Tag Archives: Macau

GBA News: 11/11/2021

No respite for Evergrande: China Evergrande Group is facing another US$366 million in interest payments on its onshore and offshore debt – some already overdue – by the end of this year, after narrowly staving off default once again with a series of last-minute coupon payments on Wednesday.It is just a small portion of the cascading amount of debt payments set to come due in the coming months for the world’s most indebted property developer.The Shenzhen-based company has 1.97 trillion yuan (US$308 billion) in total debt outstanding. SCMP

Another HK university chief leaving: The president of City University will not be renewing his contract in 2023, with the institution’s vice-president announcing an international search for his replacement. The news that Professor Way Kuo, who has been with CityU for over 13 years, would be quitting his post as head of the institution came just two days after the Hong Kong University of Science and Technology announced its president, Professor Wei Shyy, would be stepping down 11 months before his contract was set to end. SCMP

HK poverty numbers jump: Almost a quarter of Hongkongers would have lived in poverty last year without government aid, new statistics show. The number who would have fallen below the official poverty line without assistance was 1.65 million or 23.6 per cent of the population, the highest in 12 years. This was reduced to 7.9 per cent after government subsidies, meaning around 554,000 people actually lived below the poverty line last year. HKFP

HK power bills set to soar: Hong Kong’s two power companies will be under tremendous pressure to raise the price of electricity as the city moves to become carbon neutral by 2050 and residents should brace for double-digit increases in the future, analysts warn. But the city could create some breathing room when its own offshore liquefied natural gas terminal is completed next year, which will give the companies the option of casting a wider net for sources rather than relying solely on mainland China, one expert said. SCMP

HK housing woes deepen: The average waiting time for a public housing flat in Hong Kong has edged upwards to 5.9 years, despite a long-standing Housing Authority pledge to allocate homes to applicants in no more than three. The wait, the longest it has been in 22 years, grew by more than a month in the third quarter of this year, according to official figures released by the Housing Authority on Thursday. The statistics, released every quarter, are used as a reference for current applicants, and are based on data collected from those who received public flats in the past 12 months. SCMP

HK firm launches crypto insurance: Hong Kong virtual insurer OneDegree has partnered with cryptocurrency exchange Hong Kong Digital Asset Exchange (HKbitEX) to offer insurance for cryptocurrencies, as they try to address concerns holding back institutional investors from investing in the US$3 trillion asset class. OneDegree will offer up to US$100 million in coverage to HKbitEX, insuring it against theft and the hacking of cryptocurrencies put in its custody by clients. It is the first insurer in Asia to underwrite insurance policies for digital assets, a service that has only recently become available for players in the virtual asset sector through specialist insurers based primarily in the United Kingdom and Bermuda. SCMP

Macau urged to award direct licenses: The Macau government should consider an amendment to the gaming law to provide for the possibility of directly awarding the casino gaming concessions to the current casino operators, according to gaming legal expert Antonio Lobo Vilela. Under the current legal and regulatory framework on casino gaming, granting casino gaming concessions by a direct award is not allowed, unlike all other types of permitted gambling in Macau. The Macau government had long announced that it would open a public (international) tender for the award of the casino gaming concessions, which are set to expire in June 2022. However, Vilela says it is obvious that the government will not reduce or add licences, and therefore it would be most efficient to dispense with the need to run a tender. MDT

Macau wants overseas Chinese: The new Regime for the Attraction of Qualified Personnel will aim to draw qualified Chinese people who are currently living overseas to live and work in Macau, the Secretary for Social Affairs and Culture, Elsie Ao Ieong revealed yesterday during a press conference on the draft system. Questioned by the media on whether the government already has a list of preferred people to occupy such positions, Ao Ieong said, “We would like to attract the overseas Chinese to come to Macau.” The Secretary also added that while there is no specific list of roles that the government is aiming to attract, she noted that there are several “specialists that we know can satisfy our [objectives],” since the government already previously engaged with these candidates and consequently holds existing knowledge of their suitability. However, she confirmed that these people are “obviously not my friends.” MDT

