Macau Business Daily, Aug 4th, 2014

MOP 6.00 Closing editor: Sara Farr Publisher: Paulo A. Azevedo Number 596 Monday August 4, 2014

Mind the gap T

Year III

here’s a big discrepancy in construction workers’ wages. Labourers from Macau are likely to see 25 percent more than their non-resident co-workers. Both are paid more or less the same for unskilled work. But the gap in the skilled and semi-skilled categories is widening significantly

www.macaubusinessdaily.com

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And another thing . . .

The Forefront of Macau Gaming is staging another protest. This time, casino workers from Galaxy are demanding better pay and career prospects. They say the Labour Affairs Bureau is not listening. So they’re taking to the streets – with a detailed demand list covering wage structure, holidays, staff promotion, shoe options and even an ‘attendance bonus’ Page 2

Upside down

Slot machine maker Scientific Games to buy Bally Page 5

World cup casualty Page 2

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Follow that cab!

HSI - Movers

Macau’s taxi drivers continue to get bad press. The government is considering authorising sting operations to bring errant cabbies to book. Drivers will not be deliberately tempted to commit a crime, according to the Legal Affairs Bureau.

But fines will increase fivefold to 5,000 patacas. A public consultation session kicks off this week.

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The Chinese National Bureau of Statistics has released the Purchasing Managers’ Index for July. While factories are gaining momentum, services seem to be affected, just the reverse of the last 12 months

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Slow summer The VIP segment is falling behind expectations. Analysts predict slow growth over the summer months. Hopes are now pinned on October. But that’s when the mass market smoking ban in casinos kicks in; while China’s crackdown on corruption goes from strength to strength. Single-digit growth for the year is the consensus

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August 1

Name

%Day

China Shenhua Ener

1.30

China Mengniu Dair

1.06

Belle International

0.62

Hengan Internation

0.48

AIA Group Ltd

0.48

Sands China Ltd

-2.08

China Overseas Lan

-2.31

China Resources Ent

-2.33

Galaxy Entertainme

-2.35

Cheung Kong Holdin

-4.71

Source: Bloomberg

I SSN 2226-8294

INTERVIEW

Glass half full

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Wine is in, big time. Wine courses are packed solid; and expertise is growing. French tipples maintain their crown. But other producers are making progress here. David Wong from the Institute of Tourism Studies speaks to Business Daily about the industry. And warns against the pitfalls surrounding the nectar of the gods Pages 6 & 7

2014-8-4

2014-8-5

2014-8-6

28˚ 33˚

28˚ 33˚

28˚ 32˚

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August 4, 2014

Macau Domestic violence law with Assembly in October The Legal Affairs Bureau is striving to pass the Anti-Domestic Violence Bill to the Legislative Assembly before October 15, after legislators finish recess. Director of the Bureau André Cheong Weng Chon said that the related departments are expected to finish the draft amendment this month and then pass it to the Assembly. However, no new public consultation session will be conducted following the previous two as authorities say they have ‘collected enough opinions.’ The focal point of the draft bill is to address those parts making assailants realise their mistakes as well as protecting the victims, solely discussing punishment and whether it constitutes a public offence, Mr. Cheong said.

IACM: Referendum associations may re-apply

P Local construction workers paid 25 percent more than foreigners Local construction workers got an 11.6 percent jump in their wages in the year ended in the second quarter. The overall construction market received half of it, 6 percent, official statistics reveal. The wage gap with foreign workers is widening

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he gap between wages paid in the construction sector to local and non-resident workers continues to widen with some categories showing residents achieving salary increases two to three times larger than those of imported labour.

According to data revealed by the Statistics and Census Service Bureau (DSEC), the daily wage for local construction workers increased 4.4 percent in the second quarter to 825 patacas compared to the previous quarter. The salaries for the overall sector (including local and non-resident workers) jumped 4.1 percent to 657 patacas, meaning imported labour is receiving less money than Macau residents. The difference between the local-overall wage today is 25 percent.

The Statistics and Census report also shows that last year (the 12 months ended in June) wages for local construction workers went up 11.6 percent, while the overall market saw an increase of only 6 percent, almost half.

Since the second quarter of 2012, salaries for Macau residents in the sector rose 14.9 percent while the overall market got around 6 percent increase. This difference in wage increases is widening the gap between foreigners and local workers.

While residents and non-residents in the construction sector are paid more or less the same for unskilled work, the gap in the skilled and semi-skilled categories is widening significantly.

A local fire service mechanic here

got a wage increase of 25 percent in the second quarter, while the overall segment got three times less (9.3 percent). The same is true for plumbers. Macau residents saw a surge of 9.8 percent in their income, while plumbers as a whole got 2.9 percent.

The statistics and census bureau also reveals that the price of concrete and sand continues to record the highest gains of all construction materials in Macau. Concrete prices jumped 7.8 percent in the second quarter compared to the first three months of the year, while sand costs have increased 8 percent. The price index of construction materials for residential buildings reached 121.1 points, a marginal increase since a year ago (120.8 points).

Casino workers to protest tomorrow, again T he Macau Gaming Industry Frontline Workers union, also known as the Forefront of Macau Gaming – FMG, are set to stage a protest tomorrow afternoon with Galaxy casino workers.

Demands for wage increases, better working conditions and more promising career prospects are all on the agenda. According to FMG, members want workers’ monthly salaries to be based on their experience. For example, the starting point for those with up to a year of work experience would be 23,000 patacas, between one and three years experience would attract 25,000 patacas, and more than three years experience would be worth 27,500 patacas. These should all be increased annually by percentage, the workers said, without

saying what percentage these figures should increase by. In addition, wages of pit managers should start at 33,000 patacas for those with one or less years of professional experience, 36,000 patacas for between one and three years and 38,000 patacas for over three years. Workers also want these

to be adjusted every year based on a percentage level.

Dealers and trainee supervisors want an initial salary of 15,000 patacas, which would be adjusted to 17,500 patacas after three months and 19,000 patacas after one year.

A new job position, that of ‘senior dealer,’ should also be introduced with an initial salary of 21,000 patacas, according to FMG. Monthly wages of those working in the card room should range between 12,000 patacas and 22,000 patacas depending on work experience.

In addition, workers are asking for Galaxy to cancel its scoring system when increasing wages, and also offer a 14th month salary, and add two days to their annual leave. They also want an ‘attendance bonus’ for workers

resident of the Civic and Municipal Affairs Bureau (IACM) Alex Vong Iao Lek said that the Bureau respects the refusal of the Court of Final Appeal to rule on referendum associations seeking to erect public polling booths to promote a civil ballot. The Bureau will evaluate any re-application according to Regulation for General Public Spaces if the associations do so.

“First of all, IACM has not received any other applications [from related associations to set up a polling station].

Regarding the previous application, IACM respects the judgment of the Court,” Mr. Vong said. “There are no regulations in the Basic Law covering the referendum which the associations are to hold, hence, when they hold relevant events, they should obey the law.”

He stated that the associations have to submit their applications again if they want to erect booths or hold events in a public space, while IACM would evaluate any application based on the regulations for general public spaces.

The Commission of Civil Referendum, jointly formed by three local associations, said earlier last week that it would try to re-apply for public space to set up polling stations during the referendum period between August 24 and 31.

However, the spokesperson for the Commission, Jason Chao Teng Hei, said they are not “optimistic” that IACM will approve the application.

Currently, they are trying to seek private venues supplied by the public to hold the ballot.

K.L.

who are never late and do not take any sick leave days in a year. Female workers want the option to be able to go to work in flats as opposed to high heels.

On Friday, the group met with the Labour Affairs Bureau to voice their complaints but left feeling unheard and as such are staging a protest tomorrow afternoon.

Last month, Galaxy expressed regret for a similar protest and appointed the Macau Federation of Trade Unions (AGOM) to collect workers’ demands in order to set up talks between the three sides. However, FMG questioned Galaxy’s move and claim AGOM had previously received 3 million patacas from the casino company and as such doubt the union will help workers.

This claim could not be independently verified by Business Daily yesterday.

Protest organisers estimate between 2,000 and 3,000 workers to participate if Galaxy does not reply still today.

S.F. & K.L.

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August 4, 2014

Macau

Consumers may claim damages directly from local providers While the Husi meat scandal has affected local fast food restaurant businesses, the Legal Affairs Bureau says that restaurants should take responsibility, too, as consumers can directly claim damages from such restaurants, rather than from the food source Kam Leong

kamleong@macaubusinessdaily.com

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ndré Cheong Weng Chon, director of the Legal Affairs Bureau, said local residents can directly claim for damages from local organisations that offer poor quality food rather than the provider.

He spoke to reporters on the sidelines of a seminar on consumer protection laws in Macau, Hong Kong, mainland China and Taiwan last Friday.

“Macau consumers did not buy the poor quality food directly from the [source] factories but through local fast food restaurants or organisations.

As such, if the consumers find some problems after eating such [poor quality] food they can actually claim damages from these local restaurants or organisations under the current law,” said Mr. Cheong, referring to the Husi food scandal.

He remarked that local restaurants and organisations take full responsibility for controlling their food quality and protecting the benefits of consumers.

The Husi food scandal started to spread in China after it was reported that its factory in Shanghai had repackaged expired chicken and beef by giving it a new expiry date. The factory used to provide such meat to fast food restaurants, including

McDonald’s in Hong Kong and Japan.

The fast food giant chain store in Macau, however, said that while the source of a proportion of its food is from Husi it is not from Husi Shanghai.

On the other hand, the president of the Civic and Municipal Affairs Bureau, Alex Vong Iao Lek, said that the Bureau had destroyed all Husi food in Macau, no matter where it originated from. He also added that the Bureau had not received any report from the Health Bureau relating to residents feeling unwell after eating such food.

Consumer Protection Legislation consultation nears end Mr. Cheong also said that since the consultation sessions had started in June, the Consumer Council had

received around 200 suggestions from the public, primarily related to the content drafted in the consultation text, such as prohibiting abuse of marketing advantage and pricefixing.

“First of all, in our current law system there is no specific article to supervise setting prices casually [without a base] or abuse of the dominant position in the market; hence, we have [to update the law] to confirm such behaviour is illegal,” said Mr. Cheong, who thinks that the current related law in other regions such as Hong Kong and the mainland can serve as a good reference.

The consultation, which started on June 12, ends two weeks from tomorrow on August 12.

Meanwhile, legislator and legal expert Gabriel Tong Io Cheng said in the seminar that he agreed with the directions of the legislation prohibiting the abuse of marketing advantages and price-setting. In addition, he suggested the need to enlarge the power of the Consumer Council. He said, however, that the consultation text did not explain in detail such part as the current status of the Council in the government not having the authority to mete out punishments.

The seminar, which was jointly held by the Legal Affairs Bureau, IACM and the Consumer Council, invited experts from the China Consumers’ Association, Taiwan’s Consumer Foundation as well as Hong Kong’s Consumer Council to share the region’s regulations on consumer protection.

