Macau business daily, Apr, 14, 2015

MOP 6.00 Closing editor: Luís Gonçalves Publisher: Paulo A. Azevedo Number 769 Tuesday April 14, 2015 Year IV

Confirmed: Cap on Mainland visitors It’s the news everybody’s been anticipating. The quota of Mainland visitors allowed to visit Macau. The gov’t has settled on 21 million a year. To balance residents’ quality of life, sustain gov’t revenues, and leave room to attract international visitors.

The Secretary for Social Affairs and Culture says the proposal has been submitted to the central gov’t. Alexis Tam added that the policy would remain in place until mega local and regional infrastructure projects are up and running PAGE 2

Immune

SunCity’s cultural and entertainment arm to move to Macau

No big deal. Frederick Yip Wing Fat, directorgeneral of the Macau Association of Retailers and Tourism Services, is confident. Hong Kong’s new curbs on visits made by Shenzhen residents will not overly impact Macau’s tourism and retail business. The city will, however, suffer the effects of the weaker retail climate. And softer spending power of Mainland Chinese visitors

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Sands China raises US$ 1 billion Page 7

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Crocodile Garments extends shares sell-off

Longer licences, please For the sake of stable development. Pansy Ho says the gov’t should renew the current gaming operators’ licences. The MGM China Co-chairman says Macau authorities should also extend the length of licences. So that corporations are willing to invest for the long term

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Export setback

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HSI - Movers

CAM to provide aviation maintenance

Surprisingly, China’s exports shrank. Some 15 pct in March. Deeply impacting gov’t growth forecasts. And probably triggering new stimulus measures

A new opportunity has presented itself. Macau International Airport (CAM) will be able to provide maintenance facilities to airlines flying to the city. CAM and Jet Aviation have sealed a 10-year concession deal. Whereby the latter will operate a new business aviation maintenance facility at Macau International Airport.

The contract was approved by the Civil Aviation Authority of MSAR last week. Jet Aviation operations start in August 2015

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www.macaubusinessdaily.com

Triple fines on horizon Industrial accidents are on the rise. Thus, the Labour Affairs Bureau proposes tripling occupational safety violation fines. Seven fatal industrial accidents blighted the reputation of the city in 2014. DSAL concedes current fines are too low and guidelines outdated. Authorities imposed almost half a million patacas in fines last year on 83 construction sites

April 13

Name

%Day

Hong Kong Exchanges

19.44

Kunlun Energy Co Ltd

11.45

Bank of China Ltd

8.57

China Construction B

7.75

Industrial & Commerc

5.74

Belle International

-2.72

Tingyi Cayman Island

-2.77

Sands China Ltd

-2.82

Galaxy Entertainment

-3.78

Link REIT/The

-3.82

Source: Bloomberg

I SSN 2226-8294

Brought to you by

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Estoril Hotel to become creative hub Page 2

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2 | Business Daily

April 14, 2015

Macau

Macau limits Mainland visitors to 21 million until new infrastructure in place The Secretary for Social Affairs and Culture said Macau has proposed to Bejiing capping the number of visitors at 21 million. During the Policy Address he also revealed that the government is in the market for land in Hengqin João Santos Filipe

jsfilipe@macaubusinessdaily.com

T

he number of Mainland visitors coming to Macau will be capped at 21 million but the government is focusing on increasing the number of international tourists. This was the proposal submitted for the Central Government’s approval, according to Secretary for Social Affairs and Culture Alexis Tam Chon Weng.

“Our largest market is Mainland China, which from a total of 31 million visitors accounts for 21 million, which means that they account for 66.4 per cent of the total number of visitors.

Our selection of the visitors is aimed at reaching an equilibrium point. For the moment, we want to receive 21 million Mainland Chinese tourists and increase the number of international tourists” he said. “However, this number is not stable. After the new hotels, Light Rapid Transport and other infrastructure related to public transport are ready the number of Mainland tourists will increase again.”

“According to a study by IFT [Institute for Tourism Studies] Macau has the capacity to receive 89,000 to 92,000 visitors per day. However, during the Chinese New Year there were 147,000 visitors per day. This number is well above the city’s capacity according to the IFT study and if this trend continues the quality of life of residents will be affected”, Mr. Tam explained.

Smoking Ban The Secretary for Social Affairs and Culture also explained that the government is still keen on a full smoking ban in casinos and that a

proposal is being compiled. The fact that gaming revenue has been decreasing for ten consecutive months will not stop the government from investing in the health of the population, he said.

“The government is feeling the pressure of the decline in gaming revenue but we are going to continue to invest in the health of the Macau population. Regarding the full smoking ban on casinos we are still working on this matter and we will not stop. At the moment, we are working on a proposal to be analysed by the Chief Executive.

The work is on schedule”, he said.

However, in relation to this point the Secretary met opposition from the member of the Legislative Assembly and member of the board of directors of the casino operator SJM, Angela Leong On Kei. This happened because in October the operators had to build smoking lounges as the law on smoking was changed.

“This policy is very good for public health but the casino operators have already invested MOP1 billion to construct smoking lounges. We want the government to have a clear policy so that we do not have to waste our resources building lounges that are demolished sometime after”, Leong said. “This money would be better invested in increasing the salaries and benefits of the workers of the operators.”

Hengqin Opportunity In reply to this, Alexis Tam praised Angela Leong’s position stressing that she has always supported a full smoking ban in casinos and called upon Lei Chin Ion for further explanation.

Estoril Hotel to become creative hub Estoril Hotel is to be transformed into an exchange centre for youngsters and a hub for the creative industries. The goal of Alexis Tam is to transform the core function of Tap Seac whereby it can become a complex where arts, creative, educational and cultural industries meet. “We want to develop the Estoril Municipal Swimming pool and Estoril Hotel as an exchange centre for youngsters. We want the Estoril Hotel building to be reconstructed to mix all the institutions related to arts and culture, including Macau conservatory”, the Secretary for Social Affairs and Culture said. “We can use that space as a school for artists where they can develop their activities. Also, the students will have the opportunity to see artists’ performances related to music, dance and theatre. This space will be an art complex and a total new area in the city of Macau”, he added.

The director of the Health Bureau said that smoking will be banned from all closed public spaces.

During the Policy Address, Tam Chon Weng also revealed that he had had some meetings and that the Macau Government is ready to invest in property in Hengqin to create services for the population, such as retirement homes, hospital and nurseries. However, Mr. Tam said that the government would have to pay the market price for such land.

The Secretary revealed as well that during this year 188 nurses will be hired by public hospitals and health centres. He also announced that from May 1 Kuok Cheong U will be the new Director of Conde de São Januário Hospital.

SunCity’s cultural and entertainment arm to move to Macau The cultural and entertainment company of Macau’s largest junket group, SunCity, will move its headquarters to Macau, according to the Secretary for Social Affairs and Culture Alexis Tam Chon Weng. This is part of the government’s policy to have more companies associated with culture based in Macau.

“Sun Entertainment Culture Limited is already committed to changing its base to Macau, where it will operate its headquarters. We want to promote economic diversification through the active development of the cinema industry but also of the other cultural industries associated with it”, the Secretary for Social Affairs and Culture said yesterday during his Policy Address speech at the Legislative Assembly.

Last month, the chairman of Suncity, Alvin Chau Cheok Wa, was appointed

by Alexis Tam as a member of the Cultural Industry Committee for a term of two years. For the time being, Sun Entertainment Culture Limited is based in Hong Kong, where it is active in the cinema and music industries.

J.S.F.

Business Daily | 3

April 14, 2015

Macau

Macau International Airport to provide aviation maintenance Jet Aviation has been awarded a 10-year concession to operate a new business aviation maintenance facility at Macau International Airport Joanne Kuai

joannekuai@macaubusinessdaily.com

T

he Macau International Airport Co. Ltd. (CAM) and Jet Aviation Macau have sealed a deal for the maintenance organisation to operate a new maintenance, repair and overhaul (MRO) facility in Macau. The contract was approved by the Civil Aviation Authority of Macau SAR last week.

CAM told Business Daily that since they had liberalised the market for service providers through openbidding, Jet Aviation was the only one to triumph in the tender and will start providing aviation maintenance services to airlines at Macau Airport within this year.

According to an Aviation International News report, Jet Aviation is leasing half of a new 8,000 square metre hangar plus an additional 1,000 square metres of workshops and office space from Macau International Airport. The facility is adjacent to Macau’s new FBO (fixed base operator – private jet terminal) and will begin operations in August 2015.

The executive committee office of CAM told Business Daily that as a sub contractor

Jet Aviation has to pay a commission and rent for the space without disclosing the exact amount.

Waiting for licence Macau Civil Aviation Authority (AACM) has confirmed to Business Daily that the authorities have informed CAM that the contract was approved by the SAR Government on April 8, 2015.

However, as a newlyestabilised branch of the Swiss-based group, the Macauregistered Jet Aviation is still waiting for a licence – Macau Aviation Requirement (MAR)

145 - according to AACM spokesperson Euphemia Lam Pou Kam. She added that only when the new company acquires the licence can they provide the service in Macau.

The MAR-145 Approved Maintenance Organisations Issue 4, prescribes the requirements to be met by organisations seeking approval to perform service maintenance on Macao registered aircraft used for Commercial Air Transport or any aircraft component intended for fitment to such aircraft.

Currently, from its roots in Basel, Switzerland, Jet Aviation provides maintenance services

to large-cabin aircraft from MRO hubs in Basel, Dubai, Singapore and St. Louis, complemented by other maintenance bases in EMEA & Asia and North America.

Increasing demand The group also runs an MRO operation in Hong Kong, and Macau as its new location would be able to act as a supplement to the works of the existing facility, and also an alternative base for supporting aircraft operating in and out of Greater China.

“We’re developing a reputation as a one-stop shop with our combined

maintenance inspection and refurbishment offering, including upholstery and avionics or cabin management upgrades,” said John Riggir, vice president and general manager of Jet Aviation Singapore, as Aviation International News reports.

“We have experienced increased demand from the maturing fleet of long-range, large cabin aircraft that are based in Hong Kong, Singapore, Malaysia, Thailand and Indonesia. We also expect to receive certification from the Civil Aviation Administration of China later this year, which will further support our customers.”

