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MOP 6.00 Closing editor: Alex Lee www.macaubusinessdaily.com

Year III

Number 528 Tuesday April 29, 2014

Publisher: Paulo A. Azevedo

Insurance Record

At a princely 10 billion Hong Kong dollars, the insurance taken out for the exhibition ‘Masterpieces of Paintings from French National Museums’ starting in June is the highest the Macau Art Museum has ever arranged.

The 12 masterpieces en route to Macau from French museums are all originals by renowned artists like Pablo Picasso, Auguste Renoir and Jean-Honore Fragonard, and valued at over 300 million euros. Page

Hands across the water

From Spain with Love Just five days after announcing plans to raise his Russian casino stake, Lawrence Ho’s main holding company Melco International Development entered into a legally binding memorandum of understanding with Spanish company Veremonte to build an integrated resort in Barcelona with 10,000 rooms.

Macau enterprises have more chances to secure personnel for job vacancies in Taiwan due to lower salary expectations on the island, recruitment executives here say. Speaking the same language as the city’s largest tourist source – mainland China – and the solid service industry background also make Taiwanese job candidates appealing to local bosses, they say

Page 4

Safe harbour

3

Saipan eyes Macau casino experts Page 2

Hotel prices jump 13.2 percent Page 6

Huishan borrows US$ 50 million Page 5

Brought to you by

Page 2

More than 60 worldwide specialists - from architects to urban planners to anthropologists – have been reflecting on Macau’s Inner Harbour future. The area should focus on locals not tourists and add leisure activities in the area like bicycle lanes, shops and restaurants, they say, increasing the links between the city and the river. The final report will be published on May 14 Page 7

Bonds jumbo-size spree Chinese Ministry of Finance announced US$4.48 billion in offshore yuan bonds this year in Hong Kong. This year’s massive pack is aimed at promoting the use of Chinese currency in Europe as well as Asia Page 10

HSI - Movers

Catch of the day

April 28

Name

Macau-based company Wing Yip Group has purchased its way into the Taiwanese snack and souvenir business with an investment of HK$25 million (US$3.2 million) to lease a space in Fisherman’s Wharf for catering and souvenir sales targeting mainland Chinese tourists Page 4

%Day

China Unicom Hong K

3.13

Swire Pacific Ltd

1.97

New World Develop

1.76

PetroChina Co Ltd

1.70

CLP Holdings Ltd

1.66

Belle International

-2.99

Hang Lung Propertie

-3.04

Sands China Ltd

-3.25

Galaxy Entertainme

-3.26

China Mengniu Dairy

-5.10

Source: Bloomberg

I SSN 2226-8294

Brought to you by

2014-4-29

2014-4-30

2014-5-1

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April 29, 2014

Macau

Local bosses zero in on Taiwan graduates Recruitment executives say local bosses may have a higher chance to employ staff in Taiwan than in Hong Kong or the mainland due to lower salaries Tony Lai

tony.lai@macaubusinessdaily.com

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acau enterprises might enjoy better opportunities to secure personnel for job vacancies promoted in their recent recruitment fairs in Taiwan due to lower salary expectations on the island, recruitment executives here say. Speaking the same language as the city’s largest tourist source – mainland China – and the solid service industry background also make Taiwanese job candidates appealing to local bosses, they say. The Macau Small and Medium Enterprises Association, chaired by banker Stanley Au Chong Kit, held a recruitment seminar in Taiwan last weekend with the objective of recruiting Taiwan university graduates – both Macau students studying there and local students. The Association of Macau Former University Students in Taiwan will also host an employment fair in Taiwan on May 4 providing over 2,000 jobs in 27 Macau and Taiwan enterprises, with the backing of statutory body Taipei Economic and Cultural Office in Macau. The former university student association said in a press statement that it was the second time it had hosted such a fair in Taiwan since 2012 but it has this time expanded the scope of the target group from Macau students studying there to local Taiwan students as well. Jennifer Liao, managing director of human resources company EvolutionHR Consultancy Ltd, said: “The companies here don’t just pick up [job] candidates from Taiwan but from other places in the region, too, like mainland China and Hong Kong.” The local companies, namely big firms here like gaming operators, have already held similar fairs in different places over the past years, spurred by the low unemployment situation here, said Ms Liao. Latest official figures show the unemployment rate here plunged to its record lowest in

the territory at 1.7 percent in the December-February period.

Mandarin

…it is easier for [Macau] companies to recruit people in Taiwan - if the same salary package is offered in [the markets of] Taiwan, Hong Kong and Malaysia – as the average salary in Taiwan is not high Jennifer Liao, managing director of human resources company EvolutionHR Consultancy Ltd

“But it can be said it’s easier for [Macau] companies to recruit people in Taiwan - if the same salary package is offered in [the markets of] Taiwan, Hong Kong and Malaysia – as the average salary in Taiwan is not high,” the EvolutionHR managing director said. Official figures show that average monthly earnings in the service industry like retail were about NT$37,716 (9,955.8 patacas) in Taiwan at the end of last year, excluding bonuses, while the average earnings of similar positions in Macau were about 11,730 patacas at year-end. Apart from possibly better opportunities to employ new blood in Taiwan, job candidates there have other advantages, according to Jiji Tu, managing director of recruitment firm MSS Recruitment Ltd. “The service industry is one of the biggest industries in Taiwan whose quality is quite good,” said Ms Tu. “Taiwanese also speak Mandarin [as

their native tongue], the language spoken by mainland Chinese,” the city’s largest tourist source, she added. Macau welcomed 7.69 million tourists in the first three months, up 8.7 percent from the previous year, with over 67 percent hailing from mainland China. Ms Tu added: “The companies participating in the Taiwan fairs can also have better chances to pick up some of the best Macau students studying there in the first place.” Both Ms Tu and Ms Liao believe that local enterprises will seek out other places to recruit from. With about 40,000 new workers required to service the new mega resorts in Cotai slated to open next year, a labour crunch is literally just around the corner. Figures from the Human Resources Office last week reveal that there were 145,692 non-resident workers in Macau as at last month, rising 47.7 percent from two years earlier. Of these, 1,300 were Taiwanese, mostly working in the hotel and gaming sectors, and more than doubling from two years ago.

Saipan sounds out Macau casino personnel

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he island of Saipan in the Northern Mariana Islands is actively seeking a casino investigator and a gaming consultant from Macau for a casino resort development there. The Saipan Tribune quotes island governor Eloy Inos as saying that because their casino project targets the Chinese market the experts would be hired from Macau for the Lottery Commission. To date, two investor groups have applied to open and manage a casino in Saipan. These are the Marianas Stars Entertainment Inc, 25 percent of which is “owned by the new owner of Tinian

Dynasty Hotel & Casino, Hong Kong-based Mega Stars Overseas Ltd,” the newspaper says. Mariana Stars Entertainment is already incorporated in the Northern Mariana Islands. The other company - Best Sunshine International Ltd - is not, however, and is a Hong Kong-based whollyowned subsidiary of First Natural Foods Holdings Ltd, incorporated in Bermuda.

US$2 billion Both companies have applied for the exclusive licence to develop the casino resort, and have until May 5 to deposit US$30 million

each “in an escrow to be further considered for a grant of the exclusive casino licence,” the report says. The Saipan Tribune describes Marianas Stars Entertainment’s plans to include a 2,000-room hotel. Best Sunshine International, on the other hand, has not applied for a licence for business in the Northern Mariana Islands, and plans to change its name to Imperial Pacific Holdings Ltd “to provide a better identification for the company as it further diversifies its business, including adding eco-tourism and gaming to its portfolio,” the Saipan Tribune reported Regardless of whom the exclusive casino licence is granted to, the investor group will have to put in US$2 billion in initial investment and build a hotel-resort offering at least 2,000 rooms.


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April 29, 2014

Macau

French masterpieces insured for HK$10bln euros Insurance for the exhibition ‘Masterpieces of Paintings from French National Museums’ is the highest the Macau Art Museum has taken out Sara Farr

sarafarr@macaubusinessdaily.com

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acau will host paintings by renowned artists like Pablo Picasso, Auguste Renoir and Jean-Honore Fragonard at the Macau Art Museum in June. The 12 masterpieces travelling to Macau directly from French museums are all originals and valued at over 300 million euros. This translates into an insurance premium nudging 10 billion Hong Kong dollars. “The insurance [for this exhibit] is one of the highest coverage amongst our previous exhibitions,” a spokesperson for the Macau Art Museum told Business Daily, adding that because the issue is being taken care of by the French museum group, “we cannot provide detailed information right now.” Beijing is also hosting a French exhibition to mark the 50th anniversary of the

François I by Jean Clouet. Also part of the loan is Picasso’s ‘Painter and Model in the Studio’. All of which will be returned to their respective museums in France once the exhibition here is over. Over the past 15 years, the Macau Art Museum has hosted over 300 exhibitions, with works on loan from the Palace Museum, Louvre Museum, Pompidou Centre, and the V&A Museum. Some of the past works on display include masterpieces by Auguste Rodin, Pablo Picasso, Joan Miro, Pierre-Auguste Renoir, Richard Guino, Fernando Botero, Marc Riboud, Diane Arbus, Robert Doisneau, Ralph Gibson, Andy Warhol, Yue Minjun and Zhang Huan. In Hong Kong, Le French May kicks off on Friday and will feature up to 30 exhibits and 56 theatrical shows, as well as screenings of French films.

establishment of diplomatic ties between China and France. And according to information the value of the exhibit there exceeds 3.3 billion patacas. Given that all the works are originals, the Macau Art Museum pays “special attention” to security issues, designing specific security solutions for each exhibition venue. “[We] tend to put emphasis on the installation and hanging system, monitoring system and the deployment of security guards,” the spokesperson added. The works are on loan from Paris’s Pompidou Centre, Musée d’Orsay and Louvre as well as the Versailles palace. They will be on display from June 27 to September 7. The 12 on display will include Renoir’s ‘Le Balancoire’ (The Swing), Frangonard’s ‘Le Verrou’ (The Lock) and a portrait of

Mainland power purchase surge

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acau’s increased its purchase of power from mainland China to 92 percent in 2013 from just 7 percent in 2004. Local electricity company CEM said in a statement yesterday that while the mainland can supply Macau with “sufficient and stable power . . . a higher degree of dependence also means higher risk.” A group of legislators visited CEM’s power plant in Coloane yesterday and met with the company’s CEO and

executive directors. During the visit, CEM generation department senior manager Ip Kam Veng introduced the principles of power supply mix in Macau and the status of local power generation. He said that currently Macau “has adopted a power sources diversification policy” with three main sources of power, including imports from mainland China, fuel oil generation at its Coloane-A power plant and natural gas at its Coloane-B power plant.


