Macau Business Daily, Dec 9, 2014

MOP 6.00 Closing editor: Luis Gonçalves Publisher: Paulo A. Azevedo Number 684 Tuesday December 9, 2014 Year III

Change in the air

T

hey accept the inevitable. The gaming operators acknowledge the new reality. With the MSAR’s 15th anniversary less than a fortnight away, 4 CEO’s affirm their continued confidence in Macau.

Melco Crown, MGM, Galaxy and SJM leaders believe that the new Cotai can provide the catalyst for the diversification government and society seek PAGE

2

JL Warren predicts gaming revenues to fall 11 pct in 2015

Levers of power

PAGE 5

Ho Iat Seng is effusive. The president of the Legislative Assembly (AL) says Macau has enjoyed expanded legislative power since its return to China in 1999. ‘Unimaginable’, apparently, under Portugal’s administration. AL’s promulgation of 208 laws as at November has been made possible by the ‘One country, two systems’ and the Basic Law, he maintains

December crucial for retail, says Shun Tak director PAGE 4

Lau Si Lo: Transition has begun PAGE 3

PAGE 7

‘Canteen for wealthy’ Imports shrinking arrives in May

HSI - Movers December 8

China’s imports contracted last month. Resulting in a widening trade surplus. Exports grew but at a slower pace. Reflecting the economy’s moderating momentum. Experts forecast new stimuli ahead

Fook Lam Moon. It’s renowned far and wide. The high-end Cantonese restaurant will open in Galaxy Macau Phase II in May. At the personal invitation of GEG boss Lui Che Woo. Local high-spending power was the clincher. The chain is already established in major cities on the mainland and in Japan – and is seeking to expand further

Page 8

PAGE 6

Name

%Day

Bank of China Ltd

4.60

Ping An Insurance Gr

4.32

China Construction B

3.89

Industrial & Commerc

3.65

Hong Kong Exchanges

3.31

Belle International

-2.17

CNOOC Ltd

-2.41

www.macaubusinessdaily.com

Galaxy Entertainment -2.60

Those were the days Last year treated these industries well. Retail and wholesale registered 24 per cent and 13 per cent y-o-y growth in receipts, respectively. Amassing more than MOP100 billion. Visitor spending and domestic demand drove sales. In 2013, some 13,272 establishments operated in the sector

PAGE 4

Tingyi Cayman Island

-2.67

Sands China Ltd

-3.04

Source: Bloomberg

I SSN 2226-8294

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2 | Business Daily

December 9, 2014

Macau

Macau gaming operators peer into crystal ball The slump in gaming revenue has sounded alarm bells. Many claim that ‘diversification’ is the way out. Some gaming operators take a look ahead into the future and remain optimistic about the industry, while looking back over the glorious 15 years’ since the establishment of the Macau SAR Joanne Kuai

joannekuai@macaubusinessdaily.com

T

he ongoing decline of gross gaming revenue has sounded alarm bells. But some gaming operators remain optimistic about the long haul.

“It (dropping gaming revenue) is concerning. Overall, consumption, especially consumption by the middle to higher income earning bracket has dropped. The core market of Macau is China and the Chinese economy is not doing that well. I think all of these factors are understandable. But long term, as a company, we’re very confident about the long term. We just need to live through the short term,” said Lawrence Ho, Co-Chairman and CEO of Melco Crown Entertainment Limited Group.

Speaking about the new administration that will be sworn in on 20th December Ho cast his vote of confidence by saying he believes that Chief Executive Chui Sai On has demonstrated his ability in the past five years but concedes there are still issues to be addressed.

“Still, for the infrastructure side, within Macau, the light railway transit, the new ferry terminal, connectivity within Cotai in terms of building footbridges, all of that will help drive visitation to Macau. Right now, there are still issues about taxis, buses, etc.

I think once these issues are resolved, tourists will be happy, and even more importantly residents will be happy”, he said.

When answering whether his group’s gaming projects elsewhere in Asia and Russia will threaten Macau’s gaming industry, Mr. Ho believes in Macau’s competitiveness and geographic advantage, saying, “It’s unlikely that somebody in Guangdong would fly six hours to Vladivostok to gamble”.

“It caters to different segments of the market. Because if you look at our property in the Philippines which is actually opening soon, it’s really catering to the south-east Asian business and [playing a] big part in raising the local economy in the Philippines. Whereas Russia is very much a green-field project and caters to north Asia - northern China, northern Japan, northern Korea. The truth is that in Macau the facilities right now and the integrated resorts are worldclass. Next year, when Galaxy Phase II and Studio City open there’re going to be even more attractions for people to go to”.

Diversification - challenging but not impossible It’s the word that has been repeated so many times – ‘diversification’.

Gaming operator Galaxy Entertainment Group also pledged to make it happen.

Vice chairman of the group Francis Lui Yiu Tung said it was the wish of all and once the consensus is reached, “united, we stand”.

“It’s not one man’s job. But the whole industry, everyone, has to work together . . . In the future, in Phase II, III and IV we’re going to bring in family entertainment and conventions which we think - once the bridge linking Macau, Hong Kong and Zhuhai is finished - will offer more flexibility in bringing in other tourists and other businessmen to Macau”, said Mr. Lui. Co-chairperson of MGM China Holdings, Pansy Ho, agrees it’s time to think about balance. “We’ve had 15 very exceptional years of successful development in Macau. Now the whole global economy is still recovering.

And now there are certain timings that we need to consolidate areas of

development. I think in the next few years one needs to be careful to balance the speed of development against the consequences”, said Ms. Ho. As the Secretary-General of the Global Tourism Economy Forum, Pansy Ho indicated the possibilities for Macau’s youngsters. She said this year China has recorded a landmark 100 million outbound tourists, 75 percent of whom chose Hong Kong, Macau and Asia has their destination. But a growing trend of visiting elsewhere in Asia as also shown Mainland tourists’ appetite for new experiences.

“We know that Macau’s resources are limited. But we’re now starting from a good point where we have a lot of resources for tourism development.

If we can also redevelop, recreate what we can offer, I’m sure we can continue still to attract more Chinese tourists to come. We can’t only offer a one-dimensional kind of experience.

Gaming is very good but beyond that they need more”, she said.

Pansy Ho also expressed her bigger vision of the future for Macau’s next generation. Ms. Ho said it was her honour and obligation to keep contributing to Macau’s development.

But the future is not only about building more businesses – it is also about raising the whole economic platform and improving people’s livelihood, showing “what Macau can really become”.

“I think in the next phase we would have to grow our capabilities, including helping to diversify and helping our young people learn more skill sets so that they can find in their own career development path what they would like to do. Right now, there are jobs but there aren’t many jobs that they can choose from. But in the future, we would like to offer them

the opportunities that they could also have the chance to develop their own interest, their talents,” said Ms. Ho. “With MGM, my partner, we’re still building our Cotai project. Without the new project, without the facilities, without the possibilities to bring more content, we cannot start to offer those job opportunities,” said Ms. Ho. “I’m sure my counterparts are all working towards what to inject into these new properties. But you need to have the facilities, finish building, you need to have them open, and we need to then continue to explore what are the areas of interest. To be frank, I think it’s a cycle and it’s going to take at least five years before we can get to the other phase.”

Admitting it’s a challenge, Pansy Ho adopts a very positive attitude.

“Business is like that. If you just wait for opportunities to come, if you just wish that whatever you have done is sufficient, then there is no business.

We have to make it happen,” said Ms. Ho. “So we cannot stop working.

Every day we are continuing to discuss partnerships. Every day we continue to grow out of our programme. That’s the fun.”

These gaming operators were speaking on the sidelines of the opening ceremony of an exhibition celebrating the Macau SAR’s 15th anniversary.

The CEO of SJM Holdings Limited, Ambrose So Shu Fai, also commented, “In the past 15 years Macau has undergone tremendous changes. There are extraordinary performances in economic and social development.

We hope with the development of the Pearl River Delta, Hengqin area, and through other regional cooperation, there will be more opportunities bringing more chances of Macao’s economic diversification”.

Business Daily | 3

December 9, 2014

Macau

Zhang Dejiang meets Macau officials Over 300 people, including national leaders, foreign diplomats, Beijing Government representatives and a Macau delegation attended the opening ceremony of an exhibition showcasing the achievements of the Macau SAR during the 15 years of its establishment, yesterday at the Beijing Exhibition Centre Joanne Kuai

joannekuai@macaubusinessdaily.com

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hairman of the National People’s Congress (NPC) Zhang Dejiang met with Macau’s incumbent and incoming principal officials. He said the current principal officials had gone through the pre-handover era and are witnesses and participants in the establishment of the SAR. He said the central government is happy with their performance and their contribution to Macao’s development, stability and prosperity. He extended the central government’s regards and gratitude to them, adding no matter what positions these officials assumed after leaving their current posts he expected them to remain attached to Macau and the country and continue to support the SAR Government’s work.

Regarding those assuming major posts, Zhang said it was not appropriate to comment yet but he would exchange more ideas with the Chief Executive in future meetings.

Following the meeting, the NPC chairman presided over the opening ceremony of the exhibition showcasing the 15 years’ journey since the establishment of the Macau Special Administrative Region in the Beijing Exhibition Centre.

He said that during the 15 years, under the correct leadership of the central government and strong support from Mainland China, throughout the tenure of two Chief Executives and the SAR Government’s officials leading residents exerting much effort Macau had changed tremendously, making great achievements in social stability and economic prosperity, improving people’s livelihood and many other areas. Zhang Dejiang expressed the central government’s high recognition and praise of the SAR.

Zhagn Dejiang reiterated that the Basic Law and ‘One country, two systems’ has taken root in Macau people’s hearts and become the core value. He wished the best for Macau’s future and happiness and health to Macau’s residents.

