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All events subject to regulator approval.

19–28 APRIL 2013

City of Dreams Level 1, Casino Estrada do Istmo, Cotai Macau SAR

MARCH 2013


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60 Economy & Finance 28 Meeting ground The forum for trade cooperation between China and Portuguese-speaking countries celebrates 10 years 31 Snakes and ladders The Year of the Snake will be good for gaming, say the feng shui ‘masters’ at brokerage CLSA

Politics 36 Hobbling job-hoppers Enhanced restrictions on laid-off non-resident workers taking new jobs will have few benefits for business

Greater China 40 Danger level Inequality is becoming a growing problem in the mainland

Society 43 League of extraordinary women Macau Business picks the city’s 10 most influential women

Property 48 Growing pains More demanding rules for realtors are set to introduce revolutionary changes to the industry 52 Frontier gold rush Border crossings open 24 hours a day will push up prices of commercial property closest to the Barrier Gate 54 Play it cool The Hong Kong government unveils fresh measures to cool its real estate market

CEO Interview 60 Star turn An exclusive interview with the deputy chairman of Galaxy Entertainment Group, Francis Lui MARCH 2013

Photo: António Mil-Homens



Gaming 68 Noble ambitions Aristocrat celebrates its 60th anniversary 70 New footing U.S.-based Leap Forward strikes a deal with Sands China 71 Upping the ante PokerStars to open a poker room at City of Dreams 73 Manila Bay watch Manila’s Solaire Resort and Casino is set to open its doors this month 78 Ready to go Las Vegas Sands goes ahead with its huge casino complex near Madrid 79 ICE baby Novomatic under the spotlight at the ICE 2013 trade show 80 Not just in the mind Interblock’s latest hologram technology creates a buzz

Hospitality 82 Head out, eat in Private kitchen owners say business is increasing by between 15 and 50 percent a year 88 Love and money A growing number of casino resorts are betting on the wedding business

Technology 94 Plugging e-leaks Companies still don’t monitor corporate email accounts

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Photo: Naty Tôrres

82 Human Resources 98 Tested and tired Work-related stress is taking a toll on the workforce

Arts & Culture 102 Brilliant baroque The Cultural Centre welcomes the Geneva Ballet 104 The pen’s mightier The Script Road literary festival is back for its second edition

Opinion 10 From the publisher’s desk Paulo A. Azevedo 13 Editorial Emanuel Graça 26 Policy, unpolished José I. Duarte 32 Trouble ahead for stocks André Ribeiro 42 A bullet to gnaw Keith Morrison 93 Call to arms Gustavo Cavaliere 97 Our children’s economics Barry Eichengreen 100 Breaking China’s investment addiction Zhang Monan 110 The measurement of hope Bill Gates


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from the publisher’s




Mainland tourists have a huge impact on nearly all areas of the economy. The downside is the lack of understanding that these visitors have of social mores

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few days ago, while waiting for sleep to come to me in a hotel in Hong Kong, I could not resist watching a televised debate about the consequences for the neighbouring territory of its high numbers of mainland tourists. One critical voice was highlighting not only the negative impact of excessive tourist numbers, but also their unconventional behaviour and poor understanding of Hong Kong’s values. A second, more permissive participant, argued for further understanding and respect for different values and attitudes. In the end, despite the failure of either commentator to find any common ground, it was not hard to see that both were right and wrong at the same time. The debate was somewhat tautological: they were saying the same thing but in different words. Life is often like that. Turning to Macau and analysing the effects of the hordes of mainland tourists that visit daily, on the positive side there are the immense benefits they bring to such a small economy. The gaming revenue they generate pretty much pays for everything here, as taxes from casinos are the main contributor to government revenue. Mainland tourists also have a huge impact on nearly all other areas of the economy, from hospitality to retailing, and from small street stalls to arcades filled with expensive, high-end merchandise.

The downside is the impact mainland tourists have on infrastructure, which is expanding at a much slower pace than the crowds that cross the border daily. Another downside is the lack of understanding that these visitors have of social mores. Inappropriate behaviour is documented by a number of images circulating online. For the strain that mainland tourists place on infrastructure, the government can be blamed, despite its efforts and some of the improvements achieved already. As for a lack of manners, Macau might rightly be disappointed with the central government for achieving so few results.

Mutual convenience The photos here show gaffes, including urinating and defecating in public in daylight hours, that are unacceptable in any part of the world, regardless of political ideologies. Only continuous, far-reaching public education campaigns in the mainland can help turn around behaviours such as these. Actually, campaigns in Macau to introduce civility are also few, and often badly designed, and frequently ‘clear-buthard-to-accept’ examples of how to waste public money. Readers may think things in Hong Kong are only slightly better, in spite of the growing unrest among the public there, but that is arguable. The Hong Kong


CRYING SHAME government’s commitment to civic campaigns is commensurate with the city’s size. Of course the public should not forget that Hong Kong, with a population about 12 times bigger than Macau’s, also welcomes about 20 million more tourists annually. Burying your head in the sand is not the answer to these public education problems, nor is criticising without suggesting solutions. The problem must be acknowledged, worked on and common answers found. It might even become a topic for the trilateral meetings between the mainland, Macau and Hong Kong governments, which have been quite unproductive in the social and cultural fields.


ittle more than a year ago I experienced first-hand the impact pollution can have on quality of life. At the invitation of the Liaison Office of the Central People’s Government, a group of journalists was invited to the mainland and the tour included a night in Chengdu. I enjoyed Chengdu but rapidly discovered the huge burden of living in the capital of one of the most industrialised provinces in the mainland, Sichuan. After dinner, I went for a walk in the streets near the hotel. Tears began to well and my eyes started to sting. At that moment, pollution in the mainland stopped being a more or less abstract topic for discussion and became quite tangible and disturbing, almost intolerable. News of shocking levels of pollution in Beijing is alarming. Indeed, it is frightening. It highlights the urgency of striking a balance between economic development and wellbeing. In Macau, some experts say we sometimes experience pollution levels that are double the safe limits. Yet others say the situation is worse. Unlike in Hong Kong, where the pollution index is shown each day on the television news, Macau continues to turn away from the reality. Obviously, pollution cannot be solved without action to confront it. On the contrary, failing to confront pollution creates an impression that nobody is particularly interested in matters related to the quality of life. This is a decisive factor in the success or failure of efforts to attract highly skilled workers and their families to Macau, not to mention efforts to keep those already living here happy. On issues such as pollution, silence is not golden. On the contrary, it is irresponsible and toxic.

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Editorial Council Paulo A. Azevedo, Emanuel Graça, Tiago Azevedo, Duncan Davidson, José I. Duarte Founder and Publisher Paulo A. Azevedo VOL.1 Nº107

Editor-in-Chief Emanuel Graça

Assistant Editor-in-Chief Alexandra Lages Cover photo: António Mil-Homens

Executive Senior Analyst José I. Duarte

Art Directors Connie Chong, Luis Almoster

Hong Kong Bureau Michael Hoare (Chief), Anil Stephen

Events Director Margarida Luz

Special Correspondent Muhammad Cohen

Advertising Bina Gupta José Reis

Xu Yu, Irene

Beijing Correspondent Maria João Belchior

Media Relations

Manila Correspondent Max V. de Leon

GRIFFIN Consultoria de Media Limitada

Assistant to the Publisher Laurentina da Silva

Translations PROMPT Editorial Services, Poema Language Services Ltd, TLS Translation and Language Services Agencies AFP, Lusa

Office Manager Elsa Vong

Photography António Mil-Homens, António Leong, Carmo Correia, Greg Mansfield, Gonçalo Lobo Pinheiro,John Si, Manuel Cardoso, MSP Agency, Naty Tôrres, Agencies Illustration G. Fox, Rui Rasquinho

Regular Contributors André Ribeiro, Branko Milanovic, David Cheung, David Green, Dominique Moisi, Eswar Prasad, Frank J. Fahrenkopf Jr., Gustavo Cavaliere, Hideaki Kaneda, José António Ocampo, José Sales Marques, Joseph Stiglitz, Leanda Lee, Keith Morrison, Kenneth Rogoff, Kenneth Tsang, Marvin Goodfriend, Pan Yue, Paulo J. Zak, Peter Singer, Richard Whitfield, Rodrigo de Rato, Robert J. Shiller, Sin-ming Shaw, Sudhir Kalé, Sun Shuyun, Vishakha N. Desai, Wenran Jiang

Letters to the editor

Contributing Editors Christina Yang Ting Yan, Dennis Ferreira, Derek Proctor (Bangkok), Filipa Queiroz, Helder Beja, Joana Freitas, João Ferreira da Silva, João Francisco Pinto, José Carlos Matias, Kahon Chan, Kim Lyon, Lois Iwase, Luciana Leitão, Mandy Kuok, Michael Grimes, Sara Farr, Sara Silva Moreira, Sofia Jesus, Xi Chen, Yuci Tai


Exclusives Gambling Compliance, Project Syndicate Printed in Macau by Welfare Ltd Published every month in Macau. All Rights Reserved. Macau Business magazine is a media product of De Ficção - Multimedia Projects

Disclaimer: In Macau Business magazine, the translation of MOP amounts into US$ amounts (and vice-versa) is made at the rate of MOP 8 to US$1 for the purposes of illustration only.

Address: Block C, Floor 9, Flat H, Edf. Ind. Nam Fong, No. 679 Av. do Dr. Francisco Vieira Machado, Macau Tel: (853) 2833 1258 / 2870 5909 Fax: (853) 2833 1487 Email: MARCH 2013 EMANUEL GRAÇA EDITOR-IN-CHIEF



Last year, Macau was spared the debate on how many tourists it could handle, as arrivals stagnated. But the government will be forced to return to the discussion sooner or later

erious questions about the city’s ability to handle periods of peak tourist traffic surfaced again last month during the Lunar New Year

holiday. Congestion was particularly severe at the Barrier Gate immigration checkpoint on the third day of the Lunar New Year. Thousands of tourists jammed the checkpoint while trying to cross into the mainland, and many were forced to wait for hours as the police endeavoured to restore order to the chaos. Luckily, no one was injured. But safety has been put at risk and that should be food for thought for officials here and in Beijing. The first reactions from the Macau government following these events were positive. The police have pledged to improve the way it handles crowds, while the Policy Research Office announced it would study the impact on Macau of the individual visitor scheme. Both moves are in step with comments made by Central People’s Government Liaison Office director Bai Zhijian ahead of the holiday period, who indicated Macau needs to assess its capacity to accommodate tourists. Macau Government Tourist Office director Maria Helena de Senna Fernandes has been clear about her position on the city’s tourism infrastructure. The city has not reached its tourist capacity, she says. Ms Senna Fernandes has not, however, indicated what the limit is.

Enough already

Ms Senna Fernandes is right to argue that the public cannot use the Lunar New Year holiday period as a gauge to evaluate the city’s overall tourism capacity. However, Macau must be better equipped to handle these peaks properly. Failure to do so would be highly detrimental to establishing the city as an

international tourism destination. There is much that can be done to better manage tourist flows. Most tourists at the busiest times of the year are from the mainland and they must apply for a travel permit to enter Macau, regardless of whether they travel individually or with an organised tour. If officials on both sides of the border were to cooperate effectively, they could introduce special rules for travel permits during peak travel times that would give higher control of the number of tourists entering the city, their length of stay and even specify the checkpoints used to enter and leave the city. But that does not answer the big question: how many tourists are enough? The answer is complex, dynamic and obviously political. There are studies that have zeroed in on this topic, but as long as there is one vacant cobblestone in Senado Square, officials can argue we have yet to reach the limit. And that has been the government’s approach so far. It says the problem is not the number of tourists, but how they are managed. For instance, it has proposed taking more tourists to less-frequently visited parts of the city to reduce the pressure on tourist hotspots. On paper, it makes sense. But there is a reason why tourists choose to visit Senado Square and not the Iao Hon neighbourhood – there is little to see there. Last year, Macau was spared the debate on how many tourists it could handle, as arrivals stagnated. But the government will be forced to return to the discussion sooner or later. As long as it hides its head in the sand, both the public and tourists will continue to lose out. The government is robbing both of the opportunity to truly enjoy Macau.

MARCH 2013



Making a difference The second edition of the Special Olympics Asia Pacific Golf Masters Tournament, hosted by the Charity Association of Macau Business Readers, tees off next month BY MIKE ARMSTRONG

ome four million Special Olympics athletes are active in sports, healthcare and youth programmes in more than 170 countries, their intellectual disabilities a barometer of the challenges they face, not an impenetrable wall. Macau is coming out swinging to end the cycle of exclusion such people often face, hosting next month the second edition of the Special Olympics Asia Pacific Golf Masters Tournament. Organised by the Charity Association of Macau Business Readers, the event is the biggest of its kind in Asia. It will take place from April 22 to April 27. At the helm of the organisation is Stefan Kuehn, the tournament’s director. An ex-team owner and professional motorcycle racing manager, with the trophies, steel pins and scars to prove it, his is not the immediate image one might conjure up when thinking of a candidate


MARCH 2013

for building a ground-up Special Olympics golf tournament. While racing still gets his blood pumping – he speaks with unbridled enthusiasm about his recent ‘training sessions’ with the titans of the Thai road cycling community in Phuket – the German admits he has now reached the point in his career where “it’s time to give something back”.

How it all started “The way things unfolded, and how we came to be doing what we are doing now is a bit like a fairy-tale,” Mr Kuehn says. “It was in 2007 when a partnership began to grow between Macau Business magazine, with whom I’ve co-operated for quite some time on community projects, and the Special Olympics,” an international sports organisation for people with intellectual disabilities.

“Honestly speaking, we didn’t even know that the Special Olympics organisation existed in Macau, but it happened to be the institution that [gaming supplier] Aristocrat donated their prize money to,” when its team won the 2007 edition of the Annual Macau Business Charity Golf Tournament. It took another five years however, for the Macao Special Olympics to approach Macau Business and Mr Kuehn looking for support for its newly founded golf programme. With golf going from strength to strength in the region, the partners felt it was the right sport at the right time in the right place to help promote the Special Olympics concept. With the help of some committed casino executives, the Charity Association of Macau Business Readers supplied new sets of clubs to the special athletes,



he Charity Association of Macau Business Readers is calling on players interested in acting as guardians during the Special Olympics Asia Pacific Golf Masters Tournament, potential sponsors and other parties eager to join the event to contact the organisation at specialolympicsgolf@ The Office of the Chief Executive and the Sports Development Board, plus established partners of the Charity Association of Macau Business Readers from the gaming and hospitality industries are already among the supporters of the event. “The athletes of our very own Macau team are practicing hard at the Caesars Golf course,” says tournament director Stefan Kuehn. “We would be more than happy to see Macau Business readers joining and helping them improve their game.”

prior to approaching sponsors and Caesars Golf Macau for practice facilities. Caesars took to the idea and agreed to partner with the project, whilst freeing up a driving range and practice greens. “We realised pretty soon that this would not be enough and decided to organise an international Special Olympics golf event,” says Mr Kuehn. The new competition aspired to demonstrate that youth with intellectual disabilities could be exceptional athletes, and that through sports they could realise their potential. It was the tee off for the Special Olympics Asia Pacific Golf Masters

Tournament. The maiden edition took place last year, in a two-day competition at Caesars Golf Macau featuring teams from Australia, Mainland China, Taiwan, Hong Kong and South Korea. In addition to special challenges on the driving range and putting greens, the main competition was a nine-hole round in which local businesspeople and enthusiasts partnered with athletes on the greens as ‘guardians’, serving and teaching them how to improve their game.

A community moment Mr Kuehn describes the response to the inaugural edition of the tournament

as “moving, emotional, exciting – with pure happiness reflected in the eyes of the athletes and their guardians.” Funding for the event came from the community at large, business partners and event host, the Charity Association of Macau Business Readers. The organisers received supportive notes and emails from around the world and, critically, the Special Olympics headquarters in the U.S. liked very much what it saw in Macau. “So there was no doubt at all that we would have to grow in our second outing,” says Mr Kuehn. “Consequently, we went to the Special Olympics World


Eunice Kennedy Shriver

unice Kennedy Shriver, a member of the Kennedy family, believed in justice. But, in the late 1950s and early 1960s, she saw little fairness in the way people with intellectual disabilities were treated, observing all too frequently how they were excluded and routinely placed in custodial institutions. Her sister Rosemary was similarly disadvantaged but they grew up playing sports together and with their family, swimming, sailing, skiing and playing football. Ms Shriver went on to become a college athlete and began to realise that

sport could act as the catalyst to unite people from all walks of life, believing that if those with intellectual disabilities were given equal opportunity they could accomplish wonders. She put that vision into action in 1962 by inviting young people with intellectual disabilities to a summer day camp she hosted, naming it Camp Shriver. The objective was to explore their skills in a variety of sports and physical activities. The concept eventually evolved into the Special Olympics and the first international competition took place in 1968. MARCH 2013



“I understand all too well how it feels to be isolated, to be removed from society and to be parted from those one loves. However, at least I had a radio to link me to the outside world, I had books to read and I knew that there were people rooting for me. Importantly, I had hope that one day things would change for the better. Far too many people with intellectual disabilities are denied even such hope.” Aung San Suu Kyi, Nobel Peace Prize laureate, speaking at the Special Olympics 2013 World Winter Games Winter Games in Pyeongchang [in South Korea] to introduce our event to the rest of the world, in the expectation that additional teams would join.” The entry list for this year’s event is impressive. Participating in the basic competition levels are teams from Australia, Mainland China, Taiwan, Hong Kong, India, Macau, Malaysia and South Korea. The entries for the 36-hole competition currently include athletes from Australia, the United Kingdom, the United States, Hong Kong, Taiwan and South Korea. “You’ll be surprised at how good they are,” says Mr Kuehn. However, preparing the logistics for such a big international event can be a huge headache. “We hope to receive as much help MARCH 2013

as we had last year so that it makes it worthwhile for the teams to travel as long as 36 hours to come to Macau,” he says. “With the sponsored funding, we’re not only able to provide multiple sets of event wear and equipment, but the teams can take everything home with them after the competition to further develop

The vision of the Charity Association of Macau Business Readers is to create a world series with the finals held in Macau

their own golf programmes, hopefully returning even stronger next year.” Mr Kuehn says that the vision of the Charity Association of Macau Business Readers is to create a world series with the finals held in Macau, and that via the vehicle of the Special Olympics Asia Pacific Golf Masters, Macau can help change the world for the better. “We’re not just getting the world together for a round of golf with the locals,” he stresses. “Our overriding objective is to show how different Macau is, how responsible the local corporations are when it comes to the less fortunate, and how Macau is positively stepping up to the plate to promote not only multiculturalism in terms of people, for which it’s famous, but multiculturalism in terms of attitude and acceptance.”


You talking to me?

Young entrepreneurs After reading the article “Loan plan for young entrepreneurs: 2013 Policy Address” at from November last year, I was asking myself how Macau’s new business blood can use this kind of funding. Are they prepared for entrepreneurship? And how can the city’s business environment, which is still maturing and not well diversified, use those young business people and their ideas, to improve its own prospects? An entrepreneur is a person who is willing and able to convert a new idea into a successful business. This kind of behaviour can be created through education. Research has shown that students who complete entrepreneurship courses are more likely to start and maintain their own ventures. I hope these kinds of courses can soon make their way into the curriculums here. Next and very important, are mentoring programmes. These help train young professionals for future leadership positions. The establishment of start-up incubators and seed funding schemes also help new companies to succeed. Creating sharing programmes and putting less-experienced entrepreneurs face-to-face with seasoned business people is another way to build stronger young enterprisers. These forums will help them boost their confidence, develop new ideas and get some answers. While young entrepreneurs have long sought for support informally, policymakers, universities and investors are recognising that their hands-on help can be as essential as financing in getting new businesses off the ground. The Macau government’s interest-free loan plan is a great start for young entrepreneurs. But not all will have a chance to be a part of it for one reason or another. The rest will need to rely on traditional funding and other channels. But financing challenges are just a small part of being a young entrepreneur.

It’s amazing how you can survive in this region, being understood and understanding just a small part of the communication. That’s ok for you but not for your business. At goldfish we know how to adjust your message for each audience or product and make it effective. Yes. We are talking to you.

Mack Maciej Pijewski

Write a letter to the editor To submit a letter to the editor, e-mail with the subject “Letters to the Editor”. Letters may also be sent by regular mail to this address: Letters to the Editor, Macau Business, Block C, Floor 9, Flat H, Edf. Ind. Nam Fong, No 679 Av. Dr. Francisco Vieira Machado, Macau. Please include your full name, address and a telephone number for confirmation purposes. Letters should be 300 words or less, and all are subject to editing.

+853 2833 1258


RETAIL SALES SOAR IN 2012 Watches, clocks and jewellery led the pack

Retail sales for 2012 reached MOP52.85 billion (US$6.6 billion), up by 22 percent year-on-year, data from the Statistics and Census Service shows. Sales of watches, clocks and jewellery led the pack, amounting to MOP15.7 billion, up by 28 percent.


Macau hosted a total of 1,022 meetings, incentives, conferences and exhibitions in 2012, a year-on-year drop of 2.2 percent, official data shows. The total number of participants and attendees increased 26.2 percent, to over 1.6 million. The increase was mostly on the exhibition side, with close to 1.5 million attendees, up 27.6 percent year-on-year, visiting the 61 events held here last year. The data doesn’t disclose how many of those were business travellers. Many of the exhibitions hosted here in 2012 were open to the general public.

Sales of goods in department stores came in at a distant second, at MOP7.6 billion, an increase of 21 percent in comparison with 2011. The value of retail sales for the fourth quarter of last year totalled MOP14.32 billion, up by 14 percent year-on-year.


Macau’s Composite Consumer Price Index, the city’s main gauge for inflation, increased by 5.04 percent year-on-year in January. This is the lowest growth rate since April 2011, when the Composite Consumer Price Index rose by 4.88 percent. It is unclear whether the slowdown was the result of lower inflationary pressures, or if the year-on-year comparison was impacted by the Lunar New Year calendar. This year, the Lunar New Year was in February, whereas in 2011, it was in January. Past data shows that prices usually go up during the festive period, fuelled by higher demand.


The construction of Taipa’s permanent ferry terminal is on track to be finalised by mid-year, the head of the Maritime Administration, Susana Wong Soi Man said last month. However, there is no date yet for the new terminal’s opening. After its construction, it is expected that the Maritime Administration will need some months to run trials. Last year, the government said the new terminal would only open to public in early 2014. A temporary ferry terminal, located just beside the final Taipa ferry terminal’s construction site, has serviced Taipa since 2007.

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AIRPORT PASSENGERS TO GO UP BY 5 PERCENT IN 2013 CAM also expects revenue to increase this year, to reach MOP798 million The Macau International Airport Company Ltd – CAM is targeting passenger volume at the airport to reach 4.7 million this year, up by 4.7 percent in comparison with 2012. Among the other targets the company set in its 2013 work plan, is to handle 28,200 tons of cargo, CAM said in a press release. Last year the airport handled less than 28,000 tons of cargo,


Companhia de Electricidade de Macau – CEM, SA expects to post a profit of MOP547 million (US$68.4 million) for 2012, company sources told the media. This is an increase of 14 percent from 2011. The utility’s chairman Franklin Willemyns didn’t provide any figures, but said the company’s results for 2012 were positively impacted by the sale of some real estate properties by CEM. He did not give further details, saying the company’s results had not yet been audited or approved by management. MARCH 2013

below the targeted 30,000 tons. Overall, CAM is expecting to reach total revenue of MOP798 million (US$100 million) in 2013, up 5 percent year-on-year. CAM generated a net annual profit of MOP14.4 million l ast year, chairman Ma Iao Hang said in January. This was the first profit in the company’s history, since airport operations started in 1995.

YELLOW TAXI CONTRACT CITIC RAISES DEBT EXTENDED FOR ONE YEAR TO FUND CTM BUY The Transport Bureau has decided to extend the service contract with yellow taxi operator Vang Iek Radio Taxi Co for one extra year, it said in a statement. The previous radio taxi concession contract expired last month. The statement said Vang Iek must now introduce a number of improvements including increasing taxis fit to transport disabled people and strengthening its services in the old neighbourhood districts. Vang Iek Radio Taxi Co owns 100 taxis.

Hong Kong-listed Citic Telecom International Holdings Ltd reached an agreement with four financial institutions to issue this month US$450 million (MOP3.6 billion) of senior 12-year bonds. Citic will pay an annual interest rate of 6.1 percent. The money raised will be used to replace part of the US$1.16 billion loan the company secured earlier to fund the acquisition of local telecom operator CTM, Companhia de Telecomunicações de Macau SARL.


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SME LENDING REBOUNDS Banks approved MOP12.2 billion of new loans in the second half of last year

New lending for small and mediumsized firms approved by Macau banks rebounded in the second half of last year, data disclosed by the monetary authority shows. From July to December, newly

approved SME credit limit totalled MOP12.2 billion (US$1.5 billion), up by 82.6 percent from the first half of 2012. However, the figure was down by 28.2 percent from the same period in 2011. As at December-end, the outstanding


The number of pataca/ remninbi dual currency personal credit cards surpassed the 100,000 mark for the first time in the fourth quarter of last year, data from the monetary authority shows. At Decemberend, the city had almost 107,000 such cards, up by 10.2 percent in comparison with three months before. On a year-on-year basis, the figure was up by an impressive 41.2 percent. Since the third quarter of 2009, Macau banks have been authorised to offer pataca/renminbi dual currency credit cards, which are simultaneously regarded as pataca cards and renminbi cards. MARCH 2013

value of total SME loans increased 3.2 percent from end-June to MOP31.9 billion. The utilisation rate, defined as the proportion of outstanding credit balance to the credit limit granted, dropped 1.5 percentage points to 57.5 percent.


The Macau branch of Portuguese bank Banco Comercial Português SA (BCP) recorded a profit of MOP177.7 million (US$22.2 million), Rádio Macau reported. That was a year-onyear increase of 165 percent. Managing director João José Pãosinho said the bank is now expecting its profit for 2013 to come in the range of MOP130 million to MOP150 million. Mr Pãosinho also said that BCP continues working to get a licence to operate in the mainland, but he added that this would still take time.


Resident deposits rose by 25.8 percent in 2012, to MOP366.8 billion (US$45.9 billion) in December, according to official data. But the increase rate was even faster for non-resident deposits: they hit MOP128.1 billion in December, up by 38.0 percent year-on-year. Domestic loans to the private sector went up by 18.2 percent for full-2012, to MOP198.1 billion.