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April 29, 2014

Macau

Lawrence Ho sizes up Spain Melco International has entered into an MOU with Veremonte to manage the operation of at least one of the casinos in the BCN Dream project

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ust five days after announcing plans to raise his Russian casino stake, Macau casino developer Lawrence Ho Yau Lung’s main holding company Melco International Development Ltd entered into a legally binding Memorandum of Understanding with Spanish company Veremonte Espana S.L. Veremonte is currently developing BCN Dream project, part of BCN World in Vilaseca and Salou, in Barcelona. Under the agreement, Melco International agrees to manage the operation of “one or more of the casino(s) to be developed as part of the ‘BCN Dream’ gaming, mixed tourism and integrated resort project,” the company’s filing reads. The term of the MUO is for 10 years, which can be automatically extended for an additional 10 years with a base fee of 3 percent of gross gaming revenue per year. According to the filing, the BCN Dream project will include up to 10,000 hotel rooms, 5,000 residential units and an exhibition and congress centre, theatre and shopping malls. “It’s intended that the BCN World project will create a world-class entertainment destination in Europe offering the world’s best hospitality brands combined with entertainment, sports, shopping and dining venues,” the filing reads.

10,000

Rooms in Barcelona Project Las Vegas gaming mogul Sheldon Adelson had previously expressed his interest in developing a gaming project there. However, the Spanish government announced that Las Vegas Sands Corp’s existing plan for Alcorcón – a largely commercial district to the southwest of the Spanish capital Madrid – included requests that were “irreconcilable” with European Union law. EU legislation and regulation places an emphasis on creating equal conditions for all investors across the various EU markets. The company had said in an announcement last September that a decision to proceed with Spain depended on “guarantees that there will be an adequate legal framework, which will not change with time”. Soraya Sáenz de Santamaría, Spain’s deputy prime minister, told reporters last December that LVS had been seeking a compensation deal in the event of any losses related to future changes in Spanish law.

Lawrence Ho

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April 29, 2014

Macau Gaming associations to hit streets on Labour Day Macau’s gaming associations are set to take to the streets on May 1 to protest against smoking in casinos, legislation banning non-residents becoming croupiers and supervisors, and growth in the number of casino tables, whilst advocating a uniform allowance for all casino workers and better living conditions for residents. The Gaming Workers Association, Youth Dynamics and the Forefront of Macau Gaming raised 11 appeals for the Labour Day demonstration, TDM told Chan Chi Kin, President of the Gaming Workers Association. Organisers are expecting more than 1,000 people to protest and added that they had reached an agreement with the police on the protest route in the hope of avoiding disturbances.

Taiwan lure to hook mainlanders for Fisherman’s Wharf A local company intends to offer Taiwan snacks and souvenirs targeting mainland Chinese tourists at Fisherman’s Wharf Stephanie Lai

sw.lai@macaubusinessdaily.com

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Macau-based company specializing in the environmental business, Wing Yip Group has purchased its way into the Taiwanese snack and souvenir business with an investment of about HK$25 million (US$3.2 million), of which a majority has been allocated to leasing space at Fisherman’s Wharf for catering and souvenir sales targeting mainland Chinese tourists, Business Daily has learnt. Starting on the Labour Day holiday on May 1, “Taiwan Food and Culture City”, an 8,600 square foot space for Taiwanese snacks and retail souvenirs, will serve customers from 8:30am to 10:00pm on a daily basis, the group’s representative told Business Daily on the sidelines of the opening ceremony for the project yesterday. The Taiwanese food and souvenir spot is located adjacent to a chain of local souvenir and cosmetics shops opposite the convention centre in Fisherman’s Wharf, which is currently undergoing a major overhaul. The delicatessen and souvenir centre of “Taiwan Food and Culture City”, however, is just phase 1 of the HK$25 million investment project by the Wing Yip Group, who also anticipate a second phase – a Taiwanese cultural centre – being

Taiwan].” Mr Chang added that his group prefers to establish the centre in central or southern Taiwan, places where the locals are not as familiar with as Taipei visitors travelling to Macau.

Travel barrier

established in the refurbished Fishermen’s Wharf.

HK$25 million investment “We expect that more than 80 percent of the HK$25 million investment will be spent on phase 1,” chief executive officer of Wing Yip Group Weny Chang Chin Wen told Business Daily. “That covers the hardware and products for sale here, which we got from the agricultural and fishery associations from the Taiwanese counties; we’ll change the imports every two to three months.”

Wing Yip Group has already signed a 5-year lease for its catering and souvenir space with Fisherman’s Wharf but its management declined to reveal the cost of the lease. Wing Yip Group - which is principally engaged in the environmental business, such as energy-saving lights and air and water purification services - has been established in Macau for five years. The catering space in “Taiwan Food and Culture City” offers delicatessen counters selling snack foods costing around 20 to 30 patacas but no full course meals for visitors.

“The second phase will be located at the pier now being renovated [by Macau Legend Development Ltd], which we are planning as a Taiwan information and cultural centre,” Taiwanese businessman Weny Chang added. “But for the cost of the lease, it has yet to be decided by the company, and we’ll also see how much official support we get from both the Taiwanese and local government for carrying out this project Similarly, we would also like to establish a Macau-themed culture display centre in Chiayi county [in southwestern

“Of the nearly 30 million visitors that travel to Macau, about 80 percent are from mainland China,” said Weny Chang. “And 70 percent of these mainland tourists cannot enter Taiwan and travel freely, so we’d like to make up for this gap through this project [Taiwan Food and Culture City].” Since December 1 last year, Taiwan authorities have relaxed the quota for mainland Chinese visitors traveling on individual travel schemes, which allows a daily maximum of 3,000 individual travelers, up from the 2,000 travellers previously. Currently Taiwan only accepts mainland individual travellers from 26 cities in China, including the major capitals such as Beijing, Shanghai, Tianjin, Chengdu, etc. Taiwan authorities have also imposed a limit on mainland visitors travelling to Taiwan in tour groups, for which the daily maximum is 5,000 visitors – a regulation that entered into effect in April last year. The previous limit was 4,000 visitors a day.

Dairy giant Huishan refreshes finances

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ainland-based milk producer China Huishan Dairy Holdings Company Ltd signed a loan agreement yesterday with Bank of China Ltd’s Macau Branch, in which the company expects to borrow US$50 million (HK$388 million or 399 million patacas), it informed the Hong Kong Stock Exchange yesterday. According to the filing, China Huishan Dairy has signed an unsecured and uncommitted term

loan facility letter with the bank, pursuant to which the company expects to borrow US$50 million for a tenure of 3 years. The loan is arranged for the “purpose of refinancing the bank loans with relatively higher interest rates in China”, the dairy company wrote in the filing. Under the provisions of the letter, Bank of China Ltd’s Macau Branch requires that if the company’s chairman and executive director

Yang Kai and the executive director Ge Kun together cease to be the ultimate single largest shareholder of the company, the bank can have the mandatory prepayment of the loan. As at yesterday, Mr Yang and Ms Ge together control about 51.26 percent of the shares in China Huishan Dairy, thus the largest ultimate shareholder of the company. The Shenyang City-based China Huishan Dairy, established

in 2009 as a raw milk producer, is also engaged in selling liquid milk and milk powder products, grain processing and trading. The company was listed on the Hong Kong Stock Exchange on September 27 last year. Hong Kong billionaire Cheng Yu Tung, whose family controls Chow Tai Fook Jewellery Group Ltd, is another major shareholder, with 8.98 percent of the shares of the dairy company.


