Macau business daily, Mar, 26, 2015

MOP 6.00 Closing editor: Joanne Kuai Year III

Number 757 Thursday March 26, 2015

Publisher: Paulo A. Azevedo

Full speed ahead for 4G

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TM vows to invest heavily in developing 4G networks.

Initial investment: MOP600m. CEO Vandy Poon says its new network will blanket the SAR by end-2015. Another MOP200m is earmarked to upgrade its current 3G networks and services. Two times faster than the current speed, he says. The company also announced 2014 profits increased 10.9 pct, to MOP1.11 billion. Mainly driven by 36 pct increase in business solutions revenue Page 2

Bitcoin bravado?

Chan Pou Ha steps down as DSSOPT Deputy Director Page 4

Bitcoin has its naysayers. But nothing education can’t solve. So says Bobby Lee, founder of BTC China, the PRC’s biggest Bitcoin exchange. Macau is perfect for the virtual currency, he maintains. Given the restricted popularity of the local currency. And the lure of the world’s biggest gaming industry. The Chinese, he says, are among the most enthusiastic fans of Bitcoin anywhere

MGM breaks ground on US$800 mln Springfield Casino Page 4 Brought to you by

HSI - Movers March 25

Name

Pessimism prevails

www.macaubusinessdaily.com

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Now Fitch Ratings has pitched in. Substantially revising down its Macau gaming revenue growth forecast for 2015. From negative 4 pct to negative 22 pct. Citing the anti-corruption crackdown in China, tighter credit availability, recently implemented smoking and visa restrictions. Plus concerns about labour shortages. Long term it sees redemption in the economic development of the Asia Pacific Region

%Day

Hengan International

5.43

Sands China Ltd

2.34

China Overseas Land

2.34

CK Hutchison Holding

2.18

Swire Pacific Ltd

2.17

CITIC Ltd

-0.91

Belle International

-1.47

China Life Insurance

-1.51

China Shenhua Energy

-1.56

Tingyi Cayman Island

-2.21

Source: Bloomberg

I SSN 2226-8294

CEPA success

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CEPA is bearing fruit. The Closer Economic Partnership Arrangement Agreement is breaking down barriers.

Making it easier for SAR businesses to compete on equal terms with Mainland Chinese enterprises. Consequently, two Macau banks are applying to set up banking businesses on the Mainland. The reduced minimum asset demand has been met, said AMCM deputy head Wan Wing Long

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Black gold glut

Brought to you by

Full up. China’s oil storage facilities. Low global oil prices have increased reserves to maximum capacity. Demand will temporarily be tempered.

But a rebound is anticipated year-end

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2 | Business Daily

March 26, 2015

Macau Glória Batalha Ung appointed to IPIM Board Glória Batalha Ung has been appointed to the Board of Directors of Macao Trade and Investment Promotion Institute (IPIM) for a term of one year, according to the Macau Official Gazette. She will occupy the vacancy left by Echo Chan, who recently assumed the position of Deputy Secretary-General of the permanent secretariat of Forum Macau. The new member of the Board of Directors of IPIM has been working in the Institute since 1995, where she has served as Director of the External Cooperation Department, Director of the Macao Business Support Centre and Director of the Small and Medium Enterprises Centre.

CTM to invest heavily in developing 4G networks With annual profits of more than MOP1.1 billion, CTM is to pour MOP600 million (US$75 million) into building its 4G networks, which may cover the whole of Macau by the end of this year Kam Leong

kamleong@macaubusinessdaily.com

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ocal telecommunications company Companhia de Telecomunicacoes de Macau (CTM) said that it is initially investing MOP600 million in developing the 4G networks in the city, indicating that the Special Administrative Region may be covered by its new networks ‘more than fully’ by the end of this year. “[Developing] 4G networks is a long-term investment. We estimate investing MOP600 million for the overall 4G developments. Meanwhile, we will make use of this chance to develop 4G networks to update and improve our 3G networks,” the chief executive officer (CEO) of CTM Vandy Poon Fuk Hei said during a press briefing on the company’s 2014 performance and its future development plans.

According to Mr. Poon, CTM will put another MOP200 million into updating its current 3G networks and services. He also said that the total MOP800-million network investments were just the initial number.

“I believe that this amount will only increase, not decrease in the future. I’m confident in our 4G services. As such, I believe that our clients will demand more after using our [initial] services, so that we’re willing to invest more,” he said.

The improvement of the 3G services will be unveiled about the same time as the company’s 4G services, the CEO said, claiming that the speed of the service will be two times faster than the current speed.

In addition, the CEO expressed his confidence that the company could successfully instal its 4G networks by covering more than the government requires.

“We’re building our networks rapidly. Everyone knows that the government regulates that [the 4G networks of the operators] have to cover 50 per cent of Macau by the end of this year. Meanwhile, our target

of [the 4G coverage] by this year is to be higher than our current 3G [coverage], which is nearly 100 per cent,’ Mr. Poon claimed.

Nevertheless, he said the company has not yet set the charging fee for the 4G services, indicating only that such prices will be “the most reasonable.”

CTM profit up 11 pct In fact, the company saw its profits increase 10.9 per cent in 2014, amounting to MOP1.11 billion, compared to MOP1 billion in 2013.

The revenue of the company also rose by 4 per cent year-on-year, reaching MOP4.88 million from MOP4.70 million in the year before.

‘The increase in revenue was mainly driven by the increase in business solutions revenue of 36 per cent and the increase in Internet service revenue of 16 per cent; other than these, there were also increases in mobile service revenue of 4 per

cent and leased circuits revenue of 5 per cent,’ the company wrote in its annual report.

In addition, the company claimed it had invested ‘a record-high amount of MOP519 million in modernization and expansion of the mobile network, fixed network, fibre network and other systems’.

According to its report, the telecommunications company had a total of 813,978 mobile customers, with 188,394 mobile broadband subscribers and 161,737 Internet users at the end of 2014, representing a year-on-year growth of 3 per cent, 8 per cent and 6 per cent, respectively.

On the other hand, regarding the cyber attack that the company encountered last week -claimed as ‘rare’ and ‘newly discovered’ - Mr. Poon stressed that the attack had only brought some technical problems to CTM but not a breakdown of services, claiming that the company firewall did function during the attack.

Five idle land parcels in Taipa reclaimed by gov’t

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he government announced yesterday the invalidity of land grants for five parcels of idle land awarded to enterprises in the 1980s and 1990s. These plots of land are the first five of the 22 parcels of idle land that the government claimed it would reclaim ‘shortly’.

According to the Official Gazette released yesterday, these five plots of idle land are all located in Taipa; namely, Phase 14 of Rua de Viseu of Baixa da Taipa, Phase O1 at the conjunction between Estrada do Pac On and Rua da Felicidade, Phase A of Baixa da Taipa near Estrada Lou Lim Ieok, Phase 4a in Rua Heng Long of the Pac On reclamation area, and Phase H of Pac-On reclamation area, respectively.

Occupying more than 18,000 square metres in all, these five land parcels are all zoned for industrial use and were awarded in 1988, 1995 and 1998.

Secretary Raimundo Rosario claimed in the announcements that the invalidity of land grants is due to the landlords not executing their responsibility in developing the land parcels as regulated in the land-grant contracts.

Nevertheless, these landlords can still file an objection with the Chief Executive within 15 days, or submit a judicial appeal to The Court of Second Instance (TSI) within 30 days.

Prior to the announcements, a total of 48 parcels of idle plots in the city had been undergoing legal procedures to determine the validity of the individual land grants, while the government had announced the procedure of losing land grant validity for 22 of them.

Chief Executive Fernando Chui Sai On said during his Policy Address this week that the list of these 22 idle land parcels - to become land reserves for the city - would be announced in a short period of time.

The newly recovered parcels belonged to five companies; namely, Pacífico Infortécnica — Computadores e Serviços de Gestão, Fábrica de Isqueiros Chong Loi (Macau) Limitada, Empresa Fountain (Macau) Limitada — Bebidas Tak Heng Sing — Companhia de Construção e Fomento Predial Limitada, and Metalminer (Pacific) — Indústria de Materiais de Precisão S.A. K.L.

Business Daily | 3

March 26, 2015

Macau

AMCM: Two Macau banks apply to operate in Mainland China The banks have surpassed the minimum assets threshold under the CEPA arrangement, says AMCM Stephanie Lai

sw.lai@macaubusinessdaily.com

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wo Macau banks are currently applying to set up banking businesses in Mainland China, lent impetus by the liberalised trade terms signed under the Closer Economic Partnership Arrangement Agreement (CEPA) with Guangdong benefiting local businesses, said deputy head of the Monetary Authority of Macau (AMCM) Wan Sin Long.

Mr. Wan confirmed the news with Business Daily on the sidelines of a CEPA policy explanation session yesterday, which several official delegates from Guangdong Province attended.

“The two banks have basically satisfied the US$6 billion (37.3 billion yuan) of minimum assets required [to set up a branch in the Mainland],” said Mr. Wan, although declining to name the two banks. “The liberalised trade terms signed under CEPA did help the businesses here to enter the Mainland.”

The threshold of the minimum assets as mentioned by Mr. Wan that banks here should hold to operate in Mainland China has remained

the same in the latest edition of CEPA signed by both Macau and the Guangdong Government on December 18 last year as in the previous edition of the ninth supplement to the trade pact signed in 2012.

The ninth supplement has also, for the first time, lowered the minimum assets a Macau bank must have before it opens a Hengqin branch.

This is now US$4 billion from US$6 billion – again this threshold has

remained in the latest CEPA signed with Guangdong in December last year, effective since the beginning of this month.

This latest edition of CEPA was set to benefit the companies of both Hong Kong and Macau that have previously been subjected to more restrictions than their Mainland counterparts wishing to provide services in Guangdong Province.

