Page 1

Photo by David Hartung

Publisher: Paulo A. Azevedo

MOP 6.00

business daily 1

Friday April 19, 2013

Year II

Number 506 Friday March 28, 2014

Wynn produces ace Steve Wynn arrived in Macau and gave the good news to his employees: now you’re all shareholders. Each worker gets 1,000 shares and two bonuses a year until 2017. The pressure now goes to the other operators. And not only them. Page

5

Brought to you by

HSI - Movers March 27

www.macaubusinessdaily.com

Name

It’s a long and painful birth, the new public hospital in Taipa. Specialists acclaim the importance of the new facility but the soonest it will be ready is by the end of 2017. Construction hasn’t started and the hospital is already 3 years late.

Still in labour

Pages

2&3

%Day

CITIC Pacific Ltd

12.95

Wharf Holdings Ltd

2.98

China Mobile Ltd

2.22

HK & China Gas

1.93

Power Assets Hold

1.83

Hengan Internat

-2.79

Sands China Ltd

-3.99

Galaxy Entertainm

-5.39

Tencent Holdings Ltd

-5.87

BOC Hong Kong Hold

-6.20

Source: Bloomberg

I SSN 2226-8294

Brought to you by

Lesson to be learned Forget the cash bonuses, invest in health and education, says Economics Nobel Prize winner Joseph Stiglitz. Page 6

Bridging the gap German trade fairs and exhibitions company Koelnmesse will open a Macau subsidiary next month. The company’s vice-president told Business Daily the new bridge to Hong Kong will boost the conference and the corporate event market.

TCM speeds up A new entity is to be created to absorb all assets from Reolian. Bus operator TCM is behind the proposal and the investor Secretary Lau Si Io has presented to the court in order to gain 3 more months to close the deal. The court is expected to agree to the time extension. Page

7

Page 7

Up and down Hotel Fortuna profits are up despite strong competition. But businessmen Sio Tak Hong awaits approval of his Coloane project. Until then, Capital Estate Ltd is counting its losses. Page 8

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Macau

Painful birth

The government now says that by the end of 2017 the new public hospital will start operating on a preliminary basis, three years after the scheduled date. Professionals related to health sciences believe it is needed, even though it is already late Luciana Leitão Photos by Manuel Cardoso

W

hen first announced, the initial phase of the new public hospital of Macau was supposed to be finished by the end of this year. The government, however, has already conceded that it should be finished only by the end of 2017, three years after the scheduled date. In 2010, in his delivery of the Policy Address, chief executive Chui Sai On announced the necessity for a new hospital. “Macau has 2.16 hospital beds per 1,000 residents, lagging far behind the ‘normal standard’ of four beds in developed regions, and farther behind Hong Kong’s five beds”, he said at the time in answer to legislators’ questions. The first phase of construction was to begin in the second half of 2011, with completion symbolically slated for December 19, 2014. Four years have passed since that first announcement and not even the foundation soil has been treated. Answering Business Daily’s question about the reason behind the delay, the Health Bureau started by explaining that there were some changes in the initial planning of the hospital. First, it was supposed to be divided into three phases but, after consulting with a North American company specialising in health planning, they decided to separate the construction works into two phases only. “The initial planning pointed out that the emergency services building would be finished first and as a consequence the insufficiency of complementary installations would generate difficulties in the functioning of the hospital”, the note explains. The initial phase I (the emergency services building) - originally planned for completion in 2014, and phase II (the hospital complex buildings), expected to be completed in 2017 - should now be completed in one phase, with a revised finish date of

late 2017. The following phase should be completed in 2019. Currently, according to what the Health Bureau told Business Daily, the preliminary planning of the hospital is already finished and the public tender for the treatment of the land has already started. Yet, on the Infrastructure Development Office (GDI) website the treatment of the foundation soil remains filed under “Works being planned” - it is mentioned that the treatment of the foundation soil in the areas where the hospital is going to be built and the surrounding public roads should be completed in 780 days, which would mean that if it started now it would have to be completed by May 2016. The GDI website also adds that such works should be completed in two phases, with the first phase having to be wrapped up in 450 days after being adjudicated. The work has not yet been adjudicated. On December 27, the GDI opened bids submitted by 12 companies tendering for construction. The results have yet to be announced. At the time, GDI Chief Officer (Engineering) Tomas Hoi said that the construction of the Taipa hospital complex project is in its early stages, building the foundation for the complex’s facilities and the surrounding roads. He said no environmental impact assessment was necessary. In August 2013, the new hospital project was commissioned to architect Eddie Wong, beating two other local firms. The project is to be completed in two years - by August 2015 following which construction can commence. Macau’s second public hospital is going to be built on the Estrada do Istmo in Cotai, between Seac Pai Van Reservoir and the Macau Dome. The first phase of the hospital will include an emergency centre, ancillary services building, administrative

We need doctors with above-average quality, with teaching experience Humberto Évora

We currently don’t have enough bed space, we don’t have enough doctors Larry So Man Yum

Right now, when someone has a serious disease they send them to Hong Kong or Mainland China and pay them, rather than develop our own hospital Larry So Man Yum

building and the Institute of Nursing, to be finished by 2017. The next phase should include the Rehabilitation Hospital, the Public Health Laboratory, the Centre for Blood Transfusion, the Centre for Control of Medication, the Centre for Exams of Civil Servants, the Centre for Prevention and Control of Diseases, the Technical Unit for Licensing of Activities and Professions of Private Healthcare and dormitories. The whole project is estimated to be put to bed by 2019. The complex will include a 466bed capacity (originally 400) general hospital, an emergency centre with a 100-bed capacity, and another 140 beds for a rehabilitation hospital (originally 100).

A real need Private dentist Carlos Augusto says a new hospital is important in order to accommodate the growing needs of the people living in Taipa and Cotai, even if it is already a bit late. “Today, these people can already go to Kiang Wu”, he says. But he believes these facilities are still well behind the needs. He doubts that certain areas will be better developed in the new hospital than in the existing one. “They will always focus on Conde São Januário as the centre.” He believes the current existing public hospital could improve a lot, as in certain specialities Macau people can only be served by neighbouring regions. For his own speciality of dentistry he doesn’t expect much from the new hospital. “Usually, in hospitals, they don’t really care that much about dentistry”, he says. José Gabriel Lima, a cardiologist at the public hospital Conde de São Januário believes that with the increase in Macau population there is a need to reshape the health


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services and bring in a new hospital. Currently, there is one public hospital, one private and six health centres plus two health stations. A new hospital will answer the needs of a growing population. “It is desirable that the government departments if studies being undertaken point to that - increase the health services capacity to assist the population and improve quality”, he says.

Relatively urgent Humberto Évora, a specialist in sports medicine working in the private sector, says the new public hospital is “relatively urgent”, as the population is expanding and there is now a new population that together with the University of Macau’s new campus, on Hengqin Island, creates “a new dynamic”, generating the need for uprated healthcare. Despite believing the new hospital should be at a more advanced stage by now, he says the current renovated Conde São Januário public hospital is still coping with existing demand. “We feel the need

[for more] but it can be fulfilled by some institutions”, he says. Considering it is a highly complex entity involving several healthcare professionals, Mr Évora believes that by this stage the new public hospital should already be in “implementation” mode. “And I think the new hospital should have differentiated areas”, he says. As to what areas those are, he simply replies: “We have basic healthcare with the health centres in Macau and Taipa. And any hospital must have its own emergency services. It should be areas [specialities] that are not able to currently grow.” Larry So Man Yum, an associate professor with the Macao Polytechnic Institute Social Work, says the new hospital is “definitely too late”. He says that since 2005 there has been talk about the need for a new hospital, new beds and the possibility of new diseases. “We currently don’t have enough bed space; we don’t have enough doctors”, he says. In fact, within the social services of Macau, he believes that the medical services are the ones most lagging. He believes that the delays are related to the “indecision” of the government. “Back in 2005, they couldn’t decide what to do; if they wanted more clinics or if they needed a hospital”, he says. Such indecision led to a 10-year health plan presented by the government and to the current system. “Right now, when someone has a serious disease they send them to Hong Kong or Mainland China and pay them, rather than develop our own hospital.” The vice-dean of the Faculty of Health Sciences - Macau University of Science and Technology (MUST), Christopher Lam Wai Kei, says it’s a sensitive issue and he dares only look at it from a certain perspective. “In the Macau medical scene there are no specialty clinics, no college of anaesthesiology, no college of plastic surgery, no colleges. There seems to be no well defined specialist training, which is very important, because every [human] organ needs a specialist.” Yet, considering Macau’s society is “well empowered with money”, one can be optimistic. And currently, even if there are not enough beds, Christopher Lam Wai Kei believes that there is a “good system” of sending patients to nearby places like Hong Kong to be treated. “That compensates for the temporary inadequacy; we cannot blame the system too much,

it’s doing something.” According to Health Bureau statistics for 2012, there were 623 beds in 14 specialist departments. Its bed occupancy rate was 85.7 percent. MUST University Hospital has 60

beds. Currently, the population is nudging 600,000 inhabitants. In 2013, Macau received 29.3 million visitors. By 2019, six new resorts will have opened in Cotai, creating a demand for new workers.

Four years have passed since that first bold announcement and not even the treatment of foundation soil has started

Crying out for professionals The Health Bureau says that between 2011 and 2020 it needs 416 doctors general practitioners and specialists - and that during the course of 2014 it will hire 187 health professionals. It did not specify to Business Daily how many of these are needed for the new public hospital. On a note sent to Business Daily, the Health Bureau responded that having started in 2011, and by 2020, they intend to have 265 specialists as well as developing the training capacity of Conde São Januário Hospital, Kiang Wu Hospital and the Macau University of Science and Technology Hospital. They will also increase the number of positions in Macau’s two nursing schools. As stated, in this year alone the Health Bureau is planning to hire 187 health professionals. These will comprise doctors, nurses, superior health technicians, diagnostic technicians and nursing auxiliary staff. Larry So Man Yum, the Macao Polytechnic Institute Social Work associate professor, says the issue

at stake, when contemplating a new hospital, is: “Do we have the medical personnel? We don’t have physiotherapists, let alone psychiatric teams. We have students with mental problems, and there is no counsel for them”, he says. He believes that the government should import health professionals, as training in the universities takes at least four years, plus the time needed for specialization. And, with the new hospital being prepared for 2017-2019, these will not be ready in time. “When the hospital comes into place, we need this medical personnel; we can import good medical teachers so they can treat the people as well as teach”, he says. Private sector sports medicine doctor Humberto Évora says it is not relevant where the professionals come from. It is important, however, that the doctors coming to Macau to work are also able to train other professionals. “We need doctors with above-average quality, with teaching experience.” L.L.