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April 29, 2014

Macau Brands

Trends

Glass slippers and more

Robust demand driving hotel prices Figures compiled by the Macau Hotel Association say the average room rate in this year’s first quarter rose by 13.2 percent to over 1,528 patacas Tony Lai

Michael Kors see‑through designs give new life to the trend Raquel Dias newsdesk@macaubusinessdaily.com

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emember when plastic and vinyl items were considered tacky? When Cinderella-like shoes were only seen on ladies who danced around poles? Yes, it has been a while. One of the trends to hit big last year was see-through items. Chanel and Prada designed to-die for shoes in plastic, Dolce & Gabbana went all out with the see-through raincoat and Furla introduced the Candy Bag, Fendi played around with it, too, in their amazing Baguette line. It must be a childhood dream but the truth is we can’t seem to get enough of the magic feeling of wearing something you can see through. You can blame the 1960’s and the Mood years, not that we don’t love the trend - we do but self respect stops us from fully engaging with the craze. For the brave of heart, however, there are new reasons to be happy. This time, the pieces even look grown-up and useful. Michael Kors has launched three items in his new summer line, perfect for those very hot summer days. If you think it’s hard to look stylish in humid, hot weather look no further. Although we have to admit the Converse-inspired sneakers look beautiful, the Tote and purse look like the perfect season buy.

tony.lai@macaubusinessdaily.com

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trong demand, tightening supply and rising operating costs have resulted in the territory’s hotel rooms charging one-tenth more so far this year, says the industry. The latest figures released by the Macau Hotel Association show the average room rate of 3-star to 5-star hotels last month reached 1,528.3 patacas (US$191), increasing some 13.2 percent from the previous year. In the first three months, the average hotel room rate here shot up 11.9 percent year-on-year to 1,638.5 patacas, the Hotel Association said, whilst rooms remained 90.9 percent occupied in the same period, up from the occupancy rate of 85.6 percent a year earlier. Chan Chi Kit, president of another hotel group - Macau Hoteliers and Innkeepers Association - also acknowledges its members have raised their room rates this year. The Macau Hotel Association compiled the industry data from 41 hotels ranging from 3-star to 5-star grade while Mr Chan’s Association focuses on lower-grade accommodation like

There are also no new big hotel resorts opening this year, meaning that supply will remain unchanged to cater to the growing demand Chan Chi Kit, president of Macau Hoteliers and Innkeepers Association

budget hotels. “The consumer price has risen rapidly in the past year, while the hotels have also adjusted their price tags with demand driven by robust tourist growth,” Mr Chan explained, citing a 5.69 percent increase in annualised inflation for the past 12 months ended March 31. He continued: “There are also no new big hotel resorts opening this year, meaning that supply will remain unchanged to cater to the growing demand. “So, the hotels adjust the room rate based on market conditions. For instance, many hotels cut their price last year after Sands Cotai Central opened 2,000 more rooms.”

Solid growth The city’s hotel supply increased after Sheraton Macau opened a new tower in January last year, bringing an additional 2,067 rooms. But supply will stay put until next year when several new Cotai resorts start to become operational, bringing thousands of new hotel rooms. As at February, there were 27,900

rooms in the city’s 99 hotels and guesthouses, government figures show, about 200 rooms fewer than the same period a year earlier. The Macau Hotel Association’s figures added that the average room rate of 5-star hotels in the first quarter of this year hit 1,919.1 patacas, surging nearly 11 percent from a year earlier, while the occupancy rate rose 5 percentage points to 91.4 percent in the same period. The average room rate for 4-star hotels surged the most, at 16 percent, in the January-March period to 1,107 patacas, while a slower 11.9-percent rise for 3-star hotels to 1,291.1 patacas was posted. Mr Chan of the Hoteliers and Innkeepers Association said he expects the hotel sector this year will remain robust with solid growth in tourist figures, benefiting from improved land transportation in mainland China. Macau received 7.69 million tourists in the first three months, up 8.7 percent from the previous year, while the number of mainland tourists expanded more quickly at 17.2 percent to 5.17 million.

Macau to Ink Tax Info Exchange Pact with UK

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acau is preparing to sign a Tax Information Exchange Agreement (TIEA) with the United Kingdom of Great Britain and Northern Ireland. According to the Official Gazette published yesterday, Chief Executive Fernado Chui Sai On granted authority to Secretary for Economy and Finance Francis Tam Pak Yuen to sign a TIEA with the UK, although no signing date has yet been confirmed. The number of jurisdictions that have a TIEA or Double Taxation Conventions (DTC) with Macau will increase to 18 once the UK has signed on the dotted line. Macau and Japan signed a Tax Information Exchange Agreement (TIEA) in March.


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April 29, 2014

Macau

Reflections on the Inner Harbour Some 60 worldwide specialists - from architects to urban planners to anthropologists – have been reflecting on Macau’s Inner Harbour future. The area should focus on locals not tourists and add leisure activities like bicycle lanes, shops and restaurants, they say, increasing the links between the city and the river. The final report will be published on May 14. Alex Lee

Alex.lee@macaubusinessdaily.com

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n “excellence area” between the city and the river, a place made for Macau’s residents with shops, restaurants, bicycle lanes, sidewalks and leisure areas that preserve the port activity. This is one of the main proposals for the revitalisation of the Inner Harbour suggested by more than 60 specialists from around the world. Architects, urban planners, anthropologists and other professionals are brainstorming the future of one of the most iconic areas and former main commercial districts in Macau, an initiative launched by the Institute of European Studies of Macau, the University of Macau, the Cultural Institute, the International Institute for Asian Studies (IIAS) from Leiden University in Holland and Macau-based architect Nuno Soares.

territory. “The Inner Harbour today is a barrier in front of the river”, he added.

Linking points

Aside from the port, the Inner Harbour should be a local gathering point for residents to enjoy the river Nuno Soares, Architect

Talking to Business Daily, Mr Soares said that the proposals, comments and information coming from the 60 specialists were integrated, analysed and filtered by the promoters of the initiative. This will result in a final report with policy recommendations that will be published in Macau on May 14. Background information will be made available with the report. Nuno Soares emphasised that the report is not an architectural or urban plan but more a reflection on the Inner Harbour’s future, an area “that was forgotten by the authorities and today lacks any strategic relevance” to the

The promoters think it’s important to increase the “linking points” between the population and the river in the area but also vital to retain its primary activity, the port industry. The choice is not about a transportation hub or tourism, it’s about adding new options and possibilities to the port and fishing sectors, says Soares. Restaurants, shops, bicycle lanes and sidewalks are some of the options recommended by the report, slated for publication mid-May. “Aside from the port, the Inner Harbour should be a local gathering point for residents to enjoy the river”, said Soares. Tourists are not the objective because they already have plenty of areas catering to them , like Cotai, for example”, he told Business Daily. The final report will also propose the rehabilitation of the Inner Harbour’s buildings and streets in order to keep the local culture and fishing communities intact, said José Sales Marques, president of the Institute of European Studies of Macau. On the day of public presentation of the final report, promoters will organise a roundtable to discuss both the report and to listen to feedback from Macau’s residents and institutions. One of the

foreign promoters is the International Institute for Asian Studies (IIAS) from Leiden University in Holland. It’s a research and exchange platform focused on urbanisation, heritage

and globalisation that promotes multidisciplinary and comparative study of Asia, and actively promotes national and international cooperation.


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April 29, 2014

Macau Civil servants wages bumped 5.71pct A dispatch published in the Official Gazette yesterday confirmed that the salaries of civil servants will increase by 5.71 percent, effective May 1. The value of each point in the pay index of civil servants increases from 70 patacas to 74 patacas. This means that 100 points equates to 7,400 patacas. Pensions are also being adjusted according to the proportional rise in salaries.

Unemployment rate remains unchanged in 1Q

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acau’s unemployment rate remained at 1.7 percent between the months of January and March this year, as did the underemployment rate at 0.4 percent compared with the last quarter of 2013. Monthly wages also increased by 700 patacas to an average of 13,000 patacas

in the first three months of the year over that of the previous quarter. Salaries were higher in the gaming sector averaging around 17,000 patacas a month, followed by the construction sector with an average of 12,000 patacas. According to official figures released yesterday by the

Statistic and Census Service, the labour participation rate stood at 73.3 percent with a total labour force of 384,200. Some 1,900 more people have been employed so far this quarter over the period from December 2013 to February 2014, while 6,400 people were unemployed in Macau.

First-job seekers accounted for 7.6 percent of the total unemployed, slightly down by 2.8 percentage points. Compared with the fourth quarter of last year the total labour force increased by 7,000, with total employment up by 7,500. The majority – some

5,100 - were aged between 25 and 34 years of age. Employment in the construction sector increased by 3,400 while that of the retail industry increased by 2,400. In addition, the median monthly wage of local residents stood at 15,000 patacas.

Stay in the finest hotels in Macau and read Business Daily news where it matters

Teachers’ subsidies increased

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ubsidies for private school teachers’ professional development have increased 9.11% to 9.37% - from 210 patacas to 450 patacas - based on various education qualifications and whether teachers received training diplomas in education. The raise will take effect on September 1. According to a dispatch published in the official gazette yesterday by

Secretary for Social Affairs and Culture Cheong U, teachers without higher diploma and training diploma in education are entitled to 2,480 patacas subsidies per month; teachers holding a bachelor’s degree and who have received training diplomas in education or the equivalent are entitled to a subsidy of 5,250 patacas subsidies per month.


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April 29, 2014

Greater China

Protesters force Taiwan nuke power station moratorium The government won’t be seeking additional funding to complete the project

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uling party Kuomintang agreed with the opposition on suspending construction for a nuclear power plant that attracted tens of thousands in a demonstration last weekend. Premier Jiang Yi-huah said the government won’t be seeking additional funding to complete the project, located 40 kilometres East of Taipei, as a gesture of goodwill to

the opposition Democratic Progressive Party, during a press briefing carried on cable television networks. Pressure was mounting on President Ma Yingjeou’s administration to halt the NT$283.8 billion (US$9.4 billion) project, after about 28,500 people rallied against it in front of the president’s office on Sunday, according to police.

Opposition DPP Chairman Su Tseng-chang last week called for a suspension of the project in a televised meeting with Ma. A former chairman of Su’s party has been on a hunger strike since April 22. “We’re putting the No. 4 nuclear power plant on hold in the spirit of leaving the next generation an option,” President Ma said on a post

Riot police use water cannon to evict anti-nuclear protesters from a busy street in Taipei on Sunday

on his Facebook page on Sunday, after a meeting with cabinet members including the premier, ministers of economy and atomic energy, as well as Taipei and Taichung city mayors. “When we need it in the future, it can offer an additional choice.”

