the government launches a raft of measures to tackle environmental degradation, which has become a politically sensitive issue. Transpacific’s New Zealand waste business specialises in environmentally friendly landfill methods, odour management and hazardous waste handling. “The Chinese understand how to recover the plastics and the metals from landfill and reuse them,” said Mark Glover, director of Australian waste management consultants Eco Waste Pty Ltd. “The model now needs to be expanded so that we start looking at all the biomass and organic materials.” Much of Northern China was blanketed in toxic smog recently, and the authorities raised the pollution
alert to its second-highest danger level after drawing public ire for its ineffective response to the crisis. China’s government will spend 100 billion yuan (US$16.3 billion) over three years to deal with the pollution in Beijing, according to state media reports. It also aims to treat 90 percent of all urban waste by the end of 2015, housing ministry data shows. Australia and New Zealand waste management companies are well placed to benefit from China’s demand, as they are experienced in landfill technologies and sustainable waste management because of government levies that encouraged these practices, analysts say. People with knowledge of the Transpacific sale said Beijing Capital Group (BCG), which is owned by the Beijing municipal government, was keen on tapping Transpacific’s expertise, and had not bought the waste management unit for re-sale. “The investment carries significant...mutual technical and commercial benefits,” BCG Chief Executive and Deputy Chairman Wang Hao said in a statement.
The deal comes just over a year after Hong Kong’s family-owned Cheung Kong Infrastructure Holdings bought Envirowaste, New Zealand’s second largest waste management company behind Transpacific, for NZ$490 million.
Morrison & Co, two Maori tribes and infrastructure investor Infratil Ltd, and another unnamed bidder. HSBC Holdings Plc advised BCG and Deutsche Bank ran the sale for Transpacific. Reuters
Mutual benefits The sale also advances Brisbanebased Transpacific’s push to exit non-core businesses and focus on its Australian waste management operations. Transpacific can now refinance its debt and resume paying dividends, the company said in a statement, adding that it expected the sale to be completed in June. Transpacific sold the unit for NZ$950 million (US$798 million). In August, Transpacific sold its commercial vehicles business to U.S.based Penske Automotive Group for A$219 million ($195.97 million). A source told Reuters last week that BCG had been up against three other bidders for the New Zealand business, including private equity giant Carlyle Group, a consortium involving investment manager
KEY POINTS Chinese state-run firm pays NZ$950 mln Sale gives Beijing govt access to pollution-reducing technology Transpacific can refinance debt, consider dividends Unit is biggest waste firm in New Zealand
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Mt. Gox bitcoin exchange sued in U.S. Fraud claims can be pursued despite Mt. Gox’s request for bankruptcy protection suggests a lawyer
Britain drops plans to tax bitcoin trading Britain’s revenue collector is preparing to abort its plans to tax Bitcoin trading only days after the currency’s leading exchange, Mt Gox, collapsed after losing almost US$500 million of customer deposits to hackers, the Financial Times reported. HM Revenue & Customs said in a meeting with UK traders that it would no longer levy 20 percent value-added tax (VAT) on bitcoin transactions and also said it would not tax margins either, according to the paper. The British support for the currency comes days after Mt. Gox, once the world’s largest bitcoin exchange, was sued by a customer in the United States seeking to recover money lost in the hacking attack. Corporation tax and other taxes would still apply, according to the FT. The market for bitcoins - a virtual currency created or “mined” through a process involving a network of computers that solve complex mathematical problems - is worth about US$7 billion at current market rates. The currency has been facing regulation issues worldwide, having already been banned by some countries. “HMRC has been working closely with the bitcoin industry on the tax treatment of trading in bitcoins and commission. We will be issuing guidance shortly,” the UK tax authority said. Reuters
Mark Karpeles, chief executive of Mt. Gox, leaving the Tokyo District Court on Friday
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t. Gox, once the world’s biggest bitcoin exchange – which began life as a marketplace for illustrated trading cards used in a game called ‘Magic: The Gathering’ – has been sued for fraud by a U.S. customer. The lawsuit came within hours of Mt. Gox filing for bankruptcy protection in Japan. With prosecutors and regulators already probing the use of the digital currency, the Tokyo-based Mt. Gox exchange said on Feb. 24 it had lost 750,000 bitcoins belonging to users and 100,000 more of its own. The value of the missing virtual currency could be as much as US$425 million at prices current before the exchange was suspended. The exchange filed for bankruptcy protection saying in a statement that its debt exceeded its assets by 2.7 billion yen (US$26.4 million). “This catastrophic loss has not only revealed the instability of a burgeoning new industry, it has also uncovered a massive scheme to defraud millions of consumers into providing a private company with real, paper money in exchange for virtual currency,” Illinois resident Gregory Greene said in a Feb. 27 complaint in federal court in Chicago that may be the first lawsuit against Mt. Gox. Bitcoin was introduced in 2008 by one or more programmers under the name Satoshi Nakamoto and has since gained traction with merchants around the world. The virtual coin has no central issuing authority and uses a public ledger to verify transactions while preserving users’ anonymity.
