Macau Business Daily, June 23, 2014

MOP 6.00 Closing editor: Sara Farr Year III

Number 566 Friday June 23, 2014

Publisher: Paulo A. Azevedo

Budget under water

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he government is sticking to its 2009 plan. The LRT metro railway line will go under Nam Van Lake and Sai Van Lake. At increased cost. Phase One of the project – covering Macau, Taipa and Cotai – will be of around 11 billion patacas. The budget has more than doubled from the 4.2 billion patacas announced in 2007 Page 3

www.macaubusinessdaily.com

Cost of living soaring

Hong Kong stocks rise on casino operators Page 8

Inflation reached 6.16 percent in May. Fingers were pointed at higher rents and the cost of dining out. Housing costs increased at double the pace of the rest of the economic basket. Macau’s inflation rate is one of the highest in Asia

BOC wins first yuan clearing deal in Euro area Page 8

Page 5

Hukou handout

Brought to you by

HSI - Movers June 20

The housing industry and officials in China are searching for new ways to stimulate buyers’ appetite. The last resort is offering a permanent residence permit, known as a hukou

Name

Own goal Local police have cracked a World Cup betting syndicate. The ring took in as much as 5.1 billion patacas in illegal wagers. This makes it the biggest betting bust in history, according to police. At least 26 Asians have been arrested, none from Macau

Page 9

Page 4

%Day

Want Want China Ho

2.73

Sands China Ltd

2.34

China Resources Po

1.94

Galaxy Entertainme

1.77

China Shenhua Ener

1.35

Hang Lung Propertie

-1.05

China Resources Lan

-1.12

China Unicom Hong K

-1.16

China Mengniu Dairy

-1.26

Cheung Kong Holdin

-1.30

Source: Bloomberg

INTERVIEW

I SSN 2226-8294

Not playing the game Given the lack of human resources, companies are hiring people with disabilities. But it’s not all about altruism. Every local employee translates into a foreign worker quota. Hetzer Siu Yu Hong of the Macau Special Olympics speaks to Business Daily about the unintended consequences

Brought to you by

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2014-6-24

2014-6-25

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25˚ 29˚

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June 23, 2014

Macau

There’s always One For some, no price is too high for a piece of real estate to call home. At One Penha Hill, home can mean a price tag of as much as MOP100 million for two apartments Sara Farr

sarafarr@macaubusinessdaily.com

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wo apartments in the same residential building have sold together for a staggering 100 million patacas. The buyer then turned these two apartments into one and now calls it home. These are at One Penha Hill, the new highend residential apartment building in Penha district.

While there are a total of 63 apartments at One Penha Hill, Business Daily understands that as many as one third have already been sold, the majority of which went for a lump sum similar to those identified above.

A Hong Kong real estate agent who asked not to be named said that the average price per square foot of the apartments in this building is HK$13,000 (US$1,677) with the average size of apartment here between 1,000 and 2,000 square feet, although some can occupy an area of as large as 4,000 square feet, Business Daily understands. “It’s a big lump sum, but it’s also a big apartment,” the property agent said.

According to real estate agents, the apartments at One Penha Hill are of similar luxury to those at One Grantai and One Central. The prices are also almost the same.

Estate agent Jones Lang LaSalle (Macau) Ltd is the project’s principal agent.

While not all 63 apartments were up for sale at the same time, Michelle Lou, the company’s assistant manager here, told Business Daily that the first tranche of units had all sold out. How many these comprised, however, Ms. Lou did not mention. These are first-hand sales, she says, “the apartments are in very good condition inside, and in a good location.”

The property developer,

Tomson Group Ltd, asked Jones Lang LaSalle to handle the sales for some of the 63 apartments at One Penha Hill because of the company’s previous experience with residential buildings such as Buckingham in Taipa and M Residence, Ms. Lou said.

According to her, the majority of the buyers for the apartments sold by JLL are Macau residents, and are for their own personal use and not to lease.

The Hong Kong real estate agent said this particular

residential building is in a prime location and not an ‘easy target’ for Macau buyers. Investors looking to buy an apartment to rent it out would consider something smaller with an area ranging between 400 and 600 square feet. Smaller-sized apartments are easier to rent and do not cost a big lump sum, the property agent said.

The project is located in the middle of Penha Hill, with views to Sai Van Lake, and just a few minutes’ walk from the World Heritage site of Penha Church.

Less than 20 new units located in the Penha Hill area have been sold in the past 10 years and there are no new developments planned for the area, Jeff Wong Chi Wai, head of Jones Lang LaSalle (Macau) told Business Daily in April last year. “Penha Hill is a traditional luxury residential area in Macau,” he said at the time, “where most of the properties are held by the local affluent community.

Properties in the area are seldom available for sale.” with Stephanie Lai

Louis XIII posts loss for Macau hotel project The company said that its Coloane hotel and entertainment complex on the periphery of Cotai, due to open in 2016, weighs on its earnings Stephanie Lai

sw.lai@macaubusinessdaily.com

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acau boutique casino hotel developer Louis XIII Holdings Ltd reported a group-wide loss attributable to owners for the year ended March 31, 2014, although its major Hong Kong-based subsidiary Paul Y. Engineering Group Ltd (PYE) had generated significant contributions via strong growth in its thriving construction business in both SARs. In its annual results filed with the Hong Kong Stock Exchange on Friday, Louis XIII reported a loss attributable to owners of about HK$51 million (US$6.6 million) resulting mainly from the operating costs associated with its hotel development in Macau, and the recognition of a loss of HK$27 million from ‘a long outstanding receivable’ related to a construction project of its major subsidiary Paul Y. Engineering Group in mainland China. Louis XIII owns a 51 percent stake in builder Paul Y. Engineering Group.

Louis XIII also said in the filing that another main reason accounting

for the loss was the ‘full-year impact of dramatic increase in the share of profit attributable to non-controlling shareholders following the distribution in specie of 49 percent of PYE in March 2013.’

Louis XIII is currently building a luxury hotel and entertainment complex on a 65,000 square foot site in Coloane close to Cotai, which is expected to be completed within the first half of 2016.

The foundation works for the hotel project are nearing completion and the preparation for the superstructure works started this month; Louis XIII obtained approval for its general building plans for the hotel under development in May, the company said in the filing.

In previous media reports, the hotel and entertainment complex has been referred to as a boutique casino resort project that is subject to government approval, although Louis XIII’s Friday filing made no mention of the progress of the intended gaming elements.

The company has described its

expectation of the Macau hotel project as one that could generate ‘strong cash flows’ when it enters into full operation with provision of ancillary retail and entertainment facilities.

Louis XIII recorded a turnover, including its joint operations, of about HK$8.58 billion, representing an increase of 20 percent over the HK$7.13 billion in the previous fiscal year, the filing noted.

Gross profit group-wide has increased by 28 percent to about HK$289 million from HK$226 million in the previous fiscal year.

The segment revenue from Paul Y. Engineering Group increased 30 percent to HK$9.24 billion from HK$7.13 billion in 2013.

With ‘significant increase in capital investments’ from public and private projects, the builder secured new contracts worth about HK$6.34 billion in the fiscal year ended March 31, including about HK$3.85 billion for Louis XIII’s hotel project in Macau.

The hotel development segment for Louis XIII has recorded assets

of HK$2.95 billion and liabilities of HK$499 million, mainly from the cost of land and the hotel under development in Macau, and the liability portion of convertible bonds issued for financing the project.

On November 15 and December 16 last year, Louis XIII raised HK$1.03 billion through a general mandate placing, a specific mandate placing and a convertible bonds subscription to finance the Macau hotel project.

This year, on January 13, the wholly-owned subsidiary of Louis XIII and the developer of its Macau project, New Concordia Hotel Ltd, accepted an offer from an unnamed mainland China-based bank’s Hong Kong branch for a term loan facility of up to HK$3.045 billion, which is to be used principally for the construction of the Macau hotel.

The loan facility is for a term of six years starting from the date of the first drawdown, which is subject to the terms of the related loan facility agreement, the company noted in its Friday filing.

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June 23, 2014

Macau

LRT: Nam Van, Sai Van sections to go underwater Gov’t says it is sticking to its 2009 plan to have the railway for Nam Van Lake and Sai Van Lake go underwater, despite higher cost Stephanie Lai

sw.lai@macaubusinessdaily.com

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large part of the light rapid transit (LRT) railway section for Sai Van Lake and Nam Van Lake on the Peninsula coast will go underwater, despite the government bearing a higher cost than building an elevated metro railway, deputy director of Transporation Infrastructure Office André Sales Ritchie told media on Friday.

Office representatives were introducing to media its route plan for the southern Macau Peninsula, which covers seven stations from the Outer Harbour Ferry Terminal in NAPE to Barra, the stop where the metro system of the Peninsula will link up to Taipa.

The seven stations will be sited at the Outer Harbour Ferry Terminal, Golden Lotus Square (near Fisherman’s Wharf), Science Centre (sitting on the newly reclaimed urban Zone B), Jardim das Artes (near Wynn Macau casino), Nam Van, Sai Van and Barra.

According to the Office’s illustration, a large part of the southern Peninsula metro railway section is elevated – except for the route stretching from Nam Van Station to Sai Van Station, where much of the railway was designed to be built in a tunnel under the lake waters.

Mr. Ritchie noted that such an underwater metro railway design was actually part of the Macau Peninsula LRT route plan in 2009.

He added that the LRT first phase project budget of 11 billion patacas (US$1.39 billion) – which should include Macau, Taipa and Cotai sections with a total of 21 stations – has already factored in that the

railway sections for Sai Van and Nam Van would employ the underwater tunnel. The budget revision was made in 2011, after the government initially estimated in 2007 that the project would cost 4.2 billion patacas.

The cost for the ferroconcrete-built underwater tunnel for both the Sai Van and Nam Van metro lines would definitely be higher than the aboveground railway as it involves more complicated construction, Ritchie added.