More than 150 money-laundering cases Amended taxi regulations investigated last year carry sting in the tail Judiciary Police investigated 154 money‑laundering crimes last year. As for economic crimes, authorities investigated 676 cases. These included transgressions such as frauds, breach of position of trust and dishonoured cheques

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acau authorities investigated 154 money-laundering cases last year. Of these, 70 cases were left over from 2012 and 84 cases related to 2013. Although Judiciary Police (PJ) managed to solve 92 cases, 62 remain open and are expected to be closed this year.

According to the PJ’s annual report, of the cases closed, six individuals were arraigned in court, three of whom – two men and a woman – were charged and arrested.

In one of cases, which was revealed last month, the PJ solved a document forgery case and fraud case that involved some HK$250 million. The investigation began in 2010 and started after a denunciation against a Macau woman, who was allegedly laundering money.

After investigating the woman, police found large amounts of money being transferred from bank accounts from a company created by the woman to accounts of an engineering company created by a

man. The majority of the transactions were staged.

According to the PJ, both are accused of forging documents that allowed them to proceed with 200 loans from different financial institution in Macau.

The largest amount borrowed by both suspects amounted to HK$54 million.

As for economic crimes, the PJ investigated 676 from 2013 plus another 131 that had been open since 2012, which totalled 807 cases.

Thus, during 2013, there were 491 cases of fraud, 76 of breach of position of trust, 81 of dishonoured cheques and 28 other cases that were not defined.

As for the cases investigated, the PJ managed to solve 563 that were then handed to the Public Prosecutor’s Office.

The remaining 244 were still being investigated in 2014.

The authorities also announced that in relation to 2012, in 2013 the number of criminal offences related to cyber crimes, and mainly in cases such as documents money and credit card forgery, went up. Enquiries increased from 724 to 1,035, special

enquiries from 196 to 229 and requests for assistance from 123 to 125.

In 2013, more than 166 enquiries and 7 requests for assistance were concluded than in 2012. However, 36 less special enquiries were concluded. The fact that many of the events related to cyber crimes occurring outside Macau, through email hacking and social applications, increased the difficulty of the tasks for the PJ. However, authorities have been reinforcing cooperation with other countries for the exchange of information.

With regard to juvenile delinquency, last year 12 persons were summoned to the Public Prosecutor’s Office, all of whom were underage and could not be held accountable.

This figure decreased almost by half compared to 2012.

As for the number of suspects aged between 16 and 18, 43 and 56, respectively, attended the Public Prosecutor’s Office. The majority of their crimes were related to drugs trafficking and abuse.

JTM/Business Daily

Kam Leong kamleong@macuabusinessdaily.com

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suggested amendment to the current taxi regulations by the government includes the setting up of sting operations to catch drivers breaking the rules. However, the director of Legal Affairs Bureau André Cheong Weng Chon says clearer regulations have to be drafted to guide such sting operations, which is different from its original meaning in the law.

According to Mr. Cheong, the so-called sting operation may not be applied too casually. Such operations are usually applied in cases of serious crimes by tempting others to commit unlawful actions.

“Tempting others to commit crimes is strictly ruled in our criminal code and as such can only be used under specific conditions.

This [sting] operation usually serves to dismiss criminal

corporations and put them in court,” Mr. Cheong explained.

“However, we think that we don’t have to collect the evidence of taxi drivers breaking the rules by tempting them to do so.” He said that such sting operations refer only to undercover officials not showing their identification and pretending to be normal passengers to get evidence without any tempting actions, such as tempting the taxi driver to take a longer route.

The government said it would fully review the current taxi regulations, primarily to introduce sting operations, and increase the fines for drivers refusing to accept passengers to 5,000 patacas from the current amount of 1,000 patacas. A public consultation session is scheduled to begin some time this week.

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August 4, 2014

Macau

Packer seeks Vegas return in Oaktree talks Australian billionaire James Packer is plotting his return to Las Vegas after losing almost US$2 billion during the 2008 credit crisis from ill-timed North America casino investments

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he chairman of Australia’s Crown Resorts and also an investor in Macau casino developer Melco Crown Entertainment Ltd, is in talks to develop a Las Vegas Strip resort on land once occupied by the New Frontier Hotel & Casino after buying a piece of a loan backed by the property, according to people with knowledge of the matter. He is negotiating a potential deal with other creditors including Oaktree Capital Group, said the people, who asked not to be identified because the talks are private.

A deal would mark Packer’s return to Las Vegas after losing money on investments including Fontainebleau Resorts LLC and Cannery Casino Resorts LLC. It would also breathe new life into the 34.5-acre site of the former New Frontier after plans by Israeli businessmen Nochi Dankner and Yitzhak Tshuva to build a casino resort there stalled.

“Crown is a great brand and if it’s going to be a major international player in gaming then it really does need to be in Las Vegas in some way, shape or form,” said Matt Williams, who manages US$20.5 billion (164 billion patacas) as head of equities at Perpetual Ltd, which owns 5 percent of Crown.

The company has enough development experience to make a Las Vegas project work, Williams said by phone today from Sydney.

Packer is the biggest shareholder in Crown, which jointly owns Melco Crown Entertainment. Melco runs casinos in Macau, China, and Packer could bring a network of Asian gamblers to the proposed venture.

No deal between Packer and Oaktree on the New Frontier site has been completed and talks could still fall through. Packer owns less than 10 percent of the debt, according to one of the people.

Alyssa Linn, a spokeswoman for Oaktree, declined to comment, as did Karl Bitar of Crown.

Shares in Crown fell 1.6 percent last Friday in Sydney, headed for their sharpest fall in three weeks and outstripping the 1.2 percent decline in the S&P/ASX 200 index.

Dankner’s IDB Development (IDBD) and Tshuva’s Elad Group paid US$1.2 billion to buy the property in 2007 from Phil Ruffin and had the New Frontier hotel demolished that November. They planned to spend US$6 billion to US$8 billion developing a hotel and casino complex on the site across the Strip from

Wynn Resorts Ltd’s Wynn Las Vegas. The project was abandoned as property values plunged.

Oaktree’s investment Oaktree, the world’s biggest distressed debt investor, now owns more than half of the abandoned project’s loan after buying the debt at a discount of as much as 50 percent, the people said. Credit Suisse Group AG (CSGN) helped arrange a US$625 million loan tied to the property, and sold Oaktree at least a portion of the debt, according to the people.

Credit Suisse spokesman Drew Benson declined to comment.

The Clark County Assessor’s Office, which oversees Las Vegas, lists Elad and IDB as the legal owners of the property. IDB spokesman Tal Rabina said the group ceded control of the land two

years ago because it couldn’t service the loans.

Elad spokesman Idan Wallace in Israel said the group no longer owned the property. Elad’s New York office manager Maya Carasso was unable to verify the ownership of the land, saying the project had been “inactive” for some time and that the matter was “complicated.” She said in an e-mail that Elad didn’t want to comment further about the project.

‘Mistakes’ made Packer is the world’s 208th richest person with a net worth of US$6.7 billion, according to the Bloomberg Billionaires Index. He has been considering a return to the U.S. casino market after saying in 2012 that his investments there were his worst to date. They preceded the 2008 credit crisis that led to a slump in property values,

World cup casualty Gross gaming revenue decreased 3.6 percent year-on-year in real terms to 28.4 billion patacas during the month of July, dragged down by the World Cup effect that diverted both gamblers’ money and attention. This is the first time since June 2009 that a two-month consecutive drop in gaming revenue has been posted João Santos Filipe

jsfilipe@macaubusinessdaily.com

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he World Cup championship diverted bets money from the gaming industry for the second month in a row and casinos’ gross gaming revenue fell 3.6 percent yearon-year during July to 28.4 billion patacas, according to data released

last Friday by the Gaming Inspection and Coordination Bureau (DICJ).

Last year, by the end of June, the gross revenue of Macau casinos totalled 29.5 billion patacas.

On July 13, Argentina lost to Germany in the World Cup final by

1-0. However, the Argentineans were not alone in their defeat. The impact of the FIFA competition that began on June 12 also reduced the gross gaming revenue of casinos for the second month in a row. But in the month of June the effect was stronger

room rates and gambling revenues in Las Vegas.

“I should have been better than the mistakes we made in the U.S.,” Packer said at an October 2012 event sponsored

by AFR and Deutsche Bank AG in Sydney.

The city’s economy has been recovering. The unemployment rate for the area dropped to the lowest since 2008 in April, according to the Bureau of Labor Statistics. Tourism is also up, with 20.7 million visitors this year through June 30, a 4.2 percent increase over the first half of 2013, according to the Las Vegas Convention and Visitors Authority.

Packer, who is also developing casinos in Sydney and Sri Lanka, tried earlier this year to buy the Cosmopolitan of Las Vegas hotel and casino, the Australian Financial Review reported in April. Blackstone Group LP (BX) agreed to buy the property.

as year-on-year gross gaming revenue fell by 3.7 percent from 28.3 billion patacas in June 2013 to 27.2 last June.

The last time the gross gaming revenue fell for two months in a row was in 2009. In the months of May and June gross gaming revenue fell by 10.2 percent year-on-year, from 9.8 billion patacas to 8.9 billion patacas, and 17.4 percent, from 10.1 billion patacas to 8.3 billion patacas, respectively.

The results for the last month are within the predictions of gaming analysts that forecast a drop in gaming revenues ranging between 2 and 5 percent. For this month, however, gaming experts expect growth to pick up the pace, mainly due to the increase of visitors expected for August that is likely to boost mass-market revenue.

In spite of the two-month drop, since the beginning of the year gross gaming revenue has been growing at a rate of 10.2 percent year-on-year.

Last year, by the end of July the 35 casinos in Macau posted gross profits of 200.1 billion patacas, while this year that amount increased 21.5 billion to 221.5 billion patacas.

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August 4, 2014

Macau

Weak revenues until October, at least The VIP recovery is failing to materialise and Beijing’s corruption crackdown plus upcoming smoking ban are likely to drag out the revenue crisis in Macau much longer than expected. It’s all fuelling anxiety among investors Luís Gonçalves

luis.goncalves@macaubusinessdaily.com

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he softness of gaming revenues in Macau is likely to last far longer than expected this year, as the VIP recovery is failing to gain traction and the current anticorruption drive from Beijing and the upcoming smoking ban will probably divert gamblers, investors say.

Wells Fargo predicts that the current weakness in gaming revenue growth in Macau will last until October and could spread well into the last quarter of 2014. The ‘choppy’ second quarter is turning into a ‘choppy’ year.

Of the several factors pressuring Macau, two dominate: ‘The continued (and very real) Chinese anticorruption campaign could impact player sentiment and spending.

Moreover, the October 6 smoking ban has not yet come into investor focus and remains an unknown,’ wrote the US bank in a note to clients.

The market was already expecting a softer performance in Macau this year after a record 2013, but even the most pessimistic estimates at the beginning of the year are now well above the current numbers.