Credit review Safety inspections on the plant’s first unit will be exempt from the halt, Jiang said, though the start of operations will need to follow a referendum vote. The plant is being built by Taiwan Power Co., a staterun utility. Standard & Poor’s is reviewing the company’s credit rating in light of the controversy, analyst Daniel Hsiao, said by phone yesterday. The firm currently has a twAAA rating on the utility. Taipower, as the company is known, invited bids last week for NT$12 billion of bonds to be issued by late May. Planning for Taiwan’s Longmen Nuclear Power Plant, the island’s fourth, began in 1980. Its two units

Alibaba buys part of Youku Chinese private equity firm Yunfeng Capital is raising up to US$1 billion in its second fund

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libaba Group Holding Ltd and a private equity firm co-founded by its executive chairman Jack Ma have agreed to buy a US$1.22 billion stake in Youku Tudou Inc, as China’s ecommerce giant intensifies its focus on online video business. The deal underscores the growing rivalry beetween China’s two Internet giants - Alibaba and Tencent Holdings Ltd - as they attack each other turf. Alibaba’s Youku Tudou investment is the third major media acquisition by the company and its founder in less than two months and brings Alibaba’s deal making spree to nearly US$4.0 billion in the past six months. “Alibaba and Tencent are clearly not wanting to run the risk of the other company buying something useful,” said Duncan Clark, chairman of Beijing-based tech advisory BDA. Alibaba and Yunfeng Capital are paying US$30.50 per American Depositary Receipt of Youku, or a 26.3 percent premium over the last traded price, Youku Tudou said in a statement yesterday. The two companies will jointly own a 18.5 percent stake in Youku, whose online video services resembles Google Inc’s YouTube. Alibaba CEO Jonathan Lu will join Tudou’s board. “Alibaba’s investment will strengthen Youku Tudou as China’s

largest online video platform and further differentiate our services and user experience,” Victor Koo, chairman and chief executive officer of Youku Tudou said in a statement. Alibaba is preparing for a U.S. initial public offering, which could raise more than US$15 billion, Reuters previoulsy reported. Chinese private equity firm Yunfeng Capital was co-founded

KEY POINTS Alibaba, Yunfeng to pay 26.3 pct premium to last traded price The two will own 18.5 pct stake in Youku

have a planned electricitygeneration capacity of 2,700 megawatts, which would account for about 6 percent of Taiwan’s installed capacity once completed. Atomic reactors made up 13 percent of the island’s electricity capacity in March, compared with 27 percent from coal-fired generators and 37 percent from gasfuelled units, according to Taipower’s website.

Tectonically active Taiwan needs a continued adequate energy supply at reasonable cost to avoid sinking into a period of economic decline, the America Chamber of Commerce in Taipei said last year in its annual position paper. Taipower missed a deadline to start commercial operations at the Longmen plant by the end of 2012 after at least five delays since the 1980s. Construction for the project’s unit one is completed, and unit two is more than 90 percent finished, Taiwan’s economy ministry said on its website this month. Like Japan, Taiwan lies on the Pacific Ring of Fire, an area bordering the Pacific Ocean that is tectonically active. In 2011, water from a tsunami flooded into the Fukushima Dai-Ichi station after a magnitude-9 earthquake off Japan’s northeast coast and disrupted cooling mechanisms, causing radioactive material to be released. Bloomberg News

by Alibaba’s Ma and is raising up to US$1 billion in its second fund, Reuters previously reported. “If Alibaba can try to find traffic in the media world that’s driving all the eyeballs and make a consumer play that’s desirable,” Clark added. “For Alibaba anything to boost their consumer facing non e-commerce business is useful, though I don’t know whether they can make money or not,” said Clark. “As with YouTube, it never made Google much money but it did help them boost traffic,” he added. Last month, Tencent and online retailer JD.com agreed to combine their ecommerce operations to take on dominant rival Alibaba, a move that also took an aim at Alibaba’s weakness in mobile busines. That deal gave JD.com a headline slot on Tencent’s WeChat app that dominates China’s smartphones, an entry into eBay-style consumer-toconsumer shopping and a backer with the muscle to help it make the most of a logistics infrastructure that Alibaba lacks. Earlier this month, Ma and cofounder Simon Xie agreed to take a 20 percent stake in online media company Wasu Media Holding Co., a cable and TV company which also manufactures Internet TV set-top boxes, for 6.54 billion yuan. The investment was made via Hangzhou Yunxi Investment Partnership Enterprise using a loan from Alibaba. ChinaVision and Wasu Media each said they would seek to explore future opportunities with Alibaba, in online entertainment and integrated television respectively. Reuters


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Greater China Steelmakers profitability to rise China’s steel sector is expected to see improving profit margins in the second quarter from the first quarter, but shrinking credit and rising environmental costs would limit profit growth, the China Iron & Steel Association (CISA) said yesterday. CISA also called on the government to take strong action to punish those responsible for building new capacity and to implement tougher environmental controls, Zhang Changfu, CISA’s vice chairman, told a news conference in Beijing.

WH Group IPO will get bottom price China’s WH Group Ltd, the world’s biggest pork company, will likely price its Hong Kong initial public offering near the bottom of expectations, IFR reported yesterday, citing guidance sent to prospective investors in the deal. Hit by weak investor demand, WH slashed the size of the IPO last week by two-thirds to up to US$1.9 billion. IFR, a Thomson Reuters publication, said the revised deal had a “well oversubscribed” book and will likely be priced at the bottom of the HK$8.00-$11.25 per share range.

Massive offshore yuan debt to be traded in Hong Kong China is accelerating the pace to expand the footprint of its currency and open up more channels for cross-border fund flows

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hina’s Ministry of Finance will sell the biggest batch of yuan-denominated bonds it has offered in Hong Kong in a bid to boost the appetite among investors. The MOF said yesterday it will issue 28 billion yuan (US$4.48 billion) in offshore yuan bonds this year, the highest level since the issuer first tapped the dim sum market in 2009. In 2013, the MOF issued only 23 billion yuan on bonds in Hong Kong. This year’s jumbo-sized issuance comes as the former British colony’s offshore market has been hit by sharp currency volatility and as authorities have moved to promote use of the Chinese currency in Europe and Asia. Even before the MOF’s announcement of its plan, the overall dim sum market has been buoyant. In the first three months of 2014, about

KEY POINTS

174 wasteful spending cases unveiled A total of 171 cases were uncovered by disciplinary watchdogs at Xinjiang Production and Construction Corps and 30 provincial-level regions, including Beijing, Tianjin and Hebei, the CPC’s Central Commission for Discipline Inspection (CCDI) said in a weekly report. The other three cases were disclosed at the Ministry of Education and at China Telecom, a major player in the country’s telecom industry. The violations include use of public funds for feasts and private tours, official car use infringement, disobeying workplace rules and holding extravagant wedding ceremonies or funerals.

Iron ore inventory rises to record Stockpiles surged to the highest ever amid demand to use the steel-making ingredient as collateral to get credit and as mills ramped up production in a peak season. Inventories at ports rose 1.4 percent to 109.55 million metric tons in the week ended April 25 from a week earlier, according to data tracked by Shanghai Steelhome Information Technology Co. Stockpiles climbed 25 percent this year. Spot ore prices in China declined 17 percent this year as inventory climbed amid slowing economic growth in the world’s biggest producer of steel.

Warhol and Picasso lead Shanghai auction Works by Andy Warhol and Pablo Picasso led Christie’s Asian and Western 20th century and contemporary art sale that raised 125 million yuan (US$20 million) in Shanghai. The 61-lot sale on April 26 earned less than the US$25 million achieved at Christie’s inaugural mainland sale in September, where jadeite, wine, watches and jewellery were also included in the 39-lot auction. As Chinese collectors begin to venture beyond traditional Chinese paintings and antiques to collect Western works, auction houses have offered mainly prominent artists such as Picasso, Warhol and Marc Chagall.

Planned sale comes amid renewed FX volatility, more yuan hubs March quarter set a record for offshore yuan bond sales

The logo of the Hong Kong Stock Exchange inside in Exchange Square

When loan guarantees become Concern about the huge growth in Chinese corporate debt since the

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network of loan guarantees set up to improve companies’ access to credit in one of China’s richest districts is creating new risks of default as some debts sour, another sign of how private firms are bearing the brunt of an economic slowdown. Chinese media have reported on a credit crunch developing among steel and textile manufacturers in Hangzhou city, 175 km south of Shanghai in Zhejiang province, as the failure of some to repay loans pushes their burden onto healthier firms. Hangzhou is part of the Yangtze River Delta (YRD), an engine of growth during China’s boom years but now the source of a third of nonperforming loans in the country. The government ranks the city’s Xiaoshan district as China’s seventh wealthiest. One of the main drivers of its prosperity -small, private firms- is now a handicap. “The textile industry is not a big borrower in the banking sector. The problems that we see arise when mutual guarantees go bad and textile firms are dragged in,” said Robert Yang, assistant to the president at the China National Textile & Apparel Council. Concern about the huge growth in Chinese corporate debt since the global financial crisis has intensified this year as the government allows market forces to play a bigger role in

deciding winners and losers. Private firms often struggle to obtain credit from state-owned banks, which prefer to lend to stateowned firms due to their government backing. That trend has worsened as economic growth slows, credit conditions tighten, and authorities work to reduce excessive investment and overcapacity in some sectors. Steel and textile manufacturers in Xiaoshan, like other private firms around the YRD, sought to overcome

such obstacles by providing loan guarantees for each other to gain bank credit. Now defaults by a few companies threaten a chain reaction that could ensnare even profitable firms, as the guarantees have left them on the hook for debts of their bankrupt competitors. “Currently, Zhejiang’s economic structural adjustment and (industrial) upgrading is at a critical stage. The risk from guarantee chains is still rather large,” the Zhejiang branch

KEY POINTS Private firms use loan guarantees to gain access to credit Guarantee chains can transmit risk through local economy Isolated defaults could spark chain reaction Local government urges banks not to withdraw loans

Silk Town in Hangzhou. Traditionally the city has been


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April 29, 2014

Greater China 125 billion yuan in bonds -a record for any quarter- were issued. In the last quarter of 2013, issuance was 53 billion yuan. China is accelerating the pace to expand the footprint of its currency and open up more channels for crossborder fund flows, in order to lift the global status of the yuan and make it match China’s position as the world’s second-largest economy. The country’s securities market

regulator said this month it would allow cross-border stock investment between Shanghai and Hong Kong, another step towards opening China’s capital account.

