Macau Business Daily October 7, 2015

MOP 6.00

MGTO promotes Macau as a business travel destination in Thailand

Closing editor: Joanne Kuai

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U.S. government probes alleged UN bribery scheme Page 5

Stock market analyst recommends joining Macau casino rally Page 16

Publisher: Paulo A. Azevedo Number 893 Wednesday October 7, 2015 Year IV

Asian currencies see monetary defences challenged Page 11

Secretary Tam Defines Tourism Parameters More resources. More tourism products. Maintaining visitation numbers. This is the way forward, says Secretary for Social Affairs and Culture Alexis Tam Chon Weng. With details soon to be revealed to the Legislative Assembly. Adding in an exclusive interview that a universal smoking ban in casinos is non-negotiable.

Although smoking lounges may be allowed, depending upon the operators’ proposals. And staff reaction Pages 6&7

Not on the horizon Dozens of Pearl Horizon homeowners have petitioned Gov’t HQ. Again. Pleading for help on a bureaucratic nightmare.

Developer Polytex Corporation Ltd. says construction could be halted if the gov’t doesn’t extend land-use rights for the plot

China’s yuan has overtaken Japan’s yen. To become the fourth most-used currency for global payments. Whilst shrugging off a surprise devaluation to rise to its highest ranking ever. And boosting its claim for reserve status

www.macaubusinessdaily.com

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Sands China Ltd

+8.59

Galaxy Entertainment

+3.94

PetroChina Co Ltd

+3.04

China Mengniu Dairy C

+2.87

China Petroleum & Che

+1.58

CITIC Ltd

-2.74

China Unicom Hong Ko

-3.10

China Resources Enter

-3.12

China Overseas Land &

-3.19

Lenovo Group Ltd

-3.38

Cooling Down

A good first five days. The start of National Day Golden Week attracted some 789,438 visitors to Macau. An increase of 1.7 pct y-o-y. More than 85 pct hailed from Mainland China, up 6.5 pct y-o-y. Visitation since Monday, however, has been lacklustre

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Gaming

MIA has posted growth in passenger traffic and aircraft movements in the year-to-date. Passenger volume surpassed 4.3m, up 6pct.

With aircraft movements up 7.5 pct y-o-y. Korean companies Jeju Air and T’Way Airlines plus Air Asia have new route plans from Macau International Airport

Name

I SSN 2226-8294

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MIA business climbing

October 6

Source: Bloomberg

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Yuan overtakes japanese yen

HSI - Movers

More than a ‘Lehman Moment’ Labelled Macau’s liquidity crisis. But more than a ‘Lehman Moment’, says equity research firm JL Warren Capital. Who believe that prospects will remain bleak this year and next. Saying 50 pct of junketoriginated VIP business and 25 pct of casinooriginated VIP business will disappear

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2 | Business Daily

October 7, 2015

Macau Hang Seng Bank announces dividend of HK$1.10 Hang Seng Bank yesterday announced a third interim dividend of HK1.10 per share for the year ending 31 December, in a filing with the Hong Kong Stock Exchange.

The filing, signed by the Board of Directors, also said that the dividend will be paid on 10 November this year.

The date for this dividend is 22 October. Hong Kong-based Hang Seng Bank, which is represented in Macau, recorded a net income of HK$9.41 billion for the first six months of the year. This was an increase of 11.1 per cent year-on-year from HK$8.47 billion for the first half of last year.

Visitor arrivals up 1.7 pct in early October

T

he first five days of the National Day Golden Week attracted some 789,438 visitors to the city, an increase of 1.7 per cent compared to the same period last year, the latest data published by Macau Government Tourist Office (MGTO) reveals.

Between October 1 and October 5, more than 85 per cent of the total visitors to the city were from Mainland China, some 674,015, an increase of 6.5 per cent year-on-year. However, the authorities noted that the figures did not exclude arrivals registered

by Mainlanders who are working or studying in the Special Administrative Region.

On Monday alone, a total of 157,430 visitor arrivals were recorded at the city’s border checkpoints, of which 133,093 were

from Mainland China, representing a year-onyear rise of 1.2 per cent and 1.8 per cent year-on-year, respectively.

In fact, Macau saw its daily tourist number surge 18.6 per cent year-on-year on October 2, amounting to 179,810, while 152,850 of the total were Mainland visitors, who soared 24.3 per cent year-on-year.

Nevertheless, on Monday, only 130,930 visitor arrivals were registered, the lowest number of the five days, as well as a plunge of 20.3 per cent compared to one year ago.

Meanwhile, some 524,370, or 68.7 per cent of the total visitors that the city welcomed in the five days, entered the territory through the Border Gate.

The seven-day Chinese national holiday ends tomorrow.

K.L.

MGTO spotlights Macau Airport passenger traffic up as a business travel 6 pct in first three quarters destination in Thailand

M

acau Government Tourist Office (MGTO) led a delegation of local industry partners to participate in the 23rd edition of Incentive Travel & Conventions, Meetings Asia (IT&CMA 2015) in Thailand to jointly promote Macau as a business travel destination. In addition, the Tourist Office was presented the Best National Tourism Office (N.T.O.) of Travel Services Awards in the 26th Annual TTG Travel Awards 2015 held concurrently.

MGTO hosted a booth

themed ‘Touching Moments, Experience Macau’ this year and partnered with around 30 enterprises to present the destination’s business tourism products and facilities to their international counterparts and industry buyers. The enterprises include hotels, convention and exhibition companies, travel agencies, entertainment businesses, airlines and ferry operators from Macau. The MGTO team also took the opportunity to advertise its ‘Travel Stimulation Programme’ to incentive travel organizers.

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acau International A i r p o r t ( MIA ) recorded a growth of 6 per cent year-onyear in passenger traffic volume during the first three quarters of the year, to 4.30 million from around 4.06 million. MIA also revealed to Business Daily that Korean companies Jeju Air and T’Way Airlines are considering launching flights to the territory.

‘From October to November, some new airlines from Korea are planning to launch an air service on the Macau route while Air Asia is planning

to start a Macau-Pattaya service in November’, MIA announced.

According to figures released yesterday by MIA, aircraft movements increased at a 7.5 per cent rate to 41,000 from around 37,200 during the first three quaters of last year.

During this period, visitors from the Mainland China market decreased 1 per cent although MIA did not disclose the precise number. Passengers from Southeast Asia increased 14 per cent, while travellers from Taiwan increased 4 per cent.

“Until eternity, José”

Y

esterday, it was with a heavy heart and indescribable sorrow that I received the sad news of a friend departed. More than a friend: a generous, combative and unmatched older brother.

Recovering from a very complicated illness, José Braz-Gomes was one of those individuals that left no-one indifferent to him. A true etiquette-observing gentleman, very educated and unflappably eloquent.

An exemplary banking professional, he worked in the industry for over four decades; but my dear José left us all too suddenly. Like a Summer storm, he caught us all, his many long-time friends, by complete surprise.

Professionally, he always worked for the Caixa Geral de Depósitos group, in Portugal, and since 1982 with BNU in Macau. He was private banking director and general director of the offshore branch. A staunch Benfica supporter and vice-president of the Military Club, José Braz-Gomes was one of those friends that you wanted to have close. Now, he will remain in our hearts, filled with pain but also with memories and stories that will be told, again and again, after a long round of his beloved golf.

Here’s to you, my brave friend, my older brother.

Until eternity.

Paulo A. Azevedo

The company reiterated its commitment to the Special Administration Region and the development of the South East Asia market.

‘The continuous route development to South East Asia strengthens the route network and also provides a wider range of choice for the Macau citizen and tourists to travel to multi-destinations.

MIA will continually provide multiple innovative services to airlines and passengers; consequently, it will encourage the economic and cultural exchanges of Macau and other cities’, the company said.

Business Daily | 3

October 7, 2015

Macau

Pearl Horizon owners submit petition on land-use rights The developer said the construction for the project could be halted if there is no approval from the government to extend its land-use rights for the plot

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ozens of property owners of highend residence Pearl Horizon submitted a petition to Government Headquarters yesterday, hoping to meet with officials regarding the resolution of the expiration of the site’s land use term at the end of the year.

Project developer Polytex Corporation Ltd. told property owners last month that the company’s 25-year land use term on the project site expires on December 26 this year.

Although the company said it had applied to extend its term in February and is now awaiting official approval, the Secretary for Transport and Public Works, Raimundo Rosário, said last week that no extension would be given to developers failing to complete their projects during their land use terms based on the new Land Law. Submitting their second petition to Government Headquarters yesterday since July, Pearl Horizon property

owners told reporters that they were concerned about how the government would protect their rights and benefits if the developer fails to complete the project.

On Monday evening, the Office of the Secretary for Administration and Justice suggested in a press release that the government is studying how to resolve the Pearl Horizon issue, claiming the government is highly concerned about “the expiration of the land-use term for some plots”, as well as the rights and benefits of residents who have purchased properties on those land plots.

‘Dispatched by the Chief Executive, the Secretary for Administration and Justice, the Secretary for Economy and Finance and the Secretary for Transport and Public Works have initiated a study on the issue, and will resolve the related problems by following the principle of legality in order to protect the rights and benefits of the property owners,’ the Office wrote.

The project, located in Areia Preta on the Macau Peninsula, is slated to be completed by the end of 2018. But the developer said last month that construction on the project could be halted if there is no approval from the government to extend its land-use right on the plot.

In fact, before Polytex announced the land use term on the plot was expiring, the property owners of the project had already complained about the developer’s delay in construction works, as they were concerned they would not see the residential building completed as scheduled. In August this year, they also

attempted to solicit help from the city’s Consumer Council.

