MOP 6.00 Closing editor: Alex Lee Publisher: Paulo A. Azevedo
Efficiency the key It’s Wynn’s efficiency that puts the operator ahead of its competitors, says The Man. Operating profits grew 16 percent in the first quarter and net revenues 14.2 percent, surpassing the magical US$1 billion mark
Number 531 Monday May 5, 2014
Speedier connections Last year, some 2.64 million Chinese visitors entered Macau from the mainland using visas for overseas journeys. But little over 20 percent of them exited Macau. The scheme, that permits visitors to stay for seven days as long as they use Macau for transit, is now being studied by the government. That might restrict the stay period here Page
PMI moves north
United we stand www.macaubusinessdaily.com
More households have turned to using a fibre optical broadband connection in 2013, a fivefold increase over that of the previous year
Chinese purchasing manufacturing index (PMI) increased up to 54.8 last month. Investors should welcome the weak improvement in the services sector
Dealers are unhappy due to shiftwork and the way they are treated by disgruntled gamblers the president of Forefront of Macau Gaming Association tells Business Daily. The movement seeks to protect as much as it can its members, as dealers are usually not too educated and unable to develop other talents, says Ieong Man Teng
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HSI - Movers
Momentum still gathering
Gaming revenues increased 10.6 percent in April, the second lowest hike of the year. Nevertheless, the year is still growing ahead of analysts’ consensus Page
China Mengniu Dairy
Tencent Holdings Ltd
Sands China Ltd
Henderson Land Dev
Hong Kong & China G
CITIC Pacific Ltd
China Mobile Ltd
Sino Land Co Ltd
China Unicom Hong Ko
Less room, more rooms
I SSN 2226-8294
There are 18 hotels being constructed and 25 projects under appraisal for a possible total of 25,600 rooms. At the same time, 86 residential buildings are under construction, 69 of them on the Macau Peninsula Page
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May 5, 2014
Mainlanders’ transit stay under review Security authorities have published immigration data revealing that a low proportion of mainland visitors transit Macau to overseas Stephanie Lai
n the past few years, only some 20 percent of inbound mainland Chinese visitors that have entered Macau using visas for overseas journeys were transit passengers, a phenomenon that has triggered the local security departments to consider tightening terms for mainlanders staying in the city. Chinese passport holders transiting Macau to and from another country or territory can be granted a stay of seven days upon arriving in the territory as long as the passport holder can show his or her passport and the travel documents for an overseas journey, the city’s immigration requirements state. In 2013, the Cabinet of the Secretary for Security recorded a total of nearly 2.64 million Chinese visitors entering Macau from the mainland using visas for overseas journeys; however, only 547,836 of these visitors - or 20.8 percent - exited Macau through the city’s airport or ferry terminals in ZAPE and Taipa. From 2010 to 2012, the proportion of the millions of mainland visitors exiting Macau’s airport and ferry terminals after entering the city
using a visa for overseas journey only ranged from 16 percent to 18 percent, Cabinet figures reveal. The number of mainland visitors entering the city using the visa for overseas journeys
grew from 1.79 million in 2010 to 2.28 million in 2012. The figures, compiled by the Cabinet, were issued on Friday as a response to legislator Antonio Ng Kuok
Cheong’s enquiry, who suspected that many mainland visitors have used transit visits to Macau as a means of avoiding the regular procedures of applying for an entry permit to come here through the individual visit scheme or tour group travel scheme. “Many of these so-called transit visitors from the mainland are not really transiting Macau to other countries but only come here for travelling and shopping and then they’ll return to the mainland,” Mr Ng posited in his enquiry, citing doubts reflected by residents engaged in the tourism business. A legislator from the Federation of Trade Unions, Ella Lei Cheng I, and legislator Si Ka Lon have also expressed similar doubts via written questions and speeches made in the Assembly. The government will study the terms of restricting the stay period that mainland visitors can enjoy when transiting Macau: the related restriction measure may be put forward in July, Chinese-language newspaper Macao Daily News reported on Saturday, citing the Cabinet’s response.
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May 5, 2014
Macau Airport duty free contenders check out facilities The duty free concessions of Macau International Airport enticed 11 major players in the market to join last week’s pre-bid meeting and site tour, according to UKbased media The Moodie Report. Airport operator Macau International Airport Co Ltd (CAM) has launched a 54-day public tender, closing June 2, to identify two companies to run the Airport’s duty free service once the King Power Duty Free (Macau) Co Ltd monopoly expires in November. The Moodie report cited retailers and duty free operators including the DFS Group casting doubt on whether the Macau aviation market is large enough to sustain two duty free service operators.
April air passengers up 10 pct Air Macau 1Q
acau International Airport continues to enjoy stable growth, handling 10 percent more passengers last month versus the previous year due to the robust economy and tourism, the operator said. Macau International Airport Co Ltd (CAM) also said that one more international route was launched last month, providing charter flights connecting the territory to Cambodia. The operator said in a press release on Friday that the Airport welcomed about 450,000 passengers last month,
versus nearly 409,000 in the same month of the previous year. The number of aircraft movements also rose 10 percent year-on-year to 4,300 landings and take-offs last month, CAM said. The April result sustains growth so far in the first quarter, when the number of passengers handled expanded by 10 percent to about 1.28 million. “Macau’s economy continued to expand at a brisk pace, and the tourism industry attained prosperous growth,”
CAM reported in its Friday statement. “The stable growth in the passenger market reflects the optimistic attitude of airlines towards the current aviation market,” it added. The operator said a Cambodiabased carrier, Skywings Asia Airlines, has started providing charter flights between Macau and the nation’s tourist city of Siem Reap since April 28. This new route brings the number of direct flights connecting to Macau to 38, run by 21 carriers, CAM noted, adding it will continue to expand the city’s air service network. The Airport operator has said it is likely that there will be two more new flights to Ho Chi Minh City in Vietnam and Sabah in Malaysia during this quarter. CAM also said that the average daily passenger volume in the fourday Easter holiday last month hit 17,490, increasing 14 percent over the same holiday last year. T.L.
Future Bright: ‘satisfactory’ business growth for Q1 R
estaurant operator Future Bright Holdings Ltd said it is ‘satisfied’ with the growth of both its turnover and gross operating profit recorded for the three months ended March 31, the company’s latest unaudited results filed with the Hong Kong Stock Exchange shows. The turnover of Future Bright in the period, mostly generated by the group’s Japanese restaurants, was approximately HK$217.3 million (US$28 million), a yearon-year increase of 23.7 percent; the company’s gross operating profit climbed by 37.4 percent to HK$84.9 million. Future Bright’s managing director Chan Chak Mo said after a shareholders’ meeting on Friday that the HK$276 million the company had raised through share placement earlier should suffice the land cost for establishing a food plaza in Hengqin –
which is to enter operation after four years, although he said the company did not rule out further financing to support construction costs, Hong Kong financial wires reported. Mr Chan also revealed on Friday that about HK$60 million will be spent on setting up three big restaurants and one food court in Huafa Mall, Zhuhai, all of which are expected to open by September of this year. For the Macau market, the Friday filing noted that the company is planning to open 5 food souvenir shops in Macau by June, although neither the filing nor Mr Chan detailed costs. The company also said in the Friday filing that it is in the process of signing an agreement to rent 6 shop spaces in a new casino shopping mall in the Cotai area which is expected to open within the next two years. SL.
passengers up 20 percent P
assengers handled by the territory’s sole carrier, Air Macau Co Ltd, surged nearly 21 percent from the previous year to 515,800 in this year’s first quarter, according to majority shareholder Air China Ltd. The Beijing-based airline said in its annual report released last week that the passenger load in Air Macau had hit 69.2 percent in the first three months, up 0.22 percentage points year-on-year. Air Macau’s revenue passengerkilometre (RPK), a gauge used by the aviation sector to measure the sales volume of passenger traffic, rose by 23.4 percent to 870.4 million.
May 5, 2014
“Dealers dealt a bad hand” Reports show that dealers are probably the unhappiest workers in Macau. In an interview with Business Daily, the president of Forefront of Macau Gaming Association, Ieong Man Teng, says that occurs not only due to shiftwork that prevents them from seeing their families but is also due to the way they are treated by disgruntled gamblers in local casinos. Yet, despite Macau’s low unemployment rate and the apparent ease in changing to a more acceptable job, Mr Ieong believes it is now hard for dealers to move as they are usually not too educated and are unable to develop other talents whilst working in casinos. As such, he says that his Association will continue to fight for the dealers’ right to work in proper conditions and stand against the growth in the number of gaming tables which he believes will lead to an increase of the number of foreign workers in casinos. Luciana Leitão Photos by Manuel Cardoso
What are the main problems affecting gaming workers? The main problems are smoking and imported labour. I’ve protested against the number of gaming tables in casinos because there are now a great number of gaming tables and I don’t want the government using this as an excuse to import more labour from other countries. Considering the upcoming gaming development in Macau, it’s almost inevitable that imported labour will be employed. Why do you insist on preventing foreigners from working in casinos? There really is insufficient labour supply in the gaming industry but is it really necessary to increase the [number of] gaming tables in the casinos? In the past 10 years, there’s been a real boost to Macau’s GDP but actually citizens haven’t really enjoyed the economic results, so my protests concern the number of gaming tables in casinos because there’s an abnormal development
in the number. The government has declared a gaming tables growth of no more than 3 percent per year since 2013. Is it lying? At the end of last year, the Secretary for Economy and Finance said that he would cancel the limit of growth of gaming tables in casinos, so I really don’t believe in the three percent gaming table cap. In 2017/2018, about five to six casinos will open to the public and there’ll be about 5,000 more gaming tables in casinos. With the 5,000 gaming tables, I estimate there’ll be a need for 20,000 to 30,000 dealers in the casinos and the number of residents cannot really handle this, so the government will use this as an excuse to import more labour to Macau. Considering the future developments, isn’t there room for locals and foreigners? The number of foreign workers in
Macau in comparison to Macau residents is increasing. If the amount of foreign labour keeps increasing, Macau cannot really handle this issue because of the housing and traffic problems.