First batch in May The first batch of the MOF’s 2014 bonds, worth 16 billion yuan, will be sold on May 21 to institutional investors, foreign central banks and regional monetary authorities. The rest will be offered to institutional investors and Hong Kong residents in the second half of the year. Demand from institutional investors is expected to be robust as there is a lack of high-quality instruments in the offshore yuan market. Foreign central banks are also active buyers of high-quality dim sum bonds as they try to diversify their reserve portfolios. Last year, when the MOF sold dim sum bonds, about eight central banks participated, including ones from Asia, South America and Africa. The MOF is the biggest and most prolific player in the primary market of dim sum bonds and its bond sales are a much awaited event among investors as it sets the tone for other issuers. This year’s sales will make its issuance since 2009 top 108 billion yuan. Despite the recent weakness of the Chinese currency, yuan payments rose in value by 29 percent in March from a month earlier and climbed one place to seventh position as a global payments currency with a market share of 1.62 percent, from 1.42 percent in February, global transaction services organisation SWIFT said on Monday. China’s renminbi has weakened more than 3.5 percent this year, wiping out its gains last year, and analysts expect more near-term weakness for the currency. Reuters

global financial crisis has intensified

Mutual guarantees Unlisted polyester yarn producer Hangzhou Jianjie Chemical Fiber Co Ltd was recently liquidated following the default of another textile firm whose debts Jianjie had guaranteed, China Business News, a national newspaper, reported. Jianjie’s collapse in turn affected five other textile firms. In all, 3 billion

one of the most important textile centres in China

Chinese domestic companies have increasingly invested in international intellectual property through mergers and acquisitions

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hinese high-tech companies are on the counterattack regarding intellectual property rights (IPR), which used to be very much a soft spot. Beijing’s Zhongguancun, China’s “Silicon Valley”, has witnessed the birth of the country’s first funds dedicated to IPR trading and technology industrialization. Ruichuan IPR Funds, which is soon expected to have 100 million yuan (about US$15.99 million) worth of funding, has attracted several domestic technology firms such as smartphone maker Xiaomi and electric appliance producer TCL. These companies, mostly in smart terminal and mobile Internet, are the first batch of strategic investors of the funds, said Zhi Binwei, deputy director with the innovation promotion department of the management committee of Zhongguancun. “It creates an entirely new business model, with enterprises being the main body of market-oriented funds on IPR business,” said Zhi. China has become the world’s largest smart terminal producer, while the industry has to pay about five to 10 percent of output value to foreign companies in royalties. Ruichuan IPR Funds will help Chinese high-tech companies to gain core IPR effectively and legally, said Zhang Hongjiang, CEO of Beijing Z-good Sci-tech Co. Ltd., which

operates the funds. “We will strive to help them grasp their rights and avoid pain from IPR conflicts,” said Zhang.

Spread your wings Chinese domestic companies have increasingly invested in international intellectual property through mergers and acquisitions. Lenovo, the world’s biggest PC maker, has just purchased a portfolio of patents from Unwired Planet Inc, an intellectual property and technology licensing company, for 100 million U.S. dollars. The 21 patent groups included 3G and LTE (long-term evolution) and other ones covering mobile Internet. It is a major step for Lenovo in its push into the smartphone market as the desktop PC market shrinks. In January 2013, Lenovo bought Motorola Mobility’s handset unit for 2.91 billion U.S. dollars. “Lenovo has made intellectual property its enterprise strategy. The change started in 2010 and caught the world’s attention last year because of our acquisition,” said Li Xin, a senior executive at Lenovo. In 2010, Lenovo set up a special team to analyze mobile Internet business and formulate an intellectual property plan. Xinhua

Official warns about leverage ratios changes

a trap of the China Banking Regulatory Commission warned in February.

New intellectual property approach

yuan (US$480 million) in bank loans to the six firms are at risk, the paper said. “After (Jianjie Chemical Fiber) went bankrupt and was liquidated, companies with mutual guarantees had to take on more debt,” the paper quoted Zhu Rujiang, director of the Xiaoshan District Funding Chain Risk Prevention and Mitigation Leadership Group, as saying. “They can still handle this debt, and they will have no trouble surviving, but a key requirement is that banks can’t withdraw their loans,” he said, according to the paper. Zhu’s group was set up to mediate between banks and companies, according to the district government’s website. Zhu declined to comment when Reuters reached him by phone. China Business News also reported that Hangzhou Zhongxin Steel Structure Manufacture Co Ltd, which makes scaffolding, had shut down and could place another 1.2 billion yuan in bank loans to four other companies at risk. Zhongxin, whose website is no longer accessible, couldn’t be reached for comment. “The crisis of mutual guarantees is very serious and there is no good solution for this problem,” said Zhou Dewen, vice chairman of the China Association of Small and Medium Enterprises in Wenzhou, another prosperous city in Zhejiang. Reuters

Concern about the huge growth in Chinese corporate debt since the global financial crisis has intensified this year

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hina must act cautiously in cutting leverage ratios in the corporate and government sectors, as any abrupt move could deal a blow to an economy that is already slowing, a senior central bank official said in remarks published yesterday. Xu Nuojin, a deputy director of the statistics department of the People’s Bank of China, said the slowing economy could expose the property sector and local government financing vehicles to high risks, potentially becoming the biggest concern for world’s second-largest economy. “On the one hand, we must be highly vigilant on high leverage ratios, while on the other hand we must avoid simply taking blind measures to cut leverage,” he said in an article published in the China Securities Journal. “We should solve the high leverage ratio problem in a gradual and healthy way, including by maintaining sustainable economic growth.” China has seen a rapid build-up of debt in recent years, especially

following an investment spree driven by a 4 trillion yuan stimulus package in the wake of the 200809 global financial crisis. The total credit to GDP ratio reached 215 percent at the end of 2013, according to figures from Standard Chartered. The high credit-to-GDP ratio is widely seen as increasing financial sector risks. Concern about the huge growth in Chinese corporate debt since the global financial crisis has intensified this year as the government allows market forces to play a bigger role in deciding winners and losers. The central bank’s governor, Zhou Xiaochuan, had said earlier this month that the government must not lower its guard against the risks of high leverage in the corporate sector. Latest data from the National Audit Office showed local governments had total outstanding debt of 17.9 trillion yuan ($2.86 trillion) at the end of last June, leaving the country with total government debt of around 58 percent of gross domestic product. Reuters


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Asia Kiwibank looking at NZ$100 million issue New Zealand state-owned bank Kiwibank Ltd is looking to raise NZ$100 million (US$86 million) through a bond issue to beef up its balance sheet to meet banking capital standards. The bank would use a subsidiary to raise the funds through a public issue of capital notes, which would be invested in the bonds. The issue, which is being joint-managed by Deutsche Craigs and Forsyth Barr, is part of the bank’s move to comply with central bank-imposed capital requirements. Kiwibank, established in 2002, is owned by the state mail operator New Zealand Post.

Spotless Group plans a US$928 million IPO Australian facilities management company Spotless Group plans to raise as much as A$1 billion (US$928.15 million) in the country’s biggest initial public offering so far this year. Spotless is offering 540.5 million new and existing shares at A$1.60 to A$1.85 each, partly to repay debt, the company said yesterday. The planned share sale comes less than two years after Australia’s biggest private equity firm Pacific Equity Partners (PEP) acquired the group for A$730 million. PEP will retain 49 percent of the business after the IPO. The sale will give Spotless a market value of A$1.76 billion to A$1.93 billion.

Philippines signs rice deal with Vietnam firms The Philippines’ state grains procurement agency has awarded deals to supply the country with 800,000 tonnes of rice to two Vietnamese exporters. That marks the Southeast Asian nation’s biggest purchase of the grain in three years, as it looks to boost stockpiles. The National Food Authority (NFA) approved prices offered by Vietnam’s state-owned rice exporters Vinafood 1 and 2 at a tender on April 15, NFA Administrator Orlan Agbin Calayag said yesterday. “I have approved the award but I haven’t signed any contract yet,” he told Reuters.

Galaxy S5s with spoilt camera minimized Samsung Electronics Co Ltd said the number of its flagship Galaxy S5 smartphones shipped with non-working cameras was “very limited” and that it has taken measures to ensure the issue does not recur in new shipments. Reports of the problem surfaced last week and come less than a month after the phone’s global launch, with Samsung banking on the S5 to outdo its predecessor and rebuild momentum for the brand in an increasingly competitive market. The South Korean firm has warned profits are likely to have fallen in January-March from a year earlier, its second straight quarter of decline.

IMF requests Asian structural Economic expansion in Asia will be more than twice as fast as

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sian policy makers must push ahead with structural changes to ensure the region continues to lead global growth and withstand volatility as the U.S. reduces monetary stimulus, the International Monetary Fund said. Asian economies will face higher interest rates and bouts of volatility in capital flows and asset prices as global liquidity tightens amid a recovery in advanced nations, the Washington-based lender said in its Regional Economic Outlook for Asia and Pacific released yesterday. Tightening of global liquidity is one of the four main risks confronting Asia this year and next year, the IMF said. Other dangers include a sharper-than-envisaged slowdown in China, waning effectiveness of growth-supporting policies in Japan, and political and geopolitical tensions that disrupt trade, it said. “Asia is well positioned to meet the challenges ahead provided it stays the course on reforms,” the IMF said. “Reforms are critical not only to sustain Asia’s growth leadership over the medium term, but also, in some cases, to maintain investor confidence and secure financial stability in the near term.” Economic expansion in Asia will be more than twice as fast as advanced nations this year, while growth in the emerging Asian economies, which includes China and India, will be three times faster, the IMF estimates.

