Macau Business Daily, Aug 8th, 2014

MOP 6.00 Closing editor: Luis Gonçalves Year III

Number 600 Friday August 8, 2014

Publisher: Paulo A. Azevedo

Record number of start-ups

M

acau is attracting an increasing number of companies. Between April and June, almost 1,500 companies were created in the SAR. A five-year record. New businesses injected more than MOP1 billion of fresh capital into Macau’s economy in just three months. Wholesale and retail led the charge with 544 new companies accounting for 31.7 percent of new incorporations Page

www.macaubusinessdaily.com

Gaming strike coming?

3

TEE lands Parisian contract

Two big protests against The Venetian and Galaxy.

Followed by an assembly of hundreds of casino workers yesterday. There’s talk of a strike if their conditions are not met in full. The organiser of the marches told Business Daily: “Only a very small proportion of our demands were resolved”. Promotion and remuneration lie at the heart of the dispute

PAGE 4

Macau donates MOP100 million to Yunnan

PAGE 2

PAGE 3

Investors distrust Packer’s second run at Vegas PAGE 6

Walking a tightrope

HSI - Movers August 7

China wants to stimulate the housing market. More cities have had property controls lifted. Experts think deeper changes are called for, though. To make house purchases affordable for the average consumer Page 8

Mass market malaise Forget the VIP plunge.

Mass market revenue slowdown is a growing concern. Beijing’s crackdown is now affecting premium mass players. With the worst yet to come, say investors. Macau operators’ stocks fell more than 5 percent yesterday, and analysts are backtracking on previous estimations PAGE 5&7

Name

%Day

Sino Land Co Ltd

2.01

Power Assets Hold

1.94

Hong Kong Exchan

1.78

China Mobile Ltd

1.59

BOC Hong Kong Hold

1.45

China Unicom HK

-1.54

China Overseas Land

-1.74

Tencent Holdings Lt

-3.46

Sands China Ltd

-5.76

Galaxy Entertainm

-6.38

Source: Bloomberg

I SSN 2226-8294

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August 8, 2014

Macau

Fanning the flames Is a strike coming next? Maybe but not likely, says the organiser of the gaming workers marches Kam Leong

kamleong@macaubusinessdaily.com

T

wo weeks ago, some 2,000 gaming workers from Sands China marched around The Venetian. However, they claimed that most of their demands were not yet met, which led some 700 of them to attend another assembly yesterday in the plaza of Macau Cultural Centre, close to Sands Macau, to continue their fight for better remuneration and promotion systems; in particular, a 10 percent increase in salaries.

“Holding the assembly today [yesterday] is because the corporation had not responded to most of the workers’ demands,” said the organiser, Ieong Man Teng, who is the president of local gaming union Forefront of Macau Gaming (FMG).

“Only a very small proportion of our demands were met; such as some of the interns of supervisors were promoted to supervisors, as well as promotion for some dealers… however, this only covered a part of [the workers] but not all,” Mr. Ieong told Business Daily in a phone interview.

He claimed that between 600 and 700 people attended the assembly, according to local media TDM. That number is actually smaller than his estimate yesterday noon, when he told Business Daily that he expected around 2,000 workers to attend.

In fact, the night before the assembly, the union used social media channels to urge the 60 percent of the gaming workers who were not on morning or night shifts yesterday to attend; if not, “it is difficult to discuss further actions,” he said on the networks.

Asked by Business Daily what he meant, he replied that it was not likely that they would strike today as

proposed. “In the current situation, we might not go on strike as scheduled; only if more than 3,000 workers suddenly joined the assembly [yesterday] and reach an agreement to do so.” He said yesterday at noon that the final decision would depend on the number of participants.

No confirmed decision was released before this story went to press.

Workers’ demands According to Mr. Ieong, the workers are requesting a 10 percent increase in their salaries. In addition,

they ask the corporation to improve the promotion and remuneration systems, which they claim are unfair, such as doing tasks of a superior position but paid for the lower position and unequal pay.

Sands China denied all the claims after the first ‘Occupy Venetian’ protest two weeks ago. The company told Business Daily yesterday that it had no further comment to make on its workers’ protests beyond what it had already announced.

In an earlier announcement, Sands China said it regretted the pervious march. In addition, it claimed that it had

offered a slew of benefits to all full-time, eligible workers such as January pay as a special arrangement in light of the Chinese New Year holiday, a bonus in February, a five percent increase in wages and a special award of onemonth’s additional salary to all staff at or below manager grade in July from this year to 2017 On Tuesday, the union plus some 1,000 gaming workers from the Galaxy group gathered to protest as well despite the group having awarded shares and bonuses to most of its staff the day before. According

to the union, some of the employees above dealer grade got increases in salary; but this was criticised by the union, saying that the group was trying to differentiate workers by not increasing the salaries of all workers.

Galaxy Entertainment Group, meanwhile, responded that it would resolve the situation appropriately and reasonably, continue to strengthen its internal communication between employer and employees and sustain a long-term development for its team members and the Group. with João Santos Filipe

Chui Sai On only candidate

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he Electoral Affairs Commission of the fourth Chief Executive Election announced on Wednesday night that the Special Region’s incumbent Chief Executive Fernando Chui Sai On is the only candidate accepted for the coming CE election by the Commission.

Chinese Medical Doctor Lei Kuong Un had submitted his nomination form with 110 signatures but the Commission found that none of these signatures were from the 400 Commission members.

According to the announcement by the Commission, Mr. Lei did not appeal the Commission’s decision by the Tuesday deadline. Consequently,

Mr. Chui became the only candidate in the CE election.

Mr. Chui told media yesterday that he is now collecting opinions on policies for the future five years.

Nevertheless, he denied that he was a ‘CE that acceded to every plea’ during his re-election bid. He said he is willing to listen to advice and that carrying out policies needs a scientific base, research and analysis.

Mr. Chui was nominated by more than 82 percent of the Commission members. In the last election in 2009, he was also the only candidate and successfully secured the position by getting 282 out of 300 Commission members’ votes.

K.L.

3

August 8, 2014

Macau

New company boom in 2Q; capital jumps sixfold Close to 1,500 new companies were created here in the second quarter, a five-year record. The wave of new incorporations injected more than MOP1 billion of fresh capital into Macau’s economy João Santos Filipe

jsfilipe@macaubusinessdaily.com

T

he total amount of registered capital in Macau hit a new high during the second quarter of this year by jumping 556.9 percent to MOP1.14 billion, according to the Statistics and Census Services (DSEC). The number of new companies operating in Macau increased 308 percent year-on-year (1,454) during the second quarter.

Although the financial services, recreational, cultural and other service industries had only 84 new incorporations, it contributed the biggest share, MOP929 million, to the total capital registered. Wholesale and retail registered MOP77.6 million, business services MOP24.7 million, and construction MOP17.8 million.

In terms of new companies created in Macau, wholesale and retail led the charge with 544 new companies, accounting for 31.7 percent of new incorporations. The industry

related to business services ranked second, with 316, 21.7 percent of new incorporations, followed by construction (206; 14.1 percent), and financial services, recreational, cultural and other services (84; 5.7 percent).

As for the value of the registered companies during the second quarter, the majority (989) declared capital of less than MOP50,000. On the other hand, 43 new incorporations declared over 1 million patacas, accounting for MOP1.06 billion (92.6 percent) of the capital.

The majority of the shareholders of the new incorporations (968) were Macau citizens, while 306 companies listed shareholders from other regions or countries. A combination of shareholders from Macau and other regions or countries accounted for 156 companies, while other combinations accounted for 25 incorporations.

Capital for new incorporations mostly came from Mainland China (79.1 percent), while 18.6 percent came from Macau and 1.2 percent from the Special Administrative Region of Hong Kong. In Mainland China, Beijing accounted for MOP807 million from a total of MOP902 million. This notwithstanding, capital from Beijing was only present in 15 companies. Around 87 million patacas come from the nine provinces of the Pan Pearl River Delta Region.

Capital from Macau amounted to MOP212 million.

Yunnan Quake: Macau donates 100mln patacas

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hief Executive Fernando Chui Sai On has allocated 100 million patacas (US$12.5 million) to support emergency relief arising from the earthquake in Ludian County in Yunnan Province.

Mr. Chui wrote again to the Chinese central government on Wednesday saying that the disaster is of much concern to Macau residents.

The Macau SAR decided to donate 100 million patacas in response to the emergency relief tasks, hoping to contribute to the rescue operations and show its regard to the affected parties, he said.

He added in his letter that the Macau Government would continue to follow up on the situation in the county and would provide both human and material resources according to the situation. The government will also support the disaster relief operation organised by local residents and organisations.

The Chinese Government has also pledged more than 1.6 billion yuan for emergency relief. The 6.5-magnitude quake killed at least 589 people and left 2,400 injured, with 9 people missing.

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August 8, 2014

Macau

Public consultation on foreign car companies

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Carmakers could exert influence on the rules and laws made in Macau, the Consumer Council told Business Daily

HOSPITALITY Vanishing Voyagers Tourism statistics record separately the number of visitors from 15 non-Asian countries. They include the US, Canada and Brazil, in the Americas; nine countries in Europe: some of the wealthiest ones plus Portugal and Russia; two countries usually catalogued in Oceania, Australia and New Zealand; and a single African one, South Africa. The combined number of these countries represents usually just above two percent of total visitors. Those included in the list above represent most of the visitors coming from the respective regions, and their evolution can be used as an indicator for each of the regions as a whole. We will leave aside Africa: it is represented by a single country, making any generalisation risky; and the number of entries is likely to be significantly biased by the visa needs of the African communities residing in Guangdong.

Assuming that the second half of this year follows a pattern similar to the one seen last year, we can roughly estimate the expected changes this year. That exercise suggests that the numbers for non-Asian countries will change little, compared to last year, and that their share will continue declining.