Nevertheless, the developer said the delay was because it was only issued the construction permit by the government in August 2014, having spent three years completing an environmental assessment report on the project.

K.L.

4 | Business Daily

October 7, 2015

Macau opinion

Green engagements

José I. Duarte Economist

W

hen all’s said and done, there are more ‘green’ concerns in the city than meet the eye. Things are not as bad as some say. A seemingly innocuous news item, just before the National Day long weekend, made it all much more clear somehow.

A recycling association had stopped the collection of all materials; an openended recycling strike had started. The Association represents 150 entities (their nature was not clarified) and involves some 1,100 persons. We suppose the latter are mostly the ‘collectors,’ those that are (or should be) refusing to collect those materials. Consequently, “more than 20 tons of rubbish are collected every day by CSR” [the rubbish collection service concessionaire] and were not being recycled. (Apparently, some older people, “responsible for the collection of materials” were not yet aware of the strike. They just left their spoils in front of the “closed recycling posts” without getting any remuneration for their work).

The Official Gazette tells us that the Association is a non-profit entity, created in 2009. In Chinese it calls itself ‘Macao Green Material Recovery Association’. In Portuguese, the name is even friendlier, as the word ‘green’ is replaced by the word ‘confraternization’ without any obvious malice. Its meritorious aims are: ‘to carry forward the spirit of loving Macau’ plus the promotion of the industry’s ‘unity, friendship [and] mutual love’, not to mention, environmental awareness’.

Members can be any legal resident of Macau, engaged in materials recovery.

They seek the government’s support for the sector. All they need is a land slot for the collection and processing of materials.

We can see the difficulties of the government here. It is not a small demand: the plot size must be equivalent to ‘several football stadiums, far from residential areas’. To compound the Association’s concerns, a (their?) warehouse is being reclaimed by the owner and will be lost by November.

There are several mysteries here. On a very fundamental level: has Article 27 of the Basic Law, a subject of so much concern, been regulated yet? Can a nonprofit organization declare a strike? The Association members are the undefined ‘entities’ – in which case this would look more like a lockout – or the individual collectors – in which case this would seem more akin to a trade union industrial action?

Then: are there two parallel systems of collection, or do these collectors act as a kind of ‘sub-concessionaire’ of CSR? What exactly are the recycling points, and where are they located? Hopefully, someone is inspecting and assessing any impact on the environment and health. Or not?

Some figures are difficult to come by. It is stated that the strike means that CSR collects some additional 20 tons per day; later, it declared that the Association would usually process some 500 tons.

Where does the difference come from, where are the missing tons? How do these figures fit the official statistics on the collection of ‘recyclable’ (note they do not say recycled) materials?

Too many questions… Possibly, best is really to ‘confraternize’. Open some bottles (recyclable glass, please!)

JL Warren: Macau’s liquidity crisis more than a ‘Lehman Moment’ The American-based equity research firm predicts that gaming revenue will decline approximately 27 per cent during 2016 João Santos Filipe

jsfilipe@macaubusinessdaily.com

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quity research firm JL Warren says the liquidity problems faced by Macau gaming promoters, also known as junkets, are more severe than the bankruptcy of the American bank. The problem is related to the movement of capital from Mainland China and the anticorruption campaign of President Xi Jiping, and is expected to cause gaming revenue to contract 27 per cent.

‘What many have labelled Macau’s ‘liquidity crisis’ is more than a ‘Lehman Moment’. While the downward spiral started with the anti-corruption campaign (ACC) and consequently a sharp reduction of wealthy gamblers from the Mainland, Macau’s plague will outlast the ACC thanks to the anti-capital flight measures’, the latest report of JL Warren Capital – titled ‘Macau: Here Come the Lean Years’ – reads.

‘Today, it is easier to get money out of the country legally due to a range of capital account liberalizations and the fact that China is cracking down harder on illegal currency outflows, the capital flight enabling role of Macau has been diminished’, it adds.

Troubled junket liquidity

The origin of the problem is traced back to the flight of Huang Shan, a junket individual who disappeared in May 2010 with HK$100 billion.

‘As credit became tighter for the VIPs, bad debt rose, the collection cycle lengthened, casino traffic slowed, junkets faced declining profitability

and cash flows worsened. As a result, many junkets – starting from the small ones followed by the big ones – have begun to downsize their operations in Macau’, the report explains.

The company believes this trend will continue during this year and 2016, stressing that ‘around 50 per cent of the junket-originated VIP business and around 25 per cent of casinos-originated VIP business will disappear’. JL Warren expects this to be translated into a decrease of 46.25 per cent in the VIP segment.

that range from a decline of 7 per cent (Deutsche Bank) to an increase of 13 per cent (Goldman Sachs).

“We are four times more pessimistic than the most bearish view on Wall Street, just as we were in May when we revised our GGR estimates down from a decline of 30 per cent to a decline of 35 per cent in 2015/2014’, they said.

UnionPay cap to hit mass market

Gaming revenue down during Golden Week

The new measures related to the annual cap on withdrawals overseas for UnionPay cards issued on the Mainland are also believed to directly hit the premium mass segment, which will lead the whole mass segment, including the grind mass market, to dip 5 per cent.

“Based on our conversations with the industry, we estimate 50 per cent of card usage is for money laundering.

Once the cash cap is implemented, some people will attempt to circumvent the new regulations by getting multiple cards, which is doable but rather inconvenient. We therefore believe that the new regulation will be quite successful in preventing illegal money transfers through Macau’, they added.

All in all, JL Warren Capital predicts gaming revenue in the territory will contract by ‘approximately 27 per cent exiting 2016/2015’, against Wall Street analysts’ predictions for 2016

Gaming revenue during Chinese Golden Week is decreasing in comparison with the like period of last year, according to equity research firms Wells Fargo and JL Warren Capital.

“We estimate daily Gross Gaming Revenue [GGR] to be approximately MOP600 million during the first week of Golden Week, down 52 per cent from the same week last year”, JL Warren Capital said.

For its part, Wells Fargo, and senior analyst Cameron McKnight, estimate that Golden Week is down in comparison to the previous year.

“Our preliminary checks suggest Average Daily Revenues (ADR) were MOP800 million to MOP900 million last week, down 33 per cent versus Golden Week last year”, the analyst Cameron McKnight.

Business Daily | 5

October 7, 2015

Macau UN officials under US federal probe over bribery allegations linked to Macau real estate Wall Street Journal reported the lawyer for Ng Lap Seng, Alex Spiro, said that the legal team’s position is that the businessman “committed no crime”

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.S. law enforcement authorities are investigating an alleged bribery scheme involving payments to officials at the United Nations to gain support for real estate developments in Macau, the Wall Street Journal reported, citing people familiar with the matter.

According to the newspaper, the arrests last month of local realestate mogul Ng Lap Seng and his assistant, Jeff Yin, are connected to the alleged scheme. However, the number of U.N. officials involved in the alleged scheme and their identities were not known, the newspaper said.

The investigation, led by the office of the U.S. attorney in Manhattan and the FBI, centers on alleged bribery by Chinese businesspeople, the newspaper reported. Meanwhile, additional charges are expected to be announced as early as today against a number of other people, including current or former U.N. officials.

Reuters could not immediately reach the Manhattan U.S. Attorney's office and representatives at the UN for comment.

According to Wall Street Journal, the lawyer for Mr. Ng, Alex Spiro, said on Monday that the legal team’s position is that the businessman “committed no crime.” In addition, Kevin Tung,

another attorney for Mr. Ng, said last week that he believed the Macau businessman was innocent and he did not beware any connection between Mr. Ng’s current case and the U.N.

On September 19, US authorities charged Ng and his principal assistant for engaging in a two-year scheme to import more than US$4.5 million (MOP35.9 million) into the United States under false pretences.

The complaint said Ng and Yin concealed the true purpose of the money, repeatedly and falsely telling US Customs and Border Protection officials that it was for buying art, antiques or real estate, or was to be used for gambling.

The complaint did not specify its real purpose, although it cites a June 2014 meeting with an unidentified business associate in the New York City borough of Queens to which Ng brought a suitcase with about US$400,000 in cash that he had falsely claimed was meant for gambling and buying paintings.

Ng, whose interests straddle casinos and apparel, sits on government advisory body the Chinese People’s Political Consultative Conference. Mr. Ng heads local real estate developer Sun Kian Yip Group, and he was also one of the major investors and prime movers behind the Nam Van Lakes project in the 1990s. with Reuters

6 | Business Daily

October 7, 2015

Macau

“Tourism optimisation does not mean reducing tourist numbers” In an exclusive interview, Secretary for Social Affairs and Culture Alexis Tam Chong Weng said the government is planning to provide more resources and products in order to attract more visitors and prolong their stay in the territory. Apropos the universal smoking ban bill, the Secretary said his office would consider a change in stance if workers change their opinion about the establishment of smoking lounges Kam Leong and Paulo A. Azevedo kamleong@macaubusinessdaily.com Photos: Cheong Kam Ka

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lthough the city’s tourist numbers have dropped for the first eight months of the year amid the economic downturn, the Secretary for Social Affairs and Culture, Alexis Tam Chon Weng, says he remains confident and optimistic about the tourism industry. Claiming Macau has many visitor sources yet untapped, he indicates optimising the tourism environment and structure as the current tasks, such as creating more tourism resources for visitors.

In an exclusive interview with De Ficção Multimedia Projects (which owns Business Daily, Macau Business and Business Intelligence) the Secretary revealed that he would present his new plan on offering more tourism products during his political address to the Legislative Assembly this month.

