mb 107 | march 2013

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MARCH 2013

19–28 APRIL 2013

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bizintelligenceonline.com

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 benefi ts 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 infl uential 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

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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

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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MACAU BUSINESS OFFICIAL BLACKBERRY CARRIER

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from the publisher’sdesk

PAULO A. AZEVEDOFOUNDER

AND PUBLISHER

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 convenienceThe 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-but-hard-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

A 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 fi nd 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 benefi ts 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 fi lled with expensive, high-end merchandise.

IT’S ESSENTIAL

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

MARCH 2013

TO EDUCATE

11

Little more than a year ago I experienced fi rst-hand the impact pollution can have on quality of life. At the invitation of the Liaison Offi ce 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.

CRYING SHAMEgovernment’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 fi elds.

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Editorial CouncilPaulo A. Azevedo, Emanuel Graça, Tiago Azevedo, Duncan Davidson, José I. Duarte

VOL.1 Nº107

Founder and PublisherPaulo A. [email protected]

Editor-in-ChiefEmanuel Graç[email protected]

Assistant Editor-in-ChiefAlexandra [email protected]

Executive Senior AnalystJosé I. [email protected]

Art DirectorsConnie Chong, Luis [email protected]

Hong Kong BureauMichael Hoare (Chief), Anil [email protected]

Events DirectorMargarida [email protected]

Special CorrespondentMuhammad [email protected]

Beijing CorrespondentMaria João [email protected]

Manila CorrespondentMax V. de [email protected]

Assistant to the PublisherLaurentina da [email protected]

Offi ce ManagerElsa [email protected]

PhotographyAntónio Mil-Homens, António Leong, Carmo Correia, Greg Mansfi eld, Gonçalo Lobo Pinheiro,John Si, Manuel Cardoso, MSP Agency, Naty Tôrres, Agencies

IllustrationG. Fox, Rui Rasquinho

Contributing EditorsChristina 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, Sofi a Jesus, Xi Chen, Yuci Tai

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 Whitfi eld, Rodrigo de Rato, Robert J. Shiller, Sin-ming Shaw, Sudhir Kalé, Sun Shuyun, Vishakha N. Desai, Wenran Jiang

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Printed in Macau by Welfare LtdPublished 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 8to US$1 for the purposes of illustration only.

Letters to the [email protected]

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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: [email protected]

MARCH 2013

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CITY LIMITS

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international tourism destination.There is much that can be done to

better manage tourist fl ows. 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 offi cials 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, offi cials 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.

Serious questions about the city’s ability to handle periods of peak tourist traffi c 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 offi cials here and in Beijing.

The fi rst 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 Offi ce 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 Offi ce director Bai Zhijian ahead of the holiday period, who indicated Macau needs to assess its capacity to accommodate tourists.

Macau Government Tourist Offi ce 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 alreadyMs 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

EMANUEL GRAÇAEDITOR-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

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MARCH 2013

BY MIKE ARMSTRONG

Making a differenceThe second edition of the Special Olympics Asia Pacifi c Golf Masters Tournament, hosted by the Charity Association of Macau Business Readers, tees off next month

Some four million Special Olym-pics athletes are active in sports, healthcare and youth programmes

in more than 170 countries, their intel-lectual disabilities a barometer of the challenges they face, not an impenetra-ble wall. Macau is coming out swinging to end the cycle of exclusion such peo-ple often face, hosting next month the second edition of the Special Olympics Asia Pacifi c Golf Masters Tournament.

Organised by the Charity Asso-ciation 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 direc-tor. An ex-team owner and professional motorcycle racing manager, with the tro-phies, steel pins and scars to prove it, his is not the immediate image one might conjure up when thinking of a candidate

for building a ground-up Special Olym-pics 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-operat-ed 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 organi-sation existed in Macau, but it happened to be the institution that [gaming suppli-er] Aristocrat donated their prize money to,” when its team won the 2007 edition of the Annual Macau Business Charity Golf Tournament.

It took another fi ve years however, for the Macao Special Olympics to ap-proach Macau Business and Mr Kuehn looking for support for its newly found-ed 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 Spe-cial Olympics concept.

With the help of some committed casino executives, the Charity Associa-tion of Macau Business Readers supplied new sets of clubs to the special athletes,

Inbox

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MARCH 2013

ONE WOMAN’S VISION

prior to approaching sponsors and Cae-sars 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 Ol-ympics 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 Pacifi c 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, Tai-wan, 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 en-thusiasts partnered with athletes on the greens as ‘guardians’, serving and teach-ing them how to improve their game.

A community momentMr Kuehn describes the response to the inaugural edition of the tournament

as “moving, emotional, exciting – with pure happiness refl ected in the eyes of the athletes and their guardians.”

Funding for the event came from the community at large, business part-ners and event host, the Charity Asso-ciation of Macau Business Readers. The organisers received supportive notes and emails from around the world and, criti-cally, the Special Olympics headquar-ters 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

CALLING OUT FOR SUPPORTThe Charity Association of Macau

Business Readers is calling on players interested in acting as guard-ians during the Special Olympics Asia Pacifi c Golf Masters Tournament, potential sponsors and other parties eager to join the event to contact the organisation at [email protected].

The Offi ce of the Chief Executive and the Sports Development Board, plus established partners of the Char-ity Association of Macau Business Readers from the gaming and hospital-ity 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 Busi-ness readers joining and helping them improve their game.”

Eunice 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 play-ing 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 fi rst inter-national competition took place in 1968.Eunice Kennedy Shriver

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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

Inbox

Winter Games in Pyeongchang [in South Korea] to introduce our event to the rest of the world, in the expectation that ad-ditional teams would join.”

The entry list for this year’s event is impressive. Participating in the basic competition levels are teams from Aus-tralia, Mainland China, Taiwan, Hong Kong, India, Macau, Malaysia and South Korea. The entries for the 36-hole com-petition 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

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

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

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 fi nals held in Macau, and that via the vehicle of the Special Olympics Asia Pacifi c 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 lo-cals,” he stresses. “Our overriding ob-jective is to show how different Macau is, how responsible the local corpora-tions are when it comes to the less fortu-nate, and how Macau is positively step-ping 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.”

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Write a letter to the editorTo submit a letter to the editor, e-mail [email protected] 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 confi rmation purposes. Letters should be 300 words or less, and all are subject to editing.

Young entrepreneursAfter reading the article “Loan plan for young entrepreneurs: 2013 Policy Address” at MacauBusiness.com 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 diversifi ed, 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 confi dence, develop new ideas and get some answers.

While young entrepreneurs have long sought for support infor-mally, policymakers, universities and investors are recognising that their hands-on help can be as essential as fi nancing 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 fi nancing challenges are just a small part of being a young entrepreneur.

Mack Maciej Pijewski

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MARCH 2013

FEWER MICE EVENTSMacau hosted a total of 1,022 meetings, incentives, conferences and exhibitions in 2012, a year-on-year drop of 2.2 percent, offi cial 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.

RETAIL SALES SOAR IN 2012

TAIPA PERMANENT TERMINALTO BE READY BY MID-YEAR

The construction of Taipa’s permanent ferry terminal is on track to be fi nalised 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 fi nal Taipa ferry terminal’s construction site, has serviced Taipa since 2007.

INFLATION DROPS TOLOWEST SINCE APRIL 2011Macau’s Composite Consumer Price Index, the city’s main gauge for infl ation, 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 infl ationary 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.

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.

Watches, clocks and jewellery led the pack

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.

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MARCH 2013

CEM POSTSPROFIT INCREASECompanhia de Electricidade de Macau – CEM, SA expects to post a profi t 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 fi gures, 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.

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,

CITIC RAISES DEBTTO FUND CTM BUYHong Kong-listed Citic Telecom International Holdings Ltd reached an agreement with four fi nancial 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.

YELLOW TAXI CONTRACTEXTENDED FOR ONE YEARThe 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 fi t to transport disabled people and strengthening its services in the old neighbourhood districts. Vang Iek Radio Taxi Co owns 100 taxis.

CAM also expects revenue to increase this year, to reach MOP798 million

AIRPORT PASSENGERS TO GO UPBY 5 PERCENT IN 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 profi t of MOP14.4 million l ast year, chairman Ma Iao Hang said in January. This was the fi rst profi t in the company’s history, since airport operations started in 1995.

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BCP MACAU’S PROFIT SOARSThe Macau branch of Portuguese bank Banco Comercial Português SA (BCP) recorded a profi t of MOP177.7 million (US$22.2 million), Rádio Macau reported. That was a year-on-year increase of 165 percent. Managing director João José Pãosinho said the bank is now expecting its profi t 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.

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

RESIDENT DEPOSITS UP BY 26 PERCENTResident deposits rose by 25.8 percent in 2012, to MOP366.8 billion (US$45.9 billion) in December, according to offi cial 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.

DUAL CURRENCY CREDIT CARDSPASS THE 100,000 MARK

The number of pataca/remninbi dual currency personal credit cards surpassed the 100,000 mark for the fi rst time in the fourth quarter of last year, data from the monetary authority shows. At December-

end, 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 fi gure 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.

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

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

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

23

MARCH 2013

24

MARCH 2013

242424

BANKS REPORTRECORD PROFITThe total operating profi t 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 profi ts reached MOP5.1 billion. Macau has 29 banks.

NEW INCORPORATIONSGO UP BY 6 PERCENTThe number of new companies incorporated here reached 3,612 in 2012. That represented a 6.1 percent year-on-year increase, offi cial 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 WIDENSAS IMPORTS SOARMacau’s merchandise trade defi cit reached MOP62.8 billion (US$7.8 billion) in 2012, a new yearly record, offi cial 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 all-time high set in 2011. Exports rose by 17.1 percent, to MOP8.2 billion.

Bittersweet holidayThe 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

937,000The 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

25.5%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

MOP2,282The average room rate in fi ve-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

89%The average occupancy rate of three to fi ve-star hotels

during the holiday period, an increase of 1.2 percent over 2011’s Lunar New Year golden week

MOP7.2 billionThe casino gross gaming revenue collected in the fi rst seven days

of the Lunar New Year (February 10-16), down by 3.9 percent from last year’s festive period

53The number of inspections at border ports and main tourist spots

conducted by the Macau Government Tourist Offi ce during the Lunar New Year period

SO

UR

CE

S: M

AC

AU

GO

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CE

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MARCH 2013

26

MARCH 2013

The increasing number of motor vehicles on the roads is taking a rising toll on the environment. Traffi c 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. Specifi cally, it must include the examination of the roles of private and public transport, and, necessarily, an environmental and social assessment of their costs and benefi ts.

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 justifi able 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 effi ciency. 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 listA 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.

Offi cials 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.

That would appear to be easy but it is not happening. And the government fails to set a good example. Vehicles in its fl eet 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 questionIn light of these arguments, the present policy seems insuffi cient, 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.

Policy, unpolishedJOSÉ I. DUARTE ECONOMIST, MACAU BUSINESS SENIOR ANALYST - [email protected]

MEASURES TO REDUCE POLLUTION BY MOTOR VEHICLES: THE GOVERNMENT HAS YET TO PUT FLESH ON THE BONES

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

28

MARCH 2013

BY LUCIANA LEITÃO

Meeting groundThe Macau-based forum for trade cooperation between China and Portuguese-speaking countries celebrates 10 years

The Forum for Economic and Trade Cooperation between China and Portuguese-Speaking Countries

is celebrating its 10th anniversary.Hundreds of senior offi cials and

business leaders from the mainland, Angola, Brazil, Cape Verde, Guinea-Bissau, Mozambique, Portugal and East Timor are expected to gather here later this year, at the forum’s fourth ministeri-al conference, to discuss how to further enhance business exchanges. Chinese premier Wen Jiabao attended the previ-ous 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 bil-lion, representing an increase of 9.6 per-

cent over the 2011 fi gure.The body is based in Macau, where

its permanent secretariat is headquar-tered. 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 pro-mote 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 offi cially part of the forum.

Aside from boosting Macau’s pro-fi le in the international arena, experts say the benefi ts of the forum to the city have been little.

The city’s trade is only signifi cant 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 ac-counted for less than one percent of Macau’s overall imports last year.

Not a priorityThe Macau government pays the op-erational costs for the supporting offi ce to the forum’s permanent secretariat. Last year, the offi ce’s budget stood at MOP96.8 million, almost double from the previous year.

Carmen Amado Mendes, an expert in international relations at the Univer-sity of Coimbra, in Portugal, says the fo-rum 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.

2010 ministerial conference

Economy & Finance28

29

MARCH 2013

FROM TRADE TO CULTUREThe Forum for Economic and

Trade Cooperation between China and Portuguese-Speak-ing Countries has been increas-ing the number of activities it promotes, says Rita Santos, who heads the supporting of-fi ce to the permanent secre-tariat of the forum.

It has promoted dozens of high-level multilateral meetings since 2010. The body has also organised trade meetings, busi-ness delegations and fi eld trips.

In 2011, it offi cially es-tablished a training centre in Macau to train offi cials and technical personnel from de-veloping Portuguese-speaking countries in Africa and Asia.

The forum has also played a role ensuring fi nancing 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-benefi t ratioMacau-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 Portu-guese-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 be-tween China and Portuguese-speaking countries. “There should be a consoli-dated mechanism to assess what the spe-cifi c weight of Macau is, even to know what the cost-benefi t ratio is.”

Mr Morbey says he was pleased when the forum was fi rst established. But 10 years later, there has been little progress, he stresses. The forum is mostly

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 govern-ments.”

