Macau business daily, 2015 July 3rd

MOP 6.00

Jimei to operate at least 7 VIP tables in NegaWorld’s Cambodia casino

Closing editor: Joanne Kuai

China’s securities regulator bets on relaxing margin trading rules to avoid crash

Page 5

Page 10

Petrochemical firms Sinopec and Cnooc bid for Petrobras field Page 11

Year IV

Number 827 Friday July 3, 2015

Publisher: Paulo A. Azevedo

Courts to decide affordable housing compensation Page 3

Feel-Good Factors Surfacing

It’s not over ‘til the fat lady sings. Looser transit restrictions. Summer holidays around the corner. And a smaller-than-expected slump in June casino revenues. It’s all grist for the mill for Macau’s tourism, hospitality and gaming industry. Industry insiders predict improved hotel occupancy rates. While gaming operators and analysts are guardedly optimistic. Casino stocks have surged to a degree not seen in more than three years

Smoke and mirrors

3,000 to 5,000 junket employees’ jobs in danger. A gaming promoters’ association head believes it might come to that yet. If a universal smoking ban is put in place in casinos. Give us smoking lounges for VIP rooms at least, he urges the gov’t. And plans to lobby legislators

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Economic chess Macroeconomic management to green growth. Premier Li sees a cornucopia of benefits in OECD. Declaring China’s intention to have closer collaboration with the Organization for Economic Cooperation and Development

Pages

6&7

Brought to you by

HSI - Movers July 2

Name

%Day

Galaxy Entertainment

+13.27

Sands China Ltd

+12.07

Belle International Ho

+2.91

Cathay Pacific Airways

+2.73

Swire Pacific Ltd

+2.72

China Life Insurance C

-1.93

China Petroleum & Che

-1.94

China Mengniu Dairy C

-2.59

Ping An Insurance Gro

-2.67

China Shenhua Energy

-2.83

Source: Bloomberg

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I SSN 2226-8294

www.macaubusinessdaily.com

Society

Casting shadows A two-edged sword. UNESCO World Heritage status attracts visitors. But an urban planning academic warns of the flip side. Claiming rapacious developers are racing against time to demolish old buildings. In case they’re categorised as ‘heritage’

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Brought to you by

2015-7-3

2015-7-4

2015-7-5

28˚ 33˚

27˚ 32˚

27˚ 32˚

2 | Business Daily

July 3, 2015

Macau Tigerair Taiwan increases Macau-Taipei flights Low-cost carrier Tigerair Taiwan said it would add one extra flight between Macau and Taoyuan Airport, Taipei from August this year. The extra flight will add to the airline’s Tuesday, Wednesday and Friday schedules, which currently provide two return flights between the cities. The airline believes that the new extra services, departing for Macau at 6:05am, and returning to Taipei at 8:35 am, will offer more flexible options to travellers. The new service opened for ticketing sales from July 1.

UNESCO status encouraging demolition of old buildings Academic Cecilia L. Chu praises the heritage conservation policies of the territory but says World Heritage City status has inadvertently led to the demolition of many old buildings João Santos Filipe

jsfilipe@macaubusinessdaily.com

M

acau is a case of success that is not often recognised in terms of heritage conservation; such is the opinion of an academic at the Department of Urban Planning and Design of the University of Hong Kong.

“Despite being criticised for its heritage policies,” says Cecilia L. Chu, “Macau has actually achieved more success in conserving its built environment than many of its neighbouring territories undergoing rapid urban development over the last decades”. The academic was writing an article titled ‘Spectacular Macau: Visioning futures for a World

Heritage City’ published in the journal Geoforum.

However, the author recognises that the inscription of Macau as a UNESCO World Heritage City in 2005 has led to the destruction of some of its old buildings.

“The inscription of Macau as a UNESCO World Heritage City has also prompted, somewhat ironically, the demolition of many older buildings across Macau as developers, wary of the possibility that these structures may one day be listed as ‘heritage’, race against time to replace them with new ones with potentially higher real estate value”, she explained.

By way of illustration the academic mentions the local photography exhibition held in 2008 at the Creative Macau, Centre for Creative Industries

by Nuno Soares and named ‘Awaiting reflection on urban voids’.

If on the one hand Cecilia L. Chu mentions the dangers of development of the gaming industry to the conservation of the heritage of the city’s buildings, on the other she stresses very clearly the advantages of gaming to the territory.

“The unlikely pairing of gaming and heritage – the two key engines driving Macau’s spectacular urban change and surging gross domestic product (GDP) – has elevated the tiny city into a prime tourist destination in the region”, she says.

2015 Macau Franchise Expo kicks off today

T

he annual Macau Franchise Expo (MFE) kicks off today, having attracted a total of 168 exhibitors from 11 countries and regions, the Macau Trade and Investment Promotion Institute (IPIM) said.

According to IPIM, the three-day Expo occupies some 6,000 square metres in Exhibition Hall A at The Venetian Macao for the 168 exhibitors and 218 booths.

Meanwhile, more than 70 per cent, or 123, of the exhibitors are from Mainland China, Hong Kong, Japan, Korea, Malaysia, Portugal, Singapore, Taiwan, the United Kingdom, in addition to firsttime participants from the United Arab Emirates plus 45 local exhibitors.

The government department indicated that the number of exhibitors and booths for the event are

similar to that of last year.

These exhibitors, according to IPIM, are from a variety of industries, including food and beverage, retail, education, leisure and entertainment, finance, real estate, brand agency services

and consultancy, with the participation of more than 100 international brands such as Subway, Store Friendly Self Storage Group, BOSSible, Chocolat-ier and Kids Kingdom.

In addition, the Macao

Products Display Centre, Macao Ideas, will set up an exhibition area to promote ‘Made in Macau’ products, as well as those from Portuguesespeaking countries for which Macau enterprises hold the sole distributorships.

In addition to the Expo, a series of seminars and presentations are offered, as well as forums, experiencesharing sessions, business matching, brand repackaging and consultancy services.

IPIM said the organisers had already collected information on about 130 projects involving chain operations and franchises for the business matching sessions for the city’s enterprises and young entrepreneurs.

Meanwhile, the highlighted forum for the event - Forum on Chain and Franchise Business Opportunities of International Brands - is scheduled for the afternoon of July 3.

More than 640 participants from a total of 29 trade promotion organisations and associations have registered to participate as in MFE as trade visitors, IPIM said.

K.L.

Business Daily | 3

July 3, 2015

Macau Gov’t increases disability subsidy to MOP3,350 The government’s temporary disability subsidy has been increased to MOP3,350 (US$418.8) per month from MOP3,180 since July 1, the Social Welfare Bureau has announced. Following the increase, the amount of the subsidy is equivalent to that issued by the Social Security Fund (FSS). According to the Bureau, this temporary subsidy benefits about 400 local residents. Meanwhile, the Bureau noted that it will continue distributing this financial aid to the disabled before a new law or amendments to the current law are carried out, despite the programme being slated to finish by the end of the year.

AL: Courts have final say on affordable housing compensation

T

he government will let the courts decide on the compensation for wrongfully excluded applicants from the affordable housing selection process.

The revelation was made by the President of the Second Standing Committee of the Legislative Assembly (AL) Chan Chak Mo. At this moment the Second Standing Committee is working on the proposal of the government to review the affordable housing law to speed up the process to hand such houses to local residents.

According to the proposal, if an excluded applicant appeals to the courts, the process will not stop to wait for the outcome of the case.

This means that by the time the court’s decision is known, all the units may have already been assigned to other people.

In a previous meeting of the Standing Committee,

this proposal raised some questions from members.

Now it has all been resolved after the committee talked with representatives from the government.

“We accept the explanation from the government concerning this issue. The courts will decide the solution for the problems arising from such cases”, Chan Chak Mo told journalists.

“The compensation will always depend upon the specific cases. It may involve the payment of a compensation fee, the allocation of other housing units if there are any available or the opportunity to participate in another process to distribute more affordable housing units”, he explained.

Chan Chak Mo added that he expects the law to be sent for AL plenary’s approval before the end of the legislative year.

For its part, the government believes the revision of the law will allow the speeding up of the process to distribute affordable housing units by one year.

J.S.F.

4 | Business Daily

July 3, 2015

Macau

July gaming revenue to drop 30 per cent Following a better than expected June, the market is anticipating smaller drops in gaming revenues in the upcoming months. But some question whether the market really has touched bottom Luís Gonçalves

Luis.goncalves@macaubusinessdaily.com

I

t was probably the first time during the current casino downturn here that official figures for gaming revenues were much better – or less bad – than what the government and investors were expecting. June gaming revenues decreased 36 per cent from a year ago, a performance that contrasted with the consensus forecast of 38 per cent. The Secretary of the Economy and Finance, Lionel Leong Vai Tac, had guesstimated a few days prior to the release of final figures that revenues last month could amount to between MOP16

billion and MOP16.5 billion, an implied 41 per cent fall.

The figures caused a rally in casino stocks all over the world and some investors saw signs of a bottoming out for Macau casino market.

According to predictions by three investment houses Wells Fargo, Credit Suisse, Deutsche Bank - gaming revenues are expected to drop 31 per cent this month yearon-year.

However, the forecast range between the three banks is quite wide. The most optimistic estimation comes from Credit Suisse, which

admits gaming revenues could fall in a best-case scenario by 24 per cent year-on-year.

Deutsche Bank estimates revenues to decline 37 per cent this month.

In a note to clients yesterday, Wells Fargo estimated July growth to track at around minus 30 per cent. The prediction is ‘in line with historical seasonality and takes into account the ramp of Galaxy Phase II’.