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n responding to China’s antimonopoly investigations into foreign car companies, Macau’s Consumer Council has been accepting enquiries and consultations from the populace since yesterday to the 12th of this month regarding dealing with unfair trade practices.

The Consumer Council told Business Daily that it has been listening to and accepting suggestions and advice from the pubic regarding irregularities in market advantages, the combined pricing system, and the storing of goods for selling on purposes. The consultation will last until 12th August.

Macau relies heavily on imports of auto parts from overseas and the mainland, the outcome of the new investigations conducted by

mainland officials reveals. Carmakers could exert influence on the rules and laws made in Macau, as well, said the Consumer Council spokeswoman.

According to the Consumer Council, there is no law or rule on the combined pricing system in Macau at the moment. On the other hand, regarding irregularities in market advantages for commodities or any other goods, there are sufficient rules for imports and exports, and the local markets in Zhuhai, Shenzhen and Guangzhou, which are also important coastal ports in China.

Some departments claim that the majority of their price increases, particularly luxury car prices, attribute to China’s own heavy imports. On the other hand, Chinese state media has accused them of

using market advantage power to their own benefit.

China’s regulator said on Wednesday that it will “punish” Audi AG and Chrysler as an investigation has revealed that the two luxury car producers had persued monopoly practices.

Li Pumin, secretary-general of the National Development and Reform Commission of China, confirmed a recent investigation, led by China’s National Development and Reform Commission (NDRC), related to the monopoly practices of Daimler AG’s Mercedes-Benz.

Audi is a German automobile manufacturer, while Chrysler is a US company owned by Italy automaker Fiat.

Li said: “The two companies do have monopolistic practices.

They will be punished soon.” He also added information about 12 Japanese companies that did not pass the anti-trust investigations of China regarding the pursuing of price monopolies in auto parts. He declined to name the companies.

According to analysts, Audi has confirmed the company’s network of dealers in Hubei province is under investigation by provincial price bureau.

A Chrysler spokeswoman said: “Chrysler Group China Sales has been in full cooperation with NDRC investigations. It is not appropriate for us to discuss any details before NDRC issues an official conclusion.”

In response to the investigations, the carmakers - including Audi, Chrysler and Mercedes - all took action by cutting prices on spare parts in recent days.

L. L.

Sands China appoints TEE for M&E works on Parisian The company is going to pay MOP385 million to TEE for mechanical and electrical works for the hotel-apartment tower, plus the podium planned for meeting rooms, restaurants, retail outlets and family-friendly entertainment activity areas The likely figure for the Americas will be in line with the one that was recorded in 2013 and will stay below the figures in the three previous years. The steady growth in European visitors, seen after 2010, appears to be stalling. In both cases, annual growth will probably reach 0.6 percent at most. The changes in the other countries are virtually insignificant, possibly around 0.1 percent. These figures compare unfavourably with overall expected growth. ‘Long-range’ visitors are becoming scarcer. On the assumptions made, their combined growth rate will be about one-eighth the rate of all visitors.

J.I.D.

3.9%

visitors’ annual growth rate expected in 2014

João Santos Filipe

jsfilipe@macaubusinessdaily.com

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ands China has reached an agreement to pay 385 million patacas to TEE International for the mechanical and electrical works of its Parisian Macao project in Cotai.

The agreement was revealed yesterday by the Integrated Engineering, Infrastructure and Real Estate Group based in Singapore.

Under the contracts signed with Sands China, TEE will conduct mechanical and electrical works for the Hotel-Apartment Tower, and the Podium, earmarked for meeting rooms, restaurants, retail outlets and family-friendly entertainment activity areas.

In order to seal the deal for the Parisian Macao project, TEE Group’s wholly-owned subsidiary

TEE Hong Kong Limited entered into a 55-percent/45-percent joint venture agreement with Hou Chun Construction and Engineering Company Limited, forming the company TEE-HC Engineering C o m p a n y L i m i ted ( T E E - H C Engineering).

This is the second time that a company controlled by Sheldon Adelson and TEE are working together. In 2008, the two companies established a business relationship worth MOP1 billion for the mechanical and electrical works of Marina Bay Sands Integrated Resort, in Singapore.

“It’s with great pleasure to once again work with the prestigious Las Vegas Sands. Our successful partnership is an instance of how

we’re able to grow alongside our clients, and to be the preferred partner of choice when it comes to delivering high value and complex engineering projects for the gaming industry and beyond,” Mr. CK Phua, Group Chief Executive of TEE, said about the partnership.

The Parisian Macao is being built in Cotai and it is the fourth property of Sands China in the Cotai Strip Resorts Macao. The casino and resort is expected to open in late 2015. It is to feature approximately 3,000 rooms and suites, gaming space, a retail mall, replica Eiffel Tower, MICE space, diverse food and beverage options, and entertainment. The total cost of the project is an estimated MOP21.6 billion.

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August 8, 2014

Macau

Decelerating mass market now Macau’s biggest problem Analysts in various firms are reviewing their Macau gaming revenue growth forecasts. While the VIP segment has been the focus of many, a decelerating growth in the mass market is on the cards Sara Farr

sarafarr@macaubusinessdaily.com

S

ince the beginning of the year, analysts have been labelling this a ‘choppy’ twelve months for casino operators here. Stocks and revenues went on a rollercoaster ride in the first seven months of the year due to a number of reasons, the three biggest being the World Cup, the crackdown on UnionPay cards and the announcement of the full smoking ban to be implemented on October 6. The slowdown in China is also a culprit.

If the term ‘choppy’ is anything to go by, then analysts’ predictions are just that. At Telsey Advisory Group (TAG) analysts are reviewing their forecasts for the third quarter of the year and 2014 full year, as are analysts at Deutsche Bank.

‘While the choppiness in VIP is expected at this point, the bigger disappointment is clearly the deceleration in mass market growth to 17.3 percent compared with 26.9 percent in June and 32.5 percent in all of the second quarter [of 2014],’ Telsey Advisory Group said in a note to clients.

With Macau casinos’ gross gaming revenue declining 3.6 percent last month and 3.7 percent the month before, analysts at Telsey Advisory Group are revising gross gaming revenue growth estimates for the third quarter of the year to between 4 and 6 percent, while that for the full year has been revised to between 8 and 10 percent.

At Deutsche Bank, analysts also revised down their estimates for the third quarter and full year revenue forecast. ‘We’re now estimating third quarter VIP and mass revenue comparisons of -10.3 percent and 16.3 percent, respectively, versus our prior estimates of -8 percent and 23.2 percent, respectively,’ analyst Carlos Santarelli said.

Revenue for 2014 full year forecast

for the mass market has been lowered to 24.3 percent from the previous 27.9 percent, while VIP revenue forecast was lowered to -2.6 percent from 1.3 percent, according to Deutsche Bank analysts. ‘Our 2015 growth forecast is 11.5 percent, down from 11.6 percent,’ Mr. Santarelli added.

Bad to worse In addition, casinos on the Macau Peninsula are faring relatively better than their counterparts in Cotai. The mass market growth of Peninsula casinos has outpaced Cotai, ‘as the Peninsula also benefited from materially easier comps,’ Telsey Advisory Group said. ‘Notably, Wynn Macau and MGM China both led the group in mass market growth, up 36.1 percent and 39.7 percent, respectively, compared to more moderate growth of [between] 15 and 17 percent for Sands China, Galaxy and MPEL,’ analysts at Telsey Advisory Group said.

According to analysts, the Chinese Government’s crackdown on corruption is also to blame for the deceleration in growth of the mass market here. ‘While traditionally linked to VIP, it has likely spread to the premium mass segment,’ analysts said. As well as China’s crackdown on corruption, the weather is in part to blame for declining gross gaming revenues. Super Typhoon Rammasun that made landfall in mainland China on July 18 – and that day being a Friday – made ‘travel difficult all across the region for the weekend . . . The average daily run rate for the week Rammasun hit was HK$775 million, which picked up to a more respectable HK$886 million in the week immediately following the storm,’ Telsey analysts said.

Meanwhile, estimations for this month’s gross gaming revenue were

lowered to 0.3 percent. ‘Our August estimate is underpinned by a 7.8 percent year-on-year decline in VIP revenue, offset by 14.5 percent year-on-year growth in mass market revenue,’ said Santarelli.

Compared to July, daily mass table revenue on a sequential basis is estimated to be up 8.6 percent, Deutsche Bank forecasts, ‘versus an average over the last four years of 5.1 percent (9.8 percent in 2013),’ Mr. Santarelli said, adding that ‘our 14.5 percent growth expectation for the mass market assumes 16 percent year-on-year growth in mass table revenue and a 2.3 percent year-onyear improvement in slot revenue.’

Still in July, rolling chip volume declined 13.5 percent compared with 9.7 percent a month earlier. And while

the VIP segment is forecast to continue performing as it has done so for the next ‘several months’, analysts at Deutsche Bank forecast a decline in rolling chip volume. ‘Our 9 percent year-on-year roll decline implies 11 percent sequential rolling chip volume per day growth from July,’ Santarelli said. In addition, this 11 percent sequential rolling chip volume per day forecast compares ‘to an average daily sequential change of 5.5 percent over the last four years.’

It was in the first week in June that analysts first said casinos here would experience ‘choppy’ revenue growth throughout this year. ‘We continue to believe that Macau [gaming] revenue growth will remain choppy through October,’ analysts at Telsey said in their latest note to clients.

6

August 8, 2014

Gaming

Investors pessimistic about Packer’s Vegas venture The second try of Australia’s third-richest person in Sin City fuels risking Crown’s bonds. Vegas isn’t the growth market Macau has been, whose period of explosive growth may be over here, analysts say

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he last time billionaire James Packer bet on the Las Vegas casino industry he lost A$1.37 billion ($1.27 billion). Bond risks on his Crown Resorts Ltd. (CWN) have risen to a six-month high as he prepares to spin the wheel once more.