All of these restrictions are removed

for 58 service sectors - including advertising services, photography, meetings and conventions, restaurants, tour guide and goods transportation – giving them the same market entry conditions as Mainland companies.

The agreement also contains a most-favoured treatment provision which states that any CEPA-plus preferential treatments offered by the Mainland to other countries will be extended to Hong Kong and Macau.

Also attending the CEPA policy explanation session yesterday to deliver an opening talk was Secretary for Economy and Finance Lionel Leong Vai Tac, who said the city would target to achieve full liberalised trade terms with Guangdong Province by the end of this year.

On Tuesday, the province approved the establishment of a free trade zone, which is meant to further integrate the economies of the Mainland, Hong Kong and Macau.

The zone will comprise Nansha in Guangzhou, Qianhai and Shekou in Shenzhen, and Hengqin in Zhuhai.

McMacC o. Ltd. (McDonald’s Macau)

24th March Advertisement.indd 1

3/23/2015 1:01:57 PM

4 | Business Daily

March 26, 2015

Macau DSSOPT Deputy Director steps down Chan Pou Ha is no longer the Deputy Director of Land, Public Works and Transport Bureau (DSSOPT), according to the Macau Government’s Official Gazette. The official document announced that the former Deputy Director stepped down from her post on 16 February but will continue to work in DSSOPT which she first entered in 1990, returning to her former position of principal consultant and senior technician.

Ms. Chan holds a degree in Civil Engineering from Huaqiao University and was appointed Deputy Director of DSSOPT in February 2009, having first taken the position of interim Deputy Director in November 2008.

Non-resident workforce grows 20.6 pct to over 173,000

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n the space of a year the number of non-resident workers in Macau has jumped 20.6 per cent - from 143,752 in February 2014 to 173,358 in February 2015 - according to Public Security Police Force data published yesterday.

In terms of source of non-resident workers Mainland China continues to be the largest at 112,110 workers, a number that in one year has increased 23.6 per cent from 90,704 workers in February 2014. The Philippines provides the second largest source of the Macau workforce in terms of non-residents with 22,154 workers, which represents a 13.2 per cent year-on-year increase from 19,566 in February 2014.

Third place is occupied by Vietnam with 13,921 workers and an increase of 10.1 per cent from 12,647 in the second month of 2014. As for Hong Kong people working in Macau, the number went up by 39.3 per cent from 7,098 to 9,887 and was mostly attributable to the construction sector.

In fact, construction is the main driver of the increase in terms of non-resident workers. In this sector alone the number jumped 59.6 per cent year-on-year from 29,087 to 46,418 non-local workers. The steep increase can be explained by the new wave of casino openings expected to take place until 2017 and also by the Public Works such as the Light Rapid Transport system.

Hotels, restaurants and similar enterprises are the second largest importer of workers at 43,377 nonlocals: in February 2014, the number was 39,916. Since July, this sector has been overtaken by construction as the main importer of workers, with the gap widening.

The last place in the top three by industry in terms of non-resident workers is occupied by domestic workers. This sector alone employs 22,189 workers while in the second month of last year it employed 20,494 non-local persons.

J.S.F.

C Y Foundation likely to miss gaming machine target

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ong Kong-listed C Y Foundation Ltd. says it is not able to achieve its target to expand the number of gaming machines in operation to 1,000 by the end of this financial year, which ends on March 31.

C Y Foundation attributed this to the headwinds currently evident in Macau’s gaming industry, namely the combined factors of the non-smoking policy in casinos, Mainland China’s visa restrictions imposed on its visitors, in addition to the anti-graft drive.

C Y Foundation, which is engaged in the management of electronic gaming machines in local casinos, said it has extended its plan to achieve the goal of 1,000 gaming machines in operation by March 31, 2016.

The company has also extended

its goal to achieve 3,000 gaming machines by the financial year ending March 31, 2018 rather than a year earlier as stated in a previous company statement.

The company noted likely missing the target in its profit warning announcement filed with the Hong Kong Stock Exchange on Tuesday, in which it announced that it was likely to register a greater loss for the financial year ending March 31, 2015 when compared to the previous financial year.

C Y Foundation reported a net loss of HK$11.92 million for the six months to September 30 last year, as compared to the profit of HK$7.82 million made in the prior-year period, the company said in its interim report.

SL.

MGM unveils its US$800 million Massachusetts casino

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GM Resorts broke ground on Tuesday on its US$800 million casino in Springfield, set to become Massachusetts’ first resort casino to compete with Connecticut and Boston, who are also opening gaming properties.

“We’re number one in Vegas, and we’ll be number one in New England, regardless of what Connecticut does,” CEO Jim Murren said during the ceremony.

MGM’s casino is being developed on 14.5 acres in an area still recovering from a devastating 2011 tornado. The property will have 3,000 slot machines, 75 gaming tables and a 250-room hotel. Not to

mention shops, restaurants, meeting and office space and residential apartments.

The company has described the resort as a unique, urban-centred casino that will restore or reuse all or parts of a number of historic buildings, including a castle-like armoury. MGM agreed to pay Springfield at least US$17.6 million annually after the casino opens its doors.

Facing competition from other casino operators and nearby areas such as Boston, Murren said “I think the people of Massachusetts, at least, will vastly prefer to go to a brand-new luxury resort than a box of slots on the Connecticut border.”

Wing Hing pays MOP500,000 for extension of lottery monopoly

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he Chinese lottery company Sociedade de Lotarias Wing Hing is going to pay MOP500,000 (US$62,500) in order to explore the rights for the sale of the lotteries until the end of the current year, it was announced yesterday in Macau Government’s Official Gazette.

The amount that the company will have to pay per year has remained the same since 2010, when contracts started to be renewed on an annual basis, following a 5-year concession that ran from 2005 to 2010.

In 2014, Sociedade de Lotarias Wing Hing managed to increase revenues by MOP1 million in relation

to 2013 - to MOP6 million from MOP5 million - which accounts for an increase of 20 per cent, according to the data of Gaming Inspection and Co-ordination Bureau (DICJ).

Sociedade de Lotarias Wing Hing has had the monopoly to explore the sale of Chinese lotteries in the Special Administrative Region of Macau since 1990.

The first contract, which expired in December 2001, was signed before the handover between the Portuguese Administration and the General Manager of the company at that time, Stanley Ho Hung Sun. J.S.F.

Business Daily | 5

March 26, 2015

Macau

Fitch: Macau gaming industry to shrink 22 pct this year The American rating agency has revised its forecast from negative 4 per cent to negative 22 per cent and expects local competition in the Asia Pacific region to grow stronger João Santos Filipe

jsfilipe@macaubusinessdaily.com

Local competition grows stronger

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ating agency Fitch has revised its forecast for the Macau gaming industry down from negative 4 per cent to negative 22 per cent. The decision was announced yesterday by the American-based rating agency and includes an estimation of a 40 per cent decline year-on-year in the period 1-24 March.

The anti-corruption crackdown in Mainland China, tighter credit availability and smoking and visa restrictions are the main reasons cited to explain the negative revision for the industry. However, the allocation of gaming tables to the new casinos opening is also stressed as a cause for concern of the operators.

‘We believe there is some risk that the visa and smoking rules will become more restrictive and that new casino openings may not gain the full allocation of table games’, it is explained. ‘Our forecast incorporates more muted benefit from Galaxy’s and Melco’s projects coming online

Macau Phase II opens May 27 and Studio City is set to open mid-2015’.

Nevertheless, Fitch still holds a positive view of the Macau gaming industry for the future, stressing the importance of the economic development of the Asia Pacific Region.

‘We estimate that GDP per table game is about US$2 billion across all APAC countries, or roughly US$300 million per table position assuming six positions per table.

And continued GDP expansion in the region and improving transportation infrastructure should support the gaming supply over the next several years’, the report reads.

this year. Melco expressed concerns in their fourth-quarter call that table allocations may not be as generous as the company hoped.’

The report also opens the door for delays in the works of Galaxy Macau

Phase II, which includes Broadway at Galaxy Macau, and of Studio City.

‘There is also potential for further opening delays as several concession holders expressed concerns about construction labour shortages. Galaxy

The Fitch report also mentions the possibility of some recovery for the VIP and premium mass segment. But on this, the competition from other locations is expected to grow stronger with benefits for the junket companies operating in these locations.

According to the rating agency, VIP volume increased 74 per cent in the second half of 2014 at Echo’s and Crown’s properties in Australia.

Echo also disclosed that its credit extensions increased 124 per cent at its Sydney property in the same quarter. In Cambodia, NagaWorld grew its VIP volume in the second half of 2014 by 47 per cent and the rating agency said that much of the growth came from China.

The report also assumes that from this year on Macau will also feel the effect of the VIP-focused expansion at the Solaire, in the Philippines, as well as from City of Dreams Manila, a project developed by Melco Crown.

6 | Business Daily

March 26, 2015

Macau Brands

Trends

The Perfect Diamond Raquel Dias newsdesk@macaubusinessdaily.com

“Bitcoin has potential in Macau and its casinos” Bobby Lee, the founder of China’s biggest Bitcoin exchange, BTC China, says the virtual currency has space to grow in Macau due to its casinos and millions of visitors every year, especially now that Bitcoin is booming in China Luís Gonçalves

Luis.goncalves@macaubusinessdaily.com

D

iamonds are many things. They are eternal, strong, elegant and, at least for some, a girl’s best friend.

What most diamonds are not is perfect. The three ‘C’s are the rule of thumb most of us know to look out for when purchasing: Colour, Cut, Carat (not to be confused with the unity of gold purity, Karat). For most mortals anything above one karat is already a decent sized gem; depending on the cut a diamond may appear larger or smaller and believe it when I say that size does matter.