On the other hand, Credit Suisse sounds a more optimistic tone expecting the recent visa policy easing and upcoming summer holidays

to act as drivers for an improvement in revenues.

Daily revenues in casinos here could hover between MOP650-700 million, the bank said. Deutsche Bank advances an estimation of a 37 per cent fall as July ‘on average has been up roughly 1.3 per cent from June on a win per day basis. Should the average hold firm, July would fall 37 per cent’.

Not a bottoming out?

Also, in a report published yesterday Morgan Stanley underlines that many investors are considering

the full smoking ban and the less strict visa policy as signs of the bottom for the Macau gaming industry but the US bank disagrees.

Regarding visa relaxation: ‘We don’t think it's a sign of relaxing regulation, nor will it help premium mass/ VIP revenue to grow. First of all, the negative impact on high-end visitors was felt in 2014 because they were coming illegally and used to cancel onward journeys. That restriction still remains. Since the average length of stay in Macau is 1.4 days, any extension of stay beyond 5 days may not be material’.

Morgan Stanley also recalls that transit visitors have already recovered since April without any corresponding improvement in VIP/ premium mass revenue. The full smoking ban is expected to slash revenues an extra 10 per cent, with Melco Crown the casino operator most exposed to the impact.

Credit Suisse added that, ‘We expect a prolonged debate on this bill in the Legislative Council, and think a low probability of the rule being finalised in the near term, given more pushbacks from casino operators and more discussions among local communities amid a slump in revenue. We are likely to get more clarity into 2016 which should buy some time for the sector’.

Corporate

Melco Crown Entertainment developing local talent Melco Crown Entertainment Limited has announced its new Local Management Development initiative - the Foundation Acceleration Programme - for its local employees being encouraged to take on the exciting journey of upward movement and whole person development in May. There was a kick-off ceremony for the Programme in the 38 Lounge of Altira Macau. The Foundation Acceleration Programme is planned and structured to develop its current local employees’ understanding of business operations and their business perspective beyond the functional view.

It is a two-month programme to enhance participants’ current knowledge through a journey of functional and cross-functional exposure, along with mentorship from management staff in the same discipline.

The programme is a balanced combination of classroom-based theory training and practical operational placements, designed to assist participants develop a wellrounded view of their role and become more effective and engaged in delivering service excellency. The ultimate goal of the Programme is to build local employees’ readiness for future managerial roles.

Business Awards 2014 Winners interviewed on Macau Cable TV

Macau Cable TV’s Talent Talk show will broadcast a series of 8 interviews featuring the Business Awards’ second edition’s Grand Winners and Excellence Winners throughout July and August 2015. The first talk show features Mr. Jones Chong, Young Entrepreneur Excellence Award Winner, and will be broadcast on Saturday, July 4 at 8:00 pm.

Mr. Austin Ao, New Talent Grand Award Winner, will be interviewed on July 11, while Innovation Grand Award Winner Mr.

Justin Lu from the Sheraton Macao Hotel will be interviewed on July 18.

Talent Talk is a weekly programme, in which eminent personalities from the territory are invited to discuss the current situation surrounding talent management, the growth of the economy and the sustainable social development of Macau.

The programme, in Chinese, is broadcast on Saturdays on CH2 at 8:00pm. The interviews are also going to be available online at www.macaucabletv.com.

Business Daily | 5

July 3, 2015

Macau

Thousands of junket employees’ jobs under threat About 3,000 to 5,000 employees working for the city’s junket operators will see reduced remuneration or even lose their jobs if VIP gaming revenue is further depressed by a universal smoking ban Stephanie Lai

sw.lai@macaubusinessdaily.com

T

he city's VIP gaming promoters are demanding that the government allow at least smoking lounges to be set up in VIP rooms, as the proposed full smoking ban measures could further trigger a VIP gaming revenue fall affecting at least 3,000 gaming employees, the president of the Association of Gaming and Entertainment Promoters of Macau, Mr. Kwok Chi Chung, told Business Daily.

About 3,000 to 5,000 employees working for the city’s 178 VIP gaming

promoters, ranging from frontline gaming workers to administrators, could see their existing remuneration terms and welfare further reduced or even lose their jobs if the government's proposed full smoking ban is enacted in the casinos here, Mr Kwok told us, citing the Association's rough estimate.

“If the measures are enacted, we'll just continue to lose clients,” Mr. Kwok said. “We expect VIP gaming revenue to further shrink by 30 to 50 per cent as the smoking ban will just

pressurise the already strained VIP gaming promoters, who have already started downsizing staff.”

The Association president noted that at present, an average of five gaming workers are employed per gaming table on a round-the-clock basis.

“The gaming revenue will for sure suffer a blow from the proposed smoking ban because I don't think clients would like having to walk down from the VIP gaming room on the 27th or 37th floor of a casino to

smoke outside, or that mass gamblers like having to walk out of the property to smoke,” Mr. Kwok added.

Mr. Kwok, also an independent non-executive director of Hong Kong-listed junket operator Jimei International Entertainment Group Ltd., said his Association's core member companies include the major junket operators here, such as Suncity Group, Tak Chun, Jimei, Meg-Star International, the Cali Group and Macau Golden Group.

On Tuesday, Macau's Executive Council announced the bill for an amended smoking control policy, entailing a total smoking ban on gaming floors including VIP rooms, and the elimination of smoking lounges on mass gaming floors. The bill has yet to be scheduled to be discussed by the Legislative Assembly.

The government has mentioned before that the new smoking control policy, which also proposes an increase in tobacco tax and a ban on the sales of electronic cigarettes, is expected to be implemented by next year.

Stressing that most VIP gamblers smoke, Mr. Kwok said that VIP gaming promoters are proposing to the government that smoking lounges be allowed to be established on VIP gaming floors.

“Now the VIP gaming promoters here are running about 2,000 gaming tables, which if the proposed smoking ban come into practice, the revenue generated will be further depressed,” Mr. Kwok said, “In that case, if we cannot have sufficient fill-up of more [VIP] gamblers, we estimate that the operation of about 600 to 1,000 tables will have to stop, and that we will have to return these tables to the gaming operators.”

Mr. Kwok added that his Association is now scheduling meetings with legislators to voice their concerns in a bid to convince them to tweak the government's proposed smoking ban bill.

“In principle, we also support the government's smoking control policy, and we don't plan to protest in the streets to voice our concerns,” Mr. Kwok told us, “We think having smoking lounges on VIP gaming floors is a solution to meeting the government's initiative while protecting gaming employees’ health.”

At least seven gaming tables for Jimei in NagaWorld’s Cambodian casino

J

imei International Group will operate “no less” than seven VIP gaming tables in NagaWorld, Phnom Penh's sole integrated hotel-casino entertainment complex. The move expands Jimei’s businesses to Cambodia following other agreements in Macau and Australia this year.

The company, chaired by famous local junket operator Jack Lam, responsible for Jimei Casino and nine VIP rooms here, announced the agreement with NagaCorp – owner of NagaWorld resort - through a filing with the Hong Kong Stock Exchange reading: ‘It is the Group’s current intention to promote approximately no less than 7 gaming tables in operation under the NagaWorld Junket Arrangement which may be changed over time’.

The filing noted that Jimei would be responsible for several services to its clients in NagaWorld Casino Cambodia including but not limited to accommodation, transportation, food and beverage. The partnership has the duration of one year, automatically renewed for another one year on the same terms and conditions unless either party gives written notice of non-renewal to the other party not less than one month in advance prior to the expiration of the initial term.

NagaCorp is the largest hotel, gaming and leisure operator in Cambodia, and the company has been listed in Hong Kong since 2006. Its casino licence in the country will run until 2065, in addition to a 41-year monopoly within a 200km radius of Phnom Penh that expires in 2035.

With this agreement, Jimei continues to expand to other markets after already announcing this year that it is expanding its junket business in Macau and Australia.

Here, Jimei signed an agreement with New International Club to ‘indirectly participate in the gaming promotion business in Macau’. The latter is in negotiations with Wynn Macau to manage some VIP rooms and expects to get ‘no less’ than 30 gaming tables in these Wynn rooms and earn ‘not less’ than 40 per cent of the revenues from the gaming tables. Currently, Jimei runs Jimei Casino in Macau and nine high-roller rooms in several casinos here such as Wynn (three rooms), City of Dreams, Altira and Sands (three).

Jimei International has also announced a junket agreement with Australian casino mogul James Packer, CEO of Crown Resorts and partner here with Lawrence Ho in Melco Crown Entertainment who manages City of Dreams and the upcoming Studio City.

Jimei will be responsible ‘for administration and management of its junket patrons playing at the Crown Perth Casino and provide the necessary services to them. The casino is located in Perth, Western Australia and opened in 1985.

Outside Macau, Jimei runs operations in Hong Kong (wealth management) and in the Philippines where it has the Fontana Hot Springs Leisure Parks, Fort Ilocandia Resort Hotel and Solaire Resort and Casino, according to the company’s information.

L.G.

6 | Business Daily

July 3, 2015

Macau

Casinos post rare rally on easing slump, travel rules

I

t’s been a while since investors had reasons to buy Macau casino stocks.

A surprise move by the Macau government to ease China’s traveling rules and the smaller-than-expected slump in June casino revenue have given hope that the industry might finally be due for a recovery. Casino stocks surged by a degree not seen in more than three years.

Four out of five Hong Kong-listed casino stock jumped by the most since October 2011, helping the Bloomberg Intelligence Macau Gaming index claw back a sliver of its 58 per cent dive from its January 2014 peak. MGM China Holdings Ltd. closed up 16 per cent while Wynn Macau Ltd., Galaxy Entertainment Group Ltd. and Sands China Ltd. gained between 12 and 14 per cent. The benchmark Hang Seng Index was up 0.1 per cent.