Crown is the worst performer in the iTraxx Australia index of creditdefault swaps in the past

Melco Crown will pay about $1.11 billion in cash payments by the end of 2016, according to a calculation based on analyst estimates of $3.7 billion net income over the period

three months, with contracts climbing to 126 basis points yesterday. The Melbournebased company said Aug. 4 it had paid $280 million for a 34.6 acre (14 hectare) site on the Las Vegas Strip to build a new casino in a venture with former Wynn Las Vegas LLC President Andrew Pascal.

The latest plan lifts Crown’s projected spending on resorts due to open by 2020 to about $10 billion, according to Credit Suisse Group AG. The Nevada complex alone could cost as much as $4 billion, Deutsche Bank AG said. The investments will deplete cash as gambling growth in Macau, where Crown has a stake in the City of Dreams casino, is poised to slow.

“The Las Vegas land purchase further reinforces the company’s aggressive growth strategy and may weaken credit metrics,” Raymond Lee, who helps manage about A$7 billion at Kapstream Capital Pty in Sydney, said yesterday.

“This new project will likely result in significant capital spending in addition to the existing projects.”

Macau slowing Crown owns part of the City of Dreams in the Macau SAR through its 34 percent stake in Melco Crown Entertainment and also targets Asian high rollers travelling to Australia.

Melco Crown will pay

30 percent of its net income in quarterly dividends to shareholders including Crown, the Hong Kongbased company said on February 14. That amounts to about $1.11 billion in cash payments by the end of 2016, according to a calculation based on analysts’ estimates of $3.7 billion of net income over the period.

Even so, Macau’s period of explosive growth may be over.

Casino revenue fell in June for the first time in five years, and then dropped again in July.

It will grow by less than 10 percent this year, according to the territory’s government, compared with an average rate of 30 percent over the past eight years.

Crown’s management has always been clear about its determination to maintain their BBB credit rating, said George Bishay, a portfolio manager at BT Investment Management Ltd. who helps manage about A$15 billion in Australian fixed income, including Crown debt. Any spending that would strain that measure should come from equity raising rather than new debt issuance, he said.

“You have a big capex bill coming in 2018,” Killian Murphy, an analyst at CIMB Group Holdings Bhd. in Sydney, said by phone.

“Vegas isn’t the growth market Macau has been.”

Packer - Australia’s thirdrichest individual, Crown chairman and 50 percent

controlling shareholder - has ridden an Asian consumer boom since the company’s December 2007 listing.

His is now the world’s only gambling company judged investment grade by all three major ratings companies, with a BBB rank at Standard & Poor’s and Fitch Ratings Ltd. and Baa2 at Moody’s Investors Service.

The Vegas casino lifts Crown’s projected spending on resorts due to open by 2020 to about $10 billion

Free cash flow per share, a measure of financial agility showing Crown’s available funds after capital and operating expenses, rose almost tenfold last year, the fastest rate of any gambling company worldwide, Bloomberg-compiled data show. That period of lowcost growth may be ending as Crown and its partners look at developing as many as six new casinos, including the Vegas complex.

“We see the announcement

as a potentially negative development for the credit,” Gus Medeiros, a credit strategist at Deutsche Bank, said in an August 5 note about the purchase, citing “uncertainty around the related capex, which will add to the ongoing sizeable project pipeline.”

Risk surging Crown has A$300 million of July 2017 bonds outstanding and A$532 million of hybrid notes, data show.

The company’s CDS has climbed 9 basis points in the past three months to the highest level since February 6 even as a global credit rally compressed costs for the 25-member iTraxx index to near the lowest in four years, CMA prices show. The premium over the Australian benchmark was 36.7 basis points, close to the gap of 37 reached in June that was the most since September 2013.

To be sure, the flood of money into Macau’s casinos gives Packer a ready source of funds. Quarterly gaming revenues there have risen more than fourfold since Crown listed to peak at 102.5 billion pataca ($12.8 billion) in the three months to March. That compares with the $9.68 billion Las Vegas casinos made in the whole of 2013, according to Bloomberg Intelligence data.

Bloomberg

7

August 8, 2014

Gaming

Macau stocks plunge on soft mass market and protests Gaming stocks were the standout performers yesterday in Hong Kong with gaming operators’ shares falling more than 5 percent growing 17 percent from a year ago, “the lowest result since we started tracking the data in 2010,” Cameron McKnight, a U.S.-based analyst at Wells Fargo & Co., wrote in a note today. The sector had risen by 27 percent in June, according to Barclays Plc analyst Phoebe Tse.

Cutting estimates

G

alaxy Entertainment Group and Wynn Macau led declines in Macau casino stocks after the world’s largest gambling hub posted its weakest monthly growth in mass market revenues since 2010. Shares lost more than 5 percent yesterday in Hong Kong.

Galaxy Entertainment, founded

by billionaire Lui Che Woo, fell as much as 6.4 percent to HK$59, headed for its worst loss in three months, before trading at HK$59.30 in midafternoon. In Hong Kong. shares of Wynn Macau, the Macau unit of Wynn Resorts, dropped 7 percent and Sands China lost 5.8 percent.

“The mass market growth of 17

percent was disappointing,” Alison Law, head of consumer research at Daiwa Securities Co. Ltd., said by telephone today. “Investors didn’t expect the monthly mass market growth to be the slowest in years.”

Macau’s July monthly casino revenue breakdown, released late yesterday, showed the mass market

Deutsche Bank cut its forecast for Macau casino revenue growth in 2014 to 6 percent from 9 percent, citing the weak mass market increase and slowerthan-expected VIP recovery after the World Cup football tournament, its Hong Kong-based analyst Karen Tang wrote in a research note today.

The bank reduced its expectations for mass market revenue growth in the second half of the year to 16 percent from 23 percent, and estimates VIP revenues will fall 7 percent instead of a 3 percent decline predicted previously, according to Tang.

Melco Crown Entertainment slid 4.4 percent to HK$79. MGM China Holdings and SJM Holdings fell 4.4 percent and 3.2 percent, respectively.

Macau casino revenue fell 3.6 percent to MOP28.42 billion (US$3.56 billion) in July, the second consecutive month of declines, as the World Cup soccer tournament distracted bettors while business from high-stakes gamblers remained weak.

Bloomberg

Revel postpones bankruptcy auction to analyse bids Revel, whose Atlantic City, New Jersey casino has been in bankruptcy twice since it opened in 2012, postponed its auction set for today one week to Aug. 14 so it can analyse multiple purchase offers

R

evel ‘received a number of bids’ by the Aug. 4 deadline yet the company still requires ‘additional time to fully analyse and evaluate the bids,’ according to court documents filed yesterday in U.S. Bankruptcy Court in Camden, New Jersey.

Revel will probably postpone a hearing to seek approval of the sale to the winning bidder, which is currently set for Aug. 8, to a reserve date of Aug. 18.

Atlantic City Mayor Don Guardian has said he thinks Revel could fetch from US$100 million to US$200 million. The sale could be a

barometer of things to come for the seaside resort town, which has already seen the Atlantic Club close due to its recent bankruptcy and is slated to see two more shutter by the end of September.

Caesars Entertainment Corp. plans to shut down the Showboat on Aug. 31 and the Trump Plaza Hotel & Casino said it plans to wrap up operations on Sept. 16.

The casino opened in April 2012 at a cost of $2.4 billion, only to shut down for five days a few months later because of Hurricane Sandy. It filed a first bankruptcy in March 2013 before seeking creditor protection again in June.

Revel’s bankruptcy embodies the difficulties Atlantic City and its gaming industry face from growing competition of gaming venues in neighboring Pennsylvania,

Maryland and New York, which have lured away its patrons.

Casino revenue in the New Jersey gambling mecca plummeted more than 40

percent to about US$2.8 billion in 2013 from a peak of more than US$5 billion in 2006.

The casino and resort, on Atlantic City’s Boardwalk, occupies about 130,000 square feet of gaming space, with 2,400 slot machines, 130 table games and a poker room, according to its website. The resort has 1,399 rooms, indoor and outdoor pools plus 13 restaurants and nightclubs.

The company listed as much as US$1 billion in assets and debt in its Chapter 11 filing June 19 in U.S. Bankruptcy Court in Camden.

Five affiliates also sought court protection.

Bloomberg

8

August 8, 2014

Greater China

More cities relax property rules Half of China’s 46 local governments have scrapped limits on the number of homes that Chinese can buy, in a bid to support economic growth Xiaoyi Shao and Koh Gui Qing

Property sector represents a weak point in the Chinese economy. (Pictured) Qingdao development zone

M

ore than half of China’s cities have relaxed property controls and analysts say more are expected to follow, suggesting the central government is easing its grip on the sector as the cooling housing market poses a growing threat to the economy.

Foshan, a southern city in Guangdong Province, relaxed restrictions yesterday that limited the number of homes that residents can buy, the government said on its Weibo microblog.

With Foshan’s move, at least 28 regional governments in small- to

mid-sized Chinese cities have openly or quietly relaxed home purchase restrictions this year, data from private property consultancies showed.

In the last few years, local attempts to relax restrictions on the housing market unilaterally have often displeased Beijing and tougher

measures were quickly put back in place.

But analysts say the increasing number of local governments which are unwinding controls now signals that Beijing is giving them the green light to bolster the troubled property market.

The central government had been waging a five-year campaign to curb red-hot housing prices and keep homes affortable.

“Given the central government’s tolerance for greater policy loosening in recent months, a further easing in purchase restrictions is expected in smaller cities,” Carlby Xie, a research director at real estate services company Colliers, said in a statement.

But with home prices still near alltime highs, some analysts are voicing worries that China may have buckled too much amid pressure to safeguard the economy, at the expense of calming a frothy housing market.

Fitch Ratings warned yesterday that the loosening of property curbs, together with an easing in overall monetary policy, may stoke property speculation yet again.