Gov’t should renew gaming licences, says Pansy Ho For the sake of stable development, the government should renew the current gaming operators’ licences, MGM China Co-chairman Pansy Ho says.

Kam Leong

kamleong@macaubusinessdaily.com

T

he government should renew current gaming operators’ licences for the long-term development of the gaming industry in Macau, the co-chairman of gaming operator MGM China, Pansy Ho Chui King, says.

In an interview with Hong Kong English language newspaper The Standard, Ms. Ho indicated that the government should extend the length of licences so that corporations are willing to invest for the long term.

“The timeline should be lengthened.

The fundamental principle should not be altered. Otherwise, how can Macau attract long-term investments? If the payback period is too short, no-one will be interested,” the newspaper quotes the MGM China Co-chairman as saying.

“If every casino operator puts great effort and capital into the business, I don’t believe the government won’t let them survive,” she claimed, adding, “I think the government knows very

well that Macau’s economic growth is largely driven by the gaming business.”

The Standard is published by Hong Kong-listed Sing Tao News Corp., of which Ms. Ho is an independent nonexecutive director.

Currently, the city has a total of six gaming operators. However, only Sociedade de Jogos de Macau, S.A. (SJM), Galaxy Entertainment Ltd. and Wynn Macau hold the original licences granted by the government.

The other three major operators MGM China, Sands China and Melco Crown Entertainment Ltd. - are operating under sub-licences purchased from SJM, Galaxy and Wynn, respectively.

As such, the gaming licences for SJM and MGM China expire in 2020, while licences for the other four corporations expire in 2022.

The city’s Secretary for Finance and Economy, Lionel Leong Vai Tac, said the review of gaming licences,

starting this year, will be based on whether the gaming operators have fulfilled the promises made in their concession contracts, the non-gaming elements they have developed, and the social responsibilities that they have executed.

Macau’s future reliant on regional co-operation Meanwhile, although the city’s gaming revenues have been dropping for 10 consecutive months, Ms. Ho is not worried. She is, by contrast, optimistic about the situation, according to her interview with Chinese language East Week magazine.

“We cannot expect double-digit growth every year at this phase. Still, our base is very high and tops the world despite the fall. And we remain profitable,” she remarked.

The co-chairman perceives that the future of Macau will be be dependent

upon regional tourism co-operation, suggesting Macau should establish links with Hong Kong, Zhuhai and Hengqin.

“In the future, people from Guangdong could have a meeting in Hong Kong, then proceed to Macau for dinner and a show for entertainment before heading home,” she told the magazine.

In 2014, MGM China’s casino revenues dropped 1.07 per cent yearon-year to some HK$25.5 billion (US$3.17 billion), due to the VIP market plunging 15 per cent yearon-year. Nevertheless, the operator’s mass market surged nearly 34 per cent year-on-year to HK$9.6 billion.

“Customers don’t only gamble.

They also want to enjoy the whole atmosphere, including arts and cultural events. We’ve been doing this from day one,” Ms. Ho said, claiming the corporation’s non-gaming elements had helped the business performance of its mass market.

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April 14, 2015

Macau Brands

Trends

Pool Trends Raquel Dias newsdesk@macaubusinessdaily.com

Y

ou can already feel Summer approaching.

Even with the recent drop in temperatures, we all know that the hot and humid season is here.

Although Macau is hardly the paradise island we want it to be, the truth is that many resorts in town make for a great escape at weekends.

For families it’s a blessing to be able to unwind by the pool with a cocktail (oops, I meant power juice) in your hand and the sun in your eyes.

Ladies need to beware, though. We all know there is a group of beings in the world that always look their best. Perfect hair, perfect make-up, amazing taste for accessories, just like the flight attendants, these ladies are always beautiful and appropriate. The pool is no exception.

How to get ahead this season? Simple. One-piece swimming suits. Please note we don’t mean a ‘Tank-Tini’, or one of those that come with a little skirt. We mean an elegant number that will make you look sophisticated.

Net a porter.com ships to Macau and has some great options. Our favourites are the ones below. A sexier version of the one-piece and (should you prefer) a sportier option. Neither is cheap but will last longer than a bikini.

Throw a nice pattern pareo and you are good to go.

Oh, don’t forget those nice sun hats; not just for style, they’re actually useful.

Another hole in the wall Outdated legal procedures for public tenders, insufficient liaison between stakeholders and shortage of skilled labour are just some examples identified for the shambolic state of public works

“I

t’s the new normal,” legislator Ho Ion Sang lamented sarcastically, employing the already-tired lexicon of Mainland Chinese leaders speaking of the slowing Mainland economy.

“There are just too many instances of delays, budget overruns and quality flaws in large-scale public projects, one following another,” said Mr. Ho, who heads the Legislative Assembly’s special committee on land and public concessions.

His words ring true with a frustrated public who have witnessed the same old problems repeating themselves.

The latest controversy of bags stuffed

inside the walls of a public housing project, Koi Nga Building in Seac Pai Van, has only added to the backlog of problems confronting public works in recent years.

Ben Leong Chong In, president of the Architects Association of Macau, commented that the current system of tender evaluation is likely to allow bidders with lower bidding prices to win.

“The government does evaluate some of the criteria like the experience and project plan but they only account for small chunks of the score - any contractor can claw back the overall score with a low bidding price,” he added.

However, Eddie Joe Wu Chou Kit,

president of the Macau Society of Civil and Structural Engineers, and Lo Kai Jone, honorary chairman of the Macau Construction Association, do not agree that the current mechanism favours low-priced bids.

In the evaluation of the tenders, the government calculates “a reasonable price” for the project based on the multiplication of the median price of the tenders - excluding the highest and lowest prices - and a coefficient, said Mr. Lo. The full story can be read in this month’s issue of Macau Business magazine, available at newsstands and online at www.magzter.com.

Bringing the café lifestyle to Macau South Korean coffee chain Tom N Toms Coffee has set its sights on opening 20 stores in the South China market by year-end, including four outlets in Macau

F

rom cream cheese pretzel to honey buttered bread, from caffe Americano to java chip drink.

These are what a coffee shop at Avenida do Conselheiro Ferreira de Almeida offers on its à la carte menu, in a striking resemblance to what customers can expect from Western coffee chains like Starbucks. Even its name, Tom N Toms Coffee, exudes a European flavour rather than its South Korean roots.

One of the top five Korean coffee chains, Tom N Toms opened its first store here in February, a step that is anticipated to translate into 20 shops in the South China market by the end of this year.

Its strongest suit, according to a young local entrepreneur who brought the franchise to the territory, is not its coffee or food but its lifestyle - a unique spot for locals to chill with loved ones and friends at any time of the day or night, with a liberal dose of arts and culture thrown in.

“We’re different from other cafés and coffee chains,” said Felix Se, Tom

N Toms’ South China Chief Executive Officer. “They’re selling products but we’re selling a lifestyle, a culture.”

“No other cafes in Macau [offer] the spacious per [person] area we have here. Each customer can find a comfy seat here and relax,” he said of the twostorey 4,000 square foot flagship store.

The other three stores that are planned for opening here within this

year - in NAPE, Taipa and in a new casino resort - will also span some 1,500 to 2,500 square feet, he added, with an investment of about MOP10 million [US$1.25 million] slated for the Macau operations this year.

The full story can be read in this month’s issue of Macau Business magazine, available at newsstands and online at www.magzter.com.

Business Daily | 5

April 14, 2015

Macau

Shenzen-HK cap: No impact on Macau While Macau’s retail association says it will not impact the tourism trade here much, the new curb on visits by Shenzhen residents is set to impose more adverse factors on Hong Kong’s retail businesses Stephanie Lai

sw.lai@macaubusinessdaily.com

F

rederick Yip Wing Fat, director-general of the Macau Association of Retailers and Tourism Services, believes that Hong Kong’s new curbs on visits made by Shenzhen residents would imply only a minimal impact on Macau’s tourism and retail business.

Currently, Shenzhen residents can apply to come to Macau every three months under the Individual Visit Scheme; the multiple-entry permit system practised in Shenzhen before does not apply to Macau.

“This restricted access against Shenzhen residents is a policy that is targeted very specifically for Hong Kong, where tension has been rising due to rows between parallel traders and local protesters,” Mr. Yip remarked to us.

“But that policy is not having any big impact here. Alhough in Macau, the retail climate in these recent months

has been bad, especially for high-end retail like jewellery and watches,” Mr Yip added. “The weak retail climate is going to stay for a while this year due to the fundamentals - such as Beijing’s anti-graft policy and weaker spending power by Mainland Chinese – rather than being influenced by this new policy we see in Hong Kong now.”

Tightening Effective yesterday, residents from Shenzhen City will be allowed one trip per week to neighbouring Hong Kong, a tightened visit scheme that the city’s Chief Executive Leung Chun Ying said is a policy that targets the career parallel traders that led to bouts of protests this year.

Prior to this tightened visit scheme, visitors from Shenzhen did not face limits on their trips to Hong Kong.

The policy change will not affect

Crocodile Garments extends exclusive period for share sell-off

H

ong Kong-listed Crocodile Garments Ltd. has extended the expiry date of the exclusive period for selling about half of the company’s entire issued share capital to an independent third party from April 17 to May 17, the menswear retailer said in a filing after trading hours on Friday.

As disclosed in a filing made on February 13, Crocodile Garment’s chairman and chief executive officer Dr. Lam Kin Ming has entered into a memorandum of understanding (MOU) with an “independent third party” regarding the possible acquisition of 472.2 million ordinary shares in the share capital of the company, representing about 50.46 per cent of its entire issued share capital.

Pursuant to the MOU, the selling shareholder agreed not to negotiate any arrangement with any other party for

an exclusive period of 60 days from the date of payment of the deposit in the sum of HK$30 million (US$3.87 million).

According to Crocodile Garment’s Friday filing, the company said no formal or legalling binding agreement has been reached between Dr. Lam and the potential purchaser other than the memorandum.

Crocodile Garments halted trading with effect from 1:00 pm on Friday, resuming yesterday morning.