The loosening of travel restrictions “marks the first supportive policy since a year ago,” wrote Karen Tang, an analyst at Deutsche Bank AG. While she expects the impact will be small, “we note the change in policy tone as important.” She raised Galaxy, MGM China, Sands China and Wynn Macau to hold from sell.

The Macau government announced on Tuesday a reversal of the transit visa policy exactly a year after the entry rules were tightened. Starting July 1, Mainland China passport holders transiting through Macau are allowed to stay in the city longer and visit more frequently.

The government is expected to issue more supportive policies in the second half for Macau’s economy while keeping gaming revenue regulated, according to Chris Kwai and Haofei Chen, analysts at China International Capital Corp.

Misplaced optimism

Las Vegas Sands Corp. and Wynn Resorts Ltd., which rely on their Macau units for at least 60 per cent of their revenue, rose for two days in New York on the back of the eased visa restrictions.

Melco Crown Entertainment’s New York-listed shares ended up 4.2 per cent, after surging 9.7 per cent on Tuesday.

Gross gaming revenue in Macau fell 36.2 per cent to MOP17.4 billion (US$2.2 billion) in June, beating the median estimate of a 38.3 per cent drop from six analysts surveyed by Bloomberg. The slump has been easing for four straight months following 13 consecutive months of declines.

Optimism that the market is showing signs of bottoming may be misplaced, according to Morgan Stanley analyst Praveen Choudhary, pointing to disappointments for Macau casinos over the next six to 12 months “that should keep investors at bay.”

These include the risk of VIP revenue declining further as more junket operators shut down, and the impact on casino earnings due to higher labour and construction costs, he wrote in a note on July 1.

Bloomberg

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Business Daily | 7

July 3, 2015

Macau opinion

Making a PIGS ear of Europe

Pedro Cortés

Lawyer* cortes@macau.ctm.net

T

he Roman Empire united Europe for the good and for the bad. It was the first idea of Europe, as we know it today. As a consequence, the legal concepts and maxims of Roman law are still used in our time in almost every court of the world or in some of their proceedings.

What we’ve seen last week is the complete distortion of the foundations of Europe. The dictatorship of the markets is imposing furious anger on the people. The end of Europe, for some. The turmoil around the corner, for others.

Europe as we see it is a consequence of WWII, which was a corollary of WWI that started with less than what we see today: the assassination of Archduke Franz Ferdinand of Austria on 28 June 1914 (101 years and 5 days ago).

The Troika is imposing rules on southern European countries that should not be accepted by the common people. The war has started. Germany is winning by imposing its rules. It seems that Ms. Merkl has suddenly forgotten that she was born in East Germany.

Lagarde has forgotten that Germany invaded France. Yes, Monsieur Astérix would surely conclude that the Europeans are, indeed, crazy.

What happens in the stock exchanges of the world and what may be the consequences of this crisis or of the so-called Grexit (I personally savour the appearance of new catchphrase headlines) is an event that no-one can predict the outcome of. Nobel prizewinners are telling us that Greece must resist. There will be a referendum soon to decide whether the Greeks want the current status quo or whether they want to rule themselves. These are decisive times for Europe and for the world. The tension is in the air and no-one can understand where it may lead us. The euro currency was a great and interesting idea and concept. Nonetheless, it might have been imposed too soon or the way it was conceived may not have been the correct way. We should have had two euros: Tier 1 for the rich and wealthy countries of the North and Tier 2 for the southern European countries, the so-called PIGS. But this is very easy to say, like ‘guessing’ the mark six number the day after.

Anyway, what the European leaders (?!?) should take now are History lessons. I am not asking them to go to pre-Greco civilization. They well may start with the Greece civilization followed by the Roman Empire. Then read up on the wars that led to the European countries as we know them today. A semester on the Middle Ages would be advisable, too. While the Magna Carta could take a week or two more.

I would also recommend a special assignment titled: Portuguese Expansion and, of course, the Independence of the United States of America. I am sure that they would fail in all of categories. As they would fail in the 19th Century Napoleonic Empire. But, if they wanted to take a shortcut, maybe the history of Europe in the 20th Century would be enough to let them understand what they are doing to European civilization, whatever that may be.

If they were smart enough to pass the final exams, I would change the title of this article into: ‘Tenham mas é juízo!’ or, in English, ‘Do not play with fire!’ *Part-time lecturer at the Chinese University of Hong Kong

Loosened transit visa new dawn for economy?

Following 13 consecutive months of gaming revenue slump, the policy is seen as the first positive news for the city’s big money-spinner as well as tourism industries Kam Leong

kamleong@macaubusinessdaily.com

T

he city’s relaxed transit visa restrictions for Mainland Chinese may herald a new dawn for the recovery of local tourism, hotel and gaming industries, Credit Suisse and local travel associations predict.

On Tuesday, the Public Security Police Force (PSP) announced that the maximum permissible stay of Mainland tourists entering the territory for the purpose of onward travel will be increased to seven days from five, effective from July 1. In addition, it will allow Mainlanders transiting the city twice within 30 days to stay two days the second time they enter.

The President of the Macau Travel Industry Council, Andy Wu Keng Koung, told Business Daily that the policy will help local hotels to a higher hotel occupancy rate.

“The relaxation, for sure, is helpful to the tourism industry, especially the hotels, which have experienced drops in occupancy for half a year.

The extension of the permissible stay by two days may increase the chances of tourists spending one more night in Macau; as such, the hotel occupancy rate will be boosted,” Mr. Wu said in a phone interview yesterday.

The ‘new’ visa restriction for the Mainland Chinese, in fact, is the ‘old’ practice that the government applied

before July 1 last year. The tightened changes on visa restriction is believed to be one of the factors that drove the city’s gaming industry south.

Asked how he anticipated that the policy would stimulate tourist numbers to the city the travel association head claimed that the policy would be interpreted by tourists as a positive psychological message.

“When the government tightened the restrictions last year, many of the Chinese tourists were not comfortable with it. In addition to regulating the permissible stay period, the government had also required documented proof showing that tourists were indeed heading to a third destination, which made many transit tourists choose Hong Kong,” he said.

Positive signal

Mainland tourists are the biggest source of visitors to the Special Administrative Region. In the first five months of the year, the city registered total visitor arrivals of 12.5 million, of which 66.8 per cent, or 8.35 million, were from Mainland China, according to the latest official data of the Statistics and Census Service.

Credit Suisse also believes that the new rule will help prolong the stay of Chinese tourists, and increase

the frequency of their visits, thus suggesting a sign of recovery for the local gaming industry.

‘We view the visa loosening as a positive signal by the government, and expect the Macau names to trade positively on the back of this. We believe a recovery, if any, is likely to be gradual as Macau gross gaming revenues was hurt by both demand (weak macro) and supply (visa and fear factor of anti-corruption),’ Credit Suisse wrote in its latest research report.

‘The VIP and premium mass segments have been hurt by the transit visa restriction since July 2014 which reduced players' visit frequency and length of stay,’ the firm added, stressing that the [new] policy will be ‘a positive signal’ from the Macau Government to support the industry.

However, the firm noted that the recovery of gaming revenues will still take time even with visas loosened.

Nevertheless, the city’s Secretary for Security, Wong Sio Chak, claimed yesterday that the decision to loosen the transit visa restriction is due to the violations of such regulations having improved following the tightening last year, indicating that the government might evaluate adjusting visa restrictions at any time if the number of regulatory violations increases again.

8 | Business Daily

July 3, 2015

Gaming

Revel wins approval of plan bringing bankruptcy to a close

T

he former owner of the Revel casino in Atlantic City, New Jersey, which aimed to complete its bankruptcy in a few months, won approval of its bankruptcy plan after more than a year of court fights and failed sales.

“It’s a Kumbaya hearing today,” Revel AC Inc. attorney Michael Viscount told a judge at a hearing Monday in Trenton, New Jersey.

U.S. Bankruptcy Judge Michael Kaplan approved Revel’s bankruptcy liquidation plan and settlements reached last week that resolved the last remaining creditor opposition.

“The Revel needs to be

buried -- I do not intend to leave a carcass out there to be gnawed at and picked at,” and putting it to rest will allow Atlantic City to begin healing, Kaplan said.

“This is the best outcome I can conceive,” he said.

Revel reached a deal last week with its main antagonist, ACR Energy Partners LLC, which supplied energy to the casino, giving it a claim of US$3.3 million.

ACR had claimed it was owed more than US$20 million for utility service and sought to have the bankruptcy converted to a Chapter 7 liquidation, which would strip the company of control over its case.

After opening at a cost of US$2.4 billion in 2012, Revel sought bankruptcy protection last June for the second time in as many years. It closed in September after failing to draw interest for a quick sale.

The casino was one of four in Atlantic City to fold last year as competition from surrounding states lured away customers.

Failed deal

Brookfield Property Partners LP eventually won the first auction for the company in October for $110 million but backed out of the deal after it was unable to come to terms with ACR.

Ultimately, Polo North Country Club Inc., owned by Florida real estate developer Glenn Straub, bought the property for US$82 million in April, after multiple previous

Cashless casinos as confusion reigns in Greece’s heartland

P

rime Minister Alexis Tsipras may or not have blinked earlier today, but far from the power center of Athens, Greeks are still rubbing their eyes in confusion.

“Are we keeping the euro, are we leaving Europe, are we voting on Sunday? What is happening?” asked Stefanos Camber, a gas-station owner on the highway to Thessaloniki, as he pondered whether to demand cash or accept a credit card from a customer.