Macau tracking app ready soon: The mobile app version of the Macao Health Code, together with a contact tracing function, should be ready by the end of this month, Health Bureau (SSM) Director Alvis Lo Iek Long has announced. The health chief underlined that after the new function is launched, Macao Health Code users can choose whether or not to scan the QR codes placed at premises they are visiting. He reaffirmed that users’ travel history records will only be stored on their smartphones after they scan the QR codes, and will not be uploaded onto the bureau’s database. MN

Dongguan’s leading science project to expand: The China Spallation Neutron Source, located in Songshan Lake, Dongguan, is preparing for its second phase of construction. The number of spectrometers at the park, which is China’s China’s first, and the world’s fourth, neutron source facility, will be expanded to about 20. Moreover, the target power will be increased from 100 kW to 500 kW, which means that under the same experimental accuracy, the data collection time is 1/5 of the original. This also means smaller samples can be studied and faster processes observed, providing a more advanced research platform for cutting-edge scientific research. DGT (Read background on the project here.)

Qianhai focuses on international talent: Qianhai, the special zone in Shekou, Shenzhen, will open an “International Talent Port” early next year, aiming to attract “global scientific and technological innovation talents”. Qianhai is the first zone in the country to exempt Hong Kong and Macao residents from obtaining employment permits, and it is the first to have launched tax subsidies for “overseas high-end talents”. Under this scheme, it has reportedly  gathered more than 6,000 overseas talents and 577 “high-level talents”. SZN

GBA News: 8/11/2021

HK youth believe rule of law eroded

About seven in 10 young people have less confidence in the rule of law in Hong Kong than they did before the 2019 social unrest, a survey by an influential youth group has found. Some 45 per cent also said they believed the government could exert influence on the courts, and close to three in 10 indicated they would not follow laws they deemed unreasonable. A total of 529 residents aged from 15 to 34 were interviewed, about half of whom had a university qualification or above. SCMP

HK justice chief unfazed by landmark court ruling

Hong Kong’s Secretary for Justice, Teresa Cheng Yeuk-wah, has weighed in on rulings concerning illegal assembly and riots by the city’s top court, warning those who were not present at a disturbance could still be dealt with through other means. The landmark decision, delivered by the Court of Final Appeal last Thursday, prompted Cheng to say she would “assist the general public in learning the legal principles set out in the judgment”. SCMP

HK finance chief sees no reason for more spending

Hong Kong will run a smaller deficit than expected this financial year because of increased income from land sales, but it will not translate into major spending increases, Financial Secretary Paul Chan Mo-po said. Revenue from land sales hit HK$40 billion (US$5.1 billion) as of last month – a record high – following the sale of several prime urban sites. Those sales fuelled confidence in the property markets which, in turn, prompted developers to pay a premium for development projects, he said. SCMP

Shenzhen to add 1m more parking spaces

Shenzhen’s city government has set a target of adding 1 million more parking spaces in the current Five-Year Plan, which would close the gap with the 3.5 million registered cars in the city. SZNews

Macau govt budget for next year called ‘cut and paste’

Analysts have poured cold water on the Macau government’s budget forecast for next year, saying neither its revenue forecasts nor its expense assumptions are realistic. One even described the budget as a “cut and paste” job from the current year. The government has set a target of 130 billion patacas for revenues in 2022, which is the same as it set this year. However, most analysts think this year’s revenues, heavily affected by the Covid-19 situation, will more likely come in around 90 billion patacas. MDT

Macau revenues rise, as Shenzhen promotions continue

Macau’s post-Covid recovery continued last week, with estimates for gaming revenues rising 12% week-on-week, as the government continued to promote the tourism industry in Shenzhen. Macau-related gaming stocks listed in Hong Kong rose on general optimism for travel and tourism-related industries. MDT

Dongguan cross-border e-commerce jumps

From January to September this year, Dongguan’s cross-border e-commerce import and export volume exceeded 50 billion yuan, a year-on-year increase of over 150%. This compares to 38.056 billion yuan for the whole of 2020, of which 36.218 billion yuan was exported and 1.838 billion yuan was imported. DGT

Macau’s casinos face up to common Prosperity

It would appear that the lights are about to be turned up on Macau’s casinos. With 20-year concessions expiring next year, the government has released a list of changes it would like to implement, several of which appear similar to those launched recently under Beijing’s “Common Prosperity” drive. The way these were unveiled and the perceived lack of detailed explanation by the government has sent stocks tumbling.