It is thus extraordinary that Sotheby’s has unveiled a diamond unlike any offered before: an extraordinary 100-carat emerald-cut perfect diamond. The stone joins an elite group of just five other comparable quality diamonds with more than 100 carats that have ever been sold at auction worldwide.

What makes this one different, however, is its cut. No diamond of this size has ever been seen with the emerald-cut.

Since the 1990’s the price per carat has been increasing.

What started as US$125,000 is now valued at US$260,000.

Sotheby’s perfect diamond has a low estimate of $19 million representing another increase, US$190,000 per carat.

The rough gem initially weighed over 200 carats and was mined by De Beers in South Africa. The current owner spent over one year studying, cutting and polishing the rough diamond in order to deliver the stone. The diamond will be exhibited in Dubai, Los Angeles, Hong Kong, London and Doha, before returning to New York for exhibition beginning April 17.

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hen you have the world’s gaming mecca with 30 million tourists per year visiting from all over the world but a local currency that’s only accepted here, what do you need? A unified and global currency. That’s what could make Macau and the virtual crypto currency Bitcoin made for each other, says Bobby Lee, the founder of China’s biggest Bitcoin exchange, BTC China. According to him, Bitcoin has the potential to grow in Macau, especially in the gaming industry. In China, Bitcoin business is booming, with Mainlanders some of the world’s hardcore fans of the virtual currency.

And Chinese are, by far, the largest group of visitors (and gamblers) to Macau, with a share of 70 per cent, official data says.

“Bitcoin can enable travellers to Macau, especially for the gaming industry, move their funds no matter the country they’re from”, Mr. Lee told Business Daily. “Macau is an international destination for gaming in Asia but the local currency is not widely recognised outside the city.

The Hong Kong dollar has much greater influence than the pataca”.

Almost famous On the sidelines of a France Macau Business Association (FMBA) event where Mr. Lee was the keynote speaker in a session titled: ‘Will Bitcoin revolutionize the world?’ Mr. Lee said that Chinese gamblers can come to Macau and bring the Bitcoins, having exchanged them in China, through companies like BTC China.

The founder of the largest Bitcoin exchange company in China said it didn’t have any figures on how many

bitcoins are used these days to gamble in Macau casinos. “We sell Bitcoins to people but we don’t know how they use them. If to gamble in Macau, or to buy computers”.

But one thing is certain. The virtual currency is expanding fast in China. “Bitcoin is very popular in China and it’s growing”, emphasises Mr. Lee. “Chinese are really into new things, and people are excited about the digital revolution. Bitcoin, because of its volatility, provides a way for people to make a profit and speculate”. Today, there are around a million Bitcoin users around the world, says Lee, with most of them Chinese.

But Mr. Lee admits that Bitcoin, created only six years ago, still has a long way to go from a current niche currency to global acceptance. First, because it’s complicated to understand by the man in the street, and second, due to the several scams that have made headlines in the last few months.

“Bitcoin is a niche market today because people don’t understand it.

Until more people understand it, it’s not going to be a wider option”, he concedes.

Regarding the scams, the founder of BTC China says the problem is not entirely in the Bitcoin itself. “The scams are basically business scams,

“In five to ten years, Bitcoin could become more mainstream”

people trying to steal other people’s assets, like in the real estate scams, stock market scams. If a scammer convinces you to buy property in Hainan Island and the market goes bust who’s to blame? The scam. Not Hainan or the property”, Mr. Lee says.

Easy target But he adds that Bitcoin is an easy target for scams because the currency is pretty much like cash because “when you have it, you can spend it . . . If a thief tries to steal your wallet the first thing he’ll do is to take the cash, not the credit cards because the latter can be stopped and cancelled”. Also, the complex nature of Bitcoin invites reports on scams to focus on Bitcoin as the problem and not on the scam itself, he maintains.

Bobby Lee says BTC China is trying to make Bitcoin easier for the public and that new things need time.

“Think about email. It started to be used in the late nineties but it was invented ten years before. The early adopters of email were the hardcore computer scientists. It took ten years for everyone to start using it. The people who use Bitcoins today are the real hardcore fans. “In five to ten years, Bitcoin could become more mainstream”, Lee says.

Bitcoin is a consensus network that enables a new payment system via completely digital money. Developed in 2009, it is currency created for the connected world and its open-source, decentralised and not controlled by governments or central banks.

“Payment – like Bitcoin – is the last frontier of the digital revolution after music, video or photography”, the BTC China founder said.

Business Daily | 7

March 26, 2015

Gaming

Elaine Wynn didn’t disclose nephew’s land bid, company says Elaine Wynn’s nephew, Andrew Pascal, a former president of the company’s Las Vegas casino operations, joined billionaire James Packer in the $280 million purchase of the former New Frontier casino site, across from the Wynn properties in Las Vegas, Bloomberg News reported in August.

Elaine Wynn is listed as the company’s second-largest individual shareholder, with a 9.4 per cent stake, behind her ex- husband Steve, the founder and chief executive officer, who has 9.9 per cent, according to data compiled by Bloomberg.

Voting rights

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ynn Resorts Ltd., battling Elaine Wynn’s proxy drive to keep her board seat, said she sold stock during a prohibited period and failed to disclose a relative’s bid for land the company was pursuing.

Wynn’s foundation sold US$10 million of stock during a “blackout” period before the casino operator reported quarterly results, a time when directors are barred from such

sales, the company said in a filing Tuesday. Wynn said the rule didn’t apply to her organization, according to the filing.

The 72-year-old philanthropist also didn’t disclose that her nephew was trying to buy land in Las Vegas the company wanted or recuse herself from discussions about the property, according to the filing, which includes a presentation the company is making to investors.

Elaine Wynn is also pressing her case with stockholders.

“The nominating and corporate governance committee believes that Ms. Wynn has placed her individual interests ahead of her director duties,” the Las Vegas-based company said in the filing.

Luke Barrett, a spokesman for Elaine Wynn at the Abernathy MacGregor Group in New York, declined to comment.

Wynn Resorts said in February it won’t renominate Elaine Wynn to the board at its April 24 annual meeting, citing a legal battle with her ex-husband. Elaine Wynn is trying to reverse an earlier agreement giving her ex-husband the right to control her stake in the company.

She sold 69,257 shares on Jan. 26 for about US$9.54 million, according to a filing. The company reported earnings that missed analysts’ expectations after market closed on Feb. 3 and the shares fell 6.2 per cent the next day.

The company said Elaine Wynn sought to increase the number of shares she is allowed to sell under her agreement with her ex-husband, while the company was negotiating Steve Wynn’s compensation. She has also tried to obtain documents from the independent directors about their decision not to renominate her in connection with her legal fight with her ex-husband.

The casino operator also said in the filing it would name at least one woman or minority group member to the board by the end of the year.

Bloomberg

Atlantic City manager may delay debt payment to close gap

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overnor Chris Christie’s emergency manager for Atlantic City, New Jersey’s struggling casino resort, is considering job cuts and debt-service deferrals as part of a plan to close a US$101.1 million budget deficit this year.

The fiscal crisis is “actually a lot more severe than what we thought when we started 60 days ago,” Emergency Manager Kevin Lavin said on a conference call Tuesday, after he released an initial report on the situation. Still, bankruptcy “is not something that we are contemplating,” he said.

Christie, a Republican, appointed the manager in January to oversee Atlantic City’s finances after four casinos closed last year because of competition from nearby states. The governor’s move led Moody’s Investors Service and Standard & Poor’s to lower its grade on Atlantic City debt. S&P, which cut the rating to junk, cited concerns that the

managers are “mandated to consider debt restructuring, which could involve a loss to bondholders.”

The management team includes Kevyn Orr, who guided Detroit through its record $18 billion municipal bankruptcy in part by asking bondholders to accept less than they were owed.

Recent property-tax appeals by casinos have resulted in refunds and an “unsustainable” debt load, according to the report released Tuesday.

Stable taxes The city’s debt has more than doubled over the past five years to US$271 million, including a state loan of US$40 million. Debt bills will total US$34.9 million this year.

Property taxes, which pay for 86 per cent of the budget, won’t be increased to deal with the shortfall, Lavin said.

The city from 2010 to 2013 relied on casinos for 70

per cent of its annual property taxes. The eight remaining resorts now represent 49 per cent of the tax base.

Casino revenue dropped to US$2.6 billion last year from as much as US$5.2 billion in 2006. Amid the slide, Christie agreed to provide US$261 million in tax breaks to Revel, the newest resort, in an effort to spark a city-wide rebirth.

The US$2.6 billion casino closed in September, after twice filing for bankruptcy.

The report identified ways the city could save US$130 million, with renegotiating US$42.6 million of employeebenefit payments one such step. “Immediate operational cuts” of as much as US$10 million would lead to job losses among the 1,150member workforce.

Senate President Steve Sweeney, the highest-ranking Democrat in the legislature, said the report was “starkly lacking in innovative ideas.”

“I want more specific ideas in the weeks ahead, and details on how exactly any layoffs would impact public safety and vital services,” Sweeney, from West Deptford, said in an e- mailed statement.

Bloomberg

8 | Business Daily

March 26, 2015

Greater China Internet banking transactions surge The number of personal Internet banking users in China hit 909 million at the end of 2014, up 150 million compared to a year before, the latest data showed.

The increase in users led to a surge of Internet transactions totalling 60.85 billion in 2014, up 22 percent year on year, according to data released yesterday by the China Banking Association.

With more people using the Internet and ATMs, 67.88 percent of transactions were conducted off the counter, up 4.65 percentage points from a year ago, the data showed.

National crude oil storage almost full Oil imports will likely stay flat or rise only slightly this year

KEY POINTS Crude imports likely to be flat to slightly higher in 2014 -exec Storage being added, but not ready for use -exec

Huawei tops patents ranking Huawei Technology Co., the Chinese provider of telecommunications and networking technology, was the leading applicant for international patents under the Patent Cooperation Treaty, according to a newly-released report from the World Intellectual Property Organization. According to WIPO, a United Nations agency, 215,000 applications under the treaty were filed in 2014, a 4.5 percent increase over the previous year. Treaty applications enable applicants to seek patent protection in 148 countries with one single application.