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 rela-tionship between China and Portuguese-speaking countries would be different,” says Ms Mendes.

Nonetheless, the forum has promot-ed several business gatherings and train-ing 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 benefi ts to developing Portuguese-speaking coun-tries in Africa and Asia.

At the 2010 ministerial confer-ence, Beijing announced it would make RMB1.6 billion (MOP2.1 billion) in

30

MARCH 2013

branch of Bank of China, already of-fer 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 infor-mation.

Focus on businessAll 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 Sil-va, says some of the political goals es-tablished 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 bil-lion fi nancial cooperation fund was an-nounced, but the details are still sparse.

“There is much more to be done to showcase Macau to Portuguese-speak-ing 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

reduced to holding training courses and seminars in Macau and in the mainland.

He says the forum should be re-vamped, not acting so much as a govern-ment bureau. It should work to promote business.

Macau Small and Medium-size Enterprises Association administrator Kenneth Lei Chi Leong says few busi-ness people here are directly engaged with the forum.

“Most local business owners don’t speak Portuguese, and they are not fa-miliar with the trading rules or invest-ment regulations in those countries,” he says. “Most of the small and medium en-terprise owners just don’t have enough information.”

Mr Lei says the forum should change this, providing better informa-tion on each Portuguese-speaking coun-try.

The head of the Macau-based Inter-national 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 in-surance tools, to boost trust among busi-ness people from different countries.

Some banks here, like the Macau

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 organis-ing conferences, seminars and meetings has been positive, and highlight its sup-port of their associations.

However, Mr Barreto and Mr Pinto say the mainland doesn’t need the forum to engage in trade directly with Portu-guese-speaking countries.

Even so, Mr Barreto says the forum makes sense. He stresses the role it has played in showcasing culture from Por-tuguese-speaking countries in Macau.

Macau Business requested com-ments from the forum’s secretary-gener-al, Chang Henxi, but received no reply. The offi ce of the Secretary for Econom-ic and Finance also did not reply to our questions.

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

Economy & Finance

31

MARCH 2013

BY SARA FARR

This Year of the Water Snake promises to be a good one for gaming, with the industry thriv-

ing, especially in March and Novem-ber. Just keep away in the “sss-stormy” month of August or so predicts the latest Feng Shui Index Report by CLSA Asia-Pacifi c Markets.

The Hong Kong brokerage and in-vestment 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 dat-ing back thousands of years that events are dictated by the changing balances among the fi ve elements that make up the universe: metal, wood, water, fi re 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 best-performing industries will be those as-sociated with the element of metal – the banking and other fi nancial industries – along with those associated with the ele-ment of water, such as logistics and gam-ing. It warns investors to keep away from

Snakes and ladders

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

industries associated with the element of fi re, such as oil and gas, and those asso-ciated 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 fortunesThe 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 fi rst half of the lunar year

It forecasts that the Hang Seng In-dex, the main index of the Hong Kong Stock Exchange, will perform well in the fi rst half of the lunar year. The ele-ment of fi re will play an important role in this performance.

If CLSA’s celestial readings are right, by early August the fl ames will have died down and the Hang Seng In-dex will drop. The index will then have a series of big swings, upwards and down-wards. But the index will fi nish the lunar year with an appreciable gain.

The CLSA Feng Shui Index Report was fi rst published in 1992. There was a break in publication during the bull run for stocks from 2005 to 2008. Publica-tion 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 cor-rect) and a blindfolded chimp hurling darts” is how the brokerage fi rm 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.

32

MARCH 2013

Trouble ahead for stocksTechnical analysis of chart patterns is a tool widely used in

the world of fi nance. 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 fi nancial 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 fi rst. 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 fi nal climb this year. When it ends, stock prices are likely to plunge, deeply.

Big bang theoryThere have already been two peaks and two troughs in this broadening top pattern.

In the case of the S&P 500, the fi rst 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 fi rst 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 fi nal 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 fi nal climb typically infl ates 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

ANDRÉ RIBEIRO CONSULTANT AND EXECUTIVE COACH - [email protected]

STOCK MARKETS MAY SOON DROP SHARPLY, IF TRENDS UNCOVERED BY TECHNICAL ANALYSIS HOLD TRUE

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

1/1/90

1/1/90

1/1/91

1/1/91

1/1/92

1/1/92

1/1/93

1/1/93

1/1/94

1/1/94

1/1/95

1/1/95

1/1/96

1/1/96

1/1/97

1/1/97

1/1/98

1/1/98

1/1/99

1/1/99

1/1/00

1/1/00

1/1/01

1/1/01

1/1/02

1/1/02

1/1/03

1/1/03

1/1/04

1/1/04

1/1/05

1/1/05

1/1/06

1/1/06

1/1/07

1/1/07

1/1/08

1/1/08

1/1/09

1/1/09

1/1/10

1/1/10

1/1/11

1/1/11

1/1/12

1/1/12

1/1/13

1/1/13

1,800

1,600

1,400

1,200

1,000

800

600

400

200

0

16,000

14,000

12,000

10,000

8,000

6,000

4,000

2,000

0

S&P 500 - HISTORICAL WEEKLY CHART

DOWN JONES INDUSTRIAL AVERAGE - HISTORICAL WEEKLY CHART

Poin

tsPo

ints

probably do huge damage to fi nancial markets. The ramifi cations 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 fi nancial environment.

33

MARCH 2013

GDP at current prices

GDP in chained prices

GDP per capita at current prices

GDP per capita in chained prices

Domestic loans to private sector

Resident deposits

Foreign exchange reserves*

Infl ation rate (full year 2012)

Exports

Imports

Trade balance

Total revenue

- Direct tax revenue from gaming

Total expenditure

Balance

Water

Electricity

Gasoline

Liquefi ed Petroleum Gas

Natural Gas

Licensed vehicles

- Automobiles

- Motorcycles

Mobile telephone users

Internet services subscribers

Unemployment rate

Median monthly employment earnings (Oct - Dec 2011)Employed population

Labour force participation

Non-resident workers (end-balance)

MOP 86.1MOP 75.0

-- --

MOP 190.0MOP 366.8MOP 132.5

5.0%

29.1 20.726.2 18.0

27.722.743.2

0.3

41.5 44.9 29.7

--

5.15.59.35.3

-52.4

4.95.54.5

20.622.7

6.79.06.61.5

-100

5.36.94.0

19.210.7

15.314.316.714.5

0.2 41.2

--

17.113.9

--

11.85.1

-- --

17.525.8

-- -1.8

Economic output

Money and prices

External merchandise trade

Public accounts

Utility consumption

Transport and communications

Employment

2011

2011-end

2011

2011

2011

2011-end

Oct - Dec 2012

Year-on-year change (%)














Latest

Latest

Latest

Latest

Latest

Latest

Latest

Notes

Notes

Notes

Notes

Notes

Notes

Notes

Q3 2012Q3 2012

-- --

Dec 2012Dec 2012Dec 2012Jan 2013

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

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

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

Dec 2012Dec 2012Dec 2012Dec 2012Dec 2012

MOP 292.1MOP 273.1

MOP 531,723MOP 497,219

MOP 161.9MOP 291.6MOP 272.4

6.1%

MOP 112.7MOP 99.7MOP 49.0MOP 63.7

70.53,857

81.742,908

73.6

206,34995,151

111,1981,353,194

209,223

75.34,205

87.143,615

--

217,335101,712115,623

1,613,457231,582

MOP 118.5 MOP 104.0

MOP 42.5MOP 76.0

MOP 7.0MOP 62.3

- MOP 55.3

MOP 8.2MOP 70.9

- MOP 62.8

1.9%

MOP 10,000

350,00072.4%

110,552

1.9%

MOP 12,000

351,00072.5%

111,642

-0.3

11.1

4.0-0.8

17.6

-0.2

16.5

4.0

-0.7

17.3

billionbillion

billionbillionbillion


billionbillionbillionbillion

million m3

million kWhmillion Ltonsmillion m3

million m3

million kWhmillion Ltons

billionbillionbillionbillion



billionbillion

So

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: Sta

tistic

s an

d C

ensu

s S

ervi

ce a

nd F

inan

cial

Ser

vice

s B

urea

u

percentage points

percentage points

percentage points

percentage points

percentage points

percentage point

Nov 2012 - Jan 2013

Oct-Dec 2012

Nov 2012 - Jan 2013

Nov 2012 - Jan 2013

Jan 2013

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

Statistical Digest

34

MARCH 2013

Num

ber s

old

MOP

mill

ion

MOP

per

squ

are

met

re

Chilling failure

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?

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 fi nancial 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 fi nancial crisis.The small dip in sales afterwards could be reasonably expected in a market infl uenced by many economic and demographic factors.

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.

The average price per square metre of residential fl oor space reveals striking changes in prices.The average price per square metre for housing on Taipa and the peninsula last year was fi ve 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.

GRAPH 1

GRAPH 2

GRAPH 3

Economic Trends by José I. Duarte

GRAPH 1 - Homes sold annually

GRAPH 2 - Total value of homes sold

GRAPH 3 - Average price per square metre of housing

0

20,000

0

5,000

15,000

10,000

20,000

25,000

80,000

85,000

65,000

45,000

25,000

5,000

60,000

40,000

2004

2004

2005

2005

2004 2005

2006

2006

2007

2007

2006 2007 2008

2009

2009

2008

2008

2009 2010

2010

2010

2012

2012

2011

2011

20122011

OverallTaipa ColoanePeninsula

Taipa

Taipa

Coloane

Coloane

Peninsula

Peninsula

35

MARCH 2013

3,000

2,500

2,000

1,500

1,000

0

500

-2,000

-500

Num

ber,

or M

OP m

illio

n Y

ear 2

004

= 10

0

Creation and destruction

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 profi t or as older companies become unprofi table.

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 fi nancial crisis.There has always been a net surplus of incorporations.In contrast, there has sometimes been a net defi cit in the balance of the combined registered capital of newly incorporated companies and the combined registered capital of newly dissolved companies.The defi cit 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 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 fi gures may paint a distorted picture, as some new companies may never have begun operating and some may have begun operating but subsequently stopped.

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

GRAPH 5 - Incorporation indices

GRAPH 6 - Incorporations by industry, 2001-2012

GRAPH 4 - Balance of company incorporations and dissolutions

GRAPH 4

GRAPH 5

GRAPH 6

3,500

600

500

300

-1,500

-1,000

0

400

100

200

2004200320022001

2001 2002 20042003

2005

2005

2006

2006

2007

2007

2008

2008

2009

2009

2010 2011

2010

2012

20122011

Net combined registered capitalNet number

Index of combined registered capital of newly incorporated companiesIndex of average registered capital per newly incorporated company

Index of number of incorporations

Wholesaling and retailing34%

Real estate13%

Finance and business services

23%

Hotels and restaurants3%

Others12%

Construction15%

36

MARCH 2013

BY ALEXANDRA LAGES

Hobbling

Proposed restrictions on job-hopping by non-resident workers will have few, if any, benefi ts for business

job-hoppersThe government is pushing for

amendments to the law on im-ported labour, less than three

years after it was enacted. The propos-al’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 work-ers who are laid off, voluntarily or invol-

Politics

37

MARCH 2013

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

The government says the amend-ments are meant to stabilise the labour market. Offi cials say the new restric-tion would prevent non-resident workers from job-hopping between different oc-cupations.

No exceptionsMacau SME Association administra-tor Kenneth Lei Chi Leong says the re-quirement to leave for six months is too complicated. “There is no benefi t for small businesses. But maybe there are a lot of benefi ts for mega-companies,” Mr Lei says.

He says many non-resident workers use SMEs as stepping-stones to employ-ment 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 fi nd 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 better-paid job here without having to face the six-month ban.

untarily, wrongfully dismissed or had a just cause for quitting.

But the amendments say these work-ers, while being allowed to continue working here, would be allowed to work only in similar jobs as they had previ-ously – at least for the fi rst six months after they lose their job. At present, they can work in any kind of job they like.

Some observers say the amend-ments would make non-resident work-ers think twice before volunteering to be laid off. But an offi cial of the Macau Small and Medium Enterprises Associa-tion says the amendments offer no real benefi t to small businesses.

Between the enactment of the law

Num

ber o

f im

porte

d w

orke

rs

FEB

FEB

FEB

MAR

MAR

MARAP

R

APR

APR

MAY

MAY

MAYJUN

JUN

JUN

JUL

JUL

JUL

AUG

AUG

AUG

SEP

SEP

SEP

OCT

OCT

OCT

NOV

NOV

NOV

DEC

DEC

DEC

JAN

JAN

JAN

JAN

2010 2011 2012

120,000

110,000

100,000

90,000

80,000

70,000

60,000

RISING IMPORTED LABOUR

SOURCE: STATISTICS AND CENSUS SERVICE, HUMAN RESOURCES OFFICE

2013

SITUATIONS VACANTOn 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 gradu-ates of the universities here.

Mr Udani suggests a special scheme to tap this pool of highly-qualifi ed work-ers, 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 govern-ment to stay and work. In Macau, the law sends mainland students home imme-diately 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 retain-ing 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 empow-ered,” he says.

The administrator of the Macau Small and Medium Enterprises Associa-tion, 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.