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Bittersweet holiday

The Lunar New Year golden week, from February 9 to 15, brought more mainland tourists to Macau, but also raised concerns about the city’s capacity to handle growing hordes of visitors. Despite the increased number of tourists, casino gaming revenue dropped

BANKS REPORT RECORD PROFIT The total operating profit of Macau’s banking sector increased 24.4 percent year-on-year in 2012, to reach MOP6.3 billion (US$788 million), setting a new record, data from the monetary authority shows. The previous record was set just one year before, when operating profits reached MOP5.1 billion. Macau has 29 banks.


The number of visitor arrivals (including non-resident workers and students) during the Lunar New Year golden week, up by 15.4 percent from last year’s festive season




The average room rate in five-star hotels during the Lunar New Year golden week. The amount was down by 3.3 percent in comparison with last year’s festive season


The average occupancy rate of three to five-star hotels during the holiday period, an increase of 1.2 percent over 2011’s Lunar New Year golden week

MOP7.2 billion

The casino gross gaming revenue collected in the first seven days of the Lunar New Year (February 10-16), down by 3.9 percent from last year’s festive period


The number of inspections at border ports and main tourist spots conducted by the Macau Government Tourist Office during the Lunar New Year period

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The increase in the number of mainland visitors during the holiday season in comparison with the previous Lunar New Year period, to almost 630,000 people

The number of new companies incorporated here reached 3,612 in 2012. That represented a 6.1 percent year-on-year increase, official data shows. The wholesale and retail industry was the most active, accounting for around one third of all new companies. By year-end, the city had close to 39,800 companies, up by 8.5 percent year-on-year.

TRADE DEFICIT WIDENS AS IMPORTS SOAR Macau’s merchandise trade deficit reached MOP62.8 billion (US$7.8 billion) in 2012, a new yearly record, official data shows. The previous all-time high of MOP55.3 billion was set just the year before. For 2012, the total value of merchandise imports increased by 13.9 percent to MOP70.9 billion, also a new record, breaking the alltime high set in 2011. Exports rose by 17.1 percent, to MOP8.2 billion.


Policy, unpolished MEASURES TO REDUCE POLLUTION BY MOTOR VEHICLES: THE GOVERNMENT HAS YET TO PUT FLESH ON THE BONES he increasing number of motor vehicles on the roads is taking a rising toll on the environment. Traffic is congested. The air we breathe is becoming thicker. The number of hazy days is increasing. Part of the solution to these problems is an explicit transport policy, which must deal with multiple issues. Specifically, it must include the examination of the roles of private and public transport, and, necessarily, an environmental and social assessment of their costs and benefits. Some have proposed restrictions on the acquisition of private vehicles. Such restrictions would either limit the number of vehicles on the roads or make owning and using them more expensive, or both. Such restrictions may indeed be part of an effective, environmentally-friendly transport policy. But this issue doesn’t end there, and this problem has been raised many times. The government has so far been taking a milder approach. It combines stricter standards for new vehicle emissions with incentives to buy less-polluting models. These measures are perfectly justifiable and are always likely be part of a comprehensive policy. However, it is not clear whether they have had the intended effects. First, their impact is softened by the absence of complementary measures that would increase their efficiency. Second, without these, they may even make the urban environment worse rather than better. Let us put aside no-less-important issues relating to the design of a public transport network that is an effective alternative to private transport, or the incentives that could foster the use of such a network. Instead, let us focus on why stricter standards for vehicle emissions and incentives to buy less-polluting models are not enough.


Exhaustive list A coherent, environmentally-friendly transport policy would have one critical objective: to reduce the overall amount of pollution vehicles emit. It might also seek to reduce the number of vehicles on the road. Reducing the amount and concentration of emissions from private cars would mean undertaking four main tasks. Officials should aim to reduce the harm done by vehicles already on the road by enforcing the present emission standards. This would require no further initiatives, just the application of the regulations in place.

A coherent, environmentally-friendly transport policy would have one critical objective: to reduce the overall amount of pollution vehicles emit MARCH 2013

That would appear to be easy but it is not happening. And the government fails to set a good example. Vehicles in its fleet are often sources of visible fumes, as are the public buses, for which the government is ultimately responsible. Second, the government should make a commitment to immediately adopt the most advanced world standards. The adoption of European standards is a step in the right direction but the government could go further. Third, we would need a set of suitable incentives to dispose of old vehicles, and perhaps even rules making it compulsory to scrap vehicles under certain circumstances. The objective would be to ensure that dirtier vehicles are taken off the road, so that even if the total number of vehicles rises, the total amount of emissions falls. Finally, the government should focus on encouraging the adoption of zero-emission vehicles through a proper combination of tax incentives, obligations imposed on holders of public concessions and government investment in infrastructure.

Taxing question In light of these arguments, the present policy seems insufficient, if not plain inadequate. Enforcement of the present emission standards is patchy. The rules for operating vehicles run by the government or holders of public concessions, insofar as they are meant to protect the environment, are not too demanding. There are no clear incentives to expedite the scrapping of more polluting vehicles or to promote the early adoption of zero-emission models. Regardless of the merit of the present government measures, in the absence of other measures, they are not good enough. Eventually, all or almost all new vehicles will meet stricter standards. That will be the outcome of competition and technical progress. The tax breaks will then amount to little more than a permanent reduction of the price of new cars. They will, in effect, be an invitation to put more vehicles onto the congested roads – on top of the more-polluting vehicles that are already there and that will remain there while there is no incentive or obligation to get rid of them. This may well increase the total number of vehicles and the total amount of emissions, instead of decreasing them, which is what the main purpose of the measures should be. In fact, the most visible outcome of the tax breaks seems to be to promote the sale of more and more bigger and more expensive cars. This will please some importers, dealers and a few owners. But it does not amount to a proper transport policy that takes into consideration concerns about the environment and the quality of life here. Does the present policy make sense in terms of environmental protection, urban management and social considerations? The only possible answer seems to be no, no, no.


Economy & Finance

2010 ministerial conference

Meeting ground The Macau-based forum for trade cooperation between China and Portuguese-speaking countries celebrates 10 years BY LUCIANA LEITÃO

he Forum for Economic and Trade Cooperation between China and Portuguese-Speaking Countries is celebrating its 10th anniversary. Hundreds of senior officials and business leaders from the mainland, Angola, Brazil, Cape Verde, GuineaBissau, Mozambique, Portugal and East Timor are expected to gather here later this year, at the forum’s fourth ministerial conference, to discuss how to further enhance business exchanges. Chinese premier Wen Jiabao attended the previous meeting, held in 2010. When the forum was established in 2003, the trade volume between China and resource-rich Portuguese-speaking countries was just over US$10 billion (MOP80 billion). Yet by last year, the trade volume had reached US$128.5 billion, representing an increase of 9.6 per-


MARCH 2013

cent over the 2011 figure. The body is based in Macau, where its permanent secretariat is headquartered. The forum aims to make use of the city’s long-term relationships with Portugal and other Portuguese-speaking countries, as a service platform to promote economic and trade cooperation with the mainland. São Tome and Principe, which has diplomatic ties with Taiwan, is the only Portuguese-speaking country that is not officially part of the forum. Aside from boosting Macau’s profile in the international arena, experts say the benefits of the forum to the city have been little. The city’s trade is only significant with Brazil and Portugal. Last year, the trade volume between Macau and Brazil reached around MOP278 million, while

with Portugal it was just below MOP240 million. Portuguese-speaking countries accounted for less than one percent of Macau’s overall imports last year.

Not a priority The Macau government pays the operational costs for the supporting office to the forum’s permanent secretariat. Last year, the office’s budget stood at MOP96.8 million, almost double from the previous year. Carmen Amado Mendes, an expert in international relations at the University of Coimbra, in Portugal, says the forum for economic and trade cooperation has institutionalised a role that Macau has been playing informally for 500 years. She highlights that the forum was established with the support of Beijing.

29 Ms Mendes says however that Macau doesn’t play a vital role in the bilateral relationship between China and Portuguese-speaking countries. “Beijing has direct contact with their governments.” She says the forum is not a priority for any of the parties involved, adding that there is too much bureaucracy and a lack of coordination. It is also hard to assess its results. “We have no data that allows us to say that if the forum didn’t exist, the relationship between China and Portuguesespeaking countries would be different,” says Ms Mendes. Nonetheless, the forum has promoted several business gatherings and training courses for civil servants from the participating states. It also contributed to a better understanding of China. “Ultimately, this trust reduces the risks of doing business,” she says. The forum has brought benefits to developing Portuguese-speaking countries in Africa and Asia. At the 2010 ministerial conference, Beijing announced it would make RMB1.6 billion (MOP2.1 billion) in


he Forum for Economic and Trade Cooperation between China and Portuguese-Speaking Countries has been increasing the number of activities it promotes, says Rita Santos, who heads the supporting office to the permanent secretariat of the forum. It has promoted dozens of high-level multilateral meetings since 2010. The body has also organised trade meetings, business delegations and field trips. In 2011, it officially established a training centre in Macau to train officials and technical personnel from developing Portuguese-speaking countries in Africa and Asia. The forum has also played a role ensuring financing for public infrastructure in those countries, and has supported activities to promote cultural exchanges between China and Portuguese-speaking countries.

concessional loans to these countries. Also announced were full funding and support for an agricultural cooperation project in each of these countries, while providing each with medical equipment worth RMB10 million. A total of 1,000 one-year government scholarships to study in China were also offered.

Cost-benefit ratio Macau-based historian Jorge Morbey, who published a book on the forum in 2006, says that up to now, the body has just played a formal role. “Trade between China and Portuguese-speaking countries is increasing but that is due to global trends; it is not due to the action of the forum.” Mr Morbey says there is lack of data on the role played by Macau in trade between China and Portuguese-speaking countries. “There should be a consolidated mechanism to assess what the specific weight of Macau is, even to know what the cost-benefit ratio is.” Mr Morbey says he was pleased when the forum was first established. But 10 years later, there has been little progress, he stresses. The forum is mostly

MARCH 2013


Economy & Finance

reduced to holding training courses and seminars in Macau and in the mainland. He says the forum should be revamped, not acting so much as a government bureau. It should work to promote business. Macau Small and Medium-size Enterprises Association administrator Kenneth Lei Chi Leong says few business people here are directly engaged with the forum. “Most local business owners don’t speak Portuguese, and they are not familiar with the trading rules or investment regulations in those countries,” he says. “Most of the small and medium enterprise owners just don’t have enough information.” Mr Lei says the forum should change this, providing better information on each Portuguese-speaking country. The head of the Macau-based International Lusophone Markets Business Association, Eduardo Ambrósio, says the forum must become more focused on business and not so much on politics. He highlights the need for trade credit insurance tools, to boost trust among business people from different countries. Some banks here, like the Macau

branch of Bank of China, already offer export credit insurance products for trade between the mainland, Macau and Portuguese-speaking countries. SME Association Mr Lei says banks and the forum need to better promote that information.

Focus on business All Portuguese-speaking countries have established lobby groups in Macau, gathering together nationals living here. Only Portugal and Angola have set up consulates-general in Macau. The president of the Angola-Macau Association, Alexandre Correia da Silva, says some of the political goals established by the forum 10 years ago have been accomplished. He says it is now time to focus on promoting business. He gives one example. At the 2010 ministerial conference, a new US$1 billion financial cooperation fund was announced, but the details are still sparse. “There is much more to be done to showcase Macau to Portuguese-speaking countries. At this point, Macau has more information about the Portuguese speaking-countries in Africa than the other way around,” Mr Silva says. “Some Angolan business people are

starting to discover Macau, but that has more to do with their own individual homework.” Mr Silva points out that just one hour away, in Guangzhou, there is a huge community of African business people. Many still have no idea about the forum, he says. Carlos Barreto, vice-president of the Friends of Mozambique Association, and Daniel Pinto, head of the Macau Cape Verde Friendship Association, share similar opinions. They both say the work done by the forum in organising conferences, seminars and meetings has been positive, and highlight its support of their associations. However, Mr Barreto and Mr Pinto say the mainland doesn’t need the forum to engage in trade directly with Portuguese-speaking countries. Even so, Mr Barreto says the forum makes sense. He stresses the role it has played in showcasing culture from Portuguese-speaking countries in Macau. Macau Business requested comments from the forum’s secretary-general, Chang Henxi, but received no reply. The office of the Secretary for Economic and Finance also did not reply to our questions.

Hundreds of senior officials from the mainland and Portuguese-speaking countries are expected to gather here later this year, at the forum’s fourth ministerial conference

MARCH 2013


The Year of the Snake will be good for gaming, according to a light-hearted look at the year ahead by the feng shui ‘masters’ at brokerage CLSA BY SARA FARR

Snakes and ladders his Year of the Water Snake promises to be a good one for gaming, with the industry thriving, especially in March and November. Just keep away in the “sss-stormy” month of August or so predicts the latest Feng Shui Index Report by CLSA AsiaPacific Markets. The Hong Kong brokerage and investment house publishes the colourful, tongue-in-cheek report every year. The astrological prediction assesses what the new lunar year has in store for the Hang Seng Index, important industries and markets. It is the company’s most eagerly awaited publication. Chinese fortune telling is based on ancient philosophy and the belief dating back thousands of years that events are dictated by the changing balances among the five elements that make up the universe: metal, wood, water, fire and earth. Accepting these assumptions and making use of fortune charts and other fortune-telling methods, the report for this lunar year forecasts that the bestperforming industries will be those associated with the element of metal – the banking and other financial industries – along with those associated with the element of water, such as logistics and gaming. It warns investors to keep away from


industries associated with the element of fire, such as oil and gas, and those associated with the element of earth, such as property and infrastructure. Previous Years of the Snake were marked by the terrorist attacks on New York and Washington on September 11, 2001; the crushing of the demonstrators calling for democracy in Tiananmen Square in 1989; the Japanese attack on Pearl Harbour that brought the United States into World War II in 1941; and the stock market crash in 1929 that heralded the Great Depression. But CLSA’s report says, rather unoriginally: “The past is a foreign country [where] they do things differently.”

Twisting fortunes The report notes that the cosmic signs indicate that in this Year of the Snake, the reptile will be better behaved.

The CLSA Feng Shui Index Report forecasts that the Hang Seng Index will perform well in the first half of the lunar year

It forecasts that the Hang Seng Index, the main index of the Hong Kong Stock Exchange, will perform well in the first half of the lunar year. The element of fire will play an important role in this performance. If CLSA’s celestial readings are right, by early August the flames will have died down and the Hang Seng Index will drop. The index will then have a series of big swings, upwards and downwards. But the index will finish the lunar year with an appreciable gain. The CLSA Feng Shui Index Report was first published in 1992. There was a break in publication during the bull run for stocks from 2005 to 2008. Publication resumed in 2009. CLSA’s predictions for the last lunar year were not too far off, the Hang Seng Index having behaved as forecast on a few occasions. “Somewhere between the ‘three Cs’ (credible and creditably correct) and a blindfolded chimp hurling darts” is how the brokerage firm grades the accuracy of its predictions for the Year of the Water Dragon. The report for this lunar year says individuals born under the sign of the rooster, cow or dog will prevail. Those born under the sign of the pig, tiger, sheep or snake may need all the pluck they can muster. MARCH 2013




S&P 500 - HISTORICAL WEEKLY CHART 1,800 1,600 1,400


1,200 1,000 800 600 400 200 0 1/1 /9 1/1 0 /9 1/1 1 /9 1/1 2 /9 1/1 3 /94 1/1 /9 1/1 5 /96 1/1 /9 1/1 7 /98 1/1 /9 1/1 9 /00 1/1 /0 1/1 1 /02 1/1 /0 1/1 3 /04 1/1 /0 1/1 5 /06 1/1 /0 1/1 7 /0 1/1 8 /0 1/1 9 /1 1/1 0 /1 1/1 1 /1 1/1 2 /13

echnical analysis of chart patterns is a tool widely used in the world of finance. Researchers make use of past market data, primarily price and volume, to forecast future trends. While some impugn the reliability of technical analysis, reality has repeatedly shown that it is a dependable tool. What it tells us about this year is far from good news. Technical analysis of financial market charts hints that stock prices will form a big multi-year top, which will be followed by the worst decline in years. The bear market will be sizeable and could last several years. Looking at the historical weekly charts of the S&P 500 index and the Dow Jones Industrial Average from 1990 until now, we can clearly see the formation of what is called in technical analysis a “broadening top” pattern. A broadening top, also known as a “megaphone pattern”, frequently occurs in the later part of an over-extended bull market. It comprises three peaks, each higher than the last, and, between them, two troughs, the second lower than the first. A broadening top ends with a long, steep drop after the third and last peak. The typical result is economic recession or depression. Analysis shows that most of the big crashes in stock markets in the past 100 years have followed this pattern. The trend is clear in both the S&P 500 and the Dow Jones Industrial Average charts. They show the biggest broadening top pattern seen over the past century, which has been developing for more than two decades. This broadening top trend seems to have begun its final climb this year. When it ends, stock prices are likely to plunge, deeply.

Big bang theory

MARCH 2013



10,000 8,000 6,000 4,000 2,000 0 1/1 /9 1/1 0 /9 1/1 1 /9 1/1 2 /9 1/1 3 /94 1/1 /9 1/1 5 /96 1/1 /9 1/1 7 /98 1/1 /9 1/1 9 /00 1/1 /0 1/1 1 /02 1/1 /0 1/1 3 /04 1/1 /0 1/1 5 /06 1/1 /0 1/1 7 /0 1/1 8 /0 1/1 9 /1 1/1 0 /1 1/1 1 /1 1/1 2 /13

There have already been two peaks and two troughs in this broadening top pattern. In the case of the S&P 500, the first climb started at 300 points in late 1990 and peaked at 1,527 points in early 2000. The index then fell, bottoming out at 801 points in late 2002, before climbing again to a peak of 1,562 points in late 2007. It then fell again, bottoming out at 683 in early 2009. It has been on the rebound since then. In the case of the Dow Jones Industrial Average, the first climb started just below 2,400 points in late 1990 and peaked at 11,723 points in 2000. The index then fell, bottoming out at 7,582 points in late 2002, before climbing to a peak of 14,093 points in late 2007. That was followed by a fall, bottoming out at 6,627 points in early 2009. Since then, the index has climbed. The broadening top pattern is moving towards its end as stock prices climb to reach their third and final peak. The trend suggests the Dow Jones Industrial Average will rise to 15,000 points – perhaps higher – and the S&P 500 to about 1,600 points in the months to come. The final climb typically inflates a stock price bubble. When the bubble bursts, it wipes out up to half of a stock market’s value. What is impressive and worrying about the present broadening top pattern is its size. Its disruptive power will

probably do huge damage to financial markets. The ramifications are likely to shake up whole economies and even politics. Meanwhile, the bull markets for gold and silver persist, and the biggest rises in the prices of these metals are still ahead, as I have written here before. Precious metals will be one of the best investments in the coming years, especially in such a volatile financial environment.

The views expressed here are those of the author and are not investment calls by Macau Business

Statistical Digest Year-on-year change (%)

2011 GDP at current prices

MOP 292.1 billion

GDP in chained prices

MOP 273.1 billion

GDP per capita at current prices

MOP 531,723

GDP per capita in chained prices

MOP 497,219

Employment Oct - Dec 2012

29.1 20.7 26.2 18.0


Median monthly employment MOP 10,000 earnings (Oct - Dec 2011) Labour force participation

350,000 72.4%

11.1 4.0 percentage -0.8 points

Non-resident workers (end-balance)



Unemployment rate

Employed population

MOP 86.1 billion MOP 75.0 billion


Year-on-year change (%)

-0.3 percentage points

Money and prices 2011-end Domestic loans to private sector

MOP 161.9 billion

Resident deposits

MOP 291.6 billion

Foreign exchange reserves*

MOP 272.4 billion

Inflation rate (full year 2012)


External merchandise trade 2011

MOP 49.0 billion


MOP 63.7 billion

Utility consumption 2011 Water Electricity Gasoline Liquefied Petroleum Gas Natural Gas


Oct-Dec 2012

351,000 72.5% 111,642


Year-on-year change (%)

27.7 22.7 43.2 percentage 0.3 points Year-on-year change (%)

Year-on-year change (%)

MOP 99.7 billion


16.5 4.0 percentage -0.7 points

2011 - Direct tax revenue from gaming


MOP 12,000

MOP 62.3 billion - MOP 55.3 billion

Total expenditure

Q3 2012

Nov 2012 - Jan 2013


MOP 112.7 billion

Q3 2012


0.2 41.2 --

Total revenue

11.8 5.1 ---

-0.2 percentage points

MOP 7.0 billion

Public accounts


Year-on-year change (%)


Exports Trade balance

Year-on-year change (%)


41.5 44.9 29.7 -Year-on-year change (%)

70.5 million m3 5.1 3,857 million kWh 5.5 81.7 million L 9.3 42,908 tons 5.3 73.6 million m3 -52.4


Nov 2012 - Jan 2013 Nov 2012 - Jan 2013 Jan 2013

Year-on-year change (%)



17.5 25.8 -percentage -1.8 point


Year-on-year change (%)

MOP 190.0 billion MOP 366.8 billion MOP 132.5 billion

MOP 8.2 billion MOP 70.9 billion - MOP 62.8 billion


17.1 13.9 -Year-on-year change (%)

MOP 76.0 billion

15.3 14.3 16.7 14.5


Year-on-year change (%)

MOP 118.5 billion MOP 104.0 billion MOP 42.5 billion

75.3 million m3 6.7 4,205 million kWh 9.0 87.1 million L 6.6 43,615 tons 1.5 --100

Dec 2012 Dec 2012 Dec 2012 Jan 2013

Notes Jan-Dec 2012 Jan-Dec 2012 Jan-Dec 2012

Notes Jan-Nov 2012 Jan-Nov 2012 Jan-Nov 2012 Jan-Nov 2012

Notes Jan-Dec 2012 Jan-Dec 2012 Jan-Dec 2012 Jan-Dec 2012 Jan-Dec 2012

Transport and communications 2011-end Licensed vehicles - Automobiles - Motorcycles Mobile telephone users Internet services subscribers

206,349 95,151 111,198 1,353,194 209,223

Year-on-year change (%)

4.9 5.5 4.5 20.6 22.7


217,335 101,712 115,623 1,613,457 231,582

Year-on-year change (%)

5.3 6.9 4.0 19.2 10.7

* A new fiscal reserve system was introduced in January 2012, impacting the way foreign exchange reserves are accounted for MARCH 2013

Notes Dec 2012 Dec 2012 Dec 2012 Dec 2012 Dec 2012

Source: Statistics and Census Service and Financial Services Bureau

Economic output



Economic Trends by JosĂŠ I. Duarte Chilling failure

GRAPH 1 - Homes sold annually Peninsula





Number sold




0 2004









GRAPH 2 - Total value of homes sold Peninsula





The economic boom has brought in its wake rising prices for real estate, leading to complaints from a broad spread of society. The government’s attempts to control housing costs have had mixed results and it has sent mixed messages to the market. The government has often said it cannot intervene because Macau is a free market, but has infrequently introduced measures aimed at cooling speculative investment. Among the measures were the suspension of a policy that offered residency to non-residents who invested in real estate, mortgage lending restrictions and the special stamp duty on the resale of property within two years of purchase. Have these measures produced the expected results? GRAPH 1

A look at the number of homes sold since 2004 reveals a sharp decrease in sales in 2008 and 2009. The probable cause was uncertainty about the world economy due to the unfolding financial crisis. The spike in sales in 2010 may have been due in part to pent-up demand by prospective buyers who had stayed on the sidelines during the financial crisis. The small dip in sales afterwards could be reasonably expected in a market influenced by many economic and demographic factors.

MOP million




0 2004









The number of homes sold last year was less than in the peak years of 2005 and 2007, the two busiest years for sales in this analysis. That downward trend may have been due to the government’s measures to cool the housing market. But a look at the total value of homes sold shows the market has not cooled. The value of homes sold has risen to a record every year since 2010. The average annual value of homes sold from 2010 to last year was 2.6 times the average annual total in the preceding six years. GRAPH 3

GRAPH 3 - Average price per square metre of housing Peninsula





MOP per square metre




5,000 2004



MARCH 2013







The average price per square metre of residential floor space reveals striking changes in prices. The average price per square metre for housing on Taipa and the peninsula last year was five or six times what it was in 2004. The extreme increase in housing costs on Coloane is a unique case and has been excluded from this analysis. Even accepting that most new homes introduced to the market in recent years are better quality than the average home on the market, this upward trend does not support the notion that the market is cooling.


Creation and destruction

GRAPH 4 - Balance of company incorporations and dissolutions Net number


Net combined registered capital

3,000 2,500

Number, or MOP million

2,000 1,500


1,000 500 0 -500 -1,000 -1,500 -2,000 2001





GRAPH 5 - Incorporation indices








Index of number of incorporations Index of combined registered capital of newly incorporated companies Index of average registered capital per newly incorporated company

In each year since 2001, except 2008 and 2009, the positive balance between incorporations and dissolutions has grown steadily. The positive balance was the biggest ever last year. The previous record was set in 2007, before the financial crisis. There has always been a net surplus of incorporations. In contrast, there has sometimes been a net deficit in the balance of the combined registered capital of newly incorporated companies and the combined registered capital of newly dissolved companies. The deficit in the balance of capital in 2009 was so big that the combined surpluses in the succeeding three years failed to make up for it. GRAPH 5

600 500 400 Year 2004 = 100

The incorporation of new companies and dissolution of older ones is constant. In a dynamic, booming economy, new business ventures are started and some become companies. Winding up occurs when some of the new companies fail to make enough profit or as older companies become unprofitable.

300 200 100 0 2001












GRAPH 6 - Incorporations by industry, 2001-2012 Others

12% Hotels and restaurants


Wholesaling and retailing

34% Finance and business services


Graph 5 shows indices based on the number of newly incorporated companies, their combined registered capital and their average registered capital. Each index uses 2004 as its base. That was the year Stanley Ho Hung Sun’s monopoly of the gaming market was broken by the opening of Sands Macao. The indices show big differences before and after 2004. The number of newly incorporated companies has risen almost continuously, but their average registered capital has declined since 2004, with occasional rebounds. The rebounds are where you would expect them to be, given the successive waves of openings of new casinos and related businesses. The average registered capital for each newly incorporated company was highest in 2001 and 2003. After that, the average size of newly incorporated companies stabilised well below MOP200,000 (US$25,000), except in 2007 and 2011. These were small companies. There is no data on how many of these companies are active. The figures may paint a distorted picture, as some new companies may never have begun operating and some may have begun operating but subsequently stopped. GRAPH 6

There are no prizes for guessing which industries most newly incorporated companies joined, shown in Graph 6. Construction Real estate



MARCH 2013



Hobbling job-hoppers Proposed restrictions on job-hopping by non-resident workers will have few, if any, benefits for business BY ALEXANDRA LAGES

MARCH 2013

he government is pushing for amendments to the law on imported labour, less than three years after it was enacted. The proposal’s centrepiece is enhanced restrictions on laid-off non-resident workers taking new jobs. The Legislative Assembly has been deliberating on the amendment bill for four months and appears prepared to pass it soon. The present law says non-resident workers who are dismissed or resign must leave the city and not come back here to work for at least six months. The amendments make it clearer that that this requirement does not apply to workers who are laid off, voluntarily or invol-



RISING IMPORTED LABOUR 120,000 Number of imported workers

110,000 100,000 90,000 80,000 70,000























on imported labour, in April 2010, and January, the Public Security Police applied the six-month ban to non-resident workers in 8,772 cases, data from the force’s immigration department shows. The government says the amendments are meant to stabilise the labour market. Officials say the new restriction would prevent non-resident workers from job-hopping between different occupations.