From a 14 percent growth year-onyear, investors are now expecting a high single digit performance with revenues set to climb 8 percent from 2013. New downgrades are a likely scenario in the coming weeks, for revenues and gaming stocks.

Wells Fargo says investors are ‘anxious’ and very short-term oriented: ‘In the very near term, all eyes are likely to remain on weekly

trends, and investor anxiety could increase if we don’t see a noticeable sequential step up in revenues – now the World Cup is well-and-truly over.’

With anxious investors, pressure on gaming stocks will continue to mount, noted Wells Fargo, ‘as some short-term uncertainties remain and company estimates may remain under some pressure.’

With June and July in the red, August and September performance will be key to the 2014 outlook. Wells Fargo says if gaming revenues in these two months don’t recover to a daily average of 1.05 billion patacas in Macau (revenues are running on a daily 919 million patacas) investors’ anxiety will increase. If revenues grow only 5 percent in August compared to July, the US bank says it will lower its estimates from a 7 percent growth year-on-year to only 1 percent regarding August. This will also affect on the downside the third quarter estimates.

The weakness of the VIP segment has been the main driver for the plunge in gaming revenues this year and will continue in the coming months. Gains from high rollers are likely to fall 20 percent year-on-year, while the mass market will sustain Macau this year with revenues boosting 30 percent.

Wells Fargo believes the VIP slowdown is ‘largely political’ due to the crackdown on corruption led

by Beijing and less economic or even event driven (World Cup in Brazil).

‘With this in mind, we would expect

Investor anxiety could increase if we don’t see a noticeable sequential step up in revenues – now the World Cup is well-and-truly over Wells Fargo

the VIP [sector] to continue to be soft over the near term, and would expect overall GGR to continue to decline in the low single digits through the summer,’ Wells Fargo wrote.

The US bank writes that it had recently had several conversations with the gaming industry in Macau and believes that ‘there is nothing on the horizon to suggest that a VIP recovery is imminent.’ The anticorruption crackdown will probably expand and increase the pressure on the VIP segment and some smaller junkets are already experiencing financial difficulties, which means less credit available for gamblers here.

‘Together, we believe these dynamics will keep the lid on any sort of VIP recovery for the time being,’ Wells Fargo said.

Slot machine maker Scientific Games to buy Bally

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.S. Slot machine maker Scientific Games Corp will buy larger rival Bally Technologies Inc in a US$3.27 billion (26.16 billion patacas) deal, the latest in a consolidating U.S. gaming industry.

The deal, which was put together in just over three weeks, will strengthen Scientific Games’ casino management systems and table gaming products as well as help it expand in Australasia. A new generation of gamers who prefer to make bets online have left U.S. slot machine makers questioning their own relevance. They also face increased competition as their core lower-income gambler base keep a tight lid on spending.

Credit rating firm Moody’s downgraded its outlook for the U.S. gaming industry in June to “negative” from “stable”. “Following a trail of recent mergers, we believe the combination of Scientific Games and Bally Technologies makes sense strategically,” BMO Capital

Markets analyst Edward Williams said.

Italian gaming group GTech SpA said last month it would buy slot machine maker International Game Technology for US$4.7 billion to strengthen its U.S. presence.

Scientific Games bought slot machines maker WMS Industries for US$1.5 billion in January last year. Bally

acquired Israeli online casino company Dragonplay Ltd in June, and casino equipment maker SHFL Entertainment in 2013.

Scientific Games’ US$83.30 per share cash offer was a 38 percent premium to Bally’s Thursday closing of US$60.17 on the New York Stock Exchange. The deal was valued at US$5.1 billion, including debt of US$1.8

billion.

BMO’s Williams said he did not expect a competing bid, citing the high premium and the cost savings the deal would generate. Scientific Games, backed by billionaire investor Ronald Perelman, said it expects to save US$220 million and cut US$25 million in capital expenditure annually by the end of the second year of the

deal’s close. It also expects tax benefits.

Perelman’s MacAndrews & Forbes Holdings Inc holds a nearly 40 percent stake in Scientific Games.

The deal will add to Scientific Games’s earnings per share and cash flow immediately on its closing – likely early next year – said the company, which had a market capitalization of US$720 million as of last Thursday.

Scientific Games estimated its revenue at US$1.6 billion and that of Bally at US$1.4 billion for the year ended March 31.

The company said it would finance the deal with cash on hand and debt financing from BofA Merrill Lynch, J.P. Morgan and Deutsche Bank Securities, who advised it on the deal. Cravath, Swaine & Moore LLP served as the legal adviser.

Macquarie Capital and Groton Partners served as financial advisers to Bally. Its legal advisers are Skadden, Arps, Slate, Meagher & Flom LLP.

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August 4, 2014

Macau Brought to you by

HOSPITALITY IVS consolidation A significant share of mainland tourists come to Macau under the Individual Visa Scheme (IVS), introduced more than 10 years ago. In the last twelve months to last June, very close to half a million Chinese visitors came using this kind of arrangement. Such a figure corresponds to about 45 percent of all mainlanders visiting Macau in the same period. The growth rate for the first half of the year, compared with the same period in 2013, was set at 19.4 percent. That rate stood neatly above the average for all mainland visitors, which was 14.7 percent. Consequently, the proportion of total visitors using this type of visa is rising. The main driver of this growth is Guangdong. The province has the largest share of visitors using IVS, with monthly figures that typically oscillate between the values of 60 and 70 percent. It seldom sets outside these limits.

A few provinces or cities registered noticeably higher growth rates – for example, Beijing (27 percent), Hubei (30.3 percent) and Fujian (37.5 percent). But their absolute figures are comparatively much smaller and these changes do not generate any immediately visible impact upon the overall trend.

The overall trend is, therefore, mostly determined

by Guangdong. The monthly patterns for both the province and the total number of visitors follow parallel paths, reflecting very similar growth rates and closely related monthly oscillations. In that sense, concerns about changes in the province’s visa policies are reasonable. However, the figures suggest that, so far, policy changes have had little impact. The behaviour of the 6-month moving averages (which make the comparison between data sets easier) suggests that the upward trend is steady, except for a short-lived slowdown recorded in 2012.

11.4%

annual growth for IVS visitors, June, on previous year

Wine market continuing to grow, More residents are enrolling in wine courses at the Institute for Tourism Studies (IFT) and expressing a keen interest in knowing more about the nectar of the gods. In an interview with Business Daily, food and beverage expert David Wong, working with the Institute of Tourism Studies, says that the interest from locals combined with the development of Macau is contributing to a continuous growth of the wine market in the territory. In addition, Mr. Wong says that it is not easy to break into the mainland China wine market through Macau, as it is still a very tough and specific market. He also said that mainland China’s market is in its early stages and facing problems such as counterfeit wines Luciana Leitão leitao.luciana@macaubusiness.com

Is the wine market here growing?

There are more and more hotels, so the wine market is growing tremendously. Within the next five years, it will go on and on.

Are French wines still the leaders or are there other wines coming up?

Portuguese [wine] will always have a home here in Macau. It will always be number one or two in terms of volume because of the heritage here. People always drink French wines, as well. What’s coming up is that other countries have improved their standards; places like South Africa, New Zealand, even Greece. Also, some of the Old World countries in the last 20 years have improved the quality of wine. Portugal as well, in table wines, has improved tremendously. A lot of other countries are coming in and doing a good job.

Are the casinos the ones responsible for the growth of the wine market in Macau?

Casinos have the buying power and every casino has a few restaurants with the best wine lists, that can buy wines from everywhere in the world and that want to win awards like the ‘Best Wine List in the World’.

There are also new restaurants coming up and Michelin-starred chefs coming over. Within the next five years, there’s going to be more and more growth.

A bigger interest Are locals or tourists responsible for the growth of the wine market?

In Macau, we also have quite a lot of people with wine knowledge, like the Portuguese and the Macanese. The Chinese are following the trend from Hong Kong.

Hong Kong is a mature market for wine in Asia, one of the most mature ones in Asia and open to learning about wine. Any wine event in Hong Kong is always full.

Macau follows that a bit. We do WSET wine courses at IFT and all our classes — we did Wines of Portugal classes last month for two

days and it was full with 30 people in each class — they’re always full. Attending these classes are not only people from the industry but people who are interested in getting more information about wine.

Why is this happening?

In the Old World, wine always goes with food. In Asia, it’s always tea. They begin to see the health benefits of wine. It’s very good for your health, especially red wine. They see the health benefits as well. And at the end of the day wine makes you happy. It’s a family thing, you enjoy with friends, family and loved ones — there’s nothing more civilized than wine with friends, and the conversation, that’s why it’s so good.

Are the French wines still the number one wine in Macau?

French is for sure number one, because of the cost of the wines — the most expensive ones are way above Portugal’s most expensive wines and even France is overtaking Portugal, volume wise. Portugal was number one for volume but even now France is slowly taking that over as well.

Why is this reverse trend happening?

Before, not many tourists visited Macau and now there are a lot of tourists. And the tourists who come are mainly from China and Hong Kong. From China they come to gamble, but they also buy French wines all the time, to drink, or they buy at casinos or to take back to China. People from Hong Kong

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Macau

says academic

Hong Kong is a mature market for wine in Asia, one of the most mature ones in Asia and open to learning about wine

who come to Macau usually choose Portuguese wines. Before, tourists were mainly from Hong Kong and now they’re mainly from China, that’s why the reversal.

How different is Macau and Hong Kong’s wine market?

Hong Kong is a much more mature wine market. Hong Kong is like a hub — it has an international airport, the biggest wine shows, auctions, so many schools, competitions for wine and shows as well. That’s why Hong Kong still has the edge and it always will, because of that. There are a lot more people going there, it’s easier to access than Macau.

Are French wines also dominant in Hong Kong?

Yes, for sure. Because French wines have always been up there and mainland Chinese go to Hong Kong to buy at auctions, always the biggest wine fairs, it’s always French they sell at auctions.

You say more people are interested in wine in Macau. But do you see more people with a deep knowledge about wine in the territory?

That’s why they come to IFT to learn; we do international standard wine teaching here — it’s open to anybody who’s interested in wine.

They don’t have to be in the trade; it’s not an easy subject to learn but it’s a fun subject.

No platform Is Macau still a good entry door to mainland China?

China is a very difficult market compared to Macau. Macau is a tough market, but China is also very tough. With China, if you’re not talking about first-tier cities or even second-tier cities, then it’s very hard to get in there. In Macau, the Chinese sometimes need to get to know people for a long time, make friends, have dinner, and it’s like that, it’s not easy.

What’s the best strategy for a wine distributor to enter China?

You have some international wine companies in China. They started in Shanghai and then they expanded in each main city — that’s the way to do it. But in the wine business it’s much harder to do it. You start off with one office and then move around the region, that’s the best way to do it. Now, unless you’ve really got money to burn, it’s going to be quite tough.