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

38

MARCH 2013

PoliticsNu

mbe

r of c

ases

2010 (Apr - Dec) 2011 2012 2013 (Jan)

5,000

4,500

4,000

3,500

3,000

2,500

2,000

1,500

1,000

500

0

NON-RESIDENT WORKERS OBLIGED TO LEAVE FOR SIX MONTHS AFTER A CONTRACT

SOURCE: PUBLIC SECURITY POLICE IMMIGRATION DEPARTMENT

Vong Kok Seng of the Macau Cham-ber of Commerce has said the amend-ments would be a deterrent to this prac-tice. The reasoning is that restricting a worker to the same kind of job would reduce his chances of fi nding a job with better pay, and so make it less rewarding to attempt to be sacked.

Summary expulsionZenon Udani, a human resources devel-opment trainer and a teaching fellow at the honours college of the University of Macau, does not think the amend-ments would make laid-off non-resident workers much worse-off. “If the laid-off workers’ skills, attitude and experience stand them in good stead, fi nding a suit-able job in the same area of work should not be diffi cult,” 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

streamline the process of getting laid-off workers into new jobs. Groups rep-resenting 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 la-bour is how it is applied. She accuses the authorities of throwing out laid-off or wrongfully fi red workers who are en-titled 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 opposi-tion 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 work-ers say one of the shortcomings of the amendment bill is its failure even to attempt to solve one outstanding prob-lem that non-resident workers have. At present, the authorities usually give non-resident workers just 10 days to leave Macau after their contracts end, what-ever the reason for losing their job.

Time constraintThis means unemployed non-resident workers who are not required to leave and stay away for six months have just 10 days to fi nd new jobs. After 10 days, they must go home, where they have to rely on recruitment agencies to fi nd new jobs for them.

The lobbyists that represent import-ed workers are asking that laid-off work-ers be allowed to stay longer once their contracts end. The extra time would offer them a better chance to fi nd 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 amend-ments are reasonable “given that the la-bour shortage is a common and serious problem for almost all business sectors in Macau”.

Mr So says that unless the problems of insuffi cient labour and insuffi cient land are solved, Macau will become less attractive to foreign investors. “Econom-ic growth, therefore, will not be sustain-able,” he says.

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 fi nd new jobs on their own, avoiding recruitment agency fees and thus potentially being taken advantage of

39

MARCH 2013

40

MARCH 2013

Greater China

BY BORIS CAMBRELENG*

Danger levelMainland needs ‘full-scale’ reform to fi ght inequality, say economists

The mainland’s stated aim to nar-row 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 dis-tribution of income” were announced last month ahead of Lunar New Year, as hundreds of millions working in cit-ies returned to their rural homes, many without running water or heating. Bei-jing promised to improve the lives of these rural migrant workers, who are denied equal access to health, educa-tion 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

entitled to all basic public services in the cities,” according to the measures quoted by the offi cial 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 re-serves and a motor of global recovery.

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

eas, saw authorities refuse to publish the country’s Gini coeffi cient, a commonly used measure of inequality, for more than 10 years. But in December, the Survey and Research Centre for China House-hold Finance, a body set up by the Fi-nance Research Institute of the People’s Bank of China and Southwestern Univer-sity of Finance and Economics, said the mainland’s Gini coeffi cient stood at 0.61, one of the highest in the world.

A Gini fi gure of zero represents perfect equality of income and 1 total inequality.

Last month, the central government said the fi gure was 0.47, higher than the United States, and above the 0.4 fi gure widely cited as a “danger level” for so-cial discontent.

Research centre director Gan Li

41

MARCH 2013

* AFP NEWS AGENCY

questioned the offi cial 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 be-lieves the authorities underestimate the incomes of the wealthy, who hide a sig-nifi cant 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 govern-ment 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 reformsAware of the growing resentment against the rich and endemic corruption, the Communist Party is urging offi cials to be frugal, pledging strict controls on

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 sys-tem of property rights, where all land is offi cially owned by the state or rural collectives.

“Farmers should be able to develop or sell their land, which is their collec-tive property,” he says.

Mao Yushi, a guru of economic liberalisation in the mainland, calls for reforms to the fi nancial system, where fi rms 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 mem-bers of the communist elite.

“The two-tier society of rich and poor is everywhere. The distinctive char-acteristic of China is people who have special powers and bully others.”

government spending on banquets, car purchases and overseas travel. But many observers say that fundamental tax re-forms are essential to create more equal income distribution.

The mainland should introduce a national property tax and inheritance tax, economist Hu Xingdou of the Bei-jing Institute of Technology told AFP.

The government plan said only that property tax, which some cities have been experimenting with, will be ex-tended, and inheritance tax will be in-troduced “at the appropriate time”.

Local governments derive much of

The extent of inequality in the mainland, particularly between urban and rural areas, saw authorities refuse to publish the country’s Gini coeffi cient for more than 10 years

42

MARCH 2013

A bullet to gnawINCOME INEQUALITY AND POOR EDUCATIONAL ACHIEVEMENT ARE RELATED PROBLEMS THAT STALL DEVELOPMENT

KEITH MORRISON AUTHOR AND EDUCATIONIST - [email protected]

In an important international study published this year, “Affl uence, 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 affl uence 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 affl uence.

“Inequality may inhibit achievement and undermine the positive impact of affl uence,” he says. This holds true, he argues, for both affl uent 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 stratifi cation 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 affl uence? The city needs highly skilled workers. Witness its need to import skilled labour. But its educational achievement levels are far too low.

Arrested developmentData 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 fi nished secondary school, on average. In Macau, 28.0 percent of

mothers of school pupils fi nished secondary school.In the OECD countries, 5.6 percent of mothers fi nished

primary school only. In Macau, 23.2 percent of mothers fi nished primary school only.

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

Choices madeThe 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 fi gures 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?

MARCH 2013

BY LUCIANA LEITÃO

ILLUSTRATION BY RUI RASQUINHO

Macau Business picks

the city’s 10 most infl uential women

to mark International Women’s Day

he worlds of politics and busi-ness in Macau are dominated by men. But women are play-ing 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 infl uen-tial women. Their work in business, pol-itics, education and social service makes these 10 individuals Macau’s league of extraordinary women.

43Society

44

13

4

5

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Society

45

MARCH 2013

Tipping the scalesFLORINDA CHANAfter 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 fl uent speaker of Chinese, Portuguese, English and Italian.

Power to the peopleKWAN TSUI HANGSupporters 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 earnedANGELA LEONG ON KEIAngela 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 vice-chairman 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.

A star’s understudy

Gift for leadership

LINDA CHENThe chief operating offi cer 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.

TINA HO TENG IATTina 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.

1

3

4 5

2

MARCH 2013

The daughter also risesPANSY HO CHIU KINGA 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 contributionFANNY VONG CHUK KWANFanny 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.

Multi-tasking epitomisedSUSANA CHOUBusinesswoman Susana Chou was the fi rst 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.

Tending the grassroots

She leads, fashion follows

NG SIO LAINg 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.

TERRY SIO UN IOne of the most infl uential 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 fi rst 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.

6

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46 Society

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47

48

BY ALEXANDRA LAGES

Growing painsNot everyone is thrilled by demanding new regulations for realtors that promise to revolutionise the property industry

Property48

49

MARCH 2013

The 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 Leg-islative 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 certifi cation or registration requirements.

Real estate experts and industry insiders Macau Business spoke to wel-comed the changes but said they would also introduce higher costs and addi-tional 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 rep-resents 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 li-cence 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 educa-tion. The association’s director Vincent Ip Kin Wa says 60 percent of real estate agents and brokers in Macau only com-pleted primary school.

“Traditionally, many salespeople in the property sector are not well edu-cated. Only 5 percent hold a bachelor’s degree,” Mr Ip says.

Rotten applesPraise for the new law comes from Rica-corp (Macau) Properties Ltd executive director Jane Liu Zee Ka and Midland Realty (Macau) Ltd chief executive Ro-nald Cheung Yat Fai.

“People will have more confi dence [in real estate agents] because they will be more knowledgeable,” Ms Liu says.

Mr Cheung says the law is designed to boost staff qualifi cations. “For cus-tomers, it will be very good because agents should have a minimum knowl-edge [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

50

MARCH 2013

Michele Lou, 27, put her de-gree in hotel management to use for two years be-

fore 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 fl exible.”

She has worked for small agen-cies but decided to move to a top-tier company, citing less working hours. She joined the Macau branch of Jones Lang LaSalle in 2010. She

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 be-tween 30 and 40.

Mr Cheung says Midland’s agents are mainly male, aged between 20 and 45, less than one-third have a “low-lev-el” 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 profi les 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 inter-fering without understanding the day-to-day 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 in-crease their costs, Mr Ip adds.

Questionable timingThe law provides a bedding-down peri-od 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 Af-fairs Bureau and pass the professional examination. The training programme runs from 30 hours to 96 hours, depend-ing on the agent’s amount of formal edu-cation, age and experience.

The Labour Affairs Bureau says the courses should start in July. The course covers real estate legislation and practi-

The insiders’ storiesA fl exible schedule is one reason that people are attracted to the real estate industry

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 of-fi ce hours and not around the clock like in smaller fi rms. 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 familyClaudia Chan, 40, opened Batalha Home Property Agency three years

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

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 Kong-based real estate company here. She could not fi t in.

“It was big pressure for me at that time and I didn’t had much working ex-perience,” she recalls.

In her own agency, Ms Chan works in partnership with a group of other small real estate fi rms 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

Property

51

MARCH 2013

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

“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

A.L.

lay off people as well.”Rose Lai Neng, an associate pro-

fessor of fi nance at the University of Macau, says the new rules are good for the market. She says they introduce a higher degree of professionalism, a re-quirement for an industry were buyers and sellers seek expert advice.

“Increased professionalism increas-es the credibility of the industry, sub-sequently reduces problems and brings higher reputation, as well as better de-velopment in the long run,” she says.

The diverse background of real es-tate agents makes it diffi cult to impose high training standards without driv-ing some professionals out of their job. Ms Lai says the training provided by the government to existing real estate agents will help to boost qualifi cations, 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 require-ments, 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 sec-tor 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 op-portunities,” Mr Cheung says.

Data from the Statistics and Cen-sus 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 offi cial data on the number of real estate agents were not met.

course of study, he says.The city’s property industry has

been rocked on its heels by a series of re-strictions introduced by the government to curb real estate speculation.

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

dwellings within two years of their orig-inal purchase, transactions have dropped and about 100 small real estate compa-nies 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

latest property curbs by the government, Ms Chan says. She currently inks up to fi ve 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 commis-sions.

Ms Lou and Ms Chan both support the new rules for the trade because it

will increase standards and enhance customer confi dence.

“Everyone can be an agent in Macau. But not everyone is aware of the responsibilities. Most just want to fi nish the deal and get the commis-sion money,” Ms Chan says.

Ms Lou welcomes more training. “Macau’s real estate has undergone so many changes lately and sometimes it is diffi cult to keep up.”

52

MARCH 2013

It 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 dis-cussions with offi cials about keeping the border crossings open continuously. He said he hoped the Gongbei and Lo-tus 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 valu-able.

Savills (Macau) Ltd managing di-rector Franco Liu says the novelty of round-the-clock access to Macau will

BY ALEXANDRA LAGES

Frontier gold rushExpect the cost of commercial property to rise substantially when border crossings open 24 hours a day

push up prices of commercial property closest to the Barrier Gate crossing, the city’s busiest. At present, shops in the vi-cinity 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 fl ow. We fore-see that both rents and prices of com-mercial property adjacent to the Barrier Gate will go up once this policy is con-fi rmed,” Mr Liu says. He did not give es-timates of how signifi cant 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 cover-ing 297 square metres, which was going for MOP32 million.

Second homesCentaline (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 sup-ply 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 continu-ously will also make it more conven-ient for residents of Macau to live in the

Zhuhai

Property52

53

MARCH 2013

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 gener-ally 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 bor-der crossings. They say it is unlikely to reduce prices for housing here at all.

“Considering the experience of Hong Kong and Shenzhen, the future de-velopment of Macau, as well as the eco-nomic benefi ts due to upcoming major infrastructure, we expect further growth in Macau’s property market in the me-dium to long term,” says Mr Liu.

“The impact of opening the borders 24 hours will not be very signifi cant in the long term.”

Investors at the gateThe average price per square me-tre of residential space in Macau was MOP70,407 in December, almost one-third 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 pro-fessor of economics and international fi -nance Jenny Huang Bihong says around-the-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, espe-cially during rush hours. Many people will prefer to stay here, Mr Huang fore-casts.

She also says the property market here is driven not only by domestic de-mand but also by demand from non-resi-dent investors, who forked out one-quar-ter of the money spent on property here last year. Keeping the border crossings open continuously “would have little impact on investors’ behaviour because

the Macau economy is still expected to achieve high growth in the next few years”.

Mr Liu says: “The 24-hour clear-ance system seems insuffi ciently attrac-tive 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

Keeping the borders open 24 hours will also make it more convenient for residents of Macau to live in the mainland

authorities no longer automatically al-low 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 resi-dents 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, hous-ing prices [in Macau] will keep on ris-ing until signifi cant increases in interest rates are introduced.”

The New Macau Association has expressed concern that keeping the bor-der 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.

54

MARCH 2013

The Hong Kong government un-veiled fresh measures last month to cool its red-hot property mar-

ket, as the fi nance minister warned that an asset bubble is forming in the neigh-bouring city. This was the second pack-age announced in fi ve months.

Stamp duties on both residential and non-residential properties were doubled across the board with the top rate in-creasing 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 fl at fee to 1.5 per-cent of the transaction’s consideration.

The new stamp duty rates will not apply to fi rst-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 mort-gage rate rise of three percentage points, instead of two points.