No exceptions

Between the enactment of the law on imported labour, in April 2010, and January, the Public Security Police applied the six-month ban to non-resident workers in 8,772 cases, data from the force’s immigration department shows


















60,000 JAN

untarily, wrongfully dismissed or had a just cause for quitting. But the amendments say these workers, while being allowed to continue working here, would be allowed to work only in similar jobs as they had previously – at least for the first six months after they lose their job. At present, they can work in any kind of job they like. Some observers say the amendments would make non-resident workers think twice before volunteering to be laid off. But an official of the Macau Small and Medium Enterprises Association says the amendments offer no real benefit to small businesses. Between the enactment of the law

Macau SME Association administrator Kenneth Lei Chi Leong says the requirement to leave for six months is too complicated. “There is no benefit for small businesses. But maybe there are a lot of benefits for mega-companies,” Mr Lei says. He says many non-resident workers use SMEs as stepping-stones to employment by bigger corporations and thus higher pay. He says the new restriction would do nothing to change this practice. Mr Lei says SMEs spend a lot of time and money on grooming imported labour. “It’s not fair. Small businesses are not a training centre.” He says all non-resident workers should be made to leave the city for six or nine months if they find themselves without work, no matter the reason. Some employers complain that one consequence of the requirement to leave for six months is that some non-resident workers will purposely do their job badly, but not badly enough to warrant termination for cause, in the hope that their employer will lay them off. If they are laid off, they can look for a betterpaid job here without having to face the six-month ban.


n their own, more restrictions on job-hopping by non-resident workers will not solve the labour shortage that troubles small and medium enterprises, experts say. The dean of the University of Macau faculty of business administration, Jacky So Yuk Chow, urges the government to help SMEs cope with higher operating costs. He suggests schemes for training youngsters taken on by SMEs. Zenon Udani, a human resources development trainer and teaching fellow at the honours college of the University of Macau, says the city is wasting some of the manpower it grooms: mainland graduates of the universities here. Mr Udani suggests a special scheme to tap this pool of highly-qualified workers, which would allow them to stay here for at least two years after they graduate, especially if they agree to work for SMEs. In Hong Kong, mainland graduates can obtain permission from the government to stay and work. In Macau, the law sends mainland students home immediately after they graduate. If they wish to work here, they are regarded as no different than any other kind of imported labour. Mr Udani says attracting and retaining workers has always been a problem for small businesses. “SMEs need to be more creative and innovative in their human resources strategies. And they should seriously invest in training and developing their staff to be more empowered,” he says. The administrator of the Macau Small and Medium Enterprises Association, Kenneth Lei Chi Leong, urges the government simply to scrap quotas for imported labour. Small businesses should be allowed to hire as many non-resident workers as they need, he says. MARCH 2013


Politics streamline the process of getting laidoff workers into new jobs. Groups representing migrant workers have made similar calls. Indarti Lin heads the Association of Indonesian Migrant Workers in Macau, or ATKI-Macau. Ms Lin says the main problem with the law on imported labour is how it is applied. She accuses the authorities of throwing out laid-off or wrongfully fired workers who are entitled by law to continue working here. She says the amendments would not harm the status of domestic servants. About 3,200 Indonesians are employed here as domestic servants. Before the law on imported labour was enacted in 2009, the Macau Migrants Rights Network was vocal in its opposition to the inclusion of the requirement to leave for six months. It is keeping quiet about the amendments. A spokesperson declined to comment on them. Groups representing migrant workers say one of the shortcomings of the amendment bill is its failure even to attempt to solve one outstanding problem that non-resident workers have. At present, the authorities usually give nonresident workers just 10 days to leave Macau after their contracts end, whatever the reason for losing their job.


Number of cases

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2010 (Apr - Dec)



2013 (Jan)


Vong Kok Seng of the Macau Chamber of Commerce has said the amendments would be a deterrent to this practice. The reasoning is that restricting a worker to the same kind of job would reduce his chances of finding a job with better pay, and so make it less rewarding to attempt to be sacked.

Summary expulsion Zenon Udani, a human resources development trainer and a teaching fellow at the honours college of the University of Macau, does not think the amendments would make laid-off non-resident workers much worse-off. “If the laid-off workers’ skills, attitude and experience stand them in good stead, finding a suitable job in the same area of work should not be difficult,” he says. But Mr Udani prefers the status quo. He says these non-resident workers should be allowed to change occupations freely, provided that they do not directly compete with resident workers for jobs. He says the government must MARCH 2013

The lobbyists that represent imported workers are asking that laid-off workers be allowed to stay longer once their contracts end. The extra time would offer them a better chance to find new jobs on their own, avoiding recruitment agency fees and thus potentially being taken advantage of

Time constraint This means unemployed non-resident workers who are not required to leave and stay away for six months have just 10 days to find new jobs. After 10 days, they must go home, where they have to rely on recruitment agencies to find new jobs for them. The lobbyists that represent imported workers are asking that laid-off workers be allowed to stay longer once their contracts end. The extra time would offer them a better chance to find new jobs on their own, avoiding recruitment agency fees and thus potentially being taken advantage of. The University of Macau’s dean of the business administration faculty, Jacky So Yuk Chow, says the amendments are reasonable “given that the labour shortage is a common and serious problem for almost all business sectors in Macau”. Mr So says that unless the problems of insufficient labour and insufficient land are solved, Macau will become less attractive to foreign investors. “Economic growth, therefore, will not be sustainable,” he says.


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Greater China

Danger level Mainland needs ‘full-scale’ reform to fight inequality, say economists BY BORIS CAMBRELENG*

he mainland’s stated aim to narrow the income gulf between its sports-car driving elite and vast numbers who still live in poverty will need radical political and economic changes to work, say economists. Long-delayed “proposals on the distribution of income” were announced last month ahead of Lunar New Year, as hundreds of millions working in cities returned to their rural homes, many without running water or heating. Beijing promised to improve the lives of these rural migrant workers, who are denied equal access to health, education and housing services in cities under a half-century old system of residency permits known as ‘hukou’. “Migrant workers from rural areas will be assisted to register as citizens and


MARCH 2013

entitled to all basic public services in the cities,” according to the measures quoted by the official Xinhua news agency. But the aspirational document was generally short of concrete steps. Tax reductions will be “promoted” for low- and middle-income earners, it said, and the government will “target” reducing the number of people living on less than US$1 (MOP8) a day by around 80 million by 2015. In 2011, Xinhua said 150 million Chinese live on less than that, a stark contrast to the country’s image as the world’s manufacturing heartland, the holder of its biggest foreign exchange reserves and a motor of global recovery.

Income distribution The extent of inequality in the mainland, particularly between urban and rural ar-

eas, saw authorities refuse to publish the country’s Gini coefficient, a commonly used measure of inequality, for more than 10 years. But in December, the Survey and Research Centre for China Household Finance, a body set up by the Finance Research Institute of the People’s Bank of China and Southwestern University of Finance and Economics, said the mainland’s Gini coefficient stood at 0.61, one of the highest in the world. A Gini figure of zero represents perfect equality of income and 1 total inequality. Last month, the central government said the figure was 0.47, higher than the United States, and above the 0.4 figure widely cited as a “danger level” for social discontent. Research centre director Gan Li


questioned the official statistic, arguing that the government has not published the percentage of people who refused to answer. “The richer they are, the more likely they are to refuse to answer,” he says. Like other economists, Mr Gan believes the authorities underestimate the incomes of the wealthy, who hide a significant portion of their earnings. The mainland has seen an explosion in its luxury goods market – which grew 56 percent last year – as Western makers of products from designer handbags to yachts and supercars pile in. The boom casts doubt on government statistics saying the top 10 percent of earners had an average annual income of RMB59,000 (MOP75,494)) in 2011, economist Wang Xiaolu said recently in Caijing, a respected economics journal. “Solving the income distribution issue requires full-scale reform,” he wrote on his blog.

Fundamental reforms Aware of the growing resentment against the rich and endemic corruption, the Communist Party is urging officials to be frugal, pledging strict controls on

The extent of inequality in the mainland, particularly between urban and rural areas, saw authorities refuse to publish the country’s Gini coefficient for more than 10 years government spending on banquets, car purchases and overseas travel. But many observers say that fundamental tax reforms are essential to create more equal income distribution. The mainland should introduce a national property tax and inheritance tax, economist Hu Xingdou of the Beijing Institute of Technology told AFP. The government plan said only that property tax, which some cities have been experimenting with, will be extended, and inheritance tax will be introduced “at the appropriate time”. Local governments derive much of

their income from land sales, leading to many farmers being evicted from their land and compensated below market rates. The newly released plan says that farmers will be “guaranteed proceeds” from land sales, but Mr Hu called for greater changes to the mainland’s system of property rights, where all land is officially owned by the state or rural collectives. “Farmers should be able to develop or sell their land, which is their collective property,” he says. Mao Yushi, a guru of economic liberalisation in the mainland, calls for reforms to the financial system, where firms with close connections to the state receive the vast majority of bank loans, leaving small-business owners short of capital. “The princelings can go to the bank and get money just on the strength of their status and get rich on this basis,” he says, referring to the children of members of the communist elite. “The two-tier society of rich and poor is everywhere. The distinctive characteristic of China is people who have special powers and bully others.” * AFP NEWS AGENCY MARCH 2013


A bullet to gnaw INCOME INEQUALITY AND POOR EDUCATIONAL ACHIEVEMENT ARE RELATED PROBLEMS THAT STALL DEVELOPMENT n an important international study published this year, “Affluence, Inequality and Educational Achievement: A Structural Analysis of 97 Jurisdictions Across the Globe”, Dennis Condron demonstrates that in terms of economic inequality “more unequal countries have lower average [educational] achievement than less unequal countries”. “Even with the positive impact of affluence taken into account ... inequality has a ... strong negative effect on achievement,” Mr Condron says. His report also shows that school resource inequality has a stronger effect on educational achievement than affluence. “Inequality may inhibit achievement and undermine the positive impact of affluence,” he says. This holds true, he argues, for both affluent and poor countries. Mr Condron’s conclusions apply to Macau. Income inequality is detrimental to educational achievement and consequently the economic development of a country or territory. He argues for reductions in inequality, rather than complete equality. Inherited social stratification puts at a disadvantage those lower in the income hierarchy who are trying to achieve their full potential. Mr Condron’s knock-out punch is that “inequality is by design”. This means that countries choose to be unequal. They make deliberate decisions on how to distribute their resources and this affects educational achievement. Educational achievement, in turn, feeds into economic improvement: a more highly educated workforce promotes a country’s economic expansion. What then of Macau, with its rising average affluence? The city needs highly skilled workers. Witness its need to import skilled labour. But its educational achievement levels are far too low.


Arrested development Data for the third quarter of last year show that income inequality here is immense. For example, the median monthly earnings of the 23,000 people who worked in real estate or business activities in the third quarter were MOP7,500 (US$937.50), the median monthly earnings of the 10,000 people who worked in manufacturing were MOP7,800 and the median monthly earnings of the 54,000 people who worked in hotels or restaurants were MOP8,500. In contrast, the median monthly earnings of the 25,500 people who worked in public administration and social security, the highest-paying sectors, were MOP27,900. In other words, the median monthly earnings of about 87,000 workers were less than one-third of those of the highest earners. Some employees of clothing manufacturers made MOP4,000 or less a month. As for educational achievement, the latest data on Macau from the Programme for International Student Assessment, from 2009, are disturbing. In countries belonging to the Organisation for Economic Cooperation and Development or OECD, 75.4 percent of mothers of school pupils finished secondary school, on average. In Macau, 28.0 percent of MARCH 2013

mothers of school pupils finished secondary school. In the OECD countries, 5.6 percent of mothers finished primary school only. In Macau, 23.2 percent of mothers finished primary school only. Among fathers of school pupils here, the picture is not much brighter. In the OECD countries, 73.1 percent of fathers finished secondary school. In Macau, 32.3 percent of fathers finished secondary school. In the OECD countries, 5.5 percent of fathers finished primary school only. In Macau, 22.1 percent of fathers finished primary school only.

Choices made The Programme for International Student Assessment data show that 20.6 percent of pupils here repeated a year in primary school at least once. In the OECD countries, 7.8 percent did so. Here, 30.2 percent of pupils repeated an early year in secondary school at least once. In the OECD countries, 6.5 percent did so. In Macau, 49.1 percent of pupils agreed or strongly agreed that “school has done little to prepare me for adult life when I leave school”. In the OECD countries, 23.8 percent of students took that view. It is no surprise that these figures are not widely disseminated. The same assessment survey gave the OECD countries a mark of 36.4 percent for making public their data on educational achievement for accountability procedures. It gave Macau a mark of 13.9 percent. Macau has high inequality and low educational achievement. It is dangerous to assume that one is the cause of the other, but the relationship between educational achievement and inequality is striking. The message is clear: if you want to improve educational achievement, a big step in the right direction would be to reduce income inequality drastically and increase resources for education. Data from the World Bank show that public spending on education as a proportion of gross domestic product is less than 3 percent here, far less than the world average of 5 percent. To echo Mr Condron, reducing inequality requires a deliberate choice by Macau’s leaders. Will they bite the bullet?


Macau Business picks the city’s 10 most influential women to mark International Women’s Day BY LUCIANA LEITÃO ILLUSTRATION BY RUI RASQUINHO

he worlds of politics and business in Macau are dominated by men. But women are playing an ever-greater role in the city’s affairs at all levels, even though they hold fewer than one-third of the top jobs. To celebrate International Women’s Day, on March 8, Macau Business has compiled a list of the city’s most influential women. Their work in business, politics, education and social service makes these 10 individuals Macau’s league of extraordinary women.

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A star’s understudy 1 LINDA CHEN The chief operating officer of Wynn Macau Ltd since 2009, Linda Chen ducks the spotlight but plays a leading role behind the scenes in the casino operator’s success. Ms Chen is the most senior female executive in the casino industry here and has long been an associate of casino mogul Steve Wynn. She is often tipped to succeed Mr Wynn as head of Wynn Resorts Ltd, the parent company of Wynn Macau. Mr Wynn himself has admitted the possibility more than once. However, Ms Chen stepped down from the board of Wynn Resorts in December, seemingly making the possibility more remote.

Gift for leadership 2 TINA HO TENG IAT Tina Ho Teng Iat leads the Women’s Association of Macau. The association established in 1950 is dedicated to the education, health and welfare of women and children. Ms Ho is also a businesswoman and politician. She is the daughter of industrial tycoon Ho Tin, who established Ho Tin Industries Ltd, and sister of vice-president of the Legislative Assembly Ho Iat Seng. In the world of business, she is a vice-chairwoman of the Industrial Association of Macau and a member of the board of the Macau Chamber of Commerce. In the world of politics, Ms Ho was a member of the Legislative Assembly between 1999 and 2009, and last month was reappointed to the Chinese People’s Political Consultative Conference.

Tipping the scales 3 FLORINDA CHAN After working in the public sector for 25 years, Florinda Chan was appointed Secretary for Administration and Justice in 1999. During her years in the post Ms Chan has juggled hot potatoes such as the imposition of the national security law and reform of the electoral system. Her handling of these matters earned praise among the pro-Beijing lobby, but opinion polls consistently indicate that she is the least popular member of the government. Ms Chan is the only government secretary that is also a member of the Executive Council, which advises the chief executive. She is a fluent speaker of Chinese, Portuguese, English and Italian.

Power to the people


Supporters and opponents alike respect the voice of Kwan Tsui Hang, one of Macau’s most experienced trade unionists. Ms Kwan is the vice-president of the Macau Federation of Trade Unions, an establishment body which represents about 70,000 union members. She is perceived as a champion of the people and won the most votes in the direct elections to the Legislative Assembly in 2009. The results of a poll last year indicate that Ms Kwan is the best-known member of the assembly. She will run in this year’s elections for a sixth consecutive term.

Stripes that are earned 5 ANGELA LEONG ON KEI Angela Leong On Kei may be known as the number four wife of SJM Holdings Ltd chairman Stanley Ho Hung Sun, but she is also a force to be reckoned with in her own right. She began her working life as a dancer but rose to become an executive director of SJM Holdings, executive director of Macau Horse Race Co Ltd and vicechairman of Macao (Yut Yuen) Canidrome Co Ltd. All these companies were founded by her husband but Ms Leong has several business interests of her own, including L’Arc casino hotel and property investments. She has been a directly elected member of the Legislative Assembly since 2005 and will run for re-election this year.

MARCH 2013



Tending the grassroots 6 NG SIO LAI

She leads, fashion follows 7 TERRY SIO UN I

Ng Sio Lai is the head of one of the strongest pillars of the establishment, the General Union of Neighbourhood Associations of Macau, or Kai Fong. The association is omnipresent, providing healthcare and social services. It also runs a number of schools. Ms Ng was appointed last month to the Chinese People’s Political Consultative Conference. Before joining the General Union of Neighbourhood Associations she worked in education as an administrator.

One of the most influential Chinese names in the global fashion business, Terry Sio Un I is the founder and chief executive of Rainbow Group, a retailer of high-end goods. Ms Sio set up the company more than three decades ago and it has since become the city’s biggest distributor of brands such as Giorgio Armani, Cartier, Versace, Hugo Boss and Marc Jacobs. The company runs boutiques and brand stores. Ms Sio has also brought many of the brands she sells to the mainland. Ms Sio opened her first store there in 1996, in Shenzhen. She reportedly wishes to list Rainbow Group on the Hong Kong Stock Exchange but this has yet to happen.

The daughter also rises 8 PANSY HO CHIU KING A daughter of SJM Holdings Ltd chairman Stanley Ho Hung Sun, Pansy Ho Chiu King stamped her own footprint on the gaming market through MGM China Holdings Ltd, a joint venture with U.S.based MGM Resorts International. Ms Ho reduced her half-share in the venture in 2011 so MGM China could be listed. She made US$1.5 billion (MOP12 billion) on the deal, becoming the richest woman in Hong Kong. Forbes magazine estimated her net worth at US$3.9 billion in January. Ms Ho now concentrates on Shun Tak Holdings Ltd, a Hong Kong conglomerate established by her father, which she runs in partnership with her sisters Daisy Ho Chiu Fung and Maisy Ho Chiu Ha.

A welcome contribution 9 FANNY VONG CHUK KWAN Fanny Vong Chuk Kwan has headed the Institute for Tourism Studies, the city’s only public institution of higher education focusing on hospitality, since 2001. Under her leadership the institute has woven a network that links it with leading universities and other institutions around the world, and established good relationships with the tourism and hospitality industries. In recent years the institute has done considerable research on the city’s tourism and hospitality sector. Ms Vong sits on the Macau Tourism Development Committee and the Cultural Industry Committee, which advise the government. She has a doctorate in management from ISCTE, one of Portugal’s top business schools.

MARCH 2013

Multi-tasking epitomised 10 SUSANA CHOU Businesswoman Susana Chou was the first president of the Legislative Assembly after the handover. She left the assembly in 2009 and now runs a charity. A daughter of Hong Kong industrial tycoon Chao Kuang Piu, she remains engaged in political life through her blog and was recently reappointed to the Chinese People’s Political Consultative Conference. Before that, Ms Chou had already retired from business, after a successful career in the garment and textile industry. She also ran HN Group Ltd, a Macau trading company. She studied for a while in France, a country to which she still has ties. France made her a Knight of the Legion of Honour in 2002.


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Growing pains Not everyone is thrilled by demanding new regulations for realtors that promise to revolutionise the property industry BY ALEXANDRA LAGES

49 he fallout from rules designed to raise professional standards among the city’s 8,000 real estate agents could see up to 40 percent of their number quit within three years. The law was approved by the Legislative Assembly in October and is set to be enacted in July. It will establish a minimum education level and introduces a licensing system for real estate agents. Previously, anyone was able to join the trade and there were no certification or registration requirements. Real estate experts and industry insiders Macau Business spoke to welcomed the changes but said they would also introduce higher costs and additional human resources challenges for employers. The Macau General Association of Real Estate opposes the new standards, particularly the accreditation scheme. It claims agents will walk away from the industry altogether. The association represents about 600 real estate companies out of the estimated 2,000 in Macau. The rules say that only secondary school graduates can apply for a real estate agent’s licence. They also need to pass a professional exam to gain a licence that should be renewed each three years. Figures from the association show the majority of real estate professionals have little in the way of formal education. The association’s director Vincent Ip Kin Wa says 60 percent of real estate agents and brokers in Macau only completed primary school. “Traditionally, many salespeople in the property sector are not well educated. Only 5 percent hold a bachelor’s degree,” Mr Ip says.


Rotten apples Praise for the new law comes from Ricacorp (Macau) Properties Ltd executive director Jane Liu Zee Ka and Midland Realty (Macau) Ltd chief executive Ronald Cheung Yat Fai. “People will have more confidence [in real estate agents] because they will be more knowledgeable,” Ms Liu says. Mr Cheung says the law is designed to boost staff qualifications. “For customers, it will be very good because agents should have a minimum knowledge [of the industry]. It will be very welcomed in general,” he says. Ricacorp and Midland, which have their headquarters in Hong Kong, each employ about 100 real estate agents at MARCH 2013



their Macau branches. About 60 percent of Ricacorp’s employees are male, and 70 percent have at least a high school education and prior industry experience, Ms Liu says. Their average age is between 30 and 40. Mr Cheung says Midland’s agents are mainly male, aged between 20 and 45, less than one-third have a “low-level” of education and more than half have two or more years of prior experience. The General Association of Real Estate claims these are not the typical profiles of agents. About three-quarters of the agents associated with the group are female. About 70 percent are older than 40. Mr Ip says the government is interfering without understanding the day-today practices of the real estate industry. Any “rotten apples” working in the industry will be eliminated by market forces “with no need for government control”, he says. The new law imposes unfair limits on companies and will increase their costs, Mr Ip adds.

Questionable timing The law provides a bedding-down period for agents in the form of a three-year temporary licence. To continue working in the industry, agents must attend train-

ing sessions arranged by the Labour Affairs Bureau and pass the professional examination. The training programme runs from 30 hours to 96 hours, depending on the agent’s amount of formal education, age and experience. The Labour Affairs Bureau says the courses should start in July. The course covers real estate legislation and practi-

cal issues such as mortgage procedures and property evaluation. Mr Ip says it is doubtful that all of the city’s estimated 8,000 real estate agents will be able to pass the exam. “Around 40 percent of the existent agents will quit.” A 96-hour course is too long and some realtors will drop out during the

The insiders’ stories A flexible schedule is one reason that people are attracted to the real estate industry ichele Lou, 27, put her degree in hotel management to use for two years before quitting to become a real estate agent, a job she had worked at part time during university. “In a hotel front-desk job, you meet clients everyday but there is no challenge. Real estate gives you more freedom and if you work hard, it is more rewarding,” says Ms Lou. “I like to manage my time by myself and real estate is also more flexible.” She has worked for small agencies but decided to move to a toptier company, citing less working hours. She joined the Macau branch of Jones Lang LaSalle in 2010. She


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now has a nine-to-six job as a real estate consultant. “It’s different comparing to other companies in real estate. It is more office hours and not around the clock like in smaller firms. I don’t need to work on Saturdays and Sundays,” she says. “In a bigger company, you get more support and you have a strong network of clients and database. In real estate, the most important things are information and clients.” “In small companies, you have to take care of your clients all the time and cooperate with other agencies.”

Big family Claudia Chan, 40, opened Batalha Home Property Agency three years

ago. “I’m a single mother and I can have time to take care of my daughter,” she says. After her divorce and years working in property with her former husband, Ms Chan took a job with a Hong Kongbased real estate company here. She could not fit in. “It was big pressure for me at that time and I didn’t had much working experience,” she recalls. In her own agency, Ms Chan works in partnership with a group of other small real estate firms that she regards as a family. “With my own company, I have even more freedom. I have the right to choose my deals and my clients.” Business is growing, despite the


The law provides a bedding-down period for agents in the form of a three-year temporary licence

course of study, he says. The city’s property industry has been rocked on its heels by a series of restrictions introduced by the government to curb real estate speculation.

Exodus predicted Mr Ip says since the 2011 introduction of the special stamp duty on resale of

dwellings within two years of their original purchase, transactions have dropped and about 100 small real estate companies have shut down. “With the new curbs implemented last year, transactions decreased by 60 to 70 percent and more companies will close down,” he says. “With no business, they will have to

“Real estate gives you more freedom and if you work hard, it is more rewarding,” says Michele Lou

“With my own company, I have the right to choose my deals and my clients,” says Claudia Chan

latest property curbs by the government, Ms Chan says. She currently inks up to five deals a month. According to the Macau General Association of Real Estate, real estate agents earn an average of MOP18,000 (US$2,250) a month. A typical agent earns a MOP5,000 salary, plus commissions. Ms Lou and Ms Chan both support the new rules for the trade because it

will increase standards and enhance customer confidence. “Everyone can be an agent in Macau. But not everyone is aware of the responsibilities. Most just want to finish the deal and get the commission money,” Ms Chan says. Ms Lou welcomes more training. “Macau’s real estate has undergone so many changes lately and sometimes it A.L. is difficult to keep up.”

lay off people as well.” Rose Lai Neng, an associate professor of finance at the University of Macau, says the new rules are good for the market. She says they introduce a higher degree of professionalism, a requirement for an industry were buyers and sellers seek expert advice. “Increased professionalism increases the credibility of the industry, subsequently reduces problems and brings higher reputation, as well as better development in the long run,” she says. The diverse background of real estate agents makes it difficult to impose high training standards without driving some professionals out of their job. Ms Lai says the training provided by the government to existing real estate agents will help to boost qualifications, albeit not necessarily to an international standard. Mr Cheung expects a number of people will leave the sector following the enactment of the new regulations. In addition to the professional requirements, a slowdown in the number of transactions due to the curbs introduced by the government, will mean fewer agents are needed. Combined, that will generate a “tough situation” for the sector and eventually lead some people to switch jobs. “This is not a good time to launch these regulations. Last year, it would have been perfect. With the regulation on pre-sales also coming into effect soon, we cannot see new business opportunities,” Mr Cheung says. Data from the Statistics and Census Service shows that there were more than 16,900 residential transactions last year, down by 1.5 percent year-on-year. In terms of value, the MOP74.2 billion (US$9.3 billion) of dwellings sold last year was a 26 percent increase on sales from 2011. Requests to the Housing Bureau for official data on the number of real estate agents were not met. MARCH 2013

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Frontier gold rush Expect the cost of commercial property to rise substantially when border crossings open 24 hours a day BY ALEXANDRA LAGES

t seems just a matter of time until the border crossings with the mainland are open around the clock. Estate agents say it will be a game-changer for the property market, although less so for the housing market. Chief Executive Fernando Chui Sai On was in Beijing in January for discussions with officials about keeping the border crossings open continuously. He said he hoped the Gongbei and Lotus Bridge crossings would be open 24 hours a day “as soon as possible”. Keeping the border crossings open continuously is expected to increase the number of visitors. This will mean more shoppers and higher retail sales, and so make commercial property more valuable. Savills (Macau) Ltd managing director Franco Liu says the novelty of round-the-clock access to Macau will


MARCH 2013

push up prices of commercial property closest to the Barrier Gate crossing, the city’s busiest. At present, shops in the vicinity of the crossing are cheaper to buy than those in the Senado Square area, but Mr Liu says this will change when the crossing is open around the clock. “The 24-hour clearance system will enhance the visitor flow. We foresee that both rents and prices of commercial property adjacent to the Barrier Gate will go up once this policy is confirmed,” Mr Liu says. He did not give estimates of how significant the increases would be. Last month, 186 square metres of commercial space in the Areia Preta district, near the Barrier Gate, was on the market for MOP6.8 million (US$850,000), according to Midland Realty (Macau) Ltd’s website. That was just one-third of the price per square

metre of a shop in the city centre covering 297 square metres, which was going for MOP32 million.