After Mt. Gox went off-line this month, U.S. and Japanese prosecutors opened investigations into the company. U.S. regulators are said to be exploring ways to increase oversight of virtual currencies. The European Banking Authority said it would create a task force to review ways to regulate bitcoin and its derivatives.
“and bitcoins previously stored by Mt. Gox are now unavailable to them, and by all accounts, have been converted and captured by Mt. Gox,” according to the complaint.
Bitcoins ‘stolen’ “There is a high possibility that the bitcoins were stolen,” Mt. Gox said in a statement when it filed for bankruptcy. “It is considering filing a criminal complaint.” In Florida, lawyers for two men accused of using bitcoins in an alleged money-laundering scheme told a judge on Feb. 27 that they did nothing illegal because the state’s law covers only currency issued by the U.S. or another country. “No one ever anticipated there would be a non-government form of currency, but there is,” a defence lawyer, Ron Lowy, said after the hearing. In Chicago, Greene’s lawsuit seeks class action, or group, status on behalf of all people in the U.S. who paid Mt. Gox to buy, sell or trade in bitcoins as well as those who had currency stored with the Japanese entity on Feb. 7. Along with damages, Greene is seeking a court order creating a trust to oversee the company’s business. “As a result of Mt. Gox ‘going dark’ and shutting down its entire operation, users’ fiat currency” – that is, money issued by national governments –
No one ever anticipated there would be a non-government form of currency, but there is Ron Lowy, lawyer for bitcoin users accused of money laundering in U.S.
The suit names as defendants Tokyo-based Tibanne KK and its units Mt. Gox KK and Mt. Gox Inc., a U.S.-incorporated company, and Mark Karpeles, chief executive officer of all three, according to the complaint. Reflecting its start as a trading card
marketplace, the company’s name is an acronym for Magic: The Gathering Online Exchange. Karpeles didn’t respond to an e-mail seeking comment on the lawsuit. This week, he resigned from the board of the bcoin Foundation, an advocacy group for the currency. The foundation is aiding the U.S. probe. Greene’s attorney, Jay Edelson of Chicago, said in a phone interview he was aware that a foreign company in bankruptcy may ask a U.S. court to block litigation during its reorganisation.
Many claimants “Obviously it’s going to be a big issue,” he said, adding that Mt. Gox Inc. and Karpeles aren’t in bankruptcy and that the Japanese entity’s filing wouldn’t shield them. Edelson said his client’s fraud claims may be “separated from the bankruptcy proceeding and we’ll be able to pursue them.” He said there could be hundreds of thousands of claimants. Chapter 15 of the U.S. bankruptcy allows companies to seek protection from creditors in the U.S. while the primary case proceeds in another country. Edelson said he plans to file papers next week seeking to force Mt. Gox to say whether it has client money and how much, and to release it. He said his client was seeking recovery in U.S. dollars, which is “the traditional currency of the U.S. courts,” and not in bitcoins. Bloomberg News
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N. Korea fires Scud missiles: reports Seen as reaction to U.S.-South Korea military exercises this month and next
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orth Korea fired two short-range missiles from its east coast yesterday, South Korea’s defence ministry said. It’s being interpreted as a reaction to ongoing joint military drills between South Korea and the United States. One missile was fired from the Gitdaeryeong area and the other from Wonsan, both on the North’s southeastern coast, in a northeast direction beginning at 6.19am reported the South Korean news agency Yonhap, quoting officials in Seoul. “The missiles are evaluated to have flown over 500 kilometres,” the ministry said, adding the missiles were believed to be Scud-C type. Last Thursday, Pyongyang fired four Scud missiles from the same area, which flew about 220 km in a northeasterly direction. The latest firings came as South Korea and the U.S. have been conducting annual joint military exercises that Pyongyang has condemned as a rehearsal for an invasion of the communist nation. On the first day of the Key Resolve drills last week, the North briefly violated the tense western sea border three times. “North Korea should immediately stop provocative acts,” defence ministry spokesman Kim Min-seok said, saying the South Korean military
has stepped up its vigilance against further provocations Experts estimate that the North has more than 700 Scud-B and Scud-C missiles, recently deploying Scud-ER, with a range of over 700 km and improved accuracy. The communist regime has also pursued the development of long-range missiles that can fly as far as the
U.S. mainland. Seoul officials raised concerns that the missile launches could hamper the reconciliatory mood between two Koreas following the reunions of families separated by the 1950-53 Korean War at the North’s Mount Kumgang resort in late February. “Considering that the North fired the missiles into the sea, it is
deemed a low-level provocation,” a senior military official said, asking for anonymity. “But it is worrisome that [the missile launch] could badly affect inter-Korean relations when hopes are high for better ties in light of the family reunions.” The two-week Key Resolve is a computer-based command post exercise, which ends on Thursday.