“Just tell us one thing, and we can go on with our lives.”

In Athens, the city center is a battleground of dueling rallies, with protesters in both sides following every twist in Tsipras’s showdown with

European negotiators. In the sleepier towns hundreds of kilometers away, residents said they were confused and dismayed at both the lack of clarity and their inability to plan for a future so uncertain.

And yet, rural Greeks live with the repercussions of every decision made in faraway Brussels and Athens. By Sunday night, even before capital controls were formally imposed, the two bank machines in Kamena Vourla, a seaside town, had run out of cash. This morning, the town gossips were abuzz with rumors of a fistfight as one of the ATMs blinked back to life and locals rushed it.

Then, news broke that Tsipras,

after calling a referendum and roundly rejecting creditors demands for more budget cuts and tax hikes, may have opened a door to a return to a variation of that same agreement.

As word trickled out, the waitresses at a cafe on the Aegean Sea near Lamia shook their heads at the radio.

No matter

“We spent all evening arguing about this referendum, and now it may not even happen,” said Irene Demetriou, a 28-year- old waitress with a bachelor’s degree in hotel management, a bed in her grandmother’s house and a 600-euro (US$665)-a-month income.

“What I want doesn’t matter anymore.”

deals with Straub fell through.

The bankruptcy is In re Revel AC Inc., 14-bk-22654, U.S. Bankruptcy Court, District of New Jersey (Trenton).

Bloomberg

A reporter driving a rented Seat sedan along the glinting blue waters of the Gulf of Corinth and then north toward Greece’s industrial heartland found little but confusion and frustration among the Greeks queried.

The casino in Loutraki, a small town with a rocky beach where swimming children squealed in the cold waters, stands as a reminder of the fickleness of government policy.

In the mid-1990s, as government jobs created a massive middle class and Greece’s economy soared after joining the European Union, the casino boomed. Built on the ruins of an earlier establishment destroyed in the 1930s, the place was always packed, said people who worked there.

Now, the high- stakes tables stood empty and pensioners in T-shirts punched buttons on the one-euro slot machines.

‘Bored Grandmothers’

“You should have seen the cars: Porsches, brand new Mercedeses, even a McLaren F1,” said the parking valet as he parallel parked a rusting Ford Fiesta between a Skoda and a Volkswagen hatchback. “Now all you get are bored grandmothers.”

Across the street, a strip club was shuttered. Inside the casino, a croupier held his hands a foot apart as he described the wads of cash gamblers would bring in.

This week’s capital controls, which limit cash withdrawals to 60 euros a day, only hastened the impact that five years of austerity and a shrinking economy has had on the place. At the cash machine by the entrance, Giorgios, a 56-year-old Greek retiree, stared at the screen as he switched between bank cards. His hot streak had ended at the five-euro minimum blackjack tables, and his bank couldn’t give him any more money.

“You think this is funny,” he said, when asked if he saw his situation as a metaphor for Greece, out of cash and hoping creditors change their mind.

“It’s my money, and I want it now.”

Bloomberg

Business Daily | 9

July 3, 2015

Gaming

Bankrupt Baha Mar in Bahamas secures interim financing

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he bankrupt US$3.5 billion Baha Mar mega resort in the Bahamas secured up to US$30 million in interim financing on Wednesday, but it was unclear when construction on the stalled project would resume.

The resort, bankrolled and built by the Chinese and described on its website as “the world’s glamorous, new playground, is eight to 12 weeks from completion once construction resumes, a lawyer for the resort told a bankruptcy judge.

U.S. Bankruptcy Judge Kevin Carey approved up to US$30 million in interim financing for Baha Mar, one of the biggest commercial construction projects in the Western Hemisphere. Baha Mar’s developer, Sarkis Izmirlian, the son of Armenian

billionaire Dikran Izmirlian, has agreed to arrange the funding.

Thomas Dunlap, a top executive for Baha Mar, declined to comment after the hearing on any timeline for resuming construction.

The interim financing is for the next 30 days to pay salaries, benefits and key suppliers, for example. It does not come with any project milestones.

“I haven’t seen that in a long time,” Carey said at the hearing.

Meanwhile, major contractors on the project are no longer on site at the Baha Mar. ThyssenKrupp AG, which is supplying 66 elevators and eight escalators, has disabled all of the equipment for safety reasons and has left the site, company spokeswoman Kellie Harris said.

A series of construction delays, funding squabbles, lagging inspections and faulty work at the Baha Mar resort in Nassau have led to contention and finger-pointing in recent months among the local developer, a Chinese state-backed contractor and China’s export finance bank. The turmoil and internal squabbles over Baha Mar have roiled the Caribbean nation’s fragile economy, while aggravating wouldbe tourists and idling thousands of workers amid sky-high Bahamian unemployment and slack revenue growth.

Once completed, Baha Mar is to add 5,000 jobs to the economy of the Bahamas, or 12 per cent of the small country’s gross domestic product.

Baha Mar filed for bankruptcy

protection in a Delaware court on Monday. The resort will feature more than 2,000 hotel rooms and a Las Vegas-style casino.

At Wednesday’s court hearing, lawyer Mark Shinderman, a partner at Milbank Tweed Hadley & McCloy, said the project is 97 per cent complete and the rest could be finished in 12 weeks once construction resumes.

The Export-Import Bank of China financed most of the project with a US$2.45 billion loan. But Sarkis Izmirlian, whose group has invested US$850 million in the resort, blamed China State Construction’s China Construction America (CCA) wholly-owned subsidiary for “missed construction deadlines” in a statement released on Monday.

Caesars wants bankruptcy investigator to probe 2008 buyout

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aesars Entertainment Corp.’s main operating unit asked a bankruptcy judge to let a court-appointed investigator scrutinize the 2008 buyout that left the casino giant saddled with billions of dollars in unmanageable debt.

The former prosecutor looking into the bankruptcy of Caesars Entertainment Operating Co. should broaden his probe to include the US$30 billion leveraged buyout, the unit said in a filing Tuesday in U.S. Bankruptcy Court in Chicago.

Richard J. Davis was appointed to investigate Caesars’ pre- bankruptcy restructuring actions with the goal of determining which,

Reuters

if any, can be successfully challenged by a lawsuit.

Because some creditors have also questioned the 2008 buyout, Davis should also look into that transaction, Caesars said.

Any conclusions the examiner reaches on the deal’s legitimacy “will be particularly helpful in assisting the parties in plan negotiations,” the company said.

Caesars’ main operating unit filed for bankruptcy in January with a plan to eliminate debt and reorganize itself. The proposal has split creditors holding billions of dollars in claims. Some have sued, saying the Las Vegas-based company’s prebankruptcy actions were illegal and designed to shield the most valuable assets from creditors.

The case is In re Caesars Entertainment Operating Co. Inc., 15-01145, U.S. Bankruptcy Court, Northern District of Illinois (Chicago).

Bloomberg

10 | Business Daily

July 3, 2015

Greater China

Regulator relaxes margin trading rules to avoid market crash The sudden market slide was likely a contributing factor to the central bank’s decision to cut interest rates last weekend

China’s two major stock exchanges said on Wednesday they plan to lower securities transaction fees by 30 percent from August A stock investor gestures in front of an electronic screen at a brokerage firm in Beijing

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hina’s securities regulator has relaxed rules on using borrowed money to speculate on stock markets, the latest in a flurry of government measures aimed at stemming two weeks of panic selling that is posing a growing risk to the world’s second-largest economy.

Just a few weeks ago, authorities were cracking down on riskier margin financing, which had helped Chinese markets more than double in a year.

But a more than 20 percent plunge in share prices in two weeks have seen

an abrupt shift as the government works to avert a crash in the world’s most volatile stock market.

China Securities Regulatory Commission (CSRC) said late on Wednesday that it would cancel a rule requiring investors make additional guarantees if their margin ratio reaches 130 percent or else face forced liquidation of their shares.

The regulator said brokerages will also be allowed to roll over margin trading contracts with clients.

Brokerages whose margin trading

volumes were currently above permitted levels could maintain current levels but further increases are disallowed, it said.

Hong Hao, chief strategist with BOCOM International, said that relaxed rules on margin calls would likely calm the market.

“This is the right dose of medicine,” Hong said.

“The slump was largely driven by margin calls, so if brokerages don’t

force liquidation the market slide should be stemmed at least for now.”

In a separate statement reported by the official Xinhua news agency, the CSRC also said it would allow stock brokerages to issue or transfer short-term corporate bonds via stock exchanges and trading systems between institutions to widen their funding channels.

The sudden market slide was likely a contributing factor to the central bank’s decision to cut interest rates last weekend for the fourth time since November.

Other measures this week have included unveiling rules to allow state pension funds to purchase stocks.

China’s two major stock exchanges said on Wednesday they plan to lower securities transaction fees by 30 percent from August.

But fears of a deeper plunge and uncertainty over policy has fuelled wild volatility, with prices at times swinging in a 10-percent range in a single day as many traders desperately try to unload their positions while others, possibly state linked, swoop in to buy cheaper stocks, believing Beijing will not allow a market crash to threaten the already slowing economy.

OECD partnership eyed closer Secretary-General Jose Angel Gurria said that the OECD is willing to share the development experience of all sides and help with China’s socioeconomic development and modernization

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hina and the Organization for Economic Cooperation and Development (OECD) agreed to strengthen cooperation in areas ranging from macroeconomic management to green growth and beef up their two-decadeold partnership.

The world’s second largest economy and the Paris-based organization reached the consensus during Chinese Premier Li Keqiang’s visit to the OECD headquarters, where they signed a shared vision statement and a 20152016 joint work program.