Still unaffordable To cool a bubbly housing market, China started in late 2009 a campaign to temper home prices that involved raising down payment levels, mortgages rates and imposing home-buying restrictions.

Yet the controls have had a mixed

Shanxi’s coal cools down As a result the economy of Shanxi Province, which used to be fuelled by the coal industry, is undergoing fast structural transformation

T

he coal sector in north China’s Shanxi Province, one of the nation’s leading coal producers, is losing its investment appeal as the province shifts to development of non-coal industries.

According to data published by the Shanxi Bureau of Coal Industry yesterday, investments in the sector for the first half of the year were 35.55 billion yuan (US$5.7 million), down by 11.4 percent from the previous year.

Investment in non-coal sectors totalled 125.5 billion yuan, an increase of 28.1 percent year on year.

The decrease came after industry profits diminished amid falling demand.

The aggregate price of coal in Shanxi sagged to 401 yuan per tonne in the first quarter of this year, down from 656 yuan per

tonne in 2011, largely due to economic downturn and excessive capacity.

“Of all the coal companies in Shanxi, a quarter are going with low profits, a quarter are going flat, another quarter is losing money, while the rest have suspended production altogether,” said Li Junfeng, vice president of Puda Coal Industry Co. in Shanxi.

In major coal-producing cities like Shuozhou, Yangquan, and Datong, small- and medium-sized coal mines are shutting down due to tight budgets.

“There is a reshuffle coming for the coal industry,” says Pei Xiping, manager of Shanxi Yangquan Coal Industry Co. “Coal companies nowadays have neither the money nor the willingness to invest in coal projects.”

As a result the economy of Shanxi Province, which used to be fuelled

Jin Hua Gong Mine, Datong, Shanxi

by the coal industry, is undergoing fast structural transformation, says Liu Wenbin, who is in charge of the investment department of the Provincial Statistics Bureau.

“The government has focused more on fledgling industries such as manufacturing, coal chemical and

photo-voltaic,” Liu says.

Industries in Shanxi are becoming more diversified as the government seeks alternative forms of development, he added.

With industrial transformation high on their agenda, the government is also pushing forward the

9

August 8, 2014

Greater China record in delivering results.

Since 2009, home prices hit records highs in every year except 2012, and it was only this year when China’s economic growth ground towards a 24-year-low that the housing market finally lost some steam.

Following last year’s unusually strong performance, average home prices have fallen on a monthly basis since May, while new construction starts have tumbled.

Worried that record-low home affordability rates will cause social unrest, China’s central government has resisted a nationwide relaxation of the curbs in the property market.

Indeed, some experts said a broad relaxation in housing controls are unlikely to be carried out in the biggest cities of Beijing and Shanghai, where record-high home prices have sown public discontent.

But the hold-out has been painful for local governments, which benefit from a buoyant property market through revenues earned from selling land.

Analysts said easier housing policies will stabilise the market, though prices would not bounce back anytime soon.

Reuters

For those cities where there is an oversupply, a further price correction is inevitable Carlby Xie research director Colliers real estate services

Aussie Port Hedland exports to China up

Villagers force mine closure in Papua

The decline in the iron ore price and concerns over China’s economic growth has seen BHP and Rio Tinto trading at increased discounts to fair value

A

ustralian exports of iron ore to China from Port Hedland, which handles a quarter of the world’s seaborne steelmaking material, rebounded in July to hit a record high in a sign of still robust demand, figures released yesterday showed.

Shipments to China over July rose 4.8 percent month-on-month to 30.57 million tonnes, from 29.18 million tonnes in June, according to the Port Hedland Port Authority. That was up no less than 50 percent on July last year.

Rising output and shipments to China, the main destination for seatraded iron ore, comes amid a market correction that has seen the price of the ingredient drop by nearly a third so far this year.

Benchmark iron ore for immediate delivery to China stands at US$95.90 a tonne, according to Steel Index.

World No.3 producer BHP Billiton, with the ability to mine more than 220 million tonnes of iron ore a year, is Port Hedland’s main user. Future expansion work could see BHP’s iron ore capacity climb to 270 million tonnes.

Fortescue Metals Group also uses the port to ship up to 155 million tonnes annually.

Overall shipments of iron ore from Port Hedland climbed to a record 36.08 million tonnes in July from 33.6 million tonnes in June, with sales to Japan up by almost a million tonnes.

The impressive numbers come as tug boat engineers at Port Hedland

intend to stop work for four hours on Aug. 9, 11 and 13 over a pay dispute.

As of July 1, the Port Hedland Port Authority has amalgamated with the port of Dampier, creating what it says will be the largest bulk export tonnage port in the world.

The newly-formed Pilbara Ports Authority will handle about 22 percent of the world’s iron ore market, it said.

The port at Dampier is one of two in the Pilbara iron ore belt used by Rio Tinto. The other is Cape Lambert.

The decline in the iron ore price and concerns over China’s economic growth has seen BHP and Rio Tinto, an even bigger iron ore producer, trading at increased discounts to fair value, according to Morningstar Equities.

36.08 mln tonnes 2014 July overall shipments of iron ore from Port Hedland

James Paton

Coal companies nowadays have neither the money nor ]the willingness to invest in coal projects Pei Xiping manager Shanxi Yangquan Coal Industry

construction of traffic facilities like rail and electricity.

Shanxi province, with a coal output of 962.5688 million tonnes in 2013, is second only to north China’s Inner Mongolia Autonomous Region in coal production.

Xinhua

KakaoTalk and Line blocked

Reuters

Li Ka-Shing wins Envestra deal

B

illionaire Li Ka-Shing’s Cheung Kong Group won a contest to buy Envestra Ltd., after a rival bidder for the Australian gas distributor said it would sell its shares in support of the A$2.4 billion (US$2.2 billion) bid.

APA Group, which owns about a third of Envestra, will support the offer of A$1.32 a share from the group that includes Cheung Kong Infrastructure Holdings Ltd., the Sydney-based company said today in a statement. APA said it will use the A$430 million in pretax profit from the sale to fund expansion over the next 12 to 18 months.

“The cash offer put forward by the consortium well exceeded our valuation of the Envestra business, even at full ownership,” APA Managing Director Mick McCormack said in the statement. “Selling out of this investment and redeploying the proceeds in other opportunities will provide better longer-term value for APA security holders.”

APA’s shares will take Cheung Kong’s stake past the 50 percent minimum required. Cheung Kong had increased its holding in Envestra to more than 39 percent before APA said

An attack by armed villagers has forced the temporary closure of a Chinese-owned nickel mine in Papua New Guinea, media reported yesterday, the latest in a series of supply disruptions for the metal. The US$2.1 billion mine, forecast to produce 22,000 tonnes of nickel in 2014, is operated

by Ramu NiCo, which is majority owned and run by Metallurgical Corporation of China Ltd (MCC). Ramu NiCo said equipment including nine excavators, a fuel truck and a lighting vehicle were burned and five Chinese workers were injured in the attack on Monday.

it would cash in its shares, according to a statement earlier today.

The purchase gives Cheung Kong 23,000 kilometres (14,000 miles) of Envestra’s pipelines supplying gas to customers mostly in the states of Victoria and South Australia. It comes after Li almost doubled the size of his U.K. gas transmission business in 2012, with the 645 million pound (US$1.1 billion) purchase of Wales & West Utilities Ltd. Envestra’s independent directors in May recommended Cheung Kong’s cash bid for the company over APA’s proposal to buy the company either via stock or a combination of cash and stock.

Envestra shares rose 2.7 percent to close at A$1.315 in Sydney trading, just shy of the offer price, while APA shares declined 0.4 percent to A$7.36.

Bloomberg News

Chinese authorities say they have blocked messaging apps KakaoTalk and Line as part of efforts to fight terrorism, South Korea said yesterday, the first official explanation of service disruptions in China that began a month ago. South Korea’s Ministry of Science, ICT and Future Planning said China had confirmed it had blocked “some foreign messaging applications through which terrorism-related information” was circulating. China had informed South Korea that terrorist organisations were plotting or inciting attacks and spreading information about how to make bombs through channels such as mobile messaging apps and video websites

Priceline to invest in Ctrip.com Travel website owner Priceline Group Inc. will invest US$500 million in Chinese online travel company Ctrip.com International Ltd to broaden options for both companies in China. Shares of Ctrip rose about 8.6 percent in after-market trading to US$65.65 while that of Priceline’s were little changed. The investment will be made through a convertible bond and Priceline has acquired the right to acquire Ctrip shares in the open market over the next 12 months, the companies said in a statement. Priceline, which would hold about 10 percent stake of Ctrip through the combination of shares and convertible bonds.

Police investigate Qingdao port customs officer death Chinese police are investigating the death from unnatural causes of the deputy commissioner of customs at Qingdao port which is under investigation for alleged commodity financing fraud, state news agency Xinhua said yesterday. Xinhua said Qingdao Customs Deputy Commissioner Bian Peiquan died on August 5. Officials at Qingdao Customs did not respond to telephone and fax requests seeking more details. Qingdao police declined to comment, adding that investigations are on-going. The major fraud investigation at Qingdao port has prompted global banks and trading houses to fire off a series of lawsuits over their estimated US$900 million exposure.

10

August 8, 2014

Asia

Japan oil refiner to cut capacity Overall, Japan’s capacity would fall to about 3.6 million barrels per day (bpd)

by March 2017

J

apan’s biggest refiner JX Holdings Inc. is likely to cut its crude capacity by 10 percent to meet a government order on boosting efficiency in the country’s struggling refining industry, the head of its oil business said.

Japan has five major refining companies and a host of smaller refiners, all competing to fill a dwindling number of cars as the country’s population declines and younger drivers opt for more fuel efficient vehicles. Every week more than 30 gasoline stands go out of business.