“For example, we would build more museums, or themed-buildings

to attract more tourists to stay in Macau for longer days,” Mr. Tam said.

According to the government official, optimisation of the local tourism industry does not mean fewer tourists coming to Macau, but rather having them arrive in the territory at different periods of the year, in addition to prolonging their stay.

“I’m confident in our tourism and gaming industry. Of course, we know that it’s impossible for the [gaming] industry to post the same income as in previous years. However, what is happening is not our problem but due to the external environment and macroeconomic [factors]…But of course, we have got some impact so that’s why we need to face it to create more conditions [for visitors],” he said.

“We’ve asked the central government to help us… while it agrees with our direction. For

example, they’re discussing offering annual leave like the Europeans have.

I do think this is a good idea. However, China is huge. In order to implement this kind of policy, they need to study [the situation],” the Secretary added.

We will need to create conditions instead of bringing more difficulties to Macau society

Stay longer

Although the Secretary said his tourism capacity report submitted to the central government recently is under progress from Beijing, the Special Administrative Region has already witnessed its tourists staying longer than before.

Between June and July this year, the length of stay of overnight visitors in the territory reached a record-high of 2.2 days despite September slightly dropping to 2.1 days, according to the official data of the Statistics and Census Service (DSEC).

The Secretary indicated that it has never been a piece of cake for

Business Daily | 7

October 7, 2015

Macau the government to attract tourists to stay in the city longer.

“Macau will never be like other places, like Las Vegas, or other tourism destinations… Macau is so close to China that it is convenient to [reach] every other place... Meanwhile, the [accommodation] cost here is high so that tourists, especially those from China, may choose our neighbouring cities [to spend the night] like Zhuhai or Hengqin,” he perceives.

“Of course, one of our objectives is to attract more long-haul tourists as we want people to stay here longer.

However, we will need to balance we need to create more conditions for people to like Macau, as well as for our residents not to [be unwelcoming to] our tourists. As you know, the more tourists we have, the more problems we may face, which our citizens won’t like,” Mr. Tam added.

Build before they come

Refuting that he has proposed a cap on the city’s tourist numbers, the Secretary said the territory should still have the capacity to accept more tourists in the current economic downturn.

“A recent survey by IFT [the Institute for Tourism Studies] indicates that we still have the capacity to receive a similar number of tourists like last year, which was 31.5 million. As such, we can receive around 89,000 to 120,000 tourists on average per day so we still have the margin to receive more tourists,” he said.

From his point of view, developing more visitor sources would be another way to boost the development of the tourism industry in the coming years.

Currently, the central government has implemented the Individual Visit Scheme (IVS) in 49 Mainland cities for its citizens visiting the Special Administrative Region. But Secretary Tam said there are some 600 other

Chinese cities eligible for the scheme, which Macau is actually considering.

“Macau would still have a very good future… Imagine the total population of China; we had 21.5 million tourists from China last year, but there are still many more tourists wanting to come to Macau,” he said.

Nevertheless, prior to developing the new visitor sources and receiving more tourists, Secretary Tam admitted that the city would first need to improve its infrastructure.

“We will need to create conditions instead of bringing more difficulties to Macau society…Perhaps in the next five or six years, we can receive more tourists when we have the [Light Rail Transit] ready and have a better transportation system,” he said.

Smoking lounges up to workers

Meanwhile, Secretary Tam stressed during the interview that a universal smoking ban in casinos is a must, although conceding there could still be other options and alternatives if the city’s gaming workers agree.

“The industry and the operators said it is possible to create a very good smoking lounge. We don’t know. It will be depend upon the conditions.

If they really have good proposals, if the workers agree with it, it will be fine,” he said.

But the Secretary said he has not yet received any proposal on smoking lounges from the city’s gaming operators. Asked what the standard is for the government to

I think what I want to do is enable Macau people to live better and live happily

allow the establishment of smoking lounges under the full smoking ban, the Secretary said the operators would need to present their proposals first.

“The six operators have to propose,” he indicated.

In July, the government-backed bill proposing a universal smoking ban and the elimination of smoking lounges in casinos passed its first reading in the Legislative Assembly (AL) with only two votes against.

In the discussion of the Assembly’s second standing committee, the committee chairman, legislator Chan Chak Mo, said recently his group might take one year to examine the changes proposed by the government to the smoking law.

“We are well aware of all the arguments from both sides but what you can expect from a government member who oversees health is to put people’s health first. It can’t be the other way…We need to put people first and I do not want people to suffer from second hand smoke.

This objective will prevail,” says the Secretary.

Taipa Hospital

On the other hand, the Secretary revealed that the design plan for the city’s new public hospital in Taipa has been finished. However, he declined to comment on the completion date of the project or the total budget for the new infrastructure.

“Many people are concerned about the budget of the new hospital.

I’m very concerned about it, as well.

I want to know how much we are going to spend to build the hospital, too,” said Mr. Tam, indicating the budget and the completion date would be the responsibility of his colleague Raimundo Rosário, the Secretary for Transport and Public Works.

Nonetheless, Mr. Tam stressed that he is confident that his responsibilities, such as personnel and other software for the new public hospital, will be done well.

According to the Secretary, the government would conclude the recruitment of some 500 medical personnel this year, which includes both doctors and nurses. He added that the recruitment of the personnel for the new hospital would be imitated next year, claiming “everything is under control”.

Meanwhile, the government official said he is also awaiting the completion of the project as a user.

The industry and the operators said it is possible to create a very good smoking lounge. We don’t know.

It will be depend upon the conditions

The new hospital, which is located on the east side of Estrada do Istimo in Cotai, is currently scheduled to be completed in 2017.

Creating change

Having occupied the position of Secretary for more than nine months, Mr. Tam indicated that his goals for the rest of his term are to make a change to the lives of local residents.

One of the goals is to execute his promise of creating “the glorious five years” for the medical field in the city, according to the Secretary.

“We’ll get there. Not in a year, though. Some progress has been achieved, for instance, in reducing the waiting time in the hospital services, some of them by 30 per cent. Let us not forget that the city population was 237,000 in 2000 and is now 643,000,” he said.

In addition, leading Macau towards fulfilling the position of a World Centre of Tourism and Leisure is another of the Secretary’s targets.

“We know that we haven’t reached it yet. We’ve invested in promoting Macau and cultural activities to make our city even more attractive during this economic adjustment phase.

The fact that we’ve embarked upon the ‘One Belt, One Road’ plan is an excellent opportunity that we must take advantage of,” Mr. Tam believes.

“We need to make improvements and make progress for Macau society.

I think what I want to do is enable Macau people to live better and live happily,” the Secretary said.

8 | Business Daily

October 7, 2015

Greater China Moody anticipates benefit from new mortgage rules The reduced down-payment requirement for first-time homebuyers in China is credit positive for property developers, according to ratings agency Moody’s.

“The lowered down-payment from 30 percent to 25 percent of the purchase price for first-time homebuyers will ease their access to the property market, thus boosting demand,” said Kaven Tsang, a Moody’s vice president. The policy announced on September 30 applies only to cities that do not otherwise restrict home purchases, thus excluding the four first-tier cities and Sanya in Hainan Province.

Premier congratulates Chinese Nobel Prize winner for medicine

Premier Li Keqiang congratulated herbal expert Tu Youyou on winning the 2015 Nobel Prize for Physiology or Medicine, the first Chinese woman national to win a Nobel prize in science. “Tu’s winning the prize signifies China’s prosperity and progress in scientific and technological field, marks a great contribution of traditional Chinese medicine (TCM) to the cause of human health, and showcases China’s growing strengths and rising international standing,” Li said in a congratulatory letter. Li praised Chinese scientists, including medical researchers, for their long-term, dedicated work and numerous achievements.

Beijing completes checks on elevators, escalators Beijing Municipal Administration of Quality and Technology Supervision (BMAQTS) has concluded safety inspections of the city’s 188,000 elevators and escalators. The inspection found 26.1 percent of these devices have been in service for over a decade and prone to malfunction. The BMAQTS has dangerous equipment repaired, monitored or taken out of service. A BMAQTS official said risks are most severe in old apartment buildings, with the main problems being aging components and poor maintenance. Almost five percent of elevators and escalators were found to have problems.

Taiwan urges VW to recall 17,000 cars Taiwan’s environmental protection agency said it would withdraw the emission qualification certificates for problematic cars belonging to German automaker Volkswagen, and urged the world’s largest carmaker to compensate Taiwanese car owners at a fair level. According to the sales figures submitted by the company’s Taiwan branch to the agency, a total of 17,744 Audi, Volkswagen, Volkswagen CV and Skoda cars sold in Taiwan are installed with the software that was designed to cheat emission tests. The environmental authority has requested VW to recall its affected cars and make necessary modifications in three months.

Yuan overtakes yen and set as 4th most-used world payment More than 1,700 financial institutions made worldwide payments in the yuan

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hina's yuan became the fourth most-used world payment currency in August, overtaking the Japanese Yen, global transaction services organisation SWIFT said yesterday.

The yuan has surpassed seven currencies in the past three years as a payment currency and is now only after the U.S. dollar, the euro and the sterling.

Overall, global yuan payments increased in value by 9.13 percent in August, while payments across all currencies decreased by 8.3 percent, according to the organisation.

The yuan reached a record high market share of 2.79 percent in global payments for the month, compared to 1.39 percent in January 2014.

More than 100 countries used the yuan for payments in August, of which over 90 percent of flows were concentrated in 10 countries.

Singapore processed 24.4 percent followed by the United Kingdom with 21.6 percent.