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Macau

Unemployment remains at 1.7 pct M

acau’s unemployment rate remained at a historic low of 1.7 percent last month with 4,100 people newly employed, official data show. The Statistics and Census Service announced yesterday that the unemployed population totalled only 6,400 people in the DecemberFebruary period, down 2.4 percent from the preceding three months ending January. The employed population rose by 4,100, or 1 percent, in the same period to 376,000, data show. The retail industry accounted for almost half of the new employed population in the three months ending February. The number of people working in the retail industry rose by 1,500 to 35,300.

Website helps match graduates to job vacancies

The gaming industry also employed 600 more people - to 87,800 - in the December-February period, while 1,000 people headed for the 42,000-strong construction sector. The fresh labour force – those searching for their first job - accounted for only10.4 percent of the total unemployed in the DecemberFebruary period, down 4.2 percentage points from the three months ending January, the statistics bureau added. Gaming remained the largest employer in the city as at last month, taking up 26.2 percent of the employed population. The hotel and restaurant sector followed next with 14.4 percent of the share while the retail industry trailed at 11.2 percent. T.L.

Employment agency lines up 400 openings with a focus on students studying overseas

A

n employment agency has launched an online recruitment site for graduates eager to chase down one of more than 400 jobs with some of Macau’s biggest employers. MSS Recruitment Ltd says the site www.hello-jobs.com/ campus2014 is aimed at the 1,000 or so Macau residents studying overseas, and the roughly 5,000 students preparing to graduate from tertiary education here. “This year we’ve cooperated with the student associations at universities abroad, which helped to promote our recruitment channels to the Macau students there and widen our applicant base,” said MSS Recruitment managing director Tu Jiji. The online campaign features a raft of corporate sponsors, each displaying open positions. There are more than 400 job vacancies at 65 companies. “A problem with the local

students studying abroad is that they have had very scattered channels to learn about job vacancies in the city,” said Ms Tu. “Another problem is that, though there are many job opportunities available in Macau, those who have studied in a very specialised field, such as biochemistry or film production, may find it hard to land a profession of their interest here.” Ms Tu says most applicants in previous job placement drives have been drawn

to positions offered at the casinos and hotels, a trend likely to be repeated this year. “But I think the graduates now will place value not only on the salary offered, but also on the career prospects,” she said. “They are of equal importance to graduates.” The online promotion, which is supported by leading tertiary institutes in Macau, runs until October as part of the Macau Campus Joint Recruitment Event. S.L.


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Macau Wynn raises stakes in tussle for labour The gaming company will offer each of its employees 1,000 shares in an effort to keep them loyal Tony Lai

tony.lai@macaubusinessdaily.com

W

ynn Macau Ltd will offer its employees shares in the company, intensifying the struggle among casino operators to retain staff. Wynn Macau issued yesterday a written statement saying that its 7,500 employees will each receive 1,000 shares. The statement quotes company chairman Steven Wynn as saying: “I consider everyone at Wynn Macau my family.” Mr Wynn said: “The only compelling way that my colleagues can fully participate in our business success is by making each and every one of them an owner of the company with me.” He added: “This is the kind of benefit that, through stock appreciation and regular dividends, will continue to work for them and their families well into the future.” A spokesperson for Wynn Macau told Business Daily the shares will be priced at “the current stock price” when the shares are issued. But there are no further details at the moment like when the employees will get the shares and whether the shares are transferrable. The price of Wynn Macau stock was HK$31.70 (US$3.96) a share at the

HK$31.70 Wynn Macau stock value a share at the close of trading yesterday

Stephen A. Wynn

close of trading yesterday, so 1,000 shares would be worth HK$31,700 at the current market price. Gaming Industry Workers Association vice-president Leong Sun Iok said: “It is a very good start to push other companies to further improve benefits for their workers.”

Labour strains Wynn Macau and two other casino operators, Sociedade de Jogos de Macau SA and Sands China Ltd, have announced pay increases of 5 percent this year. “It is win-win for the company and the employees,” Mr Leong said.

“The workers can have better benefits while the company can increase staff loyalty and make them stay,” he said. “This is particularly important for the company as several mega-resorts will open in Cotai soon, further straining the labour market.” Official figures show gaming employed over 56,600 people at the end of last year, 25,250 of them croupiers. Neither the government nor the gaming companies have given proper projections of how many more workers will be needed to man the new casino-resorts being built in Cotai, which will open between next year and 2018.

Morgan Stanley Research Asia-Pacific estimates that the new casino-resorts will need 12,600 more croupiers. Wynn Macau also announced yesterday that it will give its employees two bonuses a year between this year and 2017. It will pay one bonus in summer and the other in winter. Macau Polytechnic Institute associate professor of gaming Zeng Zhonglu said other gaming companies would have to come up with more ways to keep their staff now that Wynn Macau was offering shares. “When the rise in a company’s benefits is slower than that of its competitors, it

definitely leads to a higher staff turnover rate,” Mr Zeng said. “It is quite good to issue shares in the company to its employees, as this can further link employee performance to company profits,” he said. He said employees that held shares might work harder. Mr Zeng said other casino operators would not necessarily have to offer their employees shares, as long as they did something to improve benefits to retain staff. Mr Leong the trade unionist thinks gaming companies could improve pensions. “For example, workers staying in the company longer could be entitled to bigger pensions, so they would not be tempted to change jobs,” he said. Relations among the government, the casino operators and their employees are tense because of the prospect of changes in labour policy. Mr Leong and Mr Zeng think improved benefits could ease the tension. This month over 1,000 people attended a demonstration held by another trade union, Forefront of Macau Gaming, to voice their opposition to any change in the government policy of reserving croupier jobs for Macau permanent residents. The union held similar demonstrations in October.

Corporate Galaxy gets ISO 14001 Certificate

Venetian’s environmental performance recognised

Galaxy Entertainment Group (“GEG”) successfully embedded the concept of sustainability into its daily operation and becomes the first integrated resort to receive the ISO 14001 certificate for establishing an effective environmental management systems in both the hotel and back-office area. As part of its sustainability efforts, last year, Galaxy Macau developed a set of environmental management systems in accordance with the ISO14001 standard to be put into practice across all business aspects. The resort property has achieved over 5 million KWh saving in the past year through investment on facility improvement and retrofit projects, such as optimization of chiller plants and boilers, use of LEDs and motion sensors. The system also proves to be effective in reducing water consumption. Through adopting a variety of water-saving measures such as water flow restriction and recycling condensation for irrigation, Galaxy Macau saved water of one million litres in a year, equalling the total volume of daily water intake for 500,000 adults.

The environmental performance of The Venetian Macao has been recognised by EarthCheck, the travel and tourism industry’s leading environmental management, benchmarking and certification company. According to a company release, EarthCheck operates the world’s most scientifically rigorous benchmarking programme and measures key indicators such as energy and water consumption, total waste production, and community commitment to provide a holistic picture of operational performance. “Benchmarking our environmental performance through EarthCheck fits in well with the goals of our Sands ECO360° global sustainability programme,” said Mark McWhinnie, Senior Vice President of Development and Shared Services and Director of Sands Cotai Central. “The impact of our various sustainability efforts has already been recognised by the Macao government twice through its Green Hotel Awards; working with EarthCheck further validates the effectiveness and success of our many ecofriendly initiatives.”

Melco shows how to recycle

 Melco Crown Entertainment built its exhibition booth at the 2014 MIECF with almost 2000 recycled water bottles, collected from City of Dreams.  The booth design utilized recycled bottles to form a sparkling wall and reception table to attract the patrons’ attention, while blending with the irregular arch and floor made by eco-friendly particle wood.  Through this green booth design, Melco aims to raise the public awareness in recycling and environmental conservation. Inside the booth, Melco Crown Entertainment continues to demonstrate its significant green achievements and best-in-class practices.  With its over MOP 100 million investments in green infrastructures to date, the Company has successfully reduced CO2 emissions by a volume that requires more than 1.75 million trees to absorb and water conservation equivalent to 190 Olympic-sized swimming pools, said the company in a press release.


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Macau

Invest in health and education

Brought to you by

Economics Nobel Prize winner would like to see Macau hand out less cash bonuses and invest more in health and education Óscar Guijarro

oscar.g@macaubusinessdaily.com

HOSPITALITY Ever higher The beginning of the year always raises some difficulties for the analysis of changes in the number of visitors. After the Christmas and New Year peak, there is usually a secondary peak around the Lunar New Year. As this one can fall in January or February, the possibility of direct comparison of each of those months may be compromised. The simplest way to get around that problem is to look at the combined figures for both months. The total number of visitors in those two months is almost 8 percent above the corresponding figure last year. This value suggests that the growth rate is ascending again. In 2012, it had dropped to 2.1 percent, down almost six percentage points from the value registered in 2012. Since 2010, the combined number of visitors in January and February has risen by almost a quarter, corresponding to an average annual rate of in excess of five percent. This year sets a new record for the number of visitors in the first two months.

The monthly plots since 2010 reveal very similar annual patterns. Three peak periods are clearly visible – one in April, one in August and one associated with the end of year celebrations. The chart also clearly illustrates the upward trend. The plot for every year is consistently above the plot for the previous year. The exception is 2012, which followed a slightly different pattern, especially in the first half of the year. That fact seems to be associated with the variation of both the dates for the Lunar New Year and for the Easter period. The growth rate in that year was also almost nil, standing at less than 0.3 percent - that is, a virtual draw. J.I.D.