Chief Executive Chui Sai On also attributed Macau’s achievement to the ever-growing advance of China and the enforcement of the ‘One country, two systems’ policy. But he pointed out that the fourth term of the SAR Government would face more challenges in diversifying the economy.

“The SAR Government would be more provisional and have more awareness of danger. As China is our backbone, we would take various opportunities of the developing country and unite all Macau residents to work hard and improve people’s livelihood and social development, to ensure the long-term prosperity and stability of the SAR [whilst] not failing the expectations of the people and the central government,” said

Lau Si Io: Transition to new Secretary underway

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ecretary for Transport and Public Works Lau Si Io said the transition of work to the new Secretary has begun, and appealed to residents to give the new Secretary, Raimundo Rosario, some time as he had been away from Macau for many years and needs to familiarise himself with local conditions.

Mr. Lao also said he is confident in the new Secretary’s ability because of his professionalism and experience. He also anticipates the staff of the secretariat to do a good job for a smooth transition to the new government.

With regard to future assignments, Lau said he would take up a position that’s related to his current position and would not go back to the Civic and Municipal Affairs Bureau (IACM) - further details will be announced by the government in due course.

When asked to assess his work over the past 15 years and for an insight into his successor’s work, Mr. Lau said there is no end to his sector’s work, which includes transport, housing, environmental protection and telecommunication plus many other areas close to people’s daily lives.

He expected transport and housing to remain the incoming Secretary’s biggest challenges.

In the remaining few days before leaving office, he said he is confident of presenting the architectural professionals’ accreditation bill to the Legislative Assembly, the draft for which was prepared more than a year ago and is now entering its final stage.

He also expressed his gratitude to all those who supported his work over the years.

J.K.

Chui Sai On in his address at the opening ceremony of the exhibition.

The Director of the Representative Office of the MSAR in Beijing, Willa W. Hong, who was in charge of arranging the exhibition, said it

would run until the 28th of this month. At least 10,000 visitors are expected in the 2,500-square metre exhibition hall.

A total of more than 6.54 million yuan has been spent on organising this exhibition, including some 1.5 million yuan on the venue, and almost 3.5 million yuan in materials.

The Beijing Exhibition Centre, located in the northwest of the city, was built in 1954and used to be called the Soviet Union Exhibition Centre. The Vice President of China, Li Yuanchao, Member of the State Council Yang Jiechi, Vice President of the National People’s Political Consultative Conference and former Chief Executive of Macau SAR Edmund Ho, State Council Hong Kong and Macau Affairs Office Director Wang Guangya, and Head of the Central Government’s Liaison Office in Macau Li Gang also attended the opening ceremony of the exhibition in Beijing yesterday.

4 | Business Daily

December 9, 2014

Macau

2013 a good year for retail & wholesale Back in 2013, when the retail & wholesale industries were unaffected by gaming revenue slowdowns or anti-graft polices, industry receipts jumped a whopping 20 pct year-on-year Kam Leong

kamleong@macaubusinessdaily.com

receipts accounting for more than 30 per cent of the receipts of the retail industry, totalling MOP20.96 billion, a growth of 29 per cent year-on-year.

According to DSEC, the jump was due to increased visitor spending and growing sales of gold jewellery led by lower gold prices last year.

In addition, retail sales in department stores registered growth of 25 per cent year-on-year, amounting to MOP11.07 billion. Although the number of adults’ stores decreased by 172 in 2013 compared to 2012, their retail sales had still jumped by 21 per cent year-on-year, totalling MOP6.4 billion.

The remaining receipts of the industry, were primarily from the sale of leather articles as well as supermarkets, whose sales reached MOP7.44 billion and MOP4.28 billion, respectively.

The growth in receipts of the retail industry may be due to the increased number of establishments. In 2013, there were a total of 6,051retail establishments, more than a half more compared to 2012. However, the number of persons engaged in the industry increased only slightly by 3 per cent year-on-year, totalling 30,910.

Wholesale industry

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he retail and wholesale industries performed well last year. The two industries registered growth in receipts of 24 per cent and 13 per cent year-on-year, respectively, according to the latest data released by the Statistics and Census Service (DSEC) last Friday.

The Bureau’s survey on the two industries indicates that the total receipts of the field, including market stalls and fixed street stalls achieved MOP103.79 billion, a jump of 20 per cent year-on-year. The growth, according to DSEC, was driven by the continuous growth in visitor spending and domestic demand in 2013.

Last year, there were some 13,272 establishments in the field, of which 11,601 were wholesale and retail establishments, while some 744 others were market stalls and the remaining 927 fixed stalls on the street.

Retail industry More than half of the total receipts of the field were from the retail industry, which gained MOP65.91 billion in receipts in 2013, compared to MOP53.31 billion in 2012.

Retail sales of jewellery goods, watches and clocks, in particular, contributed most to the industry – with

Corporate East Asia Airlines organises charity flights for kids Twenty youngsters between the ages of 6 and 17 from the Macau Cradle of Hope Association were taken on a helicopter flight by East Asia Airlines Ltd (EAA). ‘The company invited the children to visit the heliport at the Macau Maritime Terminal and to experience the thrill of flying on board one of the company’s Agusta Westland 139 helicopters, with a special sightseeing tour over Macau,’ East Asia said in a statement.

Prior to the early morning flight, the children were treated to breakfast at the passenger lounge. ‘The charity flights were not only a unique opportunity for the children to view Macau, their home city, from the sky, but provided an introduction to and an educational insight into Macau’s aviation industry,’ the statement said, adding that ‘EAA was delighted to be involved in this programme and see the delight on the faces of the children, who will long remember this occasion.’

Meanwhile, the 4,622 wholesale establishments operating in the city last year posted total receipts of MOP28.63 billion, a growth of 13 per cent year-on-year.

The wholesale industry gained the most by trading food, beverages and tobacco. The receipts from these kinds of product reached MOP9.24 billion, an increase of 16 per cent year-on-year. Wholesale of machinery,

MOP 103.79 billion

Total Receipts of retail & wholesale sectors in 2013 equipment and supplies also increased year-on-year by 16 per cent, totalling MOP3.58 billion.

In fact, the wholesale of solid, liquid and gaseous fuels posted the most significant growth in the field, of which the receipts totalled nearly MOP5 billion, surging 21 per cent year-onyear. By contrast, the wholesale of other consumer goods faced a year-onyear decrease of 6 per cent, totalling MOP6.1 billion, while its number of establishments dropped by 664.

On the other hand, sales of motor vehicles and automotive fuel registered growth of 24 per cent year-on-year, reaching MOP7.66 billion according to DSEC. Receipts from sales of motor vehicles soared 30 per cent year-onyear accounting for MOP5.16 billion of the total while the remaining MOP1.45 billion was gained form retail sales of automotive fuel, which rose 7 per cent year-on-year.

Meanwhile, the market stalls and fixed street stalls received a total of MOP1.58 billion, down 4 per cent year-on-year.

December crucial for retail industry, says Shun Tak director

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etail industry receipts increased by 24 per cent year-on-year in 2013, according to the latest data by DSEC. Whether this good performance can be maintained may rely on December retail sales - if they can overcome the slight drop in receipts registered the third quarter of the year, the general director of the Shopping Festival Organising Committee 2014, Vincent Tung, perceives.

“Retail sales in the first half [of the year] registered a slight growth [in receipts]. Meanwhile, the growth of receipts of retail sales in the third quarter was almost flat,” Mr. Tung, who is also director of group marketing at Shun Tak Holdings Limited, told Business Daily in a phone interview yesterday.

Mr. Tung said the performance of the year will now totally rely on sales in the last month of the year, and whether big-amount transactions will return.

“The flow of customers remains large

but the number of high rollers has decreased. As such, the number of transactions was still high but the value of the transactions dropped.”

He agreed that decling gaming revenues as well as the central government’s anti-graft campaign are the chief factors influencing the sales of the industry.

In fact, DSEC data shows that retail sales of jewellery, watches and clocks were the only items to record declines in their sales in the first nine months of the year. During the third quarter, the sales of these products even dropped by 15 per cent yearon-year.

Meanwhile, the total receipts of the industry dropped slightly by one per cent year-on-year in the third quarter. However, during the first nine months of the year, the MOP50.56 billion receipts of the industry were still some MOP2.8 billion more than the same period of 2013.

K.L.

Business Daily | 5

December 9, 2014

Macau

JL Warren Capital predicts revenue dip next year The research equity firm forecasts that in the first nine months of next year gaming revenues could decline 8 to 11 per cent.

With the mass market affected by tightened border scrutiny, recovery is only likely in October João Santos Filipe

jsfilipe@macaubusinessdaily.com

J

L Warren Capital predicts that Macau’s Gross Gaming Revenue (GGR) will decline next year by 8 to 11 per cent.

The US equity research firm decided to revise its initial prediction, which painted a worse scenario for Macau with GGR dropping 13 per cent.

‘We are revising our 2015 outlook for Macau Gross Gaming Revenues. We now project a decline between 8-11 per cent in 2015/2014. We assume a daily GGR run rate of MOP820-850 million for the year, except for February and October’, the equity research firm reported. ‘For February (when Chinese New Year falls) we assume 40 per cent additional traffic. For

October (China’s national holiday) we assume 20 per cent additional traffic’.

Based on JL Warren Capital’s forecast, during February, due to the Chinese New Year, the daily GGR run rate could be boosted to a value of within MOP1,148 million and MOP1,190 million. As in October, China’s national holiday could increase the daily GGR from MOP984 million to MOP1,190 million. Taking this into account, the GGR for February would be MOP33.3 billion, a decrease of 12.3 per cent from MOP38 billion, and in October it would result in a GGR of MOP31.6, which means a year-on-year increase of 12.8 per cent from MOP28.6 billion.