The Office’s deputy director said that the government had yet to project the construction cost for the Sai Van and Nam Van sections, adding that could only be confirmed when the public tender for the construction was launched.

Kun Iam Statue The Office also announced on Friday that they would be restricting the elevated LRT railway to the level of the base of Kun Iam Statue, a response to public criticism that the railway would be visually unappealing if it ran waist level to the statue.

The metro runs by the Kun Iam Statue between the Science Centre station and Avenida 24 de Junho, the road abutted by MGM, Wynn, L’Arc Macau and Starworld Macau.

According to Ritchie, the metro railway will be 30 metres or the equivalent of over 8 vehicle lanes distant from the Kun Iam Statue.

“We’ve already decided to lower the railway to the level of the base of the [Kun Iam] statue, and I believe that there’s still room for us to lower this level further,” Ritchie told the media. “After the Portuguese

Portuguese think-tank embraces Macau

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ortuguese think-tank Sociedade de Avaliação de Empresas e Risco (SAER) announced last Friday that it will expand its operations to the region of Macau and other Portuguese-speaking countries such as Brazil, Angola, Cape Verde and Mozambique.

‘SAER begins a new cycle which includes new shareholders, the diversification of its business areas and also the reinforcement of its team,’ the company said in a press release.

‘Our activity is focused on bringing the future to the present. We are focused on predicting scenarios and opportunities and so it is natural that we apply this reality to our organization,’ SAER shareholder and manager José Poças Esteves explained.

‘The time has come for our group to explore new markets and to use our experience and knowledge provided by 25 years of activity in the service of entrepreneurs and companies from

other countries, and in this case at the service of the Portuguese speakingcountries,’ he said.

The foreign expansion of the Portuguese think-tank will proceed at the same time as the increase of its capital. Also, Angolan and Portuguese-Chinese shareholders are buying into the company. At the moment, negotiations are ongoing with a Mozambique investor. José Poças Esteves and Murteira Nabo, however, will continue to be the main shareholders of the company.

‘SAER also has an agreement with a Brazilian company with whom it has been working for 15 years,’ it highlighted in the press release. ‘A stronger shareholder structure will back up the strategy of internationalization in its essential areas’.

The think-tank was founded by the former Portuguese Minister of Finance Ernâni Lopes.

designer [Cristina Rocha Leiria] for the statue arrives here [in early July], we’ll discuss together with our metro construction consultancy to see how we can effectively lower the height of the railway while improving all the supporting facilities surrounding the statue.”

Previously, the government said on several public occasions that they would target completion of the railway design for Macau Peninsula south within this year, to be closely followed by a public tender.

Filing an enquiry over the weekend, Ella Lei Cheng I, a legislator representing the Federation of Trade Unions, urged the government to explain the specifics of the timeframe and cost of the Macau Peninsula LRT project.

The legislator also queried why the government had not launched any further public consultations on the Macau Peninsula south metro route, although Mr. Ritchie stressed on Friday that the Office would strive to collect opinions from residents

MOP11 billion

LRT phase 1 budget

and from visits to local community associations.

The Transportation Infrastructure Office will meet with the Legislative Assembly’s special committee on land and public concession affairs on Friday to present their design for the LRT route for the north side of the Macau Peninsula, which would include the Border Gate station – the most important land-based portal for the city to receive mainland Chinese visitors.

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June 23, 2014

Macau Brought to you by

HOSPITALITY Bigger packages The number of visitors arriving on packaged tours is rising fast. It is, actually, one of the fastest rising segments among all the visitors to Macau. In 2010, the monthly average of this type of visitor stood at around half a million visitors. This year, by the end of April, the figure stood 75.5 percent higher, the equivalent of an annual rise of 15 percent.

Increasing numbers of packaged tours originating from mainland China drives most of this rise. In fact, the number of mainland visitors rose even faster: they have doubled in the same period, the equivalent of an average growth of almost 20 percent per year. As a result, the share of mainland visitors among all the visitors arriving on packaged tours keeps rising. Sticking still with the figures of the first third of the year, the share of mainlanders in the total rose steadily every single year, from 68 percent of the total in 2010 to close on 78 percent of the total this year.

Visitors from all other major sources of tourists, namely Hong Kong and Taiwan, also come in increasing numbers on packaged tours, although those coming from Hong Kong rose by a comparatively paltry 26 percent. The growth in arrivals from Taiwan more than doubled, so that the island has overcome Hong Kong as the second source of visitors on packaged tours. From typical values, in 2010, of less than 25,000 visitors per month, figures have jumped to almost 60,000 visitors, on average, since the beginning of the year.

The number of those coming from the rest of the world has risen marginally, on average, to less than 100,000 visitors.

880,230

monthly average for visitors on packaged tours, this year to April

MOP5.1 billion betting network dismantled An operation by Macau Judiciary Police resulted in the arrest of 26 persons and the confiscation of computers, cell phones and betting bulletins. None of the detained were from Macau

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udiciary Police (PJ) have dismantled an illegal betting network suspected of receiving 5.1 billion patacas (US$645 million) during the opening weeks of the FIFA World Cup. Police arrested 26 individuals, none of whom were from Macau.

The police raided a hotel in ZAPE last Thursday, in which individuals were arrested and from whom computers, cell phones and betting bulletins were confiscated.

“Records showed that [betting] had reached HK$5 billion. It has already surpassed the biggest betting case in history,” Suen Kam-fai, a spokesman for the Macau police told Hong Kong’s Cable News channel.

More than HK$2 million (US$258,029) in cash was found in Macau hotel rooms that served as the ring’s operating base, along with computers, records and other items.

Police found evidence of the US$5.1 million bet during the bust,

according to Hong Kong newspaper South China Morning Post.

Of the 26 arrested individuals, nine were Malaysian, another nine were mainland Chinese and four were from Hong Kong.

The Macau police had already announced before the World Cup in Brazil that it would cooperate with authorities from other Asian countries to crack down on illegal betting. Such betting is common during the FIFA tournament.

Since the FIFA 2010 World Cup in South Africa, the demand for bets from Asian sports enthusiasts has been increasing. But there are not many legal options to accommodate such a lucrative market, Warwick Bartlett, CEO of Global Betting & Gaming Consultants, is quoted as telling Asian News.

“It’s the biggest single gambling event of the decade and each World Cup gets bigger. The propensity to gamble in Asia is stronger than

anywhere else on the planet, yet there are few legal gambling opportunities.”

The current World Cup is hosted

by Brazil and will run until July 14.

According to reports from investment banks such as Credit Suisse and Morgan Stanley, the FIFA tournament will affect the gross gaming revenue of the gaming industry in Macau.

The reasons being that gamblers will not only watch the match while they could be gaming but will be more focused on betting on the month-long soccer event.

Last year, Singapore authorities placed leaders of a global match-fixing ring operating from the city-state in indefinite detention after uncovering plans to rig the World Cup, according to a book released last week.

Doha-based watchdog International Centre for Sport Security warned in a May report that Asian-dominated criminal groups were laundering more than US$140 billion in illegal sports betting annually.

Authorities urged to clamp down on human trafficking

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uthorities here are not fully compliant in setting minimum standards to eliminate human trafficking, according to the 2014 Trafficking in Persons Report by the US Secretary of State. ‘However, they are making significant efforts to do so,’ the report concedes.

As many as 34 sex trafficking cases were investigated last year, and 38 victims identified, even though no convictions were made. These figures, according to the report, are down by 9 cases from that of a year earlier. The report also suggests that

children are victims of prostitution in casinos.

The majority of the victims are from mainland China, Mongolia, Vietnam, the Ukraine and Russia, many of whom ‘fall prey to false advertisements for jobs in casinos and other legitimate employment in Macau, but upon arrival are forced into prostitution.’ Some of the victims from mainland China, the report says, are passed on to local organised crime groups, held captive and forced into sexual servitude in massage parlours and illegal brothels. ‘Chinese, Russian,

and Thai criminal syndicates are believed to be involved in recruiting women for Macau’s commercial sex industry.’

Macau remains at a tier two level in the report, as ‘authorities demonstrate increased efforts to protect trafficking victims,’ it reads.

Recommendations in the report to improve the situation here suggest authorities increase efforts to investigate and prosecute sex trafficking offences and convict offenders.

S.F.

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June 23, 2014

Macau

Disposable income shrinking by the month Prices went up 6.16 percent in May, with higher rents and restaurant bills, the second lowest figure this year. Meanwhile, summer clothing pushed up monthly inflation by 0.1 percent, official statistics reveal.

Alex Lee

Alex.lee@macaubusinessdaily.com

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ents and food continue to drive up inflation in Macau, with housing costs increasing at double the speed of the rest of the economy’s components. The property bubble is pushing general inflation here to rates above 6 percent, one of the highest in Asia, whilst slowing down GDP real growth.

According to the Statistics and Census Office, inflation in Macau reached 6.16 percent from May a year ago, lower than the previous two months when prices hiked 6.36 percent (year-on-year) between March and April due to Easter holidays and an influx of tourists. With no special events happening last month, prices slowed down as the demand for goods and services declined.

The statistics bureau said that the price increase last month was ‘attributable to higher rentals for dwelling and dearer charges for eating out’. Housing and fuel costs in Macau jumped 11.98 percent in May, a rate two times higher than that of average inflation.

Rent accounted for 22.9 percent of the goods and services basket used to calculate inflation here, its second biggest component.

The major factor is food and nonalcoholic beverages, which suffered a 6.04 percent hike compared to May 2013. Housing and food are the main drivers of inflation as they represent more than half of the basket used by authorities to calculate price oscillations. The remaining components grew at a much slower rate. Communication prices stayed flat, education and clothing increased a mere 2 percent, while culture and transport climbed 3 percent. Health and alcohol prices were the only elements closer to the inflation rate, climbing 4.67 and 4.5 percent, respectively.