Once China becomes more knowledgeable about wine, then they will buy [other Portuguese wines] but until then they choose French to be safe

Are Portuguese wines starting to become successful in mainland China?

Everybody knows about Portuguese wines and Madeira but only in the last 20 years have the cheaper wines become known. Before, the famous wine was Mateus Rosé, in the 1970s, but it’s not really a serious wine.

Once China becomes more knowledgeable about wine, then they will buy [other Portuguese wines] but until then they choose French to be safe.

Do you believe the locals in mainland China are also becoming more knowledgeable about wine?

Yes. I think they’ve just started. A lot of education is going on now; they will get education, that’s for sure, in five to 10 years time. With the wineries, they will get more knowledge exposure and drink more local wine as well. They’ve just made their first sparkling wine, a collaboration with Moet & Chandon.

What are the dangers of entering a market like mainland China?

Copying is the number one problem in China – the fake wines.

I would never buy wines in China because I don’t know where they’re from.

I don’t really trust anybody there, unless it’s the really top distributors, like ASC, Summergate and others. It’s very tough. That’s why a lot of mainland China people come to Macau to buy wine and take back — it’s always going to be a problem in China. They’ll never stop it.

Is that deterring some distributors from even trying to enter mainland China?

There’s always an opportunity everywhere. China is still a young market for wine, so people still want to enter because they want to get there when it’s young. There’s always an opportunity and the Chinese love opportunities.

For the future of the wine market in Macau, do you believe wines coming from New Zealand, Australia and

I would never buy wines in China because I don’t know where they’re from

other places will continue to grow in popularity and demand?

For the short-term, even going to the next 10 years, I can say that France will still be at the top.

Portugal will be there as well, just because of the heritage. Then, who else? I don’t think it will be Spain, I’m not sure if Chile either.

I think Australia still sells pretty well here, but in recent years it has dropped because of the high Australian dollar and the star rating system they use that many people do not like. South Africa as a country produces great wines at very good prices that will come up in the next couple of years. New Zealand is another country I like, that is producing very good wines and even Argentina and Chile are producing good quality wines at reasonable prices. Greece could be another one to watch out for.

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Greater China Power consumption to jump China’s power consumption, an important indicator of economic activity, is expected to rise 6.5 percent in the second quarter, bringing the annual rate for 2014 to around 6 percent, according to a report released by China Electricity Council. In the first half of the year, power use rose 5.3 percent from a year ago to reach 2.63 trillion kwh, earlier official data showed, as the economy expanded 7.4 percent during the period, slightly below the government target of 7.5 percent.

More mobile phones payments Payments through mobile phones in China rose 707 percent year on year in 2013, a research report said on Saturday. Mobile payment users hit 125 million in 2013, up 126 percent year on year, said the 2014 China Internet Financial Development Report. It was jointly published by the Internet Society of China (ISC) and Finance World, a magazine of Xinhua News Agency.

But Shi Xiansheng, deputy secretary-general of the ISC, said mobile payments were vulnerable to bugs in smartphones. He urged improved technology to safeguard mobile payments and safety standards to better protect consumers’ rights.

HK Customs seizes illicit cigarettes Hong Kong Customs officers Saturday seized 1.3 million cigarettes, worth HK$3.5 million (about US$451,613), with a duty potential of about HK$2.5 million HK dollars. Customs officers found the cigarettes concealed in 82 carton boxes loaded with other goods on the incoming cross-boundary vehicle declared to have DVD players at Lok Ma Chau Control Point. A 38-yearold driver was arrested for smuggling cigarettes.

Railways beat record during summer peak Chinese railways have so far carried a record number of passengers during the summer peak travel period that started in July, the China Railway Corporation (CRC) said on Saturday.

Corporation data showed that 226.5 million trips were made last month, up 12.3 percent year on year. The heaviest single-day passenger flow came on July 12, which saw more than 8.19 million passengers making train trips.

The CRC has added new trains to cope with the increasing number of passengers. The two-month summer travel peak period will end on August 31.

Toyota says July auto sales down Toyota Motor Corp and its two Chinese joint ventures sold about 74,800 vehicles in China in July, down 1.1 percent from a year earlier. That followed a 7.6 percent year-on-year fall in June and a 2.7 percent increase in May. Toyota sales have been weak in China chiefly because it is still ramping up production of the newly redesigned Corolla model, which went on sale here recently, company officials said. In the first seven months of the year, Japan’s biggest automaker by sales volume sold about 540,700 vehicles, up 9.8 percent from a year earlier.

Official services PMI dips Growth in China’s services sector slipped to a six-month low in July as new orders rose at their weakest rate in at least a year, data showed, taking some of the shine off an industry that has been a bright spot in the Chinese economy this year

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he official Purchasing Managers’ Index (PMI) for the non-manufacturing sector slowed to 54.2 in July from June’s 55, the National Bureau of Statistics said yesterday. That is the weakest reading since January.

A reading above 50 in PMI surveys indicates an expansion in activity while one below the threshold points to a contraction.

The slight retreat in the services sector came at a time when China’s factories have started to recover, having earlier this year been one of the drags on growth in the world’s second largest economy due to faltering demand at home and abroad.

In contrast, China’s services companies have held up through each slowdown since PMI records began in January 2007, with the index staying above 50 in every month.

A mixed performance from other measures in yesterday’s PMI suggested that the services sector enjoyed an encouraging, albeit slightly muddy, outlook.

Growth in new orders fell to their slackest rate in at least a year in July.

Yet at the same time, companies’ business expectations jumped to a level not seen in at least a year.

Inflation within the sector, be it

production or final sales prices, also quickened to a rate unseen in at least 12 months.

Cai Jin, vice president of China Federation of Logistics & Purchasing, which publishes the services PMI in conjunction with China’s government, advised investors to not read too much into the divergence.

“The volatility in the various subindices for the July services PMI was not great,” Cai said. “The market in general is still stable.”

In contrast, he said weakness in China’s property sector persisted last month due to seasonal factors and muted demand.

“The market remains subdued.

Prices are still in a downtrend, and declines have increased.”

China’s once-heated housing market has slowed this year as sales and prices turned south in their biggest pull-back in two years, driven in part by a cooling economy, and after the government tried for almost five years to calm the market.

But the extent and breadth of the downturn have surprised analysts, with many worrying that it is the biggest threat to the health of China’s economy this year.

To limit the drag from a cooling housing sector on the overall economy,

The volatility in the various sub-indices for the July services PMI was not great.

The market in general is still stable Cai Jin, vice president, China Federation of Logistics & Purchasing

Hong Kong banks’ exposure to China in focus The first of Hong Kong’s banks kicked off earnings on Friday with the biggest family-run lender posting a record interim profit after giving more loans to mainland borrowers, renewing investor focus on credit lines to China and the risks they pose

B

ank of East Asia, which reported a 6 percent increase in first-half net profit to HK$3.58 billion (US$462 million), said it would take steps to mitigate credit risks in China where it expected asset quality to remain under pressure in the second half of the year.

The growing exposure of Hong Kong banks to the mainland in recent years has grabbed headlines about their ability to scrutinise credit risks against the backdrop of a slowing Chinese economy. Rating agencies and supranational bodies such as the International Monetary Fund have openly voiced concern.

KEY POINTS BEA H1 net profit hits record HK$3.58 bln vs HK$3.38 bln yr ago BEA says asset quality to remain under pressure in H2 HK banks have increased their mainland exposure in recent yrs

Long praised by investors for their sound risk management, Hong Kong’s mid-sized banks are increasingly becoming more exposed to any blowup in default risk as they hunt for new opportunities in the mainland amid sluggish growth at home.

“Hong Kong banks’ exposure to China has been rising for a while, and we would be cautious of any sharp rise in exposure because they may not have the requisite expertise to analyse

the underlying credit risks on the ground,” said Frank Tian, portfolio manager and part of a team that manages US$25 billion in equities at Aberdeen Asset Management.

Data from the Hong Kong Monetary Authority (HKMA), the city’s de-facto central bank, shows a sharp rise in cross-border business.

By the end of 2013, the exposure of Hong Kong banks to corporate borrowers constitutes a fifth of their

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Greater China nearly half of China’s regional governments have started relaxing curbs on home purchases this year, reversing controls that were instituted from as early as 2009.

The services PMI followed two manufacturing PMIs released on Friday that showed China’s factory sector posting its strongest growth in at least 1-1/2 years last month, suggesting that the economy is gathering steam after a spate of stimulus measures.

Economic growth picked-up slightly in the second quarter, accelerating to 7.5 percent from an 18-month low of 7.4 percent between January and March.

Yesyterday’s survey showed a subindex for business expectations rose to 63.9 last month from June’s 62.9, while the measure for new orders slipped to 50.3 from June’s 50.9.

Production prices climbed to 58.2 from June’s 57.1, while final sales prices jumped to 52.4 from June’s 51.2.

But with China’s consumer inflation running well below the government’s annual 3.5 percent target, policymakers are unlikely to be fazed by rising prices in the service sector.

In fact, Chinese authorities have steadily loosened monetary policy since April to energise the economy, including relaxing the reserve requirements for some banks. The construction of railways and public housing projects have also been hastened to spur investment.

The services sector, which accounted for 45 percent of China’s gross domestic product in 2012 and roughly half of all jobs in the country, is expected to post steady growth in coming years as the economy matures.

A Seagate factory in Wuxi, China

Reuters

total assets compared with around 5 percent in 2007.

While the HKMA has repeatedly said a significant share of the nonbank mainland exposure is backed by guarantees and is symbolic of a strong financial centre, the fact remains the ability of a Dah Sing Bank or a Wing Hang Bank to absorb big losses is far less than their foreign counterparts such as Standard Chartered or HSBC. For example, Bank of East Asia, a medium-sized city lender, would require only roughly 15 percent of its net loan book going sour to wipe out its entire equity base, according to its 2013 annual earnings.

China exposure Bank of East Asia said loans to customers in mainland China edged up 9.5 percent to HK$207 billion at the end of June from end-December.

Those loans comprised roughly half of its total loan book.

Bad debts as a percentage of total loans rose to 0.44 percent in the first half from 0.39 percent at the end of 2013.

“A tipping point may be reached if the yuan depreciates very sharply or if loan books are expanded aggressively,” said Aberdeen’s Tian.

Under an extreme scenario presented by the IMF in May, if the default rate in the mainland banking system’s interbank obligations hits 80 percent, the losses would wipe out all the capital in the city’s banking system. System-wide, non-performing loans as a percentage of their total loan book remains below 1 percent so far.

Bank of East Asia said at an earnings briefing on Friday it expects to see more stress in China’s property sector due to maturing products from trust companies.

Reuters

Merging local watchdogs to improve food safety Several Chinese cities have piloted the merging of quality watchdogs to ensure food safety, which has been troubled by scandals in recent years

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ianjin Municipality in north China set up the Tianjin Market and Quality Supervision Administration last Wednesday, after merging three municipal government departments - the industry and commerce administration, quality and technical inspection as well as the food and drug administration.