Japan’s industry ministry last week finalised a new directive aimed at either cutting refiners’ capacities or raising their output ratio for higher value fuels. An earlier directive had forced the industry to cut overall capacity by nearly 20 percent through March this year.

Most of Japan’s refiners are likely to choose cutting capacity, industry sources said, as investments in new units don’t make economic sense in a shrinking market.

“Considering that demand is falling, we recognise we cannot avoid capacity reductions,” Tsutomu

Sugimori, president of JX’s oil unit, told Reuters. “We are cutting about 10 percent.”

Refiners are in a difficult position, however, as lower crude distillation unit (CDU) capacity could limit operation of secondary units, which would be contrary to the government’s goals of strengthening competitiveness, Sugimori said.

Refiners would also have less product to sell, he said. “It would be difficult for a refiner that has only two

KEY POINTS Most Japan refiners likely to cut capacity under mandate Refiners likely to form joint processing agreements Cosmo looks for joint operations at Yokkaichi, Sakai –exec

Oil transportation by train in Japan

or three CDUs to scrap one of them.”

Overall, Japan’s capacity would fall to about 3.6 million barrels per day (bpd) by March 2017, from nearly 4 million bpd now, unless refiners choose to upgrade secondary units.

Japan’s oil demand is projected to fall 7.8 percent to 3.06 million bpd over five years to March 2019, a government energy committee forecast in March.

Refiners have until Oct. 31 to lay out their plans under the directive, according to the Ministry of Economy, Trade and Industry (METI).

Part of METI’s intention via the mandate is to encourage oil refiners to

Australia jobless rate rises Unemployment climbed along the nation’s eastern seaboard, according to the bureau, with the jobless rate in the manufacturing hub of Victoria climbing to 7 percent from 6.6 percent

A

ustralia’s jobless rate jumped to a 12-year high in July, surpassing the U.S. level for the first time since 2007 and sending the local currency tumbling.

The unemployment rate rose to 6.4 percent from 6 percent, the statistics bureau said in Sydney yesterday, versus the median estimate for unemployment to hold steady in a Bloomberg News survey of

economists. The number of people employed fell by 300.

The data underscore a division in policy outlook between the Federal Reserve, which markets bet will tighten next year, and the Reserve Bank of Australia’s flagged period of stability for its record-low benchmark. Australia is losing its developed- world-beating status as the mining investment boom

that powered it through the global financial crisis wanes.

“It’s been a long time since Australia has had that kind of number,” said Michael Blythe, Sydney-based chief economist at Commonwealth Bank of Australia. “Most other countries have unemployment figures trending down, but our number is edging higher. This is quite a significant divergence from our trend.”

join forces in an industry realignment or in joint processing agreements, according to ministry documents.

Some refiners are already forming joint processing arrangements, and these could lead to mergers or other joint ventures, industry sources said.

Cosmo Oil may deepen cooperation with other refineries at its plants in Yokkaichi and Sakai in western Japan, Cosmo’s Senior Executive Officer, Kenichi Taki, said to reporters on Tuesday.

Kyokuto Petroleum Industries (KPI) - a unit of TonenGeneral Sekiyu - and Cosmo Oil are already integrating their refining operations

The number of full-time jobs increased by 14,500 in July, and part-time employment fell 14,800, yesterday’s report showed. Australia’s participation rate, a measure of the labour force in proportion to the population, climbed to 64.8 percent in July from 64.7 percent a month earlier, it showed.

Rate expectations In a largely unchanged statement accompanying this month’s rate decision, RBA Governor Glenn Stevens said “the exchange rate remains high by historical standards, particularly given the declines in key commodity prices, and hence is offering less assistance than it might in achieving balanced growth.”

Traders are pricing in 6 basis

11

August 8, 2014

Asia

S.Korea consumption recovers Sales of the country’s top three department store chains rose 4.2 percent in July from a year earlier

S

in Chiba near Tokyo by connecting them with pipelines.

The two may scrap the 110,000 bpd No.1 CDU at Cosmo’s Chiba plant, giving credit for the capacity cut to both Cosmo and TonenGeneral, industry sources said.

Multiple refineries are located in industrial areas in Kawasaki in eastern Japan and Yokkaichi and Sakai in western Japan, where similar arrangements could be made, said an analyst who declined to be identified.

The new mandate has come into effect just as Japan’s refiners report their first-quarter earnings.

Reuters

outh Korea’s key private consumption indicators improved in July, a government report showed yesterday, giving Finance Minister Choi Kyung-hwan an early boost in his drive to revive faltering growth in Asia’s fourthlargest economy.

Domestic demand faltered as consumers recoiled after the shock of a deadly ferry accident in April, and with exports failing to pick up strongly, economic growth slowed to its weakest in more than a year in the second quarter.

Sales at the country’s top three department store chains rose 4.2 percent in July from a year earlier, swinging from a 4.6 percent loss in June and marking the strongest growth since January, the finance ministry’s report showed.

But sales at top discount-store chains fell 4.5 percent in July from a year before, although the pace of decline eased from a 5.9 percent drop in June.

Gasoline sales in July increased 2.7 percent in volume terms from a year before, up for a fourth consecutive month and marking the fastest growth since August 2013, the report showed.

Outspoken Finance Minister Choi, who took office last month, immediately went to work by launching US$11 billion worth of stimulus measures to spur investment and domestic demand.

His push for coordinated efforts by policy makers also prompted investors

South Korean city Busan’s commercial street

4.5 pct July top discountstore chains sales decrease year-to-year

to price in at least one interest rate reduction by the central bank as soon as next week.

The sudden worsening in domestic consumption in the second quarter has widely been blamed on the shock effects from the mid-April sinking of the Sewol ferry ship, that killed more than 300 people in the worst maritime accident in two decades.

The finance ministry said in the report the economy’s recovery was still weak despite some signs of improvement, indicating the government will continue its efforts to raise consumption and investment.

Reuters

Economist Rajan warns of another market crash

Most other countries have unemployment figures trending down, He fears central banks globally “may be exhausting room” in but our number is edging their monetary-easing arsenal to cope with any economic crisis higher. This is quite a governor, adding there is a risk of significant divergence sudden price reversals and sharp spikes in financial volatility. from our trend Rajan, author of the acclaimed Michael Blythe chief economist Commonwealth Bank of Australia

points of cuts to the benchmark rate over the next 12 months, compared with 3 points of increases earlier in the day, according to an index of swaps from Credit Suisse Group AG in Sydney.

The data “validates the RBA’s desire for a period of stability that it’s been talking about for the last few months,” Blythe said.

The statistics bureau said in yesterday’s release that a new sample of respondents to the jobs survey “had a lower proportion of employed persons and a higher proportion of unemployed” than the one it replaced. The change in the sample group “contributed about one-third of the absolute change in the number of persons unemployed and 40 percent of the absolute change in male unemployment,” it said.

Bloomberg News

Reserve Bank of India (RBI) governor Raghuram Rajan listens during a press conference at the RBI head office

I

ndia’s central bank governor, renowned for forecasting the 2008 financial meltdown, has warned that the world economy faces risk of another market crash as asset prices surge.

Increasing global financial instability stems from investors chasing ever higher yields, Raghuram Rajan, a former International Monetary Fund (IMF) chief economist,

told the Central Banking Journal.

“True, it (another financial sector crisis) may not happen if we can find a way to unwind everything steadily,” Rajan, who is famed for predicting the 2008 markets crash years in advance, said in the interview posted late Wednesday on the journal’s website.

“But it is a big hope and prayer,” said the Reserve Bank of India (RBI)

2011 book Fault Lines on how hidden financial fractures threaten the world economy, added he feared central banks globally “may be exhausting room” in their monetary-easing arsenal to cope with any economic crisis.

Rajan compared today’s state of affairs as similar to the 1930s which was the era of the Great Depression.

“We are back to the 1930s, in a world of ‘competitive easing’,”, Rajan said, referring to ultra-low interest rate policies pursued by the US Federal Reserve, the Bank of Japan and the Bank of England in a bid to stimulate their economies and spur growth.

“Back then, it was competitive devaluation (of currencies), but competitive easing could lead to competitive devaluation,” says Rajan.

“If there were no consequences to competitive easing (to spurring economies), fine; but there are consequences,” he warned.

Rajan left his post as professor at the prestigious University of Chicago’s Booth School of Business and returned to India in 2012 to serve as government financial advisor and last September took over the Reserve Bank.

AFP

12

August 8, 2014

Asia

Thai consumers regain confidence

KEY POINTS

Banks expect consumer demand for home loans to pick up in the latter half

University index rises a 3rd straight month, at best since Aug 2013

Kitiphong Thaichareon

Sentiment aided by infrastructure plans, better economic outlook

A

university’s index of Thai consumer confidence rose for the third month in July, suggesting domestic demand might be improving after the army seized power and pledged to fix an economy battered by prolonged political tensions.

The consumer confidence index of the University of the Thai Chamber of Commerce rose to 78.2 in July, the highest level since August 2013. For June, the number was 75.1.

The army seized power on May 22. Through April, the index fell 13 straight months, reaching a trough of 67.8. From November, the declines were fuelled by months of sometimes violent political crisis, which hurt consumption, investment and tourism.

Thailand’s economy, Southeast Asia’s second biggest, contracted 2.1 percent in January-March from the last three months of 2013 and 0.6 percent from a year earlier.

Second quarter and first half GDP data will be released on August 18.

Exports, equivalent to more than half of the economy, have long been sluggish, while imports have slumped and factory output has fallen for more than a year, showing that pillars of the economy are shaky.

Central bank sees gains ahead But policymakers and businesses are hopeful about the second half,

predicting a rebound from a likely contraction in the first half.

On Wednesday, when its benchmark interest rate was left at 2 percent, the central bank said it believed government policies would boost the economy later this year.

In June, the Bank of Thailand slashed its 2014 economic growth forecast to 1.5 percent from 2.7 percent, but projected 5.5 percent growth next year.