There’re now a great number of gaming tables and I don’t want the government using this as an excuse to import more labour from other countries
Apart from the gaming industry, if other industries import foreign workers the salary of locals will decrease. Also, in the past there were no foreign workers for the VIP rooms but in recent years they’ve imported foreign workers as hosts and I see salaries decreasing overall. Are local workers in the gaming industry being discriminated against by the employment of foreign workers? Yes, especially in the restaurant and security departments. Filipinos comprise the majority of the labour, and I see residents being ignored and discriminated against by [the employment of] those Filipinos.
A salary matter The dealer position is still reserved for locals. Is it important to keep it that way? The problem of foreign workers exists in different countries but in Macau it’s also related to the salary of the dealers. Also, the question is: will the casinos start employing foreign workers in preference [to locals]? Surveys show that the dealer position is one that people are most unhappy with. How do you solve this? The right of being a dealer is my first concern. In the past, when gamblers came in and treated them unreasonably and rudely, the casino would try to deal with it. But now, with the six gaming concessions, when dealers are being treated badly, the casinos try to keep the customer happy instead of the dealer. In the past, a dealer’s job was considered a high position but now it’s just a lowly job. This has happened because of
May 5, 2014
Macau the salary of the dealer. In the past, the dealer got a higher salary than now. The increase isn’t according to inflation. Another problem is that they cannot spend time with their families. If these problems cannot be resolved, some of them may think about committing suicide. As far as salary is concerned, there should be a slight increase because the GDP of Macau is increasing. Casino dealers should have the right to enjoy this economic growth.
I estimate there’ll be a need for 20,000 to 30,000 dealers in the casinos and the number of residents cannot really handle this, so the government will use this as an excuse to import more labour into Macau
Regarding the unreasonable treatment of dealers, the government should have some rules to safeguard their safety; so, when they are treated rudely the casino needs to blacklist those customers. At this point, the casinos do not want to lose any customers, so dealers are being ignored. In some cases, the dealer tries to call the police but there is no solution as the gambler can still gamble in the same casino the next day. Also, second-hand smoke is a problem. In most indoor areas in Macau, smoking indoors is banned but not in casinos. I hope the casinos can also ban smoking. This could help resolve work pressure. So, you believe that the smoking ban in casinos should be full and not partial, as it is now? Yes. Smoking in the VIP rooms is not banned. If the government retains the policy that in 50 percent of the casino area people can smoke, then people will try to go to the VIP rooms to smoke, so it will burden the VIP dealers. Reports say that the partial smoking ban in casinos is not working due to ventilation conditions. As a worker in a casino, do you see any difference since it was implemented? Most of these 50 percent nonsmoking areas also suffer from second-hand smoke because of the circulation of the air. Among all those casinos in Macau, six failed because there was no distinction between smoking and non-smoking areas. So, most of the dealers are
Fibre to the home More homes accessing Internet via fibre optical broadband connection
he number of households looking for a better and speedier Internet connection has increased fivefold in the last year. According to information released Friday by the Statistics and Census Service, a total of 8,900 households now go online using a fibre optical broadband connection. But there were less homes with computer equipment; at just under 82 percent, a small drop of 0.7 percentage points. The reason was mainly due to the various Internet access options available on smart phones and tablets. A survey on information technology usage in the household sector for 2013 conducted by the bureau as a supplementary questionnaire of the employment survey shows that a total of 152,900 households used the Internet last year, a rate of 82.6 percent. Smart phones remained the most popular means of accessing the Internet, with 79.9 percent of households saying they used mobile broadband to go online, up 17.6 percentage points over the previous year. The rate of Internet usage for people 3 years and older was 65.8 percent in 2013, up 4.5 percentage points year-on-year, and equally used amongst both genders. Up to 96 percent of those surveyed aged between 15 and 24 also used the Internet last year, with the majority at 91 percent going online daily, up 9.5 percentage points over that of the previous year. Among Internet
users, 69.5 percent used a mobile phone to access the Internet, up 6.0 percentage points year-on-year. In addition, 80.4 percent said they used the Internet to access information, while 80.3 percent used it as a means of communication. Online shopping accounted for 13.6 percent of total usage, up slightly by 1.0 percentage point over that of 2012. Median Internet shopping spending amounted to 750 patacas in the fourth quarter of last year, an increase of 30 patacas over the same period in 2012. S.F.
suffering from respiratory diseases.
for these dealers to fill?
“Most dealers cannot change job”
You’ve held a few protests, including on May 1st, but have you received any response from the government? The government’s said it will try to keep the table number increase to a three percent cap growth but if the government raises other policies unfair to dealers in casinos we’ll keep holding protests to protect our rights as casino workers.
Is a no-ban or partial ban the same thing? For some casinos with really bad air circulation partial smoking is actually equal to a no-ban. For those 50 percent of non-smoking areas, the occupied tables are really a small ratio in the casino. Given Macau’s low percentage of unemployed, if these dealers are unhappy, isn’t it easier to change jobs? In the past, due to such a great development in casinos, people were encouraged to become dealers, even if they were not trained or educated. Now, with such a big number of local dealers in the casinos, because they have to balance their job with their family, they cannot be trained. So, they cannot go out for training or some short courses to educate themselves. Why can’t the government coordinate with the casinos to spare some time for them to take some courses, so that they can nurture other talents? Under the [current] scenario, most dealers cannot change job. The mobility of such workers is really low because they aren’t educated and don’t have other talents. The government has emphasised that it wants to upgrade the talents of locals but I don’t see the government actually doing so. Also, the gaming industry is developing at such a rapid pace but other industries are not. So are there positions in other industries
In the past, a dealer’s job was considered a high position but now it is just a lowly job. This happens because of the salary of the dealer. In the past, the dealer got a higher salary than now. The increase isn’t according to inflation
May 5, 2014
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Material benefits not uniformly spread Costs rise in the construction industry but the average daily wage for a construction worker decreases in Q1 Sara Farr
Charge of the Light Brigade The number of non-Asian visitors to Macau amounts to a small proportion of the total number of visitors. Even in the case of the United States, the country that leads the pack among non-Asians, the annual numbers are tiny. They have never reached the threshold of 200,000 visitors, and, since a peak in 2011, numbers have decreased 8.5 percent. The total share of that country has consequently declined from slightly over 0.75 percent in 2010 to 0.6 percent last year. The quarterly figures for that indicator have decreased in every quarter but one for the last three calendar years. In the first quarter of the current year, it stood at just 0.57 percent of the total; thus, a slowly declining trend is apparent. The next three countries from where non-Asian visitors come in bigger numbers are Australia, Canada and the United Kingdom, a feature that reflects the ownership profiles of the main economic activities.
oncrete was 4.9 percent more expensive, as were rebars used in the foundation of buildings, up 1 percent, in the first quarter of this year. According to the latest official statistics on wages of construction workers and prices of construction material released by the Statistics and
Census Service, concrete cost about 615 patacas per cubic metre and steel bars 5,124 patacas per tonne. Construction workers, however, were making slightly less money in the first quarter of the year versus the previous quarter. The average daily wage for construction workers
was 631 patacas at the end of March, down 0.8 percent. Local construction workers were the hardest hit, with daily average wages dropping 1.7 percent to 790 patacas. Unskilled workers, on the other hand, had an average daily wage of 377 patacas, up by 5.3 percent in the first quarter of the year, while skilled and semi-skilled workers’ average daily wage was 640 patacas, slightly down by 0.3 percent. Electricians and electrical workers saw their daily salaries shrink by 12.2 percent quarter on quarter to an average 612 patacas. This was primarily due an ‘increase in semiskilled workers’, the Bureau said in a statement. Concreters and drainlayers also saw their salaries reduced by 9.4 percent to an average daily of 575 patacas ‘due to a decline in demand’. Plant operators, on the other hand, saw a salary rise of 11.7 percent, with their daily wage averaging 861 patacas. In real terms and after discounting the effects of inflation, the wage index of construction workers increased by 0.4 percent in the first three months of the year over that of the previous three months, with the indices of plant operators rising 9.7 percent, while that of electricians dropped 13.8 percent.