Play it coolBY MARY ANN BENITEZ* IN HONG KONG

Stamp duty for transactions of non-residential properties, including offi ces, retail space and car park, also have to be paid at an earlier stage, after sales agree-ments are signed.

The Hong Kong government says the new measures, together with the en-hanced 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 con-sider drawing up new measures to cool down real estate speculation if neces-sary. 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 neigh-bouring city followed last October’s an-ti-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 controlHowever, property prices have contin-ued to rise. After the package was intro-duced by the government, transactions in November and December plunged sharply, but the market regained mo-mentum in January, with property prices up by 2 percent.

Financial Secretary John Tsang Chun-wah said that since 2008, residen-tial 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 nec-essary,” Mr Tsang said.

He also noted that the affordability ratio – the ratio of average home prices to average incomes – further deteriorated

Hong Kong introduces new real estate curbs

Property

55

MARCH 2013

* ASSISTANT NEWS EDITOR OF THE STANDARD NEWSPAPER HONG KONG

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

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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 soar-ing property prices in Hong Kong have drawn some investors away from tradi-tional markets, sparking a craze in invest-ing in alternative real estate markets, such as hotel rooms, car parks and offi ces.

The new curbs came shortly after investors fl ocked to buy 360 hotel suites sold by property developer Cheung Kong (Holdings) Ltd, a fi rm controlled by Asia’s richest man Li Ka-shing. The company was able to pocket HK$1.4 bil-lion from the sale.

“I expect it [the new measures] will help forestall any possible shift in exuber-ance from the residential market to the non-residential market,” Mr Tsang said.

The policy address spent 42 para-graphs on housing and land supply.

“Shortage in the supply of hous-ing has pushed up property prices and rental substantially. Many families have to move into smaller or older fl ats, or even factory buildings. Cramped living space in cage homes, cubicle apartments and sub-divided fl ats has become the reluctant choice for tens of thousands of Hong Kong people,’’ Mr Leung said in January.

The number of people on the wait-ing 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 pub-lic housing, and the middle-income families to buy their own homes. He announced that the government has se-cured land for the development of about 17,000 subsidised home ownership fl ats and about 75,000 new public housing rental fl ats.

The fi rst batch of 2,100 subsidised home ownership fl ats for sale will be offered for pre-sale next year.

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

Top priorityChief Executive Leung Chun-ying said the announcement of the new round of measures shows that the “government has been monitoring the property market, in-cluding both the residential and non-resi-dential property markets, and will launch new measures whenever necessary to re-duce the demand for properties.”

Mr Leung has made tackling the housing problem his top priority, say-ing in his policy address in January that he would announce measures to curb speculation and expand land supply when necessary.

56

MARCH 2013

Property

PRICES OF OFFICE A downtown offi ce costs on average over MOP52,000 per square metre

The average transaction price of offi ce 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 offi ce unit stood at MOP47,925 (US$5,991), dropping 2.7 percent quarter-to-quarter. The most expensive

district was downtown, where the average price per square metre for offi ce 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.

PROPERTY SALESSET NEW RECORDThe annual aggregate value of property sales hit a new all-time high last year. In 2012, combined property sales – including residential, offi ces, 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.

CAR PARKS TO BECOMEMORE EXPENSIVEThe 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.

PRE-SALES RUSH BEFORENEW RULES KICK INReal estate agencies are expecting a busy period in the coming months, as unfi nished 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 unfi nished fl ats soon, in a bid to avoid the new rules on pre-sales. A bill to regulate the sale of unfi nished housing units is now going through the Legislative Assembly.

AND INDUSTRIAL ESTATE SOAR

57

MARCH 2013

Property | Market Watch

Source: DSEC

Source: DSEC

(MOP)

(MOP)

2011 2012

AVERAGE TRANSACTION PRICE PER SQUARE METRE OF RESIDENTIAL UNITS BY DISTRICT AS PER STAMP DUTY RECORDS

AVERAGE TRANSACTION PRICE PER SQUARE METRE OF OFFICE UNITS BY MAIN DISTRICT AS PER STAMP DUTY RECORDS

Notes:1. The above information covers building units with stamp duty paid in the reference quarter2. Including residential units that were exempt from the payment of stamp duty~ No fi gure provided/confi dential data

Notes:Only covers offi ce buildings with ten storeys or higher~ No fi gure provided/confi dential data

District

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

Macau 27,700 36,618 34,011 38,404 40,362 47,767 49,245 47,925

ZAPE 27,393 35,277 23,937 34,674 39,520 39,598 37,774 50,865

NAPE and Praia Grande Bay reclamation area 30,819 37,909 35,200 39,068 41,283 50,784 52,760 45,672

Downtown Macau ~ 32,506 32,004 37,662 36,006 47,413 43,730 52,148

Praia Grande and Penha 19,649 31,391 35,023 37,549 44,969 ~ 40,164 ~

District

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

Macau 38,261 44,269 36,345 41,519 45,453 55,427 58,305 64,869

Macau Peninsula 37,159 42,296 35,416 39,228 41,266 47,461 51,662 63,336

Ilha Verde 40,402 44,075 37,154 34,363 39,520 53,011 47,599 50,042

Tamagnini Barbosa 26,959 34,159 31,614 30,563 30,276 40,011 42,983 46,640

Areia Preta and Iao Hon 28,581 32,586 31,455 32,246 34,454 40,951 41,740 48,756

Areia Preta new reclamation zone (NATAP) 43,266 51,255 43,308 45,984 47,446 52,276 67,636 85,137

Móng Há and Reservoir 30,706 33,789 32,225 36,135 35,428 39,438 41,253 47,885

Fai Chi Kei 28,762 37,637 35,682 33,401 37,690 45,077 46,402 48,419

Lamau Docks 36,867 35,081 39,655 38,787 46,543 60,767 58,544 60,271

Horta e Costa and Ouvidor Arriaga 32,437 32,889 34,592 38,461 35,943 48,889 48,433 44,359

Barca 25,714 30,370 27,438 27,574 29,132 35,055 39,387 43,591

Patane and São Paulo 23,271 27,901 28,945 29,676 28,885 31,064 38,919 48,228

Conselheiro Ferreira de Almeida 27,004 30,460 29,030 33,714 29,877 39,443 37,162 40,335

Guia 26,267 54,703 38,596 57,699 59,312 56,944 52,187 52,876

ZAPE 28,915 30,228 30,410 31,196 32,537 36,957 37,479 42,962

NAPE and Praia Grande Bay reclamation area 67,891 76,634 60,393 61,126 63,534 76,876 79,246 92,964

Downtown Macau 27,878 27,862 29,745 28,197 30,503 35,733 40,881 45,105

Barra / Manduco 30,973 36,663 30,180 32,085 30,292 39,231 40,100 40,918

Praia Grande and Penha 35,151 34,709 36,672 32,470 37,189 41,408 48,245 46,571

Taipa 33,402 42,457 38,162 45,057 48,107 66,804 67,579 67,218

Ocean Gardens and Taipa Pequena 35,102 45,435 36,629 36,115 41,319 42,510 48,183 58,458

Downtown Taipa 31,750 38,869 36,733 45,243 45,305 57,363 68,036 67,105

University and Pac On Bay 26,991 34,566 37,502 41,668 37,899 41,044 43,071 48,258

Pac On and Taipa Grande 82,688 73,898 68,090 66,910 83,346 103,267 91,129 86,932

City and Jockey Club 27,346 28,948 27,588 35,360 36,659 42,552 46,549 43,837

Coloane 67,484 70,098 61,893 64,063 83,173 78,197 81,928 82,350

2011 2012

58

MARCH 2013

Property | Market Watch

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

District Property Price per sq.ft. (HK$)Sale price (HK$)Floor area (sq. ft) Unit

Type Property Price per sq.ft. (HK$)Rent price (HK$)Floor area (sq. ft) Unit

Source: Centaline (Macau) Property Agency Ltd

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

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

Macau Lake View Tower Block 2, L/F, unit J 1,850 33,000 17.84

Taipa One Grantai Block 4, L/F, unit P 2,949 32,000 10.85

Macau Lake View Tower Block 1, M/F, unit C 1,527 28,000 18.34

Taipa Supreme Flower City Block 2, L/F, unit E 2,060 23,000 11.17

Taipa Prince Flower City Block 2, H/F, unit I 1,475 14,000 9.49

Taipa Prince Flower City Block 2, H/F, unit G 1,028 12,000 11.67

Taipa Prince Flower City Block 2, L/F, unit J 1,260 12,000 9.52

Taipa Nova Taipa Block 22, L/F, unit N 823 11,500 13.97

Macau Ville de Mer Block 1, H/F, unit D 961 9,800 10.20

Taipa Kinglight Garden Block 2, H/F, unit H 1,273 9,000 7.07

Taipa Edf. Jardim Wa Bao Block 5, H/F, unit AD 1,131 8,500 7.52

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

Macau The Residencia Block 2, H/F, unit B (with car park) 2,439 18,519,000 7,593

Macau The Residencia Block 2, M/F, unit B (with car park) 2,439 17,625,000 7,226

Macau Pearl Horizon Block 15, L/F, unit C 1,914 17,124,000 8,947

Macau Pearl Horizon Block 15, M/F, unit A 1,835 16,234,000 8,847

Macau The Residencia Block 4, H/F, unit C 2,044 15,000,000 7,339

Macau Pearl Horizon Block 8, H/F, unit A 1,248 9,944,000 7,968

Macau Pearl Horizon Block 17, H/F, unit D 1,302 9,838,000 7,556




Macau Pearl Horizon Block 8, H/F, unit B 1,085 8,928,000 8,229

Macau Pearl Horizon Block 8, H/F, unit B 1,085 8,848,000 8,155

Macau Pearl Horizon Block 17, H/F, unit G 1,183 8,693,000 7,348

Macau La Baie Du Noble Block 1, L/F, unit E 1,576 8,600,000 5,457

Macau The Bayview Block 1, M/F, unit A 1,582 8,500,000 5,373



Macau Pearl Horizon Block 6, M/F, unit D 1,198 7,136,000 5,957

Macau Pearl Horizon Block 17, H/F, unit F 952 6,948,000 7,298

Coloane One Oasis Cotai South Block 8, M/F, unit B 1,255 6,770,000 5,394

Macau Green Island Block 1, M/F, unit C 1,452 6,600,000 4,545

Coloane One Oasis Cotai South Block 5, L/F, unit G 1,177 6,474,000 5,500

Macau Pearl Horizon Block 7, L/F, unit C 1,193 6,380,000 5,348


Macau Pearl Horizon Block 7, L/F, unit D 1,069 5,800,000 5,426

Taipa Prince Flower City Block 5, L/F, unit AC 1,037 5,500,000 5,304

Macau Ville de Mer Block 5, H/F, unit E 823 5,200,000 6,318

Taipa Kinglight Garden Block 1, M/F, unit B 1,293 5,200,000 4,022

Macau Pearl Horizon Block 13, H/F, unit H 767 5,005,000 6,525

Taipa Prince Flower City Block 4, M/F, unit V 1,037 5,000,000 4,822

Coloane One Oasis Cotai South Block 5, L/F, unit C 691 4,080,000 5,904

Taipa Jardim Dragão Precioso Block 3, L/F, unit C 1,000 3,950,000 3,950

Macau Vai Yin Garden H/F, unit A 707 2,880,000 4,074

Source: Centaline (Macau) Property Agency Ltd

59

MARCH 2013

Building units completed

- Residential

- Commercial and offi ces

- Industrial and others

Building units started

- Residential



Macau

- Macau Peninsula

- Taipa

- Coloane

Under MOP1 million

MOP1 million to MOP1.9 million



MOP4 million or above

Total units transacted

- Residential

- New building

- Old building

Resident buyers (as percentage of total buyers)


Resident buyers (as percentage of total buyers)


Total value of total units transacted (2)

- Residential

- New building

- Old building



2,558

2,443

100

15

1,592

1,526

49

17

-69.4

-73.0

-45.9

67.6

148.2

162.9

8.9

100

6.8

8.4

-0.5

-5.0

-46.8

-13.4

4.7

15.6

62.5

-6.7

-4.5

26.8

-20.7

-1.8

13.7

-12.6

-17.5

34.4

28.1

41.0

5.4

93.0

10.9

-8.0

-1.5

-7.8

3.7

3.2

-5.0

n/a

-24.5

32.3

26.1

17.8

45.9

49.7

63.3

84.4

122.3

-56.7

-73.7

-26.3

-25.7

-43.0

-15.0

5.8

4.8

7.6

4.5

-45.5

-27.1

-4.8

17.8

42.0

Construction - private sector

Average transaction price of residential units (3)

Transaction price of residential units (1)

Transactions (1)

2011

2011

2012

2011







Month-on-month change (%)


Latest

Latest

Latest

Latest

Notes

Notes

Notes

Notes

Jan-Dec 2012

Jan-Dec 2012

Jan-Dec 2012

Jan-Dec 2012

Jan-Dec 2012

Jan-Dec 2012

Jan-Dec 2012

Jan-Dec 2012

Jan 2013

Jan 2013

Jan 2013

Jan 2013

Jan-Dec 2012

Jan-Dec 2012

Jan-Dec 2012

Jan-Dec 2012

Jan-Dec 2012

Jan-Dec 2012

Jan-Dec 2012

Jan-Dec 2012

Jan-Dec 2012

Jan-Dec 2012

Jan-Dec 2012

Jan-Dec 2012

Jan-Dec 2012

Jan-Dec 2012

Jan-Dec 2012

Jan-Dec 2012

Jan-Dec 2012

Jan-Dec 2012

Jan-Dec 2012

1,387

1,099

231

57

2,159

2,053

86

20

27,624

17,176

7,783

9,393

87.1

3,128

81.5

7,320

MOP76.3

MOP58.9

MOP41.4

MOP17.5

MOP12.7

MOP4.7

MOP70,407

MOP71,159

MOP64,138

MOP79,008

2,690

4,628

3,162

1,818

4,878

MOP74,524

MOP74,580

MOP69,000

MOP82,532

1,466

3,372

3,011

2,141

6,927

25,419

16,917

7,175

9,742

90.3

2,972

n/a

5,530

MOP100.9

MOP74.2

MOP48.8

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MOP19.0

MOP7.7

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Property Statistics

61

MARCH 2013

BY PAULO A. AZEVEDO, EMANUEL GRAÇA AND MANDY KUOK

PHOTOS BY ANTÓNIO MIL-HOMENS

STAR 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

TURN

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 non-gaming as well.