Company stocks dipped 1.89 per cent to HK$1.56 by the close of trading yesterday.

Crocodile Garments operated 19 shops for its Crocodile line and 6 shops for its Lacoste line at end-January in Hong Kong and Macau, the company said in its interim result filed in late March.

S.L.

Shenzhen residents who have already been granted multiple-entry visas to Hong Kong, and will take some time to take effect, Leung told media yesterday morning. Hong Kong plans to run campaigns to lure tourists, he said.

“This policy targets career parallel traders” Hong Kong Chief Executive Leung Chun Ying told reporters.

“Hong Kong is still a city for tourists from all around the world including those from the Mainland.”

The change in policy will help ease tensions in Hong Kong, where scuffles have broken out between protesters and parallel traders, who buy daily necessities in the former British colony to resell on the Mainland. Hong Kong, which has come to rely on Chinese visitors, may see a 5 per cent reduction in tourist spending, Goldman Sachs analysts wrote in a report.

The Hong Kong Retail Management Association said in a statement that it was worried that the limits sent a message that Mainland tourists weren’t welcome in the city. This

might lead to a chain reaction and discourage visitors from other Chinese cities as well, the Association feared.

Retail stocks plunge The restrictions would hurt cosmetics, food and alcohol sales, Goldman Sachs wrote in its report on Sunday. Those of jewellery and leather goods would be less affected because they were mostly purchased by overnight tourists, it said.

The news of the restricted access

by Shenzhen residents to Hong Kong has already caused Hong Kong-listed retail stocks to drop.

Sa Sa International Holdings Ltd., a cosmetics retailer which also runs shops here, plunged as much as 9.7 per cent to HK$3.91 in Hong Kong trading yesterday, the stock’s biggest intraday decline since May. Chow Tai Fook Jewellery Group, another Hong Kong-listed retailer that has shops in Macau, fell as much as 5.6 per cent to HK$8.7. with Bloomberg

6 | Business Daily

April 14, 2015

Macau Macau GP promoted at China’s F1 race A Macau Grand Prix promotion, organised by the Macau Grand Prix Committee in conjunction with the Macau Government Tourist Office, was unveiled at the Chinese F1 Grand Prix in Shanghai last weekend. The promotion was sited at the Fountain Plaza at the Shanghai International Circuit. Last year, according to data collected during the Macau Grand Prix, Shanghai netizens were the second most active on the official website after those in Guangdong Province. Through its promotions during the Chinese F1 event, the Macau Grand Prix Committee hopes to attract more fans to the Macau race and to further strengthen ties with the Shanghai track in order to jointly promote motorsport.

DSAL proposes tripling occupational safety violation fines The Labour Affairs Bureau says that the current fines are too low and outdated.

DSAL imposed a total of almost half a million patacas in fines last year on 83 construction sites, an average of just MOP6,000 per site Kam Leong

kamleong@macaubusinessdaily.com

Another factor is that the total number of employees in the field increased to some 52,500 in 2014, from some 35,300 in 2013,” Ms. Lam said.

In fact, during the first quarter of this year, a total of four fatal accidents had already happened on the construction sites of new casino and hotel projects in Cotai and Taipa, owned by Melco Crown Entertainment Ltd., MGM China, Galaxy Entertainment Ltd. and Hollywood Roosevelt Macau, respectively.

Supervision

S

even fatal industrial accidents blighted the reputation of the city in 2014, for which the greatest fine imposed by the Labour Affairs Bureau (DSAL) was MOP14,000 (US$1,750), a department head of the Bureau said, adding that it is proposing to increase such ‘outdated’ amounts by at least three times within this year.

The head of the Occupational Safety & Health Department of DSAL, Lam Iok Cheong, told reporters in a press briefing yesterday that the department had imposed a total of MOP478,500 in fines on 83 construction sites in the Special Administrative Region last year, an increase of 62 per cent and 29.6 per cent year-on-year, respectively.

Nevertheless, less than 18 per cent of the total fines imposed were on

contractors whose construction sites experienced fatal accidents. According to the department head, the fines for these seven fatal accidents ranged from MOP9,000 to MOP14,000.

Admitting that the fines were “too low”, Ms. Lam said the Bureau will increase the amount in the new regulations on occupational safety and health, the proposal for which will be ready this year for legislation. “[The current related laws] were enacted between 1987 and 1991, so for sure [these regulations] cannot catch up with the development of society and the current economic situation. As such, we will certainly increase the amount of fines,” she said.

Ng Peng Chi, head of the Division of Risk Prevention at the Bureau added that the hike in fines proposed by

DSAL is between three and five times.

Yet, he stressed that the final drafted hike in fines in the new regulation will depend on the Standing Committee for the Co-ordination of Social Affairs.

Rushing construction Meanwhile, Ms. Lam indicated that the rising number of fatal accidents in 2014 - from only two in 2013 was due to gaming operators rushing to finish their new casino projects, claiming that the speeded up pace of construction was presenting the department with a big challenge in 2015 regarding the prevention of occupational injuries.

“There are many factors leading to fatal accidents on construction sites, including [gaming operators] rushing to complete their new projects.

To extend DSAL’s supervision of site safety, Ms. Lam claimed that a new policy has been implemented since March, whereby the Bureau will fine and issue halt orders to contractors as soon as their construction is found to violate the regulations.

She said that the department had charged [the managers] of 34 different construction sites since the implementation of the new policy.

Meanwhile, the Bureau halted 9 projects in the first quarter of the year, compared to 10 halt orders in 2014, and 6 in 2013.

Nevertheless, despite the department head claiming that halting construction has had a bigger penalty effect than imposing fines on contractors, DSAL is not going to regulate a fixed period for halting construction in the new regulations.

According to Ms. Lam, a day of construction halted can lead contractors to lose hundreds of thousands of patacas. The current law allows contractors to apply to resume construction right after improving the issues related to the violations.

Landing likely to ask for more capital

C

hina real estate developer Landing International Development Ltd. has announced that the company has commenced preliminary discussions with various financial institutions as well as controlling shareholders on a potential fundraising exercise to meet the future financing needs of the group.

So far, however, no definitive terms have been agreed and no binding agreement reached.

In a filing with the Hong Kon g S tock E x ch a n g e yesterday, the company informed shareholders that the fundraising exercise was subject to further negotiation and may or may not materialise.

In 2014, the company continued to post a loss to the tune of more than two times its loss in 2013, amounting to HK$343 million (US$42.9 million).

The group said the loss was primarily due to the group’s expansion, namely a newly acquired casino business in South Korea named Jeju Casino, which held its grand

opening on January 18, 2014.

According to Landing, Jeju Casino is now operated under the trade name of Genting Jeju and currently has 26 baccarat tables, one blackjack table, one tai sai table, one roulette table and 16 slot machines.

The casino project is a 5050 joint venture by Landing Int’l and Genting Singapore

Plc. The two companies are investing some US$2.2 billion in the project, which targets Chinese gamblers, according to its first announcement of the project in February 2014.

The company added in its Monday filing that if the fundraising exercise proceeds, a further announcement will be made accordingly.

J.K.

Business Daily | 7

April 14, 2015

Macau

Sands China raises US$1 billion

A

new term loan amount of US$ 1 billion will be made on or about April 30, 2015 to VML US Finance LLC, an indirect, wholly-owned subsidiary of Sands China Ltd., according to the company’s filing with the Hong Kong Stock Exchange on Monday. The lender’s information was not disclosed.

The company announced it has entered an amended and restated credit agreement dated back to March 31, 2014. And under the previous agreement, its subsidiary VML US Finance LLC (the ‘Borrower’) entered into a Joinder Agreement on April 10, 2015.

The New Term Loan bears interest at either, at the Borrower’s option, an adjusted Eurodollar rate or HIBOR (Hong Kong Interbanck Offered Rate) plus a credit spread; or an alternative base rate plus a credit spread, which credit spread in each case is determined based on the consolidated total leverage ratio as set forth in the pricing grid in the Joinder Agreement.

“The initial credit spread for the New Term Loan is expected to be 0.250per cent per annum for loans accruing interest at a base rate and 1.250 per cent per annum for loans accruing interest at an adjusted Eurodollar or HIBOR rate,” the filing reads.

The Borrower is also required to make principal payments on a quarterly basis beginning on June 30, 2018 in accordance with the provisions of the Joinder Agreement. The maturity date of the New Term Loan is March 30, 2021.

Last week, MGM Resorts International announced that MGM China Holdings Limited, a 51 per cent-owned subsidiary, has agreed in principle with its lenders to amend and restate its Hong Kong dollar denominated senior credit facilities agreement expanding the facility by $1 billion and extending the maturity by 18 months.

The amended and extended facilities will consist of a US$1.55 billion equivalent term loan, an increase from the previous $550 million term loan and US$1.45 billion equivalent revolving credit facility.

The facilities will amend and restate the existing US$2 billion credit facilities of MGM China Holdings Limited, in their entirety, and extend the term of those facilities to April, 2019.

J.K.

The Parisian to use US$12 million-worth of cables

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ands China has reached an agreement with the Dubai-based manufacturer of Ducab cables to order US$12 million-worth (MOP95.8 million) of cables for the new resort The Parisian.

The project was won by Ducab’s Hong Kong representative Polygon Cable Supplies.

“Winning this project is testament to the global standards to which Ducab products comply, and it is a proud moment for Ducab to be selected to supply the cabling needs for the Sands Group’s latest Macau property”, Andrew Shaw, Managing Director of Ducab, said. “This shows that our quality focus continues to open up opportunities beyond the Middle East region”.

“Iconic projects such as The Venetian and The Parisian have a significant quality reputation to live up to, and we believe that this begins at the construction stage. Working with Ducab and Polygon, we’re in no doubt of the quality, safety and longevity of the product, and we were also impressed by the facilities we visited in the UAE”, Vice President - Building Services of Venetian Cotai, Dale Chandwick, said.

The Parisian is a MOP21.6 billion project set to open next year that will feature approximately 3,000 rooms and suites, gaming space, a retail mall, replica Eiffel Tower, MICE space, diverse food and beverage options, and entertainment.