For the equity research firm GGR will decrease in year-on-year terms every month until October; then, after double digit growth, it

will maintain a smooth pace increasing at a single digit rate.

According to JL Warren Capital, the mass market is

being affected by tightened scrutiny at the Macau-Zhuhai border, effective early this month. Prior to December, visitors in transit through Macau could enter the territory just by showing their visa to go to another country or region. Now they have to show not only the visa but the flight ticket before they are allowed to enter the territory.

‘Mass market traffic is being negatively impacted by the tightening, according to our checks’, JL Warren Capital’s report claimed.

‘The change aims to prevent Chinese passport holders from using transit as an excuse to stay in Macau, often for gambling. Macau police released that last year more than 2 million transit visitors didn’t leave for a third country’.

In the short term, JL Warren Capital predicts that for this year GGR will end by declining 2.1 per cent from MOP360.7 billion in 2013 to MOP353.3 billion. This means that the American equity research firm forecasts that this month’s GGR will drop by 25 per cent from MOP33.4 billion to MOP25.1 billion.

‘We estimate Macau casino Gross Gaming Revenue (GGR) will end the year by declining 2.1 per cent from 2013. Our estimates assume 810 daily GGR MOP in December, flattish month over month’, the report says.

6 | Business Daily

December 9, 2014

Macau Brands

Trends

To glove or not to glove Raquel Dias newsdesk@macaubusinessdaily.com

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arty season is on. Better yet, the ‘black tie’ events are coming to town and – as rules keep changing—one never knows what is de rigeur and what is not. Gloves have been coming back into fashion in the past two years. We’ve spoken again and again about how the love for vintage is taking a grip on the fashion world - gloves are but another expression. Few things scream vintage like wearing a pair of elegant gloves to an event. It’s feminine; they look great and work wonderfully with evening gowns that have short sleeves.

But should you do it? And if so, how?

First thing to consider is the dress code on the invitation.

Does it say ‘ball’ anywhere?

Does it mention, specifically, Black Tie? If so, then you need to think of the crowd that’s probably going. For example, do they tend to stick with dress code indication? Will ladies don long dresses and gentlemen tuxedos? If that is the case, then you know you won’t stand out too much.

Unless your invitation specifically says White Tie (I’ve never been to one in Macau) don’t think of taking a pair of crisp white gloves with your red gown. Worked great for Pretty Woman but she was going for the opening night of the Opera.

Richard Gere was her date, she could do whatever she liked.

Stick to black or dark colours and do not wear over the elbow, unless there’s that White Tie invitation or you are the bride at a wedding.

Naturally, rules are meant to be broken. If you want to impress and are confident with what you wear, go ahead and wear elegant gloves with a short cheeky dress. Attitude wears great. Just remember, whatever you choose to wear, take the pretty gloves off when it is time for dinner. They can stay on for the amuse-bouche or small canapés.

If you choose not to go with it, that’s O.K., as well, because long gloves look good with casual outfits, too.

Fook Lam Moon opening in Galaxy Phase II The reowned fine dining restaurant, often dubbed in Chinese as the ‘Canteen for the wealthy’, will open for business in the Galaxy Macau Phase II in May Stephanie Lai

sw.lai@macaubusinessdaily.com

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he renowned high-end Cantonese restaurant Fook Lam Moon will open for business in the Galaxy Macau Phase II casino resort in May next year, as the restaurateur believes the highspending power of the market here presents an opportunity.

The news of Fook Lam Moon opening in Galaxy Macau Phase II was announced by the Hong Kongbased restaurant’s chairman Mr. Chui Pui Kun in an interview with Chinese-language newspaper Hong Kong Economic Times, published yesterday. The expected opening date of the new Fook Lam Moon restaurant here comes at a time when the opening date for Galaxy Phase II is expected to be in mid-2015, according to official announcements.

The offer to establish the highend Fook Lam Moon restaurant in the city was by personal invitation from Galaxy Entertainment Group’s chairman Lui Che Woo in February 2013, Mr. Chui told the media outlet.

In a filing with the Hong Kong Stock Exchange on September 22, the Hong Kong-listed Chinese food and beverage group said it had agreed with Galaxy Entertainment to form a joint venture through Fook Lam Moon Macau Holdings Ltd in connection with the operation of a “high-end luxurious” Chinese restaurant under

the trading name of “Fook Lam Moon” to be located on Galaxy Macau resort premises, which is expected to start operation next year.

The Hong Kong-based restaurant operator charges diners an average cover charge of at least HK$1,000 (US$129). In Hong Kong, the Fook Lam Moon Group runs a namesake restaurant in Wan Chai and another in Tsim Sha Tsui plus a restaurant called Guo Fu Lou in Wan Chai.

Macau has become the “top choice” for the expansion of Fook Lam Moon restaurant when choices were mulled for Asia and Greater China as the people here have high

spending power, Mr. Chui told the newspaper.

But Mr. Chui also noted that Fook Lam Moon could seek a foothold in Taiwan, Singapore and mainland China when the restaurant chain is more equipped with human resources.

Currently, in mainland China, Fook Lam Moon runs restaurants in Beijing, Shanghai and Shenzhen; the chain also has four branches in Japan. Last year, Fook Lam Moon started to tap into the food production business, establishing a food manufacturing base in Hong Kong producing traditional Chinese cakes, dim sum and Western cookies.

Business Daily | 7

December 9, 2014

Macau

AL Speaker: Macau’s expanded legislative authority

M

acau has enjoyed expanded legislative power since its return to China in 1999, which was ‘unimaginable’ when Macao was ruled by Portugal, said Ho Iat Seng, president of the Macau Special Administrative Region (SAR)’s Legislative Assembly.

“The lawmaking body has been enjoying an expanded legislative authority since its establishment in December 1999,” Mr. Ho told Xinhua in a recent exclusive interview.

Under colonial rule, Mr. Ho said, Portugal-assigned governors had the authority to enact and issue laws and decrees, a power shared by the then-legislative body.

The governors issued more than 70 per cent of the laws and decrees during the colonial period.

Macau SAR’s Legislative Assembly had promulgated 208 laws as at November, a development which Mr. Ho said should be credited to the implementation of the principal of ‘One country, two systems’ and the Basic Law. “Under the Basic Law, the Legislative Assembly enacts, revises, suspends and abolishes laws, making distinction between the legislative authority and the administrative power, realising the legislative arm’s supervision of the SAR Government and helping residents participate in the lawmaking process,” Mr. Ho said.

However, under the colonial era’s

election law for Macau’s first legislative election in 1976, only residents with Portuguese nationality had the privilege of voting or running for office.

The colonial administration offered Chinese residents the right to vote and run for office in 1984.

After Macau returned to China, local people became masters of the region, he said.

According to him, the SAR’s first Legislative Assembly featured 23

members, the second 27, the third and fourth 29, and the fifth 33.

“There are three categories among all the Legislative Assembly members, including those from the direct election, those from indirect sub-sector election and those from the supplementary designation of the Chief Executive,” said Mr. Ho. “This formation features wide representation from the local citizens, securing their say in the Legislative

Ho Iat Seng

Assembly,” he added.

Mr. Ho, joining the lawmaking body in its fourth edition, said members and staff often work around the clock, driven by their strong sense of responsibility.

“Right after Macau’s return, the SAR Government had a treasury of merely MOP13 billion patacas (US$1.6 billion), and the government could only manage a tight balance of payments. Thanks to the fast economic development, the exchequer swelled to MOP500 billion at the end of 2013. We established and improved the fiscal reserve system by means of legislation, helping voters supervise government spending,” said Mr. Ho. The Legislative Assembly speaker said he attaches great importance to connection with the general public.

“The members of the Assembly have built close ties with the people and some lawmakers have even set up office in downtown streets to facilitate communication with local residents”, said Mr. Ho. To strengthen the oversight of the public, the Legislative Assembly invites local TV channels to broadcast all its sessions live while forming supervision committees for land project approval and public finance and administration affairs.

Mr. Ho., who is 57 years old, has been a member of the Standing Committee of the National People’s Congress, the top legislature of China, since 2001.

He said the central government has fully approved Macau’s legislative power, making his job very smooth in the Legislative Assembly.

“It is joyful to dedicate my efforts to the legislative works of the nation and the region,” Mr. Ho said.

8 | Business Daily

December 9, 2014

Greater China Tourism to see 6 billion trips in 2020 China’s domestic tourism market is expected to see 6 billion journeys by 2020, said a senior official on Saturday. The forecast was made by Li Jinzao, head of the China National Tourism Administration, at a seminar on how to help poor villages profit through tourism. The majority of the top tourist destinations are in central and western regions and surrounded by many poor villages, said Liu Yongfu, head of the State Council Leading Group Office of Poverty Alleviation and Development, at the same seminar.

Imports fall triggers trade surplus However, the data makes experts think that more stimuli should be implemented shortly Kevin Yao

Shanghai crosses 3,000 points Shanghai Composite index crossed 3,000 points to its highest level since April 2011 after rising more than 2 percent yesterday afternoon, led by gains in brokerages and military shares. Some analysts had predicted the index, the most closely-followed index by Chinese investors, would face strong resistance ahead of the key psychological level given profit-taking pressures.

Maiden voyage for the largest vessel CSCL (China Shipping Container Lines Co.Ltd) Globe, the world’s largest container vessel, started its maiden voyage to Europe yesterday in Shanghai. The CSCL Globe is the first of a series of five 19,100TEU (Twenty-feet Equivalent Unit) container ships ordered by CSCL in 2013. It was built by Hyundai Heavy Industries in the Republic of Korea. The vessel is 400 meters long and 60 meters wide and travels at a speed of 43 km per hour. Its loading capacity exceeds Maersk Line’s 18,000-TEU as the world’s largest container vessel.