Average daily wage of a local construction worker
Going up: 18 hotels More residential under construction in Q1 buildings in the works On average, for the period observed here, most of the countries represented seem almost stationary, once we account for the natural quarterly oscillations throughout the year. Only one of these countries bucked the trend. The number of visitors from Russia, which occupied the eighth and last position in this ranking, just behind Portugal, has been growing and the country is now disputing sixth place with Germany. Its average visitor counting for the last four quarters was close to 7,500 visitors, compared to less than 3,000 visitors at the beginning of the period represented. All that said, taken together, these countries still amount to less than 2 percent of the total number of visitors.
average number of US visitors per day, first quarter
here are a total of 18 hotels currently being constructed in Macau, with an additional 25 development projects being appraised. All 43 projects together could mean up to 25,600 new hotel and guestrooms and 18,400 parking spaces once all are complete. Official numbers released yesterday by the Land, Public Works and Transport Bureau relate to the end of the first quarter of the year. According to these, the 18 hotels currently under construction could offer up to 9,800 guestrooms. Ten of the properties are being built on the Macau side and will offer about 1,000 guestrooms altogether; five are being built in Cotai and could offer as many as 7,500 guestrooms, while two are under construction in Taipa and will offer 1,000 rooms. A hotel is also being built in Coloane, which will offer up to 200 rooms. The official figures show that all these 18 construction projects comprise a floor area of 1.88 million square metres and will also include up to 9,800 parking spaces – an average of one parking space per guestroom. In addition, the lands bureau is appraising 25 proposed project developments, which could see Macau increase its number of guestrooms by 15,700. Of these 25 proposed projects, 18 are in Macau and comprise a total of 3,100 guestrooms; one is in Taipa with 120 guestrooms, five are in Cotai with up to 12,000 guestrooms, and one is in Coloane with up to 450 guestrooms. All these combined could provide up to 8,560 additional parking spaces.
total of 69 residential buildings are under construction on the Peninsula alone, part of the 86 ongoing residential projects being built in Macau at the end of the first quarter. Five are located in Taipa, while the remaining 12 are in Coloane, the latest figures on residential buildings released yesterday by the Land, Public Works and Transport Bureau show. Once complete, these combined will offer as many as 14,025 residential apartments with almost as many car parking spaces, and could be complete in the next two to three years. Four developers have been issued an occupation licence, which means residential apartments in the Peninsula buildings can start receiving their first homeowners and tenants. These will also offer up to 164 parking spaces combined. No occupation licences have been issued for residential buildings in Taipa or Coloane yet. Under appraisal are a total of 19 residential buildings that have already been constructed but are awaiting the issuance of the licence. These are still being inspected, according to the lands bureau; five are on the Peninsula, one is in Taipa and three are in Coloane. Combined, they offer a total of 1,700 residential apartments and 1,870 parking spaces for both cars and motorcycles. In addition, a total of 223 residential building development projects are currently being appraised. If given the green light, these could offer as many as 20,950 residential apartments and around 27,000 parking spaces. Up to 60 percent of these have been under appraisal for more than six months now; the lands bureau says that developers have not requested to start works relating to the next phase of their projects.
May 5, 2014
Macau Cultural fund accepting applications early June The government has revised its definition for businesses under ‘cultural and creative industries’ that can apply for the 2-mln ptc fund to support operations Stephanie Lai
Macau Creation shop
he city’s ‘cultural and creative’ businesses can apply for the 200-million pataca (US$25 million) cultural industries fund in early June to support their operations, the cultural industry’s fund management team told media at a press briefing. Locally-registered company applicants, which meet the government’s criteria for ‘creative design’, ‘cultural exposition and performance’, ‘art collection’ and ‘digital media’ (see table), can claim either a direct subsidy or interest-free loan from the government depending upon the nature of the project the company is applying for the fund for. The direct subsidy is in the form of direct funding of the applicant’s
project or a subsidised loan: for projects that are engaged in operating a ‘service platform’ for the cultural industries or ‘the development of a tangible or intangible product’ applicants can seek this subsidy from the government, fund regulations state. “We have seen that some local small and medium companies can come up with good ideas for their businesses, but they are not good at making a business plan or a financial report,” explained a member of the fund’s administrative committee, Banny Chao Son U, on Friday. “We need a service platform that can help these businesses in terms of legal consultancy, intellectual property registration, making taxation reports
or marketing their brand. And so for this sort of service platform, the government can support them readily through the fund. The direct subsidy can cover a project span of five years at most, for which the application is renewable only once. Meanwhile, for ‘cultural or creative’ projects that can be developed on a big scale and widely marketed, the fund can offer up to 50 percent of the total investment amount or operation cost of the project in the form of an interest-free loan, for which the repayment period is 10 years at most. The interest-free loan application can be renewed once, according to the regulations. The administrative committee
Fashion design; brand design; ‘creative products’ (including souvenirs); advertising; graphic design; exposition design; architectural design; interior design; industrial design
Cultural exposition and performance
Performing arts: opera, dance, music; Leisure and entertainment activities planning service; Agencies for artists, models, musicians, actors and actresses; backstage service for performances
Production or sales of photography, drawings and paintings, calligraphy, sculptures, antiques
Publication and distribution of books, newspapers and news periodicals and other printed materials; Production and distribution of animation, comics and related products; Production and distribution of television programmes, films and videos; Production and distribution of electronic publications; Production, maintenance and marketing of game software; Web building service
The latest official definition of businesses related to the ‘cultural and creative industries’, which will form the basis for the city’s census service to record its economic value.
of the cultural industries fund is authorised to grant funding of up to 500,000 patacas (US$62,619) for projects engaged in the production of ‘cultural and creative products’. Projects seeking more must approach the fund’s board of trustees and chief executive.
Fund vigilance Upon successful application for the fund, a special account will be set up to manage the applied fund use, the fund’s management team said. Funded companies should deliver a project progress report to the fund on a regular basis, said chief of the centre for financial support for projects Catarina Fong Keng Seng. Failure to deliver the project before the deadline as requested by the fund can result in the suspension of funds. Funded companies that do not submit their project progress report will have their funding cancelled, and are required to return the subsidy or loan they have already received, Ms Fong noted. In 2010, the government defined the cultural and creative industries as businesses engaged in visual art, film and video production, the performing arts, design, fashion, animation, music production and publishing. Currently, about 155 companies engaged in these activities are recorded, said Mr Chan Peng Fai, chief of the Department for Promotion of Cultural and Creative Industries, in the Cultural Affairs Bureau. Many of these companies are engaged in graphic and multi-media design, he notes. While the date for the cultural industries fund application has yet to be announced, another member of the fund’s administrative committee, Mr Chan Iat Hong, told Business Daily that they expect about 100 local companies engaged in the cultural industries to apply.
May 5, 2014
Wynn win situation for Macau and Japan Profits for Wynn grew some 23 percent in the first quarter as revenues from VIP and mass gamers blossomed in tandem albeit trailing Sands and MGM. CEO Steve Wynn says China’s slowdown is not an issue and that the operator’s efficiency is 25 percent higher than that of his competitors. The Cotai resort is on schedule and set to more than double Wynn’s earnings Alex Lee
hey may be growing at a slower pace than their peers but CEO Steve Wynn describes the first quarter results of Wynn Macau as “healthy” with the Chinese VIP business “holding strong”. The operator continues to make 25percent more per table than Macau’s market average. In the first quarter, Wynn Macau’s operating profits (adjusted property earnings before interest, taxes depreciation and amortization) climbed 16 percent from a year ago to US$384.3 million beating the analysts’ consensus of US$367 million. Net revenues (revenues less promotional allowances) increased 14.2 percent surpassing the magic mark at US$1.132 billion. “We had a healthy increase in Macau in our business; we had a great year last year, we’re up 16 percent in the first quarter”, Steve Wynn told investors in a conference call on Friday.
Slower but more efficient Nevertheless, Wynn Macau’s performance in the first quarter trailed some of its competition here. MGM China and Sands China, two casino operators who have already published their quarterly figures, reported an
VIP revenues growth
operating profit increase of 32 and 49 percent, respectively. “We’re a little slower in our growth than some of the other guys because we started a little later as a company”, Steve Wynn told analysts. “But we’re okay, now. We’re okay now in our capital structure and our organisation”, he said. VIP segment revenues totalled US$28.4 billion in the quarter, jumping 26.7 percent year-onyear, a growth rate outpacing the mass market. Mass revenues rose 23 percent to US$300.7 million. Wynn’s CEO underlined this point to investors stating that “in China, our VIP business is holding strong”.
From mass to premium Wynn Macau also stressed that the US$384 million operating profit is running at a “stable” 33 percent margin with “no lock impacts in indirect or junket play”. In the mass market, the operator is going upscale, replacing tables “from poorperforming mass areas to premium mass areas“. Despite a slower profit growth rate than Macau’s big beasts, Wynn
Steve Wynn: strap on a seatbelt for the next 60 months Wynn’s CEO believes that in the next five years Macau could become the most exciting and robust tourist destination in the world, competing with famous US locations tourist draws. In a conference call with investors after the presentation of his company’s first quarter results, Wynn posited that “in the next 60 months, between Hengqin Island and Cotai and Macau’s Peninsula, the Macau area, once the bridge is finished, will probably be the most robust destination tourist centre in the world, competing with Orlando, Las Vegas and any other place on the planet . . . It will probably be the most exciting place to visit on the planet”. Wynn reiterated that its massive resort on Cotai – Wynn Palace – is on
The impact on Wynn’s balance sheet of a China slowdown is not seen as a major problem as most of its clients are not affected or are prudent investors, the US billionaire claims, saying: “It’s not a massive group. It’s a group of very successful people and we’re dealing with a very creamy top end of them. Even in the mass area, we’re dealing with the better group, in terms of income . . . And they’re being careful and prudent and conservative at times for the 7.5 years that we’ve been operating. So the song remains the same”.
track and ready to open in 2016 with investment topping US$4 billion. In the first quarter, the company invested US$163.1 million in the integrated resort’s construction bringing total spending to date up to US$866.7 million. Steve Wynn expects the 552 tables available when Wynn Palace open its doors in 2016 will “more than double our business” in Macau as the gambling operator will pass the thousand table mark. Wynn currently has 492 tables. “Coupled with the bridge, if the investment community thinks that it’s been exciting so far, you can strap on a seatbelt for the next 60 months because this is really terrific”, concluded Steve Wynn on the investors call.
Reputation, capital structure critical for Japan Steve Wynn thinks that all the major casino operators will jump in if the Japanese market opens up, claiming that reputation and capital structure will be the deciding factors for snaring licences: “We’re all buzzing around there, trying to get ourselves in proper position. And at the end of the day, it’ll be about track record. It’ll be about reputation, capital
declares it is more efficient. “Our EBIDTA (operating profit) is about 25 percent to 30 percent more per position than any of our large competitors. So we get more bottom line money out of our units than anybody else”, Matthew O. Maddox, Chief Financial Officer, told investors on the same conference call.