Tiger Airways to ‘sell or shut’ Indonesia affiliate Tigerair Mandala will go unless signs of a turnaround in its fortunes claim sources
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ingapore’s Tiger Airways Ltd aims to sell or close its Indonesian joint venture unless there are signs of it turning around this year, people familiar with the matter said. PT Mandala Airlines resumed flights in 2012 after financial restructuring under which Tiger bought a onethird stake, raised to 35.8 percent in September. Even so, Tiger lost nearly S$40 million (US$31.6 million) in the venture in AprilDecember. Tiger and Indonesian private equity firm Saratoga, which owns 51 percent of the venture, are now unwilling to make further investment, said the people, who were not authorised to speak publicly on the matter and so declined to be identified. “The writing is on the wall,” said one company source.
S$40 mln
Tiger’s loss in the venture from April to Dec 2103
Last month, the venture now known as Tigerair Mandala suspended nine routes or about 40 percent of its capacity in a market where larger competitors such as Lion Air and Garuda Indonesia are adding planes
to more destinations in the 17,000-island archipelago. “The more it flies, the more it loses money as nearly every route is below break-even,” said one of the people, referring to Tigerair Mandala. “Tiger is subscale
in Indonesia. Either it gets out or grows out of trouble.” A spokesman for Tigerair Mandala said both Tiger and Saratoga are committed to supporting the company “for a long period to ensure business sustainability.”
Tiger Airways, about 40 percent owned by Singapore Airlines Ltd, did not respond to queries from Reuters. Tiger would be facing its second exit this year if it sells or closes Tigerair Mandala, after agreeing in January to sell its loss-incurring Philippine business to Cebu Air Inc parent Cebu Pacific. Reuters
editorial council Paulo A. Azevedo, Tiago Azevedo, José I. Duarte, Emanuel Graça, Mandy Kuok Founder & Publisher Paulo A. Azevedo | pazevedo@macaubusinessdaily.com CLOSING editor Michael Grimes GROUP SENIOR ANALYST José I. Duarte Newsdesk Luciana Leitão, Stephanie Lai, Tony Lai EDITOR AT LARGE Alex Lee Creative Director José Manuel Cardoso WEB & IT Janne Louhikari Contributors James Chu, João Francisco Pinto, José Carlos Matias, Larry So, Pedro Cortés, Ricardo Siu, Rose N. Lai, Zen Udani Photography Carmo Correia, Manuel Cardoso Assistant to the publisher Laurentina da Silva | ltinas@macaubusinessdaily.com office manager Elsa Vong | elsav@macaubusinessdaily.com Agencies Bloomberg, Reuters, AFP, Xinhua, Lusa, Project Syndicate Printed in Macau by Welfare Ltd.
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Asia A combined field training exercised named Foal Eagle and involving 7,500 American troops, runs until April 18. Amid warming inter-Korean ties, Seoul and Washington have been staging relatively low-profile exercises this year so as not to provoke the North, but their drills have nevertheless drawn fierce criticism from the communist state. Pyongyang issued near-daily threats during last year’s joint drills that were held following its third nuclear test, prompting the U.S. to send high-profile nuclear bombers and stealth jets to the Korean Peninsula in a show of force.
KEY POINTS 2 projectiles flew 500 km, landing in sea N. Korea pursuing missiles that can reach U.S. Pyongyang claims U.S. exercises prelude to invasion N. Korea experts say predictable response
Oz job ads at 3-year high Figures for Australia’s GDP to be published tomorrow
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ustralian job advertisements surged the most in three years, reports the Australian Financial Review. The newspaper says it has given credence to speculation the country’s labour market has turned a corner – despite a flood of recent high-profile job losses in manufacturing, mining and transport. Notices for jobs surged 5.1 per cent in February, extending a gradual improvement since the middle of last year, according to ANZ Bank’s monthly job advertisements series. The improvement appears to fly in the face of official data showing unemployment has climbed to a decade high of 6 per cent late last year. However the job advertisements gauge is often considered a valuable leading indicator of future demand for workers. Internet notices seeking workers increased by 5.3 per cent, while newspaper adverts (which account for less than 5 per cent of ANZ’s index) slipped 0.5 per cent. Justin Fabo, an economist at ANZ, said if the recent improvement is maintained economic growth was likely to gradually improve this year. “Very low interest rates and the lower Australian dollar are providing support to the economy,” he told the AFR.