Railway operator starts chunyun selling China Railway Corporation (CRC), operator of China’s rail network, started to sell train tickets for the 40day travel period known as “chunyun” on Sunday . “Chunyun”, sometimes called the world’s largest human migration, is the hectic travel period surrounding Chinese New Year. This year, chunyun will begin on Feb. 4 and last until March 16. Chinese New Year celebrations, known as Spring Festival, are China’s most important holiday of reunion, with hundreds of millions of people traveling to their hometowns to spend time with relatives, putting huge stress on transportation system.

Agricultural Bank names new board chairman The Agricultural Bank of China (ABC), one of the country’s “big four” banks, announced on Friday that it has appointed Liu Shiyu as its board chairman. Liu will start his term when the China Banking Regulatory Commission approves the appointment. The 53-year-old economist will also chair the strategic planning committee under ABC’s board. Liu became vice governor of China’s central bank in 2006 and resigned from the post last month.

C

hina’s imports shrank unexpectedly in November while export growth slowed, fuelling concerns the world’s secondlargest economy could be facing a sharper slowdown and adding pressure on policymakers to ramp up stimulus measures.

Exports rose 4.7 percent from a year earlier, while imports dropped 6.7 percent, the biggest drop since March, data released by the General Administration of Customs showed yesterday.

That left the country with a record trade surplus of US$54.5 billion, which analysts say could increase upward pressure on the yuan even as exporters are struggling.

Economists polled by Reuters had expected exports to grow 8.2 percent, a 3.9 percent rise in imports and a trade surplus of US$43.5 billion, all slowing from October.

“Despite another record surplus, the details paint a grim picture with slower export growth and a contraction in commodity imports in volume terms,” said Andy Ji, senior currency strategist at Commonwealth Bank of Australia in Singapore.

Exports have been the lone bright spot for China’s economy in the last few months, perhaps helping to offset soft domestic demand, but there have been doubts about the accuracy of the official numbers amid signs of a resurgence of speculative currency flows through inflated trade receipts.

Dariusz Kowalczyk at Credit Agricole CIB in Hong Kong said over-reporting in exports may have been curbed in November, which contributed to a weaker reading. But he added that the import contraction was “shocking”, reflecting not only lower commodity prices but poor domestic demand.

“This means that pressure will rise on the government to do more

to stimulate growth,” he said.

“We expect a reserve requirement ratio cut in December, introduction of reverse repos this week, and another rate cut in the first quarter. The yuan should rise further on the data.”

After saying for months that China does not need any big economic stimulus, the People’s Bank of China (PBOC) surprised financial markets by lowering rates on November 21 to shore up growth and help firms pay off mountains of debt.

The government is due to release data on factory output, fixed-asset investment and retail sales later this week.

Analysts see more policy support in coming months if the economy continues to stumble, with many expecting both more rate cuts and reductions in banks’ reserve requirement ratios (RRR). Hopes of more stimulus have pushed China’s benchmarket stock indexes to their

KEY POINTS Data shows weak demand at home and abroad Nov exports +4.7 pct y/y, vs f’cast +8.2 pct Nov imports -6.7 pct y/y, vs f’cast +3.9 pct Nov trade surplus US$54.5 bln, at record high Annual central economic meeting to be held Dec 9-11-sources

highest in more than three years.

Sources familiar with China’s policy-making said leaders are prepared to lower rates again and loosen lending curbs on concerns that falling prices could cause a spike in bad loans, business failures and job losses.

“We expect at least one more policy rate cut, 2-3 RRR cuts and targeted measures (to inject more liquidity into the banking system) throughout 2015,” said Haibin Zhu at J.P. Morgan.

2015 growth target could be cut Annual economic growth slowed to 7.3 percent in the third quarter, the weakest since the global financial crisis, weighed down by a sagging housing market and tighter credit conditions.

Full-year growth is on track to undershoot the government’s 7.5 percent target and mark the weakest expansion in 24 years.

The slowdown is expected to persist well into next year.

China’s leaders are reluctant to repeat strong stimulus similar to the one implemented during the height of the global crisis, which resulted in piles of debt, but they are mindful of the risk that a sharper growth slowdown could undermine reforms.

The leadership is due to open a key meeting on Tuesday to map out economic and reform plans for 2015, including economic targets which will be unveiled in parliament next March, sources at top government think-tanks said.

Government think-tanks, which make policy proposals, have urged Beijing to cut its economic growth target next year, probably to around 7 percent.

Reuters

Business Daily | 9

December 9, 2014

Greater China Iron ore imports hit second lowest this year Spot iron ore prices fell 11 percent in November and have lost 47 percent so far this year in an oversupplied market Ruby Lian and Fayen Wong

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hinese iron ore imports tumbled to their secondlowest this year, data showed yesterday, as steel mills and traders in the world’s top consumer held back on restocking amid expectations of further price falls.

Shipments to China slid 15.1 percent to 67.4 million tonnes in November from the previous month and were down 13.4 percent on a year earlier, according to data released by the General Administration of Customs.

The figure was the lowest since imports of 61.2 million tonnes in February, although total imports for the 11 months to November still rose 13.4 percent to 846 million tonnes from a year earlier.

China’s steel exports, however, surged to a record high in November of 9.72 million tonnes, up 13.7 percent from the previous month, as producers took advantage of lower prices to offset weakening domestic demand.

Slowing economic growth in China has hit demand growth for a raft of commodities including iron ore and steel.

Iron ore prices have been further dampened by surging output from

KEY POINTS Monthly iron ore imports down 13 pct on a year ago Jan-Nov imports still up 13.4 pct on year earlier Iron ore prices seen staying at low levels

Australia and Brazil, the world’s two biggest suppliers.

“As some steel mills have already built up stocks in October and prices have been falling, big traders have largely cut their buying, especially as they do not see any improvement in prices in a well-supplied market,” said Jin Tao, an analyst with Guotai

International lending to China soars in 2014 The Bank for International Settlements says China’s status as the principal emerging market destination for international bank lending reflects a “remarkable evolution” since the financial crisis Chris Vellacott

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hina has become the largest emerging market destination for international bank lending, accounting for more than a quarter of cross-border claims on all emerging market economies, a central banking report shows.

Cross-border claims on China increased by US$65 billion in the second quarter of 2014 to US$1.1 trillion, and were up nearly 50 percent in the year to the end of June, according to a quarterly report from the Bank for International Settlements on Sunday.

“China has become by far the largest (emerging market) borrower for BIS reporting banks. Outstanding cross-border claims on residents of China totalled US$1.1 trillion at endJune 2014, compared with US$311 billion on Brazil and slightly more than US$200 billion each on India and Korea,” the report says.

It said China’s share of BIS reporting banks’ foreign claims on all emerging markets stood at 28 percent in mid-2014, up from just 6 percent at the end of 2008.

The BIS, often referred to as the central bankers’ central bank,

says China’s status as the principal emerging market destination for international bank lending reflects a “remarkable evolution” since the financial crisis of 2008-9.

However, concerns are mounting among international investors of a credit bubble developing in China, with the country’s property market seen as the biggest risk to the economy.

In late November, after saying for months that China did not need any big economic stimulus, the People’s Bank of China surprised financial markets with its first interest rate cut in more than two years to shore up growth and help firms pay off mountains of debt.

Outside China, cross-border claims on emerging market economies rose 2.7 percent, or US$33 billion, in the three months to the end of June, the BIS said, with the increase coming mainly from Asia.

However, cross-border lending to Russia declined 10 percent. Russia has seen its finances come under strain from western sanctions over Moscow’s role in the Ukraine crisis and the falling price of oil, its main export.

Reuters

Junan Futures in Shanghai.

“China’s steel production cutback during the APEC meeting in early November also hit consumption of iron ore. Imports are likely to stay at similar levels in December.”

A large number of industrial facilities, including steel mills, were forced to shut down around the capital

Beijing ahead of a meeting of global leaders in November.

Australian shipments of iron ore to China from Port Hedland, which handles about a fifth of the world’s seaborne trade, fell 8.5 percent in November to 29.0 million tonnes from a near-record high in October.

Stockpiles at main ports fell 550,000 tonnes to 102.61 million tonnes by last Friday from the previous week, data from Umetal. com showed.

Reuters

10 | Business Daily

December 9, 2014

Greater China

Convertible bonds or non-stop bullish Convertibles gained the most in more than seven years last week and the co-manager of a fund that returned 57 percent in 2014 says he’s still bullish after a world-beating equity rally in the future.”

Optimism a slowdown will be averted next year is drawing money into China’s equity markets, driving a 21 percent gain in the Shanghai Composite Index over the past month, the most among 93 global indexes tracked by Bloomberg. Stocks in China posted their biggest intraday swings since 2010 on December 5 and 30-day volatility is at a oneyear high, boosting the outlook that exchangeable debt holders can profit from conversions.

Capital pump

Bund’s bull in Shanghai. Good icon for the recent times

T

he S&P China Convertible Bond Index jumped 8.5 percent in five days, as a similar corporate debt benchmark was little changed, and is up 15 percent since the People’s Bank of China cut interest rates for the first time in two years November 21. This year’s bestperforming bond funds in China are focused on exchangeable debt.

“We’re relatively bullish,” said

Li Xiaoyu, the head of fixed income at Changxin Asset Management Co., which oversees 16 billion yuan (US$2.6 billion) of assets including a convertible fund that topped the rankings and beat the Shanghai Composite Index’s 43 percent gain.