Second homes Centaline (Macau) Property Agency Ltd sales director Noelle Cheung says the main effect of the round-the-clock opening of the border crossings will be on rents for shops near the Barrier Gate. They will rise and the lack of new supply of premises will exacerbate the rise. “When we talk about shops, their valuation depends on the number of people coming around,” she says. She forecasts that when the border crossings are open at night, shops nearby will stay open at night, increasing the value of their premises. Keeping the borders open continuously will also make it more convenient for residents of Macau to live in the


Keeping the borders open 24 hours will also make it more convenient for residents of Macau to live in the mainland mainland and commute to work here. Mr Liu and Ms Cheung say it would be an attractive option for young residents and low-paid non-resident workers, who are excluded from the private housing market here by high prices. Just across the border in Zhuhai, prices are generally lower. However, Mr Liu and Ms Cheung say housing rents will decrease only slightly and only for a short while after the round-the-clock opening of the border crossings. They say it is unlikely to reduce prices for housing here at all. “Considering the experience of Hong Kong and Shenzhen, the future development of Macau, as well as the economic benefits due to upcoming major infrastructure, we expect further growth in Macau’s property market in the medium to long term,” says Mr Liu. “The impact of opening the borders 24 hours will not be very significant in the long term.”

the Macau economy is still expected to achieve high growth in the next few years”. Mr Liu says: “The 24-hour clearance system seems insufficiently attractive to residential investors from Macau, unless the mainland government loosens its policies on the real estate market or restores favourable policies.” He points out that the mainland

authorities no longer automatically allow Macau residents who buy a home in Zhuhai to drive their cars on both sides of the border. Legislative Assembly member Ng Kuok Cheong, who belongs to the New Macau Association, says: “More residents will decide to move to Zhuhai or Hengqin, looking for better housing and lower prices, when the border crossings are open 24 hours a day. However, housing prices [in Macau] will keep on rising until significant increases in interest rates are introduced.” The New Macau Association has expressed concern that keeping the border crossings open around the clock will mean an exodus of young residents and money to the mainland, and that Macau will suffer an identity crisis as a result.

Investors at the gate The average price per square metre of residential space in Macau was MOP70,407 in December, almost onethird more than 12 months earlier. The Macau Real Estate Association expects housing prices to rise by another 10 to 15 percent this year. University of Macau assistant professor of economics and international finance Jenny Huang Bihong says aroundthe-clock border crossings will have a limited effect on the property market. It may encourage some people to move to Zhuhai, but the border will still remain and consume commuters’ time, especially during rush hours. Many people will prefer to stay here, Mr Huang forecasts. She also says the property market here is driven not only by domestic demand but also by demand from non-resident investors, who forked out one-quarter of the money spent on property here last year. Keeping the border crossings open continuously “would have little impact on investors’ behaviour because MARCH 2013



Play it cool

Hong Kong introduces new real estate curbs BY MARY ANN BENITEZ* IN HONG KONG

he Hong Kong government unveiled fresh measures last month to cool its red-hot property market, as the finance minister warned that an asset bubble is forming in the neighbouring city. This was the second package announced in five months. Stamp duties on both residential and non-residential properties were doubled across the board with the top rate increasing from 4.25 percent to 8.5 percent. For transactions valued at HK$2 million (US$258,000) or below, the stamp duty rose from a HK$100 flat fee to 1.5 percent of the transaction’s consideration. The new stamp duty rates will not apply to first-time residential property buyers who are Hong Kong permanent residents. The new measures also include tighter stress testing for mortgages. In stress-testing applicants’ repayment ability, banks must now assume a mortgage rate rise of three percentage points, instead of two points.


MARCH 2013

Stamp duty for transactions of nonresidential properties, including offices, retail space and car park, also have to be paid at an earlier stage, after sales agreements are signed. The Hong Kong government says the new measures, together with the enhanced supply of apartments, will help cool the market. The curbs took effect on February 23. In Macau, Secretary for Transport and Public Works Lau Si Io has said the government here might also consider drawing up new measures to cool down real estate speculation if necessary. Commenting on the new measures launched in Hong Kong, he said that Macau authorities were following the development of the real estate market here closely. The fresh measures in the neighbouring city followed last October’s anti-speculation package, mostly targeted at wealthy mainlanders, restricting the number of non-local homebuyers, with

a 15-percent property tax on foreign investors.

Hard to control However, property prices have continued to rise. After the package was introduced by the government, transactions in November and December plunged sharply, but the market regained momentum in January, with property prices up by 2 percent. Financial Secretary John Tsang Chun-wah said that since 2008, residential prices have risen 120 percent. “The risk of an asset bubble is increasing,” he warned. “Maintaining a healthy, stable property market will be our on-going endeavour. We shall continue to monitor the market closely and I will not hesitate to introduce further measures when necessary,” Mr Tsang said. He also noted that the affordability ratio – the ratio of average home prices to average incomes – further deteriorated


Chief Executive Leung Chun-ying says his aim is to help grassroots families to move into public housing, and middle-income families to buy their own homes to 52 percent in the fourth quarter of last year. This ratio would rise to 68 percent if interest rates were to go up by just three percentage points. Previous measures to rein in soaring property prices in Hong Kong have drawn some investors away from traditional markets, sparking a craze in investing in alternative real estate markets, such as hotel rooms, car parks and offices. The new curbs came shortly after investors flocked to buy 360 hotel suites sold by property developer Cheung Kong (Holdings) Ltd, a firm controlled by Asia’s richest man Li Ka-shing. The company was able to pocket HK$1.4 billion from the sale. “I expect it [the new measures] will help forestall any possible shift in exuberance from the residential market to the non-residential market,” Mr Tsang said.

Last year, the price of retail space in Hong Kong surged by 39 percent, office space by 23 percent and factory space by 44 percent. The number of transactions also increased.

Top priority Chief Executive Leung Chun-ying said the announcement of the new round of measures shows that the “government has been monitoring the property market, including both the residential and non-residential property markets, and will launch new measures whenever necessary to reduce the demand for properties.” Mr Leung has made tackling the housing problem his top priority, saying in his policy address in January that he would announce measures to curb speculation and expand land supply when necessary.

The policy address spent 42 paragraphs on housing and land supply. “Shortage in the supply of housing has pushed up property prices and rental substantially. Many families have to move into smaller or older flats, or even factory buildings. Cramped living space in cage homes, cubicle apartments and sub-divided flats has become the reluctant choice for tens of thousands of Hong Kong people,’’ Mr Leung said in January. The number of people on the waiting list for public rental housing in Hong Kong has exceeded 200,000, he noted. Mr Leung says his aim is to help grassroots families to move into public housing, and the middle-income families to buy their own homes. He announced that the government has secured land for the development of about 17,000 subsidised home ownership flats and about 75,000 new public housing rental flats. The first batch of 2,100 subsidised home ownership flats for sale will be offered for pre-sale next year. * ASSISTANT NEWS EDITOR OF THE STANDARD NEWSPAPER HONG KONG

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A downtown office costs on average over MOP52,000 per square metre The average transaction price of office space in Macau rose by 24.8 percent in the fourth quarter of 2012 in comparison with the same period a year before, data from the Statistics and Census Service shows. In the fourth quarter of last year, the average price per square metre of an office unit stood at MOP47,925 (US$5,991), dropping 2.7 percent quarter-to-quarter. The most expensive


The average transaction price for private car parking spaces on the peninsula is expected to continue going up this year, says Jerry Tam, associate director of Ricacorp (Macau) Properties Ltd. Prices could go up by 15 to 20 percent, he says. This is despite the government having recently announced its goal to offer 5,300 new car parking spaces. Of the new supply, only around one quarter will be allocated for cars, with the remaining designed for motorcycles. The majority will be located in Taipa and Coloane.

MARCH 2013

district was downtown, where the average price per square metre for office space reached MOP52,148. The price increases were even higher for industrial unit transactions. In the fourth quarter, the average transaction price for this type of property stood at MOP25,572 per square metre, up by 35.7 percent quarter-to-quarter, and a staggering 83.6 percent year-on-year.


Real estate agencies are expecting a busy period in the coming months, as unfinished homes go on sale before legislation regulating their sale comes into effect. Midland Realty (Macau) Ltd chief executive Ronald Cheung Yat Fai told our sister publication Business Daily the developers of two high-end projects, One Oasis and Pearl Horizon, could release unfinished flats soon, in a bid to avoid the new rules on pre-sales. A bill to regulate the sale of unfinished housing units is now going through the Legislative Assembly.


The annual aggregate value of property sales hit a new all-time high last year. In 2012, combined property sales – including residential, offices, retail, industry and other types – hit MOP100.9 billion (US$12.6 billion), data from the Statistics and Census Service shows. That was a staggering increase of 32.3 percent in comparison with 2011, when the previous record was set. Despite the new record in value of sales, the actual number of transactions dropped for the second year in a row, to 25,419.



Source: DSEC

(MOP) District


















Macau Peninsula









Ilha Verde









Tamagnini Barbosa









Areia Preta and Iao Hon









Areia Preta new reclamation zone (NATAP)









Mรณng Hรก and Reservoir











Fai Chi Kei









Lamau Docks









Horta e Costa and Ouvidor Arriaga


















Patane and Sรฃo Paulo









Conselheiro Ferreira de Almeida



























NAPE and Praia Grande Bay reclamation area









Downtown Macau









Barra / Manduco









Praia Grande and Penha


















Ocean Gardens and Taipa Pequena









Downtown Taipa









University and Pac On Bay









Pac On and Taipa Grande









City and Jockey Club


















Notes: 1. The above information covers building units with stamp duty paid in the reference quarter 2. Including residential units that were exempt from the payment of stamp duty ~ No figure provided/confidential data


Source: DSEC

(MOP) 2011 District



2012 Q3
























NAPE and Praia Grande Bay reclamation area

























Downtown Macau Praia Grande and Penha Notes: Only covers office buildings with ten storeys or higher ~ No figure provided/confidential data

MARCH 2013


Property | Market Watch

Notable residential property transactions - 01/02 to 15/02, 2013 District



Source: Centaline (Macau) Property Agency Ltd

Floor area (sq. ft)

Sale price (HK$)

Price per sq.ft. (HK$)


The Residencia

Block 2, H/F, unit B (with car park)





The Residencia

Block 2, M/F, unit B (with car park)





Pearl Horizon

Block 15, L/F, unit C





Pearl Horizon

Block 15, M/F, unit A





The Residencia

Block 4, H/F, unit C





Pearl Horizon

Block 8, H/F, unit A





Pearl Horizon

Block 17, H/F, unit D





Pearl Horizon

Block 17, H/F, unit D





Pearl Horizon

Block 8, H/F, unit A





Pearl Horizon

Block 17, H/F, unit D





Pearl Horizon

Block 8, H/F, unit B





Pearl Horizon

Block 8, H/F, unit B





Pearl Horizon

Block 17, H/F, unit G





La Baie Du Noble

Block 1, L/F, unit E





The Bayview

Block 1, M/F, unit A





Pearl Horizon

Block 6, H/F, unit A





Pearl Horizon

Block 6, H/F, unit A





Pearl Horizon

Block 6, M/F, unit D





Pearl Horizon

Block 17, H/F, unit F





One Oasis Cotai South

Block 8, M/F, unit B





Green Island

Block 1, M/F, unit C





One Oasis Cotai South

Block 5, L/F, unit G





Pearl Horizon

Block 7, L/F, unit C





Pearl Horizon

Block 7, H/F, unit D





Pearl Horizon

Block 7, L/F, unit D





Prince Flower City

Block 5, L/F, unit AC





Ville de Mer

Block 5, H/F, unit E





Kinglight Garden

Block 1, M/F, unit B





Pearl Horizon

Block 13, H/F, unit H





Prince Flower City

Block 4, M/F, unit V





One Oasis Cotai South

Block 5, L/F, unit C





Jardim Drag達o Precioso

Block 3, L/F, unit C





Vai Yin Garden

H/F, unit A




Note: L/F - Low floor; M/F - Middle floor; H/F - High floor

Notable residential property rentals - 01/02 to 15/02, 2013 Type

Source: Centaline (Macau) Property Agency Ltd




Lake View Tower

Block 2, L/F, unit J





One Grantai

Block 4, L/F, unit P





Lake View Tower

Block 1, M/F, unit C



18.34 11.17

Floor area (sq. ft)

Rent price (HK$)

Price per sq.ft. (HK$)


Supreme Flower City

Block 2, L/F, unit E




Prince Flower City

Block 2, H/F, unit I





Prince Flower City

Block 2, H/F, unit G





Prince Flower City

Block 2, L/F, unit J





Nova Taipa

Block 22, L/F, unit N



13.97 10.20


Ville de Mer

Block 1, H/F, unit D




Kinglight Garden

Block 2, H/F, unit H





Edf. Jardim Wa Bao

Block 5, H/F, unit AD




Note: L/F - Low floor; M/F - Middle floor; H/F - High floor

MARCH 2013

Property Statistics Year-on-year change (%)


1,387 1,099 231 57 2,159 2,053 86 20

Building units completed - Residential - Commercial and offices - Industrial and others Building units started - Residential - Commercial and offices - Industrial and others

-69.4 -73.0 -45.9 67.6 148.2 162.9 8.9 100

Transactions (1)

- Residential - New building - Old building Resident buyers (as percentage of total buyers) - Commercial and offices Resident buyers (as percentage of total buyers)


-12.6 percentage points




- Industrial and others Total value of total units transacted (2)

MOP76.3 billion MOP58.9 billion

- Residential - New building

MOP41.4 billion

- Old building

MOP17.5 billion MOP12.7 billion

- Commercial and offices

MOP4.7 billion

- Industrial and others

Under MOP1 million MOP1 million to MOP1.9 million MOP2 million to MOP2.9 million MOP3 million to MOP3.9 million MOP4 million or above

Year-on-year change (%)

MOP70,407 /m


- Macau Peninsula

MOP71,159 /m


- Taipa

MOP64,138 /m


- Coloane

MOP79,008 /m2


6.8 8.4 -0.5 -5.0

Jan-Dec 2012 Jan-Dec 2012 Jan-Dec 2012

Notes Jan-Dec 2012 Jan-Dec 2012 Jan-Dec 2012 Jan-Dec 2012

Jan-Dec 2012 Jan-Dec 2012



Jan-Dec 2012

MOP25.5 billion MOP19.0 billion MOP7.7 billion

32.3 26.1 17.8 45.9 49.7 63.3

Jan-Dec 2012 Jan-Dec 2012 Jan-Dec 2012 Jan-Dec 2012 Jan-Dec 2012 Jan-Dec 2012

Year-on-year change (%)


1,466 3,372 3,011 2,141 6,927

-45.5 -27.1 -4.8 17.8 42.0

Average transaction price of residential units (3) 2012

Jan-Dec 2012


MOP48.8 billion

-46.8 -13.4 4.7 15.6 62.5

2,690 4,628 3,162 1,818 4,878

Jan-Dec 2012


MOP74.2 billion

Year-on-year change (%)

Jan-Dec 2012

percentage Jan-Dec 2012

Transaction price of residential units (1) 2011

Jan-Dec 2012

3.2 points -5.0

90.3 2,972

MOP100.9 billion

34.4 28.1 41.0 5.4 93.0 10.9

Jan-Dec 2012

-8.0 -1.5 -7.8 3.7

25,419 16,917 7,175 9,742

-1.8 points 13.7

87.1 3,128


Year-on-year change (%)


-6.7 -4.5 26.8 -20.7

27,624 17,176 7,783 9,393

Total units transacted

84.4 122.3 -56.7 -73.7 -26.3 -25.7 -43.0 -15.0

2,558 2,443 100 15 1,592 1,526 49 17

Year-on-year change (%)


Year-on-year change (%)


Notes Jan-Dec 2012 Jan-Dec 2012 Jan-Dec 2012 Jan-Dec 2012 Jan-Dec 2012

Month-on-month change (%)

Latest MOP74,524 /m


MOP74,580 /m


MOP69,000 /m


MOP82,532 /m2

5.8 4.8 7.6 4.5

Notes Jan 2013 Jan 2013 Jan 2013 Jan 2013

(1) The data covers transactions with stamp duty paid during the reporting period, including transactions exempted from stamp duty (2) Figures are rounded, therefore they may not add up exactly (3) The data covers transactions with stamp duty bill issued during the reporting period, including transactions exempted from stamp duty MARCH 2013

Source: Statistics and Census Service and Financial Services Bureau

Construction - private sector


CEO Interview



After a glittering 2012, that saw its stock price more than double, Galaxy Entertainment Group Ltd hopes to break ground this year on the third phase of Galaxy Macau. Construction of the second phase is underway and is scheduled for a 2015 opening. Galaxy Entertainment deputy chairman Francis Lui Yiu Tung spoke exclusively with Macau Business last month at the China Rouge club, one of his favourite places at Galaxy Macau. He talked about the company’s future in Cotai and argued that no casino operator is short of tables BY PAULO A. AZEVEDO, EMANUEL GRAÇA AND MANDY KUOK PHOTOS BY ANTÓNIO MIL-HOMENS alaxy Entertainment Group Ltd had a fantastic 2012. Can the company repeat that this year?

Last year was very good for us. It was a good year for Macau, as well. In 2012, the outside political landscape was a bit turbulent and we went through a couple of elections, in China and in the United States. It was a very challenging year but Macau still experienced some healthy growth. A lot of people in the industry – not just me – have been saying that, being

the biggest gaming city in the world, you cannot expect Macau to be able to continue with 40 percent year-on-year growth rates. Moving forwards, as the denominator gets bigger, we should be realistic. Everybody should understand that the future, from the point of view of the central government and the Macau government, is to make Macau not a casino-only city. They want it to be more of an entertainment resort destination. In addition to pushing gaming, you will probably see a lot of us [gaming operators] focusing on nongaming as well. MARCH 2013


“In non-gaming, the growth by itself, in absolute terms, is fantastic. If you compare it within the same equation as gaming revenue, probably you will find we are not moving the needle. That is not true�

MARCH 2013

CEO Interview In non-gaming, the growth by itself, in absolute terms, is fantastic. If you compare it within the same equation as gaming revenue, probably you will find we are not moving the needle. That is not true. We are moving the needle year-on-year in terms of absolute amount. A lot of the non-gaming revenue is moving, ours especially. The UA Galaxy Cinemas [at Galaxy Macau] is already the biggest revenue-producing cinema house in all of Macau and Hong Kong for the UA movie chain. These are fantastic numbers and that encourages us. We see a way forward in moving Macau not purely from a gaming point of view, but a more holistic entertainment approach. The second phase of Galaxy Macau is expected to be a big contributor to that development. How is construction going?

I have been speaking of phase two as a more non-gaming component. We emphasise shopping, the additional pool deck area, more hotel rooms, more convention centres. Those are the things that we think are going to grow the market. It is somewhat shown in the gaming revenue. Mass gaming is by far the component growing the fastest. We expect this trend will continue in 2013. We are concentrating on continuing as fast as we can, without sacrificing quality, to build phase two. We are still on track to finish in 2015. The budget stands at HK$16 billion [US$2.06 billion]?

At this moment, yes. Unlike phase one, which was focused on Asian brands, phase two brings in U.S.-based Marriot International Inc to manage the two new hotels, a Ritz-Carlton and a JW Marriott. Will that lead to a reshaping of your marketing proposal?

No. Phases one and two should combine together in a seamless integrated resort. Phase two has always been there since day one. But in 2006, if we’d been saying we wanted to build a resort with 1 million square metres and 3,600 rooms, everybody would have said we were dreaming. That was one of the reasons why we decided

to take a more realistic approach. We built phase one and scheduled to build phase two when things went well, depending on the demand. We anticipated it, and announced the phase two construction in April last year. Why did you opt to bring in another company to manage the new hotels and not have Galaxy Entertainment manage them, as you did with phase one’s Galaxy Hotel?

We did research. In the past couple of years, Ritz-Carlton and JW Marriot have gained tremendous exposure in China. We felt that these are brands that mainland Chinese would be able to connect to. Not only that, we sat down with the people from the Marriot group, we talked to them and we found that we share the same language. They understand the Asian and China market really well.


Previously, you said it would be a Galaxy Entertainment objective to offer cheaper hotel rooms. In phase two, they are still not there.

I never used the word “cheap”. It should be “affordable luxury”. When people come to a place like Macau, which is larger than life, you have got to make sure they are happy to stay here, and that all the things that we do go beyond their expectations. Phase two is part of the five-star integrated resort that is Galaxy Macau. We are not going to deviate too much from what we are doing right now. In phases three and four, you will probably see something very different. Regarding phases three and four, in December they were announced and you said phase three would start by the end of 2013. It means Galaxy Entertainment will have construction going on in Cotai until 2018. Why did you feel the need to announce these plans so far in advance?

We didn’t make a too-far-inadvance statement. What we have said is that, if possible, we will start to break ground by the end of this year. What has been the government’s feedback in terms of construction licences?


The land already belongs to us. I cannot say that we have the construction licence today. But we have been working on it since day one. All along, we have been planning all the pieces of land. The combined budget for phases three and four ranges between HK$40 billion and HK$50 billion. That is a lot more than phases one and two combined, forecast to cost HK$32.5 billion. Why the price difference?

Do you know construction costs have increased by 30 percent over the past three years? Do you know how much labour costs are today? We feel costs are rising. I am not the only one saying it. People in the real estate industry have all been saying that. You also mentioned that phase three would include creative industries to attract middle-class families. Can you elaborate?

We think the middle class, when they come here in the future, will be looking not just for gaming. You can see it in the whole evolution of visitors coming to Macau. Ten years ago they basically wanted to gamble. But now people come here not just for gambling any more. They want food, drinks, entertainment, and they want to see a show. As long as the middle class in the region continues to mature, you will see these people wanting a bit more of everything.


This is where the plans for an arena in phase three come in.

The arena is only the hardware. Of course, we are going to put the stateof-art technology there. What we have in mind is that, by the time we finish, it will be the best arena in the region. But this is just a piece of hardware. You still have to worry about your programming, your software, what kind of shows, artists and performances you will be able to bring. That is a big challenge. We would like to make sure we would be able to diversify the offering now available. Are you looking at having a resident show?

We will be looking at all options. We are going to have more than one venue. MARCH 2013


CEO Interview

Meetings and conventions is another bet for phases three and four. Do you feel the market is already there?

That is the wrong question to ask. The convention market will always be needed in Macau. The question should be the timing: when do you think the convention business will become important for the future growth of Macau? Take infrastructure into consideration, namely airlines, bridges, border crossings, human resources and hardware. All those components are equally important. All major cities around the world want to fight for the convention market because it is lucrative, bringing a lot of wealthy people. We need that market to grow. How will financing be done for phases three and four? Galaxy Entertainment has a lot of cash.

We have a lot of flexibility. We are not in any urgency to declare that we have to go to the markets for financing. We will be opportunistic. According to the figures released, phase two will have around 500 live gaming tables, phase three around 600 and phase four another 400. How can these be squeezed inside the current table cap, which overall only brings around 2,000 additional tables by 2023?

We said it is the capacity we are able to host. We didn’t say we are going to have all those tables. It very much depends on the government. At the end of the day, we will just go along with the government policy as to how many tables each phase is going to have. We have confidence that we will have a fair amount of tables for us to be able to justify our investments.


Some analysts say the table cap doesn’t make sense. It doesn’t allow for operators to invest in the mass market. With fewer tables available, they are likely to dedicate more units to high rollers. It also makes it harder to introduce new games. Do you agree the cap should be rethought?

It would be irresponsible [for the government] to say, “How many tables do you want? We are going to give it to you.” Being a responsible government MARCH 2013

is ensuring that things are being done with moderation and some degree of understanding of how much the market can take each year. Even if you have 400 tables coming in, do we have the needed labour force, hardware and infrastructure? Do we have the customers? All that comes into consideration. So far, I haven’t seen any of the operators coming out and saying they are really short of tables. Of course, everybody wants more tables, but this is another thing. All operators have a reasonable amount of tables. Like I have advocated before, I think the best thing to do is to have an equal share of tables among the six operators, so that we don’t have to compete on that front and can concentrate on making sure our nongaming components are the differencemakers. Are the tables fairly distributed today?

It could be done better.


alaxy Entertainment Group Ltd has a history of sponsoring sport in Macau. It has supported the international marathon since 2004 and the Macau stage of the FIVB Volleyball World Grand Prix since 2005. It has also been involved in Macau Grand Prix team sponsorship. Galaxy Entertainment deputy chairman Francis Lui Yiu Tung says this is a way to click with the public while promoting the Galaxy brand. “We felt that by using sport as a platform, we would be able to connect with society,” he says. “We are a gaming operator, but also a company wanting to get involved in other aspects of the community as well.” He says Galaxy Entertainment also regards big sporting events as a way to put the city and the company on the map.

The government announced earlier this year that Galaxy Entertainment would get an extra 50 tables. Have you received them already?

They have been given to us. Do you have any idea where you will use them?

We will put them to good use. A couple of weeks ago, reports mentioned fresh mainland curbs on junket operators. Did you get any information on that?