Also on Wednesday, China officially joined the OECD development centre, a forum where countries share their experience in economic and social policy-making to help decision-makers work out measures to boost growth in developing countries and emerging economies.

OEC D S e c r e t a r y General Jose Angel Gurria hailed China’s entry as a “historic and transformative opportunity for mutually beneficial knowledgesharing.”

In a speech delivered at the OECD headquarters, Li stressed the importance of

Chinese Prime Minister Li Keqiang delivers a speech at the Organisation for Economic Co-operation and Development (OECD) headquarters during a conference in Paris

developing the real economy against the backdrop of the global economy’s slow recovery and speeding up structural reform.

“To my understanding, the most important structural reform is to inspire people’s interactivity and creativity to maintain a vigorous economic growth,” he told the 500-odd audience.

That is why the Chinese government is taking various steps to create an amicable environment

for mass innovation and entrepreneurship to power growth and create jobs, added the premier.

Recognizing that the policy of quantitative easing is indispensable to prevent the world economy from plunging into recession, he pointed out that the approach alone is by no means enough to prompt a strong recovery.

He called for more international cooperation in production capacity, which involves bringing in facilities,

equipment, technology and management expertise from other countries to effectively reduce construction costs, create jobs for local communities and promote development of domestic industries.

China, he added, is ready to carry out tripartite cooperation with a view to combining the manufacturing advantages of his country with the advanced technologies of developed countries and the huge development needs of developing countries.

Reuters

“That will benefit all the three sides,” Li said.

In his speech, Li also reassured that China has the confidence and ability to maintain a growth rate around 7 percent this year by restructuring its economy and shifting to a more sustainable pace of growth.

During the process China wants to get the OECD’s support and help, he said, noting that for a nation with a population of 1.3 billion, development precedes everything.

Li reiterated that China, with a huge disparity between its rural and urban areas, remains the world’s largest developing country, with its per capita GDP lagging far behind those of the developed ones.

Noting that this year marks the 70th anniversaries of the founding of the UN and the victory of the World Anti-Fascist War, Li called on countries around the world to safeguard the peaceful development environment and the UN-centred post-war world order.

Gurria, for his part, said that 20 years of cooperation with China have reinforced mutual trust, understanding and respect.

The OECD, he added, is also ready to work with China within the framework of the Group of 20 (G20) major economies, whose rotating presidency goes to China next year, to ensure meaningful outcomes for the global economy.

Xinhua

Business Daily | 11

July 3, 2015

Greater China Suez eyes China waste, Asia expansion with Chonqqing deal Suez and its larger French peer Veolia are the world’s largest private international water and wastewater firms Geert De Clercq

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rench environmental services company Suez said on Wednesday it aims to enlarge its Chinese water and waste business and is looking for opportunities outside China through a new partnership with the city of Chongqing.

Suez and its long-time Chinese partner NWS Holdings have agreed with Chongqing Water Assets, owned by the western Chinese municipality of Chongqing, to create a new water and waste firm called Derun Environment, Suez said in a statement on Wednesday.

Under the agreement, Chongqing Water Assets will bring into Derun a 36.6 percent stake in Chongqing Water Group - one of China’s largest listed water groups with a market capitalisation of US$7.7 billion - and a 67 percent stake in Chongqing Sanfeng, which specialises in energy from waste.

Suez and NWS will contribute to Derun their 13.44 percent stake in Chongqing Water Group and an unspecified amount of cash. As a result of the operation, Chongqing

Water Assets will own 74.9 percent of Derun while Suez and NWS together will own 25.1 percent.

“Suez and NWS now become the main private partners for Chongqing Water Assets,” Suez head of international operations MarieAnge Debon told Reuters.

She added that while Suez’s activities in China have been focused mainly on water, through Derun Suez will also become active in waste, which is its main activity in its French home market.

“Derun will pursue its development in China, invest, make acquisitions and maybe even go outside China,” Debon said.

She said Derun’s foreign investments could focus on SouthEast Asia, and possibly Australia, where Suez already has a sizeable presence. Africa could also be a possibility.

“Derun will be a second pillar for us in China,” she said.

Debon said that its long-time partnership with NWS, with whom it has some 30 joint ventures in China going back 30 years, will continue.

Hong Kong listed NWS is a diversified infrastructure company with a market value of US$5.5 billion.

Through its Sino French Water joint venture with NWS, Suez manages turnover of about 1 billion euros in water and provides water for about 14 million people.

Suez and its larger French peer Veolia are the world’s largest private international water and wastewater firms, serving populations of 118 million and 124 million respectively, of which 80-90 percent are abroad, according to Global Water Intelligence.

Reuters

Sinopec, Cnooc said readying bids for Petrobras field stakes

Military tightens financial management The People’s Liberation Army (PLA) has promised “financial discipline” after an inspection campaign across all of its financial departments uncovered irregularities. According to a circular released yesterday, the on-going campaign, which started in February, focused on the management of budgets, accounts, expenditure, balances, extra-budgetary funds and the funding of official receptions. The irregularities included “randomly-adjusted budgets, embezzlement of public funds, unapproved bank accounts, unofficial deposits or borrowing of money, and unapproved subsidies,” according to the PLA. Certain funds had been allowed to go over budget, and fake invoices for reimbursement were found, the statement said.

Planning agency won’t allow enterprise bond defaults The deputy head of the National Development and Reform Commission (NDRC) has given assurances that China’s primary economic planning policy agency will not allow any enterprise bonds to default, China Securities Daily reported on Wednesday. NDRC deputy head Lian Weiliang’s remarks were made to other commission officials in a private teleconference, the official newspaper reported. Although China’s onshore bond markets have seen defaults on corporate bonds and medium-term notes over the past two years, no firm has yet to publicly default on an enterprise bond.

Xiaomi’s full-year target in doubt

The world’s top deep-water producer is looking to raise a total of US$15 billion in asset sales this year and next to fund operations and reduce debt that stands at an industry-high US$125 billion

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wo Chinese companies that entered Brazil’s giant deepwater oilfields two years ago are now looking to increase their presence as state-run Petrobras sells assets to pay down debt, said two people with knowledge of the matter.

China Petroleum & Chemical Corp., or Sinopec, and Cnooc Ltd. are among companies interested in buying stakes in so- called presalt offshore exploration blocks, the people said, asking not to be identified because talks are private.

Petroleo Brasileiro SA, as it’s known formally, invited a small group of international companies with offshore experience to bid for stakes in some concessions, including presalt blocks, people said last month.

Royal Dutch Shell Plc and Statoil ASA are also accessing geologic data on the fields to prepare offers, one of the people said. Shell is looking for opportunities to grow in Brazil, country manager Andre Araujo told reporters.

The fields in which Petrobras is selling stakes, a process known as

Country manager Andre Araujo said Shell is looking for opportunities to grow in Brazil

a farm out, include the Sagitario, Jupiter and Pao de Acucar deep-water discoveries where production hasn’t started, one of the people said.

Petrobras removed the Carcara and Jupiter pre-salt discoveries from its schedule of projects to start producing by 2020, indicating that the fields may be for sale, Bank of America Corp. said in a June 29 research report. Petrobras said by e-mail that it delayed those projects until after 2020.

A group made up of Petrobras, Shell, Total SA, Cnooc and Sinopec won a 35-year license to develop the Libra discovery in October 2013.

That was the first, and only, pre-salt auction using a production-sharing model that makes Petrobras the operator of all new projects and requires it to own at least 30 percent.

Some lawmakers are pushing for those rules to be eased.

In a separate process, Petrobras is preparing to sell its 20 percent stake in the Bijupira and Salema offshore fields to PetroRio SA for about US$25 million, said a person with direct knowledge of the deal, asking not to be identified because talks are private. That would be Petrobras’s first divestment of an offshore asset in Brazil under CEO Bendine.

Bloomberg News

Xiaomi yesterday said it sold 34.7 million smartphones in the first six months of 2015, casting doubt on the ability of China’s most valuable tech start-up to achieve its full-year target. Chief Executive Lei Jun last year spoke of reaching 100 million shipments in 2015 but in recent months has revised the figure to a more conservative range of 80 million to 100 million. Xiaomi’s new sales data comes at a moment when industry analysts believe the smartphone market in China - where Xiaomi is No. 1 - may be reaching saturation.

CPC official calls for further cooperation with Portugal Senior official of the Communist Party of China (CPC) Liu Qibao called for efforts to further promote personnel exchange and media cooperation between China and Portugal while meeting Portuguese Prime Minister Pedro Passos Coelho here. Liu, a member of the Political Bureau of the CPC Central Committee, said that China and Portugal are currently enjoying the best of their bilateral relations in the history as the two countries celebrated the 35th anniversary of diplomatic relations.

12 | Business Daily

July 3, 2015

Asia

Indians sceptical about Modi’s landmark tax reform The government says the proposed goods and services tax would subsume at least 14 federal and state levies Rajesh Kumar Singh

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or years Indian businesses have lobbied for a nationwide sales tax, hoping to replace a chaotic structure that inflates costs and halts their trucks at state borders for duty payments, and to unify the country into one of the world’s largest single markets.

But after political compromises that finally got a goods and services tax (GST) bill before parliament, they have turned wary.

India’s top business groups are now calling for a slowdown in the process as they try to roll back those compromises, putting them at odds with Finance Minister Arun Jaitley who wants to push through what he touts as the country’s biggest tax reform since independence nearly 70 years ago.

But Jaitley wants no further delays and has set next April as the deadline for launching the reform, which he says will boost annual economic growth by 2 percentage points.