8 | Business Daily

April 14, 2015

Greater China

March exports shrink in shock fall Taking that disappointing outcome into account, the government has lowered its growth target for 2015 combined imports and exports to around 6 percent Koh Gui Qing and Kevin Yao

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hina’s export sales contracted 15 percent in March while import shipments fell at their sharpest rate since the 2009 global financial crisis, a shock outcome that deepens concern about sputtering Chinese economic growth.

The tumble in exports - the worst in about a year - compared with expectations for a 12 percent rise and could heighten worries about how a rising yuan has hurt demand for Chinese goods and services abroad, analysts said.

In a sign that domestic demand was also tepid, imports into the world’s second-biggest economy shrunk 12.7 percent last month from a year ago, the General Administration of Customs said yesterday.

That was the biggest slump in imports since May 2009, and compared with a Reuters poll forecast for a 11.7 percent drop.

“It’s a very bad number that was much worse than expectations,” Louis Kuijs, an economist at RBS in Hong Kong, said in reference to the export data.

“It leads to warning flags both on global demand and China’s competitiveness.”

Buffeted by lukewarm foreign and domestic demand, China’s trade sector has wobbled in the past year

on the back of the country’s cooling economy, unsettling policymakers.

Chinese Vice Premier Wang Yang was quoted by Xinhua state news agency as saying earlier this month that authorities must act to arrest China’s export slowdown lest it further dampens economic growth.

Wang was quoted as saying that local governments should offer “preferential policy support” and

KEY POINTS Bad trade numbers to increase worries on economy Exports -15 pct y/yin March, poll saw +12 pct Imports -12.7 pct y/y, poll forecast -11.7 pct March trade balance $3.08 bln, below poll’s $45.35 bln

encourage more private investment in exports.

Anaemic growth in the trade sector could hurt jobs, which the government wants to protect for fear that widespread unemployment could fuel social discontent and trigger unrest.

So far, China’s labour market appears to be holding up well, despite signs that economic growth is steadily grinding to its lowest in a quarter of a century of around 7 percent.

Data on growth in the first quarter will be released on Wednesday.

Difficulties faced Last month’s trade performance left China with a surplus of US$3.1 billion, much smaller than the poll forecast for a US$45.4 billion trade gap.

A breakdown of exports and imports by major markets was not yet available yesterday, though many economists said there were few doubts that a stronger yuan - which is pegged to a rising dollar - had crimped export sales.

Indeed, Huang Songping, a spokesman at China’s customs office, acknowledged the difficulties that exporters faced from a firmer yuan.

Costs stemming from labour, financing and the exchange rate “remain stubbornly high and the competitive advantage of the traditional foreign trade has been weakened,” Huang said.

He added that 56.2 percent of exporters surveyed by the government said their costs had risen in March.

Against the euro, for instance, the yuan hit a record high of 0.15274 euros on March 16, up a steep 14 percent against the common currency this year.

“The really weak trade surplus has implications for the weakness in the renminbi,” said Andrew Polk, an economist at the Conference Board in Beijing. “So we might see more weakness going forward.”

China expanded grew its trade sector by 3.4 percent in 2014, according to government data, missing the government’s growth target of 7.5 percent by more than half.

OIL

March crude imports up 14 pct

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hina’s imports rose 14 percent in March from a year ago as domestic oil production has remained flat and demand for refined fuel products held at near-record levels in recent months.

China still imported a lowerthan-expected 26.81 million tonnes of crude oil in March, data from the General Administration of Customs showed. On a daily basis, March imports of 6.3 million barrels per day (bpd) were down 5.2 percent from February.

China’s crude imports have been sustained by flat domestic oil output and implied oil demand that has remained above 10 million bpd for the past six months. The International Energy Agency (IEA) last month revised up its forecast for China’s oil demand growth in 2015 to 2.7 percent.

With global oil prices at their lowest levels in six years, China has also been adding to its strategic reserves.

The March volumes were 1 million tonnes shy of an earlier estimate by Thomson Reuters Oil Research and Forecasts.

In the first quarter, China imported 80.34 million tonnes of crude oil, or 6.52 million bpd, up 7.5 percent over the same period last year.

China also imported 2.87 million tonnes of oil products in March and exported 2.83 million tonnes, leaving net oil product imports at 40,000 tonnes, customs data showed.

Reuters

Reuters

EXPERT POINT OF VIEW

Business Daily | 9

April 14, 2015

Greater China SOY

COAL

COPPER

Imports rise 5.4 Imports decline pct from February 42 pct year on year

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Investors to subscribe shares of 30 companies

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Monthly imports climb

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hina imported 4.49 million tonnes of soybeans in March, up 5.4 percent from the month before as the world’s top buyer of the oilseed shifts to cheaper South American supplies.

March imports also picked up after the Chinese New Year holiday which fell in mid-February, reducing arrivals that month.

Imports in the first quarter of the year rose 1.9 percent to 15.63 million tonnes, according to the data published by the General Administration of Customs.

Slightly stronger imports came even as downstream demand weakened in some regions.

Soy imports will climb further in April-June as cheap South American supplies offer processors better crushing margins, said the China National Grain and Oils Information Centre (CNGOIC).

Imports in April are estimated at 5.3 million tonnes, while arrivals in May and June will increase to more than 6.5 million tonnes per month, the centre said. Shipments stood at 4.26 million tonnes in February.

Crushing margins were as high as 140 yuan ($23) per tonne for Argentina soybeans for May shipment, it said.

China imported 360,000 tonnes of edible oils in March, up 56.5 percent from the prior month, according to customs data. China imports palm oil, soy oil and rapeseed oil.

hina’s coal imports in the first quarter fell 42 percent on a year earlier amid tepid demand and tighter quality checks.

Imports by the world’s biggest coal consumer reached 49.07 million tonnes in the first three months of the year, according to data from the General Administration of Customs.

The preliminary import figure includes lower-grade lignite.

Imports for March came in at 17.03 million tonnes, up 11.6 percent on the previous month, but analysts said underlying demand eased after taking into account the shorter month and week-long Lunar New year holiday in February.

Along with subdued demand, China’s coal needs have been curbed by tougher environmental checks from Beijing to tackle air pollution.

The National Development and Reform Commission (NDRC) said in its annual report in March that it would implement policies aimed at reducing coal consumption and controlling the number of energyintensive projects in polluted regions.

China has imposed tougher quality standards on imported coal as part of its efforts to prop up domestic prices and reduce oversupply on the market.

However, the country’s energy regulator acknowledged in a policy document last month that foreign coal is still very competitive and imports are likely to remain at a relatively high level.

hina’s copper imports surged 46.4 percent in March as firms resumed shipments after the Lunar New Year holidays the month before.

Arrivals of anode, refined copper, copper alloys and semi-finished copper products reached 410,000 tonnes in March, compared with 280,000 tonnes in February.

February’s shipments were the lowest since June 2011 as slowing economic growth curbed demand.

Traders said importers had bought spot refined copper in early February when the difference between London Metal Exchange and Shanghai prices favoured imports, with the bulk set to arrive in Shanghai between late March and mid-April.

But March arrivals were down 2.4 percent from a year earlier, which Peng said was due to reduced imports by firms that had in the past shipped in refined copper as a financing tool.

In the first quarter of 2015, copper imports dropped 17.1 percent to 1.1 million tonnes from the same period last year, the data showed.

Many Chinese importers have reduced term shipments of refined copper for 2015 as they were uncertain whether they would receive credit for such purchases, traders said.

One trader at an international company said his firm’s 2015 term shipments of refined copper to China would halve from last year.

Reuters

Reuters

Reuters

Chinese investors are allowed to subscribe for new shares from 30 companies this week, according to the country’s initial public offering (IPO) schedule. Among those companies, 11 will be listed in the Shanghai Stock Exchange, 2 in the Shenzhen Small and Medium Enterprise Board and 17 in the ChiNext Index, which tracks China’s NASDAQ-style board of growth enterprises. The firms are planning to issue a total of 1.48 billion shares to raise 15.46 billion yuan (US$2.52 billion), down from 21.36 billion yuan raised during the IPOs in March, according to data from Wind Information.

Stock reform allows investors up to 20 accounts Investors will no longer be restricted to only one stock account in China’s A-share market and each can have up to 20 accounts from yesterday, the managing institution for stock accounts said. The China Securities Depositary and Clearing Co., Ltd. (CSDC) will introduce more such reforms to encourage investment, said CSDC chairman Zhou Ming. The reform means investors no longer face complicated procedures if they want to transfer their accounts to other brokerage firms. All they need to do is to open new accounts with other firms and the information will be transferred.

AIIB accepts 5 more founding members The Netherlands, Brazil, Finland, Georgia and Denmark have been approved as prospective founding members of the Asian Infrastructure Investment Bank (AIIB), the Ministry of Finance said. This brings the total number of prospective founders to 46, the ministry said in a statement on its website. Countries that applied to join after March 31 will be ordinary members with voting rights only, and less say in the rule-making process. The founder membership will be finalized on April 15. It is expected to be established by the end of this year.

Dubai’s financial court seeking ties with China

CAO YANG

analyst at Pudong Development Bank in Shanghai “The slide in March exports was beyond the market expectation, and the data was quite weak. There is a downward risk to reach the 6-8 percent export growth target for this year. And the reason might be our exports to ASEAN countries dropped 9 percent.”

YAO XUEKANG

short, the Q1 data is bland.”

ZHU QIBING

macro strategist at China Minzu Securities, Beijing “The exports sector might be dragged by the sluggish exports to Europe, which are mainly due to the sharp drop of the euro over the past several months. The imports still reflect the weak domestic demand and fall of global commodities price.”

analyst at Essence Securities, Beijing

NIE WEN

“March figures were much weaker than expected, and all numbers from the past three months were distorted by the Chinese New Year holiday.

People resumed working late, construction activities picked up late. In

“One major reason for the falling exports was yuan appreciation. Exports fluctuated quite a lot month on month, probably because of timings of customs

analyst of Hwabao Trust, Shanghai

clearance. For the first quarter, exports rose 4.9 percent was in line with expectation. Yuan appreciation is expected to continue curbing exports in the second quarter of this year.”