Japanese Prime Minister Shinzo Abe speaks on stage during the ‘Niconico Chokaigi 3’ fan event on Saturday. His Abenomics are under close observation by IMF.

Oxfam challenges Australian banks over ‘land grabs’ T he NGO yesterday accused Australia’s big four banks of financing companies the charity said were linked to illegal logging, forced evictions and child labour. A report by the aid group highlighted cases from Papua New Guinea, Cambodia, Indonesia and Brazil in which Commonwealth Bank, Westpac, National Australia Bank or ANZ directly or indirectly funded illegal “land grabs”. “From PNG and Cambodia to Indonesia and Brazil, our banks have backed companies accused of forcing people from their land,” Oxfam Australia chief executive Helen Szoke said in launching “Banking on Shaky Ground - Australia’s big banks and land grabs”. The banks declined to comment on their links to specific companies highlighted by Oxfam Australia, but emphasised their commitment to ethical lending practices. Oxfam said Australian banks were investing in Asia and the Pacific and trumpeting the regions as growth opportunities, but were unaware of, or failing to respond, to the risks of

From PNG and Cambodia to Indonesia and Brazil, our banks have backed companies accused of forcing people from their land Helen Szoke, Oxfam Australia chief executive

doing business there, particularly in the agricultural and timber industries. It said that in PNG, Westpac was supporting a timber company logging pristine rain forest in defiance of a finding by PNG’s Commission of Inquiry into Special Agricultural Business Leases that its lease was

invalid and should be revoked. In Cambodia, ANZ Bank was accused of financing a sugar plantation that used child labour, military-backed land grabs and forced evictions. The Commonwealth Bank has invested in an agribusiness giant in Brazil that sourced sugar from people occupying land in defiance of Brazilian laws that determined the indigenous people evicted for the plantation were the true landowners, Oxfam said. Across Asia, NAB has been funding palm oil giant Wilmar, which has been linked to land grab allegations in Indonesia and Malaysia, the report said. “The banks need to say which companies they’re investing in, and where those companies have pushed people off the land, to work with those companies to change their practices and provide compensation to communities,” said Szoke. “Where there is a risk of customers operating outside the law or the customer does not meet our requirements, Westpac will undertake a review, and if appropriate, exit the banking relationship,” Westpac said.

editorial council Paulo A. Azevedo, José I. Duarte, Emanuel Graça, Mandy Kuok Founder & Publisher Paulo A. Azevedo | pazevedo@macaubusinessdaily.com Newsdesk Alex Lee, Luciana Leitão, Michael Armstrong, Sara Farr, Stephanie Lai, Tony Lai International editor Óscar Guijarro GROUP SENIOR ANALYST José I. Duarte 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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AFP


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Asia

reforms

Thai figures reflect troubled times

advanced nations this year

The central bank has slashed its 2014 economic growth forecasts three times since November

Even so, productivity has decelerated in recent years and the region needs a new wave of reforms to boost potential growth and to continue to attract inward investment, according to the report.

Key risk Asian economies are now more resilient to global financial volatility after implementing policies to address their vulnerabilities, the IMF said, noting that India and Indonesia were among nations that were able to better weather January’s rout in emergingmarket currencies and equities as the Federal Reserve began withdrawing stimulus. Yet a sudden or sharper-thananticipated tightening of global financial conditions remains “a key downside risk” for Asia, the IMF said. Low inflation in most economies will allow central banks to loosen monetary policy and cushion the blow on growth, it said. Within the region, the IMF highlighted risks posed by China and Japan, Asia’s two largest economies. It estimates China will expand 7.5 percent this year and 7.3 percent next year, while Japan will grow 1.4 percent and 1 percent. A sharper-than-envisaged slowdown in China would have “significant spillovers” for the region, especially in economies linked to the regional supply chain

and commodity exporters, according to the report.

Adverse reaction Increasing stress in China’s nonbanking financial sector and high local government borrowing are potential systemic dangers and further news of credit problems or debt servicing issues could “spark adverse financial market reaction both in China and globally,” according to the report. “The challenge is to slow the growth of credit, especially in the shadow banking sector, and minimize the buildup of risks in the financial sector without causing a steep deceleration in growth,” the IMF said, calling on the government to push ahead with interest-rate liberalization and rein in money-supply growth. In Japan, the risk is that Prime Minister Shinzo Abe’s policies could prove less effective than envisaged in terms of supporting growth, increasing nominal wages, sustaining the recent increase in inflation expectations or boosting private investment, according to the report. “The third arrow of Abenomics structural reforms - is essential for Japan to avoid the risk of falling back into lower growth and deflation, a further deterioration in the fiscal situation and an over reliance on monetary stimulus, with negative consequences for the region,” the IMF said. Bloomberg News

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actory output fell more than expected in March, showing how intractable political turmoil in Bangkok has hurt a key pillar of the economy and will cut growth prospects this year. Southeast Asia’s second-largest economy has endured months of turbulence as protesters seek to topple Prime Minister Yingluck Shinawatra and the central bank has warned growth will contract for the first time in a year in the first quarter. Industrial output in March fell for a 12th straight month, down 10.41 percent from a year earlier, the Industry Ministry said in a statement. That compared with February’s revised 4.7 percent drop and an 8.2 percent decline in a Reuters poll. Sliding output and imports reflect how the export-reliant economy has suffered from political instability. Consumer confidence slid to a more than 12-year low last month, weaker than it had been even after the bad floods of late 2011, violent political unrest in 2010 and a deadly tsunami in late 2004. The prolonged unrest has hit domestic demand, delayed public spending and scared away holiday makers from the capital. Growth estimates for Thailand have been cut steadily since the trouble erupted in

November and further downgrades are almost certain.

Growth downgraded The central bank has slashed its 2014 economic growth forecasts three times since November to 2.7 percent, a level it recently said was out of reach now. It said the economy could have contracted in the January-March quarter from the fourth quarter for the first time in a year. Tisco Securities economist Sarun Sunansathaporn predicted the first quarter would contract 0.4 percent from a year earlier and about 2 percent against the prior quarter. “That’s because of the political impact on everything; consumption, investment, tourism, government spending,” he said. But he expected growth in the second quarter as tourism and exports should improve along with investment sentiment following a new Board of Investment to approve pending investment pledges worth about 660 billion baht (US$20.43 billion) after a delay. Sarun expects 2014 economic growth of 2.5 percent, in line with the IMF’s prediction, which would be the lowest in Asia. Reuters

India’s C. Bank governor discussed The ruling Congress party saw the fiscal deficit rise to a peak of 6.5 percent of gross domestic product in the 2010 fiscal year

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eserve Bank of India Governor Raghuram Rajan’s job will be safe if the opposition Bharatiya Janata Party comes to power in elections ending May 16, Piyush Goyal, the organization’s treasurer, said in an interview. “Just because he’s been appointed by someone else doesn’t mean we have an agenda to remove him,” Goyal, a lawmaker who is on the standing committee on finance, said in New Delhi on Sunday, referring to Rajan. “No government can dictate to the central bank. It’s an autonomous body and he holds a constitutional position. We don’t have any likes or dislikes.” Most polls show Narendra Modi’s BJP winning enough seats to form a coalition government as voters look to end 10 years of Congress party rule amid the slowest economic growth in a decade. Rajan, a former chief economist at the International Monetary Fund, has raised the benchmark interest rate by 75 basis points since Congress appointed him to head the central bank in September. Goyal said the BJP has

“zero tolerance for inflation” and would move to prevent hoarding of fresh produce, which has exacerbated food prices during supply shortages. It would seek a price stabilization fund to support farmers during supply gluts and procure imports when there are shortages, he said, without saying how much it would cost.

Raghuram Rajan

‘Lousily managed’ “The Reserve Bank is fulfilling its duty to make an effort to reduce inflation, but sadly the government has been so lousily managed in the last few years,” Goyal said. “A government led by Modi will repress the concerns of any central bank leader.” India’s consumer-price inflation quickened in March for the first time in four months to 8.31 percent from a year earlier, keeping pressure on the central bank to keep interest rates elevated. Rajan left the repurchase rate unchanged in the last review on April 1 and said further tightening isn’t anticipated if price gains stay on path to hit 8 percent in January 2015 and 6 percent a year later. Goyal distanced himself

from comments he made in February to the Economic Times newspaper, which quoted him saying that India’s rupee has been the best performer among emerging markets since hitting an all-time low on August 28, surging 14 percent in that time partly on optimism that a Modi government will

boost economic growth. The benchmark S&P BSE Sensex has climbed 15 percent since September 13, when the BJP named Modi as its prime minister candidate.

Fiscal deficit Reducing the fiscal deficit and fighting corruption would

give space for interest rates to come down, Goyal said. The ruling Congress party saw the fiscal deficit rise to a peak of 6.5 percent of gross domestic product in the 2010 fiscal year. It will narrow to 4.1 percent of gross domestic product by March 31, 2015 from an estimated 4.6 percent in the previous fiscal year, lower than an earlier target of 4.8 percent, Finance Minister Palaniappan Chidambaram said in February. India’s subsidy bill rose fivefold in the past decade under Singh’s ruling Congress party to 2.6 trillion rupees (US$43 billion) a year. In the same period, the Indian economy has only doubled in size, according to the International Monetary Fund. India has seen record turnout averaging 66 percent through six of nine rounds of voting, according to the Election Commission of India. More than two-thirds of seats among the 543 up for grabs have already been decided. The last round of voting will take place on May 12, with all votes counted on May 16. Bloomberg News


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International

Top ad agency merger wobbles

Steel firms sued over price fixing German rail company Deutsche Bahn said Sunday it was launching a multi-million-dollar lawsuit against major steel manufacturers over illegal price fixing. Gerd Becht, a member of the Deutsche Bahn board, told the Bild am Sonntag newspaper that it would file suit against nine unnamed companies, four of them German, for a figure in the “hundreds of millions of euros” range. “The companies participating in the cartel have refused talks on compensation for damages. That is why we are suing,” he said.