5,064,169

combined number of visitors in January and February

J

oseph Stiglitz has no doubts: health and education are the way to go. Talking to a group of journalists yesterday on the sidelines of the Macao International Environmental Co-operation Forum and Exhibition (MIECF), the 2001 Nobel prizewinner was keen to share his views on the global and local economy, and the enlarging social and economic gap. The economist indicated that the current trend to sharpen differences between poor and rich, a phenomenon especially acute in Macau, would “lead to a poorer economic performance and more instability just on the economic side”, causing disappointment and annoyance on the social side. In the long term, it would cause “society to become dysfunctional in every way.” From his perspective, it’s also in rich people’s interests to “create a society that has less extremes”. To Mr. Stiglitz, every city needs a plan that “embraces the whole city”. When it is time “to think in the design of this city, more than in terms of environment, I think more in terms of equity, fairness, affordable housing, not having economic segregation”, he added. “The model of the city of the past will be very different from the model of the city of the future”, he

commented apropos the desirable evolution of the city. “Many of the old cities were based on manufacturing factories” but the city of the future is based on a services economy. Stiglitz added that Macau should spend the extra bonuses on health and education. Moreover, he said that the main problem of the town is the low unemployment rate that causes nil worker competition. He commented that inequality undermines confidence in government. In such a sense, the economist said that every society needs to have confidence in its government, knowing it will help them, thus governments are obliged to find a way to resolve different sources of problems. Stiglitz added that the government of China has a big corruption problem that is undermining people’s confidence but that it is successfully addressing this issue. He indicated, as well, that environmental problems are an undermining factor as related to the health system. Regarding recent yuan fluctuations, fears of a possible Western-style crisis and the growing anxiety of investors, he said that the stimulus policy the government has been pursuing to now has worked properly and that “China is the best student of Western economics. It didn’t work perfectly and they are

dealing with the consequences right now” but without that stimulus things would have been a disaster. “In the moment of crisis, China did what it had to do”.

Joseph Stiglitz is an economist and professor at Columbia University. He was awarded the Nobel Memorial Prize in Economic Sciences (2001) and the John Bates Clark Medal (1979). He has also worked for the World Bank and was Chairman of the Council of Economic Advisers. Founder of the Initiative for Policy Dialogue (IPD), Stiglitz has over 40 honorary doctorates and at least eight honorary professorships.

Ker-ching! The revenue of Macau Parking Co Ltd rose last year . . . but profits tumbled 12.4 pct due to soaring cost

T

he revenue of Macau Parking Co Ltd reached a new high last year following the installation of more roadside meters but profits still slumped due to soaring costs. Lei Kuong Wa, business manager of Macau Parking, said: “Last year’s revenue hit a new high in recent years as there are more meters for on-street parking and a higher utilisation rate of public car parks.” But the company’s profits last year fell by 12.4 percent year-on-year due to rising costs such as labour expenses and the cost of installing more parking meters, he explained. But he declined to provide further concrete figures for last year’s result. Until 2003, the company was

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@ : signature@macaubusiness.com tel : +853 2833 1258

piloted by prominent local mogul Ma Iao Lai, operating monopolies for public car parks and on-street parking. Macau Parking now continues to operate the city’s network of on-street parking meters and over 10 of the city’s 36 public car parks. Mr Lei estimated that the number of on-street car parking spaces for automobiles remained at 10,000, while there are 2,000 on-street spaces for motorcycles now vis-a-vis 300 at the end of 2012. The company also aims to install 1,000 more car parking spaces for motorcycles this year, particularly in the NAPE region, he added. Mr Lei spoke with Business Daily yesterday after an interview

first advanced by Chinese-language newspaper Macao Daily News. Electricity company Companhia de Electricidade de Macau – CEM, S.A has also installed seven new charging stations this year for electric vehicles in Macau Parking’s public car parks, bringing the total number of charging stations in Macau to nine. This number does not include the two stations at CEM headquarters and its electric power plant in Coloane, neither of which is open to the public. Cecilia Nip, senior manager of CEM communications and public affairs office, said that they did so to further promote the use of electric vehicles, which are “still not prevalent in Macau”.

welcome

opportunity

Tony Lai with Pierre-François Metayer


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Orange on top The ace up the government’s sleeve for the Reolian embroglio is TCM. But through another commercial entity. Transmac bides its time Alex Lee

alex.lee@macaubusinessdaily.com

T

he investor ready to take over Reolian assets is one of the two existing bus operators, TCM. Business Daily knows that the intention was already transmitted to the courts and to the bankruptcy administrator, which has as a main task to protect Reolian’s creditors’ interests. Speaking to the media on Wednesday afternoon, secretary Lau Si Io confirmed the exclusive news from Business Daily on that same day that the government would request three more months to resolve the Reolian case. An extension to give the government time to secure what was promised on 31st December 2013: to find a buyer or to take over and run it, maintaining all jobs intact and the company fully operational. The interested investor –

TCM - knows this newspaper from reliable sources. What still needs to be clarified is who is applying for the licence and all the assets: TCM, stateowned conglomerate Nam Kwong (Group) Company Ltd, which announced the acquisition of TCM in January 2012 or its subsidiary China Travel Service (Macao) Ltd under which the transaction was made? Neither of the company sites shows the exact shareholder structure. Nam Kwong also owns another company in the same industry, Zhuhai Jiuzhou Travel and Transport. According to what Business Daily has learned, the project is not for TCM to absorb Reolian. Another structure (sociedade) is to be created and thus all three operators will continue. “It would be too

complicated to have one absorbing the other, since they have different operational methods, salaries and so on”, one of our sources told us. To the courts, however, the main objective promised by the government is about to be fulfilled, which is to find a solution to the problem. So, nobody is expecting the request for a three-month extension to be denied. Caught by surprise in the process is the other operator. Transmac was before “in talks with the government” regarding a possible takeover, a source with the company told us. More that person did not want to disclose, preferring to “wait and see” how the government is going to lead the matter and make the related announcement. With Stephanie Lai

A whiff of Cologne in Macau event market Koelnmesse will set up a subsidiary here after seeing the potential offered by the Hong Kong-Zhuhai-Macau Bridge Tony Lai

tony.lai@macaubusinessdaily.com

try to do in other events, too.” Mr Dreyer declined to say how much Koelnmesse was investing in its Macau subsidiary. But he did remark: “Investment in service industries is always very low”. He set no targets for the subsidiary.

No immunity

G

erman trade fairs and exhibitions company Koelnmesse will set up a Macau subsidiary next month to tap the growing market for events here. Koelnmesse Pte Ltd’s Asia-Pacific vice-president, Michael Dreyer, said the subsidiary would be set up in the next four weeks, after the authorities had received all the necessary paperwork. “It’s going to be a small set-up at first, because what we are doing at the moment are two events, which are both once a year,” Mr Dreyer said. “So we are going to have part of our two project teams based here in Macau.” Koelnmesse has been in the meetings, incentives, conventions and exhibitions (MICE) market in Macau for some years. Koelnmesse and the Macau Trade and Investment Promotion Institute signed four years ago a contract for the company to manage the annual Macau International Environmental Cooperation Forum and Exhibition. They subsequently signed

another contract for the company to keep managing the event until next year. Koelnmesse and the institute have also signed a contract for the company to manage the Macau Franchise Expo this year. The Cologne company was established in 1924. It now has subsidiaries in Singapore, Hong Kong and Beijing, and intends to increase its presence in Macau in view of the growing potential of the MICE market here. “It’s coming up, actually,” Mr Dreyer said. “It’s going to be stronger once the bridge is open, connecting Hong Kong airport and Macau and Zhuhai, because access to Macau will then be much easier than at the moment.”

Bridge to the future The Hong Kong-ZhuhaiMacau Bridge is due to open in 2016. It is expected to cut the journey from Hong Kong to Macau to less than an hour. “This is going to boost, particularly, the conference and the corporate event

market,” Mr Dreyer said. Official data show the attendance at meetings and exhibitions in Macau was over 2.03 million last year, three times what it was in 2009. But the number of MICE events fell by 22 percent last year to 346. The president of the Macau Convention and Exhibition Association, Eva Lo Tak Wah, said last month: “The way that Macau’s MICE industry is developing has gradually changed from increasing the quantity of

events to improving the quality of events.” Mr Dreyer said: “The Macau event market is pretty well off already, with the few events that are here.” He said gaming events and the Macao International Trade and Investment Fair [MIF] were doing well. “The MIF has been growing quite a bit and it’s really establishing itself not just as a government-run event but it is really being recognised as a must-go event for Asia. That’s what we will

Mr Dreyer said that Koelnmesse, as well as running its own events, could give advice to other meetings and exhibitions companies. He said his company was not immune from the shortage of suitable labour and high rents in Macau. He said it had two employees here and intended to have at least four once its subsidiary was set up. “When the shows are coming closer we will have more staff in PR and invoicing and all that,” he said. Mr Dreyer said that in the next couple of months Koelnmesse would look for permanent offices to replace its temporary premises in the Macau Business Support Centre. The Macau Management Association issued this week the results of a study indicating that two-thirds of MICE companies had a staff turnover rate of more than 20 percent in the 12 months preceding the study. The study also found that the MICE industry was worth 3.53 billion patacas (US$441.3 million) in 2012, accounting for 1.01 percent of Macau’s GDP that year.


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Macau Milan Station up for 60-pct takeover The controlling shareholder of secondhand luxury bag retailer Milan Station Holdings Ltd says it has entered into a non-legally binding memorandum of understanding with a third-party buyer to acquire at least 60 percent of its shares in Milan Station. According to a filing with the Hong Kong Stock Exchange on Wednesday night, the shareholder, Perfect One, now holds a 72.29-percent stake in the business. The firm’s 2013 interim report states it has only one outlet in Macau - in Rua de São Domingos which raked in HK$328.50 million (US$42.36 million) in the first half of last year.