“China’s economic growth may stabilize at the current pace which will support convertible bonds’ good performance for some time

All of 2014’s 10 best-performing bond funds in China are focused on convertible debt, with gains exceeding 55 percent, according to data compiled by Bloomberg. Changxin Asset’s Convertible Bond A and C funds have gained 56.5 percent and 55.9 percent respectively this year, as of December 5.

According to Changxin’s Li, the central bank may cut its reserve requirement ratio or offer reverse repurchase agreements in December to pump capital into banks after recent data pointed to a further slowdown and rising deflation risks. The government’s Purchasing Managers’ Index tumbled to an eight-month low of 50.3 in November, figures from the National Bureau of Statistics released December 1 showed.

While the central bank’s easing has lowered borrowing costs for the government, it’s yet to reduce rates for companies. The yield on 10-year government bonds has declined 78 basis points this year to 3.78 percent.

Average loan rates for Chinese nonfinancial companies rose to 6.97 percent in September, from 6.96 percent in June, central bank data

showed November 6.

As Premier Li Keqiang shifts the economy’s focus to consumption from smokestack industries, growth is set to cool to 7.4 percent this year, the slowest in more than two decades, according to the median estimate of economists surveyed by Bloomberg.

That’s still faster than any other country in Asia and compares with an International Monetary Fund forecast of 3.3 percent for global growth in 2014.

Convertible bonds outstanding in China totalled 174 billion yuan as of the end of October, compared with 161 billion yuan at the end of last year, according to data compiled

by China Securities Depository & Clearing Corp Ltd. Bloomberg News

Investors may prefer equity-linked assets next year. The central bank’s monetary policy will stay loose and liquidity will be abundant Deng Xinyu Bosera Asset fund manager

Taiwan opposes IOI’s stake in Taipei 101 Controlled by Malaysia’s fifth-richest man, IOI had said the deal would give it an iconic building with stable rental income Faith Hung

A

planned US$790 million investment by Malaysia’s IOI Properties for a 37 percent stake in the owner of the Taipei 101 skyscraper ran into trouble after the Taiwan government said yesterday it was opposed to foreign control of the landmark.

IOI had said on Friday it was planning to buy the stake in the Taipei Financial Centre for 2.74 billion ringgit (US$789.74 million) from Ting Hsin International Group.

But Finance Minister Chang Shengford told parliament yesterday that the centre should not be controlled by foreigners as it is a national landmark.

“Our evaluation shows that IOI is seeking management control rather than just a financial investment,” he told lawmakers.

Taiwan’s Investment Commission also chimed in on Monday, saying it will “give a strict review” of the

deal. The investment regulatory body’s comments came after four lawmakers urged over the weekend that the deal be rejected.

IOI’s corporate communications department in Kuala Lumpur did not answer phone calls and did not immediately respond to an

email requesting comments on Taiwan’s stance.

Controlled by Malaysia’s fifthrichest man, Lee Shin Cheng, according to Forbes, IOI had said the deal would give it an iconic building with stable rental income.

Ting Hsin, the parent company of Hong Kong-listed Tingyi Cayman Islands Holding Corp and maker of China’s popular Master Kong instant noodles, has been under scrutiny after being hit by food scandals.

Taiwan prosecutors detained in October a key member of the family that controls Ting Hsin over the alleged sale of tainted cooking oil.

The Taiwan government also urged local banks not to give new loans to Ting Hsin, putting pressure on it to sell assets, including its stake in the Taipei Financial Centre.

Reuters

Business Daily | 11

December 9, 2014

Asia Infosys founders seeking US$1.1 bln via stake sale Deutsche Bank is the sole book runner of the sale Anuradha Subramanyan

S Japanese Prime Minister Shinzo Abe waves amid a crowd of voters during the lower house election campaign rally at a train station in Tokyo, Japan, 07 December 2014

Japan economy shrinks more than expected Despite the two straight quarters of contraction, the size of Japan’s economy is still 1.4 percent bigger than before Abe seized power in late 2012 Leika Kihara

J

apan’s economy shrank more than initially reported in the third quarter on declines in business investment, data showed on yesterday, surprising markets and backing premier Shinzo Abe’s recent decision to delay a second sales tax hike.

The hit from an April sales tax hike turned out to be bigger than expected, the revised gross domestic product data indicated, underscoring the challenges Abe and the Bank of Japan face in pulling the world’s third-largest economy sustainably out of deflation.

The revision to an annualised 1.9 percent contraction from a preliminary 1.6 percent fall confirmed Japan slipped into recession and confounded a Reuters poll projecting a 0.5 percent contraction.

Abe, who has called a snap election for Sunday, hopes voters will agree that his stimulus policies and delay in the planned second tax hike next year will revive a sputtering economy.

Media polls predict a landslide victory for his coalition.

The “harsh evidence for Abenomics,” shows that “tame growth in wages in particular is likely to drag on private consumption and broader economic activity,” said Takeshi Minami, chief economist at Norinchukin Research Institute.

Adding to the gloom, manufacturers’ confidence slid in December and is expected to deteriorate further, the Reuters Tankan showed, highlighting the patchy nature of the recovery.

The key factor behind the GDP downgrade was a 0.4 percent decline in business investment, revised from a preliminary 0.2 percent fall. Analysts

had expected capital spending to be revised up after an upbeat survey last week.

But spending was probably weak for small firms not included in the survey’s sample base and, coupled with other data used in revising GDP, led to the downward revision, a government official told reporters.

An increase in Japan’s sales tax to 8 percent from 5 percent in April hit household spending and clouded the outlook for “Abenomics,” a mix of aggressive monetary expansion, fiscal stimulus and structural reforms aimed at ending economic stagnation.

Policy challenges The policies have been an initial success, brightening household and

KEY POINTS Q3 GDP revised to annualised -1.9 pct vs prelim -1.6 pct Capex falls 0.4 pct vs preliminary -0.2 pct Data confirms Japan slipped into recession, modest rebound eyed Reuters poll shows frail business mood, keeps BOJ under pressure

corporate sentiment by boosting stock prices and weakening the yen.

Abe’s decision to delay the second tax hike to 10 percent by 18 months until April 2017 eased concerns about the outlook for consumer spending, which makes up 60 percent of GDP. But the recession has also shown that Abe’s stimulus policies have not been enough to strengthen the underlying economy even after two years in office, as companies remain hesitant of boosting wages and capital spending.

The frail business sentiment in the monthly Reuters Tankan is another bad sign for the BOJ as it suggests further weakness in the central bank’s quarterly tankan survey, which had been forecast to stay largely flat in the fourth quarter.

The BOJ’s massive stimulus, adopted in April last year and expanded in October, relies heavily on psychology to accelerate inflation to the bank’s 2 percent target. A weak result in the BOJ tankan, due on December 15, could cast further doubt on the central bank’s rosy economic forecasts and keep it under pressure to expand stimulus again, analysts say.

The BOJ is widely expected to keep policy unchanged and maintain its upbeat view of the economy at its next decision on Dec. 19.

Still, many economists expect Japan to resume moderate growth this quarter on signs corporate and household spending are recovering from the tax hike. Exports are also showing signs of bottoming out after remaining disappointingly weak despite a sharply weaker yen.

Reuters

ome of the founders of Infosys Ltd want to sell shares for US$1.1 billion in the Indian IT outsourcing company, a person familiar with the matter said, months after the company picked its first outsider as chief executive officer.

Four of the original founders, co-founders and their families are offering 32.6 million shares in Infosys at a fixed price of 1,988 Indian rupees (US$32) each, a 4 percent discount to Friday’s close, the person said.

Deutsche Bank is the sole book runner of the sale and the books were covered just after the launch, said Thomson Reuters publication IFR. It named the founders as Narayana Murthy, Nandan Nilekani, S.D. Shibulal and K. Dinesh.

The person declined to be named as the matter remained confidential and Infosys executives were not immediately available for comment.

Infosys, established by seven engineers in 1981, chose Vishal Sikka as its CEO in June in a bid to overhaul a company that was once the posterchild of India’s US$100-plus billion IT services industry but which had in recent years scrambled against rivals for low-margin contracts.

Some investor said Infosys failed to move up the value-chain due to its risk averse management team which was largely comprised of the company’s founders and co-founders.

Most of these executives have left the company since Sikka took office in August.

The founders and their families held a combined 91.5 million shares, or nearly 8 percent of Infosys’ outstanding shares, according to the company’s annual report.

Infosys shares are up 18.8 percent so far this year, while the benchmark Indian share index is up about 35.4 percent.

Reuters

KEY POINTS Founders selling 32.6 mln shares at $32 each Selling price a 4 pct discount to Friday’s close Sale comes months after company picks non-founding member as CEO

Infosys office branch

12 | Business Daily

December 9, 2014

Asia Modi to replace central planning Indian Prime Minister Narendra Modi held a brainstorming session on Sunday on replacing Soviet-style central planning with a ‘Team India’ concept that would give federal states a greater role in developing Asia’s thirdlargest economy. Although he won a huge election mandate in May, the writ of Modi’s government is weak as the majority of India’s 29 states are controlled by his opponents. That has led him to seek their help in implementing his growth and jobs agenda. As chief minister of Gujarat, Modi objected to meddling by the Planning Commission in his state’s affairs.

Cambodia-SK to further enhance ties Cambodian Deputy Prime Minister and Foreign Minister Hor Namhong said yesterday that the upcoming visit by Prime Minister Hun Sen to South Korea will broaden relations and cooperation between the two countries. Hun Sen will start a tour to South Korea from Thursday to Sunday this week for the ASEAN-Republic of Korea Commemorative Summit and an official visit. “The Prime Minister Hun Sen’s visit to South Korea will deepen traditional relations and close cooperation between the two nations,” Hor Namhong said during a meeting with the outgoing ambassador of South Korea to Cambodia, Kim Han-Soo.