Huawei filed 3,442 treaty applications in 2014. China’s ZTE Corp. came in third, with 2,179 applications.

Free trade zones officially approved Government approved on Tuesday the formation of three new free trade zones (FTZ) in the city of Tianjin, southeastern Fujian province, and southern Guangdong province, the official Xinhua news agency reported. The three new free trade zones along China’s eastern coast will copy the model of the Shanghai FTZ established in 2013 as a testing ground for looser rules governing currency conversions and foreign direct investment. The Shanghai FTZ has been considered a success by the country’s leadership and will be expanded as well, according to state-owned China Central Television.

Scaling back coal industry The National Energy Administration (NEA) vowed yesterday to continue scaling back the coal industry in a drive to encourage use of renewable energy.

China will continue to eliminate excess production capacity in the industry and curb its blind expansion, as the country targets a switch to greener energy sources, according to a circular issued by the NEA. It vowed to “spare no effort” to reduce air pollution and improve environmental protection through efficient use of coal and cutting emissions.

Coal consumption accounts for about 66 percent of China’s primary energy consumption.

Higher investment in Holland China’s investments in the Netherlands are expected to increase further in the coming years as Chinese enterprises established in the country add new corporate functions, while new industry sectors attract additional projects, the Netherlands Foreign Investment Agency’s (NFIA) Commissioner Jeroen Nijland told Xinhua in an interview.

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hina’s commercial and strategic oil storage is almost full, a Sinopec trading executive said at an industry forum yesterday, leaving little room for the world’s No.2 oil consumer to increase its crude imports this year.

China’s purchases to fill its strategic petroleum reserves (SPR) was one of the main drivers of Asian demand since August of last year, with the nation’s importers buying cheap crude to fill oil tanks despite slowing economic growth.

But with storage capacities approaching their limits, China’s oil imports will likely stay flat or rise only slightly this year, said the

executive, who requested not to be named despite speaking to reporters at an industry event.

China’s crude oil imports grew 4.5 percent in the first two months of the year compared to the same period a year ago, according to official customs data.

But daily crude imports in February of about 6.7 million barrels per day (bpd) were down more than 6 percent from a record 7.15 million bpd in December, the data showed.

While some new commercial storage is being added, it is mostly privately funded and not available for use yet, said the trading executive.

Court accepts first lawsuit from environmental organization The targeted company was placed on a blacklist by the Ministry of Environmental Protection in October last year

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commonwealth organization has demanded an industrial polluter in Shandong province receive hefty penalties when filing the country’s first environmental lawsuit under a new law that came into effect on January 1.

Yesterday, the Intermediate People’s Court in Dezhou City, east China’s Shandong Province, confirmed it accepted the lawsuit lodged by the All-China Environment Federation. In it, the federation demands 30 million yuan (US$4.8 million) compensation for damages from air pollution discharged by the Zhenhua Co. Ltd., an affiliated branch of Dezhou Jinghua Group.

The case arose after Zhenhua Co., which produces glass, neglected warnings by environmental watchdogs that they were emitting excess sulphur and dust.

The company was placed on a blacklist by the Ministry of Environmental Protection in October last year after failing to treat the emission.

Experts from the federation received several strong complaints from residents living near the company’s plant, which regularly discharges foulsmelling yellow smoke.

“Neither fines by the local environmental watchdog nor the blacklist warning by the ministry pushed the polluter to take effective measures in the pollution control. The

litigation is a new attempt to check headstrong violators like Zhenhua,” said Ma Yong, a litigation director with the federation.

It is the first case after amendments to the environment protection law were enacted by China’s national legislature in April 2014. The new law makes it much easier for environmental NGOs to file lawsuits against polluters for public good.

The new environment law must be a powerful, effective tool to control pollution instead of being “as soft as cotton candy”, Premier Li Keqiang said while speaking at a press conference following the annual national legislative session which concluded last week.

Fu Qiang, a lawyer with the Shandong Pengfei Law Firm, said big industrial polluters are often protected by the local government, which makes pollution control difficult. Nongovernmental organizations will play a bigger role in representing public interests for environmental cases in the future.

The federation’s involvement has also triggered more government efforts.

The Dezhou municipal government urged Zhengzhou Co. to immediately overhaul emission treatment facilities to meet pollution control requirements before the end of the month. Otherwise, it would be ordered to suspend production on April 1.

Xinhua

Storage companies in China are set to boost commercial oil tank capacity by more than a tenth this year, as oil prices remain at almost six-year lows.

Additional tanks for holding SPR supplies are not expected to be available until later this year.

The trading executive also said that China’s diesel demand is likely to decline in the first quarter.

“There are uncertainties in economic growth,” he said. “Diesel demand is lacklustre.”

Diesel output from Sinopec Corp was down 4 percent in 2014, as China’s slowing economy hit demand in the transportation and construction sectors.

Reuters

Business Daily | 9

March 26, 2015

Greater China

Telefonica sells O2 to Hutchison Whampoa Hutchison already owns Britain’s Three mobile phone network

Will Hutchinson merge Three UK and O2?

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pain’s Telefonica said it would sell British telecom giant O2 to Hong Kong group Hutchison Whampoa for £10.25 billion in a deal that could create Britain’s biggest mobile phone firm.

“A definitive agreement has been reached after the finalisation of the process of due diligence on O2 UK,” the Spanish firm said in a statement, adding the deal was worth the equivalent of 14 billion euros (US$15.2 billion).

Subject to regulatory approval, Hutchison Whampoa will make an initial payment of £9.250 billion and a further £1.0 billion later once O2 reaches an agreed cash flow level, it said.

It hopes to wrap up the deal by June 30, 2016 -- a deadline that may be pushed back to September 30, 2016 in certain circumstances.

It is the latest purchase in a spending spree by Hutchison’s owner, Hong

Kong investment tycoon Li Ka-shing, one of Asia’s richest men.

Li, 86, whose fortune is worth US$30.6 billion according to Bloomberg’s Billionaires Index, announced a sweeping re-arrangement of his business empire in January.

Hutchison already owns Britain’s Three mobile phone network -- if he merged O2 with that company, he would reduce to three the number of players in Britain’s fast-consolidating wireless telecoms sector.

A statement from Hutchison said the agreement to buy O2 “will create the number one mobile operator in the UK”.

Hutchison’s group managing director Canning Fok described the deal as a “major milestone”.

“The combination of Three UK and O2 UK will create a business with unmatched scale and strength that will allow us to better compete against

The combination of Three UK and O2 UK will create a business with unmatched scale and strength that will allow us to better compete against other operators in the marketplace Canning Fok, Hutchison Whampoa, managing director

other operators in the marketplace,” Fok said.

But some analysts have warned that a merger could lead to price hikes, owing to less competition.

Hutchison could “drive a lot of synergies” with the takeover, James Britton, a London-based analyst at Nomura Holdings, was quoted as saying by Bloomberg News. “Whether that really equips them to be fully competitive in a converged UK market remains to be seen.”

It was the latest in a series of shake-ups in Britain’s telecom sector.

British telecoms and TV firm BT had said in November that it was in preliminary talks to buy back O2 -- its former domestic mobile phone division -- from Telefonica.

Instead BT ended up buying another British mobile phone operator, EE, for £12.5 billion.

British telecom giant Vodafone took over Spanish cable firm Ono on July 24 for 7.2 billion euros.

Telefonica, with operations across Europe and Latin America, is meanwhile looking to turn around its fortunes.

It reported a 35-percent plunge in net profits to 3.0 billion euros in 2014. Its debt stood at 45 billion euros at the end of 2014.

It said last month it plans to step up its value-added activities such as fibre optic cable, pay TV and smartphones, and to focus on its main markets in Spain, Germany and Brazil.

The Spanish group wants to pull out of the British market where it has been present since 2005, when it bought O2 for 26 billion euros.

Telefonica has already sold its operations in the Czech Republic and Ireland.

Hutchison’s revamp is expected to pave the way for Li’s retirement and follows speculation of a handover to his son Victor.

AFP

10 | Business Daily

March 26, 2015

Greater China

Cheap eurozone takeaway fuels Chinese appetites China’s overseas direct investment pushed sharply higher in February Kelly Olsen

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he inexorable decline of the single currency offers ambitious Chinese firms a bargain buffet of eurozone business, analysts say, with this weekend’s multibillion deal for Italian tyre maker Pirelli only the latest course in an acquisition binge.

Less than a year ago the euro was worth nearly US$1.40 on international markets. Earlier this month it stood at less than US$1.05, down by a quarter as the European Central Bank embarks on a massive stimulus programme while the US Federal Reserve is widely expected to start raising interest rates.

By the standards of first-world forex markets it ranks as a collapse.

It has recorded a similar performance against China’s yuan currency, falling from almost 8.7 yuan in May to bottom at less than 6.6 yuan. The yuan trades in a tight range against the dollar.

As the unit weakens it makes eurozone acquisitions cheaper for outside buyers and its biggest headline impact may come in terms of Chinese overseas investment, which surged past US$100 billion for the first time last year.

“For Chinese going into Europe it can’t get better than this,” said Joerg Wuttke, president of the European Union Chamber of Commerce in China (EUCCC).

“Chinese companies are eager to go outside China as its own domestic economy is slowing down,” he told AFP, adding that profit margins in the rest of the world are higher than in China, according to EUCCC member surveys. “So I can only expect a major push from Chinese companies to buy into the European company landscape.”