The military government has made delayed payments to rice farmers and is working to fast-track dormant spending plans. It has approved urgent infrastructure projects and accelerated the approval process of big investment projects.

Last week, Thailand’s junta named a majority of active and retired members of the security forces to an interim legislature of 200 people, as it seeks to keep tight control over the body it will task with enacting sweeping reforms. The assembly will open later on Thursday.

Thanavath of the university said consumers “think the formation of an legislature and the next prime minister will be the key factor to get purchasing power back.”

Are sales improving?

Improving sentiment about the Thai economy does not

Army took power in May in bid to end unrest, revive economy Confidence should improve steadily – professor

A Thai street vendor walks past a mobile phone banking service advertisement in Bangkok, Thailand

necessarily mean consumer sales are already rising.

Phattaramon Jaemjaeng, a 24-yearold master’s degree student, said that while the situation is “getting better with more confidence coming back, I have to delay purchasing a new phone for now”.

Advanced Info Service, Thailand’s biggest mobile phone operator, this week cut its 2014 revenue growth target to 1-2 percent from 6-8 percent.

New Zealand house price growth eases

But the company said growth in the second half “is expected to accelerate on the back of improving consumer confidence.”

CP All Pcl, Thailand’s largest convenience store chain, on Wednesday reported a 15 percent drop in quarterly net profit for April-June, mainly due to higher costs and slower sales growth after the political unrest. Analysts expect earnings to recover in the second half.

Reuters

earthquake-damaged Christchurch rose 6.5 percent from an annual rate of 7.0 percent in June.

Reuters

As Reserve Bank of New Zealand put limits on banks’ lending at high loan-to-value ratios

G

rowth in New Zealand’s house prices slowed for a seventh consecutive month in July, with higher interest rates and bank lending restrictions weighing on the market, the government property evaluator said yesterday.

Quotable Value’s (QV) residential property index rose 7.6 percent in the year to July 31, compared with 8.0 percent in June.

The index is now 15.6 percent above the market’s previous peak in late 2007, with the country’s biggest city Auckland leading national gains, but showing signs of slowing.

The rapid growth in house prices in 2012/13 sparked fears of inflation taking off and a credit boom prompting the Reserve Bank of New Zealand (RBNZ) to put limits on banks’ lending at high loan-to-value ratios (LVR).

The RBNZ has also started raising rates to contain broader inflation pressures.

“This slowdown is most likely due to the LVR speed limits and interest rate rises as well as the annual winter seasonal downturn,” QV spokeswoman Andrea Rush said in a statement, adding that house sales volumes are down as much as 25 percent on a year ago.

The RBNZ has said the limits will stay in place at least until late this year as it wants to be sure there is no risk of rapid growth in the housing market being reignited.

The central bank last month raised its benchmark rate for a fourth consecutive review, taking the official cash rate to 3.50 percent, but also signalled it will take a break from rises as it looks at the impact of its tightening to date, data and the currency.

House prices in the Auckland region were 11.7 percent higher in the year to July from a 12.3 percent rise the month before, while prices in

This slowdown is most likely due to the LVR speed limits and interest rate rises as well as the annual winter seasonal downturn Andrea Rush QV residential property index spokeswoman

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13

August 8, 2014

Asia Philippines growth forecast trimmed

BOJ begins two-day Private consumption is expected to remain robust, making up policy meeting more than half of GDP growth Bank of Japan yesterday began its regular two-day policy meeting, at which the central bank is expected to maintain its massive asset purchases and its optimistic view on the economic outlook. After recent downbeat data, some policymakers might propose offering a bleaker view on exports and output than given in the July assessment. But overall, the BOJ is not expected to change its policy framework, under which it has pledged to increase base money by 60-70 trillion yen (US$585-US$683 billion) per year through aggressive asset purchases, largely of JGBs, in a bid to reflate the economy.

T

he World Bank lowered its growth forecasts for the Philippines this year and the next after weak state spending in the second quarter and a tightening of monetary policy, but the bank said strong domestic demand would still fuel economic expansion.

The development lender said in a statement yesterday that it now expects growth this year to reach 6.4 percent, Having previously forecast 6.6 percent growth.

The forecast for growth in 2015 was revised down to 6.7 percent from a forecast of 6.9 percent issued in April.

The downward revision follows a similar move by the International Monetary Fund, which last month cut its 2014 growth forecast for the Philippines to 6.2 percent from 6.5 percent previously.

The government has set a GDP growth target of 6.5 to 7.5 percent this year, after 7.2 percent growth last year, the strongest in Southeast Asia.

Philippine inflation could reach 5 percent this year, higher than its previous forecast of 4 percent and at the top end of the government target, mainly due to increases in prices of food such as the national staple rice, said Rogier van den Brink, lead economist at the World Bank’s Philippine office.

The central bank expects inflation to average 4.33 percent this year, based on latest data, within a government target of 3 to 5 percent.

The Philippines must “quickly

World Bank Lead Economist of the East Asia and Pacific Region Rogier van den Brink speaks during a press conference in Taguig city, south of Manila, Philippines

increase” rice imports to dampen rising food prices, said van den Brink.

The government has authorised the purchase of an additional 500,000 tonnes rice, bringing to more than 2 million tonnes the country’s imports of the grain this year -the highest in four years- following strong typhoons that hurt domestic output and led to thinning stockpiles.

Private consumption is expected to remain robust, making up more than half of GDP growth, supported by strong inflows of remittances from Filipinos overseas, the World Bank said, adding infrastructure projects awarded under the public-private partnership scheme are new sources

Sri Lanka could cut rates The central bank has been maintaining the key policy rates at a multi-year low since January

S

ri Lanka’s central bank chief said yesterday there is a greater chance of a cut in key monetary policy rates than a hike, despite the IMF’s advice to keep key rates on hold for the near term.

The central bank chief’s comment came a day after yields on one-year government debt fell to 6.45 percent, below the rate of 6.50 percent at which the central bank mops up liquidity from commercial banks.

The central bank has been

maintaining the key policy rates at a multi-year low since January to spur economic growth.

“The chances of rate reduction are more than chances of rate increase,” Central Bank Governor Ajith Nivard Cabraal told Reuters in a telephone interview.

The International Monetary Fund, which has lent US$2.6 billion to Sri Lanka, last week urged the central bank to keep key interest rates on hold for the near term, saying a “cautious

of growth.

External risks to the country’s growth remain, and could come from a disorderly policy normalisation in developed countries, uncertainties related to adjustments in China’s property market, and political tensions in the Middle East and Eastern Europe, as well as territorial tensions with China, the bank said.

The lender noted poverty incidence in the country declined by 3 percentage points to 24.9 percent in 2013 from the previous year, which meant that 2.5 million Filipinos were lifted out of poverty after years of slow progress towards more inclusive economic growth.

Reuters

approach is warranted”.

Despite the policy-easing measures, growth of credit extended to the private sector has slowed to 2.2 percent yearon-year in May, its lowest since January 2010 and falling from 3.3 percent in April, the latest data showed.

The central bank has estimated the $67 billion economy to expand at 7.8 percent this year, from a 7.3 percent in 2013. It also expects private sector credit to expand by 14 percent by the end of this year compared to 7.5 percent at the end of 2013.

The central bank’s intervention in the foreign exchange market to keep the rupee stable has pumped more than $1 billion in local currency into the banking system.

The IMF last week said the central bank’s intervention may create a perception that the rupee’s exchange rate is implicitly fixed and it could lead market participants and firms to hold un-hedged foreign exchange risk on their balance sheets.

Reuters

KEY POINTS IMF has urged c.bank to hold policy rates, limit intervention Yields under downward pressure on c.bank’s heavy dlr buying

(Pictured) Central Bank of Ceylon building (white tower on right)

C.bank chief: can achieve 2014 credit, BOP surplus goals

Air NZ, Singapore Airlines alliance closer

The national carriers of New Zealand and Singapore received New Zealand government approval Thursday to form a strategic alliance, which would see Air New Zealand fly to Singapore for the first time since 2006. New Zealand Transport Minister Gerry Brownlee has authorized a strategic alliance between Air New Zealand and Singapore Airlines, saying air travellers would benefit from more flights and lower fares between the two nations. The services the airlines could provide through the alliance should help strengthen New Zealand’s ties with emerging markets throughout Asia.

Newmont seeks Indonesian workers’ return Newmont Mining Corp said yesterday it is applying for an injunction to get workers back to its Batu Hijau mine as it fights a controversial tax on copper exports that led the company to halt shipments from Indonesia this year. The top U.S. gold miner stopped exporting copper concentrate from the mine on the Indonesian island of Sumbawa in January after the government introduced an escalating tax on metal concentrates in a push to force miners to build smelters in the Southeast Asian country.

Singapore resale home prices record The resale prices for Housing and Development Board (HDB) flats declined 0.9 percent month-on-month in June, a 29-month low since Febuary 2012, the Singapore Real Estate Exchange (SRX) said yesterday. The agency said that the prices for resale flats have dropped by 7.8 percent compared to the peak in April 2013.

Rental prices also fell 1.5 percent on-month, while volume went up by 1.7 percent. An estimated 1,601 HDB flats were rented out in July, an increase compared to the 1,574 units in the previous month, SRX said.

14

August 8, 2014

International Adecco expects steady demand for temps Adecco, the world’s largest staffing company by sales, expects a modest economic recovery to keep demand for temporary workers stable in Europe as it reported a slight slowdown in underlying revenue growth in the second quarter.

Employment agencies like Adecco and Dutch rival Randstad are seen as barometers for economic health since companies tend to hire temporary workers at the start of a recovery when they are reluctant to commit to full-time hiring.

In Europe, Italy and Iberia were bright spots, while in France, the company’s biggest market, sales were flat.