NZ selling more manufactured products New Zealand’s manufacturing sales volume rose by 0.4 percent in the quarter to the end of September, led by a 5.1-percent rise in metal product manufacturing, the government statistics agency announced yesterday. However, the total value of manufacturing sales fell 1.2 percent, or 290 million NZ dollars (US$220.05), pulled down by a 4.8-percent -- or 383 million NZ dollars (US$293.26 million)-- fall in meat and dairy product manufacturing sales, according to Statistics New Zealand.

The volume of meat and meat and dairying product manufacturing sale fell by 1.4 percent.

Myanmar to centralize fruit market Myanmar’s Yangon region government has invited tenders to establish fruit and vegetable wholesale market in Yangon, a semi-official media reported yesterday.

The project of fruit and vegetable wholesale market, the first of its kind, will be implemented under publicprivate partnership and a 34.4-hectare land in Insein township’s Danyingon will be used for the move, said the Global New Light of Myanmar. The public company, set up for the purpose, will sell its shares to farmers, traders and other people, an announcement of the Yangon City Development Committee was quoted as saying.

Australian tech listing boom raises red flags Attractions for foreign companies in Australia include relatively low listing costs and less stringent accounting requirements compared with the United States

A

ustralia is experiencing a recordshattering boom in technology listings as start-ups starved of venture capital funding pursue backdoor listings, a trend that has regulators concerned companies are trying to take short cuts to get to market.

The value of technology IPOs on the Australian Securities Exchange so far this year has hit US$1.5 billion, according to Dealogic, easily surpassing the previous annual record of US$894 million at the height of the dotcom bubble in 1999.

The boom has caught the eye of officials who are increasingly concerned about the quality of some of the new listings, particularly reverse takeovers, in a market that has attracted companies from as far away as the United States.

KEY POINTS 2014 tech IPOs hit US$1.5 bln, surpassing dotcom record Many startups using failed mining firms to list Regulators raise red flag on backdoor listings

“In a number of cases, audited financial statements or business valuations for the incoming companies have not been prepared or disclosed and there has been insufficient disclosure of the incoming companies’ business models,” an Australian Securities and Investments Commission spokeswoman told Reuters in an email.

ASIC has forced these companies to file additional documents and “at times ASIC has issued interim stop orders on prospectuses”, she added.

A big test of the market’s strength is likely early next year when banking sources expect Melbourne-based accounting software firm MYOB Ltd to launch an IPO valuing the company at around A$3 billion (US$2.51 billion).

Indian PM looks to eastern state for future of farming Rising corn output in Bihar state has encouraged banks, a commodity exchange and commodity collateral management companies to move in Mayank Bhardwaj

F

rom his sleepy village in eastern India’s Bihar state, Ram Narain arrives at Gulab Bagh market to sell a truckload of corn that will fetch him enough money to buy a motorbike for his son, school uniforms for his daughter and a gift for his wife.

Narain and legions of farmers in the dirt-poor state have more than doubled corn output in just five years by adopting hybrid seeds and good farm practices, a rare success story Prime Minister Narendra Modi wants to replicate in other states. He came to power six months ago by promising faster farm and economic growth.

Traders such as Cargill Inc, Glencore International AG and Louis Dreyfus Commodities BV have set up operations in Purnia, an administrative outpost that now buzzes with trading activity.

“Corn has come as a boon ... helping our children attend good schools and improving our living standards,” Narain, 42, said, lending

A farm landscape in India

a hand to labourers unloading sacks at the mandi, or wholesale market.

Bihar had an initial advantage as corn is grown year-round to meet local food demand, making it a natural

place for traders to seek supplies when demand began to rise. Other states were largely growing corn for animal feed.

The arrival of global traders and

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

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Business Daily | 13

December 9, 2014

Asia Australian Securities Exchange hall

The major tech listings in 2014, a record year for Australian IPOs generally, included data security firm Covata Ltd which raised A$15 million through the biggest ever backdoor listing, via a failed uranium explorer.

Reverse or backdoor listings via shell companies are favoured by some businesses as the disclosure requirements are seen as cheaper and less stringent than direct listings.

Other tech companies to list included derivatives exchange platform OzForex Group Ltd, digital network

Vocus Communications Ltd, cafe loyalty programme Rewardle Holdings Ltd and trading and payment platform BPS Technology Ltd. Two of the year’s biggest are expected this month: construction software firm Aconex Ltd which plans to raise A$120 million and outdoor clothes e-tailer SurfStitch, which hopes to raise A$93 million.

Industry executives say there is appetite for more, noting a lack of venture capital for tech companies between about A$2 million, where seed money is readily

the establishment of a market for the crop gave small farmers the confidence to invest in higher-yielding hybrids.

Rising output encouraged banks, a commodity exchange and commodity collateral management companies to move in, opening up Bihar to regional and international trade.

“We acted as a catalyst by establishing a linkage between the market and farmers,” B.K. Anand, chief of the grains and oilseeds division of Cargill India, told Reuters.

Local farmers say they now produce 7-8 tonnes a hectare, a figure confirmed by Cargill’s own research which shows Bihar’s yields catching up with the 10 tonnes achieved in the United States, the world’s top producer. India’s average corn yield is just 2 tonnes.

3.4-4.5 million tonnes a year.

With the advent of top-name traders competing for stocks, farmers are now making 12 rupees (US$0.19) per kg against 2-3 rupees a few years ago, said Narain, who now grows corn on 2 hectares, up from less than a hectare 5 years ago.

Traders look to buy from local farmers living in the Gulab Bagh area because they can export to neighbouring Nepal and Bangladesh by road. The region is also close to six major ports on the east coast, including Kolkata.

“The daily corn arrival in the Gulab Bagh mandi is around 5,000 tonnes a day against 2,000 tonnes five years ago,” reckons Chandan Daga, owner of wholesale trader Arihant Agri.

An assured market encouraged farmers to embrace hybrid seeds by companies such as DuPont Pioneer and they have kept pace with the latest varieties. GMO, or genetically modified, food crops are banned in India.

“Being sturdy and taller, the plants are not prone to rat infestation and damage after hailstorms,” farmer Vinod Yadav said of his P3522 variety of seeds, looking at mounds of corn cobs in his back yard.

The government says it hopes to extend Bihar’s success in boosting yields and to other leading corn growing states such as Karnataka, Andhra Pradesh and Maharashtra.

“We are consulting concerned ministries like agriculture and government research bodies to see how this model can be replicated in other corn growing parts of the country,” Food Minister Ram Vilas Paswan told Reuters.

Buoyed by the sharp rise in physical trade, India’s leading commodity exchange NCDEX last year launched a new contract setting Bihar’s Gulab Bagh as a delivery centre. The new futures contract gives farmers an idea about the outlook for prices.

“Bihar reveals that by providing a market for farm goods and by allowing trade to determine its own course, we can write a success story even without any active government help,” said Amit Sachdev, India representative of the U.S. Grains Council.

Higher yields Urbanisation and industrialisation are limiting available agricultural land. Increasing yields addresses the issue and cuts the relative cost of inputs like fertilisers.

India produces 23-24 million tonnes of corn, with Bihar accounting for nearly 3 million tonnes, according to trade and industry estimates. If other big producing states fail to match Bihar’s gains, rising consumption would cut into Indian exports that now average

KEY POINTS Farmers in Bihar adopt hybrid seeds to boost output Cargill, Glencore, Dreyfus attracted to eastern state Yields approach U.S. levels, Cargill estimates Hub forms basis for new futures contract on NCDEX bourse

Reuters

available, and A$5 million where doors open to big investors.

Matt Barrie, CEO of jobs portal Freelancer Ltd, whose shares surged 400 percent on its debut a year ago after an IPO which raised A$15 million, said start-ups were copying the strategy of speculative mining minnows by tapping the market for funds for further expansion.

“Projecting forward, I think that the ASX (Australian Stock Exchange) will be the primary way in which technology companies raise equity in

this country in the future,” Barrie said.

And it’s not just Australian companies.

San Francisco-based online recruiter 1-page raised eyebrows in Silicon Valley when it became the first U.S. start-up to list on the ASX in October, a decision it described as logical ahead of a planned expansion in Southeast Asia.

But some major industry players are unconvinced, arguing the Australian market is still not mature enough to provide the best valuations.

Reuters

World Bank cuts Indonesia’s 2015 growth projection Weak imports of capital goods and slower loan growth indicate faltering growth for 2015

T

he World Bank yesterday cut its projection for Indonesia’s economic growth in 2015 to 5.2 percent from 5.6 percent due to the weak outlook for fixed investment and trade as well as a slowing pace of loan expansion.

The lender also revised its forecast for growth in gross domestic product (GDP) this year to 5.1 percent from the 5.2 percent projection it made in July.

Indonesia’s GDP expanded 5.01 percent in the third quarter on yearly basis, the slowest pace since 2009, as the pace of investment and net exports slowed.

“Any significant rebound of growth will require a strong rebound in investment and we’re not seeing an indication of that in Indonesia,” Ndiame Diop, the bank’s lead economist for Indonesia, told a conference in Jakarta yesterday.

Diop said weak imports of capital goods and slower loan growth indicated weak growth for 2015.

Imports of capital goods in January-October contracted more

than 7 percent from a year earlier to US$24.84 billion.

Indonesia’s central bank expects 2014 loan growth of 11-12 percent, which would be the slowest since 2010 and roughly half of last year’s pace of 21.4 percent.

President Joko Widodo’s decision to raise subsidised gasoline and diesel prices in mid-November is expected to have a limited short-term effect on GDP, but higher infrastructure and social spending from the budget savings might offset the impact on growth, Diop said.