ANDREW POLK

resident economist, The Conference Board, Beijing “Part of it may be a give back from the incredibly large export numbers in February, but if you look at the quarterly figures it makes a bit more sense.

Obviously no big surprise with imports being down in low double-digit figures; that’s a commodities story. The really weak trade surplus has implications for the weakness in the RMB. We’ve had two record trade surpluses and still weakness in the RMB, so we might see more weakness going forward.”

Reuters

The court system in Dubai’s financial free zone is seeking an agreement with Chinese courts on enforcing its judgements as trading ties between the two economies expand, a senior Dubai court official said. DIFC Courts, which covers the Dubai International Financial Centre, the Middle East’s main banking hub, has sought to strengthen its global clout since last year by signing several deals with foreign courts on mutual enforcement of decisions.

10 | Business Daily

April 14, 2015

Greater China

Yuan to take 12.5 pct of global reserves by 2030 More than 50 foreign central banks have started to use the yuan or keep it as part of their foreign reserves, according to industry estimate

reserve manager.

Foreign central banks have been buying Chinese assets in the onshore interbank bond market as well as in the offshore dim sum market. Their purchases are usually biased toward high-quality investment-grade bonds issued by central governments or policy banks.

China sent a strong message to the International Monetary Fund (IMF) in March urging that the yuan be included in its special drawing rights (SDR) basket, promising it would strive for further reforms and aim for full convertibility this year.

Beijing has also taken steps to open up its markets to foreign capital and has been pushing for the increased use of the yuan for trade and investment with a broader goal of eventually putting its currency on par with the U.S. dollar.

So far, more than 50 foreign central banks have started to use the yuan or keep it as part of their foreign reserves, according to industry estimate.

China has signed currency swaps with 31 countries worth 3,120 billion yuan to encourage bilateral trade and investment.

Although central banks already started to have exposure to the renminbi, how fast it becomes a large reserve currency will depend on growth and stability of the economy, pace of the internationalisation and deepening of China’s financial markets, said a surveyed reserve manager.

Reuters

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hina’s yuan is expected to take a 12.5 percent market share of global reserves by 2030, an HSBC survey of global reserve managers showed, suggesting that Beijing’s stepped up efforts to open its markets to foreign investments will have some pay off.

The survey was carried out in March and drew on responses from

72 central banks which manages US$5.9 trillion in reserves, or 48 percent of global reserves.

The yuan’s rise will be a gradual one, accounting for 2.9 percent of global reserves by the end of 2015, 6.9 percent by 2020, 10.4 percent by 2025 and 12.5 percent by 2030, the survey revealed.

Thirty-five central banks, or 53

percent of respondents, said they were either investing or considering investing in yuan assets now, but channels to China’s domestic markets were limited for them.

“Investment opportunities are still limited as regards liquidity of markets and diversification within the market mainly due to credit risk considerations,” said a European

Taiwan rejected as founding member of AIIB A report said Taiwan could join further down the line Ben Blanchard and Michael Gold

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aiwan is not able to become a founding member of the Beijing-led Asian Infrastructure Investment Bank (AIIB) but is still welcome to become an ordinary member in the future, the Chinese government said yesterday.

In a statement carried by the official Xinhua news agency, China’s Taiwan Affairs Office said it confirmed what it said was a Hong Kong media report about the rejection of Taiwan. The report also said Taiwan could join further down the line, the Taiwan Affairs Office added.

While the Taiwan Affairs Office provided no explanation, it repeated that Taiwan would be welcome to join if it used an appropriate name.

“The mainland will consider opinions from all sides to properly address the issue of Taiwan’s membership,” the statement said.

“The related departments will consider Taiwan’s membership when making the constitution for the AIIB.” China views Taiwan as a renegade province. Most countries, including the United States, do not recognise

AIIB’s consultation meeting

Taiwan due to pressure from China.

Taiwan is not a member of the United Nations, the World Bank or the International Monetary Fund.

It is though a member of the Asian Development Bank under the name

of Taipei, China.

Taiwan downplayed the rejection, reiterating its interest to become an AIIB member if it receives equal treatment as other members.

Joining AIIB is positive for Taiwan,

2.9 pct of global reserves in RMB by the end of 2015

said Charles Chen, spokesman for Taiwan’s Presidential Office.

“But if the future of Taiwan’s accession fails to meet the precondition of ‘dignity and equality’, then Taiwan would prefer not to participate,” Chen said.

China has not ruled out the use of force to bring Taiwan under its control.

But since Taiwan’s current president Ma Ying-jeou took office in 2008, enmity has declined considerably and the two sides have signed a number of trade and investment deals.

Taiwan’s decision to apply to join the AIIB has sparked a heated debate in democratic Taiwan, where deepening relations with autocratic China have caused growing unease.

The rejection comes as Taiwan’s ruling party, which had championed the AIIB application, said its chairman Eric Chu will visit China in May to attend a cross-straits forum. The visit has drawn criticism from Taiwan’s pro-independence opposition party.

“Taiwan is a nation. Our negotiations with China should be government-to-government, not party-to-party negotiations conducted in secret,” Democratic Progressive Party Chairwoman Tsai Ing-wen said in response to Chu’s visit.

Tsai is widely expected to be a candidate in next year’s presidential elections.

The United States has urged countries to think twice about joining the AIIB until it could show sufficient standards of governance and environmental and social safeguards.

Reuters

Business Daily | 11

April 14, 2015

Asia

World Bank cuts East Asia growth forecast

slowdown in China, although that is unlikely since the world’s second-biggest economy enjoys policy buffers including large foreign reserves, and ample fiscal room to deploy stimulus or bail out debtors, the report added.

China’s central bank has cut interest rates twice since November in a bid to spur an economy growing at its slowest pace in decades.

Growth in developing East Asia and Pacific excluding China is expected to accelerate to 5.1 percent in 2015 and 5.4 percent in 2016, from 4.6 percent in 2014, the World Bank said.

Malaysia, the region’s largest oil-exporter, is likely to see growth slow in 2015, as low oil prices hit capital spending in the energy sector and private consumption cools due to the implementation of the goods and services tax in April, it said.

The World Bank said China’s economy is likely to slow to 7.1 percent in 2015 Masayuki Kitano

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he World Bank cut its 2015 growth forecasts for developing East Asia and China, and warned of “significant” risks from global uncertainties including the potential impact from a strengthening dollar and higher U.S. interest rates.

The Washington-based lender expects the developing East Asia and Pacific (EAP) region, which includes China, to grow 6.7 percent in each of 2015 and 2016, down from 6.9 percent growth in 2014.

That’s down from its previous forecast in October of 6.9 percent growth this year and 6.8 percent in 2016.

China’s growth is likely to slow due to policies aimed at putting its economy on a more sustainable footing and tackling financial vulnerabilities, the World Bank said in its latest East Asia and Pacific Economic Update report yesterday.

The World Bank said China’s economy is likely to slow to 7.1 percent in 2015 and 7.0 percent in 2016, from 7.4 percent in 2014.

The previous forecast was for growth of 7.2 percent in 2015

Reuters

KEY POINTS Developing East Asia Pacific 2015 growth cut to 6.7 pct

and 7.1 percent in 2016.

While the impact of low oil prices will vary from country to country, the World Bank said the prospect of a sustained period of low oil costs will help underpin growth in the region, as will an expected improvement in high-income economies.

However, due to uncertainties in the global economy, there are “significant risks” to the regional outlook, it added.

“Higher U.S. interest rates and an appreciating U.S. dollar, associated with monetary policy divergence across the advanced

economies may raise borrowing costs, generate financial volatility, and reduce capital inflows more sharply than anticipated,” the World Bank said.

Any downturn in Japan and the euro area would dent the region’s exports, it said.

Another risk is a significant

World Bank cuts 2015 China growth forecast to 7.1 pct 2016 forecasts for China, developing EAP also lowered Says uncertainties in global economy pose risks to outlook

Financial industry seeks Seoul bourse trading hours The market currently closes at 3 pm local time, an hour earlier than mainland Chinese markets and two hours earlier than Hong Kong Choonsik Yoo and Lim Seung-gyu

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rading hours at the South Korean stock market should be extended by an hour at least so that they overlap with other regional markets to encourage more foreign investment, the head of the local financial investment industry association said.

Hwang Young-key, chairman of the Korea Financial Investment Association (KOFIA), told Reuters the

organisation’s members had asked for the longer trading hours and that he “strongly agreed to the idea”. KOFIA has 163 members including brokerages, asset management companies.

“Other markets such as Hong Kong remain open until 4 pm local time, and so extending trading hours here will give foreign investors an opportunity to better trade between markets in the

region,” said Hwang, a former banker.

Foreign investors currently account for 34 percent of total turnover on the Seoul exchange.

Hwang said he expects local share prices to rise as high as 2,500 points this year, breaking above the record high of 2,231.47 points set in 2011, fuelled by low valuations, record-low interest rates, improved corporate earnings prospects and bigger dividend pay-outs.

Deposits at money market funds (MMF), an indication of more appetite for riskier investments, have risen 40 percent from the end of last year to around 115 trillion won (US$105 billion) last week, KOFIA data shows.

“The MMF deposits have increased because a lot of investors are waiting for the right time to buy stocks or stock investment funds,” Hwang said.

He said local stocks were now trading around 9.4 times their earnings, a level he said was undervalued compared to the 15 to 16 times earnings levels seen in the United States and Britain.

Reuters

Other markets such as Hong Kong remain open until 4 pm local time, and so extending trading hours here will give foreign investors an opportunity to better trade between markets in the region Hwang Young-key Korea Financial Investment Association, chairman

12 | Business Daily

April 14, 2015

Asia

Japanese machinery orders decrease A soft demand outlook will be a worry for the Bank of Japan, which last week kept its massive stimulus programme intact Tetsushi Kajimoto

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apan’s core machinery orders fell for a second straight month in February in a sign that business investment remains soft, and analysts say the smaller-than-expected decline won’t necessarily allow policymakers to relax given an uncertain economic outlook.

The 0.4 percent monthly fall in core machinery orders, a highly volatile data series, came as a recent run of weak indicators raised doubts about a sustainable economic rebound following a recession last year.