Chinese companies are eager to go outside China as its own domestic economy is slowing down Joerg Wuttke, president of the European Union Chamber of Commerce in China

The latest deal came with stateowned chemical giant ChemChina agreeing to buy out the largest shareholder in Pirelli, valuing the purveyor of Formula One accessories and racy calendars at just over seven billion euros -- now about 48 billion yuan, or 13 billion yuan less than in May.

‘Itching to invest’ The euro has flirted with parity against the dollar in recent weeks -for the first time since 2002 -- and while the euro rose to US$1.0964 on Tuesday it remained within striking distance of more-than-dozen-year lows.

China’s overseas direct investment pushed sharply higher in February, the commerce ministry said, driven by oil giant China National Petroleum Corp putting nearly US$3 billion into a Dutch transaction.

“The continued slumps in the euro’s value against the dollar have led the price of eurozone assets to fall, creating an opportunity for Chinese companies to invest and carry out mergers and acquisitions there,” said commerce ministry spokesman Shen Danyang.

Beijing has accrued the world’s biggest foreign exchange reserves and has been running record monthly trade surpluses, with the state-run China Daily newspaper saying in an editorial the country “is itching to invest overseas”.

Private companies are also taking a seat at the table, with billionaire Wang Jianlin buying 20 percent of Spanish league champions Atletico de Madrid in January, the first mainland Chinese investment in a top European football club.

Conglomerate Fosun declared victory in February in its long takeover battle for French holiday resorts group Club Med, having repeatedly raised its offer to 939 million euros.

Klaus E. Meyer, a professor at the China Europe International Business School in Shanghai, said Chinese investing abroad generally take a long-term view and are driven by acquiring technology or brands they can exploit domestically.

“The fact that assets in Europe are now cheaper because of the weaker euro means that this sort of assetseeking foreign investment is likely to increase,” he said.

The Pirelli deal was met with dismay but resignation in Italy, and Derek Scissors of the Washington-

based American Enterprise Institute said that given its economic travails, the eurozone will not look askance on inflows from China.

“Most Chinese companies are now sophisticated enough to back off of outright acquisitions when there is political sensitivity, buying smaller stakes in high-profile companies,” he added.

Chinese firms may also already be taking advantage of the weaker euro to raise cheaper capital overseas.

Four China-based non-financial companies issued the equivalent of US$2.8 billion in euro-dominated bonds in January and February, according to Dealogic data, more than the US$1.9 billion raised in the whole of 2014.

Trade imbalance Nonetheless the consequences of the euro’s decline are not all one-way.

The 28-member EU is China’s biggest trade partner while China is the EU’s second-largest, and China ran a surplus of US$126.63 billion last year with the full group, nine of whose members do not use the single currency.

But the euro’s decline makes eurozone goods cheaper elsewhere and Chinese products comparatively dearer.

“When it comes to trade certainly European exporters are going to be very happy as their products are going to be more competitive,” Wuttke said, while Chinese exporters will face tougher times.

“And so I expect actually that this trade imbalance that we have will narrow significantly as we go forward,” he said.

AFP

Business Daily | 11

March 26, 2015

Asia

Japanese investors’ buying spree puts yen under pressure Giant pension funds have led the chase for overseas investments Noriyuki Hirata and Shinichi Saoshiro

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urchases of foreign stocks and bonds by Japan’s giant pension funds and other big investors in 2015 could be their highest for at least a decade, if they keep pace with the US$42 billion splurged during the first two months.

At that rate their annual net sales of yen would be over 30 trillion, the most since the government started keeping records a decade ago, and almost as much as the previous five years combined.

That will add to pressure on the yen, which earlier this month struck 122 per dollar - its lowest level since July 2007.

The outflows would wash away support that the yen could expect from a trade balance which, helped by cheap world oil prices and some improvement in Japan’s exports, could return to surplus after a record US$106 billion deficit last year.

Japan’s giant pension funds have led the chase for overseas investments, diversifying their portfolios to find better returns than the paltry yields offered by Japanese government bonds.

The prospect of U.S. interest rates rising later this year, while the Bank of Japan remains deeply committed to quantitative easing, will help sustain demand for overseas investments even as pension funds begin to reach their

asset allocation limits.

“Even if foreign asset buying by public pension funds run their course, it won’t lead to immediate yen strength. Foreign investment will be sought as long as U.S. rates are rising,” said Yunosuke Ikeda, chief forex strategist at Nomura Securities in Tokyo. “The private sector may fill the gap left by the public funds in 2016.”

The shift toward overseas investments is a consequence of the reflationary polices adopted by Prime Minister Shinzo Abe more than three years ago.

The Bank of Japan’s money printing, bond-buying strategy - aimed at lifting the economy out of decadeand-a-half of deflation - has reduced JGB yields to record lows, with yields for some

tenors sinking into negative territory.

While the yen has suffered a 37 percent depreciation from its record high of 75 per dollar posted in October 2011.

Following the leader Faced with that seachange, Japan’s Government Pension Investment Fund (GPIF), the world’s largest pension fund with a portfolio worth 130 trillion yen (US$1.08 trillion), has been at the forefront of shift away from domestic investments.

GPIF announced in October that it would increase foreign bond holdings from 11 percent to 15 percent and increase foreign stock investment from 12 percent to 25 percent, while slashing Japanese government bond

Even if foreign asset buying by public pension funds run their course, it won’t lead to immediate yen strength.

Foreign investment will be sought as long as U.S. rates are rising Yunosuke Ikeda, chief forex strategist, Nomura Securities

holdings from 60 percent to 35 percent.

Three other semi-public pension funds, whose combined investment total some 30 trillion yen, have been following the GPIF’s moves.

“The yen is likely to remain weak as flows from the ‘three pension funds’ will keep up the pressure once buying from GPIF begins petering out,” said Daisaku Ueno, chief currency strategist at Mitsubishi UFJ Securities in Tokyo.

“Foreign asset buying from private sector investors will further shore up such flows if they kick in.”

The president of stateowned Japan Post said last month that its banking unit would soon review its bond-centric 205 trillion yen (US$1.7 trillion) portfolio, pointing to a major change in investment strategy.

Nomura’s Ikeda reckoned the four pension funds alone have spent about a trillion yen a month on foreign stocks and bonds during the past eight months and reckoned they could invest another 12 trillion yen over the next year.

Osamu Takashima, head of FX strategy at Citigroup Securities in Tokyo, said GPIF, which is willing to invest more in risky assets, could buy an extra 8 trillion yen of foreign equities and another 2 trillion yen of foreign bonds.

Wall Street will benefit if GPIF stays true to character.

“The U.S. market accounts for bulk of the (GPIF’s) equity investment benchmark, and the euro zone for only a small part,” Takashima said.

Reuters

S. Korea’s economy grows 3.3 percent in 2014 Private consumption rose 1.8 percent in 2014, down from a 1.9 percent growth in 2013

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outh Korea’s economy grew 3.3 percent in 2014 after rising 2.9 percent in the prior year, central bank data showed yesterday.

Real gross domestic product (GDP) increased 3.3 percent in 2014 as private consumption and exports maintained a growing trend, according to the Bank of Korea (BOK).

The 2014 growth was faster than the previous year, but the quarterly figure slowed down, boosting worries about the sluggish recovery.

On a quarterly basis, the real GDP growth kept falling from 1.1 percent in the first quarter of 2014 to 0.8 percent in the third quarter and 0.3 percent in the fourth quarter.

Nominal GDP was 1,485.1 trillion won (US$1.35 trillion) in 2014, up 3.9 percent from a year earlier.

Private consumption rose 1.8 percent in 2014, down from a 1.9 percent growth in 2013. Increase in exports slid from 4.3 percent in 2013 to 2.8 percent in 2014, with the figure for construction investment declining from 5.5 percent to 1 percent.

US$1.35 trillion nominal GDP

Real gross national income (GNI), which measures all income earned

by South Koreans both at home and abroad, was US$28,180 per capita in 2014, up 7.6 percent from a year earlier.

Personal gross disposable income (PGDI), which gauges purchasing power of households, was US$15,786 per capita in 2014, up from US$14,704 in 2013.

GDP deflator, the broadest measure of inflation for all goods and services, posted 0.6 percent in 2014, down from 0.9 percent in the previous year.

Xinhua

12 | Business Daily

March 26, 2015

Asia Vietnam to see FDI up Some US$3.05 billion of foreign direct investment (FDI) is forecast to be disbursed in Vietnam in the first quarter (Q1) of 2015, up 7 percent year-on-year. The information was released in a monthly report on FDI by Vietnam’s Ministry of Planning and Investment (MPI)’s Foreign Investment Agency (FIA), reported local Bao Dau Tu (Vietnam Investment Review), an online newspaper under MPI yesterday. Accordingly, as of March 20, 2015, a total of 267 FDI projects across Vietnam are newly licensed, with a total registration of US$1.21 billion, down 40.6 percent year-on-year in value.

Qatar, India to enhance business ties The Emir of Qatar, Sheikh Tamim Bin Hamad Al Thani, is in India on a two-day visit to enhance business ties with the country. The Emir will hold talks with Indian Prime Minister Narendra Modi and External Affairs Minister Sushma Swaraj, sources said yesterday. He is accompanied by a delegation of ministers and industry leaders. The Indian External Affairs Ministry has said that both countries would look to increase commercial and economic exchanges.

Aussie watchdog probes mining magnate’s call Australia’s competition watchdog launched an investigation yesterday into comments by mining company executive Andrew Forrest calling for miners to cap production and push up iron ore prices. Fortescue Metals Group (FMG) Chairman Forrest told a business dinner in Shanghai on Tuesday that his company along with BHP, and Rio Tinto “should cap our production now and we’ll find the iron ore price will go straight back up to US$70, US$80, US$90 ...” Australian Competition and Consumer Commission (ACCC) Chairman Rod Sims said Forrest’s proposal could breach competition laws.