The World Bank pencilled in Indonesia’s GDP to grow 5.6 percent in 2016.

Widodo has pledged to accelerate growth in Southeast Asia’s largest economy to 7 percent on average during his five-year term.

Finance Minister Bambang Brodjonegoro has estimated economic growth next year at 5.8 percent.

Reuters

14 | Business Daily

December 9, 2014

International Euro zone to miss deadline for FTT deal

Some analysts see the Bank of England (pictured) raising rates more slowly than the Federal Reserve

Eleven euro zone countries have been unable to agree on the broad outlines of a tax on financial transactions by a year-end deadline, casting doubt over whether the disputed levy can be implemented as planned in early 2016, diplomats said yesterday. Finance ministers were due to sign off on the plan at a meeting today but diplomats preparing the measures said differences over how to levy the tax had not been bridged. “An agreement will not be possible by the end of the year,” said a senior diplomat close to the talks.

French central bank sees growth at 0.1

UK rate rise in 2015 to test high-debt households The Bank of England has said it will not hike until wages are higher David Milliken

France’s economy is on course to grow 0.1 percent in the final quarter of the year, led by a modest gain in industrial activity, the central bank said yesterday in a second estimate confirming its first.

The forecast came after official data showed the euro zone’s second largest economy eked out 0.3 percent growth in the third quarter after contracting 0.1 percent in the second. The central bank offered its latest take on French prospects in its monthly business climate survey which showed sentiment in the industrial sector stood at 97 in November.

IHG agrees to sell Paris-Le Grand InterContinental Hotels Group, one of the world’s largest hoteliers, said yesterday it had agreed to sell its Paris-Le Grand hotel for 330 million euros (US$405 million) to Constellation Hotels.

IHG said it had accepted the offer from Constellation, which was announced in August, following a period of consultation with employees. The deal is expected to complete by the end of the first quarter of 2015, with the proceeds going towards general corporate purchases.

Ukraine approves importing power from Russia Ukraine’s government has allowed state energy company Ukrinterenergo to import electricity from Russia to cover current power shortages caused by a lack of coal, the Ukrainian energy ministry said. Energy Minister Volodymyr Demchyshyn last week said Ukraine had a shortfall in electrical power of more than 10 percent as separatist violence in the country’s industrial eastern region has disrupted coal supply to power plants. Most of Ukraine’s coal mines are in territory controlled by pro-Russian rebels. President Petro Poroshenko last month urged the government to consider importing power from Russia.

B

ritons who have relied on years of record-low interest rates to manage hefty mortgages are looking nervously ahead to 2015, when the Bank of England finally looks set to start raising rates.

British people have more debt per head than in any other big rich economy, at around 140 percent of income, barely down from its peak as the financial crisis broke and equivalent to 1.5 trillion pounds (US$2.3 trillion) in total.

Fast economic growth and signs wages may finally be rising mean markets now expect rates to rise in the second half of 2015, after more than six years at a record low 0.5 percent.

But the BoE will have to tread a cautious path, as the borrowers hit hardest by higher interest rates are likely to be those who gain least from the recovery.

Stagnant earnings and fewer repossessions mean Britons have made smaller inroads into their debt than U.S. borrowers, one reason some analysts see the BoE raising rates more slowly than the Federal Reserve. And government forecasts see debt ratios rising above pre-crisis highs within a few years.

High debt could exaggerate the impact of increased rates on consumer spending, although the BoE expects an impact in line with previous cycles, with every 1 percentage point hike cutting household spending by 0.5 percent, around 5 billion pounds.

Nonetheless, over half of borrowers in a BoE survey published on Monday said they would cut spending if interest rates rose to 2.5 percent.

“Even though household debt is very high, people haven’t been feeling the impact. When interest rates do start to rise, it will finally dawn on people,” Moody’s Analytics UK economist Zach Witton said.

Lenders estimate a quarter-point rise would add just 16 pounds a month to payments on an average mortgage. But averages could be

KEY POINTS UK has heaviest household debt burden of any G7 economy Record-low rates have shielded borrowers until now Most borrowers say rate rises will curb spending Fears for heavy borrowers with poor wage prospects

misleading when looking further ahead, economists say.

Post-crisis changes to bank lending practices mean rates of interest vary widely.

Some, who took out mortgages before rates were slashed in 2009, now pay as little as 0.5 percent but will be fully exposed to rate rises. Later borrowers are likely to be paying higher rates -- reflecting banks’ greater risk aversion -- but these may be fixed.

IT worker Michael, who did not want to use his full name, and his wife bought a 350,000 pound apartment in London in May 2013 with a 10 percent deposit. Banks offered to lend more but at an interest rate of around 5 percent, they did not want to stretch themselves.

“You’ve got to be pretty stupid as a home-buyer to think (rates) are not going to go up at some point,” Michael said.

Stretched borrowers But others may have lost the wellpaying jobs that enabled them to borrow before the crisis, and are only

getting by thanks to record-low rates.

UK Asset Resolution, which manages 58 billion pounds of mortgage debt from failed lenders, said in October it was contacting 20,000 customers who might struggle if interest rates rose by 1 percent, to help them plan.

Furthermore, while the BoE has said it will not hike until wages are higher, that does not necessarily mean the borrowers who are most heavily indebted -- often those in low-paid, insecure work -- will see pay rises.

“More vulnerable households have more pessimistic income expectations for the next 12 months,” Monday’s BoE study said.

That concerns Matthew Whittaker, chief economist at the Resolution Foundation, a think tank focused on the low-paid.

He estimates the number of households in “debt peril” -- where interest payments exceed half of takehome pay -- could double to more than a million if rates rise to 3 percent by 2018, even if wages rise in line with official forecasts.

The BoE expects a smaller increase, and says less than 2 percent of households are likely to be at risk of financial distress, lower than before than financial crisis.

Britain’s Financial Conduct Authority now requires lenders to make much closer checks that people taking out new mortgages can afford repayments, reducing options for existing borrowers who get into trouble. They may find it hard to switch to a new mortgage with repayments spread over a longer period or move to a cheaper home.

Banks can make exceptions to the new rules for existing borrowers, and the FCA should do more to promote this before rates start to rise significantly, Whittaker said.

“We need the FCA to step in and encourage them,” he said. “This window of opportunity isn’t slamming shut just yet.”

Reuters

Business Daily | 15

December 9, 2014

Opinion Business

wires

Leading reports from Asia’s best business newspapers

No more geopolitical risks, please

THE KOREA HERALD South Korea has been overtaken by or is trailing China in six key industries, making it imperative for local companies to find new ways to stay competitive globally, a report by the lobbying group of large conglomerates showed yesterday. The report by the Federation of Korean Industries showed China outpacing South Korea in the smartphones, cars, shipbuilding and marine plants, petrochemicals, and the steel and refinery sectors. South Korean companies still maintain an edge in semiconductors and displays, but the lead has been eroded in recent years, it said.

John Kemp

Reuters market analyst

There is no question international events can have a major impact on economic and financial performance at home. But unless the type of risk and the transmission mechanism is specified, it becomes impossible to make the connection properly

THE BANGKOK POST Robinson Department Store Plc., a Central Group company, will spend 4.5 billion baht to expand business next year in response to an expected rebound in consumer spending.

The SET-listed retailer plans to open seven new department stores next year, five in Thailand and two in Vietnam. A Robinson executive said three of the Thai stores would be in suburban Bangkok and one each in Rayong and Buriram provinces. “We will expand our department stores in secondary provinces, which have huge opportunities because there are no direct competitors to Robinson,” he said.

THE TIMES OF INDIA Higher withdrawals for Diwali coupled with banks limiting free ATM withdrawals led to a drop in the number of ATM transactions across the country. Transactions dropped 9% from 26.8 crore in October 2014 to 24.4 crore in November, data from National Payments Corporation of India (NPCI) showed. The NPCI is an umbrella institution of all retail payments in the country and operates the NFS (national financial switch) of most ATM networks across the country.

Beginning November, banks imposed restrictions on ATM usage in metros to five free transactions a month.

THE JAKARTA POST PT Energi Mega Persada is hoping for a healthy performance next year with a plan to boost its annual output by 20 percent and outline a refinancing strategy to push up its bottom line. The oil and gas company is one of the few business entities under Aburizal Bakrie that is performing well. Energi president director Imam Agustino told reporters on Friday that the company hoped to see its production hit 68,000 barrels of oil equivalent per day (boepd), increasing by around 33 percent from this year’s estimate of around 51,000 boepd.

“W

arning lights are flashing over the global economy,” Britain’s finance minister, George Osborne, told a packed House of Commons on last Wednesday during the last major economic debate of the current parliament.

Osborne was getting his excuses in early as parliament prepares for a general election in May 2015. “Japan is in recession, the euro zone is stagnating, and the geopolitical risks are rising,” according to Osborne, who warned that forecasts for Britain’s growth had been downgraded as a result (“Autumn Statement” December 3, 2014).

The first two threats are selfexplanatory, but the “geopolitical risks” to Britain’s recovery are mysterious. I have spent most of my working career on international economic and political issues, and I have no idea what Osborne actually meant by this phrase.

The biggest threat to Britain’s economy at present is without doubt the slowdown in the euro zone economy, which is its largest trading partner. But it is not clear whether Osborne included political and economic problems in the European Union in his idea of geopolitical risk or not (the text implies a distinction between economic problems in Japan and the EU on the one hand and political risks in the rest of the world on the other).

Geopolitical risk has become a convenient catch-all to describe problems overseas.

It can encompass everything from wars, insurrections and

sanctions to recessions, debt defaults, expropriations, financial crises, epidemics and more.