However, the figure released by the Cabinet Office yesterday was better than economists’ median estimate of a 2.8 percent decline and followed a 1.7 percent drop in January.

Analysts say the decline in core orders, regarded as an indicator of capital spending in the coming six to nine months, was a reaction to a 8.3 percent gain in December, and expect them to mark a third straight quarterly gain in January-March.

“The figure was not bad at all as it points to growth in core orders in the first quarter,” said Koya Miyamae, senior economist at SMBC Nikko Securities.

“But given weakening exports and private consumption, the pace of pickup will likely slow from April.”

A soft demand outlook will be a

investments may remain slow to recover from a slump after the sales tax hike last year.

Despite Prime Minister Shinzo Abe’s call to splurge, Japanese firms - from Toyota Motor to Daikin Industries’ - remain cautious about boosting new spending on factories and equipment.

The Cabinet Office stuck to its view that machinery orders are on a gradual pickup trend.

Reuters

KEY POINTS worry for the Bank of Japan, which last week kept its massive stimulus programme intact and shrugged off speculation of near-term fresh stimulus, even as inflation ground to a halt and growth stalled two years into its radical experiment to revive the economy.

Some expect the chance of BOJ action on April 30, when it issues new long-term forecasts that may lead to a cut in its rosy price projections.

Still, many economists see the

BOJ further expanding stimulus in the second half, likely in October, giving itself more time to review the inflation outlook.

Policymakers are counting on higher capital spending driving a virtuous cycle of sustainable economic growth via increases in jobs and wages, and strong private consumption.

But weak capital spending plans for the new fiscal year that began on April 1, seen in the BOJ’s key tankan survey, suggests that business

S.Korea embroiled in presidential aides’ corruption scandal The names included eight powerful politicians, including former presidential chiefs of staff

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lose aides to South Korean President Park Geun-hye and heavyweight politicians are being embroiled in a corruption scandal as their names are listed on a brief memo left behind by Sung Wan-jong, the former ruling party lawmaker and businessman who committed suicide last week.

The presidential office Cheong Wa Dae said yesterday that close aides or anyone who is convicted of taking bribes after the prosecution’s investigation will not be an exception (to punishments).

The comments came a day after President Park urged prosecutors to strictly deal with the case in accordance with law and principles without sanctuary, indicating her willingness to punish whoever is convicted of bribery.

The prosecutors’ office formed a

special team on Sunday to probe the scandal, which became a bombshell dropped in the political arena.

The memo, which was found from a trouser pocket of Sung who killed himself on April 9, involved names

The comments came a day after President Park urged prosecutors to strictly deal with the case in accordance with law and principles without sanctuary

Feb core orders -0.4 pct m/m vs forecast -2.8 pct; +5.9 pct y/y Machinery orders are seen in gradual pickup trend Capital spending, wage gains essential to fuel economic growth Japan Inc, wary of outlook, cautious about boosting spending

and the currency figures next to the names, which strongly indicated bribes delivered to them.

The names included eight powerful politicians, including former presidential chiefs of staff Kim Kichoon and Huh Tae-yeol, who said to local media that they will cooperate with prosecutors’ probe in good faith.

Handwritten next to Huh’s name was 700 million won (about US$640,000), and next to Kim was US$100,000 along with the date of September 26 2006, around when he accompanied Park on her visit to Belgium and Germany.

Among others were Lee Byungkee, incumbent presidential chief of staff, and Prime Minister Lee Wankoo. There were no currency figures next to their names.

Sung, the former ruling Saenuri Party lawmaker and businessman running a mid-sized construction company, was charged with embezzlement and engaging in corruption of the so-called energy diplomacy, advocated under the former President Lee Myung-bak.

He committed suicide on the day when he was presumed to appear in a court to determine the validity of arrest warrants for him.

Reuters

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Business Daily | 13

April 14, 2015

Asia

Philippines clamps down on illegal miners

S. Korean import prices milder

Small-scale mining of metallic minerals will be limited to gold, silver and chromite, and will be confined to certain areas

T

he Philippines is tightening oversight of the roughly 300,000 small-scale miners in the country as it looks to curb illegal mining and gold smuggling, as well as to protect the environment, a government official said yesterday.

The Philippines is sitting on mineral reserves worth US$1.4 trillion, among the world’s biggest, but mining accounts for less than 1 percent of total GDP, as policy bottlenecks and a strong anti-mining lobby led by the Roman Catholic Church hamper development.

Illegal gold shipments from the Southeast Asian country, which its government says holds the world’s second largest reserves of the precious metal, remains a concern as some small miners try to avoid paying local taxes, Leo Jasareno, head of the Mines and Geoscience Bureau (MGB), told Reuters.

“Smuggling activity could still be prevalent,” he said, adding many small-scale miners also operate without proper permits. By law, all gold produced by small-scale miners must be sold to the Philippine central bank.

Data from the MGB showed gold sold by small-scale miners and traders to the central bank in 2014 was worth only 180 million pesos (US$4 million) based on current foreign exchange rates, compared with US$25 million

South Korea’s import prices slowed their pace of decline for a second straight month in March but only slightly as weak global commodity markets continued to pressure import prices, central bank data showed yesterday. Import prices in won terms dropped 17.1 percent in March compared to a year earlier, the Bank of Korea said, moderately slowing from a 17.8 percent drop in February. Prices for intermediate goods and raw materials that have the heaviest weightings on the index, fell 10.8 percent and 33.2 percent in March on-year, respectively, attributing to the fall.

Japan’s wholesale prices up

in 2013, US$47 million in 2012, US$764 million in 2011 and US$962 million in 2010.

“Gold production (by small miners) in 2014 was about 18 tonnes, down from about 30 tonnes before the BIR started collecting taxes from small miners,” Jasareno said, referring to the Bureau of Internal Revenue, which in 2012 ordered the imposition of a 2-percent excise tax and 5-percent withholding tax on gold purchases.

The government will attempt to closely monitor operations in what was previously a loosely regulated industry.

Small-scale mining of metallic

minerals, which is rampant in many provinces, will be limited to gold, silver and chromite, and will be confined to certain areas, Jasareno said.

Provincial or city mining regulatory boards will be set up to govern small-scale mining contractors who will be required to pay a so-called “government share” on top of the usual taxes, he said.

Big miners support the government’s move to clamp down on illegal small-scale miners, but oppose other reforms such as a proposal to increase the state’s share of mining revenues.

Wholesale prices rose 0.7 percent in March compared with the same period of last year, the Bank of Japan said yesterday.

The index of corporate goods prices stood at 103.5 against the 2010 base of 100, the central bank said in a preliminary report.

Excluding the impact of the 3-percentagepoint consumption tax hike last April, the country’s wholesale prices fell 2.1 percent on yearly basis. In the financial year 2014, wholesale prices decreased 0.1 percent on year excluding the impact of tax hike.

While including the tax hike’s impact, the index rose 2.8 percent to 105.3.

Indonesian motorbike sales reduced

Reuters

Australian manufacturers fear Shell-BG deal outcome The Australian Competition and Consumer Commission said yesterday it would begin an inquiry into the competitiveness of wholesale gas prices

S

ome of Australia’s biggest manufacturers fear a planned US$70 billion takeover of BG Group Plc by Royal Dutch Shell could potentially worsen what they see as a lack of competition in the country’s eastern gas market.

Manufacturing Australia, a lobby group whose members include world no.2 explosives maker Incitec Pivot Ltd and steel maker Bluescope Steel Ltd, warned that gas users seeking long term contracts were facing higher costs due to a limited number of suppliers.

The group has yet to decide whether to make a submission to a review of Shell’s bid that will be carried out by Australia’s competition watchdog.

“It’s an issue that does raise some concern,” Manufacturing Australia executive director Ben Eade told Reuters. “It’s certainly not going to increase competition in a market where we think what we need is more suppliers than less.”

Concerns about soaring gas prices in eastern Australia have come to a head with the start of exports

from three liquefied natural gas plants (LNG) plants in Queensland, including BG’s Queensland Curtis plant which opened late last year.

A report last year by Deloitte Access Economics found that manufacturing output could shrink by as much as

It’s not necessarily about price.

We believe there’s a great lack of competitive rivalry in the gas production market Ben Eade Manufacturing Australia executive director

A$120 billion (US$91 billion) by 2021 due to rising gas prices as LNG exports ramped up.

Estimates of gas price rises have been based on assumptions that Australia’s LNG exports would fetch US$14-16 per gigajoule (GJ), although spot LNG in the Asia Pacific is trading at around US$7 following the collapse in oil prices.

“It’s not necessarily about price.

We believe there’s a great lack of competitive rivalry in the gas production market,” Eade said.

The Australian Competition and Consumer Commission said yesterday it would begin an inquiry into the competitiveness of wholesale gas prices and the structure of the industry.

The inquiry, due to be completed

by April 2016, will be run separately and over a longer timeframe than the merger review, a commission spokeswoman said.

The review of the gas industry in eastern and southern Australia comes amid concerns raised by big manufacturers that suppliers are hoarding gas for export, and offering only limited amounts at high prices for domestic users.

“What we want to see is encouragement and incentives for a second tier of gas producers to be able to enter the market,” Eade said.

Shell Chief Executive Ben van Beurden said last week the BG deal would face anti-trust scrutiny but was unlikely to lead to forced asset sales. Shell and BG together own gas reserves in eastern Australia and offshore Western Australia as well as stakes in LNG plants on both sides of the country.

Reuters

Indonesia’s motorcycle sales in March fell 24.7 percent from a year earlier, an industry association said yesterday. On a monthly basis, sales fell 1.8 percent in March. Total sales in Southeast Asia’s biggest economy, where motorbikes are hugely popular, amounted to 546,169 in March. Sales were led by Honda Motor Co Ltd, Yamaha Motor Co Ltd and Kawasaki, the data showed.

7 Bangladeshi bank employees to jailed A special court in Bangladesh’s capital Dhaka has given 10 years’ imprisonment to seven former officials of a private commercial bank in a case of loan fraud.

The officials of the Oriental Bank, presently known as ICB Islamic Bank Limited, were also fined 19 million taka (US$243,589).