China antitrust review and tax jurisdiction issues have delayed the merger completion

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he chief executives of advertising companies Publicis and Omnicom Group are working together to resolve a seven-monthold struggle over who will be chief financial officer of their combined group if the US$35 billion merger is completed, three people close to the deal said on Sunday. John Wren, the head of New Yorkbased Omnicom, and Maurice Levy, his opposite number at Paris-based Publicis, are in regular contact to try to settle the CFO choice, which has fuelled tensions between the two sides since September as they seek to secure regulatory approvals for the blockbuster deal, the people said. Both remain committed to the tieup, which would create the world’s biggest ad agency ahead of current leader WPP, added the sources. The infighting over the CFO shows the pitfalls of trying to engineer a “merger of equals” as the deal was billed when it was announced to much fanfare in July. Some analysts, investors and rivals have expressed doubts over whether executives and staff in the two companies, especially their veteran CEOs, will be able to effectively work together if the deal is completed. Other mergers with similar profiles, including a 2006 Franco-American tieup between telecom equipment makers Alcatel and Lucent Technologies, have foundered over culture clashes. The CEO of rival WPP, Martin Sorrell, said on Friday that most people he was speaking to said there was now a third to a half chance that the deal would not be completed. The tensions between the top executives of the two companies were first reported by the Wall Street Journal on Friday. The merger calls for a 50-50 ownership split of the equity in the new company, Publicis Omnicom

New Serbia cabinet to press EU bid

Maurice Levy, head of Publicis, in the World Economic Forum in Tianjin, China 28 September 2008

Group, with Wren and Levy serving as co-CEOs for 30 months from the closing. The two companies initially aimed to close the deal in the first quarter of this year, but an on-going China antitrust review and tax jurisdiction issues that were disclosed by Omnicom last Tuesday have delayed completion. Publicis said last week that the deal would close in the third quarter, but Omnicom’s Wren now declines to predict timing. Omnicom wants its CFO, Randall Weisenburger, to get the top finance job, while Publicis wants its CFO, Jean-Michel Etienne, the people said.

Profit margin question Behind the spat over the group’s finance chief is a deeper question about how the new operation should be run, said two of the people. To boost profits, Publicis has long centralised many purchasing and support functions for the roughly dozen advertising agencies it owns, such as Saatchi & Saatchi, Leo Burnett and Razorfish. Analysts say the approach has helped Publicis achieve

higher operating profit margins than its rivals; its margin stood at 15.9 percent last year, compared with 12.5 percent for Omnicom and 15.1 percent for WPP. The choice of the CFO could determine whether the new company adopts the Publicis approach or the more decentralised model favoured by Omnicom in which individual agencies have more leeway in everything from technology systems to supplies, the people said. “There are on-going talks on the leadership issue,” said one of the people on Sunday. “Wren and Levy are determined to find a solution because it is simply in the interests of both companies. The best guarantee of success is the two CEOs determination to complete the deal.” The companies also continue to work on resolving tax issues that have slowed down the deal. Wren spooked investors on last Tuesday when he disclosed that the companies had not yet been able to get approval for their plan to have a tax residency in Britain, while being legally headquartered in the Netherlands. Reuters

Good results for Bayer while trying to sell unit Bayer is considering the sale of its MaterialScience division after chemicals company Evonik Industries expresses interest

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erman chemicals and pharmaceuticals giant Bayer, maker of Aspirin, said yesterday it turned in a better first quarter performance than expected thanks to healthy growth driven by new products. The group based in the western town of Leverkusen said in a statement that bottom-line net profit grew by 23 percent to 1.42 billion euros (US$1.96 billion) between January and March. Analysts polled by Dow Jones Newswires had expected a just sevenpercent rise. Turnover climbed 2.8 percent to 10.6 billion euros during the same period. “We are confident about our business development for the rest of the year and confirm our outlook for 2014,” chief executive Marijn Dekkers said in a statement.

She cited the pharmaceutical products on the market for providing a boost. The company said that it was counting on annual turnover of around 41 billion euros, up about two percent on the year. Underlying or operating profit, as measured by earnings before interest, tax, depreciation and amortisation (ebitda), is expected to rise 5 percent. Bayer said its first-quarter results had been powered by robust business for its healthcare and agrochemical divisions and an improvement in its material science division.

MaterialScience The company also said that is exploring the sale of its US$10 billion plastics unit to focus on growing its health business, Bloomberg reported

citing people with knowledge of the matter. Bayer is considering the sale of its MaterialScience division after chemicals company Evonik Industries AG showed interest in the unit several months ago, Bloomberg said, adding that no final decision has been made on the plastics unit. Bayer, Germany’s largest drug maker, in April last year lowered its outlook for its MaterialScience unit, which makes transparent plastics used in sports goggles, DVDs and car lights, as core earnings for the division slumped by more than a quarter. Polycarbonates, the type of transparent plastic that is Bayer’s specialty, are in ample global supply after lower-cost rivals in the Middle East, mainly Sabic, built new sites. AFP and Reuters

Serbia’s new centre-right coalition government led by Prime Minister Aleksandar Vucic was sworn in on Sunday, expected to push the country’s EU membership bid and urgently tackle the ailing economy. Vucic, leader of the centre-right Serbian Progressive party (SNS), was given a mandate after a landslide victory in March elections called after Serbia began EU membership talks in the wake of a landmark accord with breakaway Kosovo last year. Out of 228 deputies present at the SNS-dominated parliament, 198 MPs voted for Vucic’s cabinet, 23 were against it and seven abstained.

Etisalat raises offer to buy Maroc Telecom stake UAE telecommunications firm Etisalat announced yesterday it has raised 3.15 billion euros to fund the acquisition of French media giant Vivendi’s 53 percent stake in Morocco’s main provider, Maroc Telecom. The funds were raised with a group of 17 international, regional and local banks in the United Arab Emirates. “Financing consists of two facilities which can be utilised in EUR and/or USD,” Etisalat said in a statement. “Utilisation of funds under the two facilities will take place at the closing of the transaction with Vivendi.”

Holcim operating profit rises Swiss cement maker Holcim Ltd posted a 9 percent rise in first-quarter operating profit yesterday, bearing the fruits of a cost-cutting programme as it prepares to merge with French rival Lafarge SA. The results come three weeks after Holcim unveiled a deal to buy France’s Lafarge and create the world’s biggest cement maker with US$44 billion in annual sales. The move is designed to optimise the companies’ use of assets to help slash costs to better cope with the soaring energy prices, tougher competition and weak demand.

Libyan oil port still inoperative Libya’s eastern oil port Zueitina will only open after damages at its facilities and its technical state have been assessed, the country’s justice minister said on Sunday. Salah al-Merghani also told reporters in the eastern city of Benghazi that a committee to investigate oil corruption had been formed, as agreed under a deal between the government and eastern rebels to end a blockage of eastern oil ports. The reopening of four oil export terminal has been delayed with the rebels accusing the government of not fulfilling all parts of the deal, such as paying financial compensation.


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April 29, 2014

Opinion Business

wires

Leading reports from Asia’s best business newspapers

The Democratic Disruption of Finance

Mohamed A. El-Erian

Chief Economic Adviser at Allianz and a member of its International Executive Committee Chairman of President Barack Obama’s Global Development Council

JAKARTA GLOBE

Shareholders of coal miner Adaro Energy agreed to a final cash dividend payment of US$75.17 million for the 2013 fiscal year, which is equivalent to 32.51 percent of last year’s net income, Adaro said in a statement. “Our 2013 results demonstrate: in good times or bad times, we deliver,” said Adaro’s president director, Garibaldi Thohir. “Despite the cyclical downturn we continue to create maximum long-term value from Indonesian coal. As we have done every year since our IPO in 2008, and as we will continue to do,” he said.

THE STAR YTL Land & Development Bhd saw about 80% or 650 units of its latest Midfields 2 project snapped up during its sales preview recently. The group said the total gross development for the project alone for this phase was RM400mil. “Although we had received more than 5,000 registrants, it was humbling to see our customers’ confidence in Midfields 2,” said YTL Land & Development executive director Datuk Yeoh Seok Kian in a statement. “It proves that a competitively priced product in the right location is always attractive to genuine home buyers,” he added.

THE JAPAN NEWS The nation’s shipbuilding industry faces uncertain waters. As shipbuilders scramble to secure construction orders for large passenger ships and special-purpose vessels that require advanced technology, profits continue to disappoint. Shipbuilders have been able to survive thanks to the yen’s depreciation, but the prospect of having to fight an uphill price war against Chinese and South Korean shipbuilders has left them deeply concerned. While Japanese shipbuilders saw their shares in the global shipbuilding market halve the combined shares of Chinese and South Korean shipbuilders increased from 53 percent to 77 percent in the same period.

MYANMAR TIMES “Food inflation has a disproportionate effect on the poor,” Kanthan Shankar, country manager of the World Bank Myanmar office, told The Myanmar Times, responding to questions about the rise in inflation that accompanied increasing GDP. “On the one hand, a lot of investments are coming in, so you’re going to have inflation. But how will this impact the poor? That should always be taken into account.” Myanmar’s economy grew 7.5pc in 2013 and is likely to reach 7.8pc in 2014, 2015 and 2016.