On a monthly basis, inflation stayed almost flat in May at 0.1 percent, with the clothing price hike offset by the receding of liquefied petroleum gas. The increase of 1.37 percent in clothing with the arrival of summer collections was the highest

Buying and renting in Macau is pressuring inflation to levels considered unsustainable by the majority of economists

jump of all the goods and services last month, whilst the rest reported declines. Recreation and culture, communication and food saw prices go down by 2.47 percent, 0.07 percent and 0.22 percent, respectively, compared to April.

In the 12 months ended May, prices in Macau rose 5.89 percent from the previous period and in the first five months climbed 6.18 percent, the statistics office revealed on Friday.

The skyrocketing prices of property – buying and renting – in Macau is pressuring inflation to levels considered unsustainable by the majority of economists, signalling a bubble. High inflation means less real growth of the economy. In the first quarter, Macau’s gross domestic product in nominal terms reached 20 percent; when corrected by inflation it stayed at 12.4 percent. With prices going up so fast, especially housing, and wages not following the same trajectory, the disposable income of Macau workers is shrinking by the month.

Fraudsters skim MOP200,000-plus from local ATMs

Overstayers face severe fines

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ore than 200,000 patacas has been stolen in Macau since June 6 due to credit card skimming from ATM machines, Judiciary Police have revealed.

In total, 24 complaints have been made to the police, 15 of which concerned people from Macau and 9 from the mainland. Once the cards were cloned from Macau ATM machines the money

was withdrawn in Thailand and Russia.

Police believe that these crimes are related to the arrest of two Ukrainian citizens last month. The two individuals were allegedly cloning credit cards without installing any hardware device in the machines; after the data was cloned, money would be withdrawn in other countries.

According to Judiciary Police, three ATM machines

were hacked between August 30 last year and May 26 this year.

Two of the hacked ATMs were located on the Macau Peninsula near Solmar Restaurant and another in San Kio district near Cinema Alegria. The third hacked machine was situated in Taipa, near McDonald’s.

Police urge residents in Macau to check their account movements frequently in order to verify any suspicious transactions.

isitors who overstay their visa in the territory face a fine of 500 patacas (US$62.63) per day, up from the 200 pataca fine (US$25.05) per day implemented in 2009, following an amended Administrative Regulation on the Entry, Stay and Residence Permit, said the spokesman for the Executive Council, Leong Heng Teng, in a press conference last week. The

new regulations, effective 15 days after the by-law’s promulgation, also include an extension of entry ban from 180 days to one year for reoffenders. Such measures are introduced to tackle the rising number of overstayers in recent years. According to official figures by the Public Security Police, the number of overstaying cases has jumped to more than 42,000 last year from around 32,000 in 2012.

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June 23, 2014

Macau

Disabled hired for quota, claims NGO head In the past few years, given the lack of human resources in the territory, many companies are now recruiting people with disabilities. In an interview with Business Daily, Hetzer Siu Yu Hong, chief executive officer of the Macau Special Olympics, says firms are doing this because by hiring local people with disabilities they are able to get a government quota facilitating the hiring of one more overseas worker. Yet, Mr. Siu says there are some cracks in the system, with the disabled frequently not settling down in a company because they are not well supervised, which may well damage their recovery.

Luciana Leitão leitao.luciana@macaubusiness.com

Photo: Manuel Cardoso

Are private enterprises now trying to hire people with disabilities?

Yes. In these several years, private companies are willing to hire people with disabilities because in Macau there’s a lack of human resources. So, they want to find a new type of human resources.

We know if a company wants to grow it needs to have overseas employees in Macau — it is a fact; you cannot say that you will only hire locals, it’s impossible. But now, to hire an overseas employee, you must first hire locals. People with disabilities may be local employees.

Which companies are recruiting them: small and medium or bigger ones?

Every company that wants overseas employees is willing to hire people with disabilities. Yet, for big enterprises it’s easier to control them.

Some of the employees with disabilities have limits to their abilities, so big enterprises can find different jobs for different people — and a certain kind of job is suitable for wheelchairbound people, another for the intellectually disabled and another type is suitable for deaf people.

If it’s a small enterprise, it only has up to five employees and every employee performs different functions at the same time. It’s difficult for small companies to hire people with disabilities. So, for biggest enterprises like casinos, it’s easier for them to hire disabled people.

What kind of duties are people with disabilities performing in, for instance, the hotel-casinos?

I know of some deaf people, since they have other senses like very enhanced vision and can see things more carefully; they’re also working in security rooms for casinos. They can see the panel control and all the cameras. Yet, for them it’s not easy to perform the dealer function, since it requires more interaction with the clients. Usually, they’re backstage.

Other types of people with disabilities have difficulty in finding a job, like the mentally ill — maybe they have even recovered, but enterprises are afraid of the stories about mentally ill people. Bigger companies have a lot of working pressure, so mentally ill people may not easily adapt to this high pressure.

Another kind are the intellectually disabled — those that lack communication skills; it’s not easy for them to find a job.

If a company wants to grow it needs to have overseas employees in Macau

We see successful cases. In MGM, for example, they have a mentor system, in which the mentor leads the disabled and only when they are totally adjusted let them work alone. Yet, I can only see this system in MGM; in other companies, I haven’t heard about it. This system is helpful for the intellectually disabled and mentally ill because someone can help them as peers. Macau lacks human resources, so not many companies can spare people to supervise.

What kind of jobs do people with mental illness do in regular companies?

Casinos are afraid of hiring people with mental illnesses. Casinos have hired deaf people, the physically disabled, even intellectually disabled, but mentally ill people is hard. If mentally ill people totally recover, they will become normal and you cannot detect them, but some of them cannot recover 100 percent and, in these cases they may have repeated breakdowns.

When did you first see companies recruit people with disabilities?

Five years ago. It was hard to promote integration of the disabled in regular companies, even though it had started by then. There were some signals from the government indicating that if you wanted to have an overseas employee they first needed to hire a person with disabilities. But we know that in 2016 there will be thousands of job vacancies, so all the hotels need to prepare their human resources, and be willing to hire people with disabilities.

So, what will happen with the Cotai developments, considering the extra need for human resources and the fact that people with disabilities aren’t able to settle in a job?

Many companies want to hire people with disabilities, but the support system is not suitable.

Even within our organisation, we have a social welfare service to help them settle down and adjust.

But, on our side, we also lack human resources to do this — because we have the funding from the government and the executive believes this type of job belongs to the business sector and not to the social welfare sector, it will give limited support for this. Yet, the companies themselves do not have enough staff, knowledge and skills to help the disabled settle down in their posts.

In the past three years, we’ve seen the intellectually disabled easily land a job, but they don’t stay.

It’s another problem. So, in the next three years, if the support system isn’t efficient, we’ll see the situation continue. The private sector is not very aware of this, because every month they have a lot of people stepping out. Another thing is that if they hire locals they will get a quota for overseas employees.

So, they just want the quota?

Yes. Also, today, Macau citizens are willing to be dealers, but they are not willing to do backstage jobs, like cleaning — more than 80 percent [doing these types of job] are overseas employees. And the communication with people with disabilities is very difficult.

Some of these overseas workers come from the Philippines and they speak English, while others are from mainland China and speak Mandarin. Our people [with disabilities] can just speak Cantonese, so how can they communicate with each other? It’s another problem. But the company only wants the quota.

Is it good for the recovery of people with disabilities to keep changing jobs?

No, I don’t think so. In big companies, they only see the manager and this kind of post is always changing. How can staff with disabilities adjust if their boss is always changing? For normal people, it’s already difficult, so it’s worse for people with disabilities.

The mentor system When companies approach you and ask for people with disabilities, what kind of advice do you give?

Maybe in the future, casinos may use a method already used in Australia — they will hire people, with a mentor to teach people with disabilities. If in these two or three years, we start this model, in the

future, it will not be so easy to quit their jobs.

Today, I don’t see almost any company or the government doing this. The government thinks it’s the responsibility of the business sector, and the business sector asks why it needs to hire people with disabilities. In the government, 10 percent of services are performed by social enterprises. In the future, when renewing contracts with casinos, the government could ask them to do more for society.

Are the monthly wages that people with disabilities get the same as regular people?

In casinos, yes — the money will not make a difference. But maybe they will start doing a part-time job and, if their performance is good, they can have a full-time job. Some of them get 8,000 patacas or 9,000 patacas per month and even a bonus, but people with disabilities usually do jobs like cleaning or working in the canteen. They are not managers and clerks. They do non-skilled jobs.

Macau lacks human resources, so not many companies can spare people to supervise

Will the adoption of a minimum wage impact negatively on workers with disabilities?

It’s a problem for workers with disabilities, even though some people do not agree with me. For instance, the physically disabled, the blind and the deaf don’t agree. But when we talk about the mentally ill or intellectually disabled, they will not easily settle down in their jobs. And under these conditions, if we have a minimum wage the bosses may not be willing to hire this kind of disabled [person].

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June 23, 2014

Macau

So, if we have a minimum wage, certain jobs need two people with disabilities to do, so the company needs to pay two wages, and it’s not fair for the boss who may not want to hire the mentally ill or intellectually disabled.

If the minimum wage is coming, the big casinos are not worried about it because they have a lot of money, but small and medium enterprises are not willing to hire them. We have also suggested the government assess certain people and if they assess that the disabled [person] has a 50 percent ability to do the job, the company is allowed to give 50 percent of the minimum wage and then after three or four months they can upgrade their level.

A new social enterprise Macau Special Olympics also has a social enterprise, in which people with disabilities are able to work.

What kind of people does MSO put to work in the social enterprise and what kind is suitable to work in an open market?

We have therapies to assess their ability and if they’re willing to have a job on the open market or not.