More than 1,700 financial institutions made worldwide payments in the yuan, up 14 percent from a year earlier. About 600 of these institutions used the yuan for

payments without a leg with China or Hong Kong.

In the trade finance sector, the yuan has a 9.1 percent share in the global issuance of letters of credit by value, strengthening its position as the second most used currency for this purpose.

Foreign exchange transactions in the yuan by value also increased

Saudi Aramco in talks to buy CNPC refinery stake For China, the deal would ensure a steady supply of crude to feed growing demand Denny Thomas

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audi Aramco, the world's biggest oil producer, is in talks to acquire a stake in a China National Petroleum Corp refinery as well as retail assets, people familiar with the matter said - a deal that would help it sell more of its output to China amid growing competition.

The deal is estimated to be worth around US$1 billion to US$1.5 billion, although final valuations, assets and stakes are subject to change, they said.

The sale of a stake in an established refinery marks a departure from the past for China as foreign energy firms have generally been restricted to investing in greenfield projects. Beijing has, however, been increasingly keen

KEY POINTS Deal could be worth about US$1 bln-US$1.5 bln - sources May buy minority stake in at least 1 new refinery -source Talks started about five months back -sources

by 20 percent in August from a month earlier, probably due to the devaluation of the yuan by the People's Bank of China, SWIFT said.

More than 50 percent of the yuan FX trading outside China and Hong Kong is done with the U.K., followed by the U.S., Singapore and France.

Reuters

to restructure the country's many sprawling state-owned enterprises.

For China, the deal would ensure a steady supply of crude to feed growing demand, while providing CNPC with fresh funds to cut down debt at a time when energy companies' profits are under pressure from sliding oil prices.

Saudi Aramco is in discussions to buy a minority stake in at least one of CNPC's new refineries and some 300 retail outlets, one of the people said. CNPC operates 26 refineries and petrochemical businesses.

"Most of the value for Saudi Aramco is in the refinery," the person said. "This will place the Saudis in a favourable position to sell their crude at time of increased supply from other countries," the person added.

Saudi Aramco declined to comment and a representative for CNPC was not available for comment.

Sources declined to be identified as the negotiations are confidential.

It remains unclear when a deal will be finalised, the people said, adding that discussions started about five months ago.

Saudi Aramco is being advised

by Deutsche Bank, while CNPC is working with HSBC Plc and Citic Securities, according to the sources.

Deutsche Bank and HSBC declined to comment, while Citic Securities was not available for a comment.

CNPC's planned asset sale comes after China's state-controlled oil giant Sinopec Corp raised US$17.5 billion last year by selling a 29.9 percent stake in its retail business, ahead of a potential IPO in 2016.

Saudi Aramco wants to make inroads into more advanced chemicals to diversify away from its oil and basic petrochemicals businesses. In March, it signed a new US$10 billion loan deal with 27 financial institutions, partly to finance the acquisition of a stake in German rubber firm Laxness.

Reuters

Business Daily | 9

October 7, 2015

Greater China

Home prices sizzle in Shenzhen even as economy slows City's home prices rose for a fourth consecutive month in August Clare Jim

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stream of weak manufacturing data, the fall in the yuan and a stock market rout have painted a gloomy picture of the world’s second largest economy over the past few months. But for the property market in China’s boomtown of Shenzhen, things couldn’t be better.

Real estate prices in China’s answer to Silicon Valley rose by almost a third in August from the same month a year ago, a further climb from the nearly 24 percent year-onyear increase in July, official data showed, making it the country’s hottest property market by far.

The gain becomes even more stark when compared to the 2.3 percent year-on-year decline in real estate prices across the whole country, but also highlights the factors unique to Shenzhen that are driving the boom: a scarcity of land in this southern city,

few unsold homes and strong demand from executives from companies including Tencent Holdings Ltd and Alibaba Group Holding Ltd coming to live in the country’s largest technology hub.

“Shenzhen’s economic output is still doing well... despite a slowdown in the broader nation,” said Andy Lin, research director for China markets at investment firm Hopefluent Group

Holdings. “Supply constraint is also a big factor that drives home prices.”

China’s home prices rose for a fourth consecutive month in August, offering hope that the ailing property sector is becoming less of a drag on the slowing economy.

Analysts, however, do not expect a full-blown turnaround any time soon, as a huge oversupply of unsold homes discourages new

construction and investment in all but the biggest cities.

The stock market rout, which saw Chinese shares fall by almost a third in July, burning many investors, is also likely to depress demand for property.

But even though stock prices in Shenzhen have fallen by 27 percent in July and August, demand for property remains strong largely due to the lack of supply of both

apartments and land: the city sold only one plot of land so far this year, compared to the 120 plots sold in Beijing, Shanghai and Guangzhou, data by real estate researchers China Index Academy showed.

Analysts however, say the picture is changing slightly.

Hopefluent’s Lin expects the official price index to ease slightly towards the end of the year as buyers seek more affordable small to medium sized apartments, reluctant to splash out on luxury dwellings like the US$6.3 million flat at a seafront condominium amid the slowing economy.

Any substantial drop in home prices, however, is off the cards, he added, as sellers are reluctant to ask for less in a market where demand is expected to always outstrip supply.

New home buyer Tina Dong is resigned to the high property prices in Shenzhen.

She and her husband, a former Tencent employee who now runs his own start-up, bought a suburban property in July for 2.2 million yuan (US$346,135) but they hope they can eventually afford a place closer to the city centre.

“Prices of homes and goods tend to be high in all major cities, so I believe property prices will continue to rise,” said Dong. “I hope after a couple more years when we earn more money, we will be able to move to the downtown area.”

Reuters

10 | Business Daily

October 7, 2015

Asia

SE Asian economies check monetary defences built post-1997/98 crisis Despite having months of import cover, Southeast Asia’s holdings of foreign reserves still seem sufficient Nicholas Owen

TPP Trade Deal: Who in Asia stands to benefit, suffer The agreement must still be ratified by lawmakers in the TPP nations

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he Trans-Pacific Partnership is the biggest trade agreement in history, reducing tariffs and other forms of protectionism in a dozen countries making up about 40 percent of the global economy with economic output of almost US$30 trillion.

The White House estimates it will eliminate 18,000 tariffs on U.S.manufactured goods, while giving everyone from Vietnamese shrimpers

The White House estimates it will eliminate 18,000 tariffs on U.S.manufactured goods

to New Zealand dairy farmers cheaper access to markets across the Pacific.

Critics, particularly in the U.S., say it will kill American manufacturing jobs, reduce environmental standards and raise drug prices.

The deal sealed Monday in Atlanta came after more than five years of negotiations between the TPP nations -- the U.S., Canada, Japan, Australia, Brunei, Chile, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam.

The agreement must still be ratified by lawmakers in the TPP nations before it can take effect and President Barack Obama is likely to face a fight to secure passage by the U.S. Congress.

Japan

Japanese car and auto-parts makers may be the biggest winners, as they get cheaper access to the U.S., the industry’s biggest export market.

Japan was forced to reduce some of the protections granted to its rice farmers, creating a non-tariff import quota of one percent of its total consumption.

Livestock farmers may be harder

hit as tariffs on beef will be cut to 9 percent over 16 years from 38.5 percent, while pork tariffs will also be slashed.

pharmaceuticals, machinery, paper and auto parts will help Australian manufacturers.

Australia

Tariffs due to be eliminated on 93 percent of New Zealand’s trade with its TPP partners representing annual savings of about NZ$259 million (US$168 million), Trade Minister Tim Groser said.

The dairy industry, which accounts for about a quarter of exports, will see savings of about NZ$102 million a year. Some tariffs to remain in key markets such as the U.S., Japan, Canada and Mexico. though New Zealand will get preferential access to new quotas.

Tariffs on beef exports will be eliminated with the exception of Japan where they will drop to 9 percent from 38.5 percent, he said. Tariffs on all other exports including fruit, seafood, wine and sheep meat will be eliminated.

“While I am very disappointed that the deal falls far short of TPP’s original ambition to eliminate all tariffs, there will be some useful gains for New Zealand dairy exporters in

The deal will remove about A$9 billion of import taxes from Australian trade, Prime Minister Malcolm Turnbull said.

Australia will gain access to the U.S. sugar market while Japan will also reduce levies on the product and the cut in the beef tariff will help Australian ranchers Seafood and most horticulture products will see tariffs dropped, while preferential quota access will be created for grains, cereals and rice.

Australia and New Zealand successfully pressured the U.S. to compromise on the amount of time pharmaceutical companies would get protection for new biotech drugs, granting companies a minimum of five years rather than the 12 years of protection pushed by the U.S. That could lead to cheaper drug prices and more competition.

Reduced tariffs on everything from iron and steel products, to

New Zealand

Business Daily | 11

October 7, 2015

Asia

S

outheast Asia has spent the best past of two decades shoring defences against a repeat of the Asian financial crisis, including building up record foreign exchange reserves, yet is now feeling vulnerable to speculative attacks again.

Officials are growing increasingly concerned as souring sentiment has made currencies slide and investors reassess risk profiles in an environment where China is slowing and U.S. interest rates will rise at some point.

And while economists have long dismissed comparisons with the 1997/98 currency crisis, pointing to freer exchange rates, current-account surpluses, lower external debt and stricter oversight by regulators, lately there has been a change.

Malaysia and Indonesia, which export oil and other commodities to fuel China’s factories, are looking vulnerable as the world’s secondlargest economy heads for its slowest growth in 25 years and the prices of their commodity exports plunge.

“We are worried about the contagion effect,” Indonesian Finance Minister Bambang Brodjonegoro said last week, using a word widely used in 1997/98.