6%
“Non-mining activity looks to have improved,” he added. Separate official data yesterday showed company inventories fell for a second quarter and profits rose less than expected. Inventories fell 0.5 per cent from the September quarter, the Australian Bureau of Statistics said, while company earnings gained just 1.7 per cent. Economists had forecast a 2 per cent rise. Falling inventories and weaker profit growth may be a sign the economy continued to lag through the fourth quarter. Figures for gross domestic product will be published by the ABS tomorrow. The latest figures also support widespread expectations that the Reserve Bank of Australia will today keep the official cash rate on hold at a record-low 2.5 per cent.
Country is well known for militant farmers, strong protective tariffs on agricultural produce
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until 2004 in exchange for importing up to 4 percent of its annual rice consumption. The agreement was extended for another 10 years by a later agreement, in which the country
7.96%
of country’s rice from imports
South Korea’s lead March futures for threeyear government bonds fell sharply after a hawkish ex-Bank of Korea Deputy Governor was nominated as the next central bank chief, dashing hopes for further interest rate cuts. The March futures for 3-year debt were down 0.26 points at 105.72 as of 0608 GMT, after trading nearly unchanged from Friday’s closing level of 105.98 for most of the day. Yesterday, the office of the president said Lee Ju-yeol has been nominated to succeed outgoing Bank of Korea Governor Kim Choong-soo.
Official unemployment rate
S. Korea hints might liberalise rice market outh Korea will soon decide whether to open its rice market to foreign suppliers, the agriculture minister said Monday, a move that has been postponed for the past 20 years in exchange for a large import quota. “The country must give its decision on whether to open its rice market to the World Trade Organization (WTO) by September,” Lee Dongphil said in an exclusive interview with the South Korean news agency Yonhap. “The government will make its decision by June.” Under a 1993 agreement with the WTO, the country was allowed to put off liberalising its rice market
S. Korea 3-year T-bond futures fall sharply
agreed to expand its import quota to 7.96 percent of total consumption, which will translate into a little over 400,000 tons this year, according to the minister of agriculture, food and rural affairs. Lee said the country could try to again delay the liberalisation, but such a move may not be accepted by other WTO members or benefit the country. “If we had switched to opening the rice market with import tariffs 10 years ago, we would not have had to take on an additional 200,000 tons in import quota,” he said. The minister also said the Philippines, which, too, is scheduled to liberalise its rice market in 2015, has offered to more than double its import quota from the current 350,000 tons to 800,000 tons to further delay opening the market, but other WTO members have refused to endorse such a move over the past two years. “The government will carefully decide in a way that will best serve the country’s national interest and its rice industry,” he said. Lee said the country’s import duties will likely be set between 300 and 500 percent of import prices should the country decide to open its rice market. “For us, a higher tariff rate will be better, but it must be able to pass WTO verification,” Lee said. “We cannot just set the highest possible rate, but need to find one that is acceptable to the WTO.”
Sony to sell Tokyo former HQ In Sony Corp.’s latest restructuring decision, the struggling electronics giant will sell its former headquarters and other buildings in Tokyo’s Shinagawa Ward, reports Asahi Shimbun. The company has already started bidding procedures for the NS Building, which served as its headquarters from 1990 to 2007, and other structures in the Gotenyama district located southwest of JR Shinagawa Station. Sony was founded in the Nihonbashi district of Tokyo’s Chuo Ward in 1946 as Tokyo Telecommunications Engineering Corp. The next year, it moved its headquarters to the Gotenyama district.
AFL boss steps down after 11 years Australian Football League chief executive Andrew Demetriou has stepped down after 11 years in the job, commission chairman Mike Fitzpatrick announced yesterday, praising him as “one of the most influential chief executives in the history of the AFL”. Mr Fitzpatrick added: “The real strength of Andrew’s leadership has been.. in his determination to give the game an ethical underpinning a conscience.” The league – using a code of the game unique to Australia and commonly known as ‘Aussie rules’ – was touched last season by a scandal concerning allegations about the use of performance enhancing drugs.