We’re a little slower in our growth than some of the other guys because we started a little later as a company Steve Wynn
structure. I think it should be, anyway. Who can do the job? . . . I think Venetian - I think Sheldon is listening. He’s paying close attention to this. I know KT Lim is paying close attention to it. I know that MGM is. I guess, Caesars is, as well. Oh, I’m sure that the Melco people, Packer and his partner Lawrence Ho, will put their foot in”. Wynn is confident that in 2015 a decision will be taken by Japan, starting an ambitious “schedule” to get everything operational in time for the Tokyo Olympic Games in 2020.
May 5, 2014
Golden Week takes toll on April gaming revenues
acau gaming revenues growth slowed in April, with players playing less in anticipation of the May holidays and Golden Week. According to the Gaming Inspection and Coordination Bureau, gross gaming revenues increased 10.6 percent last month from a
year ago, the second lowest hike of the year. The gaming industry amassed 31.3 billion patacas in April compared to 28.3 billion in the same month in 2013. April also marked the second consecutive month of decreasing growth rates in the gaming sector. After a record 40 percent climb in
February with Chinese New Year, gains plunged 13.1 percent in March year on year. This trend is already affecting accumulated gross revenues since the beginning of the year, which rose 17.4 percent - although still ahead of the analysts’ consensus for the year’s total (around a 15 percent jump). In the
Broken Tooth’s former sidekick guilty of attempted assault Artur Chiang Calderon, an ex-associate of former triad boss ‘Broken Tooth’, has been sentenced to jail for four years and nine months for attempted assault and possession of illegal weapons Tony Lai
rtur Chiang Calderon, former right-hand man to ex-triad kingpin Wan Kuok Koi, finds himself behind bars again for attempted grave assault and possession of illegal weapons. It is not immediately known whether Mr Calderon, also a former Judiciary Police detective, will appeal the ruling of imprisonment for four years and nine months. On Friday, the Court of First Instance found Mr Calderon and three other defendants, including VIP gaming promoter Lam Peng Chi, guilty of an attempted assault on Mr Lam’s unfaithful wife in
November 2012, a week before the release of Mr Wan alias ‘Broken Tooth Koi’. The police arrested the four defendants before they materialised a plan to attack Mr Lam’s wife for cheating. The four defendants were originally charged with attempted murder but presiding judge Mário Silvestre said on Friday that the evidence presented in court like phone records could only prove they planned an attack. Mr Calderon was also found guilty of possession of illegal weapons at his residence including a stash of
January-April period, gaming revenues peaked at 133.5 billion patacas, the Bureau announced on Friday. “The VIP segment appears to remain healthy while mass remains exceptionally strong”, said Union Gaming in a note to clients when the numbers were published. “We note that April’s daily run-rate was –
sharpened screwdrivers, knives, air guns and explosives, according to the court. It is not the first time the former Judiciary Police officer has been imprisoned. Mr Calderon was convicted in 1999 of participating in organised crime and possessing illegal weapons, and was sentenced to prison for 10 years and six months. Upon his release in 2009, he was active in the junket business in casinos here before the late 2012 arrest. Mr Calderon was formerly regarded as a key player in the 14K gang here and a righthand man of Mr Wan, who was released in December 2012 after serving a prison sentence of 15 years for being a triad gang member, money laundering and loan sharking in relation to his activities inside casinos. Mr Wan has kept a low profile since his release but it is reported that he is involved in the VIP gaming business again. “[I] will definitely be involved in the gaming industry. The point is how to do it,” the former triad boss told Chinese-language Next magazine last July. Three other defendants in Mr Calderon’s case were sentenced on Friday for imprisonment between four years and three months, and four and a half years. Mr Calderon was acquitted of a charge of illegally providing accommodation to one of the accused, a mainland Chinese.
despite significant investor fears of a material slowdown – the fifth highest on record”. With mass market numbers exceeding expectations, investors are maintaining full year estimations. Union Gaming predicts a 14 percent rate in 2014, whilst brokerage Sterne Agee maintains its prediction of a gross revenue jump of 16 percent this year. “Final April results exceeded our outlook, which called for between 5 percent to 8 percent growth year on year. Results should be positive for Macau names this morning – a nice end to a bumpy month”, the brokerage concluded.
Long arm of the law M
acau law enforcement officers have attended US-sponsored capacity building training on border control, cargo targeting and interdiction, personnel and facility security, as well as post-blast investigations. In its ‘Country Reports on Terrorism 2013’, the US Department of State says that the SAR cooperated internationally in counterterrorism efforts through Interpol and other securityfocused organisations. In 2013, Macau’s financial intelligence office pursued a memorandum of understanding to formalise cooperation with other financial intelligence units. Macau’s counterterrorism cooperation with the United States includes information exchange and regular capacity building through participation in US-sponsored training programmes, the report says. Macau is a member of the Asia Pacific Group (APG) on Money Laundering and the Egmont Group of Financial Intelligence Units (FIUs).
May 5, 2014
Greater China Sina fined for indecent content Internet firm Sina Corp said it was fined 5.1 million yuan (US$815,038) by Beijing authorities for allowing “unhealthy and indecent content” on its online reading channel and on its main website. Sina was stripped of some online publication licences last week after being targeted in a pornography crackdown, the harshest punishment yet for a Chinese Internet company in an intensifying online crackdown. The fine was imposed by the Beijing Municipal Cultural Market Administrative Law Enforcement Unit, Sina said in a statement on Friday.
The end of the competition Competition between foreign and local companies may intensify
Hong Kong retail sales fall A government spokesman noted that the dip in retail sales in March was mainly dragged by the fall-off in major big-ticket items, the latter having shown notable growth in recent quarters. The spokesman added that looking ahead, the favourable job and income conditions, together with the sustained growth of visitor arrivals, should provide some support to the retail business in the near term. However, there’s a need to closely monitor whether the recent trend of moderation in retail business would continue.
ADB wants to work with infrastructure bank
The president of the Asian Development Bank said on Friday he would be “very happy” to cooperate with a multilateral bank that China is setting up to develop infrastructure projects in Asia. China’s finance ministry said in March that the planned Asian Infrastructure Investment Bank would have capital of US$50 billion, paid for by its members. It would have a mandate to fund infrastructure projects in the region, complementing the work of entities like the ADB. The Manila-based ADB is owned by 67 members, including 48 from the region.
Huawei headquarters in Shenzhen. Almost half of the company’s staff is focused on R&D
ome say that the “golden days” for foreign companies operating in China are over. But Jeffrey Towson, co-author of the “The OneHour China Book,” believes the Chinese market still has appeal. “The days of easy competition are over. The second wave may have been more profitable. But I think the competition is a lot more difficult,” he told Xinhua in an exclusive interview. He said compared with previous years, local regulations are now clearer and consumers are buying more. “In the past, people had market share but they didn’t make much money. Now they’re starting to make money and the system is in some ways easier to navigate,” said the Peking University professor and private equity investor. Towson co-wrote “The One-Hour China Book” with Jonathan Woetzel. The best-selling “speed-read” book introduces trends that are shaping today’s China. Competition between foreign and local companies may intensify, as the latter are spending more funding on research and development, as well as becoming more innovative.
Towson named the Chinese telecommunications giant Huawei as an example. According to the company’s 2012 Corporate Sustainability Report, it had about 150,000 employees, of which 45.36 percent were working in R&D. “That’s a lot of people. That combination of huge manufacturing scale plus increasing brainpower, that’s pretty daunting,” he said. Foreign entrepreneurs have worries about government intervention in the market. But Towson said their concerns may be misplaced. “It’s not going to determine your success and most things. It’s the competition that’s your biggest worry,” he said. He noted that in some areas like telecommunications, the government will play a bigger role. “But in most industries, like restaurants and online services, it’ s not going to be a big factor.” Having invested in multiple countries, Towson confessed “the interception of the government in business is the norm, not just in China, but also in Africa, a lot of parts of Europe, and a lot of sectors in the U.S. It doesn’t strike me as anything
terribly unusual.” Chinese Internet companies have been growing rapidly, with both innovative products and well-known entrepreneurs increasing in number. Towson said e-commerce is “the next really big thing in China.” Online marketplaces Tmall and Taobao, both owned by the Alibaba Group, saw transactions totalling 35 billion yuan (US$5.68 billion) during the so-called “Double-11 Shopping Spree” which took place on November 11 last year Towson said he thinks highly of Jack Ma, the executive chairman and the lead founder of the Alibaba Group. “People always ask about when China will have its own Steve Jobs. I think it is Jack Ma. I think he is already there. How many major products and innovations has he invented in the last decade?” Towson said. Behind China’s emerging Internet economy are the country’s over 600 million Internet users, many of whom have only moved online in recent years. Towson also had praise for major Internet company Tencent and its innovative instant mobile messaging app WeChat, which had over 100 million overseas registered users as of last August. “They saw the opportunity in instant mobile messaging, they developed the application in-house, they launched it in China and took over Asia pretty quickly. They’ve also launched an English version and they are moving into Europe right now,” Towson said. Facebook, a possible contender for Tencent, recently spent 19 billion U.S. dollars to purchase WhatsApp, a popular instant messaging app. “When Facebook bought WhatsApp, that put them head to head with WeChat for the first time. Because it turns out that instant messaging programs are pretty global. “Instant messaging doesn’t look like winner-takes-all. It looks like a long-term fight. I would give the first round to Tencent,” he said. Xinhua
Slight increase in PMI index Honda to double number of models Honda Motor Co will double the number of car models it sells in China over the next two years to try to capture market share from rivals such as General Motors Co, Japan’s Nikkei newspaper reported on Saturday. Honda will expand its product range to about 20 models by sharing platforms and other major parts between its two joint ventures in China, the Nikkei said without citing the source of its information. Honda also plans to source more Chinese parts to keep costs low, the Nikkei said.