Hotel Fortuna’s fortunes pick up

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he turnover of Hotel Fortuna on the Macau peninsula crept up slightly last year with a stable high occupancy rate, declared shareholder Capital Estate Ltd. The developer, steered by prominent Macau businessman Sio Tak Hong, told the Hong Kong Stock Exchange in a filing this week that the hotel’s turnover last year increased slightly by 1.6 percent from 2012 to HK$261.3 million (US$33.5 million) last year. “Despite the keen competition in the Macau hotel industry, Hotel Fortuna, Macau continued to maintain a high occupancy rate of approximately 97 percent,” the filing said. Capital Estate holds a 32.5-percent stake in the hotel. Nevertheless, Capital Estate still suffered a loss of HK$73.1 million in the six months ending January 31 “attributable to impairment loss” on properties for development in

Bye bye, middleman Real estate agents want to rip off home seekers? Then let’s get rid of the middleman, says a Facebook page that attracted more then 2,000 members in 48 hours Pierre-François Metayer

pf.metayer@macaubusinessdaily.com

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Facebook group called “Bye Bye, Real Estate Agents” has registered more than 2,000 members in 48 hours. Members agree with group founders that agents always ask for commission after a rental contract is about to start or terminate. Manuel Pereira, administrator of the group, told Business Daily that people are usually asked to pay four months rent before moving in when going through a real estate agency. “One month’s rent for the agent, two months for the landlord and one for the rent starter. The landlord then gives one month to the estate agent, who gets a double commission. For a rent of 15,000 patacas, it means you need to pay 60,000 patacas and that’s a lot of money”, says Mr Pereira. Although this newborn Facebook group is a buzz, founders still hope that landlords will join even if most of them are locals and speak Chinese. “Our primary goal is to have landlords posting. We are a non-profit organisation and we are Portuguese so we prefer the page to

stay in English as we don’t intend to invest in translations as we believe many flat owners speak English”, he says. A real estate agent working mainly for foreigners told Business Daily that he doesn’t think this kind of Internet group will affect the market. On the contrary, he says, it “will encourage the industry”. “Macau is a free market but owners of flats will still need us [real estate agents] for financing and legal procedures advice

or even getting proof of ownership”, he said. For Manuel Pereira, this is not a monopoly and it is an open market. “For legal contracts, you can download them online so an agent isn’t that essential. This is a community issue; it’s not a fight but real estate companies somehow have the monopoly and we’re not accepting the agent’s commission process,” he concluded.

Coloane amounting to HK$50.7 million, the filing said. The impairment loss was HK$135.5 million in the same period of last year. The company has a gross floor area of 4,426 square metres in a 9,553 square metre plot in Ka Ho, Coloane on which it is slated to build “6 luxury residential houses with extensive outdoor areas and related facilities”, the filing states. The firm submitted a revised building plan in late 2013 pending approval from the government, the firm said. The filing did not mention the progress of another plot in Alto de Coloane, controlled by Capital Estate via Win Loyal Development Ltd, where several residential highrise blocks are to be built. The project attracted public scorn last year from citizens concerned that the project may affect the green environment of Coloane Island. T.L.

Useful reminders about rental and leasing laws in Macau Article 1038, line 2 of Civil Code The minimum time limit for renting of all apartments is two years. The first contract period cannot be less than two years, regardless of what period is written on the contract signed by the parties Article 999, line a and b of Civil Code A rental increase can only be affected if the landlord remodels the apartment or if the amount of rent of the first and second year is mentioned in the contract agreement of both parties. Article 1039, line b of Civil Code Termination of rent – The landlord must give written warning 90 days in advance of the date of the end of the contract period. Article 1038, line 1 of Civil Code If no advance written warning is given within the lawful 90 days notice, the rental contract is considered automatically renewed for one year, following the two years of the first contract. Article 1017, line 2 of Civil Code Only a Macau Court of Law can terminate a contract and evict a tenant. If the landlord tries to “evict” someone and unlawfully enters the premises he will be charged with home invasion, punishable by 1 year in jail or up to 240 patacas a day fine, Article 184, line 1 of Civil Code. Article 5, line 2 of Civil Code Whatever is not in accordance with the law is considered null and void, and the law applies.


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Three Gorges sacks chairman

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hina Three Gorges Corp has sacked chairman Cao Guangjing and general manager Chen Fei a month after a government inquiry discovered evidence of fraud and mismanagement, Bloomberg reports.
The operator of one of the world’s biggest hydroelectric dams and the dominant shareholder in Portuguese power generator

crime

Training centre fraudsters A

father and son, and a woman, all Macau residents, were arrested yesterday for presenting false documents, fraud and making false declarations on the number of students and classes held in their training centre. Judiciary Police found that since 2011 the suspects were misleading

multiple parties by announcing more students and classes than they had in order to obtain more subventions from the DSEJ. A total of 60 fictitious students were declared to be studying in the training centre, helping the suspects fraudulently obtain some 100,000 patacas of bonus. The centre - operating for three years - mainly teaches computer skills and language. In December of last year, the Education and Youth Affairs Bureau (DSEJ), filed a complaint with police because they were suspicious about the management and administrative declarations of the training centre, located near Areita Preta, in Hak Sa Wan district. The police are still investigating exactly how many false students were declared and how much was fraudulently obtained in the scam.

Energias de Portugal SA – a shareholder in CEM Companhia de Electricidade de Macau – made the changes on Monday.
Officials in Beijing did not say why the changes were made.
Investigators found last month that friends and relatives of managers were allowed to be involved in company projects.
Other managers owned many flats and high-end vehicles.

35 illegals caught 2020 no certainty A T

he Police yesterday probed 35 migrants illegally working in the renovation site of Grand Waldo Hotel in Taipa. Police said they found 16 non-residents working there without work permits plus 19 imported workers with work permits not issued for the Grand Waldo site. The 35 illegal migrant workers hale from Hong Kong, mainland and Vietnam, police said following a four-hour inspection. The Grand Waldo site is currently under renovation after gaming operator Galaxy Entertainment Group Ltd bought out the property last year.

piece in Barron’s magazine questions the likelihood of Japan’s parliament passing a bill that would legalise casinos ahead of the 2020 Tokyo Olympic Games.
Barron’s quotes a Nomura Securities casino industry analyst, Takashi Kiso, as saying the industry’s development will be tied up in red tape.
Nomura has placed zero value on the stocks of companies jockeying for position to open casino-resorts in Japan, the report says.
In contrast, Credit Suisse says the casino gaming bill will be passed in June, allowing the first casino-resorts to open in 2016.Most of Macau’s gaming operators are willing to invest in the Japanese market.


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Greater China Industrial profit rises Profits earned by Chinese industrial firms rose 9.4 percent in January and February combined to 779.3 billion yuan (US$125.50 billion) from a year earlier, faster than the annual growth of 6 percent in December, the National Bureau of Statistics said yesterday. The NBS always gives a combined profit figure for the first two months of each year to smooth out seasonality effects, as the long Lunar New Year holiday, when most companies shut down, can fall either in January or February.

28 billion yuan bonds auction China’s Ministry of Finance said yesterday it would auction 28 billion yuan (US$4.51 billion) in seven-year government bonds on April 2. The bonds will be issued from April 3 to 4 and begin secondary market trading on April 9, the ministry said in a statement published on its website.

CITIC restructures CITIC Group agreed to inject its main operating arm into CITIC Pacific. CITIC Pacific said in a filing late on Wednesday that it would purchase 100 percent of CITIC Ltd, which had total equity of about 225 billion yuan (US$36.3 billion) at the end of 2013. CITIC Ltd’s businesses in China range from real estate to banking, securities, infrastructure, energy, natural resources and engineering among others. CITIC Ltd made a net profit of 34 billion yuan in 2013, the filing said.

New winds blowing in property market Lack of credit makes property developers search alternative sources

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hina’s property developers are turning to commercial mortgage-backed securities and looking at other alternative financing as creditors grow more discriminating in the face of rising concerns about the country’s real estate and debt markets. Bond buyers are shying away from second-tier developers because property sales have cooled as the economy slows. The expected bankruptcy of a local developer and the country’s first domestic bond default this month have heightened scrutiny of borrowers. The property companies have a renewed sense of urgency to raise capital after U.S. Federal Reserve Chairman Janet Yellen indicated the central bank, which sets the tone globally for borrowing costs, may raise interest rates as early as the spring of 2015, sooner than many investors had anticipated. Higher rates mean higher borrowing costs, both for the companies and for their home-buying customers. Highlighting the search for alternative funding avenues, property fund MWREF Ltd earlier this month issued the first cross-border offering of commercial mortgage-backed securities (CMBS) since 2006. The offer was priced at a yield lower than two US dollar bonds issued last week, IFR, a Thomson Reuters publication, said. “The market will see more of these products,” said Kim Eng Securities analyst Philip Tse in Hong Kong. “It’s getting harder to borrow

with liquidity so tight in the bond market. It’s getting harder for smaller companies to issue high-yield bonds.” The notes, issued through a MWREF subsidiary, Dynasty Property Investment, were ultimately backed by rental income from nine MWREF shopping malls in China and were structured to give offshore investors higher creditor status than is normally the case with foreign investors. MWREF is managed by Australian investment bank Macquarie Group Ltd, which declined to comment. The head of investor relations for Beijing Capital Land, which is mainly focused on middle- to highend residential development and high-end commercial property, said

the company would look at new ways to fund its business. Beijing Capital was the first Hong Kong-listed developer to issue dollar senior perpetual capital securities last year, an equity-like security that does not dilute existing shareholders. “As market liquidity is changing constantly, we have to keep adapting and exploring different funding channels,” said Bryan Feng, the head of investor relations. Chinese regulators last week allowed developers Tianjin Tianbao Infrastructure Co. and Join.In Holding Co. to offer a private placement of shares, opening up a fund raising avenue that had been closed for nearly four years. New rules were also unveiled last week allowing certain companies to issue preferred shares, including companies that use proceeds to acquire rivals. “As liquidity tightens and developers see more pressure...they may consider M&A via preferred shares,” said Macquarie analyst David Ng. Heightened fears over the outlook for China’s property developers were triggered by news this month that home price inflation is cooling and

Construction at Dongsishitiao

Smog insurance policies halted Chinese regulators have told the country’s two largest insurers to stop selling coverage against smog, a week after such policies were launched, the China Daily reported yesterday. The newspaper did not say why the country’s insurance watchdog had ordered People’s Insurance Company of China (PICC) and Ping An Insurance Group to cease sales of the coverage. The country’s worsening air quality is at the top of the list of concerns of China’s leaders, anxious to douse potential unrest as a more affluent urban population turns against a growth-at-all-costs economic model. PICC last week offered coverage to Beijing residents against health risks caused by air pollution in the city, promising to pay 1,500 yuan (US$240) to policy holders hospitalised by smog. It also said it would pay 300 yuan if the city’s official smog index exceeded the hazardous 300 level for five consecutive days.