Japan Display seeks US$3.8 bln from IPO Japan Display Inc., a supplier of screens for Apple Inc. devices, and its owners are seeking 389.3 billion yen (US$3.8 billion) in an initial public offering. Japan Display will sell shares at 900 to 1,100 yen apiece in the offering, according to a filing with Japan’s finance ministry. The company will sell 140 million new shares, while investors including Sony Corp. are offering 213.9 million existing shares, according to terms for the deal obtained by Bloomberg News on Feb. 14. The IPO offers a partial exit for state-backed Innovation Network Corp. of Japan, which bought a 70 percent stake in the company for 200 billion yen in 2012.
Aussie bonds up on currency woes Australian government bonds rose, driving benchmark yields to the lowest in at least a month, as tensions over Ukraine spurred demand for haven assets. The Australian dollar touched a four-week low before Reserve Bank officials meet tomorrow and ahead of gross domestic product data tomorrow. New Zealand’s currency slid from a 1 1/2-month high reached last week, as Asian stocks fell. “In terms of the broader fixedincome space, yields are falling and Aussie bonds are part of that,” said Michael Turner, a Sydney-based debt and currency strategist at Royal Bank of Canada.
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International Sea Shepherd says attacked by Japan whalers Activists in Southern Ocean criticise Australian govt for ‘broken promises’
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nvironmental activist group Sea Shepherd claimed yesterday that Japanese whalers attacked its vessels in the Southern Ocean. The group criticised the Australian government for “broken promises” to monitor whaling operations. Sea Shepherd said Japanese harpoon ships, the Yushin Maru and Yushin Maru 3, towed steel cables across the bow of the Bob Barker 11 times on Sunday in a bid to jam its propeller and rudder. When the Bob Barker launched two small boats to defend the ship and cut the steel cables, it alleged that a bamboo spear was thrown at crew members. High-seas confrontations are common between Sea Shepherd and the Japanese, who hunt whales off Antarctica under a “scientific research” loophole in the moratorium on whaling. A 2010 collision resulted in the sinking of Sea Shepherd’s speedboat Ady Gil Sunday’s incident was the third clash since the whaling
wrote a letter to Australian Environment Minister Greg Hunt last week complaining about a lack of action after the earlier assaults, which he said went unanswered. “They knew this attack was imminent, and yet they did nothing. Hunt’s broken promises to monitor the whaling operations are evident in the broken bodies of the whales killed today,” he said.
‘Promise’ made
season started earlier this year. No one was injured. “Each time we have located the Nisshin Maru (factory ship), the Sea Shepherd fleet has been attacked by the whalers in night-time ambushes,” said Bob Barker’s captain Peter Hammarstedt. The ship’s helicopter
located the Nisshin Maru early on Sunday with a Minke whale on board while “slabs of whale meat were also photographed on the deck, along with the severed head of a recently butchered whale”. The Bob Barker has nine Australians on board and Hammarstedt said he
Prince George going to Australia, New Zealand
Hunt had initially promised to send a government ship to tail the warring groups during the annual hunt but opted instead for aerial surveillance. Sea Shepherd has previously described it as a “pretty cowardly” backing down to appease Japan due to ongoing free trade negotiations. Hunt was not immediately available for comment. The commercial hunting of whales is prohibited in the Southern Ocean Whale Sanctuary, which was designated by the
…the Sea Shepherd fleet has been attacked by the whalers in night time ambushes… Peter Hammarstedt, captain of the ‘Bob Barker’
International Whaling Commission in 1994, but Japan catches the animals there under a “scientific research” loophole in the moratorium on whaling. Australia has taken Japan to the International Court of Justice seeking to have its whaling research programme declared illegal, with a ruling due this year. AFP
Mandela service in Westminster Abbey
His father Prince William was nine months Commemorative tablet also to be placed old when made first big foreign trip there later this year
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he second in line to the British throne Prince William and his wife Catherine, Duchess of Cambridge, will take their baby son Prince George with them on their tour of Australia and New Zealand next month. Kensington Palace confirmed the news on Sunday. The infant prince will travel with the couple around New Zealand from April 7 to 16, and then Australia from April 16 to 25. George – who under current constitutional arrangements is directly in line to become king of Australia and of New Zealand after his father William and grandfather Prince Charles – was born on July 22 last year. He has rarely been seen in public since. It had previously been announced only that William 31, and Kate, 32, were hoping to bring baby George
with them for what will be his first royal tour. They are planning on taking him along to a few specific engagements throughout the trip, their Kensington Palace official residence in London said as they gave out details of the tour – though final decisions might well be taken on the day. “There is no hiding the enthusiasm for this visit by both the duke and the duchess,” William’s private secretary Miguel Head told reporters. Though William has toured both countries several times, Kate has never been to either. “Taking a nine-month-old on a royal tour is not a first,” but hasn’t happened for a long time, said Head. “So there has been much to think about – as any new parent travelling long distance will recognise.” AFP
stone is to be laid in Westminster Abbey in London later this year, in memory of South Africa’s first post-apartheid president, Nelson Mandela. Yesterday around 2,000 people were expected in the abbey for a service celebrating Mandela’s life and work. The guests included members of the statesman’s family. Others due to attend included British Prime Minister David Cameron and South African Deputy President Kgalema Motlanthe. Prince Harry, fourth in line to the throne, will represent Britain’s Queen Elizabeth II, the head of the Commonwealth. South African peace icon Desmond Tutu, the former archbishop of Cape Town, is to give the address. Mandela, who died in December aged 95, was welcomed to Westminster Abbey in 1996 during a state visit.