The new combined market watchdog of Tianjin is the first provincial level one of its kind in the country. Similar bodies have been established in Zhoushan City in east China’s Zhejiang Province, Pudong New Area in Shanghai and Shenzhen City in south China’s Guangdong Province this year.

The reform will not only facilitate trade and investment, but also further improve the safety supervision of food and other commodities, said Lin Lijun, head of the Tianjin Market and Quality Supervision Administration.

Staff of the previous three government bodies will be integrated and specialized, according to Lin. Food safety is one of big public concerns in China. It involves different supervision departments, but the efficiency and efficacy of such supervision is not ideal. The system is often compared to “rain being allocated by nine dragons,” a mythical creature assigned to produce rain.

Tianjin

The investigation into the recent Shanghai scandal was launched after a local TV station reported in late July that Shanghai Husi Food Co., Ltd, a meat supplier owned by U.S.-based OSI Group, mixed fresh and expired meat.

Under the new “three combined into one” model, the registration of a company will be more convenient and the divided inspection mechanism will be improved, said Ma Yunze, a professor in industry development at Tianjin-based Nankai University.

“We will set up market and quality supervision bodies at township or street levels and merge the grass-roots law enforcement teams to strengthen food and drug safety administration,” said Wang Haifu, Communist Party chief of the Tianjin Market and Quality

Supervision Administration.

Sun Tao, another researcher at Nankai University, said food and drug supervision is highly professionalised and thus the operation of integrated inspection forces needs careful research to ensure specialization.

The Chinese new leadership has vowed to deepen reforms in various sectors, including government administration. The effect of local piloted reforms in food safety inspection has yet to bee seen.

In Shanghai, the Pudong New Area Market Supervision Administration was officially inaugurated on January 1. It has proved effective in strengthening law enforcement, said Chen Yanfeng, head of the administration.

Xinhua

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Greater China

China’s central bank signals refrain from broad monetary easing The People’s Bank of China warned the country’s credit and money supply have increased rapidly and indicated it will refrain from broader monetary easing to support growth

“T

he total debt level has been rising relatively quickly”, the PBOC said in its second-quarter monetary policy report on August 1.

“Our existing money supply and credit are already relatively large and their growth is also high.”

The International Monetary Fund said last week that China’s reliance on debt and investment has created “rising vulnerabilities” and that failure to change its growth pattern increases the likelihood of a sharp economic slowdown. The Washingtonbased lender urged the nation’s leaders to lower the country’s annual expansion target, rein in credit and speed

up reforms.

“Restructuring and reform of the economy remains an arduous task,” the central bank said in its 54-page report. “It’s not appropriate to expand overall liquidity sharply to solve structural problems.”

The PBOC reiterated its “prudent” monetary-policy stance and pledged to “keep overall liquidity stable while improving its structure.”

It said it will exploring resolving local- government debt problems in “marketoriented” ways.

The central bank reiterated it will use tools including open market operations, reserve requirement ratios, relending, standing lending facilities,

and short-term liquidity operations to adjust liquidity, according to the report.

Monetary easing Governor Zhou Xiaochuan is trying to balance implementing Communist Party orders to protect this year’s 7.5 percent economicgrowth target without resorting to broader monetary easing that stokes debt and inflation risks. The central bank has turned to unconventional tools including relending and selective cuts to banks’ reserve requirement ratios to channel credit to areas targeted by Premier Li Keqiang.

China Business News reported in June that the PBOC

created a revamped relending tool known as pledged supplementary lending to manage medium-term interest rates and lower the cost of financing for some industries and lenders. The paper said on July 21 that the PBOC conducted a 1 trillion yuan (US$162 billion) transaction with China Development Bank Corp., the country’s largest policy lender.

The banking regulator said last week it approved CDB to start a housing-finance business to provide loans for shantytown renovation and related city infrastructure.

Deepen reform While the PBOC’s report

made no mention of pledged supplementary lending, it did say it will “deepen reform” of CDB to support shantytown redevelopment and city infrastructure. The bank is proposing to become the sole financier to local governments, as mounting debt threatens efforts to promote urbanization, its chairman, Hu Huaibang, wrote in February.

Expansion in China’s economy-wide credit has exceeded nominal gross domestic product growth in every quarter since 2008, according to data compiled by Bloomberg.

Financing rose 16.6 percent in June from a year earlier, compared with the second quarter’s 8.5 percent increase in GDP unadjusted for inflation.

Outstanding credit rose to 206.3 percent of GDP last quarter from 202.1 percent in January-toMarch, according to data compiled by Bloomberg.

China’s stock of aggregate financing, its broadest measure of credit, rose by 73 percent of GDP in the past five years, the IMF said in its report last week. Out of 43 countries studied by the lender over 50 years, only four saw credit expansion on a similar scale to China and all four had a banking crisis within three years following the boom, it said.

Bloomberg News

Safety questioned following China plant explosion The death toll from an explosion at a Taiwan-invested car parts factory in China reached 69 yesterday, state media said, as a labour rights group cast doubt on its safety measures

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he blast on Saturday in a wheel hub polishing workshop at the Zhongrong Metal Products Co. in Kunshan, near Shanghai, also left nearly 200 injured, state television said, many with severe burns.

The force of the explosion caused metal siding on the factory building to peel back, AFP journalists saw, while state television showed wheel hubs sitting amid broken machinery.

Kunshan’s mayor Lu Jun on Saturday classified the incident as a “severe” industrial accident, which a preliminary investigation showed it was caused by the ignition of powder or dust from the production process.

Authorities have detained two company officials, the state-run Xinhua news agency said, but did not name them.

The firm makes parts for car

Safety measures like ventilation systems should have prevented such accumulation of dust particles. This tragedy is a result of lax safety standards in the workplace US-based China Labour Watch report

companies, including US giant General Motors (GM).

China has a dismal industrial safety record. US-based China Labour Watch, a workers’ rights group, said proper measures could have prevented the accident.

“Safety measures like ventilation systems should have prevented such accumulation of dust particles.

This tragedy is a result of lax safety standards in the workplace,” it said in a statement.

Dust suspended in the air in the right concentration can cause explosions, according to safety experts, with even materials that do not normally burn in larger pieces becoming explosive in certain conditions.

Kunshan, in the eastern province of Jiangsu and known as a centre for Taiwanese investment in China,

was unable to handle the number of injured, with more than 130 of them sent to hospitals in surrounding areas including Shanghai.

A doctor treating the injured said this type of burn, caused by an explosion, presented special challenges to treat.

“We have to think about infection,” the doctor from Shanghai’s Ruijin Hospital told state television.

Zhongrong was a contractor for a global supplier of GM, Dicastal, though the US company did not have direct contact with it, GM said in a statement provided to AFP yesterday.

“Our direct suppliers are required to source from tier-2 suppliers who must meet both in-country environment and safety standards, as well as quality standards,” it said.

AFP

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August 4, 2014

Asia

Indian tycoon gets office inside jail India’s Supreme Court has granted a jailed business tycoon an office, a phone, Internet connection and three secretaries in the Delhi prison that has been his home for five months so he can sell two of his company’s iconic hotels to help pay bail

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ubrata Roy, head of the Sahara conglomerate, was jailed on March 4 for failing to appear in court in a legal battle with India’s capital market’s watchdog. He needs to raise 100 billion rupees (US$1.6 billion) to have a chance of release.

The Supreme Court gave him 10 working days from today Monday to accomplish the sale of the Grosvenor House Hotel in London and the Plaza Hotel in New York.

So he can negotiate with potential bidders, Roy will get a conference room inside the jail complex, a mobile phone, laptop and desktop computers, Internet access and video conferencing facilities, as long as he pays for them.

Three of his company’s secretaries will be allowed to join him to assist with the sale, the court said.

“This is a distress situation. It is a battle of nerves. And we need all the facilities and gadgets to negotiate the deal,” Harish Salve, one of India’s top lawyers who represented Sahara in the case, told the court on Friday.

If Roy raises the funds and deposits them with the regulator, the court will meet again to decide on any further conditions for his release.

Roy was jailed after he failed to appear at a contempt hearing in the long-running dispute over the company’s failure to repay billions of dollars to investors who were sold outlawed bonds. He has yet to be charged over the bonds dispute and denies any wrongdoing.

Sahara said it had repaid most investors, but its claims have been contested by the regulator and the court.

Despite multiple pleas, Roy has been denied bail unless he can deposit the

This is a distress situation. It is a battle of nerves. And we need all the facilities and gadgets to negotiate the deal Harish Salve, lawyer who represented Sahara

Plaza Hotel in New York, which Roy needs to sell in 10 working days

100 billion rupees with the regulator.

The court estimates Sahara’s total liability to be between 330 and 350 billion rupees.

The sale of Roy’s prized hotels abroad are seen as critical to raise the deposit. Sahara paid 470 million pounds (US$791 million) for Grosvenor House and about US$570 million for the Plaza in 2012. It also owns the

Dream Hotel in New York.

Media reports have named Indian billionaire Cyrus Poonawalla and U.S.based Madison Capital Holdings LLC as potential buyers.

Based in Lucknow, the capital of India’s most populous state Uttar Pradesh, Roy calls himself “managing worker and chairman” of Sahara and chief guardian of the “world’s biggest

family”, overseeing businesses with almost a million staff and agents.

He has often been described in media as a billionaire, although last year he said his personal assets were worth less than $1 billion. In his heyday, the tycoon was often photographed with Bollywood stars and cricketers.

Sahara is worth US$11 billion and has more than 36,000 acres (15,000 hectares) of real estate, according to its website. One of its main businesses is the sale of financial products, largely to small investors in towns and rural areas. It was two such products, later ruled illegal, that drew the market regulator’s attention.

Critics say Sahara’s investment products are designed to evade regulatory oversight and that the company lacks transparency on the source and use of funds.

Reuters

Singapore GIC’s warning on investment climate Singapore sovereign wealth fund GIC, which manages more than US$100 billion of the city-state’s foreign reserves, warned of a tough investment outlook over the next decade as global central banks withdraw ultra-easy monetary policies

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IC said the prices of all major asset classes have been inflated by the massive stimulus measures, and now face weak future returns.

“Global financial markets have been recovering strongly from the 2008/09 global financial crisis, supported by low interest rates and unconventional monetary policies,” GIC said in its annual report.

As central banks unwind monetary stimulus measures and interest rates increase, “financial assets will see diminished returns,” it said.

The US Federal Reserve is expected to end multi-billion dollar bond purchases in October, winding up a five-year stimulus effort to support the world’s biggest economy. The European Central Bank has said it will reassess its stimulus measures at the end of this year.

“The investment environment for the next 10 years will therefore be more challenging for global investors, including GIC,” the fund said.

GIC said its assets earned a 4.1 percent annualised real rate of return

over the past 20 years in the year to March 2014, almost the same as last year’s 4.0 percent. It does not report the value of its assets.