Tencent to pay US$500m. for stake in CJ Games Asia’s biggest Internet company agreed to pay about US$500 million for a 28 percent stake in South Korea’s CJ Games to bolster its line-up of online and mobile entertainment. The deal includes the purchase of new and existing shares in Seoul-based CJ Games, the companies said in statements on Wednesday. The agreement includes the acquisition of the Netmarble portal of CJ E&M Corp., with titles including “Taming Monsters” and “Everybody Cha Cha Cha.” Tencent, owner of the WeChat instant messaging application, is making acquisitions to bolster content and location services amid increased competition from Alibaba Group Holding Ltd. and Baidu Inc. The Shenzhen-based company’s online gaming revenue of 8.5 billion yuan (US$1.4 billion) last quarter was unchanged from the previous quarter as sales from titles including “League of Legends” and “Cross Fire” slowed.

Unexpected great news Surprisingly, Bank of China results exceed forecasts due to loans abroad

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ank of China Ltd., the nation’s fourth-largest lender by market value, unexpectedly increased quarterly profit as more loans outside its home country helped it widen interest margins. Net income rose to 36.7 billion yuan (US$5.9 billion) in the three months ended December 31 from 33.5 billion yuan a year earlier, based on full-year figures released by the

Bank of China headquarters at Macau

Beijing- based company yesterday. That beat the 32.8 billion-yuan median of 24 estimates compiled by Bloomberg. Bank of China boosted overseas lending and benefited at home from a surge in interbank rates to a six-month high in December that made loans to smaller rivals more profitable. Concerns that liquidity is tightening and bad debts may climb in

an economy that had its first onshore bond default this month dragged valuations of the largest banks’ shares to record lows. “The business environment in the second half of last year was pretty good for the banking sector,” said Richard Cao, a Shenzhen-based analyst at Guotai Junan Securities Co. “Lending margins improved and nonperforming loans stabilized thanks to better economic conditions.” Bank of China’s President Chen Siqing said at a press conference in Hong Kong yesterday that he’s optimistic over asset quality and profit growth in 2014, especially at the bank’s overseas business. Corporate loans outside China jumped 20 percent last year, helping drive the lender’s outstanding loans up by 11 percent to 7.6 trillion yuan, according to yesterday’s statement. The growth in total lending is higher than 2012’s 8.2 percent rate. Bank of China’s net interest margin, a measure of lending profitability, widened to 2.24 percent at the end of last year, from 2.22 percent at the end of September. Besides increasing its overseas loan book, the bank also lowered its holdings of low-interest assets to bolster margins, it said. The overseas businesses’ interest margin raised 15 basis points in 2013 to 1.28 percent from a year earlier, Bank of China said. Total net interest income climbed 10 percent, while net fee income gained 17 percent. Bloomberg News


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Greater China that Zhejiang Xingrun Real Estate Co, based in eastern Zhejiang province, was on the brink of bankruptcy. The market jitters have slowed the pace of new debt issuance and prompted investors to demand bigger premiums to risk their capital. As of March 15, Chinese developers had issued 15 U.S. dollar bonds raising US$7.1 billion so far this year, compared with 23 issues that raised US$8.1 billion in the yearearlier period. “That said, quite a number of developers have demonstrated the ability to access alternative markets, such as the offshore syndicated loan markets as another means of raising capital,” said Swee Ching Lim, Singapore-based credit analyst with Western Asset Management. Offshore syndicated loans for Chinese developers have reached US$1.17 billion so far in 2014, compared with US$9.8 billion for all of last year, Thomson Reuters LPC data shows. Reuters

It’s getting harder to borrow with liquidity so tight in the bond market. It’s getting harder for smaller companies to issue high-yield bonds Philip Tse Kim Eng Securities analyst

Bankruptcy rumour-monger arrested Police in rural Chinese city of Yancheng detain person suspected of spreading rumours that sparked three-day bank run

After a police investigation, a person surnamed Cai who spread the rumours has been tracked down, and during the night of March 26 was detained by authorities. The police are now investigating the matter further,” Yancheng police said in a statement posted on China’s Twitter-like Sina Weibo. The rumour spread quickly. A small rural lender in eastern China had turned down a customer’s request to withdraw 200,000 yuan (US$32,200). Bankers and local officials say it never happened, but true or not the rumour was all it took to spark a run on a bank as the story passed quickly from person to person, among depositors, bystanders and even bank employees. Savers feared the bank in Yancheng, a city in Sheyang county, had run out of money and soon hundreds of customers had rushed to its doors demanding the withdrawal of their money despite assurances from regulators and the central bank that their money was safe. The panic in a corner of the coastal Jiangsu province north of Shanghai, while isolated, struck a raw nerve and won national airplay, possibly reflecting public anxiety over China’s financial system after the country’s first domestic bond default this month shattered assumptions the government would always step in to prevent institutions from collapsing.

Allegedly Weibo was used to spread the rumour

Rumours also find especially fertile ground here after the failure last January of some less-regulated rural credit co-operatives. Jin Wenjun saw the drama unfold. He started to notice more people than usual arriving at the Jiangsu Sheyang Rural Commercial Bank next door to his liquor store on Monday afternoon. By evening there were hundreds spilling out into the courtyard in front of the bank in this rural town near a high-tech park surrounded by rice and rape plant fields. Bank officials tried to assure the depositors that there was enough money to go around, but the crowd kept growing. In response, local officials and bank managers kept branches open 24 hours a day and trucked in cash by armoured vehicle to satisfy hundreds of customers, some of whom brought

large baskets to carry their cash out of the bank. Jin found himself at the bank branch just after midnight to withdraw 95,000 yuan for his friend from a village 20 km. away. By Tuesday, the crisis of confidence had engulfed another bank, the nearby Rural Commercial Bank of Huanghai. China’s banks are tightly controlled by the state and bank bankruptcies are virtually unheard of, so the crisis has baffled many outsiders. Yet in Sheyang, fears of a bank collapse resonate. In recent years, this corner of hard-strapped Jiangsu province has experienced a boom in the number of loan guarantee, or ‘danbao’, companies and rural capital co-operatives. These often shadowy private financial institutions promised higher returns on deposits than banks, but many have since failed. Qu Guohua, a spiky haired former migrant worker in his 50s, nearly lost 30,000 yuan in a credit guarantee scheme that went up in flames. What saved him one day in January 2013 was a tip-off from a friend at a rural co-operative just down the street from the loan guarantee company where he had his money. That helps explain why lines formed so quickly once the rumours started circulating this week. Luck has it, he deposited the cash in a bank next door: Sheyang Rural Commercial Bank. Reuters

Airbus reunites France and China 10-year contract agreement revitalises relations between both countries

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hina signed a new 10-year accord on Wednesday allowing Airbus to assemble A320 planes on its soil until 2025 and unblocked orders for larger jets worth more than US$6 billion, restoring ties after a row with Europe over aircraft emissions. Watched by visiting President Xi Jinping and his French counterpart Francois Hollande, Chinese officials in Paris also signed deals to co-produce 1,000 French EC-175 helicopters over 20 years with Airbus Group’s helicopter division and to cooperate on turbo-prop engines with France’s Safran. The A330 orders that got the go-ahead on Wednesday had been suspended during a trade row triggered by China’s opposition to a European Union scheme forcing airlines to join an emissions mechanism that China feared could harm its carriers. Airbus said China had agreed to buy a total of 70 aircraft including 43 A320-family airplanes and had gone

ahead with previously frozen orders for 27 Airbus A330 aircraft - deals worth a combined US$10.2 billion at catalogue prices. But it failed to make headway in efforts to expand sales of its most popular wide-body aircraft by offering a new version of its A330, specially tailored for China’s domestic market. Airbus is prepared to open a second industrial plant for this project. Airbus opened its first non-

US$10.2 billion

combined deal worth

European aircraft assembly plant in the port city of Tianjin in 2009 and has been negotiating for months to extend the local production venture beyond 2016. The factory and land have capacity to increase to 8 aircraft a month and could play a major role as Airbus, and its larger U.S. rival Boeing, increase production to keep up with demand. For the time being, production will remain at 4 a month, Airbus head Fabrice Bregier told Reuters.

China is the world’s fastestgrowing aviation market despite a slowdown in its economy, with a surge in outbound travellers fuelling the expansion. But deals announced during the French phase of Xi’s first presidential visit to Europe fell short of expectations that China would back the new regional model of Airbus A330 and sign a total of 150 jet orders worth as much as US$20 billion. Reuters


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Samsung in crossfire carrier battle The company is getting drawn into a battle between Korean carriers for users

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amsung Electronics Co. failed to keep its new Galaxy S5 smartphone from going on sale early in South Korea yesterday as SK Telecom Co. and other carriers try to work around penalties imposed by the national regulator. The world’s largest mobile phone maker planned to release the phone on April 11, yet that date would be in the middle of state-imposed suspensions preventing SK and KT Corp. from doing business. LG Uplus Corp.’s suspensions surround that date. Samsung is getting drawn into a battle among Korean carriers for users, with illegal discounts prompting the government regulator to limit their ability to sign up new customers for 45 days. Samsung is counting on the marquee device to maintain its lead in a global smartphone market where it competes with Apple Inc. for high-end shoppers and Chinese producers including Xiaomi Corp. target budget buyers. “We are very puzzled,” Suwon, South Korea-based Samsung said in an e-mailed statement. “SK Telecom strongly asked for an earlier release of the product but we delivered our stance that the global release date of April 11 remains unchanged.” Shares of Samsung rose 3.7 percent to 1,333,000 won in Seoul. The stock has dropped 2.8 percent

Samsung Galaxy S5

63.5 mln units shipped of the of the 5-inch S4

this year, compared with the 1.7 percent slide in the benchmark Kospi index. The shares fell 9.9 percent last year, the first annual decline since 2008. Consumers can start buying the Galaxy S5 for 866,800 won (US$808) from SK Telecom’s 3,000 retail stores and website from yesterday, South Korea’s largest carrier said in an e-mailed statement. Existing customers of KT and LG Uplus can purchase the device under certain conditions, the companies said. “I haven’t even unpacked it yet but I’m excited to have it,” said Ham Kyoung Jin, the head of application developer Hyundai Mobile Co. The 32-year-old traveled about 90 miles “just to get this new phone” at an SK store in Seoul. The Ministry of Science, ICT and Future Planning said March 7 it will ban SK Telecom from signing up new customers and from offering phones to users who want to change their devices without certain conditions for 45 days starting April 5 and ending May 19. Second-ranked KT currently is banned until April 26, while restrictions on LG UPlus are in place until April 4 and then resume April 27.