Social enterprises are a way to

Casinos are afraid of hiring people with mental illness

get their job, but if their abilities are upgraded we’re willing to let them have a chance at the open market. When they are in the open market, they’re really integrated into society.

Does your social enterprise receive any government subsidy?

No. But is it easy to make a profit?

It’s not easy.

Our social enterprise started in 2002. We started with four employees with intellectual disabilities. But in 2002, we got some contracts from IACM and other government departments for cleaning services. We broke even

after seven years. And in the last years we made a bit of profit.

Today, we are almost 70 employees – one third are people with disabilities, most of them intellectually disabled, some with mental illness. The worst thing is the mentality — they come from school, with classes from Monday to Friday and it’s not easy to change their mind. Today, in Macau, every day is a working day, even Saturday and Sunday. So, we let them work from Monday to Friday and Saturday and Sunday is for the normal staff. Step by step, we get them suited to the open market.

But we know in 2016, there will be more than 15,000 job vacancies, so all the hotels need to prepare their human resources, and be willing to hire people with disabilities

Are you thinking of creating a new social enterprise?

We have a plan, but because today in Macau the situation is difficult — human resources, high rents — we will need to use the calculator to see if the money is enough to run a new enterprise.

What kind of enterprise would that be?

We’re thinking of a cake shop, to let them interact with the public.

We run an enterprise, so we need some experience from the business sector. So, in 2002 the Macau economy was going down, so not

many competitors. Yet, today, if you run a business, there are so many competitors. If we want to run a successful business, we need a partner, so we try to invite any businessmen to start a social enterprise with us. We’re trying to find a business partner.

8

June 23, 2014

Macau

Hong Kong stocks rise on casino operators

H

ong Kong stocks rose Friday, with the city’s benchmark index heading for its first advance last week, as casino shares led gains and gold producers climbed.

Macau gaming companies Sands China Ltd and Galaxy Entertainment Group each added at least 2.9 percent.

Zijin Mining Group, China’s biggest gold producer, added 2.9 percent as bullion headed for its longest run of weekly advances since March. China Machinery Engineering Corp. slid 4.9 percent after starting to evacuate staff who are building a power plant in

Iraq amid escalating violence.

The Hang Seng Index (HSI) added 0.3 percent in Hong Kong, with about twice as many shares gaining as falling. The gauge is heading for a 0.4 percent decline last week. The Hang Seng China Enterprises Index, also known as the H-share index, added 0.5 percent to 10,407.16.

“Valuations look cheap in Hong Kong and China,” Desmond Chua, a strategist for CMC Markets in Singapore, said by phone.

“There might be further room for the market to go up should China’s economy continue to stabilize.”

Hong Kong’s benchmark Hang Seng rebounded 9.4 percent through Thursday since falling to an eightmonth low in March, as manufacturing showed signs of recovery and China introduced stimulus to counter an economic slowdown. The gauge traded at 10.7 times estimated earnings at the last close, compared with 16.6 for the Standard & Poor’s 500 Index.

Growth floor Premier Li Keqiang in London on Friday reaffirmed China will maintain a

minimum growth rate of 7.5 percent, adding to speculation “minor stimulus measures” may be announced, according to a China Securities Journal commentary.

China will run a campaign from July to November to crack down on trademark infringements and sales of fake goods on the Internet, according to the State Administration for Industry and Commerce’s website last week. The actions will target online transaction platforms and group-buy websites, the agency said. Vipshop Holdings, a Guangzhou-

based online fashion goods seller, retreated after posting a 126 percent surge in the year to June 18.

Futures on the S&P 500 were little changed. The underlying gauge yesterday rose 0.1 percent in New York to extend a record amid optimism the recovery will accelerate. U.S. leading indicators rose in May for a fourth straight month following the slowdown at the start of 2014. There were fewer unemployment benefit applications filed last week, a sign of steady progress in the labour market.

Bloomberg

BOC wins first yuan clearing deal in Euro area Bank of China is the clearing bank for the yuan in Hong Kong, Macau and Taipei

C

hina’s central bank appointed Bank of China Ltd.’s Frankfurt branch as the first institution in the euro area able to clear payments in the country’s currency on the day yuan trading started in London.

The selection of Bank of China, announced Friday by the People’s Bank of China, will help create a second European hub for yuan trading as the nation promotes greater use of the currency in global trade and finance. was named the yuan clearing bank for London on Friday.

“The London and Frankfurt hubs will complement each other,” David Pavitt, head of RMB Development for Europe, Middle East and Africa at HSBC Holdings Plc, said by phone from London. “The setting up of two hubs creates easier and more flexible access for local institutions.”

The German and Chinese central banks agreed on March 28

to cooperate in the clearing and settlement of transactions in the yuan. The Bank of China’s Frankfurt unit planned to hire about 20 people and to increase equity by 1 billion yuan (US$161 million) in its bid to become the city’s clearing bank, Li Guang, the lender’s head in the German city, said in a May interview.

‘Another Milestone’ “The nomination of Bank of China is another milestone on the road toward creating a renminbi trading center in Frankfurt,” Joachim Nagel, a member of the Bundesbank’s executive board, said in a statement today.

Since March, three issuers have sold yuan-denominated debt in Frankfurt. AAA-rated German lender Kreditanstalt für Wiederaufbau sold 1 billion yuan of notes on April 28.

That was followed by a 1.2 billion-

yuan sale by Agricultural Bank of China Ltd. on May 9. China Construction Bank raised 1.5 billion yuan on May 19.

Today’s move “will increase confidence in the use of RMB for traderelated activity,” Evan Goldstein, Deutsche Bank AG’s global head of renminbi services in Hong Kong, said by e-mail. “It will also enable a more efficient transfer of funds within the European time zone.”

The PBOC and the European Central Bank agreed in October on a bilateral currency swap line to encourage greater use of the yuan in trade finance. The swap agreement provides the ECB with a backstop of 350 billion yuan.

UK advantage Only Chinese lenders have so far been appointed as clearing banks in the offshore market. Bank of China

is the clearing bank for the yuan in Hong Kong, Macau and Taipei, while the mandate in Singapore went to Industrial & Commercial Bank of China.

The U.K.’s accord made it the first European country to allow direct exchange of the yuan. Direct trading of the yuan-pound pair started today.

Premier Li Keqiang last week said his goal was to expand trade with the country to US$100 billion by the end of 2015.

The pound is the fifth major currency to trade directly against the yuan in Shanghai, joining the Australian and New Zealand dollars, the Japanese yen and the U.S. dollar, and beating plans by Singapore and South Korea.

The yuan overtook the euro in December to become the most-used currency in global trade finance after the dollar, according to HSBC. Bloomberg

9

June 23, 2014

Greater China

Cities eye “house-for-hukou” to boost property market Some Chinese cities have found new bait to whet the appetite: easier access to hukou Nanjing development zone. Nanjing is one of the cities that started to ease the qualification criteria for home purchases

C

hina’s property sector continued to cool in May, as new home prices in half of a sample of 70 major cities showed month-on-month drops, contrasted with eight in April.

Only 15 cities saw month-on-month increases, substantially down from 44 in April, according to official data on Wednesday.

The data highlights the dilemma many cities are facing. They are anxious to stimulate the slowing property market, a main pillar of local growth, while under central government pressure to refrain from removing property curbs imposed since 2010 to contain soaring prices.

Concerns about the slowdown’s impact on growth, land sale revenue and social stability have caused some local governments to take action.

Some cities such as Nanjing and Tianjin started to ease the qualification criteria for home purchases.

Other cities like Tongling announced fiscal subsidies, whereas the Home Provident Fund offered support for first homebuyers in Yangzhou. Northeast China’s Shenyang attempted to remove its home purchase restriction policy but it was called off within 24 hours.

However, the overall impact of these measures has been limited, according to Zhu Haibin, chief China

economist with J.P. Morgan.

While easing property curbs is running out of charm, some cities are taking a different route to capitalize on the on-going urbanization drive to woo city dwellers who are potential home buyers.

Last week, central China’s Wuhan City eased its household curbs to allow older college graduates working in the city to settle locally, a move expected to attract 100,000 graduates, hopefully boosting property purchases.

Previously, south China’s Haikou City allowed five family members to register their household locally if one purchases a house with a space of above 120 square meters, while neighbouring Nanning City, Guangdong Province and east China’s Wuxi all lowered the threshold for similar house purchases that grant buyers local hukou.

Hukou, or permanent residential permit, ties subsidized social services including health, housing, education or pensions to one’s legal residence and is much coveted in first- and secondtier cities. Many migrant workers without local hukou face complicated home buying requirements such as minimum working time in the city.

“Removal of property curbs will face huge public opposition, while a “house-for-hukou” policy not only

Removal of property curbs will face huge public opposition, while a “house-for-hukou” policy not only echoes the public demand for freer settlement, but also brings potential home buyers to a city Zhang Dawei, chief analyst, Centaline Property

echoes the public demand for freer settlement, but also brings potential home buyers to a city,” said Zhang Dawei, chief analyst at real estate agent Centaline Property.

The policy is also in line with

the government’s plan of having “differentiated regulation” towards the housing market and may contribute to the improvement of city governance, Zhang added.

The “house-for-hukou” policy proved to be quite effective in 2008 when cities including Chengdu and Tianjin offered preferential policies to boost the then ailing property market dented by the international financial crisis.

However, the downturn now is more of a result of oversupply and shrinking demand due to previous intensive house-buying, a tight credit environment, as well as expectations that prices will fall, said Ni Pengfei, a senior researcher on urbanization and property with Chinese Academy of Social Sciences.

Meanwhile, the reform may further aggravate regional property market divergence, noted Li Guozheng, marketing director of central China with China Index Academy, a property market research institute.

An urbanization plan was unveiled in March including hukou reforms to gradually grant 100 million migrant workers permanent urban hukou permits by 2020, which many believe will lead to long-term home-buying demand.