Australia to join AIIB depending on governance The World Bank has also said it is discussing cooperation with the AIIB

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ustralia is “well and truly” disposed to join the Chinaled Asian Infrastructure Investment Bank (AIIB), Prime Minister Tony Abbott (pictured) said yesterday, but wants to know how much power Beijing would hold in the institution before a formal decision.

Fairfax Media citing government sources, reported the federal cabinet has approved Australia signing a “memorandum of understanding” on joining the AIIB. Australia, South Korea and Japan are the notable regional absentees from the bank, which the United States had warned against. Despite Washington’s misgivings, U.S. allies Britain, France, Germany and Italy announced this month they would join the bank, leading the Obama administration to reassess its stance.

China’s Xinhua news agency has said Beijing will not hold any power of veto in the bank.

The AIIB has been seen as a significant and possibly historic setback to U.S. efforts to extend its influence in the Asia Pacific region to balance China’s growing financial clout and assertiveness.

Although Australia is a vital part of Washington’s strategic “pivot” toward Asia, it is close to joining as well.

“We are certainly well and truly disposed to joining something which is in fact a genuinely multilateral i n s ti tu ti o n wi th tr a n s p a r e n t

governance, clear accountability and with major decisions made by the board,” Abbott told reporters.

“That is really the fundamental thing for us, would major decisions be made by the board and is it going to be a multilateral institution rather than one that is controlled by any one

Indonesia’s big banks hang hopes on infrastructure projects

President Joko “Jokowi” Widodo has identified improving Indonesia GDP growth at 5.0-5.1 pct Indonesia’s dilapidated infrastructure as a priority First quarter annual GDP growth is seen at 5.0 to 5.1 percent, Bank Indonesia central bank executive director for economic and monetary policy Juda Agung said yesterday. The country’s current account deficit is expected to be between 1.8 to 2.0 percent of GDP in the first quarter, he told reporters yesterday. Inflation in March was expected to be between 0.25 to 0.3 percent on a month-on-month basis, and 6.4 percent year-on-year.

HCM City to host tourism festival The Ho Chi Minh (HCM) City Tourism Festival 2015, the 11th edition of its kind held annually in the city, will take place here from Thursday to Sunday. Themed “Impression of the World’s Heritage in Vietnam,” the four-day event is expected to attract travel firms from Cambodia, Laos, Myanmar, Malaysia, Singapore, Thailand and host Vietnam, according to organizers.

Eveline Danubrata and Patturaja Murugaboopathy

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ndonesia’s big, state-run banks are counting on government-led infrastructure projects to revive flagging loan growth as they reduce credit lines to the risky commodities sector and as local businesses delay expansion plans.

A more cautious approach to lending since last year cut overall loan growth to 11.5 percent in January, the smallest year-on-year gain in almost five years, the latest central bank data shows. The lending slowdown lowered 2014 profit growth to 4.5 percent, the weakest pace in nine years, according to a Thomson Reuters analysis of 15 banks including PT Bank Mandiri Tbk, PT Bank Central Asia Tbk and PT Bank Rakyat Indonesia Tbk. The government’s planned

infrastructure projects will help lift loan growth in the second half of 2015, analysts say. President Joko “Jokowi” Widodo has identified improving Indonesia’s dilapidated infrastructure as a priority. He is in Japan and China this week partly to drum up investor interest to help build badly needed ports, power plants and toll roads in Southeast Asia’s largest economy. But if the projects are delayed or cancelled, “our worry is that loan growth this year will not even reach 14 percent,” said Teguh Hartanto, a banking analyst at Jakarta-based Bahana Securities.

Growth in outstanding loans slowed to 11.6 percent last year, compared with a 12.3 percent increase in third-party funds including bank deposits. Loan

growth has slowed since the central bank in late 2013 ordered banks to curb lending, concerned about overheating. Loan growth had outpaced deposit growth by 7 percentage points a year over the previous 10 years, according to a Standard Chartered report in April 2014.

Indonesian banks have reduced their exposure to commodity firms as Chinese demand for resources from coal to palm oil has slowed. Many local businesses have also put their expansion plans on hold due to the slowing economy and the rupiah’s plunge against the dollar, cutting demand for corporate loans. Nonperforming loans are still relatively low at 2.23 percent in January.

Reuters

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Business Daily | 13

March 26, 2015

Asia We are certainly well and truly disposed to joining something which is in fact a genuinely multilateral institution with transparent governance, clear accountability and with major decisions made by the board Tony Abbott, Australia’s Prime Minister

country,” he said at a news conference in Canberra.

Japan, however, is cautious about joining while South Korea has said it is yet to decide.

Tokyo “does not need to sign in” on joining the bank unless China lays out clear rules on when and what conditions it will provide loans, Finance Minister Taro Aso said on Tuesday.

Japan is hesitant to join out of concern over China-led lending practices, Tokyo’s relations with Washington and the AIIB’s potential rivalry with the Asian Development

Bank (ADB), the Manila-based multilateral institution dominated

by Japan and the United States.

But ADB chief Takehiko Nakao said his institution could cooperate with the AIIB and co-finance projects if standards for loans were met.

“When it is formally established, co-financing would be a major way of complementing ... We’d like to proceed with co-financing” and other ways of cooperation, Nakao, a former Japanese vice finance minister for international affairs, told a news conference in Tokyo.

By custom, the ADB is headed by a former senior official from the Bank of Japan or the country’s finance ministry.

The World Bank has also said it is discussing cooperation with the AIIB. Abbott said he has discussed the matter with U.S. President Barack Obama and Japan’s Prime Minister Shinzo Abe and would continue talking to them.

Speaking to the Australia China Business Council, Treasurer Joe Hockey said it was important to secure the country’s best interest in a well governed bank that will work to promote greater infrastructure and growth in the region.

“If well designed, the AIIB could play a key role in helping to address the region’s acute infrastructure needs.

In order to do this we will need a strong and well governed AIIB,” he said.

“It is early days for the AIIB, but China has made strong progress on governance so far. The proposed governance arrangements will be modelled on international best practice.”

Reuters

Philippines shifts to cleaner fuel standards The Southeast Asian nation is already many years behind other countries in taking action to improve air quality

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he Philippines yesterday ordered oil companies, including Petron Corp and local units of Shell and Chevron, to sell only Euro IVcompliant fuels by July 1 in a drive to boost air quality in the Southeast Asian country.

While there have been improvements in the capital Manila, air quality in the city of 12 million people still remains below international standards, Environment and Natural Resources Secretary Ramon Paje said.

The directive to shift from Euro II fuel norm also covers car manufacturers who can only bring in vehicles equipped with Euro IV engines starting January 1, 2016, the minister said.

“We are imposing stricter emission standards for all vehicles to be used or introduced in the local market effective July this year,” he said at a news briefing.

The sulphur content of the Euro IV fuel is up to 50 parts per million (ppm), way below the 500 ppm limit for Euro II fuel standards that the Philippines adopted in 2008, Paje said.

“Low sulphur fuels will lead to reduced emissions of particulate matter that, along with other pollutants, can penetrate deeply into sensitive parts of the lungs and can worsen existing respiratory and heart diseases,” he said.

Paje said he had advised the oil companies to just export their remaining Euro II fuels before July 1.

The measure is a key step toward the country’s goal to meet international air quality standards by 2016, he said.

The Southeast Asian nation is already many years behind other countries in taking action to improve air quality. Paje said some countries in Europe, in fact, have shifted to higher fuel standards.

The so-called Big 3 in the Philippines -- Petron, Shell and Chevron -- and their smaller rivals are supportive of the policy shift, he said.

Some car manufacturers, however, are seeking more time to prepare for the transition to new engine standards.

“There is resistance up to now but we are not giving in,” Paje said.

Xinhua

ANZ Bank interested in Asian RBS’ assets Acquisitions from RBS would help bulk up ANZ’s presence in a region where it competes with large global banks Narayanan Somasundaram

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ustralia & New Zealand Banking Group Ltd. is interested in acquiring assets from Royal Bank of Scotland Group Plc as the U.K. lender cuts back its operations in the Asia-Pacific region.

“I’m interested in looking at their assets across the region,” Andrew Geczy, head of ANZ’s international and institutional banking business, said in an interview in Sydney yesterday.

“There’s opportunities that happen as many of the European and American banks retrace back home.”

Acquisitions from RBS would help bulk up ANZ’s presence in a region where it competes with large global banks such as Citigroup Inc. and HSBC Holdings Plc. Meanwhile, RBS Chief Executive Officer Ross McEwan is taking an axe to what was once one of the world’s biggest banks, accelerating cost cuts amid seven consecutive years of losses.

Melbourne-based ANZ is seeking to double the percentage of profit it gets from businesses outside Australia and New Zealand to as much as 30 percent by 2017, according to a bank

Melbourne-based ANZ is seeking to double the percentage of profit it gets from businesses outside Australia and New Zealand

strategy briefing in March 2011.

By contrast, RBS’s corporate and institutional bank will reduce its global footprint to 13 countries from 38 at the end of 2014 as the Edinburgh-based company tries to return to profit and exit government ownership.

RBS is seeking to sell or wind down its Asia corporate banking business under a plan code-named Project

Brown, a person familiar with the process said last month.

Project Brown Disposing of the Asian corporate business would leave RBS with about 200 staff in the region, down from 2,800 at the end of last year, the person said.

RBS would probably keep some operations offering dollar, euro and yen fixed-

income products, and some staff would stay to serve institutional clients, the person said.

Businesses with the best potential to be sold include corporate lending and credit operations such as debt capital markets, according to the person. Indian consumer banking and Australian and New Zealand dollar rates are among those more likely to be closed, the person said.

ANZ CEO Mike Smith bolstered his Asian expansion plan in 2009 by acquiring RBS businesses in Singapore, Taiwan, Indonesia, Hong Kong, the Philippines and Vietnam for US$550 million.