Lim Siong Guan, GIC’s president, said the fund is committed “to ride out significant short-term volatility and focus on long-term fundamentals”.

GIC last year unveiled a new investment strategy that split its global portfolio into three segments, a move it said was in anticipation of a “more challenging and complex investment environment”.

In its annual report this year, the fund said the Americas region including the United States accounted for 42 percent of its portfolio in the year to March 2014, two percent lower than the previous year.

Its exposure to Europe was at 29 percent, four percent higher than in 2013.

Its holdings in Asia stood at 27 percent, one percent lower than 2013, while the remaining two percent was concentrated in the Australasia region.

AFP

Singapore Exchange building

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August 4, 2014

Asia Pfizer’s Mumbai factory threatened Pfizer Ltd, the Indian unit of U.S. drug maker Pfizer Inc, said on Friday it locked out staff at its Mumbai drug factory after some employees tried to disrupt production lines and threatened management. The lockout at the Thane plant, which employs 212 people, would have no impact on the group’s supply of medicines, a Pfizer Ltd spokesman said in a statement emailed to Reuters. Work would not resume at the factory until it was assured of the safety of all staff, the statement said, without saying why the unrest had occurred.

Nippon Steel seeks more “outside” assets Nippon Steel & Sumitomo Metal Corp., the world’s second-biggest steelmaker, is seeking to add assets in markets outside Japan to tap growth in metal demand that’s stronger than in its home market. Nippon Steel partnered ArcelorMittal in November to acquire a steel plant in the U.S. from ThyssenKrupp AG, and is expanding to chase swelling overseas demand, President Kosei Shindo said in an interview. The steel industry is becoming global, he said. The Tokyo-based producer said last week that profit in the June quarter fell 24 percent as steel imports from China put pressure on prices.

Singapore rolls out stock market reforms The Monetary Authority of Singapore (MAS) and Singapore Exchange (SGX) on Friday issued new reform proposals on its stock market, which include a minimum trading price of 0.2 Singapore dollars (US$0.16) for potential issuers, aiming to curb excessive speculation on the stock market. The minimum trading price requests that all the issuers to be listed on the SGX mainboard should ensure their shares are worth at least 0.2 Singapore dollars each. MAS and SGX said in a press release that this is to address risks of low-priced securities being more susceptible to excessive speculation and potential market manipulation.

Vietnam willing to strengthen ties with Japan Vietnam attaches great importance to the relations with Japan and is willing to make the bilateral ties more intensive, practical and efficient, said Vietnamese Prime Minister Nguyen Tan Dung on Friday. Dung made the remarks while receiving visiting Japanese Foreign Minister Fumio Kishida in Vietnam’s capital Hanoi. The Vietnamese leader proposed the two countries further boost cooperation in all areas including politics, trade, investment, culture, tourism, education, science, technology, national defense and security. The prime minister expressed his hope that Japan would continue supporting Vietnam in development process.

Line sends message to chat Kyoko Hasegawa

A

messaging app launched in the aftermath of Japan’s 2011 earthquake and tsunami, Line is moving towards a possible dual listing in Tokyo and New York as it jostles for space in an increasingly crowded and imaginative market.

Combining instant messaging with shopping, gaming and other features such as letting users send each other cute cartoon “stickers”, Line is hugely popular in Japan, particularly among teenagers.

But competition is fierce when it comes to expanding into emerging markets.

Its plans for a reported US$9.8 billion Tokyo listing would help on that front -coming after February’s rush of deal making, including Facebook’s purchase of WhatsApp for as much as US$19 billion and Japanese online retailer Rakuten’s US$900 million spend on Viber.

Other rivals include WeChat, owned by Chinese giant Tencent Inc, and South Korea’s Kakao Talk - both of which have also developed their own popular cartoon “emoticon” messages.

“Competition among messaging applications is heating up worldwide,” said Hitoshi Sato, senior analyst at InfoCom Research, Japanese telecom

giant NTT group’s research arm.

“Line’s challenge is how to diversify its sources of profit in the future.”

Sato said a roughly US$10 billion value for Line was reasonable given that its finances eclipse some of Japan’s most successful smartphone

Japanese PM says Brazil ‘Abenomics’ working Japan’s Prime Minister Shinzo Abe touted the success of his economic policies on a visit to Brazil and said it was time for the two nations to expand their trade and investment partnership

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n the first visit to Brazil in a decade by a Japanese prime minister, Japanese banks extended US$700 million in loans to boost Brazilian soy and corn exports to Japan and help finance oil platform construction for Brazil’s growing offshore oil industry.

Abe told Brazilian business leaders that Japan has closed a 15-year deflation cycle since his stimulus policies began to kick in and there is great potential to expand trade and investment with Latin America’s biggest economy.

“With Japan growing again, we can grow with other nations,” he said in comments to executives translated by an interpreter.

“Japanese companies are eyeing Brazil with great expectations,” he said later at a deal-signing meeting with President Dilma Rousseff.

Brazil’s state-run oil company Petroleo Brasileiro SA signed up for a US$500 million loan from Mizuho

Bank Ltd to build eight hulls that will be converted into floating oil platforms for deep-water oil production.

Sumitomo Mitsui Banking Corp (SMBC), the main banking unit of Tokyo-based Sumitomo Mitsui Financial Group, agreed to loan Brazilian agribusiness company Amaggi US$200 million for soy and corn projects that will improve shipments to Japan.

Brazil’s state development bank BNDES agreed to join forces with Japan’s bank for international cooperation, JBIC, to look for areas to promote investment by small and medium-sized Japanese companies in Brazil.

Besides shipbuilding, Japanese companies are interested in investing in the infrastructure Brazil needs to continue growing, Brazilian and Japanese officials said. A plan to build a high-speed train between Brazil’s two largest cities, Sao Paulo and Rio de Janeiro, is particularly

promising, they said.

Japan is Brazil’s sixth largest trading partner, with two-way trade of US$15.7 billion in 2012. Brazilian agribusiness is the second-largest supplier of corn and soybeans to Japan.

Japan’s enthusiasm for Abe’s economic stimulus policies has waned this year after the country’s growth sagged and investors grew impatient for more drastic structural reforms.

Rousseff thanked Japan for opening its market to Brazilian pork last year, but she asked for the lifting of a ban on Brazilian beef that Japan and a few other countries still have in place due to a mad cow scare.

Brazil’s Vale SA, the world’s largest iron ore miner, inked an agreement with Japan Oil, Gas and Metals Corp (JOGMEC) to strengthen cooperation in coal mining in Mozambique. Vale also renewed ties with JBIC for financing iron ore, coal and other mining projects.

Reuters

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August 4, 2014

Asia

rivals game developers.

Line, which says it has more than 400 million registered users in Japan and other parts of Asia, lets users

make free calls, send instant messages and post photos or short videos. It combines attributes from Facebook, Skype and WhatsApp. About 88 percent of Japanese smartphone owners use messaging apps including Line, according to a survey by the Communications and Information network Association of Japan.

“I get in touch with friends mostly through Line - for example, when I want to go somewhere together with them,” Kanako Baba, a 25-year-old Japanese translator, told AFP. “I don’t use emails very often,” she said. “Line is toll-free and handy.”

Sticky business Line’s messaging service was launched in 2011 by the Japanese unit of South Korean Internet service provider Naver Corp. after the quaketsunami tragedy damaged telecoms infrastructure nationwide, forcing millions of people in Japan to resort to online resources to communicate.

But boosting its user base alone is not enough to generate profit, say analysts. More than 60 percent of its revenues come from games, but what differentiates Line from some of its rivals like WhatsApp is one of its main selling points - its stickers.

Users can post these to friends after purchasing them from Line’s online store for a fee of around US$1-2.

Many feature a rabbit called “Cony” and her bear boyfriend “Brown”, allowing users to express themselves with pictures as much as words.

A new service launched this year allows people to create their own

Competition among messaging applications is heating up worldwide Hitoshi Sato, senior analyst, InfoCom Research

stickers and sell them to each other on the platform. Line collects 50 percent of sales revenue as commission.

While analysts see Line’s initial public offering providing funds for developing new game titles, they warn that the industry is particularly fickle.

“Success in gaming can be elusive.

One game title can be a blockbuster hit, but this may mask several other unprofitable titles,” said Sato.

Targeting non-IT types Line’s plans for an IPO in New York is seen as an attempt to tap

the North American market, said Toshiaki Kanda, IT journalist and social media consultant.

“What made Line grow at this rapid pace is that from the beginning the company has targeted the mass market comprising people unfamiliar with IT technologies, rather than the IT savvy,” he said.

“There is nothing new in free messaging functions - that already existed in Skype, for example. But it launched a huge TV commercial campaign and the ‘stickers’ service” in Japan.

“Line will probably take the same strategy in the US market, targeting teenagers there,” he said, adding the planned share offering “would provide it with much needed capital with which to launch advertising”.

Neha Dharia, senior analyst at technology research firm Ovum, said in a report that the listing “makes perfect sense as it will not only raise its profile further in the market, but it will also provide them with adequate funds to strengthen their product offering”.

Analysts said messaging app users are fickle, jumping from one app to another.

“At the moment, Line has good revenue from game and stickers. But the other messaging apps can easily and quickly imitate and take the place of Line’s current position,” Sato said.

Line gave no further details on its initial public offering (IPO), including the possible size of the deal.

Dow Jones Newswires has cited a source as saying Line could list in Tokyo as soon as the autumn.

Qatar’s Ooredoo launches Myanmar telecom network Jared Ferrie

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atar’s Ooredoo on Saturday launched telecommunications services in Myanmar, one of the world’s least connected countries.

Ooredoo will take on two rivals rolling out networks in Myanmar, which has only 10 percent mobile penetration according to government figures. Norway’s Telenor Group won the other licence granted to foreign operators.

More than 90 companies and consortia submitted expressions of interest after the government issued a tender for the two licences last year.

“They really challenged the international industry in their international tender and created the most competitive process the world has ever seen in telecommunications,” Ooredoo Myanmar CEO Ross Cormack told reporters in Yangon, the commercial capital.

The country’s sole telecoms provider until now, state-run Myanmar Posts and Telecommunications (MPT), last month announced its partnership with Japanese firms KDDI Corp and Sumitomo Corp.

Sumitomo, a trading house, and KDDI, Japan’s

They really challenged the international industry in their international tender and created the most competitive process the world has ever seen in telecommunications Ross Cormack, Ooredoo Myanmar CEO

second-largest wireless carrier, said they would invest about US$2 billion to expand the existing network.

Cormac said Ooredoo’s voice and 3G internet services will initially be available in Myanmar’s three main cities of Yangon, Mandalay and the capital, Naypyitaw. The network will cover 25 million

Ross Cormack, CEO of Ooredoo Myanmar

of Myanmar’s approximately 60 million people by the end of the year and 97 percent of the population within five years, he said.