Transformers flick to transform their edits Pangu Plaza in Beijing has written to China’s film regulator to request a delay or termination of the film’s release

A

Chinese company is demanding Paramount Pictures remove depictions of its name and properties from “Transformers 4: Age of Extinction,” a week before the blockbuster film’s worldwide opening.

The owner of Pangu Plaza in Beijing has written to China’s film regulator to request a delay or termination of the film’s release, according to an e-mailed statement from the company today. Two calls

by Bloomberg News to the State Administration of Press, Publication, Radio, Film and Television outside business hours weren’t answered.

Pangu accused Paramount of failing to live up to a sponsorship accord, and

We regret that Pangu is not currently satisfied with certain aspects of our collaboration and are working to resolve its concerns Paramount statement

The Chevrolet Camaro used to portray Bumblebee, one of Transformers’ movie characters

said in an earlier statement it’s seeking relief in Chinese courts. The studio, owned by Viacom Inc., doesn’t expect the release to be held up, according to a person with

knowledge of the matter who asked not to be named because of efforts to settle the dispute.

“Pangu Plaza has a prominent placement in

Xinhua

‘Transformers 4’ and it looks beautiful onscreen,” Los Angeles-based Paramount said in a statement. “We regret that Pangu is not currently satisfied with certain aspects of our collaboration and are working to resolve its concerns.”

Pangu has received an English-language copy of a contract with Paramount which is “vastly different” from the Chinese-language contract it had signed, the company said in an e-mail to Bloomberg News today.

Pangu said it regards the English contract to be invalid.

The film, featuring Mark Wahlberg and directed by Michael Bay, is predicted to rank among the biggestgrossing pictures of the year, with BoxOffice.com projecting U.S. ticket revenue of US$265 million.

Viacom, controlled by billionaire Sumner Redstone, fell 1.4 percent to US$85.76 at the close in New York. The Class B stock has declined 1.8 percent this year.

Bloomberg News

10

June 23, 2014

Greater China Wealth management products boom Wealth management products (WMPs) have been booming in China in the past few years, totalling 12.8 trillion yuan (about US$2.1 trillion) by the end of May, a senior official of China’s central bank said on Saturday. The growth of China’s WMPs market had been at a rate of between 60 and 80 percent annually for a few years before it decelerated to 30 to 40 percent in 2013, Pan Gongsheng, vice governor of the People’s Bank of China (PBOC), said at a forum in eastern coastal city of Qingdao.

17.2 bln yuan lock-up shares eligible for trade Lock-up shares worth 17.2 billion yuan (US$2.80 billion) will become eligible for trading on China’s stock markets this week. The volume is almost flat from last week but halves the figure for the first week in June. Shares of 20 companies, five on the Shanghai Stock Exchange and 15 on the Shenzhen Stock Exchange, will become tradeable, according to data from the two bourses.

Most of them have a small volume of lock-up shares coming online, with two exceptions being Zhejiang Kaier New Materials Co., Ltd. and Anhui Jiangnan Chemical Industry Co., Ltd.

Xinjiang sets up trade zone in border county Northwest China’s Xinjiang Uygur Autonomous Region broke ground for the construction of a border trade zone Friday to boost trade between local residents and their foreign neighbours. Taxkorgan Tajik Autonomous County, which hosts the project on the Pamirs Plateau in southern Xinjiang, borders Pakistan, Afghanistan and Tajikistan. The trade zone, built with an investment of 100 million yuan (about US$16 million), covers an area of 6.6 hectares. It comprises functional areas for commerce, trade, tourism, dining and accommodations respectively. Joint inspection units and other law-enforcement departments will be stationed in the zone.

Suning to sponsor FC Barcelona FC Barcelona and the Suning Company have announced a sponsorship agreement today that makes China’s biggest retail chain for electronic and technology goods the Club’s first ever Chinese sponsor, says the football club on its official web site. Today’s presentation of the two years with an option top one more agreement in the Chinese city of Nanjing was attended by the Director General of FC Barcelona, Antoni Rossich, the Vice-president of the Suning Group, Sun Weiming and his executive vice-president, Li Bin, the site says.

HK needs balanced approach to development CY Leung, chief executive of China’s Hong Kong Special Administrative Region, Saturday said the government must balance the need for development to provide more land for homes with the desire to conserve the city’s heritage and natural resources. After attending a historic building revitalizing event, Leung told the reporters that the government attaches great importance to conservation, but it must also cope with the ever increasing population. He said the northeast New Territories development plans are important for the future of Hong Kong in terms of providing land for building more homes.

Anti-graft drive arrives in Shanxi Several officers have been involved in graft related investigations

T

he head of China’s coalrich province of Shanxi pledged support for the ruling Communist Party’s campaign against graft as several officials in his province were put under investigation for corruption.

Li Xiaopeng, the son of former Premier Li Peng, said he will “resolutely uphold the central government’s strengthened fight against corruption and support their efforts to build a clean government,” the official Shanxi Daily said in a report on its website on Saturday.

The northern province is the latest to come under the spotlight after the party’s discipline watchdog said last week it put Du Shanxue, a deputy governor of Shanxi, and Ling Zhengce, a top provincial official and brother of an aide to former President Hu Jintao, under investigation. Earlier this month a probe was announced into Su Rong, a vice chairman of the nation’s

top political advisory body and a former party chief of Jiangxi province.

Party members must resist temptation, exercise discipline and ensure their subordinates do so, Li said at a two-day meeting in Jinzhong city that ended June 20, the Shanxi Daily said. Li, the former chairman of state-run electricity generator Huaneng Power International Inc., was named governor of Shanxi in January 2013.

Du and Ling are being probed for alleged “severe” violations of the law and party discipline, according to the Central Commission for Discipline Inspection, a phrase that normally refers to corruption. The investigations are part of a widening graft probe targeting senior officials in the province.

Not immune Ling is an older brother of Ling Jihua, who served as Hu’s personal

secretary and chief of the party’s General Office, according to a 2007 article by Southern Metropolis, part of a news group controlled by the Guangdong Provincial Communist Party. The probe into Ling shows corrupt officials aren’t immune from an anti-graft campaign even if they have relatives in high office, the Xinhua News Agency said in a commentary on June 20 that was later taken down from its website.

The investigations in Shanxi are part of President Xi Jinping’s crackdown on corruption that started after he took over as Communist Party chief in November 2012. The campaign has led to the arrest of officials in government, business and the military.

Shanxi was one of six provinces chosen for investigation by antigraft teams as part of a second round of inspections, according to a statement on the government’s website in November.

Bloomberg News

Increasing appeal of Mandarin for British business The most popular language picked was French

B

ritish firms are increasingly seeking workers who can speak Mandarin, Britain’s biggest employers’ organisation said yesterday.

The Confederation of British Industry (CBI) found that while European languages were still in demand there are signs of businesses increasingly seeking language skills that could help them break into new markets.

The annual CBI/Pearson Education and Skills Survey of around 300 British firms found that nearly twothirds of businesses questioned said they had a need for foreign language skills.

The most popular language picked was French (50 percent), followed closely by German (49 percent) and then Spanish (44 percent).

However, just under a third (31 percent) rated Mandarin as useful, up from 25 percent in 2012.

Meanwhile 23 percent said they thought Arabic was useful, up from 19 percent two years ago.

“With the EU still our largest export market, it’s no surprise to see German, French and Spanish language skills so highly prized by companies,” said CBI deputy director general Katja Hall.

“But with China and Latin America seeing solid growth, ambitious firms want the language skills that can smooth the path into new markets.

It has been a worry to see foreign language study in our schools under pressure with one in five schools having a persistently low take-up of languages,” she added.

Confederation of British Industry deputy director general Katja Hall

“Young people considering their future subject choices should be made more aware of the benefits to their careers that can come from studying a foreign language.”

The Department for Education said the government was overseeing a “languages revival after a decade of damaging decline”.

From September, languages will be compulsory from the age of seven rather than 11.

The ministry said the take-up of languages at GCSE level -the exams sat at 16 years old- increased by nearly 16 percent last year to the highest level in five years.

AFP

11

June 23, 2014

Greater China

China and Russia to embrace first bilateral expo

E

President Xi Jinping’s results in the war against corruption can be seen almost on a weekly base

xtensive exchanges will be at the forefront when Chinese and Russian delegates meet at the first China-Russia Exposition later this month, according to sources with the event’s organization committee.

Scheduled to open on June 30, the event is jointly being held by China’s Ministry of Commerce, Heilongjiang Provincial government and the Russian ministries of economic development and industry and trade.

The event’s predecessor was the China Harbin International Economic and Trade Fair initiated in 1990. It was upgraded to an exposition earlier this year to focus on bilateral cooperation.

During the five-day event, a variety of seminars on trade, application of satellite navigation systems, agriculture, forestry, tourism and financial cooperation will be held, sources with the organization committee said.

According to Sun Yao, Deputy Governor of Heilongjiang Province, the expo would be used to promote cooperation between China’s Heilongjiang and Inner Mongolia and Russia’s Far East and lake Baikal area.

The expo is also expected to help expand cooperation from goods trade to intensive integration of industry chains.

In the run-up to the event, the trade environment has been boosted.

On Tianchi Road of Ha’nan New District, Harbin, a border warehouse area covering 3,000 square meters was put into operation this month, the first of its kind specializing in e-commerce with Russia.

Five e-commerce companies, including Shenzhen Sailvan Network Technology Co., Ltd., have goods stored in the warehouse, which can accommodate more than 100,000 items.

Once Russian consumers place orders on the Internet, online store owners can immediately make shipping arrangements from the warehouse, avoiding domestic transportation, security checks, packaging and customs clearance and thus reducing the time of delivery by five days, said a commerce official.

At the expo, customs officials of both countries will explore cooperation initiatives to boost bilateral trade, according to the Heilongjiang Daily.