If the proposal goes ahead in its current form, business leaders say,

KEY POINTS Fragmented state/federal tax system boosts costs, delays trucks

local industry and a borderless national market.

India’s existing web of federal and state sales taxes is levied at different stages of the supply chain and often results in double taxation,

while forcing trucks to spend nearly a quarter of their road time in border checks or other inspections.

Taxes add about 50 percent to the base price of Maruti Suzuki’s popular Ciaz sedan from the time it leaves the factory gate until it drives out of the showroom, while the government estimates the average burden for all goods at about 30 percent.

The proposed goods and services tax would subsume at least 14 federal and state levies, the government says.

But to win support from states that fear losing revenue, the government has agreed to a 1 percent additional levy by states on the cross-border transport of goods, even on a company shipping products from one plant to another. The present system requires no such tax payments between plants.

Past Indian governments have tried for years to push through a national GST but they became bogged

Average tax burden on goods is now 30 pct -govt estimates Businesses upset at compromises to win states over on reform Fin Min insists on April deadline for reform despite concerns they will be stuck with a deeply flawed reform that could increase manufacturing costs and encourage imports - undermining Prime Minister Narendra Modi’s drive to build up

India’s Finance Minister Arun Jaitley

South Korea turns to cheap spot crudes as glut grows Imported 2.8 million barrels per day from January-May, up 13 per cent from the same period last year

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efiners in South Korea, the world’s fifth-largest crude oil importer, have stepped up spot purchases this year, buying at prices depressed by an oil glut as they run their plants at high rates to catch strong processing margins.

With the Organization of the Petroleum Exporting Countries (OPEC) and other producers keeping crude taps open in spite of soft global demand growth, tens of millions of unbought barrels have built up in floating storage sites and dragged down international oil markets.

Still, the profit earned on turning a barrel of Dubai crude into fuel have held at US$7.50-US$9 a barrel this year - well above annual averages since at least 1997 - as crude benchmarks dipped to multi-year lows,

sparking consumer demand for gasoline and naphtha.

Spot crude purchases

by South Korean refiners over January-May rose to 32 percent of the total, up from 26 percent for the same period a year ago and greater than the five-year average, according to data from state-run Korea National Oil Corp (KNOC) and Reuters calculations.

With the refiners taking many of the spot barrels from producers in the Middle East, this has hampered efforts to diversify South Korea’s crude sources to include a greater percentage of oil from West Africa, Latin America and Russia in order to improve the security of its energy supplies.

Even with the market flooded with cheap spot crude from other producers, South

Korea increased its Middle East purchases to 85 percent of the total over the first five months of the year, up from 82 percent a year earlier.

Refining sources attributed the rise to guaranteed quality and shorter shipping distances.

The same trends are being seen in other markets as Asian buyers are attracted to the cheap spot prices. In India, the third-biggest crude importer,

refiners have cut volumes from long-term contracts with Middle East suppliers to switch to West African oil.

Spot purchases by Japan are also on the rise because of the favourable prices, industry sources there said.

More spot to come

Three of South Korea’s four refiners are increasing spot crude imports from Middle East producers such as Iraq and the United Arab Emirates, as well as from Nigeria, Ecuador and Russia, according to refining sources and KNOC data.

Refiners have been running at high rates to profit from the cheaper crudes, with throughput at South Korean refineries jumping to 90 percent of capacity in May, up from 85.9 percent a month ago and 78.4 percent a year ago, according to KNOC data.

Reuters

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Business Daily | 13

July 3, 2015

Asia down in political wrangling and heavy resistance from the states.

Political wrangling

Modi’s year-old reform-minded government has vowed to push through the unified tax, which passed in the lower house of parliament and has been referred to an upper house committee.

The upper house is expected to approve the measure after it goes into session later this month.

Opposition is building, however, among businesses with operations spread across the country.

Companies are equally worried that the reform does not extend to real estate, one of the biggest revenue generators for the states, leaving them still subject to state taxes on plant and property, possibly including machinery.

With no offsets under the new tax regime, they could face doubletaxation on construction materials such as cement, steel and electrical fittings that account for nearly 40 percent of the cost of a new factory.

The shortcomings of the compromise plan have been acknowledged within the government. Arvind Subramanian, Jaitley’s chief economic adviser, warned that the proposed interstate charge could upend Modi’s plans for a Chinesestyle manufacturing boom.

But the compromises were necessary to win the support of India’s 29 states, more than half of which must ratify the GST bill before the tax can be rolled out.

Jaitley says even a flawed reform will boost economic activity and hopes the benefits will encourage states to let it evolve into a better tax over time.

Companies are not so sure.

Reuters

Japanese companies’ inflation expectations unchanged

Seoul bourse to face structural reform

Stanley White

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apanese companies’ inflation expectations in the Bank of Japan’s June tankan survey were largely unchanged from the previous survey, a sign that prices pressures may not be increasing as quickly as the central bank hopes.

The data on inflation expectations comes one day after the June tankan survey showed business sentiment improved to levels hit before last year’s sales tax hike hurt consumption and sent the economy into a mild recession.

It also showed that big companies plan to increase capital expenditure at the fastest pace in a decade.

Business sentiment points to solid economic growth, but inflation expectations suggest consumer prices may not rise fast enough to meet the central bank’s 2 percent inflation target in the first half of next fiscal year.

Companies expect consumer prices to rise an average 1.4 percent a year from now, unchanged from their projection three months ago, the BOJ tankan survey showed yesterday.

Firms polled said they expect consumer prices to rise an annual 1.5 percent three years from now, just below 1.6 percent inflation expected in the March survey.

In five years’ time, companies expect consumer prices to rise an annual 1.6 percent, unchanged from the previous survey.

In April, the BOJ pushed back the timing of meeting its 2 percent inflation target to the first half of fiscal 2016 from sometime around the current fiscal year as a decline in oil prices caused inflation to ground to a halt.

Consumer prices recently have shown signs of stabilising slightly above zero, but the BOJ’s inflation survey suggests even this delayed target may be overly ambitious.

The BOJ started the survey on corporate price expectations from the tankan in March 2014 to gather more information on inflation expectations, key to its quantitative easing programme.

Reuters

Thailand’s consumer outlook slips to one-year low One year after the coup, the junta has been unable to revive Southeast Asia’s second-largest economy Kitiphong Thaichareon and Orathai Sriring

Korea Exchange is set to become a listed holding company that will foster more competition between its boards under government reforms aimed at better attracting firms seeking to go public.

Under the planned revamp, the holding company will have different subsidiaries that will house main board KOSPI, the tech-heavy KOSDAQ and its derivatives market separately, the country’s Financial Services Commission said in a statement.

Its proposals will be submitted to parliament later this year. The commission criticised the current bourse structure as a monopoly with listing rules that are too rigid and too focused on profits.

Bangladesh’s FX reserves hit record Bangladesh’s foreign exchange reserves hit a record US$25.01 billion at the end of June, the central bank said yesterday, thanks to steady exports and remittances.

The slower pace of imports growth on the back of a fall in global commodities prices also helped to raise reserves about 17 percent higher than the same period of last year. The reserves were enough to cover seven months of imports. Exports from July to May, the first 11 months of the 2014-15 financial year, rose 2.8 percent to US$28.14 billion from a year earlier, led by strong garment sales.

Vietnamese agriculture sector seeking remedies Vietnam is seeking remedies to revive its agricultural sector that has witnessed slower growth recently. According to statistics by Vietnam’s General Statistics Office, the gross domestic product (GDP) growth of the country’s agricultural sector in the first half of 2015 is expected to stand at 2.36 percent, lower than the rate of 2.9 percent in the same period of 2014. During the six-month period of 2015, the export revenue of the sector is also expected to witness a decrease of 2.8 percent year-on-year.

S. Korea’s current account surplus lowers

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hai consumer confidence slipped to a more than oneyear low in June dampened by economic uncertainty, falling exports, low commodity prices and drought, a university survey showed yesterday.

The consumer confidence index of the University of the Thai Chamber of Commerce fell to 74.4 in June from 75.6 the previous month, its sixth consecutive month of decline.

The June reading was the lowest since May last year, when confidence was partly restored after the army seized power that month to end political turmoil that hammered domestic activity.

Thanavath Phonvichai, an economics professor at the university, told a news conference the persistent decline in consumer confidence was a “frightening” sign and suggested a weak economic performance in April-June.

The university expects annual growth of 2.5-3.0 percent in the second quarter, he said. In January-March, annual growth was 3.0 percent.

“There are no signs that consumer confidence will pick up. The government needs to come up with more measures to lift sentiment or make the baht weaker than 34 to help exports,” Thanavath said.

KEY POINTS Index at 74.4 in June, lowest since May 2014; May was 75.6 Sentiment hurt by worries about domestic and global economy One year after the coup, the junta has been unable to revive Southeast Asia’s second-largest economy, as exports and domestic demand remain weak. Growth last year was just 0.9 percent.

Exports, equal to more than 60 percent of gross domestic product, have long been sluggish due to soft global demand and low commodity prices, which have also cut farmers’ spending power.

Private consumption, accounting for half of the economy, has been curbed by high household debt and a shaky consumer mood.

Last month, the Bank of Thailand cut its economic growth forecast for this year to 3.0 percent from 3.8 percent, with exports seen contracting for the third year.

Falling exports, drought, weak commodity prices negative factors

South Korea’s current account surplus fell to US$6.44 billion in May, the smallest in eight months, from US$10.41 billion in April in seasonally adjusted terms as exports shrank, central bank data showed yesterday. Exports in May dropped 8.8 percent from April to US$44.30 billion while imports edged up 2.0 percent to US$36.49 billion. As a result, the goods surplus fell to US$7.81 billion from a US$12.80 billion surplus in April, the Bank of Korea data showed.