In 1997, “the thing happened first in Thailand through the baht, not the rupiah. But the contagion effect became widespread,” he added.

Taimur Baig, Deutsche Bank’s chief Asia economist, said that unlike 1997, when pegged currencies were attacked as overvalued, today’s floating ones are “weakening willingly” in response to outflows.

But there can still be contagion, as markets lump together economies reliant on China or on commodities.

“If you see a sell-off in Brazil, that can easily spread to Indonesia, which can spread to Malaysia, and so on,” he said.

Foreign funds have sold a net US$9.7 billion of stocks in Malaysia, Thailand and Indonesia this year, with the bourses in those three

KEY POINTS Malaysia and Indonesia look particularly vulnerable Economies stronger than in 1997/98, but concerns remain Indonesia ‘worried’ about contagion effect - finmin

countries seeing Asia’s largest net outflows, Nomura said on October 2.

Baig said that as in 1997/98, falling currencies will naturally pose balance-sheet problems for companies with dollar debts and local-currency earnings.

This year, Malaysia’s ringgit has fallen nearly 20 percent against the dollar and its reserves dropped by about the same percentage, to below US$100 billion.

“It’s almost like a perfect storm for Malaysia,” the country’s economic planning minister, Abdul Wahid Omar, said.

Malaysian officials insist the economic fundamentals are stronger than two decades ago, but some economists aren’t sure.

Chua Hak Bin of Bank of America Merrill Lynch said he draws “little comfort” from comparisons with 1997. While in many ways Malaysia’s economy is stronger now, for example by having a current account surplus, its external debt is 70 percent of

gross domestic product, compared with 44 percent in 1997, and there’s “significant downside risk even after the sharp ringgit correction”.

None of the three main creditrating agencies has downgraded Malaysia’s creditworthiness in response to market ructions, but Moody’s said in September the currency’s fall was a symptom of declining exports and other factors negatively impacting key credit buffers.

Souring sentiment

Indonesia, Southeast Asia’s largest economy, has a lower external debt relative to GDP - 32 percent - but foreigners also own a large share its local-currency bonds.

This makes the rupiah, down 13 percent against the dollar this year after jumping on Tuesday, vulnerable to souring sentiment.

“We are trying to differentiate ourselves from Malaysia,” Indonesia’s Brodjonegoro said. “At least we can get the inflows, we can still create positive sentiment.”

At end-February, Indonesia’s reserves topped US$115.5 billion.

On September 21, they were US$103 billion.

Today, the central banks of Indonesia and Malaysia are due to announce fresh reserve figures.

By months of import cover, Southeast Asia’s holdings of foreign reserves still seem sufficient. But looking at them relative to overall foreign financing needs, they are more stretched.

Malaysia’s reserves barely cover its short-term external debt due this year, while Deutsche Bank says Indonesia’s are about 1.5 times what’s needed to finance its debts and current-account deficit.

The Philippines, by contrast, has reserves equal to 11 times its financing needs. The US$2 billion monthly remittances from its overseas workers provides a solid buffer.

Vietnam

Vietnam to be among the biggest winners, according to the Eurasia Group, with the agreement potentially boosting GDP by 11 percent by 2025, with exports growing 28 percent in the period as companies move factories to the low-wage country, the report said. Reduced import duties in the U.S. and Japan will benefit country’s

apparel manufacturers, whose low labour costs have enabled them to grab business from China. Still, impact may be limited as Vietnam will still face strict rules-of-origin on materials.

Fishing industry to benefit from elimination of import tax on shrimp, squid and tuna, now averaging 6.4%7.2%.

Eliminating import taxes on pharmaceutical products from the current average of about 2.5% will lead to tougher competition between Vietnamese domestic companies and foreign companies. TPP will also increase patent protection, restricting

The agreement has been pitched as a way to counter China's rising economic and political clout in the region Linda Sieg and Kaori Kaneko

J

Malaysia’s state-owned enterprises may suffer from the deal which calls for equal access to government procurement.

Electronics, chemical products, palm oil and rubber exporters are among beneficiaries. Malaysia is the world’s second-biggest palm oil producer and one of the biggest growers of rubber

apanese Prime Minister Shinzo Abe (pictured) welcomed the pan-Pacific agreement struck in the United States on Monday, which would liberalise trade in 40 percent of the world economy, though he said bringing China into the deal in future would increase its strategic significance.

"The Trans-Pacific Partnership (TPP) establishes in the Asia-Pacific a free, fair and open international economic system with countries that share the basic values of freedom, democracy, basic human rights and the rule of law," Abe told a nationally televised news conference.

"It would contribute largely to our nation's security and Asia-Pacific regional stability, and it would have significant strategic meaning if China joined the system in the future."

The agreement has been pitched as a way to counter China's rising economic and political clout in the region.

Abe, whose ruling bloc faces a national election next July, stressed TPP would benefit Japanese consumers, workers, rural regions and companies of all sizes, not just major corporations.

"All in all, (TPP) will be a huge tailwind for Japanese companies to conduct business overseas," Abe said.

"TPP definitely brings benefits to consumers and working people. The agreement would benefit the growth of Japan."

In a nod to politically powerful farmers worried they will suffer from a flood of imports after the deal, Abe said he would set up a new headquarters to craft steps to mitigate the impact.

"I am aware many people are deeply concerned," he said. The beautiful scenery of the countryside, home towns with traditional culture where people help each other, the national character we are proud of will continue to be protected. Our determination will not change at all," said the conservative leader.

Bloomberg News

Reuters

Reuters

Trade ministers from the twelve Trans-Pacific Partnership (TPP) member countries participate in the closing press conference in Atlanta

key TPP markets such as the U.S., Canada and Japan,” John Wilson, chairman of Fonterra Cooperative Group Ltd., the world’s biggest dairy exporter, said in a statement.

Japan's Abe says TPP would have strategic significance if China joined

Vietnam companies access to new products as well their ability to produce new drugs.

Malaysia

12 | Business Daily

October 7, 2015

Asia

Australia’s central bank holds rates steady for fifth month Figures show the trade deficit grew to US$2.2 billion Ian Chua

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ustralia’s central bank left interest rates unchanged yesterday for a fifth straight month in a widely expected move and offered no clues to indicate it may change its steady stance any time soon.

The Reserve Bank of Australia (RBA) kept the cash rate at a record low 2.0 percent, where it has been since the last cut in May.

In a brief statement that was almost identical to the September note, the RBA reiterated that it would look to upcoming data to judge if the current policy setting needed to be adjusted.

“The available information suggests that moderate expansion in the economy continues,” the RBA said.

KEY POINTS RBA keeps cash rate unchanged at record low 2.0 pct Gives no guidance on future move Australian dollar pops above 71 U.S. cents to two-week highs

“Overall, the economy is likely to be operating with a degree of spare capacity for some time yet, with domestic inflationary pressures contained.”

Given this backdrop, the RBA said monetary policy needed to be accommodative, a view it has repeated in previous meetings.

The decision and an absence

Thailand turns to neighbours to diversify exports and the U.S. remain strained following a military coup in May last year. The country wasn’t among the dozen Pacific-rim nations that agreed Monday to join the TransPacific Partnership trade accord, and the European Union has said it won’t sign a free-trade agreement with Thailand until democracy is restored. Elections aren’t expected until at least 2017.

full year. The central bank also pared its expectations for economic growth this year to 2.7 percent from 3 percent.

The CLMV economies are projected to expand at more than twice that pace, according to World Bank data. The fastest-growing, at 8.5 percent, is Myanmar, which emerged in 2010 from half a century of military rule and will hold a general election next month. Imports to the CLMV region rose to about US$167 billion last year, according to the bank.

Part of Thailand’s strategy for escaping from the socalled middle-income trap is to become a trade and logistics hub for the CLMV, as well as regions in southern China and areas of India adjacent to Myanmar, Apiradi Tantraporn, Thailand’s Commerce Minister, said.

Expectations

Silk road

The country needs new export markets because the global slowdown has dampened demand for its electronics and cars

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hai policy makers searching for ways to reverse a slump in exports may have found a solution close to home -- a US$170 billion market just over the border that’s growing by more than 6 percent a year.

As shipments to China, Europe and the U.S. slow, Thailand’s government is crafting a strategy to deepen links with Cambodia, Laos, Myanmar and Vietnam, an economic bloc known as the CLMV whose population of about 240 million people would make it the world’s fifth-largest if it were a country.

Thailand is spending about US$83 billion over the next seven years to build new railways, roads and customs checkpoints to remove bottlenecks that hamper trade with its neighbours.

It’s also negotiating with China and Japan to construct high-speed rail networks that may connect the nation’s manufacturing and shipping hubs with buyers and suppliers stretching from Yunnan in southern China to India’s north-eastern frontier.

Thailand needs new export markets because the global slowdown has damped demand for its electronics and cars, while ties with Europe

of any expressed anxiety about slowing growth in China, Australia’s single biggest export market, gave the currency a bit of a boost.

The Aussie dollar popped above 71 U.S. cents for the first time in two weeks, pulling further away from a 6-1/2 year low of US$0.6892 set last month.

The RBA again said the currency was adjusting to the significant declines in key commodity prices.

“We have the RBA on hold from here,” said Tom Kennedy, economist at JPMorgan.

“It will come down to what happens in places like China and Japan and how their economies play out in next two to three quarters.”

Indeed, the health of Australia’s key trading partners like China is seen as a major risk for an economy that is struggling with a prolonged downturn in mining investments.

Falling prices for major commodity exports are already hitting company profits, national income and government tax revenues, eating into nominal GDP growth.