The term is so broad as to be meaningless. Each of these events poses a specific and different type of threat to national security and economic well-being. Lumping them together actually makes the risks harder to analyse and understand.

It also encourages policymakers, analysts and journalists to blame problems at home on a rise or fall in the general level of geopolitical risk, like a thermometer, through a mechanism which is never explained.

Policymakers like to talk about geopolitical risk in the same way central bankers invoke “uncertainty” to explain economic underperformance and why they are unsure about their forecasts.

In this lexicon, geopolitical risks are almost always “elevated” in the same way that the economic and financial outlook is more often than not “unusually uncertain”.

As a simple matter of arithmetic, geopolitical risks cannot be elevated most of the time, any more than the outlook can usually be unusually uncertain.

Normal state of affairs Geopolitical risk and uncertainty are part of the normal condition of affairs. There is no reason to believe that the current level of risk and uncertainty is any higher than in past decades.

U.S. Presidents Reagan, both Bushes, Carter, Nixon, Johnson, Kennedy, Eisenhower and Truman would fiercely dispute the idea

that current geopolitical risks are higher than the challenges they had to face in the 1980s, 1970s, 1960s and 1950s.

To take just a few examples of the problems they had to deal with: 9/11; SARS; two wars between the United States and Iraq; the Asian financial crisis; the Iran-Iraq war; the Iranian revolution and hostage crisis; Latin America’s debt default; the Soviet invasions of Afghanistan, Czechoslovakia and Hungary; the Arab oil embargo; the Cuban missile crisis; the Berlin airlift; and full-scale wars in Vietnam and Korea.

Turbulence and crisis, not peace and stability, are the norm in the global system. To blame economic and financial problems at home on “geopolitical risk” is to say the economy is not growing faster because history is unfolding in the rest of the world.

There is no obvious connection between geopolitical risks, economic growth and asset values. The supposed golden era of U.S. economic growth in the 1950s and 1960s coincided with major wars in Korea and Vietnam and a confrontation with the Soviet Union, which culminated in the Cuban missile crisis.

Researchers have not found a clear empirical link between world politics and the performance of the U.S. stock market. Even major events, such as the Cuban missile crisis, have had little or no impact on market valuations.

Major stock market crashes have often occurred in periods of relative international calm.

There is no question international events can have a major impact on economic and financial performance at home. But unless the type of risk and the transmission mechanism is specified, it becomes impossible to make the connection properly.

In drafting his text, Osborne’s speech writer probably had in mind a range of current international problems from the outbreak of Ebola in West Africa and the conflict between Russia and Ukraine to the fighting in Iraq and Syria and the threat of terrorism.

But it is not clear which of these threats he thought affected Britain’s economy or how. Oil prices, often cited as a barometer of global political risk, have actually fallen 40 percent since late June.

That drop should actually be a source of stimulus in the global economy and suggests the level of political threat is not especially high at the moment.

The bottom line is that “geopolitical risk” is not a useful or meaningful concept when speaking about international events and their consequences for the economy and financial markets.

This is one instance when greater precision is vital to analysis. It is more useful to talk about the specific and different challenges posed by war, sanctions, epidemics and financial crises.

It is time to retire the concept of “geopolitical risk” in favour of specifying those events that are thought to pose a threat, and how, to the economy and financial markets at home.

Reuters

16 | Business Daily

December 9, 2014

Closing Asset managers launch first ETFs under HK-SHG link Alipay says mobile deals grow to over half of transactions Hang Seng Indexes Company said yesterday it had granted licences to two Chinese asset managers to launch investment products linked to the Hang Seng Index in mainland China, marking the first such products under the Shanghai-Hong Kong stock connect scheme. China Asset Management and China Southern Asset Management have been allowed to sell exchange-traded funds (ETFs) under the landmark scheme and will start their public offerings today.

The trading is the latest step towards opening China’s tightly controlled capital markets.

The share of mobile transactions on Alipay, the online payment platform affiliated with Alibaba Group Holding Ltd, jumped to 54 percent of all transactions in the first 10 months of the year from 22 percent during the whole of last year, the company said. The increase was driven in part by consumers in rural areas and smaller cities adopting mobile devices as their primary tool for online shopping. More than 55 percent of all mobile transactions in the year through October, however, still came from first-tier cities and coastal provinces.

Zuckerberg, Cook meet China Internet Minister The head of China’s Internet regulator met with the chief executives of Facebook Inc., Apple Inc. and Amazon.com Inc. during a recent visit to the U.S., according to a government-run website

L

u Wei, minister of the Cyberspace Administration of China, visited the companies’ offices, according to the report

by China.com.cn, which is under the State Council. The post didn’t elaborate on the reasons for Lu’s visits or the dates. The report included photos of Lu with Apple CEO Tim Cook, who appears to be showing him a wristwatchlike device.

Facebook CEO Mark Zuckerberg greeted Lu in Mandarin, and Lu found a copy of Chinese President Xi Jinping’s book “The Governance of China” on the billionaire’s desk. While the world’s largest social network has been blocked by China’s censors since 2009, the company is seeking to build up its business selling ads to companies through a Hong Kong office and is said to have leased space in Beijing this year.

“The Chinese market is too attractive not to be in,” said Lo Shih-hung, a professor at the National Chung Cheng

Mark Zuckerberg, Facebook’s founder

University’s Department of Communication in Taiwan.

“For Facebook to get into the market, it might require them to make comprises ranging from setting up a local operation to sharing user data.”

Zuckerberg, who was named to an advisory board at Beijing’s Tsinghua University in October, told

Lu he gives Xi’s book to colleagues “to let them know the characteristics of Chinese socialism,” according to the report.

China access In September, state-run media quoted Lu as saying Facebook “cannot” win access in China anytime soon.

While the network is formally blocked, it can be accessed through so-called proxy services or virtual private networks that sidestep government filters.

“If you are hurting China’s interests, China’s security or you are hurting the interests of Chinese consumers, we won’t allow this to exist,” Lu said at the World Economic Forum in

Tianjin in September without mentioning Facebook by name.

Facebook’s Singaporebased spokeswoman, Charlene Chian, couldn’t be reached by phone today and didn’t reply to an e- mailed request for comment on the visit.

Pictures included in the website report show a stuffed bunny mascot for Beijing-based Xiaomi Corp., the world’s third- largest smartphone company, on Zuckerberg’s desk at Facebook.

Baidu Inc. Vice President Zhu Guang accompanied Lu to the meetings, China. com reported. Kaiser Kuo, a spokesman for Baidu, confirmed Zhu attended the meetings. He declined to comment further.

The website also posted pictures with Lu talking to Amazon CEO Jeffrey Bezos. It didn’t provide further details, and representatives at Apple and Amazon couldn’t be reached for comment.

Bloomberg News

Taiwan export growth tops expectations

2015 APEC meeting to focus on inclusive growth

Dalian Wanda slashes IPO to US$3.9 bln

N

T

D

ovember export growth slightly topped expectations, as components for hot-selling gadgets such as the iPhone from Apple Inc. boosted shipments.

Exports grew 3.7 percent from the same month of 2013, the island’s Ministry of Finance said yesterday. This compared to a Reuters poll expectation for a 3.47 percent increase and was higher than the meagre 0.7 percent annual improvement in October.

“The market in electronic goods remains vigorous,” the ministry said in a statement.

Exports to the U.S. saw a big 11.4 percent rise, which more than offset a 0.3 percent fall for those to largest trading partner China.

Shipments to Europe expanded 3.70 percent.

Exports to Japan gained 3 percent.

The government also expects December exports to be slightly stronger than a year earlier, on the back of restocking of goods in warehouses.

Taiwan’s overall export value in December will be at least US$26.5 billion, it said. In December 2013, shipments were US$26.38 billion.

Gains at tech firms were enough to offset weakness in trading partners such as China.

Reuters

he Philippines has identified four priorities to host next year’s meeting of the Asia-Pacific Economic Cooperation (APEC), which is expected to ensure that a sustained regional economic growth will result in tangible benefits on people’s lives, senior officials said yesterday.

Under the theme “Building Inclusive Economies, Building a Better World,” the priorities include enhancing regional integration, mainstreaming small and medium enterprises (SMEs) in global and regional markets, investing in human capital development, and building sustainable and resilient economies, Socioeconomic Planning Secretary Arsenio Balisacan said at an APEC Informal Senior Officials Meeting.

The meeting, held in the Philippine capital of Manila yesterday and today, is the first one among the various APEC meetings leading to the 23rd APEC Economic Leaders Meeting in November 2015.

Executive Secretary Paquito Ochoa Jr. said the priorities are designed to ensure continuity of past and on-going work, and promote balance and relevance to each economy’s domestic and regional needs.

Ochoa praised China for what the country had done in hosting the APEC meetings in 2014.

Xinhua

alian Wanda Commercial Properties Co Ltd, the world’s second largest developer of shopping malls and office buildings, cut the size of its Hong Kong IPO by around a third to US$3.9 billion to lure investors worried about its huge debt, analysts said.

The company, backed by Chinese billionaire Wang Jianlin, launched the deal yesterday and offered 600 million new shares in a range of HK$41.80-HK$49.60 each, according to a term sheet seen by Reuters.

It had earlier sought to raise as much as US$6 billion via the deal, Reuters previously reported.

Analysts said the company cut the IPO after some buyers were put off by the 179.7 billion yuan (US$29.2 billion) in bond and loan debt it had amassed during a decade-long, rapid expansion drive.

Dalian Wanda’s gearing ratio, a measure of indebtedness, stood at 87.8 percent at the end of June, according to its draft prospectus, more than double the industry average of 40-50 percent, analysts said.

The IPO is set to be priced on Dec 16. The shares are due to list on December 23.

Reuters