Fingerprint reader The new Samsung device enters a smartphone market where global

growth is expected to slow to 6.2 percent in 2018 from 19 percent this year, research firm IDC said last month. “Consumers are showing fairly good interest in the new phone because of its interesting features, such as fingerprint recognition,” said Pak Kyung Hoon, 24, a manager at SK Telecom’s Jonggak retail store in Seoul. Samsung had 29.1 percent of global smartphone shipments in the December quarter, compared with 17.6 percent for Apple and 5.7 percent for third-place Huawei Technologies Co., according to data compiled by Bloomberg from IDC. Apple’s iPhone 5s, which went on sale in markets including China, Japan and the U.S. on Sept. 20, has fingerprint-reading technology. Samsung shipped 63.5 million units of the 5-inch S4, according to the median of three analyst estimates. The 4.8-inch S3 shipped about 65.6 million units, according to analysts. Apple sold 51 million iPhones in the December quarter alone, and this year started selling the devices through China Mobile Ltd., the world’s largest carrier with about 776 million subscribers. In January, Samsung posted a 5.4 percent rise in fourth- quarter net income to 7.22 trillion won (US$6.7 billion), its slowest profit growth since 2011. Bloomberg News

Broader inflation information for Japan The BOJ will ask corporations for their outlook on selling prices

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he Bank of Japan has added firms’ price-growth outlook to its quarterly tankan business sentiment survey, a step intended to inform monetary policy by incorporating inflation expectations. The BOJ will ask corporations for their outlook on selling prices and prices overall at one-year, three-year and five-year horizons, excluding the effects of April’s sales tax hike. Markets are expected to focus closely on the new survey, which should provide an early view of whether firms’ inflation expectations are moving in line with the BOJ’s 2 percent inflation target. “The results will contain important information on firms’ inflation expectations and there is a high possibility it will influence

KEY POINTS Firms’ price outlook seen influencing BOJ’s next move Survey to show price outlook for 1yr, 3yrs, 5yrs ahead Inflation poll due at 8:50 a.m. April 2 the BOJ’s policy decisions,” said Masaaki Kanno, chief economist at JPMorgan Securities. The results will be issued at 8:50

Bank of Japan Head Office, Chuo-city, Tokyo

a.m. on April 2, a day after the regular tankan survey is published. “It will be a resource to see whether there is a change in the long-embedded deflationary mind-set and whether that change in outlook will spread,” said Mari Iwashita, senior market economist at SMBC Friend Securities. The BOJ has stood pat on policy since it launched an intense burst of stimulus last April when it pledged to lift inflation to 2 percent in about two years via aggressive asset purchases. Many analysts remain sceptical of whether the central bank will achieve

the inflation target, with a recent Reuters poll showing businesses expect the BOJ will need to ease rates again by July to stimulate price growth. The central bank forecasts core consumer prices, stripping out the taxhike effects, will rise 1.3 percent for the year to March 2015 and will increase 1.9 percent by the following year. A Reuters’ corporate survey taken in February showed just 15 percent of respondents think prices will increase by 2 percent or more in a year from now. Reuters

editorial council Paulo A. Azevedo, José I. Duarte, Emanuel Graça, Mandy Kuok Founder & Publisher Paulo A. Azevedo | pazevedo@macaubusinessdaily.com GROUP SENIOR ANALYST José I. Duarte Newsdesk Luciana Leitão, Michael Armstrong, Pierre-François Metayer, Stephanie Lai, Tony Lai EDITOR AT LARGE Alex Lee International editor Óscar Guijarro Brands & Trends Raquel Dias Creative Director José Manuel Cardoso WEB & IT Janne Louhikari interns Cynthia Wong, Yvonne Wong 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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New policies for (new?) politicians The nationalist Bharatiya Janata Party would introduce a general sales tax and overhaul the financial sector Yahoo Japan to acquire EAccess Yahoo Japan Corp. agreed to acquire eAccess Ltd., a mobile carrier in Japan, from SoftBank Corp. for 324 billion yen (US$3.17 billion), according to a statement to the Tokyo Stock Exchange. SoftBank will book a 55.7 billion yen gain on the sale of eAccess in the fiscal year 2014, according to the statement. SoftBank owns 42.6 percent of Yahoo Japan, according to data compiled by Bloomberg. The deal comes as SoftBank is increasingly expanding beyond Japan. Chief Executive Officer Masayoshi Son has explored acquiring T-Mobile US Inc.

Weak consumer confidence in S. Korea South Korea’s key consumer sentiment index held steady in March from the previous month, reinforcing signs of recovering confidence in the economy, a central bank survey showed yesterday. The Bank of Korea said in a statement its composite consumer sentiment index, compiled from its monthly survey, stood at 108 in March. A reading above 100 indicates positive consumer sentiment about conditions over the coming month, compared with the longterm average sentiment accumulated from 2003 to 2013. The index has stayed over 100 since January last year.

Myanmar decides on oil & gas contractors International oil majors including Royal Dutch Shell, Statoil, ConocoPhillips and Total won rights to explore for oil and gas off Myanmar, according to the Southeast Asian country’s Ministry of Energy. Myanmar has awarded 10 shallow-water blocks and 10 deepwater blocks in an auction process that began in April last year. Winners of deepwater blocks will be able to explore and operate the blocks on their own, while shallow-water winners will need to work with a registered local partner, according to the terms of the production sharing contracts.

New grain terminal in Australia A consortium of grain handlers plans to build a new terminal at Port Kembla in Australia’s New South Wales state, signalling fresh competition for the region’s biggest listed agribusiness GrainCorp. Logistics business Qube Holdings said it has formed a joint venture with Noble Resources, a unit of Singapore’s Noble Group, to develop the multi-user handling facility with capacity for more than 1.3 million tonnes of export grain a year. Cargill Group and Emerald Grain have been granted the option to acquire up to a 20 percent stake each in the new venture.

Philippines lowers inflation estimates The Philippine central bank slightly lowered yesterday its inflation forecasts for this year and next, saying the inflation outlook remains within target although there are upside risks from possible increases in utility, food and oil prices. The central bank now expects inflation this year to average 4.2 percent, lower than a previous estimate of 4.3 percent. It also sees 2015 average inflation at 3.2 percent against 3.3 percent previously.

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ndia’s main opposition party would welcome more foreign direct investment in defence, if elected, but would delay opening up the country’s market of more than 1.2 billion people to international retail chains like Wal-Mart. The nationalist Bharatiya Janata Party (BJP), which surveys show is on course to win the most seats in an election starting on April 7, would also introduce a general sales tax and overhaul the financial sector, its manifesto will say. Party sources told Reuters these concrete steps form the core of a pitch to voters that sets ambitious goals of creating 250 million jobs over the next decade, building up to 100 ‘smart’ cities and constructing a high-speed rail network. “The manifesto’s priorities, in this order, are jobs, investment, manufacturing and infrastructure,” one BJP official involved in drafting the document revealed to Reuters before its publication next week. He declined to be identified due to the sensitivity of the topic. The BJP’s candidate for prime minister, Narendra Modi, is campaigning on his economic record in running his home state, Gujarat, where the party trumpets an unemployment rate of less than a third of the national average. By contrast the incumbent Congress party, which unveiled its manifesto on Wednesday, is appealing to its core constituency of poorer voters who it says should be given the chance to participate in “inclusive” growth. “Growth by itself is not sufficient,” Prime Minister Manmohan Singh told an event at which Congress president Sonia Gandhi made a rare public appearance to support her son Rahul’s leadership of the party’s flagging campaign. While the BJP platform seeks to tap into the hopes of 100 million firsttime voters whose job prospects have been hurt by a slowdown in economic growth, the tenets of ‘Modinomics’ remain nebulous beyond a broad focus on supply-side reforms.

Narendra Modi, BJP prime minister candidate

“Most of these proposals have been discussed by other parties too,” said Shumita Sharma Deveshwar, a director at Trusted Sources, a policy advisory firm. “The key is implementation of these policies. That is the bigger challenge.”

Cautious opening The BJP’s policy platform takes a cautious stance towards opening up the Indian economy, Asia’s third largest, to foreign direct investment. There will be no quick move to allow the likes of Wal-Mart Stores Inc. or Tesco easier entry into so-called ‘multi-brand’ retail, which would pose an existential threat to small traders who form a key BJP constituency. “The domestic retail industry needs to be first made competitive before allowing foreign investment,” a second BJP source said. However, the BJP would propose raising a cap on foreign ownership of Indian defence industry enterprises to 49 percent from 26 percent now.