The acquisition gave the bank 54 branches with US$3.2 billion in loans and US$7.1 billion in deposits, ANZ said at the time.

Myanmar opportunity The lender operates in 29 countries across the AsiaPacific region, according to its website, and plans to start operations in Myanmar and Thailand to complete its footprint, Geczy said.

The opportunity in Myanmar is bigger than previously anticipated with some Asian companies looking to shift their manufacturing to the country, he said.

“By going to Myanmar, the Taiwanese, Korean manufacturers are now looking to a bank,” Geczy said. “There aren’t Taiwanese, Korean banks in Myanmar.

That’s resulted in us having a bigger opportunity than we initially thought.”

Bloomberg News

14 | Business Daily

March 26, 2015

International U.S. removes some sanctions on Cuba The Obama administration lifted sanctions on 59 entities blacklisted for doing business with Cuba. The Department of Treasury deleted six people, 37 businesses and 16 vessels from its Specially Designated Nationals list, with most of the companies based in Panama and two of them in the U.S. state of Florida. The businesses involved include tour operators and cruise lines. The move came after three rounds of talks between the United States and Cuba over restoring diplomatic relations since January. Leaders of the two countries agreed in December to normalize bilateral relations.

Brazil will not extend intervention Central bank announced it will not extend its currency intervention program past March 31 as a combination of political problems at home and fears of higher U.S. interest rates push the real near its lowest levels in a decade. The bank will, however, roll over all swaps expiring after May 1. The real has been one of the worst performing currencies this month losing 10 percent against the dollar. While all emerging market currencies have suffered from fears of higher U.S. interest rates, a number of domestic problems have further weighed on the real.

Airbnb to provide rooms for Rio Olympics Online home-rental marketplace Airbnb Inc has won a bid to provide rooms for the 2016 Summer Olympic Games in Rio de Janeiro, as the city scrambles to accommodate visiting fans and athletes, a source with direct knowledge of the situation told Reuters. The company, which has become one of Silicon Valley’s most successful start-ups in the five years since it was founded by a trio of graduates, beat off competition from two other accommodation providers Hotel Urbano and Alugue Temporada.

Kerry urges Congress to support free trade talks U.S. Secretary of State John Kerry urged Congress to grant the Barack Obama administration the Trade Promotion Authority (TPA) so as to finalize on-going free trade talks in a more efficient manner. In order to drive global growth and prosperity, the first thing for the United States is to finalize the free trade agreements and the bilateral investment treaties that the country is currently working on, Kerry said at the SelectUSA Investment Summit, a biennial event initiated by the Obama administration in 2011 to streamline investment promotion efforts.

3G Capital in talks to buy Kraft Private equity firm 3G Capital is in talks to acquire Kraft Foods Group, a source familiar with the matter told Reuters.

The Wall Street Journal first reported on the possible deal. 3G Capital and Kraft were not available for comment outside regular U.S. business hours. The Brazilian private equity firm had teamed up with Warren Buffett to buy ketchup maker H.J. Heinz Co for US$23.2 billion last year, its last major takeover. Based on Tuesday’s close at US$61.32, Kraft had a market capitalization of US$36.06 billion.

IMF ‘Plan B’ on reforms could slash US power A proposed reform was long-accepted by the White House, but blocked by Congress

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ashington’s block on crucial IMF reforms has pushed the crisis lender into discussions of other options, with one proposal potentially slashing US voting power nearly in half, AFP learned.

Talks on “Plan B” have emerged because patience has run out with the US Congress’ failure to ratify the 2010 reforms originally strongly supported by the White House.

The reforms would both realign the power of members on the IMF executive board, boosting emerging countries like China and India, and double the capital resources the bank uses to support countries in financial crisis.

Brazil’s executive director at the IMF, Paulo Nogueira Batista, has outlined a plan to “delink” the two components of the reforms in a way that could allow them to go ahead without requiring the US Congress to approve them.

“The link between these two elements is unnecessary as each pursues independent objectives that can be delivered separately. Delinking them would require the support of the US administration but not ratification by US Congress,” Batista said in the proposal.

“The delinking proposal is constructive and simple and could clear the way for the continuation of the IMF reform process.”

The Brazilian plan would first advance the modest realignment of power as planned since 2010 by giving emerging countries more seats on the executive board at the cost of Europe.

That proposal was long-accepted

US Congress has blocked IMF reforms

by the White House, but blocked by Congress.

After that happens, the resources increase could also be enacted separately, relieving the IMF’s dependence since the financial crisis on borrowed funds.

That could challenge Washington’s dominant role in the Fund since it was established in 1945.

Because contributions to IMF resources determine a country’s voting quota, if Congress still does not give its support, its quota could fall from 17.7 percent to 9.8 percent, according to Batista’s plan.

That drop is significant because major IMF board decisions require 85

percent of quotas in support, giving the United States unique veto power.

Batista allows that a deal could be done to allow Congress time to reconsider and endorse the resource increase, restoring Washington’s veto.

“With carefully chosen language such decisions can provide adequate assurances to the US Administration that the delinking option would preserve, de facto, its veto power over decisions requiring 85 percent,” he said.

“In the meantime, Fund members able to consent to their quota increases would be allowed to replenish the Fund’s permanent resources.”

AFP

German business sentiment propels euro area The report comes a day after a survey showed growth in manufacturing and services accelerated to the fastest in eight months Stefan Riecher

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erman business confidence increased for a fifth month in March, adding to signs that Europe’s largest economy is back in position as the region’s economic powerhouse.

The Ifo institute’s business climate index, based on a survey of 7,000 executives, advanced to 107.9 from 106.8 in March. The median estimate of 43 economists in a Bloomberg News survey was for an increase to 107.3.

The report comes a day after a survey showed growth in manufacturing and services accelerated to the fastest in eight months in March, adding to evidence the economy is well over a slump in the middle of last year.

That’s helping the 19-nation euro area gather strength at a time the European Central Bank adds further stimulus with its 1.1 trillion euro (US$1.2 trillion) bond-buying program.

“The general conditions for the German economy are favourable,” said Thomas Gitzel, chief economist at VP Bank AG in Liechtenstein.

“Companies are confident about the

future due to a weak euro, low interest rates and the robust U.S. economy.”

One reason for the drop is the ECB’s accommodative policy of record-low interest rates and quantitative easing.

The Frankfurt-based central bank said Monday it settled 26.3 billion euros of public-sector bond purchases in the first two weeks of its quantitative-easing plan. ECB President Mario Draghi has pledged to buy a total of 60 billion euros of assets a month through September 2016 to stave off the threat of deflation in the currency bloc.

Sustained recovery “A sustained recovery is taking hold,” Draghi said on March 16.

“We can rightly be optimistic about the outlook.”

Business confidence in France, the region’s second-largest economy, rose more than analysts anticipated to the highest since 2012.

Greece remains the major threat looming over the economy, with European officials awaiting a set of

economic policy proposals from the government in return for emergency aid. Greek Prime Minister Alexis Tsipras’s government may submit a comprehensive list of measures by the end of the week.

The Bundesbank said Monday that German output probably increased “sharply” this quarter after a “surprisingly strong expansion” at the end of 2014. A Purchasing Managers Index for the manufacturing and services industries in Germany rose to 55.3 in March from 53.8 in February, according to Markit Economics. A similar gauge for the euro region advanced to 54.1 from 53.3.

There is “hope of somewhat stronger economic growth in the spring” in the euro area, said Christoph Weil, an economist at Commerzbank AG in Frankfurt.

“Lower energy prices and the weak euro appear to be having an effect,” and the ECB is “set to continue its government-bond buying program as planned,” he said.

Bloomberg News

Business Daily | 15

March 26, 2015

Opinion

Deescalating Europe’s wires politics of resentment Business

Leading reports from Asia’s best business newspapers

THE KOREA HERALD

Yanis Varoufakis

Greece’s finance minister

South Korea’s financial regulator said yesterday it will consider making more money available for long-term fixed-rate loans after borrowers gobbled up a new government-backed loan scheme from the first day of its launch. More than 40,000 people have signed on with local banks to convert their short-term floating-rate mortgage loans into longer, fixed-rate loans introduced by the government to rein in ballooning household debt, according to the Financial Services Commission.

VIETNAM NEWS Vietnamese investors can transfer foreign currency abroad as payment for activities relating to their projects before getting investment licences from foreign local authorities under a draft decree of the Ministry of Planning and Investment. The decree says payment in foreign currency can be made for activities related to investors’ projects abroad, including market and investment opportunity research, field study and related document research, collection and purchase. The money will also cover the assessment, appraisement, choosing and hiring of foreign consultants to help assess and appraise their projects.

THE STRAITS TIMES The shipping company that helped cement Singapore’s status as a global trade hub may be shaping up as a takeover candidate. The appeal of Neptune Orient Lines (NOL) has increased after it agreed to sell its logistics unit last month for US$1.2 billion to cut debt. Analysts project the company, which moves goods globally, will benefit from the U.S. economic recovery and return to profit in 2015 after four straight years of losses. “They are a cleaner play on the expected rebound in global trade,” Nicholas Teo, a market analyst at CMC Markets in Singapore, said.

PHILSTAR Finance Secretary Cesar Purisima hopes that the China-led Asian Infrastructure Investment Bank (AIIB) won’t be used by the world’s second largest economy to advance its own economic or strategic agenda. At the fourth annual Euromoney Philippine Investment Forum held in Makati on Tuesday, Purisima said the AIIB should not be used as a political tool to push for China’s unpopular loan or procurement decisions. The AIIB is an initiative by China intended to help fund Asia’s massive infrastructure needs, which the Asian Development Bank estimates will reach US$8 trillion by 2020.