These are isolated events. If you look into what we have achieved over the past 10 years, you will see the industry is much healthier, growing in a much more positive direction. We are on the right path. Could we have been able to stop all the vices in one year? Don’t you think this is a little bit too optimistic? We have come a long way already. I have confidence that the government will continue to do positive things to make the industry healthier and more sustainable. I have confidence in it. If not, I would not spend HK$50 billion in Macau. Are you afraid that there will be over-supply in Cotai, where there are at least six mega-casino resorts in the pipeline?

It is a good question to ponder. The past 10 years have been absolutely fantastic. I had not envisioned that the market would be able to explode so quickly. But even today, if you ask me what will happen in the next 10 years, I still say we are just starting. Take a look at the bigger picture: the border checkpoint is being expanded, the Hong Kong-MacauZhuhai Bridge is being built, the high-speed train is coming in. Our own light rail transit system is only now under construction. And you have this huge Hengqin Island next door being developed. If you add all these together, I see a whole different chapter developing. What kind of future lies ahead for Macau? Only good things, provided that everybody, including the government, investors, bankers, the workforce and the community, all support this. This is where I keep using my little, limited influence to always encourage people in charge of that vision to be a little clearer about it.

65 Do we want to be a world tourism and leisure centre? We have a very good opportunity to achieve that. We can be the number one entertainment city in the world.


What is the biggest challenge in achieving that?

It is for every segment of the community to understand what we would like to achieve. If we are not all on the same side, it is not easy to move forward. First of all, we need to continue to have the central government supporting Macau to become a world tourism destination. Without its support, we cannot do anything. We have to understand that 60 percent of tourists still come from the mainland. We need to make sure that, whatever we do in Macau, it is going to be in the direction preferred by the central government. Secondly, it is important the Macau government ensures we

Also, it is about the people, the young people, being able to grab and understand that vision. This is very challenging. Their plan should not be going to work as a dealer. We need to make sure the young people in Macau understand there are many opportunities to grow, and that they take advantage of them. Take a look at Shanghai, Beijing, Singapore or Hong Kong. Young people there grabbed their opportunity when it came in previous decades. This is the decade of Macau. Will our young people be able to grab this opportunity? It is up to us.

“I have confidence that the government will continue to do positive things to make the industry healthier and more sustainable. If not, I would not spend HK$50 billion in Macau�

Regional gaming competition is not a problem?

have policies to achieve that goal, for instance regarding imported labour and construction. The local government is also important in providing a vision and having plans to support it.

I don’t see regional competition being able to take away whatever we have achieved in Macau. We have the advantage of having started much earlier, in 2002. Everybody is trying to catch up. We have a government that is very supportive. We have a population

MARCH 2013


CEO Interview

still very supportive. As long as we continue to have support, the next 10 years will be vital for us, to make sure the entire infrastructure will be in place ahead of everybody else in the game. We [the gaming operators] should not be competing with each other here. There is no point. All six of us have a lot of space to grow. We are all still growing. Competition, for us, is not to compete with each other, but to compete with the region. Is there a lack of cooperation among the operators here? The association established in 2009 to gather the six casino companies together is inactive.

Desirably, we would like to have an official body to represent us. But that doesn’t mean we are not talking among ourselves. We are. On each level, we do have very good communication among the six of us. It could be better, but it doesn’t mean we are not talking. There are certain reasons why an official body should be established: to make sure some common interests of the industry can be discussed on a more official platform. But it is going to take some time. Are you looking for investment opportunities elsewhere in Asia? Officials of the Philippine Amusement and Gaming Corp have said your company has expressed interest in their country.

We keep exploring. I would be silly to say that we are not interested. Of course we are. It is all a matter of allocation of resources. Our return on investment at StarWorld is 99 percent. Galaxy Macau is giving us a return of 42 percent. I am still unable to find any other market able to give us that kind of sustainable growth. Which jurisdictions are more appealing in Asia?

We would probably be interested in the whole sector. It very much depends on our reading of a lot of parameters such as political risk, policy risk or customer risk. Right now, I haven’t seen any legislation coming out officially in Japan or Taiwan. It is a bit premature to show interest. MARCH 2013

In Korea, we have been asked to go to have a look – not now, many years ago. So far we are still saying no because we don’t see that as a major market, as only foreigners can gamble. Vietnam is the same.


What about Hengqin Island? You have previously mentioned interest in non-gaming investment there.

that one day we will hopefully land in Hengqin. In Macau, there are four thirdparty-promoted casinos operating under your gaming licence, the so-called City Clubs. Among them, the Grand Waldo has been underperforming. Owner Get Nice Holdings Ltd tried to sell it last year. Are you worried?

Hengqin is definitely a place we should be interested in because it is close by Macau. One thing that, unfortunately, Macau doesn’t have enough of, is land. If you are looking to the non-gaming side of the business, you probably see that Hengqin could add a lot of strength to promote Macau as a world entertainment destination. We continue to be interested in Hengqin.

I am not a shareholder in Grand Waldo. I am not in a position to make any comments. We are still their partners and we will try our best to help them to get on the right track. I am not a decision-maker there, so I can only support.

When can we expect a decision?

No. Why do we have to take tables? We have always been on good terms. We just got another 50 tables from the government. There is no urgent need to take tables back.

We continue to hold conversations with the Hengqin authorities. It is a matter of gaining common understanding on whether we could be able to do certain things together. I continue to be optimistic


rancis Lui Yiu Tung says entering the Macau casino market was a game-changer for the business empire established by his father Lui Che Woo in 1955. His father put him in charge of the family’s gaming interests last year. Mr Lui says this does not mean any change at Galaxy Entertainment Group Ltd, where he is deputy chairman. “I don’t see that our organisation needs to be changed any time soon. So far the system, the hierarchy and the structure is working well for us,” he says. “We come from a very traditional Chinese family. We always respect our older generation. They are wiser and older than us, and we listen. But in the day-to-day operations, we must take more control. That is how we will be in the future.”

Have you taken, or are you considering taking back gaming tables from the Grand Waldo or any other City Club?

City Clubs were important for Galaxy Entertainment for a period. Do you perceive that period may be over?

The City Club model needs to evolve. The market is evolving and so is Galaxy Entertainment. City Clubs should evolve to make sure they find a competitive edge to survive. Certain City Clubs are still thriving. It is a matter of whether these people are able to take advantage of the situation and get better. What are your first impressions on the partial ban on smoking inside casinos, imposed in January?

This is progress that we are making. People want this to happen. At the same time, we are still implementing it. It is premature to say whether we need to do more or less. We should be a little bit more patient and hear all segments of the market. At the end of the day, nobody wants to see that, by having a thorough ban on smoking in casinos, suddenly all business goes away. Do you want to see it happening here, when all these new investments are coming into place? We have to be prudent.


“We continue to hold conversations with the Hengqin authorities. I continue to be optimistic that one day we will hopefully land in Hengqin�

MARCH 2013



Aristocrat’s stand at ICE 2013

Noble ambitions Aristocrat is celebrating its 60th year with expanded offerings online and for Asian gamblers BY EMANUEL GRAÇA

senior citizen, Aristocrat Leisure Ltd at age 60 is showing no signs of slowing down. The Australian supplier of slot machines is readying itself for a year of celebrations across Asia, led from its base in Macau. “Aristocrat is celebrating our 60th anniversary with the same approach we have taken over the last 59 years. That is getting closer to understanding the needs of our customers and players in key regions, and responding with innovative products that perform,” says David Punter, the company’s general manager for the Asia-Pacific region. The company is planning a substantial celebration at the Global Gaming Expo (G2E) Asia this May in Macau. “Visitors can expect a very special display of innovative new product concepts and gaming channels, which we be-


MARCH 2013

lieve will evolve the industry to the next level,” says Mr Punter. “The focus will be on celebrating our track record of success and the great partnerships we’ve enjoyed with our Asian customers.” Aristocrat produced its first gaming machine, the Clubman, in 1953. The company evolved to become the dominant player in Australia and then expanded globally. Today, the company boasts a workforce of more than 2,000 staff around the world and has a footprint in more than 90 countries. In the first nine months of last year, it posted revenue of A$586.2 million (MOP4.8 billion), a 29.7-percent increase over the same period in 2011. People at Aristocrat are proud of the company’s heritage but are “absolutely focused on the future,” says Mr

Punter. “We’ve never been more excited about our product pipeline and the products we’re bringing to market.”

Go, play He says content is key to driving sustainable value for any slot machine provider. That is why Aristocrat has been “working hard” to develop new products in key markets and segments around the world. In Asia that has meant developing Asian-themed games. “At the same time, we are making measured and careful investments to ensure we can deploy our content through emerging channels such as online and mobile as the industry evolves,” Mr Punter says. “We are deploying our famous casino slot content in high quality, compliant, well-regulated online casino sites in

69 European markets, and will build on this experience in the emerging U.S. market, preparing us for any future markets.” The company had 60 game deployments live on regulated online casino sites for real money gaming, and 11 games live on free-to-play sites at September-end. Aristocrat acquired social gaming platform Product Madness Inc, an Internet gaming system and remote game server last year to deepen its digital footprint.

The first in In Asia, online and mobile gaming are in their embryonic stages and the mainstay of Aristocrat’s revenue is bricksand-mortar casinos. The company opened its first Asian office here in 2006 and Macau is still the cornerstone of its regional operations. “Aristocrat has now expanded our operation to include an integration centre in Macau, allowing us to deploy our games, cabinets and service more rapidly to local customers, plus account executive presence on the ground in Manila and Singapore,” says Mr Punter. The company’s products will be on

David Punter

the gaming floors at Solaire Resort Casino, in Manila, and MGM Grand Ho Tram Beach casino resort, in Vietnam, the two main casino openings scheduled in Asia for this year. “We are proud that these new properties have both chosen Aristocrat as their number one slot supplier,” says Mr Punter. “We are hoping to leverage our

experience from being the leading slot provider to large casinos in Macau into these growth regions.” Union Gaming Research estimates that a combination of replacements and planned expansion will add about 23,600 slot machines to casinos in Asia over the next four years. That means good business prospects for Aristocrat. In Macau alone, Union Gaming has forecast that about 9,500 machines will be replaced or upgraded in the next three years. When the new Cotai properties come online, it estimates another 8,500 slot machines will be added to the market. Slot machines are not the only croupier-free casino game that is booming across Asia. The number of seats at electronic gaming tables has grown exponentially, particularly in Macau where the cap on the number of live gaming tables has operators looking elsewhere for profit centres. “Obviously we know electronic gaming tables are growing in popularity,” says Mr Punter. Aristocrat is not currently involved but is “monitoring the segment” and “carefully considering” its opportunities.


ew product releases from Aristocrat Leisure Ltd in 2013 will continue to build successful franchises, many dedicated to gamblers in Asian markets, says David Punter, general manager for the AsiaPacific region. The company is pushing forward with the next version of the successful Hyperlink product ‘Dragons on the Lake’, which includes a fourth support game this year, ‘5 Koi Deluxe’. Last year saw the genesis of a new strategy for Aristocrat, the ‘Legends Series’. It builds on the company’s most successful games in the Asia-Pacific region, boosting the features on offer. The company is promoting three games that fit into the strategy: ‘5 Koi Legends’, ‘50 Dragons Legends’ and ‘Fortune King Legends’. They add to the first game in the series, ‘5 Dragons Legends’. Other highlights include the Hyperlink product ‘Cash Express Gold Class’ and ‘Wonder 4’, the company’s number one for-sale game last year. It is a “multi-play” product, forecast to maintain steady sales orders this year, that gives players the opportunity to select up to four games and play concurrent sets of reels. MARCH 2013



New footing U.S.-based Leap Forward is working with Sands China on slot and table player management BY MICHAEL GRIMES

evada-based Leap Forward Gaming Inc announced last month a joint development agreement with Venetian Macau Ltd, a subsidiary of Sands China Ltd. The company’s SaffariNet digital technology will be used on Sands China’s gaming tables to provide services for casino patrons including player bonus systems and marketing campaigns. The firm’s founder and chief executive Ali Saffari, is a former senior vice president of engineering at slot supplier International Game Technology Inc. Sands China and Leap Forward “share a common vision that the table gaming floor of the future will integrate many features that are currently only available in gaming machines,” says Mr Saffari. SaffariNet will “enhance our continued commitment to player entertainment value while enhancing operational efficiencies,” says Tim Merrill, vice president of casino operations at Venetian Macau. Leap Forward is also working with Sands China in other areas. It has successfully run a trial of its SaffariNet system with slot machines at Sands Macao casino. The technology enables the gaming operator to manage the main screens of slot machines in order to offer personalised marketing messages to players who are a member of the casino’s loyalty programmes. It also allows sending more general messages to non-members based on their style of play or volume of play. It does this without changing the mathematics of the game or the fairness of the game for the players, and works with all brands of slot machines. “With the machines we’ve retrofitted, you will see the actual game can be shrunk by about 20 percent, giving that space for our external window,” using ‘picture-in-picture’

technology, says Mr Saffari. In that area of the screen, players can see information about the hotel, the restaurants and advertisements, for instance. “We chose the 20-percent reduction through learning by experience. At that level, the game keeps what I call its ‘crispiness’ – in terms of the graphics and etcetera – while allowing an ample window to show the rest of the casino’s ‘story’,” he says.


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Game integrity

“With the machines we’ve retrofitted, you will see the actual game can be shrunk by about 20 percent, giving that space for our external window,” says Leap Forward’s founder Ali Saffari

The targeted marketing messages apply to so-called ‘carded’ players (members of loyalty programmes). But SaffariNet also enables the casino management to send non-members messages about rewards available for signing up. Such messages are usually sent to non-members after they have played a certain number of credits. The team at Leap Forward say they have not needed special approval from Macau’s casino regulator, the Gaming Coordination and Inspection Bureau, to introduce the technology. “They came, took a look at it, and said ‘No problem’. It doesn’t interfere with the game at all,” explained Andrew Novotak, senior director innovation engineering for Leap Forward, during a recent trip to Macau to oversee the Sands Macao installation. Mr Saffari adds: “Because gaming is a regulated environment, every game that you get to play on the machine has to be approved by the regulators. Once approved, you – as a technology supplier – cannot touch it again. So the way we designed the technology is to offer all its capabilities without ever interfering with the maths of the game.” SaffariNet can also be used to deliver other gaming activities via slot-machine screens such as sports betting or online games, though those activities are not currently permitted in Macau casinos.


Upping the ante PokerStars plans new home in City Of Dreams BY DANIEL MACADAM*

okerStars will open its new permanent poker room in Macau at Melco Crown Entertainment Ltd’s City of Dreams, its third home here in five years, the company announced last month. The world’s biggest online poker company will have 13 permanent poker tables on the main floor of Melco Crown’s flagship casino in Cotai. Further details regarding the official opening day are to be announced soon. PokerStars was looking for a new residency in Macau after its contract with SJM Holdings Ltd’s Grand Lisboa was not renewed in March last year. Ever since, the company has been hosting its special events at Grand Waldo casino. Guy Templer, PokerStars’ director of strategy and business development, told GamblingCompliance that the game’s growing popularity in Asia is starting to convince more Macau casinos to put poker tables on their gaming floors. Macau’s tight table cap means gaming operators need to carefully weigh the use of each table and ensure


the rake from poker is not at the expense of more popular games like baccarat. “The economics are interesting — the demand is there but the supply is not,” Mr Templer says. “Over the last 12 to 18 months the demand has grown quite considerably, and slowly there are more and more tables opening up.” PokerStars’ Asian Championship of Poker in Macau last year had 184 players taking part with a HK$100,000 (US$12,893) buy-in, and around 3,000 attending the festival, he says.

‘Natural fit’ Mr Templer admits that under the table cap “a poker table is on a par with baccarat – the most popular game – so obviously casino owners look at the business and where they can make the most money.” Nonetheless, he says the room is a “natural fit” for City of Dreams because Melco Crown recognises poker’s growing popularity in Asia and the mass market-focused resort, which includes Hard Rock memorabilia and the popular

House of Dancing Water show, will be perfect for international players. City of Dreams previously had a poker room, but it was shut down in 2011. “For us, the poker room in Macau will give us a presence in an increasingly important market, and will benefit from there being only a limited number of poker tables in Macau,” Mr Templer says. It also fits in with PokerStars’ growing drive to have a permanent spot in land-based venues to push its brand further, he adds. The company has opened a branded poker room in Casino Grand Madrid in Spain, and will this month launch its residency in the Hippodrome casino in London. However, Mr Templer did not indicate whether PokerStars will offer poker in any other Melco Crown properties, including its planned resort in Manila Bay in the Philippines. “It’s the start of the relationship with Melco Crown. We are focused on making this room work,” he says. * GAMBLINGCOMPLIANCE MARCH 2013



MGM CHINA STARTS CONSTRUCTION IN COTAI The company’s new project will provide up to 6,000 new jobs, says chairperson Pansy Ho MGM China Holdings Ltd hosted last month an official ground-breaking ceremony for its new casino resort project in Cotai. The property will cost US$2.6 billion (MOP20.8 billion) to build. It will include 1,600 hotel rooms, as many

as 500 gaming tables and 2,500 slot machines. Around 85 percent of the gross floor area will be for non-gaming including restaurants, shops and entertainment. It is scheduled to open in mid-2016. Pansy Ho Chiu King, chairperson of

MGM China, said that the new casino resort would provide 5,000 to 6,000 new jobs once completed. Ms Ho also said she foresees that the VIP market will slow to single-digit growth in the next few years, as more mass-marketoriented projects open in Cotai.


More than half of Macau’s local workforce worked in service industries such as casinos, hotels, restaurants and retailing in the final quarter of last year, official data shows. A total of 22.7 percent worked in the gaming industry. A record total of 188,900 workers, or 54 percent of the 350,000-strong employed population, worked in tourism-related industries.

SALARIES GO UP AT WYNN AND SANDS Gaming operators Wynn Macau Ltd and Sands China Ltd both announced 5-percent wage increases starting this month. According to Wynn Macau, the salary increase will cover all non-senior management employees, or close to 98 percent of its current 7,500 workforce. Sands China said it would increase all full-time staffs. The gaming operator has over 25,000 employees. Additionally, annual bonuses were given to all workers, both gaming operators said.

MARCH 2013


The electricity usage by the gaming sector continues to increase at a double-digit rate, official data shows. The gaming sector used 1,626 million kWh of electricity last year, an increase of 14.6 percent year-on-year. The sector was responsible for almost 40 percent of all the electricity usage in Macau in 2012. It used double the energy of the residential sector.


Manila Bay watch Veterans from Macau’s casino industry are ready to launch Manila’s Solaire Resort and Casino – a rival based on Macau’s DNA BY MUHAMMAD COHEN

he Philippines takes a giant step toward remaking its gaming industry this month. On March 16, Solaire Resort and Casino opens, the first of four gaming-related projects costing more than US$1 billion (about MOP8 billion) at Entertainment City, on Manila Bay. The goal for Solaire and its future neighbours is simple: bring the Philippines into the big league of international casino resorts. “We are the game changer, bringing quality and service to a new level not just in Manila but in the entire region,” Solaire’s senior vice-president for gaming Dennis Andreaci tells Macau Business.


“Solaire brings to the Philippines, for the first time, a property whose design, quality, styling, services, food and beverage, and gaming can compete on a global stage – a property that is positioned to compete with the world leaders in Macau and Singapore.” The managing partner of gaming consultancy IGamiX Management & Consulting, Ben Lee, says that until now, the Philippine gaming industry has been “predominantly a state-run affair, which did not grow and adapt to changing conditions as the country and economy did”. Solaire aims to transform a market led by domestic players betting an average of PHP40 (MOP8) at casinos mainly

controlled by the government-owned Philippine Amusement and Gaming Corp, which also doubles as the gaming regulator. The Philippine gaming market is estimated to have been worth US$1.6 billion last year, 60 percent of that sum derived from mass-market gambling, a January report by Citibank says, compared to the US$38 billion that the Macau gaming market was worth. Gaming analyst Richard Huang of Hong Kong brokerage CLSA Asia-Pacific Markets says: “We forecast Philippine gaming revenue to increase from US$1.3 billion in 2011 to US$3 billion in 2016, assuming that’s the year the three MARCH 2013



other casinos in Entertainment City will be opened. That is still less than 10 percent of what Macau did in 2012.”

Destination market Foreign gamblers account for about 30 percent of gaming revenue in the Philippines. “The Philippines is a niche market for gaming,” HSBC bank regional gaming and consumer analyst Sean Monaghan says. “It could become a destination market in its own right, depending on the quality of its products.” The Philippines welcomed a record 4.27 million tourists last year, 9 percent more than in 2011. South Korea was the main source market, sending slightly more than 1 million tourists, about 24 percent of the total. The United States was the second-biggest source market, contributing nearly 15 percent of the total, followed by Japan, which contributed less than 10 percent of all arrivals. The mainland was the next biggest source of arrivals, sending almost 251,000 tourists or nearly 6 percent of the total. Another 5 percent of tourists were from Taiwan and under 3 percent were from Hong Kong. Tourist arrivals from Greater China grew at less than 10 percent last year, slowed perhaps by the MARCH 2013

When it opens this month, Solaire will have about 300 gaming tables, 1,200 slot machines, 500 hotel rooms, suites and villas, four “signature” restaurants among its food outlets, a spa and an entertainment lounge dispute between China and the Philippines over territory in the South China Sea, and with many still reeling from the death of eight Hong Kong tourists on a hijacked bus in Manila in 2010. “The strategic dynamics of Macau and the Philippines are sufficiently different in terms of tourism mix that both

jurisdictions should grow within their own target markets,” says the managing director of Las Vegas consulting firm Galaviz & Co, Jonathan Galaviz. “The Philippines provides more of a Greater Asia play on tourism but lacks the direct access Macau has to Hong Kong and mainland China.”

Familiar themes When it opens this month, Solaire will have about 300 gaming tables, 1,200 slot machines, 500 hotel rooms, suites and villas, four “signature” restaurants among its food outlets, a spa and an entertainment lounge. The resort, designed by Paul Steelman, will eventually have another hotel, with 300 suites, a theatre and shopping mall, bringing the cost of the project to nearly US$1.2 billion. It should be complete in two years. CLSA estimates that Solaire’s revenue this year will be US$500 million. Citibank’s estimate is about 10 percent lower. “The project execution has been first class and all that remains to be seen now is if they can get the Chinese VIPs to go there,” Mr Lee says. “I believe we can expect some


Entertainment City’s four top guns olaire Resort and Casino is the first of four casino resorts due to open in the new Entertainment City on Manila Bay. The cluster, on 120 hectares of reclaimed land, is meant to emulate the success of Macau’s Cotai Strip. Each resort has a minimum price tag of US$1 billion (about MOP8 billion), a gaming licence and at least one Filipino billionaire to back it. Ports tycoon Enrique Razon is the principal Filipino investor in Solaire’s parent company, Bloomberry Resorts Corp. Mr Razon’s fortune grew from US$1.6 billion to US$3.6 billion, enough to put him in third place on Forbes magazine’s list of the richest Filipinos, owing to the listing of Bloomberry Resorts Corp on the Philippine Stock Exchange last year. The Belle Grande, due to open next year, is backed by the richest man in the Philippines, Henry Sy, and his retailing and property empire. Melco Crown Entertainment Ltd is a partner and will operate the casino resort, which is expected to have three luxury hotels and a shopping mall, along with a casino on two floors. Universal Entertainment Corp’s Kazuo Okada of Japan recently roped fellow-billionaire John Gokongwei into his US$2.3 billion project to build a casino resort. Mr Gokongwei is the fourth-richest Filipino. He controls the second-biggest operator of shopping malls in the Philippines. Their casino resort is due to open next year. But its future is uncertain because of allegations that Mr Okada offered cash and gifts to executives of the Philippine gaming regulator to ensure a foothold at Entertainment City. Macau’s Galaxy Entertainment Group Ltd is reportedly among the casino operators circling the project if Mr Okada is forced out. Resorts World Manila opened in 2009 next to Manila airport. Its success shows there is demand for superior gaming facilities. Its backers, a partnership of Filipino billionaire Andrew Tan’s Alliance Global Group Inc and Genting Hong Kong Ltd,


Macau-style strategies to emerge, particularly in the VIP segment.” That is quite probable, as Solaire’s management includes veterans from Macau with experience in opening and running notable casino resorts here. Mr Andreaci was senior vice-president for gaming operations of Galaxy Entertainment Group Ltd’s Galaxy Macau, and formerly an executive of Las Vegas Sands Corp. Solaire’s chief operating officer, Michael French, was a senior vice-president of Melco Crown Entertainment Ltd’s City of Dreams and Altira. The new casino resort’s senior vice-president and chief financial officer, Ed Chen, is a former financial controller of Wynn Macau Ltd. Some 400 of Solaire’s gaming personnel have experience in Macau or Singapore casino resorts, many of them Filipinos that the resort has lured home.

Second home Global Gaming Asset Management LLC has the contract to manage Solaire. The company’s principals include William Weidner, who opened both the Sands Macao and the Venetian Macao before leaving Las Vegas Sands in 2009 after

whose parent Genting Group owns Singapore’s Resorts World Sentosa, now plan to open Resorts World Bayshore in Entertainment City in 2016. The casino resort will have a shopping mall and a 3,000-seat opera house along with its casino and hotels. Testing the market Some question whether the Philippine gaming market, projected to generate US$2 billion in revenue this year, can support four casino resorts together containing 1,000 gaming tables, 5,000 slot machines and 3,000 hotel rooms. “I don’t see why not,” says Leonardo Dioko, a professor at the Institute for Tourism Studies in Macau. “The economy is booming. Middle-class income appears to be sustainably rising, the current government has rationalised most of its policies and the leadership enjoys stability and support.” CLSA Asia-Pacific Markets gaming analyst Richard Huang agrees. “We believe the integrated resorts will be successful due to the strong local gaming demand,” he says. “Investors should also enjoy attractive investment returns with the low operating costs – gaming tax and staff costs are much lower in the Philippines than Macau – and the lower construction costs. Philippine casinos only cost US$1 billion to build versus US$2 billion to US$4 billion in Macau.” Galaviz & Co managing director Jonathan Galaviz says all modelling and projections point to Manila being able to sustain several billion-dollar casino resorts. IGamiX Management & Consulting managing partner Ben Lee is more cautious, pointing to the part played by President Benigno Aquino’s government. “It all depends on whether the current economic momentum generated by the Aquino administration can be maintained past his term, which will expire in three years,” he says. “A big risk is who will be the next president,” HSBC bank regional gaming analyst Sean Monaghan says. But he adds: “Sometimes you need to build it to test the market.” MARCH 2013



13 years; former Las Vegas Sands president of global operations Brad Stone; and the former chief operating officer of Melco Crown, Garry Saunders. “For the Macau and Singapore casino VIP player, they will walk into our VIP and premium player areas and immediately feel at home,” Mr Andreaci says. “Everything that they are accustomed to on the gaming tables is the same: similar gaming limits, gaming in Hong Kong dollars, similar casino credit policies, the games operated with the same rules.” Solaire will compete with Macau “to some degree”, he says. “We are going after the small part of the market that is interested in a diversified experience from Macau, a mix of high-end travel experience and the finest gaming standards in the world, an alternative to going to Macau on a regular basis.” The casino resort hopes to attract gambling junkets from Macau, and is in negotiations with junket operators, Mr Andreaci says. He did not reveal the commission offered by Solaire, but reports by analysts say commissions at Resorts World Manila, currently the swankiest gaming venue in Manila, are close to 1.7 percent of VIP rolling chip turnover, compared with 1.25 percent in Macau. Low tax rates – 17 percent for VIP gaming and 27 percent for massMARCH 2013

Solaire’s management includes veterans from Macau with experience in opening and running notable casino resorts here. Some 400 of its gaming personnel have experience in Macau or Singapore casino resorts, many of them Filipinos that the resort has lured home market gaming, versus 39 percent in Macau – enable Philippine casinos to offer bigger incentives to junketers and individual VIPs.