Ahead of yesterday’s service, the Very Reverend John Hall, the dean of Westminster, announced that a memorial stone would be placed in the abbey later this year. “Nelson Mandela was one of the most remarkable world leaders of the last century. His remarkable constancy under suffering stands as an example to everyone,” he said. “In addition, his capacity for forgiveness and his generosity of spirit show what humanity at its best can achieve. Among those commemorated at the abbey are Winston Churchill, William Shakespeare, John Wesley, Martin Luther King, Francis Drake, Edward Elgar, Oscar Wilde and C. S. Lewis. A statue of Mandela, unveiled in 2007 in his presence, stands across from the abbey in Parliament Square. AFP
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Opinion Business
wires
The last laugh in Ukraine
Leading reports from Asia’s best business newspapers
TAIWAN TIMES
Peter Singer Professor of bioethics, Princeton University
Major housing brokers saw their transactions soften last month from January, as low temperatures and the government’s planned tax increases drove buyers to the sidelines, while holiday disruptions continued to weigh. Home deals weakened by low-single digits to 25 percent in different across the nation, as prospective buyers opted to stay put until the market can better assimilate the Ministry of Finance’s plans to raise taxes on high earners, analysts said. H&B Realty Co, the nation’s largest by number of franchises, reported a 25 percent drop in home sales nationwide last month, compared with one month earlier.
KOREA HERALD Marriage, not child rearing, is the leading cause of South Korean women quitting their jobs, a survey released by an association of the country’s largest conglomerates said. According to the findings by the Federation of Korean Industries based on a poll of 5,887 women nationwide in 2010, the likelihood of a woman giving up work after getting married was 37.8 percent higher than those who remained single. Among women in their 20s, their chances of leaving work after marriage shot up 58.2 percent vis-à-vis those who were not bound in matrimony.
ASAHI SHIMBUN Japan’s consumer price index rose 1.3 percent in January and factory production also climbed, suggesting the recovery in the world’s third-largest economy is holding steady ahead of an April 1 tax hike. A raft of data released on Feb. 28 suggest the economy may need still more help in weathering the 3 percent tax increase in April as many economists forecast a contraction will follow as consumers and businesses adjust to higher costs. Factory output rose 4 percent in January from the month before on strong demand for vehicles, chemicals and machinery, a second straight month of increase.
AFR Telstra chief executive David Thodey says the company has been testing fibre-to-the-basement networks, which could compete against the national broadband network. Telstra had been installing the technology for several months as part of a trial. Fibre-to-the-basement systems connect fibre-optic cabling to the basements of apartment buildings where they connect to existing copper phone lines. They provide high-speed broadband of up to 100 megabits a second. There is a law designed to stop companies building fibre networks that compete against the NBN. But in September TPG Telecom announced its own fibre-to-the-basement network, exploiting a regulatory loophole.
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ast year, when Polish Foreign Minister Radosław Sikorski went to Kiev for talks, his Ukrainian counterparts reportedly laughed at him because he was wearing a cheap Japanese watch. Several Ukrainian ministers had watches that cost more than US$30,000. In a column I wrote about this incident, I pointed out that quartz watches perform a watch’s function – telling the time accurately – better than mechanical “prestige” watches that cost hundreds of times as much. Sikorski has had the last laugh. Those who mocked him were speedily dismissed by the Ukrainian parliament in the wake of President Viktor Yanukovich’s flight from Kiev. Nor were the expensive watches irrelevant to the fate of Yanukovich and his cronies. Corruption is a key issue in the Ukrainian revolution, as it has been in many popular uprisings, including the Tunisian revolution against President Zine el-Abidine Ben Ali, which triggered the Arab Spring, and the “People Power Revolution” in the Philippines that ousted President Ferdinand Marcos in 1986. In each case, the overthrow of the corrupt leader has been followed by revelations about the lavish lifestyle he led at the expense of his people, many of whom were desperately poor. Yanukovich, we now know, had a private zoo, his own restaurant in the shape of a pirate ship, and a collection of contemporary and antique cars.