Although India spends only a third as much as China on defence, it is the world’s largest market for arms exports - reflecting a failure of past governments to turn around the statedominated domestic defence industry. The legacy of dependence on the Soviet security umbrella has been prolonged by corruption scandals that have held up deals with foreign partners that would have moved production to India. “We can save huge foreign exchange by producing defence equipment at home,” the source said. “(We would) raise the FDI cap, (and) allow Indian companies to enter into joint ventures with foreign companies. It could be an arrangement where Indian partners hold the majority stake, say 51 percent.” Elsewhere, the BJP is expected to propose a national general sales tax - key to getting rid of a hodge-podge of existing levies. More broadly, it will seek to improve tax collection by lowering rates and closing loopholes. Reuters

Singapore follows Korean and Shanghai golden trail

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outheast Asia’s biggest bourse operator, is considering starting physical gold trading, according to three people with direct knowledge of the matter. The plan would include bullion deliveries into and out of the Southeast Asian country, said the people, who asked not to be identified because the issue is confidential. SGX declined to comment in an e-mailed statement. SGX may join peers in South Korea and China in offering physical bullion trading as Asian demand increases, drawing supplies out of Europe. The Singapore government is promoting the city-state as a centre for precious metals by removing a sales tax on investment-grade metals in 2012, and as JPMorgan Chase & Co. and UBS AG started storing gold for customers. “SGX is constantly looking into

ways to help customers tap growth opportunities and manage risks,” the company said in reply to Bloomberg questions. “While we will publicly announce any new initiatives, we do not comment on speculation.” Prices slumped 28 percent last year, ending a 12-year rally, as rising equities and prospects for a U.S. economic recovery curbed the need for a store of value. Bullion demand in the three Southeast Asian economies of Thailand, Vietnam and Indonesia expanded 42 percent to 300.3 metric tons last year, according to data from the London-based World Gold Council. That compares to usage of 308.9 tons in Western Europe, where consumption contracted 3.4 percent. Korea Exchange Inc., which has

had gold futures since 1999, started offering physical metal this month as the government sought to curb as much as US$3 billion of black-market transactions. The Shanghai Gold Exchange, started in 2002, handles gold deliveries in the world’s largest bullion user. SGX lists rubber and fuel-oil futures, while its unit AsiaClear handles products including steel, iron ore and freight. Shares in the company traded 0.4 percent lower at S$6.91 yesterday, down 4.8 percent this year. Gold may fall for a second year and average US$1,332 an ounce in 2014 as some investors shift money to stocks and property, according to Jeffrey Christian, managing director of New York- based CPM Group. Bloomberg News


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International

Games of Murdoch Throne: Rupert reconciles with Lachlan Sberbank’s 2013 profit misses target Sberbank, Russia’s biggest bank, posted a 4.1 percent rise in full-year earnings, falling short of its own target as it increased provisions for loan-losses in a deteriorating economy. Sberbank CEO German Gref said this week that Russia was at risk of recession as investors pull money out of the country, with growth likely to evaporate if capital outflows rise. The state-controlled bank’s full-year net profit was 362 billion roubles, below its estimate of 370 billion roubles given in August last year as the economy slowed.

IMF Standby Agreement with Ukraine - text The International Monetary Fund said yesterday it had agreed a US$14-18 billion stand-by agreement with Ukraine. An International Monetary Fund (IMF) mission worked in Kyiv during March 4-25, to assess the current economic situation and discuss the authorities’ economic reform program that could be supported by the IMF. At the conclusion of the visit, Nikolay Gueorguiev, Mission Chief for Ukraine said they reached a staff-level agreement with the authorities of Ukraine on an economic reform program that can be supported by a two-year Stand-By Arrangement (SBA) with the IMF.

Lira fate tied to real assets: Turkey credit Foreign demand for real assets may provide some relief for Turkey as it seeks to narrow the second- largest currentaccount deficit in developing nations amid a graft probe that is sucking cash from financial markets. Foreign direct investment this year will at least match the 2013 level of US$13.7 billion, or 1.7 percent of gross domestic product, according to Ilker Ayci, head of the Ankara-based Investment Support & Promotion Agency of Turkey, or Ispat. Turkey’s current-account deficit was 7.2 percent of GDP in the third quarter.

Angola growth targets delay tax reform Planned tax changes in Angola, Africa’s second-largest oil producer, are hindered by inaccurate budget targets and perceptions the measures will hurt the economy, the Christian Michelsen Institute said. The southwest African country has yet to approve three new tax codes first submitted to the government in 2011. President Jose Eduardo dos Santos in October cut an estimate of last year’s economic expansion to 5.1 percent from 7.1 percent, while the 2012 budget projecting a 12.8 percent increase to the US$114 billion economy was later lowered to 7.1 percent.

Rupert Murdoch has returned eldest son Lachlan to the leadership of his media empire and promoted younger son James

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his might be a way to pave the path for the 83-year-old tycoon to pass the reins to the family’s next generation. Lachlan, 42, will become nonexecutive co-chairman of both entertainment company 21st Century Fox and publishing operation News Corp, sharing both roles with his father. He re-joins the company after quitting as deputy chief operating officer nearly 10 years ago amid friction with other News Corp executives. James, 41, will become Fox’s co-chief operating officer alongside long-time Murdoch stalwart Chase Carey, the latest step in the younger son’s comeback after he was forced to relinquish some roles during a phone hacking scandal in Britain. “I think it underlines the fact that it remains a family dynasty in spite of being a listed company,” media commentator and former Murdoch editor Roy Greenslade said in a telephone interview. “The two boys are being prepared to inherit.” Each son has at various times been seen as heir apparent, and it is unclear how well they will work together when Murdoch finally hands over the companies. The Murdoch family controls both Fox and News Corp through a trust that has a 38 percent ownership stake of Class B shares with voting rights. “If there is any surprise, perhaps it’s bringing Lachlan back into Fox,” Evercore analyst Alan Gould said in a telephone interview, referring to the movie studio and broadcaster split off last year from the News Corp media holdings. “I would assume it does set up a little bit of a bake-off as to who will ultimately succeed at Fox.” A source familiar with the companies said that the plan to elevate Lachlan and James had been in the works for a while and that a tussle over control would be unlikely. It was largely expected that Lachlan might return to the

newspaper and publishing arm of his father’s empire - which includes the Wall Street Journal, Australian newspaper and TV assets, and book publisher HarperCollins. James will have responsibility for Fox Networks Group, the U.S. broadcast and cable channels business, and strategic oversight of Fox’s businesses in Europe, Asia and the Middle East. He will continue to report to Carey, 60, who analyst Gould called one of the best operating officers in the industry. “As long as Chase Carey is still there and continues to run the cable networks, that is critical,” Gould said. Still, it remains to be seen if Carey will stay with the company longterm. His contract is up for renewal this June 30. A Fox spokesman said in a statement that the company is in the process of finalizing Carey’s extended employment agreement. “We are confident it will be completed

H&M in search of good figures H

than everyone expected,” Anne Critchlow, an analyst at Societe Generale in London, said by phone. The increase was due to investment in online as well as H&M’s COS and & Other Stories store formats, she said. H&M fell as much as 4.1 percent in Stockholm trading. The retailer, which sells jersey jumpsuits for US$39.95, is ramping up its online business and introducing new store concepts to close the gap with bigger Zara-owner Inditex SA and combat increased competition from online retailers such as Asos Plc and budget chains including the U.K.’s Primark. Costs in 2014 will be at a higher level than last year, the company also said yesterday. “It’s great that H&M is diversifying away from the price competition in the core concept, so there is no issue with that over the longer term, but those costs disproportionally hit the first quarter,” Critchlow said. Profit growth in the quarter was also stinted by a narrower gross

ennes & Mauritz AB, Europe’s second-biggest clothing retailer, said the cost of investing in online expansion weighed on first-quarter earnings as it seeks to keep up with the pace of change in the industry. Operating profit rose 8.7 percent to 3.4 billion kronor (US$526 million), though the increase would have been 14 percent without the cost of longterm investments, the Stockholmbased company said in a statement yesterday. Net income rose 7.8 percent to 2.65 billion kronor, missing the 2.89 billion-kronor average of eight estimates compiled by Bloomberg. “The operating cost grew more

shortly,” he said. The announcement of Lachlan’s return is a boost to Murdoch, who has always said he would like his children to be involved in the running of his sprawling media conglomerate. “Lachlan is a strategic and talented executive with a rich knowledge of our businesses,” his father said in a statement. “James has done an outstanding job driving our global television businesses,” Murdoch added. “Our collective future has never been brighter.” Guessing who will replace Murdoch has been a game among media watchers as his children have jockeyed for position over the years. Daughter Elisabeth, who like Lachlan and James is a child of Murdoch’s second marriage to Anna Murdoch Mann, founded and sold her television business Shine Group to News Corp in 2011. Reuters

Rupert Murdoch and his son Lachlan (left)

margin as discounts in relation to sales increased marginally compared with a year earlier. The profitability gauge narrowed to 54.9 percent from 55.2 percent a year earlier. Sales at constant rates of exchange have risen 12 percent so far this month, H&M said, matching the first-quarter pace. The March figure implies growth of about 2 percent on a like-for-like basis, according to Critchlow. Bloomberg News

US$526 million operating profit


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Opinion

Climate and competitiveness wires Business

Leading reports from Asia’s best business newspapers

Taipei Times Despite being shown pictures and video footage of protesters bleeding or being beaten up by police officers, law enforcement officials yesterday denied that the police had used excessive force as they evicted protesters from the Executive Yuan complex in Taipei early on Monday. National Police Agency (NPA) Director-General Wang Cho-chiun told a meeting of the legislature’s Internal Administration Committee that “all police officers observed the code of conduct”in dispersing the protesters.

The New Zealand Herald The liquidators of the Mainzeal Group of companies have racked up US$523,000 in legal fees since taking on the administration, as they face several court battles with the failed construction firm’s principal, Richard Yan. BDO’s Brian Mayo-Smith, Andrew Bethell and Stephen Tubbs are seeking about US$46.6 million in related party debt stemming from two significant restructures in the two years leading up to Mainzeal’s collapse, as they try to claw back funds to pay unsecured creditors. The legal fees have been the biggest cost on the liquidation between Aug. 28 and Feb. 27, followed by US$492,000 in liquidators’ remuneration, according to their latest report.

The Strait Times Small-and medium-sized enterprises (SMEs) may find it easier to improve their business operations with the launch of a new guide by government enterprise agency Spring Singapore. The four-page guide, a follow-up to a more comprehensive workbook launched last year, outlines the reasons and steps for business excellence and introduces government schemes that SMEs can tap into. Launched at the Business Excellence Award Winners Sharing Conference on Thursday, it is the latest in a line of initiatives by Spring to mark the 20th anniversary of its business excellence framework.