Telenor will launch its voice and data services in September in the three largest cities and will reach 90 percent of the population within five years, spokeswoman Hanne Knudsen told Reuters.

Edwin Vanderbruggen

of law firm VDB Loi, which has offices in Myanmar and neighbouring countries, said MPT and its partners may have an advantage over the foreign operators, which face a legal maze in securing land for tower sites.

“As a locally-owned entity, MPT can roll out a network faster, at least in theory, because it can hold land without restrictions,”

AFP

he said. “Foreign-owned companies have to jump through more hoops and that might slow things down.”

Ooredoo could face another challenge: nationalist monks have called for a boycott because the company hails from Qatar, an Islamic nation.

Myanmar is riven by strife between its Buddhist majority and Muslims who make up only about 5 percent of the population, but have overwhelmingly been the victims of clashes that have killed more than 200 people over the past two years.

Cormack stressed that Ooredoo has 800 local employees working to connect the entire population.

“This for everybody,” he said. “Every creed, colour and religion can enjoy these wonderful services.”

Hate speech and sectarian tension have accompanied sweeping reforms in Myanmar that include easing restrictions on speech, which were initiated by the semicivilian government that took over in 2011 after 49 years of military rule.

Telecommunications were tightly controlled by the former junta with the government monopolising the sector and selling SIM cards for thousands of dollars when they were introduced a decade-and-a-half ago.

As a result, Myanmar had the lowest mobile penetration rate in the world with Swedish telecoms giant Ericsson saying that in 2012 less than 4 percent of the country’s population was connected.

Reuters

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August 4, 2014

International Venezuela, Colombia to set exchange rate Venezuela and Colombia have agreed to create a special exchange rate to boost plummeting bilateral trade between the two Andean countries, their presidents said. The exchange rate will be set at a later date and will enable each country to trade in its own currency and exchange any trade surplus into an international currency. “We have established a system, a mechanism for bilateral payments, to facilitate the financial aspect of trade,” said Colombia’s President Juan Manuel Santos after a meeting with his Venezuelan counterpart Nicolás Maduro in the Colombian coastal city Cartagena on Friday.

Unilever would eye job cuts if markets weaken Unilever would need to cut more jobs in Europe if real income levels among consumers fall, weighing on demand for brand-name items, Chief Executive Paul Polman was quoted as saying in an interview on Saturday. “If markets such as those in Europe don’t grow any more because people have less real income available, we still must find a way to make our product lines available,” Polman was quoted as saying in the summary of an interview to appear in the Monday edition of Germany’s WirtschaftsWoche magazine.

Deutsche Bank seeks compensation from ex-CEO The bank will seek compensation from former chief executive Rolf Breuer for a costly out-of-court settlement reached earlier this year with the heirs of the Kirch media empire, according to a report in the newspaper Die Welt. The bank’s supervisory board this week decided to seek compensation from Breuer, the newspaper reported, adding that the bank still expected to pay most of the settlement itself. Deutsche needs to seek compensation from Breuer before so-called directors and officers’ liability insurance can play a role in covering some of the settlement charges, the paper said.

Argentina debt talks must continue Argentina cannot turn its back on negotiations with holdout vulture creditors after defaulting on its sovereign debt, a U.S. judge instructed on Friday, just as the country’s failure to service a June interest payment was declared a “credit event.” In a stern tone, U.S. District Judge Thomas Griesa in New York slammed the decision by Latin America’s third-biggest economy to defy his order to pay holdout investors in full and instead default on US$29 billion in debt. The move triggers a pay-out process for holders of insurance on Argentine debt, which analysts estimate could amount to roughly US$1 billion.

Brazil quickens currency swap rollover Central bank today Monday will kick off the rollover of currency swaps that expire early in September by offering more daily contracts than it did last month, a sign it wants to slow a recent weakening of the real. The bank said in a statement that it will auction as many as 8,000 currency swaps - derivatives that provide protection against losses in the real - as part of its strategy to renew US$10.1 billion worth of swaps that expire on September 1.

Despite deflation risk, Draghi still confident The European Central Bank is unlikely to take new policy action at its monthly meeting on Thursday, despite a lingering threat of Eurozone deflation and geopolitical risks, analysts said

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or now, the ECB is in “waitand-see” mode to assess the impact of the unprecedented stimulus measures it announced in June, including taking one of its key interest rates into negative territory, they said.

Although the Eurozone came out of recession last year and unemployment has fallen slowly, the Ukraine crisis and Western sanctions against Russia present a wild card of uncertainty.

But, despite worries over the EastWest standoff, and very low Eurozone inflation data for July, central bankwatchers did not expect the ECB and its chief Mario Draghi to announce new measures on Thursday.

“After the bold package announced in June, the ECB is now in a waitand-see mode,” wrote Marco Valli of UniCredit Economics, predicting a probably “fairly uneventful” meeting.

“The only meaningful change in rhetoric is likely to flag closer ECB monitoring of the downside risks from geopolitical tensions, as tougher sanctions against Russia start directly affecting some, so far limited, sectors of the euro area real economy, while uncertainty intensifies,” he said.

For months, the other major worry has been the possibility of a plunge into deflation, or falling prices - a dangerous twist which deters businesses and consumers from spending in the belief they can wait and buy more cheaply later.

If that happens, demand suffers and companies put off investment, hurting employment and setting off a vicious circle that can choke economic growth.

It is notoriously difficult for central

ECB head Mario Draghi is still trusting its measures for preventing falling in the deflation spiral

banks to reverse deflation once the spiral has taken hold.

Deflation risk Data last Thursday showed that Eurozone inflation in July dropped to 0.4 percent.

That was its lowest level since late 2009, in the aftermath of the global financial crisis, and far off the ECB’s target of just below 2.0 percent.

Howard Archer of IHS Global Insight called the inflation data “a blow for the ECB”.

A silver lining was that the dip was mainly due to a year-on-year fall in volatile energy prices, leaving core consumer price inflation stable at 0.8 percent.

Archer said there was “a very real risk” that inflation could drop further, although he added that “we still expect the Eurozone to avoid overall deflation”.

“It certainly looks unlikely to

move markedly higher any time soon, barring an appreciable rise in oil and gas prices resulting from geopolitical factors hitting supplies,” he said.

At its June meeting, the ECB entered uncharted waters, taking one of its key interest rates into negative territory for the first time.

It lowered its benchmark refinancing rate to 0.15 percent and cut the deposit rate to minus 0.10 percent -- effectively charging banks for parking funds at the ECB, to encourage them to lend to businesses and consumers instead.

In positive news last week, an ECB survey said that Eurozone banks had eased credit standards for loans to businesses in the second quarter for the first time since 2007.

In July, Draghi also promised billions of euros in cheap loans for banks to lend to businesses via the so-called Targeted Long-Term Refinancing Operation (TLRTO).

AFP

US woos Africa as rivals eye economic growth African leaders head to Washington for a landmark US summit this week, with President Barack Obama hoping to boost trade, development and security ties amid growing competition from China on the continent

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hina overtook the United States as Africa’s largest trading partner five years ago, with Beijing’s trade now worth more than US$200 billion (150 billion euros) a year, double that of Washington.

But while the US is playing catchup, experts say it is wrong to view the situation as a direct competition between the two powers, since China’s investments potentially boost US trade and their companies are focused on different sectors.

“The Obama administration has come under increasing pressure from the commercial sector to prioritise Africa policy. This US-Africa summit is more a response to this than a direct beauty contest with China,” said Alex Vines, from Britain’s Chatham House think tank.

The International Monetary Fund says Africa is now growing faster than Asia.

“Africa now is a land of competition of Europe, America, China, and even some Arabian countries,” Rene Kouassi, director of economic affairs at the African Union, told AFP. The US has been keen to avoid any suggestion that the three-day summit opening Monday -dubbed the “largest single engagement” by any American president with Africa- is designed to challenge the role of other nations in the continent.

“We welcome the attention Africa is receiving from other countries like China, Brazil, India and Turkey,” said Will Stevens, spokesman for the US State Department’s Bureau of African Affairs.

More the merrier Although 50 heads of state were due to take part in the summit, several, including Sierra Leone

President Ernest Bai Koroma and Liberia President Ellen Johnson Sirleaf, have already said they are not planning to go because of the on-going Ebola epidemic in their countries.

The US, the world’s largest economy, is only Africa’s thirdlargest trade partner after the European Union -some of whose members have post-colonial ties with African nations- and China, which is hungry for the continent’s natural resources.

“We believe the more the merrier.

But we also think that African countries should make sure that their relationships benefit their people - and that they add value, not extract it,” Stevens added.

Redefining relationships with the continent will be key, analysts say.

AFP

15

August 4, 2014

Opinion

New hope for Haiti wires Business

Leading reports from Asia’s best business newspapers

Ban Ki-moon

Secretary-General of the United Nations

THE TIMES OF INDIA Driven by an investment friendly government at the centre, overseas investors have pumped in a staggering US$6 billion into the Indian securities market in July — taking their overall net inflows since beginning of 2014 to more than US$26 billion.

Foreign investors have poured in US$2.18 billion (Rs 13,124 crore) into the equity markets, while they have made net investments worth US$3.83 billion (Rs 22,977.65 crore) in debt securities, during July — the highest inflow for a month so far this year, latest market data showed.

THE JAPAN NEWS New types of agricultural machinery with functions and designs that differ from conventional tractors and rice planters are attracting new attention. They include hightech machines for assisting elderly farmers whose physical strength is weakened. Machines with designs intended to attract young people are also being released. Agricultural machinery makers are trying hard to expand the domestic market for the new styles of products. The average age of farmers in the nation reached 66.2 in 2013. For agricultural machinery makers, how to support farmers with waning physical strength is an important challenge.

PHILSTAR The Bureau of Internal Revenue (BIR) is not keen on initiating the filing of a bill that will set a floor price on cigarettes, saying this is more of a health measure than a revenuegenerating measure, its top official said. “The minimum floor price on cigarettes is a health measure not a revenue measure, meaning any proposal like this should emanate from the health department, not from the BIR,” said BIR commissioner Kim Henares.

While she suggested setting a minimum price … , Henares said the BIR would not actively push for it.

THE NEW ZEALAND HERALD Employment Relations Authority decisions in the past two years show employees frequently receive compensation after being unjustifiably fired for swearing at, or threatening, their bosses. In the latest case, cleaner Wendy Simkin, who reportedly told her boss that if he didn’t pay her she would send someone to him and the visit “wouldn’t be nice”, was found by the authority last month to have been wrongly fired. Paul Gillespie, who sacked her from Clean and Gleam Services via text, was told to pay her US$4,340 in lost pay and US$1,250 in compensation.

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EW YORK – During a recent visit to the rural community of Los Palmas, Haiti, I had the opportunity to talk with families directly affected by the cholera epidemic that has been afflicting the country since the 2010 earthquake. One man explained that not only had the disease killed his sister, but his mother-in-law had also perished as she undertook the hours-long walk to the nearest hospital.