Wood have A document recovered after his flight shows that Yanukovich paid a German firm €1.7 million (US$2.3 million) for
wooden decor for his dining room and tearoom. In Tunisia, the notorious extravagance of Ben Ali’s extended family included a caged tiger and the use of a private jet to fly in ice cream from St. Tropez. As for Marcos, who can forget his wife Imelda’s 3,000 pairs of shoes? One visitor to Yanukovich’s estate told The New York Times that everything had been stolen from the people. There was the same anger when Ben Ali and Marcos fell, and ordinary people saw how their rulers had lived. But, though one marbletiled bedroom in a Ben Ali mansion soon acquired graffiti saying, “The rich get rich and the poor get poorer,” the issue is not simply one of economic inequality. Arguably, income inequality is justified, because it provides incentives for entrepreneurs to provide goods and services that are better, or cheaper, than the goods or services that others are providing, and this competition benefits everyone. By contrast, it is not remotely arguable that political rulers should be able to acquire immense personal wealth through bribery or by distributing public resources to their family and friends. This is stealing from the people. Moreover, its impact goes beyond the amounts stolen. In cables made public by WikiLeaks, Robert Godec, the US Ambassador to Tunisia before the revolution, warned that the level of corruption stemming from Ben Ali and his family was deterring investment, and thus contributing to the country’s high unemployment. It seems likely that a less corrupt Ukraine would also have been more prosperous. In these situations, the public’s
anger is easy to understand and entirely justifiable. It is more difficult to explain why some political leaders behave so poorly. To become the president of one’s country is an extraordinary achievement. How could anyone think that the best one can do with that achievement is to pursue personal enrichment?
...look at the candidate’s watch. If it costs more than US$500, find someone else to vote for
The oft repeated quote from George Santayana – “those who cannot remember the past are condemned to repeat it” – is apt for Yanukovich. Did he really forget what happened to Ben Ali and Marcos? Was it not obvious that illegally amassing immense personal wealth would increase the likelihood that he would be overthrown and spend the rest of his life in prison or, at best, in exile?
Truth will out Even if Yanukovich had died in office at a ripe old age, his excesses would eventually have been exposed, and would
have tarnished whatever positive reputation he might have achieved. Did he not care about his legacy? There is also something even more important than one’s reputation. A political leader has greater opportunities than almost anyone else to help people, and that should have been Yanukovich’s highest priority. But even if Yanukovich was thinking primarily of his own interests, his quest for personal enrichment was irrational. Imagine that he had stopped to ask himself what would make him happier. Imagine that, with this question in mind, he had compared the alternative of a lavish lifestyle (with a private zoo and pirate-ship restaurant) with that of living comfortably on the substantial salary to which he was entitled while knowing that he was governing with integrity and doing his best to improve the lives of Ukraine’s citizens. No matter how self-interested a person might be, I find it inconceivable that anyone with a modicum of common sense, pausing to reflect on this choice, could choose as Yanukovich chose. There is now hope that in May the people of Ukraine will have the opportunity to elect a new leader. But how can they avoid electing another politician whose priorities are as misguided as those of Yanukovich? I suggest the following test: look at the candidate’s watch. If it costs more than US$500, find someone else to vote for. This test will not select the best candidate, but it will eliminate at least some candidates with priorities that no decent political leader should have. © Project Syndicate
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Closing Ex-Barclays employees face Libor charges
EU to ‘meet soon’ on Ukraine: Barroso
Peter Charles Johnson, a former Barclays Plc Libor trader, leaving Southwark Crown Court in London yesterday after facing charges in connection with the manipulation of the London interbank offered rate. Prosecutors and regulators around the world are investigating whether more than a dozen firms colluded to rig the interest rate benchmark and have issued fines of about US$6 billion against financial institutions. The U.K. Financial Conduct Authority yesterday published penalty notices against two traders for misconduct in relation to interest rate benchmarks Libor and Euribor.
European leaders plan to meet “very soon” to discuss the RussiaUkraine crisis, European Commission president José Manuel Barroso said yesterday. He also said the EU was preparing in consulation with the IMF a package of financial support for Ukraine, which risks a catastrophic debt default. Barroso told reporters in Berlin that after an EU foreign ministers meeting in Brussels yesterday, the heads of state and government would meet to draw up a “common response”. “We have already expressed our very serious concerns” about the crisis,” he added.