Adidas spending to increase spending Adidas, the world’s second-biggest sportswear firm, cut its profit margin target for 2014 yesterday, saying it would increase spending on marketing and an expansion of its own-run stores a week after it issued a profit warning.

The German group is now targeting an operating margin of 6.5-7.0 percent for 2014, from a previous 8.5-9.0 percent and down from 8.7 percent in 2013, excluding goodwill impairments. The reduction in the margin - a measure of operating income as a proportion of sales - comes after Adidas said last week it needed to increase investment.

Munich Re reinsurer says profits up German reinsurance giant Munich Re said yesterday that its profits were up strongly in the second quarter and the company was on track to meet its full-year targets. Munich Re said in a statement that its net profit jumped by 44.9 percent to 765 million euros (US$1.0 billion) in the period from April to June.

Underlying or operating profit soared by 62.2 percent to 1.145 billion euros, while gross premium income declined by 7.4 percent to 11.856 billion euros.

Russia threatens to block over-flights Prime Minister Dmitry Medvedev warned yesterday that Russia could block over-flights between Europe and Asia in retaliation for Western sanctions.

Medvedev said that closing the use of Russian airspace, which saves Western airlines large amounts in fuel costs, was a “serious measure” being considered in response to sanctions that have shut down Russia’s first low-cost airline.

Deutsche Telekom wants help from regulators Deutsche Telekom said yesterday it wants special treatment from U.S. regulators in upcoming spectrum auctions now that they have blocked a merger of its T-Mobile US business with the country’s No.3 mobile operator Sprint Corp. “In the U.S. we have the situation that the two largest operators take more than 100 percent of the cash flow in the market,” Deutsche Telekom Chief Executive Tim Hoettges told reporters.

“If consolidation is not desired, regulators should help to improve the position of smaller operators,” he said.

Mexico opens energy sector The legislation gives the government flexibility on setting the commercial terms for exploration and drilling contacts and private firms will be able to count reserves as their own

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exican lawmakers gave final approval to an overhaul of the state-run energy sector aimed at luring billions of dollars in new investments by foreign and private oil companies.

The senate approved a series of laws this week aimed at attracting companies such as Royal Dutch Shell Plc. and Exxon Mobil Corp, and help stem declining crude production in Latin America’s No. 2 economy.

President Enrique Peña Nieto said he would sign the set of bills into law next week, paving the way for private companies to announce their plans to tap resources in the world’s 10th biggest oil producer.

The legislation fleshes out a constitutional overhaul approved last year that ended the 75-year monopoly of state-owned oil company Pemex and opens up oil, gas and electricity markets to private companies.

Peña Nieto broke through gridlock in a divided Congress to pass energy, telecommunications and banking legislation that aims to lift Mexico out of decades of sluggish growth in the country’s most significant reform push since the NAFTA trade deal with the United States and Canada in the 1990s.

Senators approved on Wednesday a final bill that amends public finance laws. The government finances around one-third of its budget with oil revenues.

General view during debate at the Mexican senate in Mexico City, Mexico, 05 August 2014. Mexican senate has passed three of the six secondary laws which are part of the energy reform

“Today concludes a period of valuable, profound and transformative structural reforms that consolidate and strengthen Mexico’s foundations,” said Senator Manuel Cavazos from Peña Nieto’s Institutional Revolutionary Party (PRI).

The centre-right National Action Party helped pass the legislation that was opposed by leftist lawmakers who claimed foreign companies would siphon off Mexico’s oil wealth for themselves. President Lázaro Cardenas nationalized the oil industry in 1938, making Pemex a source of national pride.

Officials expect the reforms will eventually spur enough economic growth to help curb the government’s dependence on taxing Pemex, which has seen output fall by more than a quarter from a peak in 2004 as heavy taxes cut into its ability to invest.

The legislation gives the government flexibility on setting the commercial terms for exploration and drilling contacts and private firms will be able to count reserves as their own, a key provision sought by publicly-traded companies.

Analysts project the reforms could spur tens of billions of dollars per year in investments and companies could soon begin to announce plans to build pipelines and electricity plants, but establishing oil and gas drilling projects may take years.

Mexican entrepreneurs could also rush in. Petrochemicals maker Alfa and billionaire Carlos Slim’s conglomerate Grupo Carso could expand oil-related units.

Pemex asked to keep over 80 percent of its proven and probable oil reserves and the Energy Ministry has until mid-September to determine which fields the company will keep.

Once the ministry has made is decision, Pemex could move quickly to announce joint ventures with global oil majors but it is expected to take into the second half of next year before the government auctions its first exploration and production contracts to private companies.

Reuters

Industry data give Germany pause for hesitation The disappointing output figure comes a day after data showed industrial orders fell in June at their steepest rate since September 2011 Alexandra Hudson

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erman industrial output rose just 0.3 percent on the month in June, missing a forecast rise of 1.3 percent, as fears over the crisis in Ukraine weighed, adding to signals that Europe’s largest economy may have stalled in the second quarter.

June’s faint gain in output showed some recovery from May’s monthly fall of 1.8 percent, as construction activity picked up, but analysts said it was “too little, too late”.

“The second quarter was weaker, as expected, after industrial output was exceptionally strong in the first quarter due to the mild winter... geopolitical events may have also weighed,” the ministry said.

“Ordering activity and sentiment indicators signal moderate development in output for now. The positive basic trend will continue,” it added.

The disappointing output figure comes a day after data showed industrial orders fell in June at their steepest rate since September 2011 on

This is less than expected... and it is too little to turn the second quarter into a growth quarter Christian Schulz, analyst, Berenberg Bank

weaker euro zone demand and poor bulk orders, again affected in part by uncertainty over Ukraine which has hit at a time when the euro zone is still vulnerable.

“This is less than expected... and it is too little to turn the second quarter into a growth quarter,” said Christian Schulz, analyst at Berenberg Bank.

“The Putin-factor plays a role because of the Ukraine crisis. Some export firms have become more cautious and are ordering less, so less is being produced,” he added.

The Economy Ministry said industrial production was 1.5 percent lower in the second quarter than in the first.

The German economy grew at its strongest rate in three years in the first quarter but that was largely due to mild weather and it is generally seen slowing or even stagnating in the second quarter before accelerating again in the third.

The strength of that third quarter acceleration is now in question however, particularly since the European Union and United States introduced a new round of sanctions on Russia.

Reuters

15

August 8, 2014

Opinion Business

wires

Abe’s Asian gambit

Leading reports from Asia’s best business newspapers

VIETNAM NEWS Viet Nam should provide conditions for the proper development of real estate and finance such as Real Estate Investment Trust (REIT) along with real estate business projects. “Real estate finance is still underdeveloped and not yet diversified. Lenders should develop proper risk assessment methods and real estate finance products to govern the risk associated with properties and the market,” said Can Van Luc, Deputy General Director of the Bank for Investment and Development of Viet Nam (BIDV). As of December 31, 2013,real estate loans amounted to around VND262 trillion (USUS$12.5 billion).

THE PHNOM PENH POST A recent surge in lending among Cambodia’s 35 commercial banks has received a mixed response from some of the industry’s leading financial companies. According to figures from the National Bank of Cambodia, outstanding loans increased sharply by 28 per cent over the first six months of the year, reaching close to US$9.5 billion. That compares to US$7.4 billion in December last year, while total deposits increased by 15 per cent to US$8.7 billion, compared to US$7.56 billion at the end of 2013.

PHILSTAR The Philippine economy is forecast to grow 6.7 percent this year, easing from the 7.2 percent growth in 2013, a report by the United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP) said. The UN body also urged the Philippines to improve its revenue collection to be able to achieve the modest growth targets. “Tax revenue could be raised by about 11 percent,” UNESCAP said in its report. It said the Philippine government needs to introduce policies to enhance domestic resource mobilization including rationalizing the tax system.

THE TIMES OF INDIA Passenger vehicle sales may have shown a definite turnaround with positive growth for the third month in a row in July but monthon-month the graph is still far from positive. While most car companies, including market leaders like Maruti, Hyundai, Honda, M&M and others, saw sales growth in July compared to the yearago period, month-on-month, the curve is actually negative.

Take Maruti, which saw its sales grow 20% in July with 101,380 units. Compared to the June tally of 112,773, however, it’s month-on-month sales graph is down 10%.

Gareth Evans

Former Foreign Minister of Australia (1988-1996) and President of the International Crisis Group (2000-2009), is currently Chancellor of the Australian National University

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ANBERRA – With the world producing more history than most of us can consume right now, it is easy to lose sight of recent developments that could have even greater consequences for long-term peace and stability than recent alarming events in eastern Ukraine, Gaza, and Syria-Iraq. The outcome of the nuclear negotiations with Iran, the change of leadership in India and Indonesia – two of the world’s three largest democracies – and the re-energizing of the BRICS group of major non-Western states (Brazil, Russia, India, China, and South Africa) may all be such game-changers.

But Japan’s international muscleflexing under Prime Minister Shinzo Abe may be even more significant.

Unless it is very carefully managed by all concerned, including the United States and Japan’s other closest Asia-Pacific allies, Abe’s makeover of Japanese foreign policy could undermine the fragile power balances that have so far kept the Sino-American rivalry in check.

Japan is right to be concerned about China’s new regional assertiveness, and Abe’s recent diplomatic push to strengthen Japan’s relations in Southeast Asia, and with Australia and India, is understandable in that context.

Nor is it inherently unreasonable – despite opposition at home and abroad – for his government to seek to reinterpret Article 9 of Japan’s “peace constitution” to permit wider engagement in collective self-defence operations and military cooperation with allies and partners.

But the risks in all of this must be openly acknowledged.

Opposition to any perceived revival of Japanese militarism is hard-wired in Northeast Asia.

Abe is an intensely conservative nationalist, still deeply reluctant to accept the extent of Japan’s World War II guilt (even when acknowledging, as he did in Australia recently, “the horrors of the past century’s history” and offering gracious condolences for “the many souls who lost their lives”).