Attitude shift Macau junket operators Suncity Group and Jimei Group already do business in the Philippines, says one analyst who does not wish to be identified, and the

country is the base for many online gaming operations. This could help Solaire stimulate interest among potential junketers from Macau. But the analyst says this may not happen until next year. Further inducements for VIPs are Solaire’s private airport terminal, and a fleet of helicopters to take them on exclusive excursions to golf courses or beaches from its rooftop helipad, Mr Andreaci says. These offers highlight some of the strengths of the Philippine challenge to Macau. “The Philippines has a diversity of tourism offerings in terms of nature, beach and sun, heritage and generally more hospitable front-line service staff,” says Leonardo Dioko, a professor at the Institute for Tourism Studies in Macau. But he adds: “There’s a lot of catch-up work to be done in terms of security and safety, weatherproof attractions and infrastructure, especially transport linkages.” An expressway from Manila airport to the Entertainment City complex is supposed to open in 2015. “For all its hospitableness, the Philippines also needs to improve a lot on service quality and the culture of nickel-and-diming visitors at every stage of travel,” says Mr Dioko, who is Filipino himself.



Japanese gambling tycoon Kazuo Okada resigned last month from the board of Las Vegas-based casino operator Wynn Resorts Ltd. The announcement was made one day before a special shareholder meeting scheduled to oust him. In a statement, Mr Okada blasted Wynn Resorts’ chief executive Steve Wynn for plotting to discredit him and force him out of the company, and repeated allegations made earlier about the misuse of company funds to finance a US$135-million (MOP1.1 billion) donation to the University of Macau. Wynn Resorts is the parent company of Macau-based gaming operator Wynn Macau Ltd.


Macau-based slot supplier Aspect Gaming Ltd announced the acquisition of Las Vegas-based Asian casino games developer Longshot Interactive LCC. “The acquisition adds a valuable portfolio of proprietary baccarat variants to Aspect’s existing library of slot offerings,” the company said in a press release. The amount paid by Aspect Gaming was not disclosed. Concurrent with the acquisition, the principals of Longshot Interactive will be joining Aspect’s advisory board.


Nasdaq-listed VIP room gaming promoter Asia Entertainment & Resources Ltd (AERL) announced last month that it has moved its VIP room formerly at the Venetian Macao to a new room at Sands Cotai Central. Both the Venetian Macao and Sands Cotai Central are part of gaming operator Sands China Ltd’s portfolio. The new VIP room has three tables plus a private room for a total of four tables, AERL said. No reasons for the change were made public. The company promotes three other VIP gaming rooms at StarWorld, Galaxy Macau and City of Dreams.

JUNKET NUMBERS HIT NEW RECORD Macau currently has 235 junket operators, up by 7.3 percent year-on-year Official data shows that the number of VIP gaming promoters operating legally in Macau is the highest ever. There are 235 licensed companies and individuals, 7.3 percent more than a year ago, annual data released by

the Gaming Inspection and Coordination Bureau shows. That is an average of seven licensed junket operators per casino. The surge in the number of junket operators and in VIP gaming revenue has prompted several analysts to call for more

openness in the industry. For full-2012, VIP baccarat accounted for 69.3 percent of Macau’s casino revenue, reaching MOP210.9 billion (US$26.4 billion). Revenue was up by 7.5 percent year-on-year.

MARCH 2013



Ready to go Las Vegas Sands confirms Madrid mega-casino dig BY ANNA CUENCA*

as Vegas Sands Corp said last month it was set to go ahead with building a huge casino complex near Madrid, which could create hundreds of thousands of jobs at a time of record unemployment in Spain. The controversial project, dubbed “EuroVegas” in the press, plans to build four casino resorts with 12 hotels providing 36,000 rooms, nine theatres, three golf courses and several convention centres over 15 years. The first, most expensive phase foresees four resorts with 3,000 rooms each, casinos and leisure infrastructure for an investment of about US$9.2 billion (MOP73.6 billion). Las Vegas Sands hopes to open it by 2017. When the U.S.-based firm last year chose Madrid over Barcelona to host the project, some observers doubted it could finance it due to a credit crunch and uncertainties over the Spanish economy. But chief operating officer Michael Leven says the company is ready to pump in 35 percent to 40 percent of the funds for the first phase of the project and has secured financing from banks for the rest. “That money is available,” Mr Lev-


MARCH 2013

en told a news conference last month, without naming the lenders. Las Vegas Sands is the world’s biggest casino company by market value. It is the parent company of Macau-based gaming operator Sands China Ltd. It will build on 750 hectares of land in Alcorcon, 15 kilometres southwest of the Spanish capital, said the head of the Madrid regional government Ignacio Gonzalez. “We expect to lay the first stone at the end of the year,” he told the news conference. “It is the biggest investment that will take place in Spain in the coming years.” The Madrid regional government says it hopes the project will create 200,000 jobs when it is completed. Spain is currently grappling with an unemployment rate of 26 percent.

Dangers and risks The first phase of the project could create around 40,000 direct jobs and another 40,000 indirect ones, Mr Leven said. “In Singapore, which is about the size of one resort, we employ exactly 10,000 people on our payroll,” he said. “This project has enormous economic

implications and enormous employment opportunities.” Las Vegas Sands first unveiled the project six years ago. The mega-casino complex is backed by Spain’s ruling conservative Popular Party but is opposed by left-wing parties, labour groups and top officials of the Roman Catholic Church. Opponents complain that public money will be used for a private project while Spaniards are suffering from cuts in public services. A protest group, “Eurovegas No”, said it would step up its campaign against the project. “It is still possible to stop this project with strong mobilisation by citizens,” the group, which includes lawyers, architects, environmental associations and others, said in a statement. Critics fear the casinos will spawn prostitution and crime, and a return to the excesses of Spain’s property bubble, which imploded in 2008 triggering a double recession. Last year the Archbishop of Madrid, Cardinal Antonio Maria Rouco Varela, warned that the casino project carried with it “dangers and risks” for the morals of young people which are “well known”. * AFP NEWS AGENCY


ICE baby

Austria’s Novomatic sets new records as Europe’s leading casino trade show moves home BY MICHAEL GRIMES

ovomatic AG, a major supplier of casino gaming equipment in Southeast Asia and the Philippines, dominated the floor at the ICE 2013 trade show, held last month. The firm’s display at the ExCeL London Exhibition and Convention Centre, on the eastern side of the British capital, covered 4,400 square metres. That’s nearly half a hectare. “It was the largest single booth ever created for any gaming show, anywhere on earth,” said the company in a statement. The display included 25 kilometres of cabling – enough, says Novomatic, to stretch to the trade show’s former home in Earls Court on the western side of the city, and back. The move of ICE – formerly known as the International Casino Exhibition – to ExCeL was controversial. Although ExCeL is bigger and newer than Earls Court, its location in east London’s docklands is not as convenient for access to Heathrow airport, the main point of entry for many show visitors, and to London’s subway system. But the success a few months earlier of the London 2012 Olympics – held in Stratford, almost within shouting distance of ExCeL – might also have played


a role in changing hearts and minds. “The combination of the show’s new date and new venue required a leap of faith, by both exhibitors and visitors, but we can clearly see that their faith has been rewarded with a truly excellent show,” said Jens Halle, managing director of Austrian Gaming Industries GmbH, a Novomatic subsidiary.

Product launch Austria’s Novomatic has spent the past few years expanding its range of products and services via acquisition as well as in-house research and development. Recent additions to the business include subsidiaries Greentube Internet Entertainment Solutions GmbH, and Octavian Global Technologies Inc, a specialist in casino game management systems. Octavian had its first order from a Philippines casino last year for its Accounting Control Progressives System for gaming floors. One of the key products launched by the group at ICE 2013 was the Dominator slot machine cabinet, featuring touch-screen controls rather than traditional buttons – although the firm says the option of traditional controls is available for casinos that want it.

Novomatic’s new Dominator slot machine cabinet

As the name suggests, the machine is designed to stand out on crowded casino floors. It has three, 24-inch screens using thin-film transistor technology – a type of liquid crystal display flat panel screen – as well as the option of an extra screen display above the machine, known in the casino trade as a ‘topper’. “‘The Dominator’ is a self-confident name, we know,” says David Orrick, director of communications and business development for Novomatic. “But we are quite sure it will be a leading and dominating machine on international gaming floors.”

Novomatic’s stand at ICE 2013 MARCH 2013



Interblock Hologram Gaming Lounge at ICE 2013 in London

Not just in the mind Interblock’s latest hologram technology creates the possibility of table gaming without a table BY MICHAEL GRIMES

magine a casino floor where table games can be played without a table. That is the enticing prospect offered by Slovenian gaming equipment maker Interblock and one of its technology partners, Musion Systems Ltd, based in the United Kingdom. Interblock has combined old technology – a mirror-based illusion used in Victorian music halls and sideshows known as ‘Pepper’s Ghost’ – with modern digital holographic projection and computer tablets. In doing so, the company has created what just a few years ago many would have considered impossible: an alternative to the live dealer casino game, but one that doesn’t need the space taken up on a casino floor by a stadium-style electronic table installation or even a smaller multi-seat electronic game. Interblock’s new technology offers a realistic human dealer in hologram form. Displayed on stage in front of players, the projections are linked with electronic table games to convey the action in a compelling new way. Dealers throw 3D dice and cards into the virtual sphere, matching up game-play in real-time.


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Without an electro-mechanical gaming machine to play the game, all the player needs is a comfortable seat in front of a play station. In the near future, the company will offer players the chance to make bets via a computer programme downloaded to a tablet or mobile handset. The system was shown by invitation only during Global Gaming Expo in Las Vegas last autumn, but put on public display at the ICE 2013 gaming industry trade show in London last month.

Optical illusion “At first the hologram was meant more as a teaser to attract visitors at G2E Las Vegas 2012. But the more clients were interested in the product, the more we were aware we have done something revolutionary in the gaming business, a new step forward,” Tina Ferko, Interblock’s marketing director, told Macau Business. “The hologram opens up various options for operators. They can play the games without the need for a machine. Soon it will be delivered to customers via apps and the casino operator can use the hologram technology for projects in

marketing or advertising as well as gaming,” she says. Musion Systems is the exclusive master global licensor of Musion Eyeliner, a high-definition video projection system that allows moving images to appear within a live stage setting. Interblock says it has an exclusive agreement with the company for the supply of the technology for use in gaming. The projection creates the illusion of life-size, full colour, 3D moving images on stage. Interblock says that while it is actually two-dimensional images that are projected onto the stage set, the use of mirrors and the way the brain processes the information creates the 3D illusion. “Interblock Hologram Gaming Lounge offers innumerable possibilities for casino floors practically at the touch of a button,” says Ms Ferko. “The hologram technology can be used for gaming, advertising and even for concerts without the artist being physically present. “It was an amazing hit with the visitors to the show. We’re very proud of this achievement. Technology moves on and we have to keep coming up with new ideas.”


Casino gaming 2011 MOP 304.1 billion

Gross gaming revenue (2012)

5,302 16,056 34 casinos

Gaming tables Slot machines Number of casinos

Market share per casino operator* 2012 SJM Holdings Ltd Galaxy Entertainment Group Ltd Sands China Ltd Wynn Macau Ltd Melco Crown Entertainment Ltd MGM China Holdings Ltd

27% 19% 19% 12% 14% 10%

Year-on-year change (%)

MOP 27.1 billion

13.5 10.7 14.3 1 casino

11.5 3.5 3.3 1 casino

5,485 16,585 35 casinos

Year-on-year change (%)

-2 3 3 -2 -1 --

Year-on-year change (%)



percentage points percentage points percentage points percentage point percentage point

Month-on-month change (%)

26% 18% 21% 12% 13% 10%

--1 -1 -1 1

Notes Feb 2013 Dec 2012 Dec 2012 Dec 2012

Notes Feb 2013

percentage point

Feb 2013 Feb 2013

percentage point percentage point percentage point

Feb 2013 Feb 2013 Feb 2013

Gross revenue from casino games Roulette Blackjack VIP Baccarat Baccarat

MOP892 million MOP2,950 million MOP210,850 million MOP66,251 million


MOP249 million


MOP5,546 million


MOP87 million

Mahjong Slot machines 3-Card Poker Fish-Prawn-Crab

MOP203 million MOP13,244 million MOP211 million MOP22 million

3-Card Baccarat Game

MOP347 million


MOP137 million

Texas Holdem Poker

MOP289 million

Lucky Wheel Live Multi Game

MOP35 million MOP895 million

Stud Poker

MOP1,472 million

Casino War

MOP246 million

Fortune 3 Card Poker

MOP206 million

Year-on-year change (%)

13.9 8.8 7.5 36.1 18.0 16.2 -23.7 190.0 15.9 10.5 -56.9 23.5 -9.3 4.3 0.0 187.8 12.5 8.8 46.1

Latest MOP234 million MOP773 million MOP54,831 million MOP18,763 million MOP72 million MOP1,466 million MOP19 million MOP43 million MOP3,504 billion MOP54 million MOP6 million MOP84 million MOP33 million MOP77 million MOP9 million MOP314 million MOP410 million MOP64 million MOP70 million

Year-on-year change (%)

-8.2 3.1 2.9 34.6 26.3 12.6 -29.6 59.3 15.2 12.5 -25.0 16.7 -38.9 8.5 12.5 175.4 12.9 -9.9 89.2

Notes Oct-Dec 2012 Oct-Dec 2012 Oct-Dec 2012 Oct-Dec 2012 Oct-Dec 2012 Oct-Dec 2012 Oct-Dec 2012 Oct-Dec 2012 Oct-Dec 2012 Oct-Dec 2012 Oct-Dec 2012 Oct-Dec 2012 Oct-Dec 2012 Oct-Dec 2012 Oct-Dec 2012 Oct-Dec 2012 Oct-Dec 2012 Oct-Dec 2012 Oct-Dec 2012

Gross revenue from other gaming activities 2012 Greyhound Racing

MOP205 million

Horse Racing

MOP356 million

Chinese Lottery

MOP6 million

Instant Lottery

MOP0.0014 million

Sports Betting - Football

MOP418 million

Sports Betting - Basketball

MOP111 million

Year-on-year change (%)

-31.0 -19.1 --61.1 15.5 29.1

Latest MOP55 million MOP96 million MOP1 million MOP0.0005 million MOP99 million MOP36 million

Year-on-year change (%)

-5.2 -7.7 -50.0 -58.3 -3.9 89.5

* Figures are rounded to the nearest unit, therefore they may not add exactly to 100 percent

MARCH 2013

Notes Oct-Dec 2012 Oct-Dec 2012 Oct-Dec 2012 Oct-Dec 2012 Oct-Dec 2012 Oct-Dec 2012

Source: Gaming Inspection and Coordination Bureau and industry sources




Head out, eat in Intimate settings are attracting diners from crowded restaurants to private kitchens BY ALEXANDRA LAGES


acau is a small city packed with secrets at every turn. Next time you are wandering the narrow streets around Tap Seac or in the alleyways off Avenida Horta e Costa, the discovery you stumble across could be a private kitchen. It would be pointless knocking on the door and asking for a table. In this business, walk-in clients are not typically welcome. Meals are served only to guests who make a reservation well in advance. For the owners, their kitchens are an informal way of getting round some the difficulties of running a fully-fledged restaurant, including high rents and strict regulations. Private kitchens can be set up in a typical flat or anywhere with cooking facilities. Owners do not spend a penny on promotion. Some pri-


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vate kitchens have their own Facebook pages, but advertising is mostly by word of mouth. Victor’s Kitchen is one of the oldest and most popular private kitchens in Macau. It is tucked away, out of sight, in a shop owned by Victor Lo. It has a single round table for diners next to the kitchen. “People ask me: ‘How come just one table? You are a businessman, so you would like to have more tables, right?’ But, after coming here, if they find this is interesting, they bring their friends next time. That is why business is increasing,” Mr Lo says. Macau welcomed 28 million tourists last year. The flashy new restaurants that are opening all over the city tend to cater to their needs. But residents are often on the look out for establishments offering more privacy, the owners of the city’s


VICTOR’S KITCHEN Victor’s Classic Fine Foods, Rua da Vitoria, no 2G, R/C, Macau Open from 9pm until late Seats up to 20 guests Make a booking on 2830 2828 Owner Victor Lo prepares meals with seasonal ingredients. All ingredients are imported from Europe or Australia and are also available for sale at the shop

private kitchens say. Tourists from Hong Kong, where private kitchens are common, are also beginning to seek them out here. Some private kitchens have been reviewed in glossy food and drink magazines, driving more tourists to them. Owners say business is increasing by between 15 and 50 percent a year. There is a month-long wait for a table at some kitchens.

Time to digest Macau Business was able to locate at least 10 well-established private kitchens for this report. The food each serves varies in style. Some go for home cooking. Others could stand up favourably to the city’s ultra-competitive fine-dining restaurants. All the people running private kitchens that we spoke MARCH 2013



to stressed the privacy they offer diners and highlighted the quality of the ingredients. Mr Lo opened Victor’s Kitchen in 2004. He had run his own delicatessen and wine shop for more than 10 years beforehand, and wanted to cook for friends and customers. He says diners are allowed to linger after their meal, unlike diners in most restaurants that are frantic to increase turnover. “If you drink wine, you have got to spend at least two

hours. If you sit in a restaurant two to three hours drinking and not ordering too much food, the owner may not be happy because he needs customers to come and go as quickly as possible,” Mr Lo says. He took his inspiration from the private kitchens in Hong Kong and from the Portuguese culture of leisurely dining. “When I was young, I used to see the Portuguese families cooking at home for their friends and relatives. They started



he legal status of private kitchens is unclear. The restaurant industry here is strictly regulated, which makes opening a restaurant expensive and time consuming. In contrast, private kitchens operate without government supervision, in a legal limbo, without having to comply with any safety or hygiene regulations. “It is my own home and I can host a private dinner,” says Maria Couto, who runs Maria’s Private Kitchen. The regulatory regime can be confusing. The Macau Government Tourist Office oversees restaurants, but the Civic and Municipal Affairs Bureau MARCH 2013

oversees more humble eating places. A spokesperson for the tourist office told Macau Business that private kitchens in flats, serving only a few diners, would have insufficient facilities to qualify them legally for a restaurant licence. The spokesperson said the tourist office had received no applications for licences for private kitchens in the past few years. But it had received complaints, which it passed on to the Civic and Municipal Affairs Bureau. Victor Lo, the owner of Victor’s Kitchen, says the authorities have inspected his business. “After one year I was getting famous and the Financial Services Bureau sent

their staff to investigate me. Also, the Civic and Municipal Affairs Bureau came here. But I have no price list, no menu and I just have one table,” Mr Lo says. “They cannot charge me. It’s like a family having a dinner together.” The lack of a proper licensing regime for private kitchens concerns Benny and Teresa Fong, who operate the Red House Private Kitchen. “A lot of government people come here for dinner and we take advice from them,” says Mrs Fong. “The law is grey and if we have one table per night only, it is like a private party and not a restaurant.”


MARIA’S PRIVATE KITCHEN Hoi Fu Garden, Rotunda de S. João Bosco, Macau Open 5pm to midnight Seats up to 30 guests Two sittings for dinner each evening Make a booking on 6679 4825 Owner Maria Couto specialises in Macanese cuisine, made with ingredients bought here

some private kitchens on Taipa and Coloane, and I’ve been there many times. It was a wonderful time,” he says. Mr Lo taught himself to cook. He had never worked in a restaurant before opening his private kitchen. “I do it all by myself, even serve the customers and wash the dishes. It’s like the old Portuguese kitchen style. Those old-fashioned housewives used to do everything,” he says.

World of food Maria Couto is comfortable being called old school. Ms Couto claims Macanese heritage, Macau’s distinct Eurasian community, but lived in the United States and Portugal before returning here in 2008. A friend suggested that she open a private kitchen. “I gave it a try because I used to do restaurant business in California and catering in Portugal,” Ms Couto says. She calls her place Maria’s Private Kitchen. It is in her flat. Customers eat in her dining room, surrounded by dozens of pictures of Ms Couto’s relatives. It has not always been this way. She started out preparing lunch boxes and delivering them to customers. “Then people started making reservations for dinner and I didn’t have time to get up in the morning to do the lunch boxes. So I just stopped and continued with this business,” Ms Couto says as she prepares the meal for the next party of diners. Most of the dishes she serves are Portuguese or Macanese. But she also blends in American and Chinese favourites. “It depends on the client’s taste,” she says. Typical of most private kitchens, Maria’s Private Kitchen takes bookings by

phone, then emails a menu to the diners so they can make their choices. The Red House Private Kitchen opened three years ago. It is on the ground floor of a residential building in the Avenida Horta e Costa area. The host is Benny Fong, who cooks Japanese and Western cuisine. He often likes to mix the two styles but his cardinal rule is to give the dishes a home-made flavour. The Red House Private Kitchen’s decor is European, chic and trendy. It has a dining area and a chill-out area with a mahjong table, karaoke machine and video games.

Low-pressure cooker Mr Fong worked in several hotel restaurants in Hong Kong and Macau before opening his business in 2010. “Three years ago Macau was a very busy place and there was no sense of privacy in restaurants or a place for families,” says Mr Fong’s wife, Teresa. “Here, kids can be in the living room, playing Xbox, Wii or karaoke, while adults can have a sense of privacy. It’s kind of a house party,” she says. The Red House Private Kitchen uses high-quality ingredients, most imported from Australia or Europe. The only ingredient bought here is seafood. Private kitchens here typically have up to three tables and can seat, at most, two parties of diners a night. Their capacities vary, the biggest can seat 30 guests at a sitting. Some establishments are ‘one-man bands’. Others, like Maria’s Private Kitchen and the Red House Private Kitchen, have more than one person running the show. MARCH 2013



The price per head for a meal with multiple courses is between about MOP250 (US$31.25) and MOP1,000 or more, including wine. Mrs Fong says meals are inexpensive. “Some steaks in a hotel restaurant cost MOP600 alone. But here you will have the whole meal for the same price.” Business is growing apace and more and more private kitchens are being set up. Mr Lo says more new casinos and hotels means more international chefs coming to Macau, bringing new techniques that they pass on to young chefs here. Some young chefs are opening their own private kitchens, away from the pressure of working in the hospitality industry.

Private income “There are a lot of similar private kitchens in Macau now,” Mrs Fong says. “In the past three years, eight or nine people have taken MARCH 2013


nstead of heading out to a private kitchen, what if the kitchen came to you? That is the thinking behind Portuguese chef André Correia’s private catering service. Customers phone Mr Correia, place an order, and he takes care of everything, including shopping for the ingredients. He started the venture less than six months ago, based on the strength of his experience of the catering business in Portugal. “I realised there is a market here and decided to open the company,” he says. Mr Correia says business is growing. He arranges, on average, five dinners a month. The price depends on the menu and how many he caters for it. A dinner for four is between MOP1,000 (US$125) and MOP1,500, excluding the cost of the ingredients.


up the same concept. Competition is growing but, at the same time, our name is here and people still come because our food is good.” The Red House Private Kitchen has become so popular that the Fong’s intend to open a shop in May to sell their sauces. Ms Couto serves up to five sittings a week at Maria’s Private Kitchen. Depending on what she cooks, she can make about MOP10,000 (US$1,250) a week. “The development of the business really took me by surprise, especially with the interviews with magazines and television stations. Business just shot up and I got new clients,” she says. The Red House Private Kitchen turned over MOP170,000 in January. It serves an average of 20 sittings each month. At Victor’s Kitchen, business is growing at a steady rate of 15 percent a year. Mr Lo serves an average of six sittings each week, bringing in a net profit of about MOP30,000 a month.

RED HOUSE PRIVATE KITCHEN 109-C B, Avenida Conselheiro Ferreira de Almeida, Macau Open from 5pm to 11:30pm Seats up to 30 guests Make a booking on 6633 6033 Chef Benny Fong serves Japanese and French food, prepared with ingredients such as Wagyu beef from Australia and white pearl oysters from France

MARCH 2013



Love and money The hospitality industry wants to create the ultimate wedding destination, combining casino-resort know-how and the city’s romantic setting BY LUCIANA LEITÃO

growing number of casino resorts are betting on the wedding business as a way to diversify non-gaming revenue. Where once the hospitality industry put on weddings mainly for Macau couples, it is now trying to turn the city into a leading option for couples from elsewhere seeking a novel place to tie the knot. And it is working: an increasing number of couples from the mainland, Hong Kong, India, Thailand and Taiwan are choosing to say “I do” in Macau. The industry’s efforts are assisted by subsidies that the Macau Government Tourist Office has offered since Novem-


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ber. The tourist office gives out grants of up to MOP300 (US$37.50) for every wedding guest from abroad, depending on how much they consume. To be eligible for a subsidy, the wedding must have at least 50 non-resident guests that stay for two consecutive nights in a hotel. The domestic market for weddings is also lucrative business. The number of marriages recorded has increased steadily since 2006. Last year, 3,783 weddings took place, a 6.7-percent increase over 2011. The city’s casino resorts are getting creative too, with new ideas for tapping into wedding market. Galaxy Macau,

run by Galaxy Entertainment Group Ltd, opened a wedding sales centre last month and launched a glossy magazine. Both are targeting the domestic market. “We’ll be able to take prospective couples and show them different weddings, all from this centre,” says Paul Town, Galaxy Macau’s vice-president for hotel operations. The casino resort is also considering changing its menus and redeveloping some of its facilities to further tap into market for weddings.