Data earlier in the day showed Australia’s trade position worsened unexpectedly in August, extending a string of deficits stretching back to April 2014.

Figures from the Australian Bureau of Statistics showed the trade deficit grew to A$3.1 billion (US$2.2 billion), from an upwardly revised A$2.8 billion the previous month.

The deterioration was partly driven by weakness in export values, a feature that is likely to persist as long as commodity prices stay under pressure.

Thai exports have fallen for eight straight months this year on an annual basis, and the Bank of Thailand said last month that shipments may contract by 5 percent for the

Thailand is part of China’s planned transport network connecting the capital of southwest China’s Yunnan province with Vietnam, Laos, Cambodia, Thailand and

Reuters

Myanmar. China Railway Construction Corp. will help Thailand lay a track stretching more than 840 kilometres from Kunming to Bangkok and the eastern seaboard, and China will also build Indonesia’s first high-speed railway, beating out a bid from Japan.

Thailand is offering alternative rail projects to Japanese investors, including connections to the north and populous northeast and a route linking Kanchanaburi in western Thailand with Bangkok and Rayong in the east. The project will give Myanmar and India a rail link to Thailand’s Laem Chabang Port, Deputy Prime Minister Somkid Jatusripitak said Monday.

Thailand is negotiating a free-trade agreement with Pakistan, and is also hopeful of benefiting from India’s border trade with Myanmar, Apiradi said.

India is seeking to deepen economic partnerships with Asean member states as part of President Narendra Modi’s “act east” policy.

Bloomberg News

editorial council Paulo A. Azevedo, José I. Duarte, Mandy Kuok Founder & Publisher Paulo A. Azevedo | pazevedo@macaubusinessdaily.com Newsdesk João Santos Filipe, Michael Armstrong, Stephanie Lai, Óscar Guijarro, Kam Leong, Joanne Kuai GROUP SENIOR ANALYST José I. Duarte Designer Francisco Cordeiro WEB & IT Janne Louhikari Contributors James Chu, João Francisco Pinto, José Carlos Matias, Larry So, Pedro Cortés, Ricardo Siu, Rose N. Lai, Zen Udani Photography Carmo Correia Assistant to the publisher Lu Yang | lu.yang@projectasiacorp.com office manager Elsa Vong | elsav@macaubusinessdaily.com Agencies Bloomberg, Reuters, AFP, Xinhua, Lusa, Project Syndicate Printed in Macau by Welfare Ltd.

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Business Daily | 13

October 7, 2015

Asia Philippine inflation hits record low

Toyota aims to sell semi-autonomous cars around 2020

The World Bank on Monday lowered its 2015 Philippine growth forecast to 5.8 percent from 6.5 percent

Toyota Motor Corp said it would aim to bring to market cars that can autonomously change lanes, merge with traffic, and overtake other vehicles on highways by around 2020 as it aims to catch up in the nascent field of self-driving cars.

Demonstrating its newest safety technology features to media yesterday, Japan’s biggest automaker said in that car of the future, drivers would be able to turn on and off the auto-pilot mode with a single switch. Toyota also said it would launch three models in Japan this year equipped with “intelligent transportation system” (ITS) technology.

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hilippine annual inflation slowed for a seventh consecutive month in September, taking it to a record low and bolstering views interest rates will be left unchanged the rest of the year.

The consumer price index rose 0.4 percent in September, below the 0.6 percent median in a Reuters poll but within the central bank’s 0.2-1.0 percent forecast for the month.

Inflation slowed due to lower utility, transport and fuel costs. Core inflation, which takes out volatile items in the consumer basket and measures the underlying trend in prices, also slowed to a record low of 1.4 percent in September.

The September print brought the nine-month average inflation rate to 1.6 percent, below the central bank’s 2-4 percent target for 2015 and 2016.

The Bangko Sentral ng Pilipinas (BSP) has kept its key overnight borrowing rate at 4.0 percent since October, and Governor Amando Tetangco said last week it can stay that way for the rest of 2015 given benign inflation and strong economic growth.

The central bank expects inflation to move closer to its target next year due to the impact of a stronger and protracted El Niño on rice prices.

Emilio Neri, economist at Bank of the Philippine Islands, said September’s slower-than-expected inflation will likely push an interest rate hike further into 2016.

ANZ bank to tighten lending to coal power projects Earlier, a hike in the second quarter looked “compelling” because of higher inflation, “but because we are coming from a very low starting point, it’s probably going to be delayed,” he said.

Annual economic growth in the Philippines rebounded to 5.6 percent in the second quarter from 5.0 percent in the first, but the country will miss this year’s 7-8 percent target.

Economic planning chief Arsenio Balisacan has said a more realistic growth target this year would be between 6-6.5 percent, which would still make the Philippines one of the few bright spots in Asia.

KEY POINTS Sept CPI at record annual low of 0.4 pct Policy rates seen steady rest of the year Inflation slowed on lower transport, fuel costs

Reuters

Volkswagen sales fall in South Korea In recent years German carmakers have made significant inroads in South Korea, long dominated by Hyundai Motor

Japan will tell G20 its economy is in good shape

KEY POINTS Sister brand Audi sees 22 pct sales rise from Aug Foreign-branded car sales up 12 pct from Aug German brands with diesel models dominate Korean imports

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erman carmaker Volkswagen AG , rocked by a diesel emissions scandal that erupted on Sept 18, saw its sales in South Korea slide 7.8 percent in September from a month earlier, according to industry data released yesterday.

As sales slipped globally after an emissions-cheating cover-up came to light, the world’s biggest carmaker by sales cited a “limited impact” in South Korea from the scandal. It sold 2,901 cars last month, data from the Korea Automobile Importers & Distributors Association showed.

However, Volkswagen’s Audi brand recorded a 22 percent sales jump from August as foreign car sales grew 12 percent in September from a month earlier. Overall auto sales

rose 7.2 percent in September from August, according to South Korea’s trade ministry.

In a market where about ninetenths of its sales are diesel vehicles, Volkswagen’s September showing was its weakest since May. In recent years German carmakers have made significant inroads in South Korea, long dominated by Hyundai Motor, boosted by their brand cachet and the growing popularity of diesel engines, which outsold petrol engines for the first time in 2013.

A spokesman for Volkswagen Korea, declining to be named, said that in addition to the limited hit from the scandal, sales dropped last month because August was boosted by promotions, and a three-day

Australia’s ANZ Banking Group plans to lend at leastUS $7 billion to projects that will cut greenhouse gases, ending backing for new coal-fired power plants that don’t use advanced technologies to reduce carbon dioxide emissions. The move by ANZ, the smallest of Australia’s “Big Four” lenders, to provide A$10 billion (US$7.1 billion) to a low-carbon economy over the next five years was announced yesterday. Amid growing calls to reduce carbon emissions, the country’s three other major banks could follow suit, tightening financing conditions for Australia’s coal industry.

holiday meant fewer selling days in September.

The data showed Volkswagen’s sales last month rose 26.7 percent from the same month a year earlier. Sales of foreign-branded cars increased 19.7 percent from the previous September, the four biggest import brands being German with diesel engines accounting for the bulk of their sales.

In South Korea, 92,247 Volkswagen diesel vehicles and 28,791 cars sold by Audi between 2009 and 2015 were installed with emissionscheating software, according to the government. They will be recalled following an investigation by the environment ministry due to end in November.

Reurtes

Japan will explain to its Group of 20 counterparts gathering in Lima, Peru, this week that its economy continues to recover moderately, Finance Minister Taro Aso said yesterday. “Japan’s economic fundamentals are not bad at all,” he told a news conference after a regular cabinet meeting. Asked whether the Bank of Japan ought to ease monetary policy at its rate review this week, Aso said: “Answering that will be tantamount to intervening in monetary policy affairs, which I won’t do.”

Singtel to help Singapore strengthen cyber security Singapore Telecommunications Ltd said it plans to work with the Cyber Security Agency of Singapore to strengthen the country’s cyber security capabilities, as the wealthy city-state grapples with a rise in online crime. Singtel said it a statement it would work with the agency in research and development and to boost the country’s cybersecurity talent pool. Singapore relies heavily on its reputation of being a low-crime and politically stable country to attract multinational companies.

But it has struggled in recent years with cyber criminals, who have committed offences including stealing client data from Standard Chartered Bank.

14 | Business Daily

October 7, 2015

International World Bank forecasts Africa’s economy to slow in 2015 Sub-Saharan Africa’s growth will slow in 2015 to 3.7 percent from 4.6 percent in 2014, reaching the lowest growth rate since 2009 amid weak global economic conditions, the World Bank projected yesterday. The bank’s new Africa’s Pulse, the biannual analysis of economic trends released in Nairobi, says 2015 forecast remains below the robust 6.5 percent growth in GDP which the region sustained in 2003-2008, and drags below the 4.5 percent growth following the global financial crisis in 2009.

Growth in Sub-Saharan Africa will be repeatedly tested as new shocks occur in the global economic environment.

German factory orders fall for second straight month German industrial orders, a key measure of demand for goods in Europe’s biggest economy, slumped in August, official data showed yesterday. The monthon-month drop of 1.8 percent was the second consecutive month of decline, and missed analysts’ forecasts. Analysts polled by financial services firm FactSet had expected a 0.4 percent rebound in August. Weakness in domestic demand as well as from outside the eurozone had contributed to the August slump, according to the preliminary data released by the federal statistics office Destatis.