CEO Interview

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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 fi nd we are not moving the needle. That is not true”

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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 fi nd 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 sacrifi cing quality, to build phase two. We are still on track to fi nish 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.

RISING CONSTRUCTION COSTSPreviously, 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 fi ve-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-in-advance 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.

THE RIGHT TIMINGThis 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 state-of-art technology there. What we have in mind is that, by the time we fi nish, 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.

CEO Interview

64

MARCH 2013

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 fi ght for the convention market because it is lucrative, bringing a lot of wealthy people. We need that market to grow.

How will fi nancing be done for phases three and four? Galaxy Entertainment has a lot of cash.

We have a lot of fl exibility. We are not in any urgency to declare that we have to go to the markets for fi nancing. We will be opportunistic.

According to the fi gures 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 confi dence that we will have a fair amount of tables for us to be able to justify our investments.

EQUAL SHARE OF TABLESSome 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

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 non-gaming components are the difference-makers.

Are the tables fairly distributed today?

It could be done better.

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 confi dence that the government will continue to do positive things to make the industry healthier and more sustainable. I have confi dence 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-Macau-Zhuhai 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 infl uence to always encourage people in charge of that vision to be a little clearer about it.

Galaxy 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.

PLAYING THE GAME

CEO Interview

65

MARCH 2013

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.

AHEAD OF THE PACKWhat 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

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.

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.

Regional gaming competition is not a problem?

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

“I have confi dence 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”

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MARCH 2013

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 offi cial 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 offi cial body should be established: to make sure some common interests of the industry can be discussed on a more offi cial platform. But it is going to take some time.

Are you looking for investment opportunities elsewhere in Asia? Offi cials 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 fi nd 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 offi cially in Japan or Taiwan. It is a bit premature to show interest.

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.

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

Hengqin is defi nitely 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.

When can we expect a decision?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

that one day we will hopefully land in Hengqin.

In Macau, there are four third-party-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?

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.

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

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.

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 fi nd 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 fi rst 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.

FAMILY VALUESFrancis 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.”

CEO Interview

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MARCH 2013

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

68

MARCH 2013

A senior citizen, Aristocrat Leisure Ltd at age 60 is showing no signs of slowing down. The Australian

supplier of slot machines is readying it-self 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 re-gions, and responding with innovative products that perform,” says David Punt-er, the company’s general manager for the Asia-Pacifi c region.

The company is planning a substan-tial celebration at the Global Gaming Expo (G2E) Asia this May in Macau.

“Visitors can expect a very special display of innovative new product con-cepts and gaming channels, which we be-

BY EMANUEL GRAÇA

Noble ambitionsAristocrat is celebrating its 60th year with expanded offerings online and for Asian gamblers

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

Go, playHe says content is key to driving sustain-able value for any slot machine provider. That is why Aristocrat has been “work-ing hard” to develop new products in key markets and segments around the world. In Asia that has meant develop-ing Asian-themed games.

“At the same time, we are making measured and careful investments to en-sure 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 ca-sino slot content in high quality, compli-ant, well-regulated online casino sites in

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 fi rst gam-ing machine, the Clubman, in 1953. The company evolved to become the dominant player in Australia and then expanded globally.

Today, the company boasts a work-force of more than 2,000 staff around the world and has a footprint in more than 90 countries. In the fi rst 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 “abso-lutely focused on the future,” says Mr

Gaming68

Aristocrat’s stand at ICE 2013

69

MARCH 2013

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 deploy-ments live on regulated online casino sites for real money gaming, and 11 games live on free-to-play sites at Sep-tember-end.

Aristocrat acquired social gaming platform Product Madness Inc, an In-ternet gaming system and remote game server last year to deepen its digital foot-print.

The fi rst inIn Asia, online and mobile gaming are in their embryonic stages and the main-stay of Aristocrat’s revenue is bricks-and-mortar casinos. The company opened its fi rst Asian offi ce here in 2006 and Macau is still the cornerstone of its regional operations.

“Aristocrat has now expanded our operation to include an integration cen-tre in Macau, allowing us to deploy our games, cabinets and service more rapid-ly to local customers, plus account exec-utive presence on the ground in Manila and Singapore,” says Mr Punter.

The company’s products will be on

CLASSICS KEEP COMINGNew product releases from Aristocrat

Leisure Ltd in 2013 will continue to build successful franchises, many dedi-cated to gamblers in Asian markets, says David Punter, general manager for the Asia-Pacifi c region.

The company is pushing forward with the next version of the successful Hyper-link 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-Pacifi c region, boosting the features on offer. The company is promoting three games that fi t into the strategy: ‘5 Koi Legends’, ‘50 Drag-ons Legends’ and ‘Fortune King Legends’. They add to the fi rst 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.

the gaming fl oors at Solaire Resort Ca-sino, 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 prop-erties 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 busi-ness 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 prop-erties 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 boom-ing across Asia. The number of seats at electronic gaming tables has grown ex-ponentially, particularly in Macau where the cap on the number of live gaming ta-bles has operators looking elsewhere for profi t centres.

“Obviously we know electronic gaming tables are growing in popular-ity,” says Mr Punter. Aristocrat is not currently involved but is “monitoring the segment” and “carefully considering” its opportunities.

David Punter

70

MARCH 2013

Gaming

BY MICHAEL GRIMES

Nevada-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 tech-nology will be used on Sands China’s gaming tables to provide services for casino patrons including player bonus systems and marketing campaigns.

The fi rm’s founder and chief ex-ecutive Ali Saffari, is a former senior vice president of engineering at slot supplier International Game Technol-ogy Inc.

Sands China and Leap Forward “share a common vision that the table gaming fl oor of the future will inte-grate many features that are currently only available in gaming machines,” says Mr Saffari.

SaffariNet will “enhance our continued commitment to player en-tertainment value while enhancing operational effi ciencies,” says Tim Merrill, vice president of casino op-erations at Venetian Macau.

Leap Forward is also working with Sands China in other areas. It has successfully run a trial of its Saf-fariNet system with slot machines at Sands Macao casino.

The technology enables the gam-ing operator to manage the main screens of slot machines in order to offer personalised marketing mes-sages 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 ma-chines.

“With the machines we’ve retro-fi tted, you will see the actual game can be shrunk by about 20 percent, giving that space for our external window,” using ‘picture-in-picture’

New footingU.S.-based Leap Forward is working with Sands China on slot and table player management

technology, says Mr Saffari. In that area of the screen, players can see information about the hotel, the res-taurants and advertisements, for in-stance.

“We chose the 20-percent reduc-tion through learning by experience. At that level, the game keeps what I call its ‘crispiness’ – in terms of the graphics and etcetera – while allow-ing an ample window to show the rest of the casino’s ‘story’,” he says.

Game integrityThe targeted marketing messages apply to so-called ‘carded’ players (members of loyalty programmes). But SaffariNet also enables the casi-no 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 An-drew Novotak, senior director inno-vation engineering for Leap Forward, during a recent trip to Macau to over-see the Sands Macao installation.

Mr Saffari adds: “Because gam-ing is a regulated environment, eve-ry 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 capabili-ties 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.

“With the machines we’ve retrofi tted, 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

71

MARCH 2013

BY DANIEL MACADAM*

* GAMBLINGCOMPLIANCE

PokerStars will open its new per-manent poker room in Macau at Melco Crown Entertainment

Ltd’s City of Dreams, its third home here in fi ve years, the company announced last month.

The world’s biggest online poker company will have 13 permanent poker tables on the main fl oor of Melco Crown’s fl agship casino in Cotai. Fur-ther details regarding the offi cial open-ing 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’ direc-tor of strategy and business develop-ment, told GamblingCompliance that the game’s growing popularity in Asia is starting to convince more Macau ca-sinos to put poker tables on their gam-ing fl oors. Macau’s tight table cap means gaming operators need to carefully weigh the use of each table and ensure

Upping the antePokerStars plans new home in City Of Dreams

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 fi t’Mr Templer admits that under the table cap “a poker table is on a par with bac-carat – the most popular game – so ob-viously casino owners look at the busi-ness and where they can make the most money.”

Nonetheless, he says the room is a “natural fi t” for City of Dreams because Melco Crown recognises poker’s grow-ing 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 increas-ingly important market, and will benefi t from there being only a limited number of poker tables in Macau,” Mr Templer says.

It also fi ts in with PokerStars’ grow-ing drive to have a permanent spot in land-based venues to push its brand fur-ther, 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 indi-cate 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.

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MARCH 2013

Gaming

GAMING USING MORE ELECTRICITYThe electricity usage by the gaming sector continues to increase at a double-digit rate, offi cial 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.

MGM China Holdings Ltd hosted last month an offi cial 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

MGM CHINA STARTS CONSTRUCTION IN COTAIas 500 gaming tables and 2,500 slot machines.Around 85 percent of the gross fl oor 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

ONE IN FIVE WORKERS IS EMPLOYED BY A CASINOMore than half of Macau’s local workforce worked in service industries such as casinos, hotels, restaurants and retailing in the fi nal quarter of last year, offi cial 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 SANDSGaming 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.

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-market-oriented projects open in Cotai.

The company’s new project will provide up to 6,000 new jobs, says chairperson Pansy Ho

73

MARCH 2013

BY MUHAMMAD COHEN

The Philippines takes a giant step toward remaking its gaming in-dustry this month. On March

16, Solaire Resort and Casino opens, the fi rst 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 inter-national casino resorts.

“We are the game changer, bring-ing quality and service to a new level not just in Manila but in the entire re-gion,” Solaire’s senior vice-president for gaming Dennis Andreaci tells Macau Business.

Manila Bay watchVeterans from Macau’s casino industry are ready to launch Manila’s Solaire Resort and Casino – a rival based on Macau’s DNA

“Solaire brings to the Philippines, for the fi rst time, a property whose de-sign, quality, styling, services, food and beverage, and gaming can compete on a global stage – a property that is posi-tioned 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 con-ditions as the country and economy did”.

Solaire aims to transform a market led by domestic players betting an aver-age 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, com-pared to the US$38 billion that the Macau gaming market was worth.

Gaming analyst Richard Huang of Hong Kong brokerage CLSA Asia-Pa-cifi c Markets says: “We forecast Philip-pine gaming revenue to increase from US$1.3 billion in 2011 to US$3 billion in 2016, assuming that’s the year the three

74

MARCH 2013

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

Destination marketForeign gamblers account for about 30 percent of gaming revenue in the Philip-pines. “The Philippines is a niche mar-ket for gaming,” HSBC bank regional gaming and consumer analyst Sean Monaghan says. “It could become a des-tination market in its own right, depend-ing 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 contrib-uted less than 10 percent of all arrivals.

The mainland was the next big-gest 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

jurisdictions should grow within their own target markets,” says the managing director of Las Vegas consulting fi rm 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 themesWhen 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 en-tertainment lounge.

The resort, designed by Paul Steel-man, 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 com-plete in two years.

CLSA estimates that Solaire’s rev-enue this year will be US$500 million. Citibank’s estimate is about 10 percent lower.

“The project execution has been fi rst 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

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 Philip-pines 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 suffi ciently dif-ferent in terms of tourism mix that both

Gaming

75

MARCH 2013

Solaire Resort and Casino is the fi rst of four casino resorts due to open in the new Entertain-

ment 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 bil-lion (about MOP8 billion), a gaming licence and at least one Filipino bil-lionaire 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 fl oors.

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,

Entertainment City’s four top guns

Macau-style strategies to emerge, par-ticularly 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 Enter-tainment Group Ltd’s Galaxy Macau, and formerly an executive of Las Vegas Sands Corp.

Solaire’s chief operating offi cer, Michael French, was a senior vice-pres-ident of Melco Crown Entertainment Ltd’s City of Dreams and Altira. The new casino resort’s senior vice-president and chief fi nancial offi cer, Ed Chen, is a former fi nancial controller of Wynn Macau Ltd. Some 400 of Solaire’s gam-ing personnel have experience in Macau or Singapore casino resorts, many of them Filipinos that the resort has lured home.

Second homeGlobal 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 Bay-shore 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 marketSome 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 Leon-ardo Dioko, a professor at the Institute for Tourism Studies in Macau. “The economy is booming. Middle-class in-come appears to be sustainably rising, the current government has rational-ised most of its policies and the leader-ship enjoys stability and support.”

CLSA Asia-Pacifi c Markets gam-ing 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 & Consult-ing managing partner Ben Lee is more cautious, pointing to the part played by President Benigno Aquino’s govern-ment. “It all depends on whether the current economic momentum gener-ated 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 gam-ing analyst Sean Monaghan says. But he adds: “Sometimes you need to build it to test the market.”