In the financial account, South Korea saw a net outflow of US$8.81 billion in May without seasonal adjustment.

NZ’s Fletcher to rebuild Christchurch

Steady fall in confidence mood “frightening” – professor

The central bank’s monetary policy committee left the benchmark rate steady at 1.50 percent on June 10 after two surprise rate cuts in a row to support the economy.

The committee next reviews policy on August 5. Most economists expect no change for now.

Reuters

The New Zealand government said yesterday it has chosen Fletcher Building as the preferred developer for a NZ$800 million (US$536.24 million) project to build new homes in the earthquake-damaged city of Christchurch. The residential building arm of Australia and New Zealand’s biggest construction materials maker will build nearly 1,000 townhouses and apartments in the centre of New Zealand’s second-largest city, which was levelled by major earthquakes in 2010 and 2011 that killed a total of 185 people and injured thousands.

14 | Business Daily

July 3, 2015

International Belgium adopts law against ‘vulture funds’ Belgium passed a law to cap how much so-called “vulture funds” can recoup from government debt bought at rock-bottom prices from countries teetering on the brink of default.

Under the new law, approved overwhelmingly by the country’s main political parties, if a Belgian judge determines a fund is acting as a “vulture,” then it cannot claim more than the discounted price paid for the bonds, rather than their face value. The move comes after Belgium was dragged into a more than decade-long battle between a group of US hedge funds led by NML Capital Management and Argentina over some US$1.3 billion of defaulted debt.

U.S.-Cuba embassy could help to end embargo Obama made clear that he would keep up pressure on Cuba over its human rights record, an area of U.S. criticism that has irked the Havana government

Euro zone inflationary pressures at four-year high Euro zone inflationary pressures are at a four-year high, suggesting the European Central Bank’s trillion-euro bond-buying programme is working, an indicator designed to predict cyclical trends showed yesterday. The Eurozone Future Inflation Gauge (EZFIG), a measure of the outlook for inflation published by the Economic Cycle Research Institute, rose to 100.4 in May from April’s 100.2. “Euro zone inflation continues to be in an uptrend.

With the EZFIG increasing further to a four-year high in May, euro zone inflation pressures continue to build,” said Lakshman Achuthan, ECRI’s chief operations officer.

PayPal to buy digital money transfer provider Xoom

PayPal said it would buy digital money transfer provider Xoom for US$890 million as it muscles into a growing international remittance market and expand in countries like Mexico, India and China ahead of a spinoff from eBay. The offer price of US$25 per share in cash represents a premium of about 21 percent to Xoom’s Wednesday closing price of US$20.70. Xoom shares surged on the announcement.

“Our aim is to bring the companies together to make it a true consumer champion in remittances,” PayPal President Dan Schulman said in an interview with Reuters.

Chief of Mission at the US Interests Section in Havana Jeffrey DeLaurentis (L) meets Cuban interim Foreign Minister, Marcelo Medina (R), in Havana

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n historic agreement to restore diplomatic ties between Washington and Havana could provide fresh momentum for lawmakers and activists seeking to chip away at - and eventually upend - the 53-year-old U.S. trade embargo.

Despite Democratic President Barack Obama’s renewed call to Congress to lift the embargo, he would face resistance from majority Republicans. The White House has offered no sign that he is considering taking further actions on his own.

Even so, the reopening of the U.S. embassy in Havana later this month could encourage investment

by American companies that have mostly moved cautiously, despite initial enthusiasm.

Obama has used his executive powers to modestly relax some travel, business and telecommunications restrictions since sealing a diplomatic breakthrough with Cuba in December.

A full-service U.S. embassy could also help ease the way for more Americans to travel to the Communist-ruled island.

Though U.S. law limits authorized travel to Cuba and bars tourism, thousands more Americans are making their way there anyway by going through third countries like Mexico and Canada.

One Washington attorney involved in Cuba issues called it part of a “non-enforcement protocol” by the U.S. government, though the Obama administration has given no official indication that it is turning a blind eye to such violations.

Some U.S. advocates of full normalization with Cuba hope that the gradual crumbling of such restrictions will lead to the “hollowing-out” of the embargo, which blocks most trade and commercial contact between the two countries.

Several Cuba-related bills have

Puerto Rico’s public employees will keep getting paid

On Wednesday Puerto Rico made payments of around US$1 billion Germany to shut down coal-fired plants to creditors due on July 1, alleviating fears of an imminent default The German government decided yesterday to order the shutdown of several coal-fired plants in order to reach its ambitious climate goals by 2020, government sources told Reuters. Chancellor Angela Merkel and the leaders of her two junior coalition parties also settled a dispute over high-voltage power lines which are planned to carry green energy from the breezy north to the industrial south, the sources said. “Coal-fired plants with a capacity of 2.7 gigawatts will be shut down,” said the government sources, who declined to say how many plants will be closed.

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uerto Rico’s public workers should not worry about getting their pay checks as the government will keep paying them, at a cost of US$250 million every 15 days, the commonwealth’s House Speaker Jaime Perello said.

A key bill that has secured legislative passage and that is expected to be signed into law this week will boost the island’s cash flow for its

operations by allowing it to raise US$400 million in Tax & Revenue Anticipation Notes (TRANs). The government will raise the cash for the notes from three public insurance corporations.

The Caribbean island was sent into turmoil earlier this week after the governor, Alejandro Garcia Padilla, said he wanted to restructure debt and postpone bond payments to solve

surfaced in Congress in recent months, with a growing number of supporters from both sides of the aisle. A measure pushed by Arizona Republican Senator Jeff Flake calling for an end to the travel ban has attracted more than 40 sponsors.

Republicans controlling both the Senate and House of Representatives have made clear that, even with divisions forming within their own ranks over the issue, they are unlikely to allow anti-embargo legislation to come to a vote.

Obama could sidestep lawmakers and use his powers to appoint a new envoy to Havana during a congressional recess, but the State Department has suggested the administration is in no rush.

In an open letter to Obama, experts at the Atlantic Council think tank in Washington urged him to take goit-alone action such as ending a cap on remittances to Cuba and helping to integrate Cuba into international financial institutions like the World Bank, IMF and Inter-American Development Bank.

U.S. officials also want to see whether Cuban President Raul Castro will inch forward on reforms despite resistance to loosening the reins on Cuban society and the state-run economy.

At the same time, Cuba insisted on Wednesday that to have normal relations the United States must not only lift the embargo but give up the U.S. naval base at Cuba’s Guantanamo Bay and also stop beaming what it called “subversive” radio and television programming into the island.

U.S. officials made clear that they were not considering acceding to either of those demands.

Reuters

the island’s fiscal crisis.

Government officials have said Puerto Rico needs about $1.2 billion in cash to operate during the first months of fiscal 2016, which began July 1.

The TRANs measure also calls for suspending monthly payments set aside for general obligation debt in the event the commonwealth fails to either secure the necessary short-term liquidity or a $2 billion bond deal backed by a petroleum-products tax.

Government Development Bank President Melba Acosta said Tuesday that besides the US$400 million in TRANs from the public corporations, the commonwealth was also discussing with private banks a short-term financing transaction of about US$400 million.

Acosta said “this could take more time, we are in negotiations.” She added that an arrangement was reached with the public retirement systems that would allow the government to receive some funds at the beginning of the year rather than later on, as is typical.

“All the measures related to the commonwealth’s budget, including the TRANs bill, will be approved by the governor,” Perello said.

Reuters

Business Daily | 15

July 3, 2015

Opinion Business

wires

A new mission for the World Bank

Leading reports from Asia’s best business newspapers

Nancy Birdsall

Founding president of the Centre for Global Development

BANGKOK POST Thailand has fully entered “technical deflation” after consumer prices continued falling in June. Technical deflation is a condition in which prices of goods and services fall for six months in a row as people spend less, leading manufacturers to cut prices.

But Thanavath Phonvichai, vice-president for research at the University of the Thai Chamber of Commerce, said there was nothing to be scared of as long as the economy remained in a positive range.

Core inflation, which excludes volatile oil and food prices, was flat last month.

NZ HERALD Following another drop in export dairy prices overnight ASB economists are now predicting the Reserve Bank will reverse all of last year’s increases to the official cash rate (OCR). A deteriorating outlook for the terms of trade and national income was the principal reason the central bank cited for cutting the OCR by 25 basis points to 3.25 per cent last month and foreshadowing another cut beyond that. Following weaker than expected economic growth numbers for the March quarter market economists have tended to regard another OCR cut this month.

PHILSTAR The Philippines is among the more restrictive economies in the Southeast Asian region when it comes to foreign direct investments (FDIs), a recent study by the Economic Research Institute for Asean and East Asia (ERIA) showed. This was among the findings of the ERIA discussion paper titled “FDI Restrictiveness Index for Asean: Implementation of AEC (ASEAN Economic Integration) Blueprint Measures” authored by Shandre Mugan Thangavelu of the University of Adelaide-Institute of International Trade.

It compared the situation between 2010 and 2014.

TAIPEI TIMES Taiwan’s energy operating reserve margin yesterday dropped to a 10-year low of 2.46 percent due to a breakdown of four power generation units, state-run Taiwan Power Co said. The operating reserve plunged from an estimated 1.58 million kilowatt-hours (kWh) to only 860,000kWh, prompting speculation about the possibility of a power shortages in the coming days or weeks. “If the operating reserve drops to below 500,000kWh, or 1.5 percent of the energy operating reserve margin, the government would first apply power-rationing measures on industrial users with large electricity consumption,” Bureau of Energy Director said.