His refusal to rule out future visits to the Yasukuni Shrine, with its war-glorifying Yushukan Museum alongside, fuels hard-line scepticism in China. It also makes common cause with South Korea much more difficult, and heightens the risk of maritime territorial disputes becoming explosive.

Less noticed, but possibly more important in the long term, have been Japan’s efforts to reshape regional security arrangements, which for many years have had three key elements. First, there have been the hub-and-spoke alliances of the US with Japan, South Korea, and Australia (and more loosely with Singapore, Thailand, and the Philippines). These alliances are accepted and well understood, if not loved, by China.

Second, there are national defence efforts, encouraged by the US, increasingly aimed at greater self-reliance in the

Japanese Prime Minister Shinzo Abe (R) bows as he offers a prayer for victims killed by the world’s first atomic bombing of a city, during World War II in 1945, in Hiroshima, Japan, 06 August 2014, marking the 69th anniversary of the atomic bombing

event that China’s rise becomes a military threat. This, too, has been accepted reasonably calmly, if not always quietly, by China, and has not undermined the continuing growth in bilateral economic relationships that every country in the region is developing with China.

Finally, there have been multilateral security dialogues –the ASEAN Regional Forum and now the East Asia Summit the most prominent among them– designed to be vehicles for confidence building, and conflict prevention and management.

These mechanisms have so far promised more than they have delivered, though not for want of continuing efforts to give them more clout.

For all of the hype that has accompanied the US “pivot” to Asia – announced by President Barack Obama in the Australian Parliament in November 2011 – the delicate balances involved in this basic architecture have changed little for decades. But now Japan, with overt support from Australia in particular, seems determined to change the balance by establishing, as a counterweight to China, a much denser alliance-type relationship with selected partners.

Abe spoke repeatedly in the

Australian Parliament earlier this month of Japan’s new “special relationship” with Australia – terminology normally associated only with the strongest of alliance partnerships– and followed his address by signing an agreement for the transfer of defence equipment and technology.

Australian Prime Minister Tony Abbott, who earlier this year described Japan as both our “best friend in Asia” and a “strong ally,” has warmly embraced the “special relationship” language.

He consummated the love-in by expressing his admiration for “the skill and sense of honour” of the Japanese submariners who died attacking Sydney Harbor in 1942, while saying of Japan’s waging of aggressive war and wartime atrocities only that “we disagreed with what they did.”

We have not yet seen any renewed attempt to re-establish the “Quadrilateral Security Dialogue,” comprising Japan, Australia, the US, and India, which conducted joint military exercises in 2007 and was seen by China as a hostile containment enterprise.

But it is not hard to imagine that this is still very much on Abe’s wish list.

The dangers should not be exaggerated. But, with strategic competition between the US

and China as delicately poised as it is, and with the economic interests of Australia, Japan, and many others in the region bound up just as intensely with China as their security interests are with the US, rocking the boat carries serious risks.

Countries like ours should take a clear stand when China overreaches externally (as it has in the South China Sea with its indefensible “nine-dashed line” asserting historical rights with no known justification in international law). The same applies when China does not behave like a good international citizen on the UN Security Council, or should it commit egregious human-rights violations at home.

But we should be cautious about moving beyond taking stands to taking sides in the region to a greater extent than has been the norm for decades. Kishore Mahbubani has argued recently that we need to recognize that in China, as elsewhere, a significant internal contest between hard- and softer-liners is taking place. To the extent that this is the case, it is smart policy for every state in the region to speak and act in a way that helps the doves and gives no encouragement to the hawks.

The Project Syndicate 2014

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August 8, 2014

Closing Taiwan economic minister resigns over gas blast

Google cannot stop Hong Kong businessman suit

Taiwan’s Economics Minister Chang Chia-juch submitted his resignation yesterday over an August 1 gas explosion that killed 25 people, the Ministry of Economic Affairs said in a statement. The series of blasts caused by a gas leak in Taiwan’s second city of Kaohsiung injured 267 people. The explosions gutted a district in the port city packed with shops and apartment buildings. Taiwan prosecutors are still investigating the cause. LCY is suspected of being responsible for the accident after the initial investigation.

Google Inc. (founders pictured) lost its bid to halt a lawsuit by Hong Kong businessman Albert Yeung, who claimed he was defamed because the search engine’s auto-complete function linked him to the city’s criminal underworld.

Google argued that the Hong Kong court had no jurisdiction to hear the case. Yeung, the chairman of closely held Emperor Group, sued the search provider to remove auto-complete suggestions including “triad” and the names of Hong Kong criminal gangs. He is seeking an unspecified amount in compensation.

Taiwan July exports rebound Exports of semiconductors reached a record monthly high in July

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aiwan’s export growth accelerated in July, as the island’s tech supply chain ramped up for expected fall releases of products such as the new iPhone from Apple Inc. Growth came in slightly below expectations, but one analyst said momentum remained solid particularly boosted by strengthening imports.

The spill over effect from the new iPhone should keep the export trend strong going into the second half of the year, the government has said. The trade-reliant economy shifted into high gear after posting its fastest annual pace of growth in 1-1/2 years in the second quarter.

Exports in July rose 5.8 percent from a year earlier, the island’s Ministry of Finance said yesterday, below expectations for a 6.98 percent gain from a Reuters poll. It posted a 1.2 year-on-year growth in June.

Imports in July rose a strong 9.5 percent from a year earlier, on the heels of 7.5 percent growth in June.

Exports of semiconductors, including those used in iPhones and other smart devices, reached US$6.22 billion, a record monthly high, in July.

This sub-category of exports accounted for around 23

percent of total exports in July, said Yeh Maan-Tzwu, director general of the ministry’s statistics department.

Export figures have routinely undershot expectations in recent months, with both May and June coming below predictions.

Export orders, on the other hand, have been surging, handily beating expectations in June.

Exports only measure those from Taiwan’s domestic facilities, while orders also include those placed in Taiwanowned factories overseas.

Exports to China, Taiwan’s largest trading partner, grew 6.5 percent in July, more than

the 3.4 percent growth in the previous month. Those to the United States were up 2.4 percent in July, slowing from an 11.8 percent growth pace in June.

Exports to Japan fell 1.9 percent, while those to Europe rose 8.9 percent.

Positive signs The expected release of a new large-screen iPhone this fall should benefit Apple’s suppliers and assemblers, dozens of whom are based in Taiwan, although the tech giant has said its thirdquarter revenue growth will likely slightly undershoot

market forecasts.

Other readings of economic health have pointed to firming growth in both Taiwan and global economies in the coming months.

“We’re still bullish about Taiwan’s exports, and there is no reason to be bearish about Taiwan’s economy,” said Ho Show-chung, chairman of Sinopac Financial Holdings.

But he cautioned about uncertainties, such as in the global economy and recent volatility in the Chinese yuan.

A number of tech firms have reported second-quarter profit above expectations, including the world’s third-largest contract chip manufacturer

United Microelectronics Corp and the world’s thirdand fourth-largest flat-panel makers Innolux Corp and AU Optronics Corp.

Taiwan’s economy grew faster than expected in the second quarter, expanding 3.84 percent year-on-year, which dovetails with stronger momentum its two largest markets, the United States and China.

The mainland posted better-than-expected growth in the second quarter, though an unstable property market may offset the effects of further government stimulus going forward.

Australia may ease immigration for Chinese millionaires

Hong Kong home prices hit record high

China regulates instant messaging services

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H

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ustralia may ease rules on a visa scheme aimed at luring investment from wealthy Chinese to help clear a backlog of applications and in the wake of complaints that disclosure requirements are too strict, lawyers and migration agents said.

The 18-month-old Significant Investor Visa scheme offers residency to overseas individuals who invest more than A$5 million (US$4.6 million) in Australia under a programme the government hopes will eventually raise A$6 billion a year. More than 90 percent of applicants are from China.

Finding the right balance is a challenge for the government, said Jerry Gomez, a lawyer and registered migration agent, especially at a time when China has launched a sweeping crackdown on corruption that has among other things targeted officials who transfer ill-gotten gains offshore.

“High net-worth individuals in China are very private in relation to their wealth,” Rita Chowdhury, a member of the Law Council of Australia’s migration law committee told parliament.

Reuters

ong Kong’s home prices hit a record high for a second consecutive month in June, official data showed, with small and medium-sized units posting the biggest gains as pent-up demand from end-users boosts sales in one of the world’s most expensive property markets. An index of overall private home prices for June edged up 1.1 percent month-on-month to 249.8, a third consecutive month of gains and another record high after May. Home prices have risen 2.1 percent this year, according to government data. Analysts said strong pent-up demand from end-users, who are exempt from a series of cooling measures to rein in sky-high prices, is heating up the once-quiet market, with several industry watchers turning more bullish on the sector and raising their forecasts for home prices in 2014.

The data came one day after the city’s largest developer, Sun Hung Kai Properties, offered a new project on the city’s prestigious Victoria Peak, with one unit going for HK176,000 (US$22,707) per square foot, which would be the world’s most expensive property, according to local media reports.

Reuters

Reuters

he Chinese government yesterday rolled out a regulation to tighten management of instant messaging services, a move which it hopes will help build a clean cyberspace.

The regulation targets public accounts on such services, most of which are subscription-based mobile apps, and which can spread information on a large scale. New registrants will for the first time be obliged to register with real names. Users shall abide by laws and regulations, the socialist system, national interests, the legitimate rights and interests of citizens, public order, social morality and ensure the authenticity of the information they provide, under the regulation.

Meanwhile, providers of instant messaging services shall be responsible for their safe operation, protect users’ information and citizens’ privacy, be subject to public supervision and handle illegal information in a timely manner. Regulators will warn violators, limit their rights to release information, suspend their renewals or even close their accounts, based on the degree of the violation.

Xinhua