76

MARCH 2013

13 years; former Las Vegas Sands presi-dent of global operations Brad Stone; and the former chief operating offi cer of Melco Crown, Garry Saunders.

“For the Macau and Singapore ca-sino VIP player, they will walk into our VIP and premium player areas and im-mediately feel at home,” Mr Andreaci says. “Everything that they are accus-tomed 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 go-ing after the small part of the market that is interested in a diversifi ed expe-rience from Macau, a mix of high-end travel experience and the fi nest 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 mass-

country is the base for many online gam-ing operations. This could help Solaire stimulate interest among potential jun-keters 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 fl eet 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 in-frastructure, especially transport link-ages.”

An expressway from Manila airport to the Entertainment City complex is supposed to open in 2015.

“For all its hospitableness, the Phil-ippines also needs to improve a lot on service quality and the culture of nick-el-and-diming visitors at every stage of travel,” says Mr Dioko, who is Filipino himself.

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 shiftMacau junket operators Suncity Group and Jimei Group already do business in the Philippines, says one analyst who does not wish to be identifi ed, and the

Gaming

77

MARCH 2013

JUNKET NUMBERS HIT NEW RECORDMacau currently has 235 junket operators, up by 7.3 percent year-on-year

AERL MOVES VIP ROOMTO SANDS COTAI CENTRALNasdaq-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.

OKADA RESIGNS FROM WYNN RESORTS BOARDJapanese 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 fi nance 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.

ASPECT GAMING ACQUIRESCASINO GAMES DEVELOPERMacau-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.

Offi cial 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.

78

MARCH 2013

Gaming

Las Vegas Sands Corp said last month it was set to go ahead with building a huge casino complex

near Madrid, which could create hun-dreds 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 pro-viding 36,000 rooms, nine theatres, three golf courses and several conven-tion centres over 15 years.

The fi rst, most expensive phase foresees four resorts with 3,000 rooms each, casinos and leisure infrastruc-ture 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 fi rm last year chose Madrid over Barcelona to host the project, some observers doubted it could fi nance it due to a credit crunch and un-certainties over the Spanish economy. But chief operating offi cer Michael Lev-en says the company is ready to pump in 35 percent to 40 percent of the funds for the fi rst phase of the project and has se-cured fi nancing from banks for the rest.

“That money is available,” Mr Lev-

BY ANNA CUENCA*

* AFP NEWS AGENCY

Ready to goLas Vegas Sands confi rms Madrid mega-casino dig

en told a news conference last month, without naming the lenders.

Las Vegas Sands is the world’s big-gest 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 Igna-cio Gonzalez. “We expect to lay the fi rst 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 govern-ment says it hopes the project will cre-ate 200,000 jobs when it is completed. Spain is currently grappling with an un-employment rate of 26 percent.

Dangers and risksThe fi rst phase of the project could cre-ate around 40,000 direct jobs and anoth-er 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 fi rst unveiled the project six years ago. The mega-casino complex is backed by Spain’s ruling conservative Popular Party but is op-posed by left-wing parties, labour groups and top offi cials 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 asso-ciations 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 dou-ble 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”.

79

MARCH 2013

BY MICHAEL GRIMES

ICE babyAustria’s Novomatic sets new records as Europe’s leading casino trade show moves home

Novomatic AG, a major supplier of casino gaming equipment in Southeast Asia and the Philip-

pines, dominated the fl oor at the ICE 2013 trade show, held last month.

The fi rm’s display at the ExCeL London Exhibition and Convention Centre, on the eastern side of the Brit-ish 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 state-ment. The display included 25 kilome-tres of cabling – enough, says Novomat-ic, 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 ac-cess 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 dis-tance 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 excel-lent show,” said Jens Halle, managing director of Austrian Gaming Industries GmbH, a Novomatic subsidiary.

Product launchAustria’s Novomatic has spent the past few years expanding its range of prod-ucts and services via acquisition as well as in-house research and development.

Recent additions to the business include subsidiaries Greentube Inter-net Entertainment Solutions GmbH, and Octavian Global Technologies Inc, a specialist in casino game manage-ment systems. Octavian had its fi rst or-der from a Philippines casino last year for its Accounting Control Progressives System for gaming fl oors.

One of the key products launched by the group at ICE 2013 was the Domi-nator slot machine cabinet, featuring touch-screen controls rather than tradi-tional buttons – although the fi rm says the option of traditional controls is avail-able for casinos that want it.

As the name suggests, the machine is designed to stand out on crowded ca-sino fl oors. It has three, 24-inch screens using thin-fi lm transistor technology – a type of liquid crystal display fl at panel screen – as well as the option of an ex-tra screen display above the machine, known in the casino trade as a ‘topper’.

“‘The Dominator’ is a self-confi dent name, we know,” says David Orrick, di-rector of communications and business development for Novomatic. “But we are quite sure it will be a leading and domi-nating machine on international gaming fl oors.”

Novomatic’s stand at ICE 2013

Novomatic’s new Dominator slot machine cabinet

80

MARCH 2013

Gaming

BY MICHAEL GRIMES

Imagine a casino fl oor 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 tech-nology – a mirror-based illusion used in Victorian music halls and sideshows known as ‘Pepper’s Ghost’ – with mod-ern digital holographic projection and computer tablets.

In doing so, the company has creat-ed what just a few years ago many would have considered impossible: an alterna-tive to the live dealer casino game, but one that doesn’t need the space taken up on a casino fl oor by a stadium-style elec-tronic 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 ac-tion in a compelling new way. Dealers throw 3D dice and cards into the vir-tual sphere, matching up game-play in real-time.

Not just in the mindInterblock’s latest hologram technology creates the possibility of table gaming without a table

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 fu-ture, the company will offer players the chance to make bets via a computer pro-gramme downloaded to a tablet or mo-bile handset.

The system was shown by invitation only during Global Gaming Expo in Las Vegas last autumn, but put on public dis-play at the ICE 2013 gaming industry trade show in London last month.

Optical illusion“At fi rst 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, Inter-block’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 gam-ing,” she says.

Musion Systems is the exclusive master global licensor of Musion Eye-liner, a high-defi nition video projection system that allows moving images to appear within a live stage setting. Inter-block says it has an exclusive agreement with the company for the supply of the technology for use in gaming. The pro-jection creates the illusion of life-size, full colour, 3D moving images on stage.

Interblock says that while it is ac-tually 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 fl oors 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 visi-tors to the show. We’re very proud of this achievement. Technology moves on and we have to keep coming up with new ideas.”

Interblock Hologram Gaming Lounge at ICE 2013 in London

81

MARCH 2013

Gross gaming revenue (2012)

Gaming tables

Slot machines

Number of casinos

SJM Holdings Ltd

Galaxy Entertainment Group Ltd

Sands China Ltd

Wynn Macau Ltd

Melco Crown Entertainment Ltd

MGM China Holdings Ltd

Greyhound Racing

Horse Racing

Chinese Lottery

Instant Lottery

Sports Betting - Football

Sports Betting - Basketball

Roulette

Blackjack

VIP Baccarat

Baccarat

Fantan

Cussec

Paikao

Mahjong

Slot machines

3-Card Poker

Fish-Prawn-Crab

3-Card Baccarat Game

Craps

Texas Holdem Poker

Lucky Wheel

Live Multi Game

Stud Poker

Casino War

Fortune 3 Card Poker

13.5 10.714.3

1

-233

-2-1--

-31.0-19.1

---61.115.529.1

13.98.87.5

36.118.016.2

-23.7190.0

15.910.5

-56.923.5-9.34.30.0

187.812.5

8.846.1

-8.23.12.9

34.626.312.6

-29.659.315.212.5

-25.016.7

-38.98.5

12.5175.4

12.9-9.9

89.2

---1--1

-11

-5.2-7.7

-50.0-58.3

-3.989.5

11.53.53.3

1

Casino gaming

Market share per casino operator*

Gross revenue from other gaming activities

Gross revenue from casino games

2011

2012

2012

2012






Month-on-month change (%)



Latest

Latest

Latest

Latest

Notes

Notes

Notes

Notes

Feb 2013Dec 2012Dec 2012Dec 2012

Feb 2013Feb 2013Feb 2013Feb 2013Feb 2013Feb 2013

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

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

MOP 304.15,302

16,056 34

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

MOP205MOP356

MOP6MOP0.0014

MOP418MOP111

MOP55MOP96

MOP1MOP0.0005

MOP99MOP36

MOP892MOP2,950

MOP210,850MOP66,251

MOP249MOP5,546

MOP87MOP203

MOP13,244MOP211

MOP22MOP347MOP137MOP289

MOP35MOP895

MOP1,472MOP246MOP206

MOP234MOP773

MOP54,831MOP18,763

MOP72MOP1,466

MOP19MOP43

MOP3,504MOP54

MOP6MOP84MOP33MOP77

MOP9MOP314MOP410

MOP64MOP70

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

MOP 27.15,485

16,58535

billion

casinos

millionmillionmillionmillionmillionmillionmillionmillionmillionmillionmillionmillionmillionmillionmillionmillionmillionmillionmillion

millionmillionmillionmillionmillionmillion

millionmillionmillionmillionmillionmillion

millionmillionmillionmillionmillionmillionmillionmillionbillionmillionmillionmillionmillionmillionmillionmillionmillionmillionmillion

billion

casinoscasino casino

So

urce

: Gam

ing

Insp

ectio

n an

d C

oo

rdin

atio

n B

urea

u an

d in

dus

try

sour

ces

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

percentage pointspercentage points

percentage point

percentage points

percentage pointpercentage point

percentage point

percentage point

percentage point

82

MARCH 2013

Hospitality

Macau 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 wel-come. 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 diffi culties of running a fully-fl edged restaurant, including high rents and strict regulations. Private kitchens can be set up in a typical fl at or anywhere with cook-ing facilities.

Owners do not spend a penny on promotion. Some pri-

BY ALEXANDRA LAGES

Head out, eat inIntimate settings are attracting diners from crowded restaurants to private kitchens

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 pri-vate 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 busi-nessman, so you would like to have more tables, right?’ But, after coming here, if they fi nd 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 fl ashy new restaurants that are opening all over the city tend to ca-ter to their needs. But residents are often on the look out for establishments offering more privacy, the owners of the city’s

PHOTOS BY NATY TÔRRES

83

MARCH 2013

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 digestMacau 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 fi ne-dining restau-rants. All the people running private kitchens that we spoke

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

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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 before-hand, 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

SCRAMBLED REGSThe 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 con-fusing. The Macau Government Tourist Offi ce oversees restaurants, but the Civic and Municipal Affairs Bureau

oversees more humble eating places.A spokesperson for the tourist offi ce

told Macau Business that private kitch-ens in fl ats, serving only a few diners, would have insuffi cient facilities to qualify them legally for a restaurant licence. The spokesperson said the tourist offi ce 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 Kitch-en, 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.”

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 pos-sible,” 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

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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 house-wives used to do everything,” he says.

World of foodMaria Couto is comfortable being called old school. Ms Couto claims Macanese heritage, Macau’s distinct Eurasian commu-nity, but lived in the United States and Portugal before return-ing 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 fl at.

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 prepar-ing lunch boxes and delivering them to customers. “Then peo-ple 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 Maca-nese. 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 fl oor of a residential building in the Avenida Horta e Costa area. The host is Benny Fong, who cooks Japa-nese and Western cuisine. He often likes to mix the two styles but his cardinal rule is to give the dishes a home-made fl avour.

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 cookerMr 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 ingre-dients, most imported from Australia or Europe. The only in-gredient 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.

MARIA’S PRIVATE KITCHENHoi Fu Garden, Rotunda de S. João Bosco, MacauOpen 5pm to midnightSeats up to 30 guestsTwo sittings for dinner each eveningMake a booking on 6679 4825Owner Maria Couto specialises in Macanese cuisine, made with ingredients bought here

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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

DIAL-A-CHEFInstead 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, fi ve 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.

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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 popu-lar that the Fong’s intend to open a shop in May to sell their sauces.

Ms Couto serves up to fi ve sittings a week at Maria’s Pri-vate 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 sur-prise, especially with the interviews with magazines and tel-evision 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 profi t of about MOP30,000 a month.

RED HOUSE PRIVATE KITCHEN109-C B, Avenida Conselheiro Ferreira de Almeida, MacauOpen from 5pm to 11:30pmSeats up to 30 guestsMake a booking on 6633 6033Chef Benny Fong serves Japanese and French food, prepared with ingredients such as Wagyu beef from Australia and white pearl oysters from France

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MARCH 2013

A growing number of casino re-sorts 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 try-ing 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 Offi ce has offered since Novem-

BY LUCIANA LEITÃO

Love and moneyThe hospitality industry wants to create the ultimate wedding destination, combining casino-resort know-how and the city’s romantic setting

ber. The tourist offi ce gives out grants of up to MOP300 (US$37.50) for every wedding guest from abroad, depending on how much they consume. To be eligi-ble 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 stead-ily since 2006. Last year, 3,783 wed-dings 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 wed-dings, 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 fur-ther tap into market for weddings.

And in healthNearly 100 weddings took place at Gal-axy Macau last year. “We’re looking to

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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 de-mand 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 In-dia. It is expecting fi ve to 10 Indian wed-dings this year.

“Indian weddings have a lot of value for us, because for three days they uti-lise the entire property and the banquet

facilities. We had our fi rst 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 for-ward 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 res-taurants, watch the shows in the theatres, shop in the shops – and gamble in the casinos.