Russia is a major trade partner of China. In the first four months of 2014, trade volume grew by 3.4 percent year on year to 29.06 billion U.S. dollars, official statistics showed.

Xinhua

12

June 23, 2014

Asia Myanmar expects 3 mln tourists

Thais fuel Cambodian Poipet, a Cambodian frontier gambling town, has lured customers Thailand, where betting is all but banned

Three million’s tourist will arrive Myanmar by the end of this year, sources with the hotels and tourism authorities said yesterday. The number of such arrivals already reached 1.2 million in the first five months of the year, it said. To meet with the growing number of foreign tourists, efforts are being made to build more hotels, especially five-star ones, with foreign investors. According to the latest official statistics, there are so far over 900 hotels, motels and inns in Myanmar with over 38,700 rooms available.

South Korea exports up South Korean exports for the first 20 days of this month rose 6.1 percent over the comparable period last year, while imports gained by 11.0 percent, customs agency data showed on Saturday.

Exports for the June 1-20 period totalled US$29.199 billion and imports amounted to US$30.615 billion, Korea Customs data showed on its website.

It brings the trade deficit for the 20-day period to US$1.416 billion, according to Thomson Reuters calculations.

Record Japanese investment in Taiwan Investment from Japan in Taiwanese equities hit a single-month record in May. The overall fund inflow from Japan into Taiwan’s main stock exchange reached nearly T$20 billion (US$667.22 million), said David Yang, the senior executive vice president of the Taiwan Stock Exchange, more than double April’s T$8 billion figure. He said Japanese investors were seeking greater opportunities overseas amid concern that Japan’s market might be overvalued. At 1.48 percent, Japan’s share of total foreign investment in Taiwanese equities in May is tiny. The U.S. accounted for 36 percent and Europe 40 percent, according to Yang.

Thai Airways board members to resign Five board members at Thai Airways International will resign to allow the ruling military to reshuffle and restructure the loss-making carrier hit by weak tourism after several months of domestic political unrest. Air Chief Marshal Prajin Juntong will stay as chairman of Thai Airways to help turn around the statecontrolled airline after the junta refused his resignation. “Head of the military council and the airline’s board don’t want me to resign and they want me to help improve the airline which is in critical condition,” Prajin told reporters.

D

esperate for a flutter during a junta crackdown on gambling at home, Thais are making a beeline for casinos in a seedy Cambodian border town - which has already been deluged by migrants also fleeing the kingdom.

For over a decade Poipet, a scruffy, vice-ridden frontier town studded with casinos and online gambling booths, has lured customers from neighbouring Thailand, where betting is all but banned.

Casino staff in Poipet told AFP the chips have been changing hands at an unusually fast rate since the Thai army seized power across the border on May 22.

A junta blitz on organised crime has seen raids on underground casinos, dozens of arrests and access to a number of online gambling sites blocked.

In its get-tough message to illegal gamblers -and any local officials caught in cahoots with casino operators- the army rulers cited the need “to safeguard the public and uphold social order”.

The warning brought a boon to Poipet’s card tables, slot machines

Poipet’s border gate seen from Thailand

and 24-hour online gaming booths -key for live betting on World Cup football matches being played in Brazil.

“We cannot play these games in Thailand now,” 32-year-old Nan

told AFP as she laid a 100 Thai baht (US$3) stake at a baccarat table at the Crown Resort Casino. “Police will arrest us... the military has shut down illegal gambling,” she added, refusing to give her real name.

Indonesia to cut mining export tax in draft law Coal and Minerals Director General Sukhyar said on Friday the new draft regulation meant that the export tax would start below 10 percent

I

ndonesia is drafting a new mining export tax that would more than halve the base rate to be paid by miners but doubts remain whether it would be accepted by major copper miners and end a five-month-old dispute that has halted concentrate exports.

Indonesia’s main copper concentrate producers FreeportMcMoRan Copper & Gold Inc and Newmont Mining Corp stopped exports in January when the government introduced new mining rules, including an escalating export tax.

The two U.S. companies have previously insisted they should not have to pay any additional taxes because it would violate their current mining contracts, casting doubt on whether even a lower tax rate would be accepted by the miners.

Coal and Minerals Director General Sukhyar said on Friday the new draft regulation meant the export tax would start below 10 percent and would be linked to a company’s progress in building a smelter.

“Yesterday I had discussions with the finance ministry and they said the draft is already finalized,” Sukhyar told reporters, adding that it been agreed by the mining, industry and finance ministries.

Finance Minister Chatib Basri said on Friday the draft tax regulation still needed to be approved by chief economics minister Chairul Tanjung and President Susilo Bambang Yudhoyono.

The CEOs of both the companies have been in Jakarta in recent days to meet with Tanjung in a renewed government push to find a solution.

It is not known whether the CEOs are still in Jakarta.

Sukhyar said both the U.S. miners had agreed to pay the new export tax rate. However, neither firm would confirm whether a reduced rate would be acceptable.

The current copper export tax kicks in at 25 percent and rises to 60 percent in the second half of 2016, before a total concentrate export ban in 2017.

KEY POINTS New draft mining export tax regulation agreed by govt departments Newmont has yet to receive the new tax regulation -spokesman Miners previously say any export tax would breach contracts Talks continue over contract extension, royalties and smelter plans

Reuters

editorial council Paulo A. Azevedo, José I. Duarte, Mandy Kuok Founder & Publisher Paulo A. Azevedo | pazevedo@macaubusinessdaily.com Newsdesk Alex Lee, Luciana Leitão, Michael Armstrong, Sara Farr, Stephanie Lai International editor Óscar Guijarro GROUP SENIOR ANALYST José I. Duarte Brands & Trends Raquel Dias Creative Director José Manuel Cardoso Designer Francisco Cordeiro WEB & IT Janne Louhikari intern Aries Un Contributors James Chu, João Francisco Pinto, José Carlos Matias, Larry So, Pedro Cortés, Ricardo Siu, Rose N. Lai, Zen Udani Photography Carmo Correia, Manuel Cardoso Assistant to the publisher Laurentina da Silva | ltinas@macaubusinessdaily.com office manager Elsa Vong | elsav@macaubusinessdaily.com Agencies Bloomberg, Reuters, AFP, Xinhua, Lusa, Project Syndicate Printed in Macau by Welfare Ltd.

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June 23, 2014

Asia

casinos from neighbouring

by the restrictions on both Thais and Cambodians gambling on home soil.

But Cambodian government figures from 2011 showed gambling brought an annual tax bonanza of US$20 million to the impoverished nation - as well as thousands of spinoff jobs and strong profits for casino owners.

Full house

US$9-12 billion Thailand’s annual illegal gambling worth

Thais can only gamble on their state lottery or at a handful of horse racing meetings, prompting punters to splurge millions of dollars each year overseas.

Much of it funnels into Poipet, a four-hour drive from Bangkok, and the fastest-growing of Cambodia’s casino towns.

There are few available figures on the sums spent by Thais in Poipet in an opaque industry clouded further

Cambodian croupier, Bopha -also not her real name- said the latest Thai influx came in parallel with a sudden deluge of more than 220,000 Cambodian migrant workers into the town.

They began to flee Thailand through Poipet around 10 days ago amid rumours of a violent crackdown on illegal workers, which the army strongly denies.

In a nation dependent on cheap foreign labour, the migrant exodus has sheared many factories and construction sites of their workforce.

It has raised fresh economic worries in Thailand, which has limped towards recession after months of debilitating political protests that presaged the army coup.

But the sight of trucks crammed with weary Cambodian migrants has failed to deter Thai gamblers.

While there are no recent studies of what remains a controversial topic in the kingdom, Sungsidh estimates Thailand’s illegal gambling sector to be worth anywhere between US$912 billion annually. And Poipet is growing amid a wider gaming boom in Asia over the past decade.

AFP

South Korea manufacturing sentiment slips The business survey index (BSI) fell to 103 for the coming July to September quarter

A

survey of South Korean manufacturers showed business sentiment for the third quarter of the year fell from an over three-year high in the previous survey, but they remained mildly optimistic about the outlook for Asia’s fourth-largest economy.

The business survey index (BSI) fell to 103 for the coming July to September quarter, compared with 111 in the previous survey, the Korea Chamber of Commerce and Industry (KCCI) said in a statement.

An index reading above 100 indicates the number of manufacturers who see improvement in business conditions in the coming quarter outnumber those who forecast deterioration.

The reading for the second quarter survey was the highest since the first quarter of 2011 when it hit the same level.

From the fourth quarter of 2011 to the first quarter of 2014, the index had stayed below the neutral level of 100, sustaining a pessimistic stance until last quarter’s survey.

The latest survey showed

manufacturers expected the country’s gradual economic recovery to continue as negative effects from the sinking of the ferry Sewol dissipated. They also struck a positive tone on global demand.

The ferry sinking in mid-April, in which more than 300 people died, was the country’s worst maritime accident in decades. The tourism and retail sectors saw business decline in the wake of the disaster, though sales at department and discount-store chains rebounded in May. Still, roughly 40 percent of the survey’s respondents said overall weak demand onshore and abroad was the biggest hurdle for their businesses in the coming quarter.

Funding issues followed at 19 percent, while 17 percent pointed to exchange rates as their biggest problem. The won currency has firmed 3.6 percent against the U.S. dollar so far this year.

The KCCI said it surveyed 2,473 manufacturers nationwide from May 14 to 27.

Reuters

Korean TV dramas trigger shopping spree The vast audiences opened stealth-marketing opportunities that have become distinctly less stealthy as competition has intensified

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he export success of South Korea’s TV dramas has spawned a hard-selling world of branded entertainment that uses product placement to push everything from smartphones to lipsticks.

The so-called Hallyu (Korean Wave) of TV shows and pop music has long conquered most of Asia and, in recent years, found new, devoted fans in the Middle East, Latin America and North Africa.