And in health Nearly 100 weddings took place at Galaxy Macau last year. “We’re looking to


build the number. One hundred a year sounds a lot, but across this facility that’s not full capacity. We can grow this to 150 weddings per year,” Mr Town says. “We want to capture more of the demand that is already there.” Only one in 10 weddings at Galaxy Macau is of a couple from abroad. Mr Town says the casino resort is trying hard to make itself better known as a place to get married, particularly in India. It is expecting five to 10 Indian weddings this year. “Indian weddings have a lot of value for us, because for three days they utilise the entire property and the banquet

facilities. We had our first major Indian wedding last August and we did about 3,000 room nights out of that,” he says. Couples from Taiwan, Thailand, Singapore and Malaysia have also wed at Galaxy Macau. Mr Town says Macau’s main advantage over its competitors in the international market for weddings is its casino resorts. Mr Town explains the casino resorts allow couples to plan different kinds of weddings, and puts Galaxy Macau forward as an example. “We have beautiful gardens. People want a very spectacular wedding and they can do it here in many different pockets of the property.”

Weddings for couples from abroad often boost business for casino resorts in every way. Apart from the revenue brought in by the weddings themselves and all their elements, wedding guests tend to stay in the hotels, eat in the restaurants, watch the shows in the theatres, shop in the shops – and gamble in the casinos.

Colourful backdrop This is one reason why the Venetian Macao is boosting its efforts to win a bigger slice of the market. Vice-president of convention and exhibition operations, Gene Capuano, says the Sands China

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Ltd casino resort is aiming to attract couples, their families and friends, and, of course, wedding planners. The Venetian Macao holds an average of 30 to 60 weddings a year and business is growing steadily. The casino has already hosted weddings for couples from Macau, and has tickled the interest of couples from India, Japan and Taiwan. Mr Capuano says Macau has also become a hot spot in this part of the world for pre-wedding photographs. Asian couples come here to be photographed against the backdrop of the city’s historical buildings and casino resorts. Macau has more than 20 wedding photography studios. The Macau Trade and Investment Promotion Institute estimates that some can cater for up to 200 subjects a year, one-quarter of them from abroad. A basic pre-wedding photography package costs about HK$8,000 (US$1,031). The Four Seasons hosted 50 percent more weddings last year than in 2011, says the hotel’s assistant director of catering, Myra Ao, without offering an exact number. Most of the couples who marry there are from Macau. Only about 10 percent are from elsewhere, and most of those are from Hong Kong, Japan or the Philippines. Ms Ao says the Four Seasons intends to get more wedding business. Since 2011 the hotel has had what it calls MARCH 2013

a “wedding university programme”, which includes an intensive two-hour course meant to teach couples how to plan their wedding.

To the future Grand Hyatt Macau general manager Paul Kwok Sai Kit says weddings brought in more than 20 percent of the hotel’s revenue last year. “In 2012, the highest revenue received for one wedding was MOP1.7 million (95 tables) in December,” he says. The hotel put on 10 percent more weddings last year than in 2011, but Mr Kwok does not say to how many exactly.

Weddings for couples from abroad often boost business for casino resorts in every way. Apart from the revenue brought in by the weddings themselves and all their elements, wedding guests tend to stay in the hotels and gamble in the casinos

The Grand Hyatt’s wedding business is growing fast. The number of bookings made in January and February alone, for weddings to be held this year, accounted for an increase of over 50 percent in comparison with all the weddings it held last year. Bookings have been early this year too. Typically about 35 percent of bookings are made less than four months before the wedding, Mr Kwok says. Most of the couples who wed at Grand Hyatt Macau are from Greater China. The hotel also hosts wedding fairs to show couples what it has to offer. It held its most recent fair last May and intends to hold another before the end of next month. The Sofitel Macau at Ponte 16 will hold a wedding fair later this month. The hotel specialises in small and mediumsize weddings, with up to 22 banquet tables. Most of the couples married there are from Macau. The Westin Resort Macau held a wedding fair last month. The resort put on more than 40 weddings last year after holding 30 in 2011. Most of the weddings were for Macau couples but director of sales and marketing Brian Cheng says it has also welcomed “some high-spending guests travelling from overseas”. Like many in the hospitality industry, he raises his glass to many more future brides and grooms. The more the merrier.



Tourist Office head says over crowding at Barrier Gate checkpoint was a ‘one-off’ event The head of the Macau Government Tourist Office, Maria Helena de Senna Fernandes, has reaffirmed that Macau has not yet reached its limit in terms of tourist capacity. Ms Senna Fernandes downplayed the chaotic scenes at the Barrier Gate checkpoint, which was overcrowded during the Lunar New Year holidays, with people reporting to have waited for several hours to cross the border. The city “is particularly packed during Lunar New Year but the situation on normal days is different,” Ms Senna Fernandes told reporters. “We can not simply use this holiday season to evaluate the overall tourism capacity of Macau.” Ms Senna Fernandes vowed that the government would learn from this experience in order to improve arrangements in future peak seasons.


Macau had as many as 11 hotels under construction at the end of last year, according to a statement released by the government. Of those, eight were located on the peninsula and the remaining three in Cotai. There were another 25 projects in the pipeline, waiting for approval. Overall, the 36 properties were expected to add up to 25,200 rooms to Macau’s hospitality sector, almost doubling the supply.


In 2012, the number of hotel guests increased by 10.8 percent year-on-year to 9.5 million, shows official data. That is a new record, breaking the all-time high set just one year earlier. Last year, the average occupancy rate stood at 83.1 percent, down by 1.1 percentage points. There were 100 hotels and guesthouses operating in Macau at December-end, providing 26,069 rooms, an increase of 16.6 percent year-on-year. Of those rooms, 63.8 percent were rated five-star.


Maria Helena de Senna Fernandes

The government’s Policy Research Office announced last month that it will launch a study on the impact of the individual visitor scheme in Macau. The office noted that the scheme has contributed significantly to Macau’s development, but admitted it has also had some negative impact on the population’s daily life. The policy allows Chinese living in eligible areas of the mainland to apply for a travel permit to visit Macau individually instead of having to be part of a tour group. Last year, 7.1 million mainland tourists visited Macau under this scheme.

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Tourism statistics


Visitor arrivals Year-on-year change (%)

2012 Total - Same-day visitors - Overnight visitors Average length of stay

28,082,292 14,504,994 13,577,298 1.0 day

Year-on-year change (%)


2,312,321 1,195,450 1,116,871 1.0 days

0.3 -3.8 5.0 --

-6.1 -12.8 2.4 -0.1 days

Notes Jan 2013 Jan 2013 Jan 2013 Jan 2013

Visitors by place of residence 2012 Asia - Mainland - Guangdong - Fujian - Zhejiang - Hunan - Beijing - Shanghai - Tianjin - Chongqing Individual visit scheme - Hong Kong - Taiwan - Japan - South Korea - Others America Europe Oceania Others

27,356,924 16,902,499 7,929,668 811,288 620,196 587,904 326,469 505,280 127,635 194,420 7,131,904 7,081,153 1,072,052 395,989 444,773 1,460,458 306,521 262,692 129,165 26,990

Year-on-year change (%)


0.3 4.6

2,250,806 1,473,785 683,776 67,180 41,448 46,724 33,702 51,033 10,653 14,900

-3.3 -13.0 7.7 10.2 3.7 7.2 26.9 12.9 8.2 -6.6 -11.8 0.0 11.5 -4.6 -1.3 4.3 0.9 8.6

Year-on-year change (%)

616,066 509,826 76,841 26,904 52,668 110,782 23,248 22,352 13,852 2,063

-6.1 -1.4 -12.1 1.8 -19.6 13.3 2.0 1.8 -2.9 -7.1 -13.4 -20.1 -10.2 -15.0 14.1 9.1 -7.2 3.6 -8.8 1.5

Notes Jan 2013 Jan 2013 Jan 2013 Jan 2013 Jan 2013 Jan 2013 Jan 2013 Jan 2013 Jan 2013 Jan 2013 Jan 2013 Jan 2013 Jan 2013 Jan 2013 Jan 2013 Jan 2013 Jan 2013 Jan 2013 Jan 2013 Jan 2013

Hotels Hotel and guest-house rooms Hotel guests Hotel average occupancy rate Average length of stay

11.3 22,356 11.0 8,612,127 4.3 84.1 1.53 nights -0.01

percentage points nights


Year-on-year change (%)

26,069 16.6 9,541,397 10.8 percentage 83.1 -1.0 point 1.40 nights -0.13 nights

Notes Dec 2012 Jan-Dec 2012 Jan-Dec 2012 Jan-Dec 2012

Visitor expenditure 2011 Total spending (excluding gaming) MOP 45.3 billion - Non-shopping spending - Shopping spending Per-capita spending

MARCH 2013

MOP 22.9 billion

22.4 billion MOP 1,619 MOP

Year-on-year change (%)

20 23 16 7

Latest MOP 14.6 billion MOP 7.5 billion MOP 7.1 billion MOP 2,019

Year-on-year change (%)

9 15 3 11

Notes Oct-Dec 2012 Oct-Dec 2012 Oct-Dec 2012 Oct-Dec 2012

Source: Statistics and Census Service

Year-on-year change (%)



Call to arms



acau held another big international conference on tourism recently: the 15th World Federation of Tourist Guide Associations International Convention. For those hoping for eye-opening ideas for the city, this was yet another disappointing moment. Instead, the city’s officials offered the same old recycled speeches and tired old words. Catchphrases such as “Macau needs an improved language environment to welcome tourists from different backgrounds” and “tourism is growing in influence but faces many challenges” were trotted out. Some participants mounted the podium to remind us, again, that Macau’s tourism industry needs to develop young talent. And others had moments of heart-breaking honesty in admitting that players in the sector knew a lot of changes must be made to turn the city into an international tourist destination. They have consistently failed to make them. Let us stop beating around the bush. If there is a genuine desire for Macau to become an international tourist destination, then it is time to put aside political correctness, roll up those sleeves and get cracking. The Macau Government Tourist Office needs fresh ideas. It needs innovative projects and people capable of executing them. This is the moment for change. The new director of the tourist office, Maria Helena de Senna Fernandes, has replaced João Manuel Costa Antunes, who had been in charge for 24 years. Apart from wishing her all the best in her endeavour, I hope to see real change. Above all, I hope to see an open-door policy, fostering an environment of collaboration with third parties.

to it, the plan could be ready in less than two years, before the next wave of openings of casino resorts in Cotai. The master plan should focus not only on Greater China, despite it being Macau’s main source of visitors. Visitors from other markets rate their holiday experiences here poorly. Many are unlikely to return because there is little else to entertain them apart from gambling. Unlike mainlanders, who have very few options other than Macau if they wish to gamble, the broader tourism market is not lured here principally by casinos. For many tourists, there are cheaper gambling destinations closer to home and – this is important – where they enjoy better service, even though the facilities may be older and less glamorous.

Bread and butter

Advantage Macau

Making Macau a top tourism destination is an inclusive task in which everyone should be involved. That includes taxi and bus drivers, police officers, shop assistants and, of course, all in the hospitality industry. Small changes often have the greatest returns. Having a public that smiles at visitors and greets them would mean a huge leap forward for the city as a tourist destination. Unfortunately, there is a need for an in-depth awareness campaign among residents, to cultivate courtesy towards visitors. The good news is that the tourist office is reviving the courtesy campaign it rolled out some years ago and it expects one-fifth of the public to take part. Let us hope it works. For that to happen, prejudices against tourists must end, especially prejudices against tourists from the mainland. Despite any cultural differences, the public must understand that tourists are Macau’s bread and butter, and that the money they spend here has been the fuel for the city’s unparalleled boom since 1999. The entire population should be made aware of the importance of tourism to the city’s economy. If a prosperous Macau is to have widespread support, a better tourism industry is required. Smiles should be the icing on the cake. A bigger master plan, outlining how Macau will become a top destination for international tourists, is also needed. If officials put their minds

Compared to service standards in neighbouring countries, service here is disappointing. Service levels are nowhere near as good as in Southeast Asia’s tourist magnets, such as Thailand. Macau’s poor performance is the result of years of too much talk about the need to improve the skills of the labour force and too little action. Officials here have talked the talk over and over again but they have yet to walk the walk. Something must be done urgently. It is not the time to look back and point the finger. This is the time to look ahead and act fast. I hope the new leadership at the Macau Government Tourist Office will be a start of that process. Let us not be naïve: Macau’s privileged position as the only place in China where casino gambling is allowed gives the city a big advantage. Another advantage is the crop of tourist resorts that has sprouted up here in recent years, giving it the best possible facilities. But for the city to become a destination for international tourists and remain one in the longer term, it must match these advantages with greater friendliness towards visitors and better service – and do so fast. Otherwise, once Macau loses its novelty value, it will be too late for the city to catch up with the competition elsewhere in Asia – destinations that are increasingly adding gambling to their entertainment portfolio. MARCH 2013



Plugging e-leaks Despite the dangers, most companies have a laissez-faire attitude to monitoring corporate email accounts BY SARA SILVA MOREIRA

mail is the standard for communication in the corporate world. It is used for everything from day-to-day operations to complex negotiations, with messages often containing crucial information. Email is simple to use, and a quick and handy way to reach people in several different places simultaneously. However, misuse can just as quickly betray a company’s secrets or tarnish its reputation. It is much easier to circulate emails than paper memos or documents. Even once deleted, emails can be recovered much more easily than shredded documents. But companies in Macau tend to be oblivious of the dangers and neglect to set rules for its use. The Macau Information Security Survey for last year found that only 33 percent of the bodies polled had “mostly or fully” imple-


MARCH 2013

mented a policy on the security of electronic information. The same survey in 2011 that found 38 percent had done so, suggesting that the companies paying attention to email security are a declining minority. The annual survey polls more than 80 bodies ranging from government departments and gaming companies, to small or medium enterprises. It is commissioned jointly by the Macau New Technologies Incubator Centre, the Information Systems Audit and Control Association, the Macau Computer Emergency Response Team Coordination Centre and the government. University of Macau management lecturer Gordon Kerr says many companies have guidelines for using email, but only a few have formal written rules and even fewer formally monitor staff, even though electronic information security

policies have been common worldwide for several years.

Swept away The latest Macau Information Security Survey found that one of the main reasons companies give for failing to roll out information security policies, is that they are too small to warrant spending time and resources on. “Large organisations usually pay more attention to these issues because they understand the hidden risks of the Internet and the threshold that the email system may build on their confidential database,” says Brenda Chan Wing Han, assistant professor of business information systems at the University of Macau. Several companies here have experienced some form of leak or misuse of corporate information. She says many “prefer not to disclose security breaches

95 arise from the misuse of corporate email accounts for actionable or criminal purposes, such as circulating child pornography. Protocols make it clear to employees that their employer reserves the right to monitor emails sent and received using corporate accounts.

Peeking policy

in order to keep their reputation and image intact”. More than half of the companies polled in the latest Macau Information Security Survey had experienced between one and five security incidents in the preceding 12 months. Most chose to deal with such incidents internally, partly to protect their public image and to avoid legal issues, but mainly because they could not think of anybody else they might complain to. Setting rules on the use of email is important for several reasons. They limit the sort of information that can be put in an email, and dictate whether information should be encrypted or sent through special channels. The protocols help reduce the risk of secrets leaking to the public. Setting email rules is also the best way to preclude legal issues that may

“Communication channels such as email, have content and attachments that may include information that needs to be controlled not only for business integrity, but for the legal and moral integrity of the organisation,” says Geoffroy Thonon, an expert in information systems security. Email rules should cover the acceptable uses of email, have clauses meant to counter any threats to security and anticipate the ways that the rules could be broken. But there is no one template suitable for all companies. “Different companies operate at different risk levels. One organisation may feel it is perfectly fine to operate in a [certain] manner, but another company may find it too liberal and too risky,” Mr Thonon says. Rita Martins, a partner at DSL Lawyers with experience in matters of personal data protection, says emails should be monitored appropriately. Ms Martins says intrusion into private life should be avoided. “Enterprises who trade in information and sensitive data have legal and fiduciary responsibilities, for example financial and security services, and are required to adopt more robust procedures,” says Mr Kerr. “However, all organisations have a responsibility to protect the legal and moral rights of parties involved.”

Message sent To meet this obligation and ensure its information security policy is legal, a company should obtain the consent of all its employees to monitor their activity on the Internet and be open about the monitoring methods it uses, Ms Martins says. “The lack of a solid policy on email usage set by the employer can also lead to the creation of loopholes in their communications network that may facilitate intrusion by third parties on the system, the possible contamination of internal files and/or systems with viruses or corruptive files,” she says. Mr Kerr says the government is already setting an example to the private


ands China Ltd was embroiled in a scandal with international ramifications last year after the Wall Street Journal reported that one of its correspondents had seen emails that contained details of requests for payments made in 2009 by “someone high-ranking in Beijing”. In return for money, the newspaper reported the official said he would be able to help the company obtain government permission to sell flats at the Four Seasons apartment hotel in Cotai. The scandal broke in June and the chain of consequences included an inquiry by the United States regulator into Sands China’s parent company, Nevada-based Las Vegas Sands Corp. One of the central pieces of information in the report was an email exchange between Sands China legal adviser Leonel Alves and the company’s former chief executive Steve Jacobs. The exchange was afterwards made available online by ProPublica, a non-profit U.S.-based newsroom. Information security experts say the scandal should be a wake-up call for senior managers still neglectful of the importance of corporate rules guiding the use of email. They say protocols are especially important for communicating sensitive matters, and to give managers full control of any electronic messages sent or received by dismissed employees. Most casino managers monitor their staff closely as a matter of principle. “What is surprising in the Sands China case is that the same principles were obviously not applied to the control of electronic communications such as email,” says Gordon Kerr, a lecturer in management at the University of Macau. The experts say it is difficult to ensure that top managers follow the rules they set for their employees, since there is seldom strong oversight of their behaviour. Top-level managers have the greatest obligation to obey the rules, not only because they are more likely to have access to privileged information, but also because they are frequently the face and the voice of their companies.

MARCH 2013



sector. “Most government agencies, for reasons of public accountability and transparency, have a mature or welldeveloped bureaucracy to help ensure that communication protocols, including email use, are observed,” he says. Having rules does not mean they will be obeyed. The larger the company, the harder it is to control every employee’s behaviour and ensure they abide by the rules. “Education, and assimilation of the policies by the staff, is paramount for any protective tools to work,” Mr Thonon says. It is unwise for a company to neglect to explain its email rules to its staff. “It is as if the organisation deems these rules unimportant,” he says. Ms Martins says companies should let their staff know exactly what personal data will be collected and the consequences of breaking the rules, “so that the employees are able to understand and cooperate”. If corporate protocols are broken, she offers this advice: “Draw attention to the infringers and apply reasonable penalties, give internal publicity to the

MARCH 2013

Ensuring information security is made more difficult by the use of private email accounts for work relevant cases and take the opportunity to organise clarification sessions.” Managers should explain the information security policy to new recruits and remind employees about it every year to make sure they do not forget it or become careless. “Continuous communication and training is always preferable to applying penalties after the deed and the damage has been done,” the University of Macau’s Ms Chan says.

Common sense The latest Information Security Survey found companies invest little in on-thejob training. Just 13 percent of the bodies polled had “mostly or fully” given all staff instruction in information security in the preceding 12 months.

“With a few exceptions, in Macau, little time or money is spent on providing formal training related to email use or indeed to other business processes,” Mr Kerr says. Many family-run businesses often rely on highly personal and informal management and control, he says. Ensuring information security is made more difficult by the use of private email accounts for work, and the use of social media during working hours. The use of private laptops, tablets and smartphones in the office with access to corporate information and applications, makes information and systems less secure. The experts say the rapid development of technology often takes employees into uncharted territory and they should use common sense. Mr Thonon has a final observation that employers should heed. “Taking care of the staff’s wellbeing may be reciprocated by staff that will take care of the organisation’s wellbeing.” After all, by the time a company realises that valuable or damaging information has been leaked, it may have already fallen into the wrong hands.




he economics profession has not had a good crisis. Queen Elizabeth II may have expected too much when she famously asked why economists had failed to foresee the disaster, but there is a widespread sense that much of their research turned out to be irrelevant. Worse still, much of the advice proffered by economists was of little use to policymakers seeking to limit the economic and financial fallout. Will future generations do better? One of the more interesting exercises in which I engaged at the recent World Economic Forum in Davos was a collective effort to imagine the contents of a ‘Principles of Economics’ textbook in 2033. There was no dearth of ideas and topics, participants argued, that existing textbooks neglected, and that should receive more attention two decades from now. Economists working on the border of economics and psychology, for example, argued that behavioural finance, in which human foibles are brought to bear to explain the failure of the so-called efficient markets hypothesis, would be given more prominence. Economic historians, meanwhile, argued that future textbooks would embed analysis of recent experience in the longer-term historical record. Among other things, this would allow economists-in-training to take the evolution of economic institutions more seriously. Development economists, for their part, argued that much more attention would be paid to randomised trials and field experiments. Applied econometricians pointed to the growing importance of “big data” and to the likelihood that large data sets will have significantly enhanced our understanding of economic decision-making by 2033.

Revolutionary steps Overall, however, the picture was one in which the economics of 2033 differed only marginally from the economics of today. A textbook two decades from now might be more sophisticated than this year’s edition, fully integrating contributions that today constitute the frontiers of economic research. But it would not differ fundamentally in structure or approach from today’s economics. The consensus, in other words, seemed to be that there would be nothing in the next 20 years as transformative as Alfred Marshall’s synthesis of the 1890s or the revolution initiated by John Maynard Keynes in the 1930s. In contrast to the economics of those years, economics today is a mature, well-established discipline. And, like any mature discipline, it advances incrementally rather than in revolutionary steps. This presumption is almost certainly mistaken. It reflects the same error made by scholars of technology who argue that all of the radical breakthroughs have already been made. As this view is sometimes put, the next 20 years will see no breakthrough as revolutionary as the steam engine or the transistor. Technological progress will be incremental rather than revolutionary. Indeed, insofar as the increments are small, the result is likely to be slower productivity growth and a ‘Great Stagnation’. In fact, the history of technology has repeatedly refuted this pessimistic view. We can’t say what the next radical innovation

will be, but centuries of human experience suggest that there will be (at least) one. Similarly, we can’t say what the next revolution in economic analysis will be, but more than a century of modern economic thinking suggests that there will be one. All of this suggests that the economics textbook of 2033 will look very different from the economics textbook of today. We just can’t say how.

Paradigm shift Indeed, one might question the very premise that, two decades from now, there will be textbooks as we know them. Today, introductory economics is taught using a textbook in which an eminent professor authoritatively bestows the conventional wisdom on his or her (typically, his) students. Knowledge, as encapsulated in the textbook and interpreted by the professor, is delivered from above. This, of course, is also how newspapers traditionally delivered the news. Editors and publishers assembled and collated stories, and the newspaper that they produced was then delivered to the subscriber’s doorstep. But the last decade has seen a veritable revolution in the news business. News is now assembled and disseminated via Web sites, wikis and the comment sections of blogs. News, in other words, is increasingly delivered from the bottom up. Rather than relying on editors, everyone is becoming their own news curator. Something similar is likely to happen to textbooks, especially in economics, where everyone has an opinion and first-hand experience with the subject. Textbooks will be like wikis, with faculty adopters and students modifying text and contributing content. There still may be a role for the author as gatekeeper; but the textbook will know longer be the font of wisdom and its writer will no longer control the table of contents. The outcome will be messy. But the economics profession will also become more diverse and dynamic – and our children’s economics will be healthier as a result. MARCH 2013


Human Resources

Tested and tired Little understood and rapidly increasing, researchers say work-related stress is wreaking havoc among the workforce BY SARA SILVA MOREIRA

new lunar year has begun but it is business as usual at work, with stress levels running high. Does this ring a bell? Macau was, until recently, regarded as the more laid-back sister of hectic Hong Kong. However, in a handful of years, it has become a frenetic city, working round the clock. Experts say the rapid pace of change has taken a toll on the workforce, with the typical worker dealing with high levels of stress. A manpower shortage exacerbates the problem and often puts pressure on workers to do more and do it faster. Other factors only loosely related to their jobs, such as inflation and the cost of housing, are additional stressors. There is little in the way of data available about workplace stress. A survey by the Labour Affairs Bureau and Public Administration and Civil Service


MARCH 2013

Bureau in 2007 found that 48.9 percent of respondents felt they were stressed and 11.9 percent felt they were extremely stressed. There has been no other similar survey since, but experts say the stress levels of the labour force have risen in recent years, particularly in more highpressure industries such as gaming. A survey by the Macau New Vision Association in 2011 found that 48.8 percent of respondents felt they suffered “some” stress and 22.5 percent felt they suffered “high levels” of stress. Nine percent felt they suffered “a bit” of stress and only 19.5 percent felt they were “not stressed at all”. Asked about the main source of the stress they suffered, 26.3 percent of respondents said it was work, 13.7 percent said it was family and 13 percent said it was money. The survey found that those

aged between 35 and 44 years suffered most. The increase in stress follows a global pattern. Research last year by facilities management and business support services company Regus Plc found that almost half of all white-collar workers worldwide had experienced an increase in stress in the preceding 12 months.

Bosses blamed The research found that in the mainland, 75 percent of workers thought their stress levels had increased in the preceding 12 months, well above the global average of 48 percent. In Hong Kong, 55 percent of workers thought their stress levels had increased in the past 12 months. “Macau workers’ stress levels are probably somewhere in between the mainland and Hong Kong’s average,” says Jon Walsh, Regus’s public relations


and communications manager for the Asia-Pacific region. The Regus survey says the biggest cause of stress is work, followed by personal finances and customers. In large businesses, management is the second-biggest cause of stress. Some of the more stressful industries are manufacturing, banking and finance, information and communications technology, consulting and retailing. For Shelby Sio, a senior customer service officer for a food importer, work is the main source of stress. “The nature of my work is dealing with customers, so stress is part of the job description,” says Ms Sio. “With time and experience, I’ve learnt to cope better with it.” An e-commerce officer at a big company, who asked not to be identified, says she feels increasingly stressed and blames management. “As the company

pushes for more profit, our superiors demand more and more from us without giving us anything in return, such as stress management courses,” she says. Another cause of stress is the soaring cost of housing, whether it is housing to buy or housing to rent, says Kim Kuok Oi Mei, a lecturer in management at the University of Macau. Yet another is the swarms of visitors. “Locals find it difficult to relax outside of work because wherever they go they find crowds of tourists,” Ms Kuok says. University of Macau assistant professor in psychology Christine Lau Ching says: “The ability to cope successfully with stress is frequently held to be the key to human happiness.” A little stress can be positive, improving productivity, but once a limit is crossed, the effects can be highly damaging. “Stress is thought to be a major cause of psychological distress and physical illness,” Ms Lau says. Stress can damage health in a number of ways. Lack of motivation, irritability, anxiety, sleep disorders, diabetes, obesity and coronary disease have all been linked to stress. It may eventually result in burnout. “Whenever I feel very stressed, my skin breaks out. I feel more fatigued, less motivated, which, in turn, decreases my productivity,” says the e-commerce officer. Experts warn that stress at work can increase employee turnover. It can also lead to more absenteeism and more days lost to illness caused or made worse by stress. Literature on stress commonly emphasises that managers should be aware that each employee deals with stress differently. It says understanding the differences and finding the best way to help each employee overcome the problem prevents the loss of valuable manpower.