Improved info sharing after terror attack Macau, mainland, to review intelligence links after Kunming atrocity
Secretary for Security Cheong Kuoc Va (centre)
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he city’s top security chief pledged yesterday to improve communications between Macau and mainland officials following the brutal attack at Kunming station in Yunnan province that left up to 33 dead and 140 injured. The news came as it emerged that mainland police were reporting the arrest of three suspects they think
Russian markets nosedive at Ukraine panic I
are linked to the outrage. It’s been blamed on separatists from the semiautonomous region of Xinjiang in China’s far west. Macau’s Secretary for Security Cheong Kuoc Va told media yesterday: “We highly pay attention to this terrorist attack. We will strengthen our exchanges with the mainland via the existing mechanism.”
nvestors in Russia reacted with panic yesterday to the potentially disastrous economic consequences of Russian military intervention in Ukraine. Moscow stock markets crashed by up to 12 percent and the rouble plunged to historic lows against the dollar and euro. Russia’s central bank hiked its main interest rate in an emergency move to stem capital flight and the losses for the rouble, amid what risks becoming at least Russia’s worst economic crisis since 2009. President Vladimir Putin on Saturday had won approval from Russia’s upper house for the sending of troops to Ukraine due to the standoff in Crimea following the ousting of pro-Moscow president Viktor Yanukovych. Economists warned the move risks creating trouble for the Russian economy, which is already battling chronically slow growth. Russia faces becoming an international economic pariah, with US Secretary of State John Kerry already warning Putin that Moscow faces losing the right to host the G8 this year in Sochi.
“We will also see whether there is any room for improvement,” added Mr Cheong, stressing the territory has regular high-level security meetings with its mainland counterparts. Wang Jianwei, head of government and public administration at the University of Macau, told Business Daily on Sunday the Kunming case “rang an alarm” for Macau to
Russian troops flood into Crimea, investors shudder U
kraine accused Russia yesterday of pouring extra troops and military planes into Crimea as world leaders grappled with the worst standoff between Moscow and the West since the Cold War. Russian Foreign Minister Sergei Lavrov said the troops were needed in the flashpoint Black Sea peninsula until “the stabilisation of the situation” in Ukraine, and criticised the West for its threats of “sanctions and boycotts”. Crimea – a strategic Black Sea peninsula with a majority ethnic Russian population – has been under de facto occupation by pro-Kremlin troops since President Vladimir Putin won parliament’s authorisation Saturday to use force in Ukraine. The price of oil surged on fears of an all-out conflict as the Kremlin looked set to send troops into eastern Ukraine – a vast industrial region with close ties to Russia that Putin has vowed to protect from “ultranationalist forces”. British Foreign Secretary William Hague warned Russia of “consequences and costs.”
reinforce intelligence exchanges with the mainland. The Macau government released a press statement yesterday “giving the strongest condemnation” on what it called an “inhuman and extremely brutal” attack. “Three suspects involved in the terrorist attack in the southwestern city of Kunming had been captured,” the official news agency Xinhua said, citing the ministry of public security. Altogether eight members of a “terrorist gang” carried out the stabbing spree late Saturday, it said. Four were shot dead by police at the time and a wounded woman was captured at the scene, it continued, naming their leader as Abdurehim Kurban. China has blamed separatists from its restive far-western region of Xinjiang -- home to the mainly Muslim Uighur minority – for what it describes as an act of terror, with state media dubbing the incident “China’s 9/11”. The attack came just days before the annual meeting of China’s parliament. An associated debating chamber session opened yesterday with a period of silence for the victims.
IMF warns of low inflation in eurozone I
T.L. with AFP
MF chief Christine Lagarde urged the eurozone yesterday to fight persistently low inflation, warning that it presents a looming threat to economic recovery in the region. Key risks menace the 18-nation eurozone even as it emerges from recession, the International Monetary Fund head told an economic conference in Bilbao, northern Spain. Lagarde said eurozone inflation was running well below the European Central Bank’s target rate of just below two percent a year. Eurozone inflation was 0.8 percent in February, unchanged from January, according to the official statistics agency Eurostat. “We see the risk of prolonged low inflation way below targets -- targets being as you know just below two percent -- looming,” the IMF managing director said. This “could derail the recovery”, she warned. Lagarde had already warned in January of the risk of a return to deflation, which she described as “the ogre that must be fought decisively”.