He and his wife are now caring for five orphaned nieces and nephews.

In Haiti today, stories like this are not uncommon. Indeed, thousands of people across the country have endured similar trials and tragedies.

But there are also signs of hope. Increased community engagement and changes in hygiene practices have freed the women, men, and children of Los Palmas and the neighbouring village of Jacob of cholera –a dramatic reversal from the last few years– and reduced their risk of contracting other water-borne diseases. One family I met, for example, proudly showed me a new water filter.

This community-led approach will be critical to the success of the “total sanitation campaign,” which Haitian Prime Minister Laurent Lamothe and I launched in Los Palmas during my visit.

By encouraging household investment in durable, hygienic latrines, providing improved sanitation products and services at affordable prices, and ensuring that schools and health centres have adequate water and sanitation infrastructures, the initiative will improve health conditions for three million people in high-risk areas over the next five years.

Just before leaving the village, we laid the symbolic first stone of a new secure water source.

The campaign is the latest step in a comprehensive United Nationssupported operation to eliminate

cholera from Haiti. The UN and the Haitian government recently created a high-level committee tasked with implementing a comprehensive strategy that covers all aspects of cholera prevention and response, including scaled-up assistance for families and communities.

Moreover, Haiti’s Ministry of Health and the Pan-American Health Organization/World Health Organization are beginning the second phase of a UN-financed vaccination initiative that is targeting 600,000 people in areas where cholera persists; 200,000 people are set to be vaccinated in the next couple of months, with another 300,000 to follow by the end of this year. During the first phase last year, 100,000 people were vaccinated.

These efforts have already reduced the toll of the epidemic significantly. During the first few months of this year, the number of cholera cases and deaths declined by some 75% compared to the same period of 2013, reaching the lowest level since the outbreak began.

To be sure, Haiti still hosts the largest number of suspected cholera cases in the Western hemisphere – unacceptable in a world of such vast knowledge and wealth. But the country is on a trajectory toward success. Just as cholera has been eliminated from other difficult environments worldwide, it can be eliminated from Haiti.

Haiti’s prospects are improving in other areas as well, owing partly to the UN’s commitment to the country. Since 2004, the UN’s Stabilization Mission in Haiti (MINUSTAH) has been working to improve the security environment, support the political process, strengthen government institutions, and protect human rights. It also played a major role in stabilizing and rebuilding the country after the 2010 earthquake.

Since 2004, the UN’s Stabilization Mission in Haiti (MINUSTAH) has been working to improve the security environment, support the political process, strengthen government institutions, and protect human rights. It also played a major role in stabilizing and rebuilding the country after the 2010 earthquake

As a result of MINUSTAH’s efforts –and those of other UN agencies– the security situation has improved considerably, underpinned by a stronger judiciary and a more effective national police force. Meanwhile,

primary-school enrolments rates have soared, from 47% in 1993 to nearly 90% today.

Given enduring political and social fragility, a weak economy, and severely constrained finances, Haiti’s continued progress remains far from certain. In order to improve its chances of achieving its development goals, Haiti must follow through on its plans to hold long-overdue legislative and local elections later this year, followed by a presidential election next year.

Haitian leaders across the political spectrum must rise above their differences to ensure that the electoral process is conducted fairly, thereby advancing the rule of law, safeguarding human rights, and consolidating the country’s democratic foundations.

The international community’s continued support also will remain essential. Most urgent, Haiti needs help funding its US$2.2 billion ten-year National Cholera Elimination Plan. So far, just 40% of the US$448 million that will be needed in the first two years for investments in early warning, rapid response, water, sanitation, and vaccines has been mobilized, and only 10% of the total has been pledged.

The Haitian people possess all of the compassion and determination needed to overcome the cholera epidemic and achieve inclusive economic development. But the international community – in particular, international financial institutions working in the region – must step up and support them.

I was profoundly moved by the hospitality and compassion that I saw in Los Palmas. But I also understand that Haitians expect their government and the UN to deliver on the promises made that day. If everyone does their part, we can give Haitians the healthier, more prosperous future that they deserve.

The Project Syndicate 2014

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August 4, 2014

Closing Shanghai skyscraper reaches 632m

Indian banker arrested for bribery

The final steel beam was installed on Shanghai’s tallest building yesterday, with the skyscraper reaching is designed height of 632 meters. The 137-story Shanghai Tower in Lujiazui financial and trade zone in the city’s Pudong New Area is expected to open in the middle of next year. The landmark building will include offices, commercial space, a fivestar hotel, exhibition and conference halls and recreational facilities. The tower will help meet demand for high-end offices as the city seeks to become an international financial centre and free trade zone, according to Gu.

Indian police have arrested the chairman of the state-run Syndicate Bank over allegations he took bribes in exchange for loan extensions to private companies, a law enforcement official said yesterday. The Central Bureau of Investigation (CBI) arrested Sudhir Kumar Jain in the southern city of Bangalore along with 11 others, including two directors of Delhibased private firms, its spokeswoman said. The CBI, the country’s top crime-fighting body, said it “laid a trap” and recovered five million rupees (US$82,200) allegedly paid to Jain through middlemen by companies to win extensions on their loans.

Chinese ownership heats up NZ political debate Food giant Shanghai Pengxin Group’s plans purchase of major dairy holding as the political row over the proposed sale deepens with accusations of xenophobia

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ew Zealand’s main farming organization yesterday expressed unease about Chinese.

Federated Farmers President William Rolleston said the sale of the central North Island Lochinver Station, which is still subject to approval by New Zealand’s Overseas Investment Office (OIO) and Chinese authorities, “may not provide sufficient benefit to New Zealand.”

“New Zealand absolutely needs foreign investment, but it has to be of benefit to the local and national economy,” Rolleston said in a statement.

The OIO had to assess the proposed sale on whether it had “substantial and identifiable benefit” over and above just making a farm work better, which a New Zealand buyer could also promise.

“Since Lochinver Station is highly regarded in farming circles, there must be something very special and we are keen to know what that is,” said Rolleston.

Lochinver was close to 16 other North Island dairy farms that

In recent years, Chinese investment in New Zealand farms has increased substantially

Shanghai Pengxin bought in 2012, which would increase speculation that vertical integration -control of the entire dairy process from farm to processing- was likely, he said.

“The reality is that here, no one knows how much of our farmland or housing is foreign owned. To base critical economic policy decisions around a hunch is unacceptable.”

Shanghai Pengxin’s intentions became a political issue in the run-up

to the September 20 general election when the fledgling Conservative Party on Friday revealed the plan to buy Lochinver, saying it was being kept secret from the public for fear of a backlash against sales of productive land to foreign interests.

The Conservative Party and opposition parties have called for tighter rules on land sales to foreigners and for a register of foreign-owned properties.

But in a television debate yesterday, Economic Development Minister Steven Joyce called the main opposition Labour Party “xenophobic” because of its plans to tighten foreign ownership rules.

Labour finance spokesperson David Parker said in a statement that the government had broken its own promise to restrict foreign land sales.

“Labour has criticized the sale of farms and houses to American, European and Asian buyers. It is not racist or xenophobic to do so, “ he said.

An online advertisement by selling agent Bayleys said Lochinver Station was valued at NZ$70.6 million (US$60.12 million), “placing it at the top of the most highly valued stations in the country.”

The 13,800-hectare Lochinver Station had the capacity for 100, 000 stock and included three airstrips, a lake, 22 houses to accommodate the families of 20 permanent staff, a staff recreation centre, a school and 91 km of roads, said the advertisement.

The Lochinver deal would be the third major purchase by Shanghai Pengxin to draw opposition the last three years.

In October last year, Shanghai Pengxin Group announced it was looking to take over South Islandbased Synlait Farms Ltd., of which it already owned 74 percent through New Zealand Standard Farm, a subsidiary of its Milk New Zealand unit, prompting Federated Farmers to express concern over vertical integration.

Shanghai Pengxin bought 16 North Island dairy farms for NZ$200 million (US$170.31 million) in 2012 after a controversial and long legal battle.

Goldman to buy Bloomberg alternative

Taiwan to check pipe safety

GM looks for supplies after blast

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all Street firms led by Goldman Sachs Group Inc. are close to buying a stake in chat and instant messaging start-up Perzo Inc in pursuit of an alternative to a similar application from Bloomberg LP, sources familiar with Goldman’s plans said.

Banks are trying to cut costs as sluggish trading volumes and higher regulation weigh on revenues.

Bloomberg has dominated messaging on Wall Street for years, but its application is part of a data, trading and news terminal that costs about US$20,000 a year. The Perzo applications are free.

Several banks and asset managers are considering an investment in Perzo, including Morgan Stanley, JPMorgan Chase & Co, Bank of America Corp, Deutsche Bank AG, HSBC Holdings PLC, BlackRock Inc. and the hedge fund Maverick Capital Ltd, said two sources briefed on the matter who declined to comment publicly.

The companies, which have received term sheets for the deal and signed non-disclosure agreements in recent days, either declined to comment or did not respond to requests for comment in time for publication.

Reuters

aiwan will review its network of thousands of kilometres of underground pipelines after preliminary investigations indicated that leaks from a chemical company’s system may have caused a series of explosions that killed at least 28 people. “The central government will help local branches build a thorough data bank to serve as base for safety checks in the future,” Woody Duh, deputy minister of economic affairs, said by phone today. An initial meeting with petrochemical companies is scheduled tomorrow.

President Ma Ying-jeou, who yesterday visited hospitalized victims and the families of the deceased, ordered continued rescue efforts, investigations and a review of underground pipelines. At least 300 were injured in blasts in the southern city of Kaohsiung around midnight of July 31.

Rescuers continue to comb through debris for survivors as Taiwan’s second-biggest city pinned responsibility for the disaster on a company that piped gas underground. Two fire-fighters were unaccounted for and efforts to find them were continuing, National Fire Agency Deputy Director Chen Wen-long said yesterday by phone.

Bloomberg News

Xinhua

eneral Motors said yesterday that it had asked its main Chinese supplier to find an alternative source of components after an explosion ripped through a factory a day earlier killing at least 69 people.

The accident at the Zhongrong Metal Products Co Ltd plant in Kunshan city in the eastern province of Jiangsu was China’s worst industrial accident in a year. Aside from the fatalities, some 200 people were injured in the blast, state-run Xinhua news agency reported yesterday, raising its casualty estimate from overnight. According to Zhongrong’s website, the factory made wheels that are supplied to GM and many other carmakers. Distancing itself from Zhongrong, the Detroit automaker issued a statement saying it bought components from a company called “Dicastal” - which Zhongrong works with.

GM went onto say it had no direct dealings with Zhongrong, which it described as a “Tier2” supplier.

Tier-1 component suppliers such as Dicastal are “required to source from Tier-2 suppliers who must meet both in-country environment and safety standards as well as quality standards,” GM said.

Reuters