Taiwan against improper yuan derivative sales Financial regulator has warned banks it will treat improper derivative contracts as fraud as it scrutinises the rapid growth of structured derivative products tied to the yuan, local media reported on Friday. The warning is the Financial Supervisory Commission’s latest move in a week the FSC said it will penalize three more banks, after already punishing the banking unit of Sinopac Financial Holdings for failing to disclose risks associated with structured yuan derivatives. The Economic Daily said the FSC chairman would meet with the presidents of Sinopac and the three other banks.
The pick-ups in the official PMI surveys for factories and services firms would not be enough to dispel concerns
rowth in China’s services sector accelerated slightly in April as new orders held steady, an official survey showed, an encouraging sign of strength in an economy that otherwise faces a cloudy outlook. The purchasing manufacturing index (PMI) for the services industry edged up to 54.8 last month, the National Bureau of Statistics said on Saturday, up marginally from 54.5 in March. A reading above 50 in PMI surveys indicates growth on a monthly basis, while a number below that threshold points to a contraction in activity. The mild improvement in the services sector, which mirrors a marginal gain in the official PMI survey of Chinese factories in April, should be welcomed by investors fretting about the health of the world’s second-largest economy. But the pick-ups in the official PMI surveys for factories and services firms would not be enough to dispel
concerns that China’s slowing growth engine might cool at a sharper pace faster in coming months. For one thing, the manufacturing PMI - released on Thursday - showed a sizable and worrying drop in export orders in April, suggesting that foreign demand for Chinese goods remains tepid. Saturday’s survey showed services firms in China fared better than factories in April, but not by much.
KEY POINTS April official services PMI at 54.8, vs 54.5 in March New orders, business confidence hold steady
Although new orders rose on a monthly basis, the pace of growth did not change from last month, leaving the sub-index flat at 50.8. Business confidence in the services industry also stayed unchanged at 61.5. An expanding industry that is likely to continue accounting for over half of all jobs in China, the services sector has weathered the country’s economic cool down better than manufacturing, even though growth has slackened. The official PMI survey has hovered above 50 every month since records started in January 2007, though growth still slumped to a five-year low in January, when the PMI dropped to 53.4. The Chinese growth engine has lost steam in the past year. It has been squeezed by lacklustre foreign demand for Chinese exports and the government’s effort to cut its own investment in a bid to reshape the country’s maturing economy. Reuters
May 5, 2014
Railway spending target rises
Premier Li will first meet Hailemariam Desalegn (pictured), President of Ethiopia
Some economists argue that this is a low-risk way to pump investment into a slowing economy without distorting it
hina will raise its spending targets on railway infrastructure to 800 billion yuan (US$128 billion) in 2014, two sources with direct knowledge told Reuters, the third such increase this year as Beijing gingerly returns to stimulus spending in the face of economic disappointments. China Railway Corporation, the statecontrolled commercial entity spun off from the Ministry of Railways in 2013, said during a conference call on Friday that it has raised its annual spending target to 800 billion yuan for the year, according to the sources. That is the third time the target has been incrementally increased from the original amount of 630 billion yuan. This latest increase marks a 70 billion yuan rise from the most recent target of 730 billion yuan. One of the sources said the call relayed instructions from Vice Premier Ma Kai regarding the pace and quality of construction, and also said the corporation is now required to bring 7,000 km of new line into operation this year. Reuters was unable to contact China Railway Corporation for comment as mainland Chinese businesses are closed for the Labour Day holiday. While equities markets in mainland China were closed for a holiday, Hong Kong-listed Chinese railway stocks rose on rumours of the policy change, which were first reported in the domestic magazine Caixin on Thursday. Shares in China Railway Group Ltd jumped about 9 percent, making the company the best performer on the Hang Seng China Enterprise Index. China Railway Construction Corp Ltd gained 7 percent. China’s economic managers have announced a series of small stimulus measures in recent weeks as manufacturing activity data has proved lacklustre, exports have slid and signs of increasing stress have appeared in selected parts of the financial system. Railway spending, some economists argue, is a low-risk way to pump investment into a slowing economy without distorting it, as the cash shows up in the system quickly. At the same time, such spending builds public transportation services that are a key part of Beijing’s strategy to improve logistical efficiency and better link the developed coastal regions with the more impoverished interior provinces. Reuters
7,000 km of new line into operation this year
Premier Li starts African tour Li will visit four countries and AU headquarters from May 4 to 11
hinese Premier Li Keqiang expressed the hope that his visit to Africa will further deepen China-Africa traditional friendship, upgrade practical cooperation, enhance solidarity and mutual assistance and promote common development. He made the remarks in a joint interview with African media before his departure to Ethiopia, Nigeria, Angola and Kenya, according to yesterday’s press release. “This is the first time that I set foot on Africa as Premier of China’s State Council and it is also my first foreign visit this year,” he said in the press release. “I believe this visit will be one of cooperation and solidarity on the basis of past traditions. I will tread the path of friendship previously paved by the older generation of Chinese and African leaders, where I will feel the deep friendship based on solidarity and mutual assistance between the Chinese and African people, see for myself Africa’s dynamic economic and social development, and listen to the African people’s description of their expectation of good life in the future,” he said. He added he was more than ready to make concrete efforts to deepen China-Africa relations and advance our cooperation in various fields to the greater benefit of our peoples. Li said that during his visit he will pay a visit to the headquarters of the
African Union and deliver a speech on China’s approach to and position on advancing China-Africa relations and cooperation in the new era. He will have in-depth discussions with leaders of four African countries that he will visit on strengthening bilateral ties and extensively engage with local people from different sectors. He will address the World Economic Forum on Africa and exchange views with participating leaders of African countries on promoting bilateral relations and cooperation. And he will call on Chinese nationals and staff members
I believe this visit will be one of cooperation and solidarity on the basis of past traditions Li Keqiang China Premier
of Chinese companies in Africa. “I hope that my visit will further deepen the China-Africa traditional friendship, upgrade practical cooperation, enhance solidarity and mutual assistance and promote common development. I hope that through my visit, the 1 billion African people will strengthen their understanding that the 1.3 billion Chinese people are always their sincere friends and reliable partners and that China is ready to pass on the relay baton of China-Africa friendship to future generations together with Africa,” he said. “As an African proverb goes, if you want to walk fast, walk alone; if you want to walk far, walk together. The ever fresh friendship and thriving comprehensive cooperation between China and Africa deserve to be valued and cherished by our people,” the premier said. “China will treat the African people with sincerity, strengthen solidarity, promote common development through win-win cooperation and realize our glorious dreams of great renewal at an early date,” he said. Li will visit to four countries and AU headquarter from May 4 to 11, at the invitation of Prime Minister of Ethiopia Hailemariam Desalegn, President of Nigeria Goodluck Ebele Jonathan, President of Angola Jose Eduardo dos Santos and President of Kenya Uhuru Kenyatta. Xinhua
May 5, 2014
Great annual results for Indonesia Exports unexpectedly rise 1.24 percent from a year earlier
ndonesia on Friday reported a larger-than-expected trade surplus and a further slowing in inflation, brightening the picture for Southeast Asia’s biggest economy. The data came ahead of a report on Monday expected to show the economy grew an annual 5.60 percent in the first quarter, according to a Reuters poll, a touch slower than 5.72 percent in the prior quarter but within the central bank’s target of 5.5-5.9 percent this year. The upbeat results suggest the economy began the year on a steady footing, after growth hit a four-year low in 2013 on a slowdown in exports and consumption. “We are looking for a 1Q real GDP growth print of around 5.6 percent (year-on-year), driven by a combination of weak investment growth but resilient private consumption spending, thanks to pre-election spending,” Credit Suisse said in a research note. Indonesia had a trade surplus of US$670 million in March, the statistics office said, more than the US$500 million surplus expected by analysts though narrowing from US$840 million in February. Exports unexpectedly rose 1.24 percent from a year earlier, bolstered by stronger palm oil shipments and demand from China and Japan. The median forecast of analysts was for a drop of 1.3 percent. It was the first increase since December. Imports fell 2.34 percent, less than expectations for a 4.5 percent yearon-year decline. The rupiah rose 0.3 percent to 11,520 per dollar after the trade data. The import data, however, can be a double-edged sword. The smallerthan-expected decline underscores resiliency in consumer spending, yet
KEY POINTS March trade surplus $670 mln vs $500 mln seen by analysts Exports +1.24 pct y/y vs -1.3 pct expected by analysts Rupiah touches session high after trade data April inflation at 7.25 pct y/y, matching expectations GDP Q1 y/y seen at +5.60 pct, vs +5.72 pct in Q4
policymakers are aiming to lower imports in an effort to combat the country’s current account deficit. On a month-on-month basis, imports rose 5.42 percent, with demand for fuel particularly strong amid robust demand for autos among middle class consumers. The G20 economy is taking further steps to dampen imports and help ease the current account deficit. In April, the government hiked the luxury tax for high-end cars to 125 percent from 75 percent, and local media reported that the government is also eyeing a luxury tax on smartphones. First-quarter data on the current account -the widest measure of the flow of goods, services and money in and out of the country- is due
out on May 9. The central bank has estimated a current account deficit of around 2 percent of gross domestic product in the quarter. The deficit was at 3.3 percent in 2013 and hit a record 4.4 percent in the second quarter last year. That prompted Bank Indonesia to hike its key reference rate by a massive 175 basis points between June and November to help defend the sliding rupiah and restore investor confidence. The central bank has stood pat since then, and Friday’s inflation data may give it room to keep rates steady again at its policy meeting on May 8. The consumer price index rose 7.25 percent year-on-year in April, slowing from a 7.32 percent rise in
March, as food prices declined at the start of the harvest season. The result matched the median estimate in a Reuters poll and marked the third straight month of easing inflation. Core inflation, which excludes administered prices and volatile food prices, was at 4.66 percent, little changed from 4.61 percent a month earlier. For 2014, the bank has said it expects inflation between 3.5 percent and 5.5 percent, much lower than 8.38 percent last year. The low end of that estimate would be the lowest since February 2012. Still, Bank Indonesia Governor Agus Martowardojo said on Wednesday that monetary policy would remain tight for the rest of the year.