Honse Ara Begum of the Special Judge Court-3 in Dhaka pronounced the verdict in their absentia yesterday. Bangladesh’s Anti-Corruption Commission (ACC) filed the loan fraud case against the bank officials on December 29, 2006.

Japanese reactors to re-fire in 2015 Japan’s pro-nuclear lobby pledged yesterday that 2015 would be the year reactors are restarted, despite public wariness that has lingered since the Fukushima disaster. Industry officials and supporters said the country desperately needs atomic power to play its part in cutting greenhouse gas emissions and ensure a stable electricity supply. “This year marks the exit from zero nuclear power,” Takashi Imai, chairman of the Japan Atomic Industrial Forum, told an audience of around 900 people, including industry officials and global policymakers.

14 | Business Daily

April 14, 2015

International Falklands oil drillers scale back A group of three oil explorers drilling in the Falkland Islands, including Noble Energy , have shelved plans to drill a second well in the south and east Falklands following the steep drop in oil prices, one of the partners said yesterday. The partners, which also include London-listed Falkland Oil and Gas (FOGL) and Edison International, said they would continue drilling in other parts of the region. Oil explorers across the globe have scrapped expensive drilling work to rein in costs on the back of a steep decline in oil prices.

Crisis echoes in Brazil’s capital markets Paula Sambo and Denyse Godoy

EU closer to counting alcohol calories Health conscious tipplers may be closer to finding out just how many calories they are imbibing as consumer advocates push for EU nutritional labelling on alcoholic drinks in the face of strong industry resistance.

The European Parliament took a first step last month when it called on the European Commission to draw up legislation requiring such labelling by 2016. Adopted by 63 of the 68 members of the parliament’s health committee, the resolution also calls for labels that highlight the dangers of alcohol for pregnant women and motorists.

Turkey opens trial into mining disaster Dozens of suspects went on trial yesterday over modern Turkey’s worst mining disaster that left 301 miners dead last year in the western town of Soma and tarnished the image of the government. The trial, which is expected to be lengthy, opened at a court specially created for the process around 50 kilometres (30 miles) from Soma in western Turkey in the town of Akhisar, an AFP correspondent reported. Forty-five people are standing trial, including eight former top managers from the Soma Komur group that ran the mine who are charged with murder.

Panama content hosting summit The 7th Summit of the Americas just concluded last weekend left a positive fruit for Panama in economic and political fields if the consensus achieved will be implemented. Although the final declaration including eight commitments, with 90 percent of agreement according to Panamanian President Juan Carlos Varela, was not signed yet, the public opinion here gave positive reviews to the summit, where U.S. Presidents Barack Obama and Cuban leader Raul Castro held first face-to-face talks in half a century and both countries agreed to gather again in next continental summit.

easyJet names new CFO British low-cost airline easyJet named Andrew Findlay as its new chief financial officer, poaching him from bicycle retailer Halfords. The new joiner will start by the end of October 2015, FTSE 100 company easyJet said in a statement on Monday. His appointment comes after it was announced in January that incumbent Chris Kennedy was moving to British chip designer ARM. Findlay has been chief financial officer of Halfords since February 1 2011 and before that was director of finance, tax and treasury at Marks & Spencer.

A man sells T-shirts with the sentence ‘Dilma out’, during a demonstration against the government of Brazilian President Dilma Rousseff in Sao Paulo, Brazil

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PMorgan Chase & Co.’s Ricardo Leoni says he’d have to hearken back to the tumult that gripped global markets seven years ago to recall a time when Brazilian companies were so loath to tap bond markets.

“What we saw in the first quarter was a paralysis,” Leoni, a 20-year investment banking veteran who is head of Brazilian debt capital markets at New York-based JPMorgan, said by telephone from Sao Paulo.

With Brazil boosting interest rates to combat inflation, the economy heading for its worst year since at least 1992 and a widening graft scandal, companies see few reasons to take on debt to finance investment. They’ve stayed away from the overseas bond market so far this year while raising just 11 billion reais (US$3.6 billion) locally. Of that amount, almost all was used to refinance debt while just 0.5 percent was earmarked for investments or acquisitions, the lowest since the Brazilian capital markets association began compiling the data in 2009.

“Political and economic concerns have accumulated, and virtually no

company had the courage to raise money for investments with these rates,” Carolina Lacerda, the head of investment banking at UBS AG’s Brazil unit and a capital markets director at Anbima, said by telephone from Sao Paulo. “Brazil was frozen in the first quarter and everybody is in waiting mode.”

With President Dilma Rousseff’s approval rating at the lowest of any Brazilian head of state in 15 years, her plea that firms boost investment is failing to resonate.

Of the 669 companies surveyed

by Rio de Janeiro-based university Getulio Vargas Foundation, 31 percent said they’ll invest less this year than in 2014. That compares with 16 percent of respondents who said they lowered investments last year. Forty-two percent said they will invest the same amount.

“Don’t let uncertainties undermine your vision for Brazil’s future,” Rousseff said at an event in Sao Paulo on March 10. “We’ll make every effort so that we see signs of a recovery by the end of the year. But we need to count on you too.”

The sluggishness of Latin America’s biggest economy is the main reason behind the investment decline this year, according the Getulio Vargas poll.

The economy will contract 1.01 percent in 2015 while inflation will soar to 8.13 percent, according to the median estimate of 100 analysts surveyed by the central bank. Last month, policy makers lifted borrowing costs to a six-year high of 12.75 percent to quell price increases that have exceeded Brazil’s 4.5 percent target since August 2010.

While JPMorgan’s Leoni said local debt sales may pick up over the next three months, with some already in the works, issuance will largely remain depressed given Brazil’s economic woes. The bank was Latin America’s third-biggest underwriter of debt sales in 2014, data compiled by Bloomberg show.

Business confidence plunged to a record low in March as the growing corruption probe into companies that allegedly bribed executives of the state oil company eroded confidence.

Bloomberg News

Banks lobbied in South Africa over preference share billions Renee Bonorchis

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South African money manager is leading a drive to form blocks of investors holding preference shares in the country’s biggest banks to persuade the lenders to redeem the securities at the highestpossible prices.

About 22 billion rand (US$1.8 billion) of the shares were issued a decade ago by banks including Standard Bank Group Ltd., Africa’s largest lender by assets, and FirstRand Ltd. mostly to expand share ownership in the country. Grouping the shareholders into voting pools will strengthen their bargaining power, said Greg Saffy, head of Cast Iron Capital, which has partnered with Exchange Sponsors Ltd. in the program.

A change in liquidity rules is prompting the banks to review the status of the preference shares, which

typically have priority in the payment of dividends. The stocks, issued by the banks between 2004 and 2006, are known as non-cumulative, nonredeemable perpetual preference shares. Under Basel III regulations, they are no longer defined as core Tier-1 capital. As lenders try to boost their capital levels to meet the new benchmarks, they can buy back and cancel the shares or swap them for new instruments.

“Banks may have to do buybacks or replacements, but we’re going to lobby the banks for those shares,” Saffy said in an interview in Johannesburg. By setting up the voting pool, Cast Iron Capital and Exchange Sponsors, an investment adviser, will form a market place where the shares can be traded, with the two firms earning performance

fees for transactions, he said.

Investors were able to start organizing themselves into the voting groups yesterday, by visiting a website that Saffy and Exchange Sponsors have set up, or by calling the firms.

Six preference-share instruments from lenders including Investec Ltd., Nedbank Group Ltd. and Barclays Africa Group Ltd. are being targeted.

Pooling the investors will enable them to negotiate with the banks for a cash pay-out at “an acceptable level,” Saffy said on the website.

“We’ve canvassed some of the institutional investors and there is keen interest and support for our initiative,” Saffy said. “We are in the process of collecting the votes from all holders and custodians of the instruments.”

Bloomberg News

Business Daily | 15

April 14, 2015

Opinion Business

wires

Why social progress matters

Leading reports from Asia’s best business newspapers Michael Porter

TAIPEI TIMES

Professor at Harvard Business School, is chairman of the Advisory Board to the Social Progress Imperative

The steep fall in exports last month is just a temporary setback, as external demand is to log strong growth from this quarter onward, while robust tourist arrivals are to continue to prop up employment and domestic demand, foreign banks said last week. “We are optimistic about Taiwan’s exports — with electronics exports to propel industrial activity from this quarter — as Asia enters the summer launch season for consumer electronics,” Barclays PLC senior regional economist Leong Wai Ho said in a report.

The report came after Taiwan’s exports plummeted 8.9 percent year-on-year last month.

THE PHNOM PENH POST Agriculture workers have been steadily leaving the sector to pursue other kinds of employment, dropping its labour participation to 48.7 per cent in 2013, with the Ministry of Agriculture, Forestry and Fisheries stating in a yearly report, that this worrying trend could impact the nation’s agricultural output. The report, released at the ministry’s yearly review meeting last week, stated that agricultural workers were moving to urban centres in Cambodia or even abroad seeking non-agricultural jobs. The drop in agricultural labour was sizeable, considering it was 57.6 per cent in 2009, and 54.8 per cent in 2010.

THE JAPAN NEWS The government will soon step up efforts to establish new rules that will allow power utilities to share surplus electricity to be generated from renewable energy producers among nationwide service areas, in a bid to solve regional gaps in electricity generation. Some regions are currently hosting more government-approved renewable energy facilities than others, resulting in surplus electricity that could be used in other regions. The government has set a 2030 target of having renewable energy account for about 25 percent of the nation’s energy mix from the current 11 percent.

THE STRAITS TIMES The Singapore Exchange (SGX) announced yesterday that LHN, a real estate management services group, has joined the Catalist board. The group’s three main business segments are space optimisation, facilities management and logistics services. It is known for refurbishing unused, old and under-utilised properties to increase their net lettable area and potential rental yield, before sub-leasing them to tenants.

“We believe that our listing ... will enhance the public image of our group locally and overseas, and open up more business opportunities,” said Mr Kelvin Lim, executive chairman and group managing director.

A world beyond GDP

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conomic growth has lifted hundreds of millions of people out of poverty and improved the lives of many more over the last half-century.

Yet it is increasingly evident that a model of human development based on economic progress alone is incomplete. A society which fails to address basic human needs, equip citizens to improve their quality of life, protect the environment, and provide opportunity for many of its citizens is not succeeding.