The Korea Herald President Park Geun-hye and German Chancellor Angela Merkel agreed to cooperate in South Korea’s effort to achieve the unification with North Korea. The two leaders met during a summit held on Wednesday in Berlin. How to share Germany’s experience of ending decades of national division and promoting unity in a unified nation were among the main topics for talks between Park and Merkel, along with North Korea’s nuclear programme and economic cooperation between the two countries. Merkel also said Germany will provide full support for Korean unification.

Thomas Fricke

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Chief Economist of the European Climate Foundation and runs the German internet Web site WirtschaftsWunder

s Europe’s debt crisis fades, another economic disaster seems to be looming – the price of energy. Since the early 2000’s, average electricity prices for Europe’s industries have more or less doubled, and European companies now pay twice as much for gas as their US competitors do. Are Europe’s highly ambitious climate policies – which seek to increase costs for “bad” energy sources – destroying the continent’s industrial base? At first glance, the numbers seem to support the doomsayers. How can such a huge price gap not have an impact on competitiveness? But if high energy prices lead to declining exports, how is it that Germany, which boasts some of the world’s most ambitious climate policies, has doubled its exports since 2000? In fact, empirical evidence shows that in many cases, further reducing carbon-dioxide emissions might help to make industries more competitive. Exploring this potential could open up significant opportunities not only to combat climate change, but also to foster Europe’s longterm economic robustness. Since 2005, when the European Union introduced its Emissions Trading System, German industry has achieved massive gains in market share, despite energy prices having risen much faster than in the US and elsewhere. According to OECD estimates, the relative export performance of high-cost Germany increased by 10% from 2005 to 2013, while US exports grew only 1.2% faster than demand in the rest of the world. In 2013, both German and US exports

fell slightly in relative terms – hardly a sign of an energydriven competitiveness divide. The same holds true, though at a more modest level, even for energy-intensive industries, like chemicals. Despite already-high and rising energy prices, Europe’s chemical industry has grown at about the same rate as the rest of the economy since 1995. Today, EU chemical companies specialize in highvalue products, and Europe exports much more of them than it imports. The reason is simple: there is more – much more – to competitiveness than energy

Since 2005, when the European Union introduced its Emissions Trading System, German industry has achieved massive gains in market share, despite energy prices having risen much faster than in the US and elsewhere

prices. Indeed, estimates for Germany show that for most of its industrial base, energy costs account for a mere 1.6% of gross value added. Thus, even rapidly rising energy prices imply only a limited additional cost burden for firms. Of course, this burden is higher for industries such as chemicals. But energyintensive industries usually benefit from exemptions on carbon charges. And, even in these sectors, competitiveness must be defined in a much broader sense than that given simply by comparing cost statistics. For example, factors like highly qualified labour, or the benefits of being integrated into wellfunctioning clusters, probably play a more important role. Clearly, such considerations provide no guarantee that rising energy prices will not at some point seriously challenge European competitiveness. Indeed, new investment in chemical plants has grown only slowly for years now. But, while this risk must be taken seriously, history suggests that there may well be a way out that does not require rolling back climate policies. What is notable is that rising energy prices have been accompanied not only by relatively robust competitiveness, but also by huge reductions in CO2 emissions. Europe’s chemical industry has halved its greenhouse-gas emissions compared to 1990, while increasing output by 20%. This suggests that rapidly reducing emissions may sometimes even help to maintain a firm’s competitiveness. In a pilot study on specific chemical products for the

European Climate Foundation, experts from McKinsey identified the potential for a further 50-75% reduction in CO2 emissions. Moreover, in an estimated 60-70% of cases, exploring the additional abatement opportunity would have no effect – or would even strengthen – the industry’s competitiveness. This is because greater reliance on recycling, for example, reduces costs – and thus enhances companies’ competitiveness – while reducing emissions and driving new approaches like crosssector innovation. It would certainly not be wise to allow Europe’s energy bill to explode in the name of ambitious climate policies. There are smarter ways to reduce emissions than just raising costs for industry and consumers. But it would be equally senseless to push for less ambitious policies, thereby stalling progress in the fight against climate change, without being sure that doing so would improve European competitiveness. The new paradigm should focus on finding ways to reduce CO2 emissions in ways that ultimately help to produce better products at lower cost. This will also help European producers capture new markets in emerging countries, which will increasingly demand the high-value chemical products that Europe already produces competitively. The last thing a crisis-weary Europe needs is a new competitiveness gap. But ambitious climate targets, as Germany and other successful European economies have shown, are not the problem. They could even be part of the solution.


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Closing Portugal labour getting cheaper

Asian stars at CoD

Labour cost an average of 23.7 an hour in the euro zone and 28.4 in the European Union as a whole, but in Portugal the average hourly labour cost was just11.6, less than half the average, according to figures released by Eurostat Yesterday. The European Union (EU) statistics department said that Bulgaria had the lowest rate 3.7 an hour while Sweden (40.1) and Denmark (38.4), were at the top of the pay ladder.

For the first time, the ‘Oscars of Asia’ were hosted in Macau. The 8th Asian Film Awards took place at City of Dreams. Over a hundred stars and cinematic talents graced the glittering red carpet to attend the ceremony hosted at Dancing Water Theater. A-listers including Zhang Ziyi, Carina Lau, Paw Hee Ching, Odagiri Joe, Lee Kang Sheng, Tsai Ming-liang, Song Kang ho and Han Hyo-joo sauntered along the red carpet.

Historical meeting

said -- to which the pope replied: “Absolutely!” The meeting comes as a welcome rest-stop for Obama during a sixday European tour dominated by the crisis over Crimea, and the US leader will doubtless be hoping some of the pope’s stardom will rub off on him. During his visit to the Eternal City, Obama also met President Giorgio Napolitano and was scheduled to hold talks with Prime Minister Matteo Renzi -- the European Union’s youngest government leader, as well as going on a private guided tour of the Colosseum.

Obama meets Pope to discuss inequality Tangi Quemener and Jean-Louis de La Vaissiere

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S President Barack Obama held a historic first meeting with Pope Francis yesterday to discuss a shared agenda of fighting global inequality despite wide differences over issues like gay rights and contraception. Obama told Francis he was a “great admirer” at the start of their talks at the Vatican, which political observers said could be a bid to boost the US president’s support at home among Catholic voters. The closed-door talks between the first African-American US president and the first pope from Latin America lasted around 50 minutes -- slightly longer than papal meetings with other world leaders. The White House said Obama had been hoping to speak to Francis about their “shared commitment to fighting growing inequality” as well as the Middle East peace process, the environment and immigration reform. The two exchanged gifts afterwards, with the pope offering Obama a copy of his “apostolic exhortation” from last year in which he excoriated global capitalism and also reiterated his firm opposition to abortion. “I actually will probably read this in the Oval Office when I’m deeply frustrated. I’m sure it will give me strength and calm me down,” a smiling Obama said. The US leader gave the pope a chest with fruit and vegetable seeds used in the White House Garden. “If you have a chance to come to the White House, we can show you our garden as well,” the president

Pope ‘an inspiration’ In an interview with Italy’s Corriere della Sera daily ahead of the meeting, Obama said Francis “has been an inspiration to people around the world, including me”. But he added: “It doesn’t mean we agree on every issue”. Obama said earlier this month his calls for tax hikes on the rich and curbs on abuses by big banks had a strong moral grounding -- in an election-year swipe at Republicans that echoed the pope’s rallying cry for action to reduce the gap between rich and poor. But he has been deeply at odds with US Catholic leaders over his support for gay marriage and a controversial healthcare reform that requires for-profit corporations to provide insurance including for contraception. The pontiff also spoke out strongly against a proposed military intervention by the US in Syria last year, organising a mass prayer vigil at the Vatican. Vatican expert John Allen wrote in the Boston Globe that the president’s visit was taking place “with an eye towards the mid-term elections looming this fall”. AFP

New low on Spanish, China’s firms can Italian, Portuguese yields choose where to list

CITIC Securities profit rises

Spanish, Italian and Portuguese bond yields hit new historical lows yesterday, with speculation about further European Central Bank monetary policy easing prompting investors to seek higher returns in lower-rated assets. As the Federal Reserve in the United States signals an eventual turnaround in its ultra-loose monetary policy, ECB policymakers have left the door open to extraordinary measures if deflation risks in the euro zone pick up. The ECB’s policy bias has been a major driver behind this year’s rally in peripheral bonds, which have outperformed German Bunds and U.S. Treasuries, the world’s main benchmarks for borrowing costs. Yields have fallen to pre-crisis levels even in Greece, where the European sovereign debt crisis erupted in 2010 and culminated in Athens defaulting on its debt two years ago.

China’s securities regulator said yesterday that companies can issue an IPO on the Shanghai or Shenzhen stock exchange, as it tries to inject more flexibility into a system that has been prone to speculation and insider trading. The statement, released on the China Securities Regulatory Commission’s official microblog account, said that where a company lists will no longer be determined by the number of shares it plan to issue. Allowing firms to chose where they list will be good news for the Shenzhen exchange, which previously was largely restricted to handling small and mid-cap companies, though its Nasdaq-style ChiNext Composite Index of mostly high-tech start-ups has outperformed the SSEC index of top Shanghai listed shares over the past year.

CITIC Securities Co Ltd , China’s biggest brokerage, reported its fastest profit growth in three years in 2013, as revenue from newer lines of business more than offset a fall in traditional investment banking income. CITIC reported a 25 percent rise in net profit yesterday, a sharp turnaround from the previous year when profit fell by two thirds. The broker’s return to profit reflects its strength in new lending businesses, such as margin and stock-repo financing, a sign that China’s initiatives to encourage this area are succeeding. Net profit rose to 5.24 billion yuan (US$843.9 million) in line with its preliminary results released in January. The profit rise in 2013 marks the highest growth since 2010, when net profit rose nearly 26 percent.

Reuters

Reuters

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