Macquarie equals big shots One-off weather effect may make it tough to repeat growth in cyclical commodities business
acquarie Group earned A$1.1 billion (US$1 billion) in net income from commodities trading in its financial year to March, propelling the Australian bank into the big leagues of much-larger American rivals who have long dominated the sector. In its first results since losing the battle to buy
JPMorgan Chase & Co’s physical commodities business, the biggest on Wall Street, Macquarie said its net trading income from commodities surged nearly 60 percent as the coldest winter in three decades in the United States boosted power and gas prices. Client hedging and trading in its metals and energy capital division were also
up, Macquarie said. Goldman Sachs and Morgan Stanley, and oil majors including BP Plc. have also reported stronger trading results as the Polar Vortex slammed the United States. The one-off weather impact may make it tough to repeat the growth in the cyclical commodities business, but the gains underscore
Macquarie’s ambitions in commodities as Wall Street and European rivals retreat due to regulatory scrutiny and weak margins. A commodities business of that size would rank among the world’s top five banks dealing in everything from oil, copper and wheat, said George Kuznetsov, head of research and analytics at
Coalition, a UK consulting firm that tracks banks’ trading income. The top 10 banks tracked by Coalition together made US$4.5 billion trading commodities in 2013, the firm said in a report earlier this year. For Macquarie, commodities’ share of the A$1.7 billion in net income from fixed income, currency and commodities (FICC) - the bank’s trading arm - is now 67 percent, chief executive Nicholas Moore said during an analyst presentation. That is up from about 55 percent last year. It is also well above any bank tracked by Coalition, Kuznetsov said. The strong gains in U.S. energy markets helped lift Macquarie’s overall net profit over the A$1 billion (US$928 million) mark for the first time in four years. Reuters
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May 5, 2014
Japan consumption endures The increase in the sales tax has sparked worries that consumers will tighten their wallets S.Korea better than thought South Korea’s economy was probably faring better than perceived last year when new methods of assessing the optimum pace of growth are applied, an analysis by central bank officials found on Friday. The analysis by four officials at the Bank of Korea’s research department found output from Asia’s fourthlargest economy fell short of the optimum level but not as much as a conventional assessment indicated. The report said the new method included factors affecting financial stability while the conventional method mainly considered factors affecting inflation.
Indonesia manufacturing high Indonesian manufacturing activity expanded at the fastest pace in 11 months in April, bolstered by rising demand and better economic conditions, a HSBC Markit purchasing manager’s index (PMI) survey showed on Friday. The index rose to 51.1 last month from 50.1 in March. A reading above 50.0 signals expansion and one below that means contraction. New orders rose in April at the fastest pace since January on buoyant demand both domestic and overseas. Surveyed respondents reported that stronger demand from trading partners in Asia and Europe had helped export orders.
World Bank approves loan for Pakistan The World Bank has approved a US$12 billion loan for cash-strapped Pakistan that will be disbursed over five years, the country’s finance ministry and the global lender said on Friday. The ministry said the money will target “energy, economy, (fighting) extremism and education”, with US$1 billion being transferred to Pakistan in the next week. The loan will carry a 2 percent interest rate and is repayable after 30 years. Pakistan is struggling to deal with a massive energy crisis, high unemployment and a shortfall in tax revenue. It has borrowed heavily to pay to cover government expenditure.
Japan to expand tax breaks Japan is considering expanding tax breaks and loosening some rules to promote investment in start-ups as part of the second instalment of the government’s economic growth strategy, the Nikkei newspaper reported on Saturday. Japan is also likely to say next month that it will lower the effective corporate tax rate to 20 percent from around 35 percent currently, the Yomiuri newspaper said citing several government sources, which could encourage firms to boost much-needed capital expenditure in Japan. Prime Minister Shinzo Abe’s government is set to announce the second part of its growth strategy next month.
Carrefour looking to exit India
French retail giant Carrefour SA has begun making plans to exit its India wholesale operations, the Times of India reported on Saturday. Carrefour operates five wholesale cash-and-carry outlets in India and, after foreign investment rules were eased in 2012, it had been widely expected to set up a chain of supermarkets. The company has seen seniorlevel exits from its India business recently and some employees may be asked to leave over the next few weeks, the newspaper said, citing unnamed sources.
apanese household spending soared at the fastest annual pace in four decades in March as consumers rushed to beat a sales tax hike, with early signs backing the central bank’s conviction the economy will weather an expected fall in consumption over coming months. The Bank of Japan has repeatedly said in recent weeks that the world’s third-biggest economy is not in need of fresh near-term stimulus to overcome the pain of the April 1 tax increase. That view gained further currency with separate data on Friday showing the jobless rate held steady at a nearly seven-year low and the availability of jobs continued to improve. “Household spending was stronger than expected in March, pointing to considerably high growth in private consumption in the first quarter on pentup demand ahead of the sales tax hike,” said Takeshi Minami, chief economist at Norinchukin Research Institute. “The pullback in demand after the tax hike may be within expectation so far, as the BOJ and the government argue. But we need to wait to see how consumption fares in May and June before making any judgment.” Household spending rose 7.2 percent in March from a year earlier, data showed on Friday, far exceeding a median market forecast for a 1.0 percent increase, as demand boomed ahead of the sales tax hike to 8 percent from 5 percent in April. It was the biggest annual increase since 1975 and exceeded a 5.8 percent rise in March 1997, when Japan previously raised the sales tax to 5 percent from 3 percent. The rise in 1997 was followed by a 1 percent drop in April. Spending on refrigerators and vacuum cleaners quadrupled, while consumers also rushed to buy daily necessities like toilet paper and shampoo, the data showed, a sign
the pent-up demand ahead of the tax hike was broad-based. Household spending is likely to have fallen in reaction to the surge in March, though policymakers hope expectations of improving job markets and higher wages will take the sting out of the tax hike. Indeed, the jobless rate stood at 3.6 percent in March, matching a median market forecast and steady from the seven-year low hit in February. Job availability also continued to improve with separate data showing the jobs-to-applicants ratio rose to 1.07 from 1.05 in February, above a median estimate for 1.06 and matching a high last seen in 2007. “Job conditions are improving steadily,” top government spokesman Yoshihide Suga told a news conference, adding that the decline in spending after the tax hike has been within the government’s expectations so far.
Wage growth key The increase in the sales tax has sparked worries that consumers will tighten their wallets, threatening the
economic recovery Prime Minister Shinzo Abe has engineered with aggressive monetary and fiscal stimulus. But anecdotal evidence has shown the slump in spending in April has been moderate, underscoring the Bank of Japan’s view that the economy can withstand the pain from the tax hike without additional monetary stimulus. The key is whether the low jobless rate, which BOJ Governor Haruhiko Kuroda has described as nearing full employment, will translate into higher wages to spur a positive cycle of spending, business investment and prices, analysts say. Total wages rose 0.7 percent in March from a year earlier, the first increase in three months, though regular pay continued to fall as companies made up for labour shortages with overtime pay or temporary workers. If wage growth remains slow, big-ticket items may bear the brunt of any downturn in consumption. Automobile sales in April dropped 5.5 percent from a year earlier to hit the lowest level since Reuters
Easier foreign investment rules in Indonesia I
ndonesia on Friday eased its foreign investment regulations for several industries, including pharmaceuticals, power plants and advertising, amid signs of weakening investor appetite in Southeast Asia’s biggest economy. Foreign investment growth in the first quarter slowed to its lowest level in nearly five years following a government ban in January on mineral ore exports. The ban raised investor concerns over increasingly nationalistic policies. But in a reform that should ease some of that concern, the cabinet secretary’s office, after months of delays, issued a revised “negative investment list” of sectors in which foreign investors are either barred or restricted. The list, which has existed for decades, limits foreign involvement in areas deemed sensitive. “To further enhance the capital investment activity in Indonesia ... it is deemed necessary to change the provision of business sectors closed and business sectors opened for capital investment,” President Susilo Bambang Yudhoyono said in a presidential decree.
Indonesia is dependent on foreign investment to fund a current account deficit, which the central bank has estimated at around 2 percent of gross domestic product in the first quarter.