Inclusive growth requires both economic and social progress.

The pitfalls of focusing on GDP alone are evident in the findings of the 2015 Social Progress Index, launched on April 9. The SPI, created in collaboration with Scott Stern of MIT and the non-profit Social Progress Imperative, measures the performance of 133 countries on various dimensions of social and environmental performance.

It is the most comprehensive framework developed for measuring social progress, and the first to measure social progress independently of GDP. Drawing on 52 indicators of a country’s social performance, the SPI offers a practical tool for government and business leaders to benchmark country performance and prioritize those areas where social improvement is most needed.

The SPI thus provides a systematic, empirical foundation to guide strategy for inclusive growth.

The data reveal that many aspects of social progress, not surprisingly, tend to improve with income growth. Wealthier countries, such as Norway (which holds the top spot on this year’s SPI), generally de-

liver better social outcomes than lower-income countries.

But a striking finding is that GDP is far from being the sole determinant of social progress.

Costa Rica, for example, has achieved a higher level of social progress than Italy, with barely a third of Italy’s per capita GDP. And Costa Rica is not an isolated case. Across the spectrum of countries, from rich to poor, we see examples, such as New Zealand and Senegal, that are far more successful at translating their economic growth into social progress than others, such as the United States and Nigeria. Many of the fast-growing emerging economies, including China and India, have also not yet been able to attain the level of social progress that their economic progress enables.

Where there is an imbalance between economic growth and social progress, political instability and unrest often arise, as in Russia and Egypt. Lagging social progress also holds back economic growth in these and other countries that fail to address human needs, build social capital, and create opportunity for their citizens. Countries must invest in social progress, not just economic institutions, to create the proper foundation for economic growth.

In my own experience, I have seen how Rwanda made investing in social progress – including gender equity, a 61% reduction in child mortality in a single decade, and 95% primary school enrolment – integral to its economic development strategy. Rwanda’s positive economic performance would not have been possible without improvement in these and

other dimensions of social progress.

Focusing on social progress in this way leads to better development strategies, and builds political support for the controversial steps sometimes needed to increase prosperity. Rigorous measurement of social performance, alongside traditional economic indicators, is crucial to starting the virtuous circle by which GDP growth improves social and environmental performance in ways that drive even greater economic success. And, by avoiding narrow debates, such as GDP versus income inequality, the SPI provides an essential tool with which to craft a feasible agenda that does just that.

Interest in the SPI has grown exponentially since its beta release in 2013. Findings are being shared among millions of citizens around the world, making it a tool for citizens to hold their leaders accountable.

Moreover, strategic initiatives to drive improvement in social progress are underway in more than 40 countries. Paraguay, for example, has adopted the SPI to guide an inclusive national development plan for 2030.

And the SPI is being used not just at the national level, but by regional and municipal authorities as well. States such as Para in Brazil, along with cities like Bogota and Rio de Janeiro in Latin America and Somerville in the US state of Massachusetts, are starting to use the SPI as a measure of development success.

This year, the European Commission will roll out regional SPIs across Europe. And companies, such as Coca-Cola and

Natura, are using the SPI to inform their social investment strategies and build collaborative relationships with public and private partners.

GDP has been the benchmark guiding economic development for more than a half-century.

The SPI is intended to complement (not replace) it as a core metric of national performance.

Measuring social progress offers citizens and leaders a more complete picture of how their country is developing. And that will help societies make better choices, create stronger communities, and enable people to lead more fulfilling lives.

Project Syndicate

A society which fails to address basic human needs, equip citizens to improve their quality of life, protect the environment, and provide opportunity for many of its citizens is not succeeding

16 | Business Daily

April 14, 2015

Closing Hong Kong Electronics Fair kicks off

Chinese painter Cui sets record sale

A number of the world’s leading technology brands are taking part in the Hong Kong Electronics Fair (Spring Edition) and concurrent International ICT Expo which opened yesterday. Organized by the Hong Kong Trade Development Council (HKTDC), the twin fairs continue for four days with more than 3,300 exhibitors from 24 countries and regions taking part.

Industry heavyweights such as Google, Microsoft, Yahoo, Polaroid, Intel and Ford have brought their unique products and expertise to this year’s event. The 12th Hong Kong Electronics Fair features three new zones that spotlight the latest advancements in a connected world.

An eight-panel series of paintings by Cui Ruzhuo sold for HK$236 million (US$30 million) at Poly Auction Hong Kong, setting an auction record for a living Asian artist. “The Grand Snowing Mountainous Jiangnan Landscape,” completed in 2013, sold on April 7 and broke the previous record of HK$185 million also set by Cui at Poly Hong Kong in April 2014, the auction house said in a press release. Another one of Cui’s paintings, which sold for $HK29 million last year, was mistakenly taken away with the trash after the event at the Grand Hyatt Hotel and never recovered.

Graft trial opens of former head of China’s top energy group Jiang was a close associate of Zhou Yongkang, the once-powerful domestic security chief and member of the elite Politburo Standing Committee Ben Blanchard

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iang Jiemin, the former head of CNPC, China’s top energy group, yesterday admitted his guilt and asked for leniency at the opening of his trial on charges of bribery and abuse of power, the latest in a string of top officials caught in an anti-graft campaign.

Scores of senior figures in the ruling Communist Party, the military and state-owned enterprises have been felled in President Xi Jinping’s twoyear war on corruption.

State television showed pictures of a grim-faced Jiang Jiemin, who also ran the state asset regulator for five months before being sacked in September 2013, standing in the dock with two policemen at his side.

He was formally charged last month.

Jiang was a close associate of Zhou Yongkang, the oncepowerful domestic security chief and member of the elite Politburo Standing Committee, the most senior

The facts of my crimes are clear, the evidence is true and conclusive Jiang Jiemin, former head of CNPC

Great Hall of People in Beijing will host NPC sessions

person to have been charged with corruption.

Zhou had also been at CNPC, the parent company of PetroChina Co. Ltd., having risen through the ranks to serve as general manager from 1996 to 1998.

“The facts of my crimes are clear, the evidence is true and conclusive,” Jiang said,

Tencent hits US$200 bln market cap for first time

according to a statement by the Hanjiang Intermediate People’s Court in the central province of Hubei, which is trying him. “I admit my crimes and am penitent.”

Jiang did not defend himself when the evidence was presented, the court said.

He needs to be held accountable under the law

for his crimes, which include “bribery, not being able to account for a large number of assets and abuse of power by a staff member at a stateowned company”, the court cited the prosecutor as saying.

Jiang is willing to serve his time, and “earnestly requested leniency”, the

court added, saying the verdict would come at a later, unspecified date.

High-profile trials are typically held in places with little or no connection to the accused, to ensure judges’ impartiality. However, the party controls the legal system, and a court is unlikely to challenge the accusations.

Hearings of cases usually last only a day or two, with a verdict delivered a few weeks later.

Xi’s graft crackdown has also taken down at least a dozen former associates and protégées of Zhou.

Zhou was a patron of former high-flying politician Bo Xilai, jailed for life in 2013 for corruption and abuse of power in the worst political scandal in decades.

Arrested last year and expelled from the party, Zhou will be tried in Tianjin, a city near Beijing, but a date has not been set.

Reuters

Kaisa reinstates chairman China, S.K., Japan agree to roubled Chinese developer Kaisa Group strengthen water cooperation

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hina’s Tencent Holdings Ltd for the first time hit a market cap of more than US$200 billion yesterday, making it more valuable than U.S. tech firms like Amazon.com Inc, IBM Corp and Oracle Corp .

The country’s biggest social networking and online entertainment firm rose 5.38 percent to close at HK$170.50 (US$22) in trading in Hong Kong, giving it a market valuation of US$206 billion. This is higher than Oracle’s US$190 billion, Amazon’s US$178 billion and IBM’s $161 billion.

Tencent’s shares have rocketed 52 percent from the beginning of this year, bringing its valuation close to those of U.S. peer Facebook Inc’s US$230 billion and Chinese arch rival Alibaba Group Holding Ltd’s US$210 billion.

The surge in the Shenzhen-based company’s share price comes as Hong Kong stocks hit fresh seven-year highs yesterday. China recently allowed mutual funds to buy stocks on the Hang Seng Index under the Shanghai-Hong Kong Stock Connect scheme, fuelling the jump in already-rising Tencent shares.

hina, South Korea and Japan yesterday agreed to strengthen trilateral cooperation on water policy innovation during the 7th World Water Forum held in South Korea’s southeastern cities of Daegu and Gyeongju.

The three countries held a trilateral ministerial meeting during the forum yesterday, bringing together China’s Vice Minister of Water Resources Jiao Yong, South Korea’s Minister of Land, Infrastructure and Transport Yoo Il-ho and Japan’s Minister of Land, Infrastructure, Transport and Tourism Ohta Akihiro.

The three sides signed a joint statement to strengthen trilateral cooperation on water-related issues under the topic “Water Policy Innovation in Response to Persistent and Emerging Water Challenges”.

“We share the recognition that water policy innovation and reform should be promoted by each country in order to strengthen the core role of water resource in sustainable development, improve synergy among relevant government agencies and relevant stakeholders, enhance the resilience of water infrastructure and attract more financial investment into the water sector,” the statement said.

Reuters

Xinhua

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Holdings said yesterday it had reinstated its founding chairman months after he stepped down, a move traders said may dim the prospects of a takeover deal by larger rival Sunac China.

The return of Kwok Ying Shing, who along with other senior executives left Kaisa in December, comes days after the heavily indebted developer said authorities in its home base Shenzhen had unblocked sales of several residential projects.

Traders said both events indicate Kaisa had likely reached an agreement with the authorities in the southern Chinese city, which meant the company was now more likely to shrug off the takeover deal which was a financial lifeline.

The Shenzhen authorities had blocked sales of around 10 developments in December for undisclosed reasons, leaving the company struggling to repay its US$10 billion total debt.

The company announced Kwok’s resignation the same month, without elaborating on reasons.

Bondholders, who had rejected some of the terms of the Sunac takeover, also cheered the reappointments.

Reuters