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AGUNA BEACH – There seems to be no limit to the exciting possibilities that come from combining technical innovations, the Internet, and social media. It is a phenomenon that has been revolutionizing journalism and entertainment; and, by helping to overcome coordination challenges, it has also had political consequences in a growing number of countries – all of which means an everevolving set of opportunities and risks. What is less appreciated, however, is the extent to which a broadly similar phenomenon may be starting to play out in finance, via a democratization process that could gradually reconfigure a notable part of the institutional landscape, particularly in consumer finance, while challenging regulators to adapt. Bitcoin is the most visible – albeit far from a good – example of this nascent development, having attracted attention from specialists, regulators, and, slowly but surely, the public. But the crypto-currency phenomenon is far from the only example, and it is certainly not the most consequential one. Its impact, both actual and potential, is relatively limited when compared to ongoing attempts to enhance and democratize lending, borrowing, investing, and payments and settlements. The underlying sequence of disruptive technology is historically familiar. A bold innovation suddenly lowers entry barriers for certain activities. Mechanisms emerge to enable a larger part of the population to participate in what is deemed desirable but, until now, had been hard to access. As the disruptive forces gain traction, existing business models face difficult adaptation challenges, and regulators begin to fall behind. The situation is often amplified by a natural human tendency to overproduce and overconsume hitherto restricted goods and services.

This, of course, is what has been occurring in media for several years. The result is a proliferation of platforms for producing, aggregating, disseminating, and consuming content. Falling entry barriers and lower access costs have significantly democratized participation, whether in production or consumption. And, as hard as they try, many traditional media outlets – especially those unable to claim quite distinctive content – find it increasingly difficult to compete. Now something somewhat similar is starting to happen in finance as well, albeit at a less frantic pace and – at least until now – in a less disruptive manner. And, as with media, the main innovations are being spearheaded by those outside the traditional institutional setup. Most consequentially, an emerging cohort of technology entrepreneurs understand the power of online/social media innovation to disrupt components of traditional finance, and are now leading efforts that include behavioural scientists and finance experts. Recall that Bitcoin started in 2009 as an attempt to produce a “better” currency, championed especially by those who mistrust central banks’ management of fiat money. These early adopters were joined by a growing number of financial speculators attracted by highly volatile price movements. But Bitcoin’s success, which remains highly uncertain, ultimately depends on it attaining sufficient stability to perform the most essential function of any currency (as opposed to a speculative commodity) – that of providing a relatively predictable medium of exchange. Fulfilling that function would require a lot to happen. At a minimum, Bitcoin would need a more solid institutional foundation; and broad acceptance of it would require much greater clarity concerning regulatory and supervisory approaches.

The main innovations are being spearheaded by those outside the traditional institutional setup. Most consequentially, an emerging cohort of technology entrepreneurs understand the power of online/ social media innovation to disrupt components of traditional finance, and are now leading efforts that include behavioural scientists and finance experts

More promising examples, albeit less well-known, may be found in Internet-driven lending and borrowing clubs or, more generally, the peerto-peer initiatives in consumer financial services. By seeking to compress net interest margins, including through lower expenses and more efficient data assessments

and aggregation, and by targeting an enhanced consumer experience, such empowerment schemes could serve to reduce the cost of financial intermediation while providing for fairer riskpooling outcomes and better credit underwriting. Likewise, so-called digital wallets and mobile transfers are efforts to improve payments and settlement in a retail financial sector that gets a lot less attention than its institutional peers. The prospects for each of these democratizing developments vary significantly, as do the probable cost-benefit equations. Much will depend on whether the underlying technology is stable and secure, trust is established, transparency is convincing, consumer protection is effective, new content is coupled well with strong distribution channels, and broad-based validation and institutional verification boost credibility. Looking ahead, we should expect the underlying forces of innovation to remain strong. Some existing businesses will fend off disruptive threats, including through takeovers; others will adjust (for example, Walmart recently announced an expansion of its financialservices offerings); but many may well prove insufficiently agile. Regulators will also likely lag initially in their response to new structures and activities. The challenges of getting this right in finance are considerably more difficult than they are in media; and the consequences are far more profound, given the centrality of finance to broad swaths of the real economy. Anyone who doubts that should recall how last decade’s securitization boom and bust – another example of a disruptive financial innovation that was over-produced and overconsumed – contributed to a credit and liquidity crisis that pushed the global economy to the verge of Great Depression II. In their recent book, Google’s Jared Cohen and Eric Schmidt brilliantly remind us of the opportunities and risks afforded by multi-speed developments in the real and virtual worlds. Having redefined media, similar developments are slowly beginning to play out in finance – in a rather isolated way for now, but soon likely to start transforming how capital is mobilized and allocated in support of economic growth and employment. Individuals, companies, and governments would be well advised to devote more time and other resources to comprehending this important and transformative phenomenon. The Project Syndicate 2014


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April 29, 2014

Closing Mozambique: heavy sands discovery

Undersea search for MH370 to expand

British company Savannah Resources has discovered “world class” heavy sands in southern Mozambique and is going to conduct additional tests to start operations “quickly”, the company said. Heavy sands contain metals such as ilmenite, rutile and zircon, used in many technological industries including the aeronautics sector and telecommunications.

Australia’s prime minister announced yesterday an expanded search across a huge swathe of seabed where Flight MH370 might have crashed seven weeks ago, admitting it is now “highly unlikely” any surface wreckage will be found. “I regret to say that thus far, none of our efforts in the air, on the surface, or undersea have found any wreckage,” Tony Abbott said.

Philippines’ biggest casino hits early jackpot

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he Philippines’ biggest casino announced yesterday it had begun raking in huge profits in 12 months of operations, which it said vindicated its decision to sack its American managers. Bloomberry Resorts Corp., operator of Solaire Resorts and Casino, reported a net

profit of 1.461 billion pesos (US$32.78 million) from January to March. This was a turnaround from the 1.056-billion-peso loss in the same period last year, at the time Solaire was throwing its doors open to the public. “It is significant that we

were able to turn a profit after only a year of operation,” Bloomberry chairman and chief executive Enrique Razon said in a statement. Bloomberry opened the US$1.2-billion Solaire on reclaimed land on Manila Bay on March 16 last year. It was the first of four,

billion-dollar casinos to rise on the government property as part of the government’s bid to become Asia’s third major gambling hub alongside Macau and Singapore. The gaming resorts are a key part of the Philippines’ bid to raise annual tourist arrivals to 10 million by 2016, from

4.68 million last year. Razon, one of the country’s richest men and the majorityshareholder of Bloomberry, emphasised Solaire achieved the early turn to profits after firing the casino’s American managers last year. Bloomberry announced in September that it had terminated the management contract of Las Vegasbased Global Gaming Asset Management for a breach of contract, in a dispute that was referred to international arbitrators in Singapore. “This is proof positive that the group, without a thirdparty management company, has the ability and the acumen to manage an integrated resort,” Razon said. As part of its commitments to win a gaming license, Bloomberry committed to building an “integrated resort” which offered a wide range of family entertainment and not just gambling. However Bloomberry said 95.7 percent of its revenues from January to March came from gaming, with just 3.9 percent from its food, beverage and hotel business. Retail and others income made up 0.4 percent of revenues. Razon said the past year was spent “building our core business”, and that the other elements of an integrated resort would open in the fourth quarter of this year. The second of the four gaming resorts, called the City of Dreams Manila and run by Macau-based Melco Crown Entertainment, is due to open this year. AFP

Greenpeace targets Russian tanker

Panasonic eyes third year of profit

Boeing to ask Japanese firms to build a fifth of 777X

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reenpeace sent yesterday a protest ship to meet a Russian tanker carrying the first oil drilled offshore in the environmentally fragile Arctic. The ship, Rainbow Warrior, is captained by Peter Willcox, who was among campaigners detained by Russian authorities last year after staging a highprofile protest against Arctic drilling. The vessel set sail from Rotterdam yesterday afternoon, Greenpeace said, and will seek to escort to harbour the Russian tanker Mikhail Ulyanov, which is delivering oil purchased by French energy giant Total. The oil was drilled at the Prirazlomnaya platform, an offshore rig owned by Russian energy giant Gazprom and the site of Greenpeace’s protest last September. The protest, which saw two campaigners attempt to scale the rig, prompted Russian authorities to seize Greenpeace’s Dutch-flagged Arctic Sunrise boat and detain the 30 activists and journalists on board. Greenpeace argues that the Gazprom rig is an environmental catastrophe waiting to happen that risks ruining the pristine Arctic ecology of the southern Barents Sea where the deposit is located. AFP

anasonic Corp expects a final blast of restructuring to help it to its third straight year of profit, with growth depending on higher-margin industrial products such as car batteries. The Japanese electronics conglomerate has been withdrawing from loss-booking operations as it trains its attention more to serving businesses than consumers. This year, the company quit plasma TV production, pulled out of consumer smartphones and sold off some of its domestic chip factories. At the same time, Panasonic has found favour in green technology with its ‘eco-solutions’ business and as a supplier of lithium batteries to electric car maker Tesla Motor Inc. For the year ending next March, Panasonic forecast a 1.6 percent rise in operating profit to 310 billion yen (US$3.04 billion), just short of the 325.6 billion yen mean estimate of 20 analyst polled by Thomson Reuters StarMine. The growth rate pales in comparison to the 90 percent of last year, when demand for electronic goods and housing-related fixtures surged ahead of a rise in the consumption tax effective April 1. Reuters

oeing Co has lined up Japanese companies, including Mitsubishi Heavy Industries and Kawasaki Heavy Industries, to build one-fifth of its latest plane, the 777X, retaining Japan as its key Asia partner in commercial jetliners, two sources with knowledge of the U.S. company’s production plan said. A fifth of the airframe build would give the Japanese companies a workshare on par with the 21 percent of the 777 they have been fabricating since 1995. But because Boeing plans eventually to make more planes per month, there should be a greater volume of work for the Japanese suppliers, one of the sources said. Boeing’s current production rate for the 777 is 8.3 a month. A Boeing spokesman in Tokyo declined to confirm the information.

“Supply chain partnerships and production system decisions will be addressed at the appropriate time,” the spokesman said. Reuters


Macau Business Daily, April 29, 2014