To further enhance the capital investment activity in Indonesia ... it is deemed necessary to change the provision of business sectors closed and business sectors opened for capital investment Presidential Decree
Under the investment policy, the government increased the maximum foreign investment in pharmaceutical companies to 85 percent from 75 percent, and in advertising agencies to 51 percent from 49 percent. The changes were effective from April 24, the cabinet secretary’s office said. The International Pharmaceutical Manufacturers Group, which represents foreign companies like Pfizer, Sanofi SA , and Novartis, said the revisions would do little to attract further investment as it would still require having an Indonesian partner. “The main issue is intellectual property,” Parulian Simanjuntak, the trade group’s executive director, told Reuters. “By having a local shareholder, they have access to confidential information.” Indonesia also allowed foreign investment of up to 100 percent from 95 percent for power plant projects carried out as a public-private partnership. Under the partnership terms, a foreign investor now can own an entire power-plant during a concession period, after which some equity transfers to the government. Reuters
May 5, 2014
ECB to hold fire on rates At the moment, deflation is perceived to be the biggest threat to the Eurozone’s economic recovery
he European Central Bank is not expected to cut interest rates this week, but could start paving the way for a possible move in June if deflationary dangers persist, analysts said. The ECB has held Eurozone borrowing costs at their current all-time low of 0.25 percent since November. Last month, the bank’s president Mario Draghi insisted that “we do not exclude further monetary policy easing and we firmly reiterate that we continue to expect the key ECB interest rates to remain at present or lower levels for an extended period of time”. Nevertheless, no monetary easing appears to be on the cards at the bank’s next meeting on Thursday -this time being held in Brussels- central bank watchers said. At the moment, deflation is perceived to be the biggest threat to the Eurozone’s economic recovery. Deflation is a general decline in prices and can be highly damaging if consumers, expecting prices to fall further, hold off purchases. Last month, area-wide inflation picked up slightly, but still fell short of forecasts and was way below the ECB’s target of just below 2.0 percent. Consumer price inflation rose to a 0.7 percent rate in April, up from the 0.5 percent in March, which was the lowest since October 2009. UniCredit analyst Marco Valli said that inflation had come in below ECB expectations for the past two months. “But the extent of this weakness and its composition -- mostly skewed towards non-core components -- is unlikely to trigger central bank action in May,” Valli said. Still, action “appears more likely than not” in June, the expert continued. The ECB is scheduled to publish its latest economic forecasts on Thursday and it may be compelled to downgrade its inflation forecasts. “Remaining completely inactive in this context may damage its credibility,”
Valli believed. Jennifer McKeown at Capital Economics agreed.
Dovish tone expected “We doubt that recent events and data releases have been significant enough to ensure more policy action from the ECB at its May meeting. But developments in the inflation outlook and in money markets suggest that the bank’s two ‘contingencies’ for further action might soon be met,” McKeown said. “We expect a very dovish tone from Draghi to hint that such action might be taken at the June meeting. This could involve an interest rate cut together with more long-term loans to banks or even a programme of asset purchases,” the analyst added. In addition to cutting its interest rates, the ECB could ease monetary conditions by pumping money into the system or buy up government bonds to bring down borrowing costs. ECB officials have repeatedly said they see no threat of deflation, but at
the last few meetings president Draghi has always insisted that the central bank stood ready to act if necessary. Nevertheless, analysts believe the ECB’s hand will not be forced just yet. “Our analysis of the various options suggests that the ECB is likely to keep its powder dry on Thursday,” said Commerzbank economist Michael Schubert. Deutsche Bank economist Gilles Moec agreed. “I’m not expecting any new measures in May. There has been no event or sudden change in the data flow which would compel the ECB to act,” he said. “June would be more much more propitious because the ECB is publishing its updated inflation and growth forecasts,” Moec said. Newedge Strategy analyst Annalisa Piazza said that among the so-called unconventional measures at the ECB’s disposal -meaning those not related to interest rates- the central bank would “likely remain mainly focused on funding conditions for banks”. AFP
Mario Draghi (pictured) insisted that interest rates are going to remain at present or lower levels for an extended period of time
U.S. construction jobs grow
Bill Gates to own no Microsoft stock
Oil wealth has made many insiders rich, but has also been used to fund reconstruction since a devastating civil war ended in 2002
French Prime Minister Manuel Valls said on Saturday the euro was too strong and that President Francois Hollande would take initiatives to boost growth and employment after the May 22-25 European elections. “We need a more appropriate monetary policy, because the level of the euro is too high. We need a major change that makes our monetary policy a tool for growth and job creation, a tool that serves the people,” Valls said at a meeting of young European socialists close Paris.
When the U.S. economy crashed in 2008, following the implosion of the housing market, Dave Klein’s southern California construction company almost folded. Overnight, he went from employing 40 construction workers to four. Some returned home to El Salvador, others to Mexico. Several left the state to find work in pork and chicken factories in the Midwest. But in the past two months, Klein says, some of them have returned as he has started hiring again - moves that reflect a recent trend in the U.S. construction industry as the American economy continues to pick up steam.
Angola’s oil output goals remain elusive espite colossal investment, Angola’s goal of pumping two million barrels of oil a day and even upstaging Nigeria as Africa’s largest producer remains a pipedream. To be sure, Angola’s oil industry is going gangbusters. State-owned oil firm Sonangol recently announced an US$8 billion investment programme and began to flog ten on-shore concessions. Total is slated to invest US$16 billion, while other global energy companies ENI, Statoil and ConocoPhillips also have plans to put more work boots on the ground. This has led officials to predict, again, that the country will break the symbolic production level of two million barrels a day and that it could even get within striking distance of
French PM says euro too strong
Nigeria’s 2.5 million a day rate. Angola is keen to reach that level of production because, as well as two million being a nice round number, it would represent a significant boost for Africa’s third-largest economy. The black gold lying off the coast of the capital Luanda and the Cabinda enclave accounts for 30 to 40 percent of economic output and around 80 percent of government income. Oil wealth has made many insiders rich, but has also been used to fund reconstruction since a devastating civil war ended in 2002. And yet, the faster Angola pumps, the further it seems from its target. Industry insiders say a mix of technical problems, infrastructure bottlenecks and state intervention means any attempt to retake the title of Africa’s largest oil producer, which
Angola briefly held in 2008, is likely to end in failure. Last year crude production fell 1.1 percent to 1.71 million barrels a day, a disappointing showing after a 4.5 percent jump the previous year. That raised the ire of Sonangol’s chief Francisco de Lemos, who demanded “explanations” from the heads of Chevron, Total, Esso and BP about a series of problems that contributed to the drop. Maintenance work, mechanical damage and delays in delivering technical equipment have all taken their toll. Foreign operators complain that the delays often stem from Sonangol’s insistence that it gives final approval to any construction or technical work. AFP
The former chief executive and chairman of Microsoft Corp, will have no direct ownership in the company he co-founded by mid-2018 if he keeps up his recent share sales. Gates, who started the company that revolutionized personal computing with schoolfriend Paul Allen in 1975, has sold 20 million shares each quarter for most of the last dozen years under a pre-set trading plan. Assuming no change to that pattern, Gates will have no direct ownership of Microsoft shares at all four years from now. With his latest sales, Gates was finally eclipsed as the largest individual shareholder by former CEO Steve Ballmer.
JPMorgan sees markets revenue declining JPMorgan Chase & Co expects second-quarter revenue from bond and equity trading to decline by about 20 percent from a year earlier, the biggest U.S. bank by assets said on Friday. The outlook is based on results so far this quarter which “reflect a continued challenging environment and lower client activity,” JPMorgan said in a quarterly filing with the U.S. Securities and Exchange Commission. Almost all the major Wall Street investment banks reported first-quarter declines in trading revenue from a year earlier. Revenue from bond trading has persistently declined over the past five years.
May 5, 2014
Leading reports from Asia’s best business newspapers
T H E S T R A IT S T IM E S Tigerair is grounding eight planes and cutting unprofitable flights in an unprecedented move to turn its loss-making business around. Battered by bruising competition, which has pushed the carrier into its biggest loss ever, Tiger-air will park the planes - about 15 per cent of its total fleet - until the end of March next year. The decision to downsize comes about two months after the airline cancelled an order for nine single-aisle planes that were due to arrive this year and next.
PHILSTAR Inflation is expected to have picked up pace in April from the previous month on the back of higher food prices, two banks said in separate research notes. UK-based Barclays and Metropolitan Bank & Trust Co. both said inflation likely accelerated to 4.1 percent in April from 3.9 percent in March. “Inflation (is) likely to tick higher as food prices rise at the margin, along with a sticky core,” Barclays said in its latest Emerging Markets Weekly report. Inflation peaked at a two-year high of 4.2 percent in January.
THE STAR Jim Elms, global chief executive officer for US-based media agency Initiative, admits that he enjoys making trips to Asia − even if it’s only a handful of times. “It’s a wonderful region to learn from,” he tells StarBizweek. Elms, who was in Kuala Lumpur recently, was also looking forward to visiting the agency’s affiliates in Thailand, South Korea, Japan and Singapore. Elms says there is a certain amount of liberty in the way creative work is done in Asia – which is a good thing.
THE NEW ZEALAND HERALD The Government and its political allies have gone on the attack over Labour’s ground-breaking interest rates and savings policy, after signs the plan was getting traction with commentators and the public. Widely regarded as perhaps Labour’s strongest policy package in some time, the Government was initially dismissive, but chose not to engage on the specifics of the plan to vary employees’ KiwiSaver contributions within a band of about 8 to 10 per cent, as a substitute for some Reserve Bank interest rate movements when fighting inflation.