Older and wiser For employees, learning to cope with stress is crucial for the prevention of its adverse consequences. “Some people would prefer a cognitive approach to problem solving. Others may utilise friends or social support groups as a method of coping, or opt for behavioural coping mechanisms, such as listening to relaxing music and breathing techniques,” says Ms Lau. Ms Kuok says stress can be alleviated by physical exercise, hobbies and taking part in new activities, or

through drug therapies. Stress and age seems to be correlated: the younger an employee, the more likely it is they may suffer from stress. More seasoned employees usually already know how to cope with stress. They are also more likely to be married and have children, which can reduce stress. The Regus research found 63 percent of all workers surveyed thought flexible working conditions are the best way to reduce stress. Flexible working conditions include not only flexible working hours, but also working away from the workplace. “Employees feel they can better manage their lives and they feel more satisfied in their private lives,” says Ms Kuok. “Flexibility depends on the job nature and for some, a waiter or a teacher for example, this will never be an option.” To prevent stress from rising to risky levels, she tells companies to assign employees to tasks according to their abilities and knowledge, provide relaxation facilities, keep an eye on performance and health, and accurately evaluate and reward the work of staff.

Policeman’s lot Experts say the costs to a business of over-stressed employees – less motivation, lower productivity, days lost because of illness, absenteeism and the like – can outweigh the costs of preventive measures. They add that managers should make themselves available to discuss the options with employees that are suffering from stress. The government says it has taken steps to counter work-related stress. Since 2006, the Labour Affairs Bureau has offered free courses on stress management. The bureau has also held seminars about coping with stress in the food, hospitality, transport and health industries. The Public Security Police force offers psychological support to officers. In 2011, it had 95 requests for psychological support, 19 percent of them to do with stress. Ms Kuok says the government should look at the broader picture and make efforts to counter causes of stress unrelated to work, such as housing costs. More resources should be put into workplace education, and into the prevention and treatment of the ailments that stress causes or exacerbates. MARCH 2013




hina’s economic growth model is running out of steam. According to the World Bank, in the 30 years after Deng Xiaoping initiated economic reform, investment accounted for six to eight percentage points of the country’s 9.8 percent average annual economic growth rate, while improved productivity contributed only two to four percentage points. Faced with sluggish external demand, weak domestic consumption, rising labour costs and low productivity, China depends excessively on investment to drive economic growth. Although this model is unsustainable, China’s over-reliance on investment is showing no signs of waning. In fact, as China undergoes a process of capital deepening (increasing capital per worker), even more investment is needed to contribute to higher output and technological advancement in various sectors. In 1995-2010, when China’s average annual gross domestic product growth rate was 9.9 percent, fixed asset investment (investment in infrastructure and real estate projects) increased by a factor of 11.2, rising at an average annual rate of 20 percent. Total fixed asset investment amounted to 41.6 percent of GDP, on average, peaking at 67 percent of GDP in 2009, a level that would be unthinkable in most developed countries. Also driving China’s high investment rate is the declining efficiency of investment capital, reflected in China’s high incremental capital-output ratio (annual investment divided by annual output growth). In 1978-2008 – the age of economic reform and opening – China’s average incremental capitaloutput ratio was a relatively low 2.6, reaching its peak between the mid-1980s and the early 1990s. Since then, China’s incremental capital-output ratio has more than doubled, demonstrating the need for significantly more investment to generate an additional unit of output.

Running on credit

As the accumulation and deepening of capital accelerate growth, they perpetuate the low-efficiency investment pattern and stimulate overproduction. When production exceeds domestic demand, producers are compelled to expand exports, creating an export-oriented, capital-intensive industrial structure that supports rapid economic growth. But if external demand lags, products accumulate, prices decline, and profits fall. While credit expansion can offset this to some degree, increased production based on credit expansion inevitably leads to large-scale financial risk. Thus, a combination of investment, debt and credit is forming a self-reinforcing risky cycle that encourages overproduction. In the wake of the global financial crisis, Chinese banks were instructed to extend credit and invest in large-scale infrastructure projects as part of the country’s massive monetary and fiscal stimulus. As a result, China’s credit/GDP ratio rose by 40 percentage points in 2008-2011, with most of the lending directed toward large-scale investment by state-owned enterprises. In the last two years, bank credit has become the main source of capital in China – a risky situation, given the low quality and inadequacy of bank capital. Meanwhile, strong currency demand has led China’s M2 (broad money supply) to increase to 180 percent of GDP – the highest level in the world. The massive wall of liquidity that has resulted has triggered inflation, sent real estate prices soaring and fuelled a sharp rise in debt. MARCH 2013

Given that it is in local governments’ interest to maintain high economic growth rates, many are borrowing to fund large-scale investment in real estate and infrastructure projects. The active fiscal policy adopted during the financial crisis enabled the rapid expansion of local official financing platforms (state-backed investment companies through which local governments raise money for fixed-asset investment), from 2,000 in 2008 to more than 10,000 in 2012. But, as localgovernment debt grows, Chinese banks have begun to regard real estate and local financing platforms as a major credit risk.

Fragile system

Likewise, with key industries facing overproduction and slowing profit growth, firms’ deficits are growing – and their debts are becoming increasingly risky. Indeed, the proportion of deficit spending among enterprises is on the rise and the accountsreceivable turnover rate is falling. By the third quarter of 2012, industrial enterprises’ receivables totalled RMB8.2 trillion (MOP10.5 trillion), up 16.5 percent year-on-year, forcing many to borrow even more to fill the gap, which has driven up debt further. According to research firm GK Dragonomics, corporate debt amounted to 108 percent of GDP in 2011 and reached a 15-year high of 122 percent of GDP in 2012. Many heavily indebted companies are state-owned enterprises and most of the new projects that they initiate are “super-projects,” with the return on investment taking longer than creditor banks expect. Indeed, some highly indebted firms’ capital chains may well rupture in the next two years, when they reach their peak period for debt repayment. As a result, China’s financial system is becoming increasingly fragile. The expansion of infrastructure investment – which, according to some reports, exceeds RMB50 trillion, including highway and high-speed railway construction – will lead to the expansion of banks’ balance sheets. The investment loans and massive debts among local financing platforms, together with the off-record credit channelled through the “shadow” banking system, are increasing the risk that nonperforming loans will soon shake the banking sector. To reach the next stage of economic development, China needs a new growth model. Reliance on investment will not enable China to achieve stable, long-term growth and prosperity; on the contrary it may well inflict serious long-term damage on economic performance.

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27th Wedding, Banquet, Beauty & Jewelry Expo

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iGaming Asia Congress 2013 Grand Hyatt, Macau Beacon Events 20/F, Siu On Centre, 188 Lockhart Road, Wanchai, Hong Kong (852) 2219 0111 (852) 2219 0112 21st – 23rd

2013 Macao International Environmental Co-operation Forum & Exhibition

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4th Macau International Real Estate Fair

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APAC Investments Summit 2013 Venetian Macao-Resort-Hotel, Macau Marcus Evans 9 Demostheni Severi Avenue, Nicosia 1080, Cyprus (357) 22 849 300 (357) 22 849 307

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Mobile Payments & NFC World Summit 2013 Eaton Hong Kong, Hong Kong Symphony Global 10 Anson Road, #26-04 International Plaza, Singapore 079903, Singapore (65) 6474 1471 (65) 6725 8438 30 th – 2nd May

Annual Investment Meeting 2013 Dubai International Convention & Exhibition Centre, Dubai Annual Investment Meeting Organising Committee P.O. Box 10161 Dubai, United Arab Emirates (971) 4 39 23232 (971) 4 39 23232

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Asia Pacific Hotel Investment Conference

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21st – 23rd

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G2E Asia Venetian Macao-Resort-Hotel, Macau Reed Exhibitions and American Gaming Expo 39/F Hopewell Centre, 183 Queens Road East, Wanchai, Hong Kong (852) 2824 0330 (852) 2824 0246 23rd – 24th

Japanese Investments Summit 2013 Hotel Chinzanso Tokyo, Tokyo, Japan Marcus Evans 6F HANY Higashi-kanda-Bldg, 2-1-8 Higashi-kanda, Chiyoda-ku, Tokyo 101-0031, Japan (81) 3 5823 0688 (81) 3 5823 0689

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Arts & Culture A Ar

GTG/Vincent Lepresle

A shimmering ballet performance that captures a high point of European culture, with a triumphant score by Handel, awaits audiences next month

MARCH 2013



Geneva Ballet

WHEN: April 27, 8pm WHERE: Grand Auditorium, Macau Cultural Centre PRICE: From MOP100 to MOP250, with discounted prices for friends of the centre, early bird buys, students, seniors and groups TICKETS: Available at the Macau Cultural Centre box office and Kong Seng Outlets, INQUIRIES: Telephone 2870 0699 or email

Mikki Kunttu

recision and power run high in “Glory”, a contemporary ballet performance set to a score by George Frideric Handel. Brought to Macau by the Geneva Ballet in a unique presentation, this piece was conceived by Andonis Fondianakis, a Greek choreographer who turned it into the most acclaimed work by the Swiss company. The result is a full-blown dance evening interpreted by the company’s 20-strong troupe at the Macau Cultural Centre on April 27. Audiences take part in a homage to Baroque in all its glory, fuelled by the re-mastering of Handel’s music like the well-known Hallelujah chorus from Messiah, matched with movements full of the utmost precision. Foniadakis’ commission for the Geneva Ballet combines his urgent and physical expressivity, a contrast to that most Baroque of aesthetic qualities “sprezzatura”, a sense of effortless and ease much prized in Italy during the 17th century. Ultimately, Glory’s complex polyphony of bodies and contrapuntal architectures of movement are a compliment to Handel’s mastery of choral composition. The hour-long performance begins with a brightly lit spot-lit stage. A women’s silhouette moves through the empty stage, cloaked in a black gown. More dancers are called forth, swelling with Handel’s music. It is an opening that is more rock concert than ballet.

Grand designs “Glory” moves through a succession of tableaux. The work’s airborne duets and lifts have the feeling of ice-skating actions. Elevated splits and the complex arpeggios of the choral ensemble conjure up mass gymnastics. Glory has at its core Geneva’s Grand Theatre. In the early 20th century, the theatre was home to some of the world’s greatest ballet companies. American Isadora Duncan, Vaslav Nijinsky and the Ballets Russes were among the luminaries

that performed there before its hiatus. The 1962 reopening saw the theatre create its own ballet company and a refreshed sense of purpose, dedicated to illustrating all of the styles of 20th century dance. The theatre and company have been fortunate to have luminaries including Mikhail Baryshnikov, Rudolf Nureyev and Lucinda Childs. Currently managed by Philippe Cohen, the company is composed of classically-trained dancers performing in the neo-classical and contemporary styles. Cohen was born in Morocco in 1953. By 1971, he was training and commenced performing a few years later. At the Le Conservatoire National Supérieur de Musique et de Danse de Lyon, Cohen was director of chorographical studies throughout the 1990s, until 2003. His leadership helped develop international exchanges with Vietnam, Cambodia, South Korea and Greater China. Directing the Geneva Ballet since 2003, Cohen has claimed awards from the French Ministry of Culture. Choreographer Foniadakis was born in Crete and began his dance training on the island, then studying at the State Dance School in Athens from 1988 to 1990, before winning a scholarship to study at Rudra Bejart Lausanne in Switzerland. By 2003, he had launched his own dance company in France, called Apotosoma. The company is deeply involved in the creative research, production and diffusion of contemporary dance with artists from other fields. Foniadakis told Swiss French-language newspaper Le Temps he brings power of movement to his dance, infusing it with lyricism “that revels in its seduction”. “I give many details on the size and experienced emotional. The goal is that dancers do not copy me, but seized my pulse and are as if it were their own clothes,” he says. Foniadakis and Cohen moved in similar artistic circles through the late 1990s and 2000s. Glory appears in Macau after performances throughout France, Italy and in Guangzhou in the past 12 months. MARCH 2013


Arts & Culture

The pen’s mightier The Script Road literary terary festival brings together some ome of the best writerss in Chinese and Portuguese BY LUCIANA LEITÃO

he organisers of The Script Road – Macau Literary Festival al say it is possible to build bridges between literary traditions that are, literally, half alf a world apart. The festival takes the literature rature of Greater China and of the Portuguese-speaking speaking world, and combines them in a programme ogramme that includes panel discussions ns on topics ranging from travel writing ting to poetry to the modern Chinese ese novel. The festival crosses into to the realms of music, cinema ma and other visual arts. More than 30 writers, publishers, translators, journalists, musicians, film directors and artists from the mainland, Taiwan, Portugal, Angola, Brazil, India, Mozambique and East Timor will gather here this month, for this year’s festival. The event will pay tribute te to the late Brazilian novelist st Jorge Amado, screening a documentary ntary film and a movie based on one of his novels. vels. The festival relies on support upport from the government. The Cultural Affairs Bureau and the Macao Foundation are organising it jointly with the Portuguese-language anguage newspaper Ponto Final, which established lished the event last year. Several prominent mainland land authors are taking part in it. Among them m are Bi Feiyu, whose “Three Sisters” won the Man Asian Literary Prize in 2010, and acclaimed claimed novelist Han Shaogong. Lusophones at this year’ss festival include José Eduardo Agualusa from m Angola, one of the best-known Africans writing riting in Portuguese; Portugal-based writerr and publisher


MARCH 2013

More than 30 writers, publishers and artists from Greater China and the Portuguesespeaking world will gather here this month, for this year’s festival

105 Francisco José Viegas, who until last October was in charge of cultural affairs policy in Lisbon; and Portuguese novelist Valter Hugo Mãe. Poet Fernanda Dias and writers Tong Mui Siu, Chek In, Lou Mou and Wong Man Fai will wave the flag for Macau. Two French authors, Antoine Volodine and Claude Hudelot, who have developed an affinity for Macau, will also attend. That the list is studded with literary stars is due to extra funding for the festival this year. The organisers got MOP1 million (US$125,000) from the government and MOP950,000 from private sponsors, including gaming companies.


Francisco José Viegas

Beyond words Learning lessons from the first festival, this year’s will follow a different schedule. Attendance at some of the panel discussions held during working hours was low. “Last year we had events at different times and in only one place, the Macau Polytechnic Institute. It was probably not the best way,” says Ricardo Pinto, who is in charge of the festival. Mr Pinto is the publisher of Ponto Final and the co-owner of a bookshop. He says authors will visit schools and universities during the day this year. The main sessions will be in the late afternoons, around the city, with some in historical locations such as the Mandarin House. Most musical performances and film screenings will be held in the evenings. Two Portuguese acts will perform at the Cotai Arena: fado singer Camané, making his return to Macau, and duo Dead Combo, who mix rock, blues and folk music. Taiwanese singer-songwriter Joanna Wang will also appear at the festival. On the big screen, the award-winning “The Last Time I Saw Macau”, by João Pedro Rodrigues and João Rui Guerra da Mata, will be shown – its first showing in Greater China – before its official premiere at the Hong Kong International Film Festival. Another highlight will be the screening of “On the Dragon’s Flake”, the latest film by Macau-based director Ivo Ferreira. The festival includes a visual artist in-residence programme and an exhibition, “Beyond Words”, of works by Macau artists. The opening of the festival will be preceded on March 9 by an outdoor book fair and free concerts in Amizade Square, near the Sintra Hotel.

Han Shaogong

José Eduardo Agualusa

part from gathering well-established authors, The Script Road literary festival aims to nurture new talent through a short story competition. Awards are presented for short stories written in each of three languages: English, Chinese and Portuguese. The festival’s deputy director, Hélder Beja, says the organisers received more than 30 entries for the short story competition held last year. Most were in Chinese or Portuguese. Some authors were from as far away as Brazil. Macau lawyer Célia Matias won the award for the best short story in Portuguese and Lawrence Lei, who heads the school of theatre at the Macao Conservatory, won the award for the best short story in Chinese. The award for the best short story in English went to Miodrag Kojadinovic, a Serbian living in Guangzhou. Each of the winning entries has been translated into each of the other languages. They will be published together in a book, in English, Chinese and Portuguese editions, to be launched at this year’s festival. The book will also contain stories about Macau written by guest writers at last year’s festival, including Portuguese writer José Luís Peixoto, Taiwan novelist Lolita Hu and mainland author Jimmy Qi. This year, as last year, all visiting authors are invited to write about Macau. The organisers of the festival will eventually publish their contributions in the collection of the winning entries from this year’s short story competition.

THE SCRIPT ROAD Macau Literary Festival WHEN: March 10-16 WHERE: Various venues around Macau Valter Hugo Mãe

LANGUAGE: Chinese and Portuguese; translations or interpretation will be available at most events, including in English ENTRY: Free, except to concerts and some film screenings WEBSITE: MORE INFORMATION: telephone 6656 4518 or email

Bi Feiyu MARCH 2013


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THE YEAR OF THE SNAKE SLITHERS IN Macau welcomed the Year of Snake last month with a string of celebrations and fusillades of fireworks. One of the highlights was a New Year float parade, organised for the first time and including 10 floats and close to 1,000 performers. Gaming operators also held special festivities to celebrate the arrival of the Lunar New Year in style. Holding to tradition, a 238-metre-long golden dragon visited the city’s busiest tourist spots on the first day of the Year the Snake to wish all good fortune, health, happiness and prosperity.

As usual, the chief executive visited the festive firecrackers and flower stalls

On the first day of the new year, the head of the tourist office, Maria Helena de Senna Fernandes, and the president of the Civic and Municipal Affairs Bureau, Raymond Tam Vai Man, handed out lai see packets to tourists and residents

Worshippers at A-Má temple SJM Holdings Ltd once again held its traditional Lunar New Year’s Eve celebration dinner

Fireworks display on the third day of the Year of the Snake Grant Bowie at MGM Macau’s Lunar New Year celebrations

Lunar New Year float parade

Lion dance at the Mandarin Oriental

A 238-metre-long golden dragon toured the city’s major tourist spots to wish all a great year MARCH 2013

108 108


MACAU SHINES AT IGA AWARDS Macau was the big winner at the International Gaming Awards 2013, handed out last month in London. Melco Crown Entertainment Ltd’s City of Dreams was named the “Integrated resort of the year” and Galaxy Macau’s Sky32 – Banyan was awarded “Casino VIP room of the year”. Galaxy Entertainment Group Ltd also scooped another prize, for “Casino operator of the year: Australia/Asia”. For the fifth year in a row, Macau Business was nominated for best industry publication either online or in print, but eventually the honours went to iGaming Business Magazine. Congratulations to the winners! Casino operator of the year – Australia/Asia: Galaxy Entertainment Group

Casino/integrated resort of the year: City of Dreams

Casino operator of the year – Americas: Las Vegas Sands

Casino VIP room of the year: Galaxy Macau’s Sky32 – Banyan

Casino operator of the year – Europe: Rank Group (Grosvenor Casinos)

Online sports-book operator of the year: Paddy Power

Socially responsible operator of the year – land-based: Aspers

Gaming industry fair play: Betsson MARCH 2013

Online bingo operator of the year: (Foxy Bingo)

Technology provider/supplier: Bally Technologies

109 Photos: Clever Duck Media Ltd

Online casino operator of the year: Mr Green

Industry publication/portal of the year: iGaming Business Magazine

Mobile operator of the year: William Hill

Online poker operator of the year: PokerStars

Traditional casino equipment supplier: TCSJohnHuxley

Corporate services supplier of the year: Optimal Payments

iGaming software supplier: Playtech

Payment solutions provider company of the year: Skrill

Socially responsible operator of the year – online: Sky Betting & Gaming

Slots operator of the year – online: Redcorp (7Red)

Slot manufacturer/provider – online or land-based: Williams Interactive MARCH 2013




he lives of the world’s poorest people have improved more rapidly in the last 15 years than ever before, yet I am optimistic that we will do even better in the next 15 years. After all, human knowledge is increasing. We can see this concretely in the development and declining costs of new medicines like HIV drugs and in the creation of new seeds that allow poor farmers to be more productive. Once such tools are invented, they are never un-invented – they just improve. Sceptics point out that we have a hard time delivering new tools to the people who need them. This is where innovation in the measurement of governmental and philanthropic performance is making a big difference. That process – setting clear goals, picking the right approach and then measuring results to get feedback and refine the approach continually –helps us to deliver tools and services to everybody who will benefit. Innovation to reduce the delivery bottleneck is critical. Following the path of the steam engine long ago, progress is not “doomed to be rare and erratic.” We can, in fact, make it commonplace. Though I am an optimist, I am not blind to the problems that we face or to the challenges that we must overcome to accelerate progress in the next 15 years. The two that worry me the most are the possibility that we will be unable to raise the funds needed to pay for health and development projects and that we will fail to align around clear goals to help the poorest.

Aid is critical The good news is that many developing countries have growing economies that allow them to devote more resources to helping their poorest people. India, for example, is becoming less dependent on aid and eventually will not need it. Some countries, like the United Kingdom, Norway, Sweden, South Korea and Australia, are increasing their foreign-aid budgets; others, even traditionally generous donors like Japan and the Netherlands, have reduced theirs. The direction of many countries, including the United States, France, Germany and Canada, is unclear. Still, aid is critical. It helps people in the poorest countries to meet their basic needs. It funds innovation in the creation of new tools and services, and in their delivery. Unfortunately, aid budgets are threatened by fiscal weakness in almost all of the advanced countries. Unless voters hear about the positive impact that their generosity is having, they will inevitably focus on issues closer to home. A single story, true or not, about a small amount of aid being misused can often cloud the entire field. Imagine how you would feel about investing if every article you read were only about stocks that did poorly, with no reporting on the big successes. Historically, aid was discussed largely in terms of the total amount of money invested. But now that we are measuring indicators like child mortality more precisely, people are able to see the impact that aid has in stark terms – that it means the MARCH 2013

difference between, say, giving people access to HIV treatment and letting them die. When framed this way, aid has a better chance of becoming a priority. But will the world align around a clear set of goals in the next 15 years? The United Nations is starting to map out new goals for the years following the 2015 expiration of the current Millennium Development Goals. As with the Millennium Development Goals, the next set of goals could help to align groups doing the work, remind voters what their generosity supports and allow us to see where we are making progress in delivering solutions to the poor.

Celebrating progress The Millennium Development Goals’ success means that there is a lot of interest in expanding them to include a broader set of issues. But many of the potential new goals lack unanimous support and adding a lot of new goals – or goals that are not easily measurable – may sap momentum. The Millennium Development Goals were coherent because they focused on helping the poorest people in the world. The groups that needed to work together to attain them were easy to identify and they could be held accountable for cooperation and progress. When the UN reaches agreement on other important goals like mitigating climate change, it should consider whether a different set of actors and a separate process might be best for those efforts. The progress that the world has made in helping the poorest in the last 15 years is the kind of good-news story that happens one life at a time, so it often does not have the same visibility as a big setback, such as the outbreak of a new epidemic. From time to time, we should step back and celebrate the achievements that come with having the right goals, the necessary political will, generous aid and innovation in tools and their delivery. Doing so has certainly deepened my commitment to this work.


A FOUNDATION SHAKES The Macao Foundation was missing paperwork for about 17 percent of the projects it funded last year, according to the Portuguese-language newspaper Jornal Tribuna de Macau. The projects missed the deadline day for filing, January 31. The foundation gave MOP761.4 million (US$95.2 million) to 779 projects by associations and individuals last year. It is old news that there is no transparency in the way the foundation operates or in the way it makes its grants – although it answers to the Chief Executive. It seems the foundation is happy enough to grant money to pro-establishment groups and, in return, ask for little in the way of accountability. The foundation says that is changing. It introduced new rules earlier this year. If it is to walk the walk, the foundation must start by asking those who have failed to deliver a report for their grants last year, to return the money. Their names should be made public and they should be penalised if they make future applications for funding. The Frozen Spy is eager to see if that will happen.

LEADING BY EXAMPLE Many of the city’s casino operators held corporate social responsibility activities heading into the Year of the Snake. MGM China Holdings Ltd organised a spring clean-up, helping 110 single-living elderly people prepare their homes for new year. What caught the Frozen Spy’s attention was one of the photos offered to the press. Pictured was the company’s very own chief executive, Grant Bowie, with a dust cloth, getting dirty. Cynics might say it was a PR stunt. But time and time again, Mr Bowie has shown he is a down-to-earth executive, in-tune with the social responsibility role the city’s casinos must play. Unfortunately there are few other C-suite gaming executives that Frozen Spy can say the same thing about.


SSS-SOUND ADVICE SJM Holdings Ltd’s chairman Stanley Ho Hung Sun has appeared in a new video, this time for the company’s Lunar New Year Eve Gala Dinner, held last month at Grand Lisboa. The video of Mr Ho, 91, was screened during dinner and he made a few light-hearted comments playing on the sound of the word ‘snake’ in Cantonese. The smiling casino mogul offered a piece of advice to females in the audience: “Pay attention to your husbands because men have their secret shapes. You must be alert for them not to sneak out looking for other women.” It was sound advice from Mr Ho, an expert in matters of the heart who is well known for his plentiful love life and four consorts.

News about the opening of a “cashless” casino and bar in Hainan’s Sanya Bay caught many by surprise last month. The shockwaves eventually caused the venue’s closure. Punters at the bar bet with cash but winnings were paid in points that could be used to pay for accommodation and luxury goods at the resort where the gaming facility was located. While the door is currently firmly closed on casinos in the mainland, Pandora’s Box is officially wide open. The Frozen Spy shares the disbelief among Macau’s casino fraternity that a gambling den could operate in broad daylight in Sanya, an incredibly popular holiday destination, without the police knowing about it.

MARCH 2013


March 2013


IN DEX Aristocrat

Page 07

Bally Technologies

Page 19


Page 21


Page 53

Galaxy Entertainment Group

Page 03


Page 17

Macau Cultural Centre


Macau Post Office

Page 96

MGM China

Pages 23 & 25


Page 27

Ocean Gardens


PokerStars Macau

Page 02

Reed Exhibitions

Page 05

SHFL Entertainment

Page 01

Signature Events

Page 55

Zung Fu Motors – Mercedes


To advertise call 28331258 or email us at Go to for media kit MARCH 2013

MB 107 | March 2013  

Macau Business, a 132-page monthly magazine is De Ficção Multimedia Projects’ flagship publication. Launched in May 2004, focuses on Macau’s...

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