World Bank building in Washington

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he Green Revolution is considered one of the great successes in the history of economic development. In the 1960s and 1970s, the creation and adoption of high-yielding cereal varieties transformed the Indian economy and saved billions of people from starvation throughout much of the developing world.

But today, the future of the institution responsible for the Green Revolution – a consortium of 15 research centres around the world called the Consultative Group on International Agricultural Research (CGIAR) – is under threat. The World Bank, one of its primary funders, is considering withdrawing its financial support.

On its own, this decision would be worrying enough.

CGIAR’s mission is global food security, and basic agricultural research holds huge potential for providing economic returns to the world’s poor. But what is even more worrying is the signal the World Bank is sending: that it will no longer support the underfunded global public goods that are crucial to preserving the social, economic, and political progress of the last century.

The proposed cuts at CGIAR are part of the World Bank’s effort to decrease its administrative budget by US$400 million – a pledge made by the organization’s president, Jim Yong Kim, in 2013. The World Bank currently provides an annual grant of US$50 million to the CGIAR; that would be slashed by US$20 million, with the full amount possibly phased out entirely over a period of a few years.

The World Bank’s relevance to developing countries’ finances has been severely diminished in the twenty-first century

On its own, the money involved would not be overly significant to either organization. The figures being discussed are tiny compared to the US$52 billion committed in 2013 by the World Bank’s donors to help fight global poverty and provide assistance to lowincome countries. For the CGIAR, the proposed cuts, though painful, would not be devastating; in 2013, the group spent US$984 million to fund its activities.

Still, the World Bank – the preeminent global development institution – is essentially declaring that agricultural research is not a development priority. Indeed, CGIAR’s funding is not the only funding that is at risk. The World Bank is

also considering cutting its small but catalytic contributions to the Global Development Network, which funds researchers in developing countries. Its support for the Extractive Industries Transparency Initiative, which promotes disclosure of deals concerning natural resources in the interest of reducing corruption, is also at risk, as is its funding for the Special Program for Research and Training in Tropical Diseases.

These programs, and others, are supported by the Bank’s Development Grants Facility, which has been targeted as a possible source of administrative budget cuts.

The money provided by the World Bank to support the provision of developmentrelated global public goods has never made up a large part of its spending. The roughly US$200 million a year that it spent on supporting CGIAR and other grantees pales in comparison to the US$35 billion in loans that it provided in 2012. But the proposed cuts would gut an area of the Bank’s activities that should be expanded, not reduced.

To be sure, at its inception the World Bank was not conceived as a provider of grants to institutions working on global public goods. Its primary mission was – and still is – to provide governments with loans and technical assistance. But it is worth noting that, relative to sovereign borrowing, private investment, and remittances by migrants, the World Bank’s relevance to developing countries’ finances has been severely diminished in the twenty-first century.

Because its loans or guarantees are bundled with expertise and advice, the World Bank still has a viable product. But, as I have argued previously, it should have another. As the world’s premier and only fully global development institution, it is well placed – and indeed has the responsibility – to help sponsor, finance, and set priorities in the management of global public goods.

It is time for one or more of the World Bank’s member governments to take up the cause. The organization’s quick response to the recent Ebola pandemic provides an impressive example of its ability to address global concerns. Furthermore, this year, the international community will agree to the Sustainable Development Goals – targets that would be well served by investments in areas like agricultural research and development, efforts to optimize land and water use, and forestry protection.

The United States, in close collaboration with Germany, the United Kingdom, and China, should be able to provide a clear mandate for the World Bank in this regard.

The Bank’s twentieth-century mission – to help countries finance their development – will remain vital for the foreseeable future. But there is also room for the World Bank to adjust its focus for the twenty-first century, with an increased emphasis on one of the core prerequisites of development: the careful management and protection of global public goods.

Project Syndicate

16 | Business Daily

July 3, 2015

Closing India will increase limit of debt owned by foreigners

New industrial policies to revive ailing northeast

India’s central bank is committed to steadily increasing how much government debt foreign investors can buy, but will proceed cautiously to avoid becoming too reliant on overseas capital, Governor Raghuram Rajan (pictured) said yesterday. Rajan added India would examine debt limits twice a year, hinting at a more formal decision-making process. At present, the government decides on the caps in consultation with the Reserve Bank of India and capital markets regulator Securities and Exchange Board of India. India’s current limit of US$25 billion for ownership of government bonds by foreign institutional investors is fully utilised.

China announced measures yesterday to revive growth in its northeast, an old industrial base suffering a deepening economic malaise due to a decline in heavy industry. A guideline released by the National Development and Reform Commission, the country’s top economic planner, promised the regional market for research, production and maintenance of military products will be opened to more private investment, and encouraged equipment manufacturers to acquire foreign high-tech firms and set up overseas research institutes. It also encouraged state firms headquartered in the northeast to direct state assets away from traditional sectors.

Chinese and HK fund managers start to apply for mutual recognition Regulators announced the mutual recognition programme on May 22

For asset managers in Hong Kong and Mainland China, short-term challenges of the MRF would be the operational flow and efficiency of transaction and settlement

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sset managers in China and Hong Kong have started to submit applications to participate in the mutual recognition of funds (MRF) scheme that allows funds to be sold across both markets from July 1, keen to tap new clients but treading carefully.

Invesco Hong Kong, JP Morgan Asset Management (JPMAM) and its China International Fund Management (CIFM) joint

Terry Pan, Invesco’s CEO venture as well as Bank of China Hong Kong Asset Management were among funds that handed in applications to regulators immediately after the official launch of the scheme.

“MRF lays a foundation for the continued development of the asset management industry in Mainland China and Hong Kong, and sets an example for the entire region,” said Michael Falcon, head of the Asia Pacific funds business at JP Morgan.

Thai navy to buy three Chinese submarines

JPMAM will act as CIFM’s local representative in Hong Kong while CIFM will perform the same role for JPMAM in Mainland China under the programme.

Invesco Hong Kong said it planned to launch an A-sharefocused mixed securities fund managed by Invesco Great Wall Fund Management, its joint venture in China, and it had filed an application to the Hong Kong Securities and Futures Commission.

More than 20 of Invesco Great Wall’s mutual funds, representing more than 60 percent of its mutual fund assets under management, will be eligible to join the scheme by the end of this year.

Chinese and Hong Kong regulators announced

Evergrande plans China’s first soccer club listing

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the mutual recognition programme on May 22, marking another step in liberalising China’s capital account following the November launch of the Hong Kong-Shanghai “Stock Connect” trading link.

About 100 Hong Kongdomiciled funds and 850 Mainland Chinese funds are qualified for the scheme, according to the China Securities Regulatory Commission (CSRC).

Although fund managers are excited about the opportunity to expand their business, many say they will enter the Chinese market slowly with one or two funds at first due to uncertain demand and logistical difficulties.

“For asset managers in Hong Kong and Mainland China, short-term challenges of the MRF would be the operational flow and efficiency of transaction and settlement,” said Terry Pan, Invesco’s chief executive officer for Greater China, Singapore and Korea.

Ensuring investors are fully aware of the different features of funds in the two jurisdictions would be another challenge, Pan said.

Reuters

India invests to reduce monsoon dependence

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hailand’s navy has voted in favour of buying three Chinese submarines worth US$1 billion, an official said yesterday, the kingdom’s first such vessels in decades if the purchase is approved by the cabinet.

The country last operated submarines in its waters 50 years ago and wants the new high-tech vessels as a “deterrent”, said Thailand’s navy chief, without elaborating on the nature of threats faced by the junta-ruled nation.

“Fourteen of the 17-strong submarine selection committee has voted to buy three submarines from China,” navy chief Kraisorn Chansuvanich told reporters in Bangkok.

It is unclear when the cabinet will meet to consider the navy’s decision but if approved the submarines would come into operation within seven years.

“These are weapons for our future security,” he said.

For more than a decade Thai forces have battled against ethnic Malay Muslim insurgents calling for greater autonomy in the country’s southernmost provinces.

vergrande Real Estate Group Ltd. applied to list its Alibaba-backed soccer club, which would make it China’s first soccer stock, at a time the nation is pushing to become a force in the sport.

Evergrande wants Guangzhou Evergrande Taobao Football Club to trade on China’s New Third Board, an over-the-counter market, the company said in a Hong Kong stock exchange filing yesterday. China’s fifth-largest developer by sales last week became the club’s majority shareholder with a 60 percent stake, while the rest of the shares are held by Alibaba Group Holding Ltd. President Xi Jinping last year vowed to revive soccer’s image, tarnished by match fixing and an 82 ranking in FIFA’s international standing. China first detailed the plan in March by quadrupling the number of soccer schools to 20,000 by 2020, and setting up a Communist Party committee to advance the sport.

The listing will “enhance the liquidity” and “facilitate the introduction of strategic investors,” Evergrande said in the filing.

ndia has approved spending of 500 billion rupees (US$7.9 billion) over five years to expand irrigation in rural areas to boost crop productivity and it also plans an online agricultural market to help farmers get better prices for their produce.

A total of 53 billion rupees has been allocated for the irrigation project in the current fiscal year ending on March 31, 2016, the government said in a statement yesterday.

Half of India’s farmland lacks irrigation so any increase in irrigated land should help reduce the country’s dependence on the June-September monsoon, which is expected to be deficient this year.

The move may help the government’s standing in rural areas, after opposition parties stalled its efforts to effect changes to the land law that would have made it easier to push through compulsory land purchases for industrial and other projects.

The government has also had to cope with a wave of suicides by farmers whose livelihoods have been ruined by bad weather.

AFP

Bloomberg News

Reuters