Colourful backdropThis is one reason why the Venetian Ma-cao is boosting its efforts to win a big-ger slice of the market. Vice-president of convention and exhibition operations, Gene Capuano, says the Sands China

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The Grand Hyatt’s wedding busi-ness is growing fast. The number of bookings made in January and Febru-ary 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 book-ings are made less than four months be-fore 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 in-tends to hold another before the end of next month.

The Sofi tel Macau at Ponte 16 will hold a wedding fair later this month. The hotel specialises in small and medium-size weddings, with up to 22 banquet ta-bles. 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 indus-try, he raises his glass to many more future brides and grooms. The more the merrier.

Ltd casino resort is aiming to attract couples, their families and friends, and, of course, wedding planners.

The Venetian Macao holds an av-erage of 30 to 60 weddings a year and business is growing steadily. The casino has already hosted weddings for cou-ples 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 photo-graphed 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 es-timates that some can cater for up to 200 subjects a year, one-quarter of them from abroad. A basic pre-wedding pho-tography 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 ca-tering, 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 in-tends to get more wedding business. Since 2011 the hotel has had what it calls

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

To the futureGrand Hyatt Macau general manag-er 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 wed-ding 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.

Hospitality

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

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MACAU CAN STILL HANDLE MORE TOURISTSTourist Offi ce head says over crowding at Barrier Gate checkpoint was a ‘one-off’ event

The head of the Macau Government Tourist Offi ce, Maria Helena de Senna Fernandes, has reaffi rmed 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.

THINK TANK TO STUDY IMPACTOF INDIVIDUAL VISA SCHEMEThe government’s Policy Research Offi ce announced last month that it will launch a study on the impact of the individual visitor scheme in Macau. The offi ce noted that the scheme has contributed signifi cantly 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.

NEW ALL-TIME HIGH FORHOTEL GUEST NUMBERSIn 2012, the number of hotel guests increased by 10.8 percent year-on-year to 9.5 million, shows offi cial 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 fi ve-star.

HOTEL BOOM UNDER WAYMacau 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.

Maria Helena de Senna Fernandes

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Tourism statistics

Total

- Same-day visitors

- Overnight visitors

Average length of stay

Hotel and guest-house rooms

Hotel guests

Hotel average occupancy rate

Average length of stay

Total spending (excluding gaming)

- Non-shopping spending

- Shopping spending

Per-capita spending

Asia

- Mainland

- Guangdong

- Fujian

- Zhejiang

- Hunan

- Beijing

- Shanghai

- Tianjin

- Chongqing

Individual visit scheme

- Hong Kong

- Taiwan

- Japan

- South Korea

- Others

America

Europe

Oceania

Others

2,312,321

1,195,450

1,116,871

1.0

26,069

9,541,397

83.1

1.40

MOP 14.6

MOP 7.5

MOP 7.1

MOP 2,019

2,250,806

1,473,785

683,776

67,180

41,448

46,724

33,702

51,033

10,653

14,900

616,066

509,826

76,841

26,904

52,668

110,782

23,248

22,352

13,852

2,063

0.3

-3.8

5.0

--

11.3

11.0

4.3

-0.01

20

23

16

7

0.3

4.6

-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

-6.1

-12.8

2.4

-0.1

16.6

10.8

-1.0

-0.13

9

15

3

11

-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

Visitor arrivals

Hotels

Visitor expenditure

Visitors by place of residence

2012

2011

2011

2012









Latest

Latest

Latest

Latest

Notes

Notes

Notes

Notes

Jan 2013

Jan 2013

Jan 2013

Jan 2013

Dec 2012

Jan-Dec 2012

Jan-Dec 2012

Jan-Dec 2012

Oct-Dec 2012

Oct-Dec 2012

Oct-Dec 2012

Oct-Dec 2012

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

So

urce

: Sta

tistic

s an

d C

ensu

s S

ervi

ce

28,082,292

14,504,994

13,577,298

1.0

22,356

8,612,127

84.1

1.53

MOP 45.3

MOP 22.9

MOP 22.4

MOP 1,619

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

days daysday

nights

billion

billion

billion

billion

billion

billion

nights nightsnights

percentage points

percentage point

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MARCH 2013

Call to armsMacau 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 offi cials 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 infl uence 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 Offi ce 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 offi ce, 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.

Bread and butterMaking Macau a top tourism destination is an inclusive task in which everyone should be involved. That includes taxi and bus drivers, police offi cers, 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 offi ce is reviving the courtesy campaign it rolled out some years ago and it expects one-fi fth 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 offi cials put their minds

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 – w here they enjoy better service, even though the facilities may be older and less glamorous.

Advantage MacauCompared 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. Offi cials 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 fi nger. This is the time to look ahead and act fast. I hope the new leadership at the Macau Government Tourist Offi ce 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.

OFFICIALS ALL SAY THEY GRASP THE IMPORTANCE OF IMPROVING SERVICE TO TOURISTS. SO WHY DO THEY FAIL TO ACT?

GUSTAVO CAVALIERE HOSPITALITY INDUSTRY EXPERT - [email protected]

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MARCH 2013

Email is the standard for commu-nication in the corporate world. It is used for everything from

day-to-day operations to complex nego-tiations, with messages often containing crucial information.

Email is simple to use, and a quick and handy way to reach people in sever-al different places simultaneously. How-ever, misuse can just as quickly betray a company’s secrets or tarnish its reputa-tion. It is much easier to circulate emails than paper memos or documents. Even once deleted, emails can be recovered much more easily than shredded docu-ments.

But companies in Macau tend to be oblivious of the dangers and neglect to set rules for its use. The Macau In-formation Security Survey for last year found that only 33 percent of the bod-ies polled had “mostly or fully” imple-

Plugging e-leaksDespite the dangers, most companies have a laissez-faire attitude to monitoring corporate email accounts

mented a policy on the security of elec-tronic information. The same survey in 2011 that found 38 percent had done so, suggesting that the companies paying attention to email security are a declin-ing minority.

The annual survey polls more than 80 bodies ranging from government departments and gaming companies, to small or medium enterprises. It is com-missioned jointly by the Macau New Technologies Incubator Centre, the Information Systems Audit and Con-trol Association, the Macau Computer Emergency Response Team Coordina-tion Centre and the government.

University of Macau management lecturer Gordon Kerr says many compa-nies 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 awayThe latest Macau Information Security Survey found that one of the main rea-sons 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 confi dential database,” says Brenda Chan Wing Han, assistant professor of business informa-tion systems at the University of Macau.

Several companies here have expe-rienced some form of leak or misuse of corporate information. She says many “prefer not to disclose security breaches

BY SARA SILVA MOREIRA

Technology94

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MARCH 2013

arise from the misuse of corporate email accounts for actionable or criminal pur-poses, such as circulating child pornog-raphy. Protocols make it clear to employ-ees that their employer reserves the right to monitor emails sent and received us-ing corporate accounts.

Peeking policy“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 in-tegrity of the organisation,” says Geof-froy Thonon, an expert in information systems security.

Email rules should cover the accept-able 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 dif-ferent risk levels. One organisation may feel it is perfectly fi ne to operate in a [certain] manner, but another company may fi nd it too liberal and too risky,” Mr Thonon says.

Rita Martins, a partner at DSL Law-yers with experience in matters of per-sonal data protection, says emails should be monitored appropriately. Ms Martins says intrusion into private life should be avoided.

“Enterprises who trade in informa-tion and sensitive data have legal and fi duciary responsibilities, for example fi nancial and security services, and are required to adopt more robust proce-dures,” says Mr Kerr. “However, all or-ganisations have a responsibility to pro-tect the legal and moral rights of parties involved.”

Message sentTo meet this obligation and ensure its in-formation security policy is legal, a com-pany should obtain the consent of all its employees to monitor their activity on the Internet and be open about the monitor-ing 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 com-munications network that may facilitate intrusion by third parties on the system, the possible contamination of internal fi les and/or systems with viruses or cor-ruptive fi les,” she says.

Mr Kerr says the government is al-ready setting an example to the private

THE MISTAKES OF OTHERSSands China Ltd was embroiled

in a scandal with international ramifi cations 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 offi cial said he would be able to help the company obtain gov-ernment permission to sell fl ats 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 com-pany’s former chief executive Steve Jacobs. The exchange was afterwards made available online by ProPublica, a non-profi t 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 prin-ciple. “What is surprising in the Sands China case is that the same principles were obviously not applied to the con-trol of electronic communications such as email,” says Gordon Kerr, a lecturer in management at the University of Macau.

The experts say it is diffi cult 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 infor-mation, but also because they are frequently the face and the voice of their companies.

in order to keep their reputation and im-age intact”.

More than half of the companies polled in the latest Macau Information Security Survey had experienced be-tween one and fi ve 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

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sector. “Most government agencies, for reasons of public accountability and transparency, have a mature or well-developed 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 employ-ee’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 person-al data will be collected and the conse-quences 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

relevant cases and take the opportunity to organise clarifi cation sessions.”

Managers should explain the infor-mation security policy to new recruits and remind employees about it every year to make sure they do not forget it or become careless. “Continuous commu-nication and training is always prefer-able to applying penalties after the deed and the damage has been done,” the Uni-versity of Macau’s Ms Chan says.

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

Technology

Ensuring information security is made more diffi cult by the use of private email accounts for work

“With a few exceptions, in Macau, little time or money is spent on provid-ing formal training related to email use or indeed to other business processes,” Mr Kerr says. Many family-run busi-nesses often rely on highly personal and informal management and control, he says.

Ensuring information security is made more diffi cult 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 offi ce with ac-cess to corporate information and appli-cations, 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 fi nal observation that employers should heed.

“Taking care of the staff’s well-being may be reciprocated by staff that will take care of the organisation’s well-being.” After all, by the time a company realises that valuable or damaging infor-mation has been leaked, it may have al-ready fallen into the wrong hands.

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Our children’s economicsThe 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 fi nancial 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 fi nance, in which human foibles are brought to bear to explain the failure of the so-called effi cient 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 fi eld experiments. Applied econometricians pointed to the growing importance of “big data” and to the likelihood that large data sets will have signifi cantly enhanced our understanding of economic decision-making by 2033.

Revolutionary stepsOverall, 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 refl ects 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 shiftIndeed, 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 fi rst-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.

BARRY EICHENGREEN PROFESSOR OF ECONOMICS AND POLITICAL SCIENCE, UNIVERSITY OF CALIFORNIA – BERKELEY

THE ECONOMICS PROFESSION IS SET TO BECOME MORE DIVERSE AND DYNAMIC

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MARCH 2013

BY SARA SILVA MOREIRA

A 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, regard-

ed as the more laid-back sister of hec-tic 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 infl ation and the cost of housing, are additional stressors.

There is little in the way of data available about workplace stress. A sur-vey by the Labour Affairs Bureau and Public Administration and Civil Service

Tested and tiredLittle understood and rapidly increasing, researchers say work-related stress is wreaking havoc among the workforce

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 high-pressure industries such as gaming.

A survey by the Macau New Vi-sion 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 re-spondents 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 glo-bal pattern. Research last year by facili-ties 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 blamedThe 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

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MARCH 2013

pushes for more profi t, our superiors de-mand more and more from us without giving us anything in return, such as stress management courses,” she says.

Another cause of stress is the soar-ing cost of housing, whether it is hous-ing 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 fi nd it diffi cult to relax outside of work be-cause wherever they go they fi nd crowds of tourists,” Ms Kuok says.

University of Macau assistant pro-fessor in psychology Christine Lau Ching says: “The ability to cope suc-cessfully with stress is frequently held to be the key to human happiness.”

A little stress can be positive, im-proving productivity, but once a limit is crossed, the effects can be highly dam-aging. “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, dia-betes, obesity and coronary disease have all been linked to stress. It may eventu-ally 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 offi cer.

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 em-phasises that managers should be aware that each employee deals with stress dif-ferently. It says understanding the differ-ences and fi nding the best way to help each employee overcome the problem prevents the loss of valuable manpower.

Older and wiserFor employees, learning to cope with stress is crucial for the prevention of its adverse consequences.

“Some people would prefer a cogni-tive approach to problem solving. Oth-ers 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 breath-ing techniques,” says Ms Lau.

Ms Kuok says stress can be alle-viated by physical exercise, hobbies and taking part in new activities, or

through drug therapies.Stress and age seems to be cor-

related: the younger an employee, the more likely it is they may suffer from stress. More seasoned employees usu-ally 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 per-cent of all workers surveyed thought fl exible working conditions are the best way to reduce stress. Flexible work-ing conditions include not only fl exible working hours, but also working away from the workplace.

“Employees feel they can better manage their lives and they feel more satisfi ed 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 em-ployees to tasks according to their abili-ties and knowledge, provide relaxation facilities, keep an eye on performance and health, and accurately evaluate and reward the work of staff.

Policeman’s lotExperts say the costs to a business of over-stressed employees – less motiva-tion, lower productivity, days lost be-cause of illness, absenteeism and the like – can outweigh the costs of preven-tive measures. They add that managers should make themselves available to dis-cuss 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 Bu-reau 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 of-fers psychological support to offi cers. In 2011, it had 95 requests for psycho-logical 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 work-place education, and into the prevention and treatment of the ailments that stress causes or exacerbates.

and communications manager for the Asia-Pacifi c region. The Regus survey says the biggest cause of stress is work, followed by personal fi nances and cus-tomers.