The mismeasure of technology Ricardo Hausmann Former minister of planning of Venezuela and former Chief Economist of the Inter-American Development Bank, is a professor of economics at Harvard University, where he is also Director of the Center for International Development
AMBRIDGE – There is nothing better than fuzzy language to wreak havoc – or facilitate consensus. Ludwig Wittgenstein argued that philosophical puzzles are really just a consequence of the misuse of language. By contrast, the art of diplomacy is to find language that can hide disagreement. One idea about which economists agree almost unanimously is that, beyond mineral wealth, the bulk of the huge income difference between rich and poor countries is attributable to neither capital nor education, but rather to “technology.” So what is technology? The answer explains the unusual consensus among economists, for “technology” is measured as a kind of “none of the above” category, a residual – Nobel laureate Robert Solow called it “total factor productivity” – that remains unexplained after accounting for other production inputs, such as physical and human capital. As Moses Abramovitz aptly noted in 1956, this residual is not much more than “a measure of our ignorance.” So, while agreeing that technology underpins the wealth of nations sounds more meaningful than confessing our ignorance, it really is not. And it is our ignorance that we need to address. In an important book, W. Brian Arthur defines technology as a collection of devices and engineering practices available to a culture. But devices can be put in a container and shipped around the world, while recipes, blueprints, and how-to manuals can be posted online, putting them just a few clicks away. So the Internet
and free trade should make the ideas and devices that we call “technology” available everywhere. In fact, much of modern growth theory, starting with Paul Romer’s research in the late 1980’s, sprang from the idea that output was driven higher by ideas that are hard to come by but easy to copy. That is why inventors have to be protected by patents and copyrights or subsidized by governments. So, if ideas are easy to copy and devices are easy to ship, why do differences in “technology” persist between countries? When something upsets a beneficent natural order, humans crave for stories featuring some malign force. For example, the argument in Daron Acemoglu and James Robinson’s book Why Nations Fail is essentially that technology does not diffuse because the ruling elite does not want it to. They impose extractive (bad) institutions, instead of adopting inclusive (good) institutions; and, because technology may upset their control over society, they choose to do without it. As a Venezuelan who is seeing his country collapse at this very moment, I do not doubt that there have been many instances in human history during which those in power have prevented progress. But I am also struck by how often governments that embrace the goal of
shared growth – post-apartheid South Africa is a good example – fail to achieve it. Such governments promote schooling, free trade, property rights, social programs, and the Internet, and yet their countries’ economies remain stuck. If technology is just devices and ideas, what is holding them back? The problem is that a key component of technology is knowhow, which is an ability to perform a task. And knowhow, unlike devices and ideas, neither involves nor can be acquired through comprehension. The tennis champion Rafael Nadal does not really know what it is that he does when he successfully returns a serve. He just knows how to do it; putting it in words is impossible, and any effort to do so would not make the rest of us better players. As the scientist and philosopher Michael Polanyi would say of such tacit knowledge, we know more than we can tell. So we do not need extractive elites or other evil forces to explain why technology does not diffuse. Technology has trouble diffusing because much of it requires knowhow, which is an ability to recognize patterns and respond with effective actions. It is a wiring in the brain that may require years of practice to achieve. This makes its diffusion very slow: As I have argued previously, knowhow moves to new areas
One idea about which economists agree almost unanimously is that, beyond mineral wealth, the bulk of the huge income difference between rich and poor countries is attributable to neither capital nor education, but rather to “technology”
when the brains that hold it move there. Once there, they can train others. Moreover, now that knowhow is becoming increasingly collective, not individual, diffusion is becoming even slower. Collective knowhow refers to the ability to perform tasks that cannot be carried out by an individual, like playing a symphony or delivering the mail: neither a violinist nor a letter carrier can do it alone. Likewise, a society cannot simply imitate the idea of Amazon or eBay unless many of its citizens already have access to the Internet, credit cards, and delivery services. In other words, new technologies require the previous diffusion of other technologies. That is why cities, regions, and countries can absorb technology only gradually, generating growth through some recombination of the knowhow that is already in place, maybe with the addition of some component – a bassist to complete a string quartet. But they cannot move from a quartet to a philharmonic orchestra in one fell swoop, because it would require too many missing instruments – and, more important, too many musicians who know how to play them. Progress happens by moving into what the theoretical biologist Stuart Kauffman calls the “adjacent possible,” which implies that the best way to find out what is likely to be feasible in a country is to consider what is already there. Politics may indeed impede technological diffusion; but, to a large extent, technology does not diffuse because of the nature of technology itself. The Project Syndicate 2014
May 5, 2014
Closing S. Korea’s President accepts blame for disaster Ukraine expands offensive South Korean President Park Geun Hye took responsibility for the Sewol ferry disaster in her second meeting with bereaved families, as her approval rate slid to a four-month low amid public anger over the accident. “I feel boundless responsibility” for both the sinking and the government’s handling of it, Park told about 50 family members yesterday. “I’ll punish those responsible for the accident and any who committed crimes”, she said.
Ukraine vowed yesterday to broaden its operation against pro-Russian rebels as the crisis-hit country observed a second day of mourning after violence that left more than 50 people dead. National Security and Defence Council chief Andriy Parubiy said the armed forces would expand the “active stage of the operation in other towns where extremists and terrorists are carrying out illegal activities”.
‘Satisfactory’ progress on self-help gamblers The government has received over 350 applications requesting self-exclusion from casinos for protection against gambling since November 2012 Tony Lai
he government says the figures of residents seeking help on problem gambling like self-exclusion from casinos were ‘satisfactory’, despite doubts cast on the progress of official work on responsible gambling. Hon Wai, an official from the Social Welfare Bureau, said that the administration had received over 350 applications since November 2012 seeking self-exclusion from casinos to counter problem gambling. Among the cases, about 20 percent, or more than 70 subjects, were willing to receive counselling offered by the Bureau, said Mr Hon, the head of the Bureau’s department of prevention and treatment of drug dependence. “We are constantly evaluating the situation [and] the current figures of asking for help [against problem gambling] are satisfactory,” he said on Saturday on the sidelines of a public event. A law which came into force in November 2012
allows Macau residents to seek a self-ban from casinos for a period of up to two years to counter their problem gambling practices. An habitual gambler’s family can also seek such a ban for him or her on condition of the consent of the latter. Nevertheless, both public and academics have cast doubt on the effectiveness of such provisions, which require the cooperation of the gamblers themselves. Davis Fong Ka Chio, a local gaming scholar from the University of Macau said in November last year: “From our studies, we understand that the percentage of people using the self-referral route (i.e.) problem gamblers seeking help, is far below our expectations … we face very significant challenges in motivating people in the Chinese community to seek help. That’s because of the cultural issue,” the director of the university’s Institute for the Study of Commercial Gaming said at the time. Mr Hon admitted on Saturday that there would
be a gap between the number of people seeking help and the number of problem gamblers. The government also faces challenges in promoting responsible gambling as the public, including gamblers and some professionals, do not have a clear grasp of
‘responsible gambling’ and ‘problem gamblers’, he said. The administration will offer more training on the matter to the social service sector, as well as launching courses for the management of gaming companies in the second half of this year to
teach them to pay attention to the gambling of their staff, Mr Hon said. He added that they will simplify procedures for seeking self-exclusion from casinos like providing such application in the responsible gaming kiosks installed in casinos.
Ukraine unrest flares from East to South
Etihad gives A380s luxury treatment
Thousands rally in Taipei
iolence escalated in Ukraine’s easternmost regions as the government pressed its offensive to dislodge rebels and the conflict spread to the south. Government troops pressed on against separatists in the Donetsk area, near the Russian border, taking back a television broadcast tower in Kramatorsk, Interior Minister Arsen Avakov said on his Facebook account. Open clashes are sweeping Ukraine’s east and south, from Donetsk to Odessa, about 100 miles from the European Union’s southeastern frontier in Romania, amid signs the industrial and coastal regions are slipping out of the Kiev government’s control. The easternmost region is “essentially at war,” the head of the country’s anti-terrorist agency said yesterday. “We are not far from a civil war,” even if the government says it’s being driven by outside forces, Timothy Ash, an emerging-markets economist at Standard Bank Plc in London, said in an e-mail. “All told, little evidence of any de-escalation in the conflict in Ukraine and little evidence of any back-room efforts to broker a solution.” Bloomberg
tihad Airways PJSC said its Airbus Group NV A380s will target travelers seeking privacy and bespoke luxury when the jets join the fleet in December, months or years after entering service with other premium carriers. Etihad will fit the superjumbos with what it says will be the industry’s largest first-class suites to help compete with Gulf rivals Emirates and Qatar Airways Ltd. and other top-end operators such as Singapore Airlines Ltd. and British Airways. “We’ve taken the concept of private jets and put them into the A380,” Etihad Chief Executive Officer James Hogan said yesterday in Abu Dhabi, announcing that the planes will serve New York, London and Paris, together with Sydney and Melbourne in Australia -cities that already have extensive A380 services. Etihad will become the 14th airline in the world to operate the A380 when its commences flights on Dec. 27, and has 10 of the double-deckers on order. While Emirates of Dubai and Doha- based Qatar don’t fly the model to Abu Dhabi, they do operate it on the same intercontinental transfer routes Etihad will target. Bloomberg
housands of Taiwanese calling for peace and the rule of law rallied in Taipei yesterday to counter a recent series of demonstrations that turned violent and led to clashes with police. Police estimated that about 1,500 people from the ruling Kuomintang party and their supporters rallied in the downtown area, ending up with a march to police headquarters. Demonstrators voiced gratitude to police for maintaining peace in the demonstrations since March. Police estimated 15,000 turned out for a separate gathering organised by the right-wing New Party, which is friendly to the Kuomintang. Waving Taiwan flags, the crowd kicked off the event by singing the national anthem. Chanting “Long Live the Republic of China”, demonstrators fired salvos at Lin Fei-fan and Chen Wei-ting, the most prominent student leaders during the island’s first-ever occupation of parliament starting on March 18. “What is their contribution to the country? They acted wildly in defiance of the law,” an angry Yok Mu-ming, chairman of the New Party, told the crowd. AFP