UN expects Latin American economies to contract America’s economies are expected to contract 0.3 percent in 2015, down from a previous forecast of 0.5 percent growth, the United Nations’ regional arm said, as Brazil’s woes drag on its neighbours. Brazil’s economy, the largest in the region, is now expected to contract 2.8 percent this year, the Santiago-based Economic Commission for Latin America and the Caribbean (ECLAC) said. While commodities-dependent South American economies struggle as growth has weakened in key trade partner China, more northerly countries with closer ties to the U.S. will do better, ECLAC said.

Tsipras pleads for debt relief with austere budget

Big U.S. firms hold US$2.1 trillion overseas to avoid taxes American companies by gross revenue operate tax haven subsidiaries in countries like Bermuda, Ireland, Luxembourg and the Netherlands

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he 500 largest American companies hold more than US$2.1 trillion in accumulated profits offshore to avoid U.S. taxes and would collectively owe an estimated US$620 billion in U.S. taxes if they repatriated the funds, according to a study released yesterday.

The study, by two left-leaning non-profit groups, found that nearly three-quarters of the firms on the Fortune 500 list of biggest American companies by gross revenue operate tax haven subsidiaries in countries like Bermuda, Ireland, Luxembourg and the Netherlands.

The Centre for Tax Justice and the U.S. Public Interest Research Group Education Fund used the companies’ own financial filings with the Securities and Exchange Commission to reach their conclusions.

Technology firm Apple was holding US$181.1 billion offshore, more than any other U.S. company, and would owe an estimated US$59.2 billion in U.S. taxes if it tried to bring the money back to the United States from its three overseas tax havens, the study said.

The conglomerate General Electric has booked US$119 billion offshore in 18 tax havens, software firm Microsoft is holding US$108.3 billion in five tax haven subsidiaries and drug company Pfizer is holding US$74 billion in 151 subsidiaries, the study said.

“At least 358 companies, nearly 72 percent of the Fortune 500, operate subsidiaries in tax haven jurisdictions as of the end of 2014,” the study said. “All told these 358 companies maintain at least 7,622 tax haven subsidiaries.”

The Centre for Tax Justice and the U.S. Public Interest Research Group Education Fund study

Reuters

Card payments boom across the world, led by Finland While card payments rise, the decline of cheques looks set to continue

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Greek Prime Minister Alexis Tsipras issued a resounding call for debt relief as his government unveiled an austere 2016 budget sticking strictly to international bailout targets in a new spirit of cooperation with European and IMF creditors. The draft budget, released as Tsipras delivered his keynote fouryear policy programme to parliament, projected that the economy would stay in recession next year, shrinking by 1.3 percent after a 2.3 percent contraction in 2015, before returning to growth in 2017. Tsipras told lawmakers he would bargain hard for debt relief.

At least 358 companies, nearly 72 percent of the Fortune 500, operate subsidiaries in tax haven jurisdictions as of the end of 2014

ayments made with debit and credit cards and other non-cash methods jumped 9 percent last year to 390 billion transactions, according to a study published yesterday.

The 2015 World Payments Report gave an estimate for transactions last year and detailed numbers for the year before.

It showed people in Finland made an average of 450 non-cash payments in 2013, more than any other nationality, thanks to innovations in payments system, and a strong economy and private spending. Its cold winters also encourage the use of e-commerce.

The report said people in the

Fortune 500 companies hold more than US$2.1 trillion in accumulated profits offshore to avoid taxes, with just 30 of the firms accounting for US$1.4 trillion of that amount, or 65 percent, the study found.

Fifty-seven of the companies disclosed that they would expect to pay a combined US$184.4 billion in additional U.S. taxes if their profits were not held offshore. Their filings indicated they were paying about 6 percent in taxes overseas, compared to a 35 percent U.S. corporate tax rate, it said.

“Congress can and should take strong action to prevent corporations from using offshore tax havens, which in turn would restore basic fairness to the tax system, reduce the deficit and improve the functioning of markets,” the study concluded.

United States were next most active, making 390 non-cash transactions on average in 2013, followed by the inhabitants of the Netherlands, Australia, Denmark, South Korea and Sweden.

Payments by cards, direct debits and credit transfers are booming as people turn to mobile banking, contactless cards and other innovations rather than cash.

The report, a joint venture between Capgemini and Royal Bank of Scotland, said further advances could come from blockchain technology -- a growing, decentralised database that allows secure digital transfers.

“Blockchain has the potential, in a simple way, to disrupt a lot of the

payment infrastructure and the way we conduct business,” said Teresa Connors, head of client engagement of payment services at RBS, saying the architecture could offer security, an audit trail, transparency and speed.

The World Payments Report estimated 390 billion non-cash payment transactions were made last year, up 9 percent from 2013 and up 45 percent from 2009.

China’s population made fewer than 50 non-cash transactions per person on average in 2013, but that was up 37 percent from the year before. China’s growth is being driven by a rising penetration of mobile phones in smaller towns and steps by authorities to accelerate the rollout of point-of-sale equipment to merchants as well as opening the domestic card payments market to competition.

While card payments rise, the decline of cheques looks set to continue.

Cheque transactions fell 11 percent in 2013 from the year before and accounted for 4 percent of non-cash payments in Europe and 13 percent in North America, down from 7 percent and 22 percent, respectively, in 2009.

The report forecast fewer than 5 billion cheques would be written in 2025, compared with about 25 billion in 2013.

Reuters

Business Daily | 15

October 7, 2015

Opinion Business

wires

Ending rogue fishing

Leading reports from Asia’s best business newspapers

BANGKOK POST Thailand’s cybersecurity is at risk because it is one of the world’s top targets for attack by online banking and point-of-sale malware infections, warns Trend Micro Inc, a Tokyo-based security software firm. “The increase of internet users here means hackers can have more chances to attack their online banking activities,” said Dhanya Thakkar, managing director for Asia-Pacific. In the second quarter, malware infections of online banking in Thailand accounted for 3% of global detections. Malware is malicious software used to disrupt computer operations, gather sensitive information or gain access to a private computer system.

Maria Damanaki

Former EU Commissioner for Maritime Affairs and Fisheries, is Global Oceans Director at The Nature Conservancy

Yoriko Kawaguchi

Former Japanese Minister for Foreign Affairs and former Japanese Minister of the Environment, is Commissioner at the Global Ocean Commission and Professor at Meiji University

Jane Lubchenco

Former administrator of the US National Oceanic and Atmospheric Administration, is University Distinguished Professor at Oregon State University

THANH NIEN NEWS Vietnam and the Philippines are set to reap the rewards of diversifying their exports, helping fireproof the two economies from plunging commodity prices. Indonesia and Malaysia’s failure to do so now represents a risk to Asia’s 2016 outlook. Two decades ago, commodities were about 50 percent of overseas shipments for both Vietnam and Indonesia. By 2014, Vietnam had cut that to less than 30 percent while Indonesia’s was almost 60 percent. In the Philippines, a net commodity importer, the ratio was about 20 percent last year.

THE KOREA HERALD The Finance Ministry plans to map out a guideline on dismissing employees at state-funded agencies or institutions with poor performance records, as part efforts to reform the public sector. The policy is an extension of the government’s recent pledge to vitalize the scheme to lay off lowperforming civil servants, which was introduced in 2006. Aside from the civil service, the government has decided to expand the stern disciplinary policy to quasi-civil servants at state-run agencies and public firms, said officials at the Finance Ministry.

THE STAR CIMB Group chairman Datuk Seri Nazir Razak says the ringgit should not be pegged to the US dollar. He said that pegging the ringgit would have a longer-term effect and the conditions are also different than the Asian Financial Crisis of 19971998. Last week, says Bank Negara Malaysia Governor Tan Sri Dr Zeti Akhtar Aziz said there was still no need to peg the ringgit despite the continued downtrend of the local unit. The ringgit has fallen about 20% against the US dollar year-to-date and it was the worst performing Asian currency.

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eafood is by far the most highly traded commodity globally, feeding billions of people worldwide.

Unfortunately, however, the industry is plagued by illegal, unreported, and unregulated fishing, which undermines conservation efforts and handicaps honest fishers and businesses that follow the rules.

It is high time to address the problem.

Rogue fishing accounts for up to one-fifth of all ocean fish caught globally. And while there have been encouraging signs of reform in some countries’ industrial-scale fisheries, the problem remains widespread, discouraging others from following suit and impeding the reform of small-scale fisheries that supply food and livelihoods for millions of families.

Rules do exist, but they need to be clearer and more specific, effectively enforced, and implemented across national borders. If not, unscrupulous operators will continue to take advantage of the lack of regulation and monitoring, with huge implications for those who depend on coastal fisheries for their sustenance and livelihoods.

A recent study found that 2032% of seafood imported into the United States was likely from illegal, unreported, and unregulated sources. This alone accounts for 4-16% of the value of the total illegal fish catch worldwide, which has an estimated value of US$15-23 billion a year.

Collaboration among the US, the European Union, and Japan has the potential to underpin great strides in addressing the problem. The US imports more than 90% of its seafood. Japan is the second-largest seafood importer after the US. And the EU is the world’s largest single market for seafood products, importing about 60% of the fish it consumes. The potential power of these three markets’ joint action is immense.

In late 2011, the EU and the US agreed to collaborate to combat

illicit fishing. A little less than a year later, the EU and Japan agreed to prevent imports of illegally caught seafood, share information, and work together at regional fisheriesmanagement organizations.

They all agreed to encourage other countries to ratify and implement the Port State Measures Agreement (PSMA), which will make it harder for dishonest fishing operations to operate.

Illicit fishing operations rely on a range of tactics and loopholes in international law to get their products to market. Ports known for lax enforcement or limited inspection capacity are a prime pathway for unethical fishermen and companies to move their catch from ship to shelf.