In large businesses, management is the second-biggest cause of stress. Some of the more stressful industries are man-ufacturing, banking and fi nance, infor-mation and communications technology, consulting and retailing.

For Shelby Sio, a senior customer service offi cer 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 offi cer at a big company, who asked not to be identifi ed, says she feels increasingly stressed and blames management. “As the company

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MARCH 2013

Breaking China’s investment addiction

China’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, fi xed 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 fi xed 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 effi ciency of investment capital, refl ected 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 capital-output 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 signifi cantly more investment to generate an additional unit of output.

Running on creditAs the accumulation and deepening of capital accelerate growth, they perpetuate the low-effi ciency 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 profi ts fall. While credit expansion can offset this to some degree, increased production based on credit expansion inevitably leads to large-scale fi nancial 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 fi nancial crisis, Chinese banks were instructed to extend credit and invest in large-scale infrastructure projects as part of the country’s massive monetary and fi scal 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 infl ation, sent real estate prices soaring and fuelled a sharp rise in debt.

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 fi scal policy adopted during the fi nancial crisis enabled the rapid expansion of local offi cial fi nancing platforms (state-backed investment companies through which local governments raise money for fi xed-asset investment), from 2,000 in 2008 to more than 10,000 in 2012. But, as local-government debt grows, Chinese banks have begun to regard real estate and local fi nancing platforms as a major credit risk.

Fragile systemLikewise, with key industries facing overproduction and slowing profi t growth, fi rms’ defi cits are growing – and their debts are becoming increasingly risky. Indeed, the proportion of defi cit spending among enterprises is on the rise and the accounts-receivable 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 fi ll the gap, which has driven up debt further.

According to research fi rm 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 fi rms’ capital chains may well rupture in the next two years, when they reach their peak period for debt repayment.

As a result, China’s fi nancial 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 fi nancing platforms, together with the off-record credit channelled through the “shadow” banking system, are increasing the risk that non-performing 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 infl ict serious long-term damage on economic performance.

ZHANG MONAN FELLOW OF THE CHINA INFORMATION CENTRE

RELIANCE ON INVESTMENT WILL NOT ENABLE CHINA TO ACHIEVE STABLE, LONG-TERM GROWTH AND PROSPERITY

March

Date: 8th – 10th

Event: 27th Wedding, Banquet, Beauty & Jewelry ExpoVenue: Venetian Macao-Resort-Hotel, MacauOrganiser: A Plus PR & Advertising CoAddress: Room 1408, 14/F Luso International Bank Building, Rua do Dr Pedro José Lobo, MacauTel: (853) 2870 3930Fax: (853) 2871 6297E-mail: [email protected]

Date: 12th – 14th

Event: iGaming Asia Congress 2013Venue: Grand Hyatt, MacauOrganiser: Beacon EventsAddress: 20/F, Siu On Centre, 188 Lockhart Road, Wanchai, Hong KongTel: (852) 2219 0111Fax: (852) 2219 0112Website: www.igamingasiacongress.comE-mail: [email protected]

Date: 21st – 23rd

Event: 2013 Macao International Environmental Co-operation Forum & ExhibitionVenue: Venetian Macao-Resort-Hotel, MacauOrganiser: Macau GovernmentTel: (853) 8798 9675Fax: (853) 2872 3322Website: www.macaomiecf.comE-mail: [email protected]

Date: 29th – 31st

Event: 4th Macau International Real Estate FairVenue: Venetian Macao-Resort-Hotel, MacauOrganiser: Macau Decheng International Media Co LtdTel: (853) 2892 0009Fax: (853) 2892 0007Website: www.v-8.cnE-mail: [email protected]

April

Date: 10th – 12th

Event: APAC Investments Summit 2013Venue: Venetian Macao-Resort-Hotel, MacauOrganiser: Marcus EvansAddress: 9 Demostheni Severi Avenue, Nicosia 1080, CyprusTel: (357) 22 849 300Fax: (357) 22 849 307Website: www.apacinvestmentssummit.comE-mail: [email protected]

: A Macau Business partner event

Date: 18th – 19th

Event: Mobile Payments & NFC World Summit 2013Venue: Eaton Hong Kong, Hong KongOrganiser: Symphony GlobalAddress: 10 Anson Road, #26-04 International Plaza, Singapore 079903, SingaporeTel: (65) 6474 1471Fax: (65) 6725 8438Website: www.symphonyglobal.comE-mail: [email protected]

Date: 30th – 2nd MayEvent: Annual Investment Meeting 2013Venue: Dubai International Convention & Exhibition Centre, DubaiOrganiser: Annual Investment Meeting Organising CommitteeAddress: P.O. Box 10161 Dubai, United Arab EmiratesTel: (971) 4 39 23232Fax: (971) 4 39 23232Website: www.aimcongress.comE-mail: [email protected]

May

Date: 15th – 16th

Event: Asia Pacific Hotel Investment ConferenceVenue: Dusit Thani Bangkok Hotel, Bangkok, ThailandOrganiser: Questex Asia EventsWebsite: http://ihif.questexevents.netE-mail: [email protected]

Date: 21st – 23rd

Event: G2E AsiaVenue: Venetian Macao-Resort-Hotel, MacauOrganiser: Reed Exhibitions and American Gaming ExpoAddress: 39/F Hopewell Centre, 183 Queens Road East, Wanchai, Hong KongTel: (852) 2824 0330Fax: (852) 2824 0246Website: www.g2easia.comE-mail: [email protected]

Date: 23rd – 24th

Event: Japanese Investments Summit 2013Venue: Hotel Chinzanso Tokyo, Tokyo, JapanOrganiser: Marcus EvansAddress: 6F HANY Higashi-kanda-Bldg, 2-1-8 Higashi-kanda, Chiyoda-ku, Tokyo 101-0031, JapanTel: (81) 3 5823 0688Fax: (81) 3 5823 0689Website: www.japaneseinvestmentsummit.comE-mail: [email protected]

If you know of an event that you believe should be listed with Macau Business, please drop us an e-mail: [email protected]. In the subject bar, type in “List me as an event”.

102

MARCH 2013

A shimmering ballet performance that captures a high point of European culture, with a triumphant

score by Handel, awaits audiences next month

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MARCH 2013

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 il-lustrating 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 per-forming 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 stud-ies 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 fi elds.

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 emo-tional. 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.

recision and power run high in “Glory”, a con-temporary 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 com-bines 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 cen-tury. 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 ac-tions. 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

WHEN: April 27, 8pm

WHERE: Grand Auditorium,

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104

MARCH 2013

The organisers of The Script Road – Macau Literary Festival say it is pos-sible to build bridges between literary

traditions that are, literally, half a world apart.The festival takes the literature of Greater

China and of the Portuguese-speaking world, and combines them in a programme that includes panel discussions on topics ranging from travel writing to poetry to the modern Chinese novel. The festival crosses into the realms of music, cinema and other visual arts.

More than 30 writers, publishers, translators, jour-nalists, musicians, fi lm di-rectors and artists from the mainland, Taiwan, Portugal, Angola, Bra-zil, India, Mozambique and East Timor will gather here this month, for this year’s festival.

The event will pay tribute to the late Brazilian novelist Jorge Amado, screening a documentary fi lm and a movie based on one of his novels.

The festival relies on support from the government. The Cultural Affairs Bureau and the Macao Foundation are organising it jointly with the Portuguese-language newspa-per Ponto Final, which established the event last year.

Several prominent mainland authors are taking part in it. Among them are Bi Feiyu, whose “Three Sisters” won the Man Asian Literary Prize in 2010, and acclaimed novelist Han Shaogong.

Lusophones at this year’s festival include José Eduardo Agualusa from Angola, one of the best-known Africans writing in Portu-guese; Portugal-based writer and publisher

BY LUCIANA LEITÃO

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Arts & Culture

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MARCH 2013

Francisco José Viegas, who until last October was in charge of cultural affairs policy in Lisbon; and Portuguese novel-ist Valter Hugo Mãe.

Poet Fernanda Dias and writers Tong Mui Siu, Chek In, Lou Mou and Wong Man Fai will wave the fl ag for Macau. Two French authors, Antoine Volodine and Claude Hudelot, who have developed an affi nity for Macau, will also attend.

That the list is studded with literary stars is due to extra funding for the fes-tival this year. The organisers got MOP1 million (US$125,000) from the govern-ment and MOP950,000 from private sponsors, including gaming companies.

Beyond wordsLearning lessons from the fi rst festival, this year’s will follow a different schedule. Attendance at some of the panel discus-sions 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 af-ternoons, around the city, with some in historical locations such as the Manda-rin House.

Most musical performances and fi lm screenings will be held in the eve-nings. 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 fes-tival.

On the big screen, the award-win-ning “The Last Time I Saw Macau”, by João Pedro Rodrigues and João Rui Guerra da Mata, will be shown – its fi rst showing in Greater China – before its offi cial premiere at the Hong Kong International Film Festival. Another highlight will be the screening of “On the Dragon’s Flake”, the latest fi lm by Macau-based director Ivo Ferreira.

The festival includes a visual art-ist in-residence programme and an ex-hibition, “Beyond Words”, of works by Macau artists. The opening of the festival will be preceded on March 9 by an out-door book fair and free concerts in Ami-zade Square, near the Sintra Hotel.

TELL ME A STORYApart 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 competi-tion 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 Portu-guese and Lawrence Lei, who heads the school of theatre at the Macao Conserva-tory, won the award for the best short story in Chinese. The award for the best short story in English went to Miodrag Ko-jadinovic, a Serbian living in Guangzhou.

Each of the winning entries has been translated into each of the other languag-es. 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 au-thors are invited to write about Macau. The organisers of the festival will even-tually publish their contributions in the collection of the winning entries from this year’s short story competition.

THE SCRIPT ROADMacau Literary Festival

WHEN: March 10-16

WHERE: Various venues around Macau

LANGUAGE:Chinese and Portuguese; translations

or interpretation will be available at most events, including in English

ENTRY:Free, except to concerts

and some fi lm screenings

WEBSITE:www.thescriptroad.org

MORE INFORMATION:telephone 6656 4518 or

email [email protected]

José Eduardo Agualusa

Han Shaogong

Bi Feiyu

Francisco José Viegas

Valter Hugo Mãe

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NOVEMBER 2012

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MARCH 2013

THE YEAR OF THE SNAKE SLITHERS INMacau welcomed the Year of Snake last month with a string of celebrations and fusillades of fi reworks. One of the highlights was a New Year fl oat parade, organised for the fi rst time and including 10 fl oats 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 fi rst day of the Year the Snake to wish all good fortune, health, happiness and prosperity.

Moments

Grant Bowie at MGM Macau’s Lunar New Year celebrations

Lion dance at the Mandarin Oriental

Fireworks display on the third day of the Year of the Snake

SJM Holdings Ltd once again held its traditional Lunar New Year’s Eve celebration dinner

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

Worshippers at A-Má temple

Lunar New Year fl oat parade

As usual, the chief executive visited the festive fi recrackers and fl ower stalls

On the fi rst day of the new year, the head of the tourist offi ce, 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

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MACAU SHINES AT IGA AWARDSMacau 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 fi fth 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!

Moments108

Gaming industry fair play: Betsson

Online bingo operator of the year: Bwin.party (Foxy Bingo)

Technology provider/supplier: Bally Technologies

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

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 – Australia/Asia: Galaxy Entertainment Group

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MARCH 2013

Online poker operator of the year: PokerStars

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

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

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

Industry publication/portal of the year: iGaming Business Magazine

Corporate services supplier of the year: Optimal Payments

Payment solutions provider company of the year: Skrill

Online casino operator of the year: Mr Green Traditional casino equipment supplier: TCSJohnHuxley iGaming software supplier: Playtech

Photos: Clever Duck Media Ltd

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The measurement of hopeThe 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 refi ne the approach continually –helps us to deliver tools and services to everybody who will benefi t.

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 criticalThe 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 fi scal 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 fi eld. 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

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 progressThe 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.

BILL GATES CO-CHAIR OF THE BILL & MELINDA GATES FOUNDATION AND CO-FOUNDER OF MICROSOFT CORP

NOW THAT WE ARE MEASURING INDICATORS LIKE CHILD MORTALITY MORE PRECISELY, PEOPLE ARE ABLE TO SEE THE IMPACT THAT AID HAS

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LEVEE BREACHEDNews 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 fi rmly closed on casinos in the mainland, Pandora’s Box is offi cially 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.

A FOUNDATION SHAKESThe 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 fi ling, 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.

SSS-SOUND ADVICESJM 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.

LEADING BY EXAMPLEMany 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.

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Aristocrat Page 07 www.aristocratgaming.com

Bally Technologies Page 19 www.ballytech.com

BNU Page 21 www.bnu.com.mo

CEM Page 53 www.cem-macau.com

Galaxy Entertainment Group Page 03 www.galaxyentertainment.com

Goldfi sh Page 17 www.goldfi shmacau.com

Macau Cultural Centre IBC www.ccm.gov.mo

Macau Post Offi ce Page 96 www.macaupost.gov.mo

MGM China Pages 23 & 25 www.mgmchinaholdings.com

MGTO Page 27 www.macautourism.gov.mo

Ocean Gardens IFC www.oceangardens.com.mo

PokerStars Macau Page 02 www.pokerstarsmacau.com

Reed Exhibitions Page 05 www.reedexpo.com

SHFL Entertainment Page 01 www.shfl .com

Signature Events Page 55

Zung Fu Motors – Mercedes BC www.zungfu.com.mo

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