South Korean firms now spend millions of dollars ensuring lovers in popular soap operas confess their feelings via Samsung smartphones, kiss in Hyundai cars and move into a house equipped with a giant LG TV. The power of the most popular dramas to launch new trends and boost existing ones was displayed by the recent production “My Love from the Star” -an unlikely love story between a top female movie star and a 400-year-old alien disguised as a human.

The SBS television show was a huge hit, especially in China where it triggered a craze for Korean-style fried chicken and beer, the favoured comfort food of the show’s heroine, played

by Gianna Jun.

28 pct Amorepacific’s 2013 overseas sales growth after PPL

Gianna Jun is the King Midas of product placement in Korean TV series

The main characters talked and sent texts on Samsung’s Galaxy Note smartphones.

Jun’s character used lotions and lipsticks made

by Amorepacific, the South’s largest cosmetics firm. The exposure clearly pays off.

Amorepacific said sales of the skincare products and lipsticks used by Jun surged 75 percent and 400 percent respectively, largely thanks to booming sales in China.

“In the past, PPL (product placement) on South Korean TV shows boosted domestic sales only,” the company said in an e-mail statement to AFP. “But we’ve recently seen it having an immediate and widespread impact in Asia, especially in China,” it said.

Amorepacific’s overseas sales grew 28 percent in 2013, boosted by 29-percent expansion in China - the firm’s largest market abroad.

More than 90 percent of PPL deals on South Korean soap operas involve domestic firms, but foreign companies are also being attracted by the lure of improved sales in a key regional market.

While details of product placement deals are not disclosed, industry sources say exposure on popular shows costs at least 100 million won (US$96,000) and much more for a hit drama featuring A-list stars with a regional following.

The biggest spender of all is Samsung which sponsors around two thirds of all domestically-produced soap operas, according to Kim Si-Hyun, head of 153 Production, a major PPL agency in Seoul.

AFP

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June 23, 2014

International Insecurity threatens Kenya’s economy Although Kenya recorded one of the fastest growing economies in Sub-Saharan Africa, rising political tensions and a wave of insecurity have posed great challenges to the country’s economic progress, experts have said. Experts and industry executives who spoke to Xinhua on Friday warned that political rhetoric and insecurity could erode gains made in expanding prosperity among Kenyans. Both the opposition and the ruling coalition have for the last two weeks engaged in war of words over pressing national matters like insecurity, high cost of living and skewed appointments in the public service.

YPF says its assets can’t be embargoed Argentina’s state oil producer, YPF, said on Saturday that since it is an “independent” company its assets cannot be embargoed by so-called holdout investors who are demanding full payment following the country’s massive 2002 bond default. The 2nd U.S. Circuit Court of Appeals ruled on Wednesday that Argentina could not continue to pay creditors who agreed to restructure their bonds after its 2001-02 default on US$100 billion in debt unless it also paid US$1.33 billion to the holdouts demanding full payment.

Yellen gives the green light for more stock gains Federal Reserve chief Janet Yellen signalled that rational exuberance is just fine. That, at least, is how some of America’s largest money managers interpreted her comments on Wednesday suggesting interest rates will remain low through 2016. It reinforced their views that easy money means the U.S. stock market rally has further to run despite notching a series of record highs already this year. That could easily put the S&P 500 benchmark on track to surpass 2000 for the first time, and to do so well before the end of the year.

EU commissioner takes one last hit The austerity line backed by Oli Rehn and imposed

by Berlin faces fresh criticism

T

o Olli Rehn, the EU’s low-key but hard-line economics affairs commissioner, another push against austerity could not have come as much of a surprise.

Rehn, who steps down at the end of the month, has spent five years as the EU’s designated figurehead for all things austerity, hailed in several northern states as an enforcer of sound public finances, but loathed in the crisis-hit south as a driver of mass unemployment and recession.

But just before arriving in Luxembourg this week for his 60th and last Eurogroup meeting as commissioner, the austerity line backed by Rehn and imposed by Berlin faced fresh criticism.

Catching many off guard, German economy minister and vice chancellor, the social-democrat Sigmar Gabriel, suggested that economically embattled countries such as Italy and France be offered some latitude in meeting EU rules while they got their finances in order.

Conservative German Chancellor Angela Merkel swiftly and flatly dismissed the idea by her coalition partner, but the message was out and the austerity-versus-growth debate thrust open once more.

Gabriel’s remarks “are more than a storm in a tea cup,” commented Carsten Brzeski, economist at ING bank, because even the IMF is now suggesting reform to the rules are in order. “They could be the start of a new debate on growth vs austerity,” Brzeski said.

Under the EU’s rules, public deficits should not exceed 3.0 percent of annual gross domestic product.

Accumulated debt is supposed to be kept at 60 percent of GDP. The rules, created in the 1990s, are part of the EU’s Stability and Growth Pact and were reinforced during the crisis to empower Rehn’s commission with stronger methods of enforcement.

The tougher rules include Brussels

Commissioner Oli Rehn represents the hard line faction of the austerity current inside EU

oversight of national budgets and potential fines for rule-breakers. They were pushed through by Germany in return for the rescue of crisis-struck countries with taxpayer money.

Defenders of the stricter rules, mostly the EU’s richer countries to the north, are wary of reversing course, and suspect the calls to change them are thinly-veiled efforts to make room for renewed public over-spending.

But even the usually fiscally hawkish International Monetary Fund says some changes are needed.

IMF head Christine Lagarde, attending the meetings in Luxembourg to present a report on the Eurozone, said the rules were “excessively complicated”, rarely met, and subject to a “divergence of interpretation” by member states.

She also threw open the validity of the EU’s often missed deficit and

debt thresholds, set during a period of high growth “that has nothing to do with today.”

After Merkel’s flat rejection, the French and Italian finance ministers denied any intention of calling for changes to the pact, though officials in Rome and Paris openly welcomed the comments by Germany’s vice chancellor.

But Finland, Rehn’s native country and one that has stressed the need for fiscal discipline, acknowledged in early June that it would also breach the public debt limit for the first time since it joined the EU in 1995.

One floated idea, notably by Italy which is about to take the EU rotating presidency, is a loosening of budget rules to exclude government investment spending when measuring the deficit.

AFP

ECB likely to keep rates low until 2016 Staff forecast this month that the euro zone economy will wwgrow between 0.5 and 3.1 percent in 2016

T

he European Central Bank is unlikely to raise interest rates from record lows until 2016 when the euro zone economy starts to pick up more strongly, ECB Governing Council member Ewald Nowotny said in a newspaper interview.

“Interest rates will turn as soon as there is clear growth, so more than 2 percent, but from today’s perspective that will hardly be before 2016,” he said in an interview with the Krone paper that was posted on its website at the weekend.

He said a recovery in the euro zone was showing only signs of green shoots and the ECB’s cheap money was not always making its way to companies wanting to borrow. “The psychological mood is lacking a bit,” he said.

KEY POINTS Says rates to rise when euro zone economic growth over 2 pct Says ECB had to act to prevent economic crisis

ECB staff forecast this month that the euro zone economy would grow between 0.5 and 3.1 percent in 2016.

The ECB on June 5 cut interest

rates to record lows - and the deposit rate to below zero - and launched a series of steps to boost lending to companies.

“We had to react to prevent a new economic crisis,” Nowotny told the paper.

ECB President Mario Draghi also said in a Dutch newspaper interview at the weekend that rates would stay low for some time.

“We have prolonged banks’ access to unlimited liquidity up to the end of 2016. That is a signal.

Our programme in support of bank lending to businesses will continue for four years. That shows that interest rates will remain low over a longer period,” Draghi told De Telegraaf.

Reuters

15

June 23, 2014

Opinion Business

wires

Leading reports from Asia’s best business newspapers

Stop taxing the sick Rod Hunter

Senior vice president at the Pharmaceutical Research and Manufacturers of America

THE KOREA HERALD Chinese President Xi Jinping is expected to tour a main Samsung Electronics facility when he visits South Korea early next month, industry sources said yesterday. Xi will be guided by the company’s vice chairman Lee Jay-yong, the heir-apparent of Samsung Group, and they will also hold talks, the sources said. The tour was arranged at Samsung’s request, they said. Xi is expected in South Korea in the first week of July. The Chinese president will tour the tech giant’s facility either in Suwon or Kiheung, both just about 40 kilometres south of Seoul.

THE JAPAN NEWS The Diet has enacted a bill to revise the Companies Act to urge companies to have outside board members. The House of Councillors passed the bill on Friday by a majority vote chiefly from the ruling coalition. Under the revised law, firms that have no external board members are required to explain their reasons at general shareholders meetings.

A supplementary provision of the bill calls for discussions about whether to oblige firms to appoint outside board directors two years after the law takes effect.

THE TIMES OF INDIA Foreign investment of 10% or more in a listed company will now be treated as FDI as the government has accepted the report of a committee on rationalizing definitions of FDI and FII. The finance ministry in a statement on Saturday said the government has accepted the report of the committee headed by finance secretary Arvind Mayaram.

It said an investor may be allowed to invest below 10%.

If the stake is not raised to 10% or above, then the investment can be treated as portfolio investment.

PHILSTAR More companies are seen raising capital through offerings in the local bourse and by tapping the debt markets as prospects for the Philippine economy remain rosy for investors. Ed Francisco, president of BDO Capital & Investment Corp., told The STAR his firm has been talking recently to a couple of family-owned corporations interested in conducting an initial public offering in the local stock exchange. “For IPOs, there are still a lot of companies who can do it if they want to. The only dilemma is if they should do it now or not,” said Francisco.

W

ASHINGTON, DC – The debate over access to affordable medicines in emerging and developing countries frequently overlooks a critical issue: Governments in these countries routinely slap tariffs and other taxes on vitally important drugs. While these measures tend to be modest revenue generators, they make the affected medicines more expensive, which can put them out of reach for many who need them most.