Adopted in 2009 by the UN Food and Agriculture Organization, the PSMA requires parties to implement stricter controls on foreign-flagged fishing vessels.

To date, 13 countries have ratified the agreement; another 12 must do so for it to enter into force and be globally effective.

Encouragingly, rogue fishing is no longer viewed as an orphan policy issue in some countries. In March, the US Presidential Task Force on Illegal, Unreported, and Unregulated Fishing and Seafood Fraud released an “all of government” action plan. The fact that the issue made it to the desk of the US president underscores the need for governments to mobilize their resources and collaborate internationally.

A variety of approaches is called for. The EU’s regulations

Collaboration among the US, the European Union, and Japan has the potential to underpin great strides in addressing the problem

are perhaps the strongest suite of measures to stop illicitly caught fish from entering the market. Early implementation shows great promise. European regulators have already introduced sophisticated monitoring and surveillance programs, blocked market access to countries with a record of illegal fishing, penalized European rogue operators, and helped support “yellow or red carded” countries reform their fisheries laws.

The EU, Japan, and the US would be even more effective if they aligned their policies to prevent criminals from accessing their markets and enabled

legitimate operators to benefit from a “supercharged” level of access. Working together could enable the use of affordable, sophisticated technology for seafood traceability – data and intelligence gathering that helps pinpoint exactly where seafood comes from, and when and by whom it was caught.

Such efforts – for example, the electronic documentation scheme for the Atlantic bluefin tuna catch– represent one of the most effective tools to eliminate illicit fishing.

Eliminating rogue fishing will help replenish marine life and secure food and livelihoods for billions of people. This must be accompanied by increased efforts, from the Arctic to the Antarctic, to protect key species affected by fishing practices and establish fully protected marine reserves or “regeneration zones” to help restock and restore habitats. Countries must also enact and implement laws ending overfishing within domestic and international waters.

Illegal, unreported, and unregulated fishing is a problem that can be solved through leadership, action, and international cooperation. We are pleased to see Chile – which is hosting this year’s Our Ocean Conference – demonstrate leadership and commitment to action by ratifying the PSMA and standing up to illicit fishing operations. We remain optimistic that others will continue to take the steps needed to end the scourge of rogue fishing and work together to regenerate ocean life globally.

Project Syndicate

16 | Business Daily

October 7, 2015

Closing AirAsia sounding out investors to take company private

ADB extends new loan to expand water project in Bangladesh

Founders of Asia’s No.1 budget carrier AirAsia Bhd are sounding out investors to take the company private in a management-led buyout, after its shares took a beating this year following a critical research report, people familiar with the matter said. AirAsia boss Tony Fernandes and business partner Kamarudin Meranun are working with banks to secure financing for the transaction, which could be launched over the next few months, said the people, who did not want to be identified as the discussions are confidential.

Obtaining financing will be key for the deal to succeed, the people said. The airline’s market value has fallen 40 percent to 3.51 billion ringgit (US$803 million) since Hong Kong-based GMT Research questioned AirAsia’s accounts in a report in June.

The Asian Development Bank (ADB) is providing fresh assistance to expand a water resources project in the southwest of Bangladesh that has sharply increased agriculture production and benefited over 191,000 people, including landless farmers and women, said the Manila-based lender yesterday. It said ADB is providing a US$45 million loan and the government of the Netherlands is expected to provide a grant of US$7 million, to be administered by ADB, to increase the scope of the Southwest Area Integrated Water Resources Planning and Management Project.

In a said the Manila-based lender also said ADB provided US$20 million and the government of the Netherlands provided US$12.5 million for the original project.

Macau’s top analyst says it’s not too late to buy into rally The BI Macau China Gaming Market Competitive Peer Group Index jumped 10.8 percent in the past two days Kana Nishizawa

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t’s not too late to find stock-market bargains in Macau after an index of the city’s casino operators surged more than 10 percent in two days, according to the industry’s top-ranked analyst.

Galaxy Entertainment Group Ltd., the Hong Konglisted firm controlled by billionaire Lui Che-Woo, looks particularly attractive amid signs that Chinese authorities have stopped tightening restrictions on visits to the gambling hub, said Jamie Soo, an analyst at Daiwa Securities Co. Galaxy is also set to benefit from its investment in Cotai -- Macau’s answer to the Las Vegas strip -- when a new ferry terminal opens in 2016, he said in a phone interview on Monday.

“At these share price levels, the Cotai-ready operators -- specifically

Galaxy -- look undervalued,” said Soo, whose calls on Macau casinos over the past year delivered the best returns among peers tracked

by Bloomberg. His HK$29 a share price target for Galaxy implies a gain of 27 percent from Monday’s close.

Soo, who stood out for his bearish views on Macau casinos over much of the past year, upgraded Galaxy, Sands China Ltd. and Melco Crown Entertainment Ltd. last month as valuations plunged to the lowest levels since 2012. The stocks -- battered by China’s anti-graft campaign and slowing economic growth -- are now bouncing back after mainland visitors surged during the Golden Week holiday and investors speculated Beijing will introduce policies this year to support Macau’s economy.

The BI Macau China

Gaming Market Competitive Peer Group Index jumped 10.8 percent in the past two days, paring its drop this year to 46 percent. It gained another 6.2 percent yesterday in its best threeday rally since 2011. The gauge’s enterprise value is 9.7 times earnings before interest, taxes, depreciation and amortization, or EBITDA. The ratio fell to a three-year low of 8.9 on October 1.

Shares started surging on Friday after Teledifusao de Macau reported that China will introduce more policies this year to support the city’s economy, citing Li Gang, director of the Chinese government’s local liaison office.

The gains extended into Monday as official data showed visitors from China, who account for more than two-thirds of the total, rose

22 percent to 276,557 on October 1 and October 2, the first two days of the nation’s weeklong holiday, a traditionally peak season.

That compared with a growth rate of 4.3 percent for the same period in 2014.

Not all the casinos are worth buying, according to Soo. Gross gaming revenue, which sank for a 16th straight month in September, will probably drop 34 percent for all of 2015 and another 5 percent next year, he predicted last month, calling his forecasts “the lowest on the street.”

Soo has underperform ratings on Wynn Macau Ltd. and MGM China Holdings Ltd., with a hold on SJM Holdings Ltd. Even if China’s government does take steps to bolster Macau’s economy, there’s no guarantee that the support will translate into

OPEC sec-gen wants cooperation Companies prepare to meet with non-members on surplus new global tax rules

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more revenue for casinos, said Pauline Dan, the head of Greater China equities at Pictet Asset Management Ltd. “In order for them to become attractive for me as an investor, I’d like to see their prices go lower,” Dan said.

Galaxy in May opened its US$3.1 billion secondphase expansion of a resort and an adjacent revamped property in the Cotai area, marking Macau’s first casino projects in three years. The company received 71 percent of its second-quarter casino revenue from its business on the Cotai Strip, according to Bloomberg Intelligence.

Galaxy has the newest high-end offering in Cotai, while Sands has the biggest gaming table capacity in the area and control of the Cotai ferries, according to Soo. Bloomberg News

Thai court dismisses Yingluck’s lawsuit against attorney-general

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PEC Secretary-General Abdullah alBadri said yesterday the oil exporter group should work together with producers outside OPEC to tackle a global surplus of crude.

“All of us should work together, OPEC and non-OPEC - work together to get rid of this overhang,” Badri told an industry conference in London.

“There is one problem we are facing: the overhang of 200 million barrels,” he added.

Non-OPEC producers including Russia have refused to cut their output, although forecasters have reduced estimates for supply growth outside the Organization of the Petroleum Exporting Countries because of a slump in oil prices. Crude prices have almost halved from a year ago.

OPEC has invited non-OPEC countries to attend a technical meeting in October to discuss the market, Badri told reporters, following on from a similar meeting held earlier this year.

Badri said oil supply growth from non-OPEC producers might be zero or negative in 2016 because of lower upstream investment.

ig companies are planning to overhaul their tax arrangements to comply with proposals for new global tax rules even before they become legally enforceable, according to a Thomson Reuters-Euromoney survey of 180 tax professionals across 35 countries. The Organisation for Economic Co-operation and Development (OECD) was asked in 2012 by the Group of 20 nations with the world’s biggest economies to look into closing off the ways that multi-national corporations can avoid paying tax on their profits and published its proposals on Monday.

Tax advisers expect the proposals, which had been flagged in earlier discussion documents, to take a number of years yet to become enshrined in law.

But the Thomson Reuters survey showed many companies are already planning to make their tax affairs compliant.

In most cases companies move untaxed money to tax havens by inter-group transactions. Over 59 percent of companies surveyed said they were already implementing changes to their intercompany agreements ahead of the actual implementation of the new rules.

hailand’s Criminal Court yesterday rejected a lawsuit filed by former prime minister Yingluck Shinawatra against the attorney-general and three other prosecutors for alleged malfeasance.

Yingluck filed the lawsuit on September 29, accusing the prosecutors of violating the Criminal Code while dealing with a case related to her government’s controversial rice-pledging scheme.

Yingluck is charged with dereliction of duty and abuse of authority.

The Supreme Court accepted the case against Yingluck in March, and Yingluck denied all charges in the first hearing in May. In her lawsuit, the former premier accused the attorney-general and public prosecutors of rushing to indict her in the Supreme Court without sufficient investigation, making additional accusations which were not included in the original allegations launched by the National Anti-Corruption Commission, and illegally using additional documents as evidence during the court procedure.

The Criminal Court dropped Yingluck’s lawsuit on the ground that her allegations were not supported by solid evidence, and the prosecutors had abided by related law and regulations.

Reuters

Reuters

Xinhua