A

German television presenter recently broadcast an edited video of me, before I was Greece’s finance minister, giving his country the middle-finger salute. The fallout has shown the potential impact of an alleged gesture, especially in troubled times. Indeed, the kerfuffle sparked by the broadcast would not have happened before the 2008 financial crisis, which exposed the flaws in Europe’s monetary union and turned proud countries against one another.

When, in early 2010, Greece’s government could no longer service its debts to French, German, and Greek banks, I campaigned against its quest for an enormous new loan from Europe’s taxpayers to pay off those debts. I gave three reasons.

First, the new loans did not represent a bailout for Greece so much as a cynical transfer of private losses from the banks’ books onto the shoulders of Greece’s most vulnerable citizens. How many of Europe’s taxpayers, who have footed the bill for these loans, know that more than 90% of the €240 billion (US$260 billion) that Greece borrowed went to financial institutions, not to the Greek state or its people?

Second, it was obvious that if Greece already could not repay its existing loans, the austerity conditions on which the “bailouts” were premised would crush Greek nominal

incomes, making the national debt even less sustainable.

When Greeks could no longer make payments on their mountainous debts, German and other European taxpayers would have to step in again.

(Wealthy Greeks, of course, had already shifted their deposits to financial centres like Frankfurt and London.)

Finally, misleading peoples and parliaments by presenting a bank bailout as an act of “solidarity,” while failing to help ordinary Greeks – indeed, setting them up to place an even heavier burden on Germans – was destined to undermine cohesion within the eurozone. Germans turned against Greeks; Greeks turned against Germans; and, as more countries have faced fiscal hardship, Europe has turned against itself.

The fact is that Greece had no right to borrow from German – or any other European – taxpayers at a time when its public debt was unsustainable.

Before Greece took any loans, it should have initiated debt restructuring and undergone a partial default on debt owed to its private-sector creditors.

But this “radical” argument was largely ignored at the time.

Similarly, European citizens should have demanded that their governments refuse even to consider transferring private losses to them. But they failed to do so, and the transfer was effected soon after.

The fact is that Greece had no right to borrow from German – or any other European – taxpayers at a time when its public debt was unsustainable

The result was the largest taxpayer-backed loan in history, provided on the condition that Greece pursue such strict austerity that its citizens have lost one-quarter of their incomes, making it impossible to repay private or public debts. The ensuing – and on-going – humanitarian crisis has been tragic.

Five years after the first bailout was issued, Greece remains in crisis. Animosity among Europeans is at an all-time high,

with Greeks and Germans, in particular, having descended to the point of moral grandstanding, mutual finger-pointing, and open antagonism.

This toxic blame game benefits only Europe’s enemies.

It has to stop. Only then can Greece – with the support of its European partners, who share an interest in its economic recovery – focus on implementing effective reforms and growth-enhancing policies.

This is essential to placing Greece, finally, in a position to repay its debts and fulfil its obligations to its citizens.

In practical terms, the February 20 Eurogroup agreement, which provided a four-month extension for loan repayments, offers an important opportunity for progress. As Greece’s leaders urged at an informal meeting in Brussels last week, it should be implemented immediately.

In the longer term, European leaders must work together to redesign the monetary union so that it supports shared prosperity, rather than fuelling mutual resentment. This is a daunting task. But, with a strong sense of purpose, a united approach, and perhaps a positive gesture or two, it can be accomplished.

This is an updated and extended version of a post at yanisvaroufakis.eu.

Project Syndicate

16 | Business Daily

March 26, 2015

Closing Greece and China vow to advance cooperation

Chinese state firms to trade overseas futures

Chinese Foreign Minister Wang Yi (pictured) met his Greek counterpart Nikos Kotzias in Beijing yesterday, pledging to advance pragmatic cooperation. Wang said the two countries trust and support each other, which is the foundation of the China-Greece comprehensive strategic partnership. The two sides should make the Chinese-run project at the Greek port of Piraeus “a paradigm of mutually beneficial cooperation between China and Greece,” Wang said.

Kotzias said Greece attaches great importance to the Piraeus port project and is willing to play positive role in the construction of the China-Europe Land-Sea Express Line.

Futures regulator is open to allowing all state-owned companies to trade on overseas futures markets, though it no longer has a full say over the issue, Zhou Lichao, a director of the regulator’s department of futures supervision, said. When asked whether the China Securities Regulatory Commission (CSRC) would consider allowing all state-owned firms to trade futures overseas, Zhou said: “We are open to this idea. (Though) this is mainly led by the stateowned assets commission.” The State-owned Assets Supervision and Administration Commission decide the hedging activities of state-owned firms overseas, Zhou said.

China, Taiwan hit with European tariffs on stainless steel

The case may revive EU-China trade tensions over steel seven years after

Jonathan Stearns

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he European Union imposed tariffs as high as 25.2 percent on stainless steel from China and Taiwan to curb competition for EU producers such as Acerinox SA and Outokumpu Oyj. Steel shares in Europe rose after the decision.

The duties punish Chinese and Taiwanese exporters of cold-rolled flat products for allegedly selling them in the EU’s 5.5 billion-euro (US$6 billion) market below cost, a practice known as dumping.

This kind of steel is used in everything from elevators and tanks to boilers and kitchen equipment.

EU producers that also include Acciai Speciali Terni SpA and Aperam suffered “material injury” as a result of dumped imports from China and Taiwan, the European Commission, the 28-nation EU’s trade authority in Brussels, said yesterday in the Official Journal. The levies, which take effect today, are for six months and may be prolonged for five years.

The case may revive EU-China trade tensions over steel seven years

US$6 billion EU stainless steel market

after European producers complained that Chinese competitors had dumped a range of goods in Europe, prompting a series of dumping inquiries. One of those probes covered stainless steel cold-rolled flat products and was closed in 2009 without the imposition of EU anti-dumping duties.

Chinese and Taiwanese exporters including Shanxi

Taigang Stainless Steel and Tang Eng Iron Works increased their combined share of the EU market for stainless steel cold-rolled flat products to 9.5 percent in 2013 from 5.8 percent in 2010, according to the commission. China’s share grew to 4.3 percent from 1.8 percent over the period, the commission said.

The anti-dumping duties

Bank of China Q4 profit rises

Environment evaluation services market to open

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T

he firm posted profit within expectations yesterday, but losses on bad assets doubled and unpaid loans jumped as the country faces its slowest growth rate in a quarter-century.

China’s fourth-largest lender reported net profit for the fourth quarter of 38.5 billion yuan (US$6.20 billion), in line with analyst estimates according to Thomson Reuters data and 5 percent higher than in the same period last year.

Rising bad loans and struggling profit growth show how China’s most international bank is vulnerable to a slowing domestic economy, projected by the country’s leaders to grow by around 7 percent this year.

BoC saw impairment losses on assets weigh in at 48.4 billion yuan at year-end, an over 100 percent increase from 23.5 billion yuan the year before.

The bank’s non-performing loan ratio also rose sharply to 1.18 percent, versus 1.07 percent in the preceding quarter, the biggest jump in over three years.

While BoC is central to government plans to internationalize the yuan its profit from overseas business indicates it is still very much a domestic lender.

Reuters

against China range from 24.3 percent to 25.2 percent, depending on the company.

The levies against Taiwan range from 10.9 percent to 12 percent.

The trade protection is the preliminary outcome of a dumping probe opened last June by the commission, which has six months to decide whether to turn the provisional duties

into “definitive” five-year measures.

The inquiry stems from a May 2014 dumping complaint

by European steel industry group Eurofer on behalf of producers that account for more than a quarter of the EU’s output of stainless steel cold-rolled flat products.

EU market The EU market for this kind of steel totalled about 5.5 billion euros last year, unchanged from 2013, according to Eurofer.

In a parallel case, the EU is threatening to impose a separate set of duties on stainless steel cold-rolled flat products from China to counter alleged subsidies to Chinese manufacturers.

The commission opened an inquiry in mid-August into possible trade-distorting Chinese government aid. It has until May 14 to introduce provisional anti-subsidy levies and until September 14 to apply definitive antisubsidy -- or “countervailing” measures.

Bloomberg News

Easier interbank market for foreign investors

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he China’s Ministry of Environmental Protection has called for its affiliated organizations to cease commercial environmental evaluation services by the end of 2016.

Eight organizations directly under the ministry are required to break away from providing such services for construction projects by the end of the year, according to a statement from the ministry yesterday.

Organizations under western China’s provincial environmental authorities and those affiliated with all levels of authorities in the east and central parts are asked to pull out of the evaluation market by June 2016.

The deadline for western municipal and county authorities is the end of 2016 due to the low number of evaluation services in that part of the country.

Cheng Lifeng, head of the ministry’s department of evaluation of environmental impact, said the plan was aimed at avoiding corruption and conflict of interest in environmental evaluation and ensuring a healthy development of the sector.

In addition, the statement said employees of the organizations affiliated with the ministry are not allowed to be involved in evaluation services for construction projects.

hina will relax rules for foreign investors for trading on its Shanghai-based interbank market, including making it easier to obtain quotas such investments, two sources with direct knowledge of the matter told Reuters yesterday.

Participants in China’s capital market investment schemes for foreigners - the Qualified Foreign Institutional Investor (QFII) scheme and its renminbi-denominated version (RQFII) - will in the future use a registration system that eliminates the need to apply for regulatory approval for quotas in the interbank market, the sources said.

Foreign investors will also be permitted to invest in more products traded in the interbank market, such as banks’ certificates of deposits (CDs), bond repurchase agreements and swaps, including interest rate swaps, the sources said.

Qualified foreign investors are currently confined mainly to trading spot bonds and conducting lending and borrowing in the money market. No firm date has been set for the reforms, but it is possible they could be implemented as early as May, the sources said. China’s central bank and foreign exchange regulators declined to make any immediate comment on the moves.

Xinhua

Reuters