Like developed countries, emerging and developing countries import some – if not all – of their medicines, the cost of which is mainly covered by the patients themselves, given these countries’ lack of health insurance. Indians, for example, pay 70% of their health-care expenses out of their own pockets. With tariffs and other taxes increasing drug costs by as much as two-thirds in some areas, even the most basic generic drugs become unaffordable for the poorest people. As one research report on Delhi’s medicine market concluded, such levies are essentially a “tax on the sick” which the government could easily remove.

The story is similar in many emerging markets. According to a 2012 study by the World Trade Organization, Argentina, Brazil, India, and Russia impose tariffs of around 10% on imported medicines, while Algeria and Rwanda, for example, maintain a 15% rate. The tariff in Djibouti is 26%. As the report noted, it

is difficult to understand why small countries maintain high tariffs on health products – a move that serves only to drive up domestic prices.

But tariffs are only part of the problem. Many countries also levy hefty sales taxes.

Brazil imposes a 28% rate on prescription medicines, while medicines in India are subject to 5% value-added tax and a 3% education tax, on top of state taxes that range from 5% to 16%.

Developing countries justify these taxes by claiming that they fund social spending.

But, in 2011, India raised more in drug taxes than the government spent on medicines for the public.

India’s health-care crisis might ease if the government stopped artificially hiking the prices of medicines that people need.

Moreover, fiscal pressures notwithstanding, it seems highly regressive, if not downright perverse, to place the greatest financial burden on those in the poorest health (and who presumably are the target of such social programs).

It is also economically counterproductive. Raising medicine prices reduces usage, leading to more illness, lower productivity, and slower GDP growth.

There is a better way. Several countries, including Colombia, Ethiopia, Malaysia, Nicaragua, Pakistan, Tanzania, and Uganda, have substantially reduced or eliminated tariffs and taxes on medicines. The results have been dramatic.

Raising medicine prices reduces usage, leading to more illness, lower productivity, and slower GDP growth

After Kenya removed tariffs and taxes on anti-malaria products, for example, it reported a 44% decline in infant mortality and disease between 2002 and 2009.

India and China, as major pharmaceutical exporters themselves, have a clear interest in seeing lower medicine tariffs worldwide.

India, hailed as “the pharmacy to the developing world,” is one of the largest exporters of finished drugs, while China produces 70-80% of these

drugs’ active ingredients.

Abolishing pharmaceutical tariffs would follow the example set by developed countries when they created the WTO two decades ago. As the World Health Organization declared: “governments should tax the things which make people ill, not the things which make them well.”

To be sure, tax cuts would not address all of the many challenges surrounding access to healthcare in emerging and developing countries, such as the lack of hospitals, clinics, doctors, and public and private insurance. But removing tariffs is something that could be implemented quickly and that would benefit the neediest people immediately.

As home to leading drug producers – and many of those most affected by these taxes – India and China should lead an international liberalization effort. The BRICS Summit, to be held on July 15-17 in Fortaleza, Brazil, might be a good place to start.

These countries have certainly demonstrated a capacity to act together. Earlier this year, China joined 13 other WTO members calling for tariffs on environmental goods to be removed. China, India, and the other BRICS should form a similar coalition to press for the elimination of pharmaceutical tariffs, thereby broadening access to health care throughout the developing world. The world’s sick and vulnerable should not have to suffer needlessly.

The Project Syndicate 2014

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June 23, 2014

Closing China and U.S. airlines carry 4.4 mln passengers Silk Road and Grand Canal on World Heritage list A total of 4.4 million air passenger trips were made in 2013 between China and the United States, according to latest Chinese official data. Seventeen companies from China and the U.S. carried the passengers and 150,000 tonnes of freight, the Civil Aviation Administration of China (CAAC) said. China and U.S. authorities have deepened cooperation as the air transport market grows bigger. On Tuesday and Wednesday, officials from the U.S. Department of Transportation met their CAAC counterparts in Chengdu, Sichuan Province, for talks on air transport policy and governance.

The famous ancient Silk Road, which served as a corridor for trade and cultural exchanges between Asia and Europe dating back to 2,000 years ago, was inscribed on the World Heritage list here on yesterday.

Jointly submitted by China, Kazakhstan and Kyrgyzstan, the application for adding part of the millennium-old trade route to the UNESCO list was approved by the World Heritage Committee at a session in the Qatari capital. China’s Grand Canal, the longest artificial waterway in the world, was inscribed on the World Heritage list as well.

Philippines could halve global debt sale The government had its biggest budget surplus in 20 years in April

T

he Philippines may offer about US$750 million in global bonds in 2015, half the overseas debt it sold this year as the nation continues to favour domestic borrowing, Treasurer Rosalia de Leon said.

Of the 700.8 billion pesos (US$16 billion) borrowing planned for next year, 86 percent, or 605.1 billion pesos, will probably be raised from the local market and the remaining 95.7 billion pesos from overseas debt, de Leon said in a mobile-phone message reply to questions today.

The Philippines sold US$1.5 billion of 10-year dollar-denominated bonds in January, returning to the global debt market after a one-year absence in 2013 when it took advantage of record-low interest rates and flush liquidity to help curb robust inflows. Money supply has expanded more than 30 percent since July and the government had its biggest budget surplus in 20 years in April, signalling less funding pressure.

Bangko Sentral ng Pilipinas raised the rate it pays on special deposit accounts to 2.25 percent on June 19, from 2 percent, after increasing the reserve requirement ratio of local banks by a total of

The government set a borrowing plan of 730 billion pesos for 2014, of which 620 billion pesos would be from the local market, according to Department of Finance data released in December. That compares with 735 billion pesos in 2013. The external funding plan for this year is US$2.5 billion, including development loans, de Leon said at that time.

Budget surplus

Philippines President Benigno Aquino will address Congress for getting the annual budget passed

two percentage points at its March and May meetings, to 20 percent. While the benchmark overnight borrowing rate was kept at a record low 3.5 percent, Governor Amando Tetangco said June 20 that the central bank has a “tightening bias.”

2015 funding The government’s economic team is discussing

next year’s funding plan as part of the 2015 budget that President Benigno Aquino will ask lawmakers to approve after his annual address to Congress in July. The team, known as the development budget coordination committee, met on June 20 and maintained growth and fiscal targets for this year and next, Economic Planning Secretary Arsenio Balisacan said.

The nation posted a budget surplus of 80.9 billion pesos in April, the most since at least June 1994 when Bloomberg started compiling the data. Revenue collection in April rose 18 percent and spending fell 6 percent, the government reported June 4.

“We’re sitting on a mountain of cash,” de Leon said June 17, citing the government’s cash and debt management, enabling it to spend less on interest payments.

The Philippines won investment grade ratings from Standard & Poor’s, Moody’s Investors Service and Fitch Ratings last year. On May 8, S&P raised the nation’s assessment to BBB from BBB, citing Aquino’s efforts to improve the economy and governance.

We’re sitting on a mountain of cash Rosalia de Leon, Philippine’s Treasurer

The government kept its economic growth target of 6.5 percent to 7.5 percent this year and 7 percent to 8 percent next year, Balisacan said June 20. The DBCC used an exchange rate assumption for the peso of 42 to 45 per dollar until 2016, he said.

The US$250 billion economy expanded 5.7 percent in the three months through March, the slowest pace in nine quarters. The peso has risen 1.3 percent this year.

Bloomberg News

Bangladesh FDI falls in July

Abbott to scrap carbon-price levy

Gordon Brown enters the battle for Scotland

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A

G

oreign direct investment (FDI) in Bangladesh in the first 10 months of the current 201314 fiscal year ending this month was down nearly 12 percent from the same period a year ago, central bank data showed yesterday.

According to the Bangladesh Bank (BB) data, in the first 10 months of the fiscal year 201314 (July 2013-June 2014), net FDI inflow was recorded at US$1,250 million against US$1,416 million during July-April period of 2012-13 fiscal year (July 2012-June 2013).

The central bank, however, did not provide any further details on the FDI inflows.

Political instability, lack of capacity in the public sector, bureaucratic tangles and natural disasters are often blamed as some of the major obstacles to investment in the country.

Officials say inadequate basic infrastructure has also been impeding large FDI inflow in Bangladesh which has ample opportunities to woo more foreign investors as there is available and cheap workforce.

Xinhua

ustralia will re-introduce a bill to repeal a carbon-price mechanism brought in by the previous Labor government, saying it will lower energy costs for consumers and businesses.

Prime Minister Tony Abbott’s government will take the proposed legislation to parliament tomorrow, according to an e- mailed statement from his office. The plan to scrap the levy has been stalled by opposition lawmakers in the Senate, which has the power to block and amend legislation.

The make-up of the upper house will change from July 1 when the Palmer United Party -led

by Clive Palmer- will hold the balance of power, meaning Abbott will have to negotiate with the mining magnate to pass laws. The government has said that repealing the carbon price will still allow the world’s 12th- largest economy to meet its promised 5 percent reduction in emissions by 2020.

A policy to repeal the carbon-price mechanism formed part of the Liberal-National coalition’s fight to topple Labor in last year’s election.

Bloomberg News

ordon Brown, once ranked Britain’s most unpopular prime minister in half a century, may yet emerge as the man who convinces Scots to reject independence.

For many English, Scotsman Brown is an unlikely hero. Often brooding and awkward in front of the camera, the former prime minister led his Labour party to its worst electoral defeat in a generation in 2010. But in the industrial towns of Scotland where the fate of the United Kingdom will be set by 1 million as yet undecided voters in a September.

18 referendum, few rival Brown’s influence.

In speeches in towns and cities across Scotland Brown makes a passionate case to stay within the United Kingdom - a G8 power with a permanent seat on the United Nations Security Council. Brown and an increasing number of others are fearful Britain may be sleepwalking towards a break up.

Less than 100 days before Scotland’s independence vote, Brown’s is a sobering intervention for many English.

Reuters