Are investors over-reacting? It might depend on ROI time horizons. A big shift is under way, but it has been years in the making and will take decades to play out. Now is a good time to be considering the long-term opportunity, remembering what makes Macau special. This is especially when looking more closely at the development of neighboring Hengqin, a special zone on an island next door to Macau’s Cotai district, which is more than three times the size of the whole of Macau.

With this in mind, GBI has prepared a report looking ahead to beyond the awarding of new gaming concessions, which should happen sometime before the old ones expire in June next year (2022). Under this 10-year outlook, it is likely that strong growth will resume as the Hengqin Port becomes the main entry point to Macau and Beijing works with Macau to make the pioneering integration project a success. It is envisaged that GGR could double from pre-pandemic levels by 2031 as Macau’s merger with Hengqin drives mass visitation.

The main risks are macro: Disease containment and socio-economic stability in the hinterland.

Please get in touch for a copy of the report, which is only available to clients of GBI’s consulting service.

Hengqin plan is game-changer for Macau

Hengqin, the special economic zone opposite Macau’s Cotai casino district, has been turned into a bold new experiment. Macau will essentially take over the daily management of the zone from Zhuhai, but will have to consult the provincial government on major policies.

The zone will be jointly managed by a committee, but Macau will be in the driver’s seat: This is clear from the fact that Macau will appoint the Executive Deputy Director of the zone’s management committee. Although Macau’s CE and Guangdong’s governor will be co-heads, the EDD will run the show on a daily basis. The language of the announcement makes it seem like this is a JV, but really this is Macau’s project. 

There is much talk about diversification, with hi-tech industries, including manufacturing, and financial services being given lots of ink. But tourism is still the key. The plan makes no mention of the gaming concessionaires, and the tourism section calls it “cultural tourism”. But make no mistake, what this means in practice is that SMEs will get subsidies to pursue tech ideas, most of which will flop, and the banks will be able to build up some wealth management products in Hengqin, but the only projects that will actually make money will be in tourism, and so they will get the lion’s share of attention and resources.

This will take time, however: No one should expect a press release on the casinos being given a role in Hengqin before the concessions are renewed next year. The deadline for getting the management committee fully functional is only 2024. The goal for integration to be fully realised is only 2035.

Continue reading Hengqin plan is game-changer for Macau

Macau lawmakers say ‘no rush’ on licenses; but this might speed the process

Macau’s health authorities announced over the weekend that mass testing of the entire city, around 700,000 people, had produced not a single positive case of Covid-19. However, they are still monitoring more than 1,000 close contacts of the family that last week became the first positive case of the Delta variant. Once that had been satisfied, the government was likely to ease restrictions on activity for the city’s residents and visitors, but another round of testing might be necessary.

More interesting for the longer-term future of Macau than the current Covid-19 scare, however, was the release of a “recommendation” paper from the legislature’s sub-committee on the future of the six gaming concessions, which expire next year, June, 2022. The legislative group has called on the executive branch to provide clarity on the process and timeline for awarding new concessions, which it calls a “re-tendering”. It also says that there should be no rush in this, i.e., hinting that the existing concessions should be extended in order to provide sufficient time for a well thought-out process.

Although the document contains nothing startling, it does bring up the curtain on a public performance between the city’s legislative and executive branches which could end up accelerating rather than delaying the awarding of new concessions, contrary to what many observers might currently imagine. And the emphasis in the document on national security considerations, particularly the recently passed criminal statutes by Beijing against gaming promotion on the mainland, provides food for thought about what could amended in the Gaming Law during the coming weeks and months.

For deeper analysis on this subject, readers are welcome to get in touch.

MACAU SHUTS non-gaming VENUES, ORDERS MASS COVID-19 TESTING after FAMILY CASE

Macau has responded to the discovery of a local family of four infected with Covid-19 by forcing the entire city of 658,000 to get tested. It has also closed all entertainment venues, except the casinos and hotels. This includes bowling alleys, massage parlours, beauty salons, fitness centres, health clubs, karaoke venues, bars, night clubs, discos and dance halls.

Around 180,000 residents have already booked their NAT tests. It is as yet unclear whether the latest measures have had a strong effect on vaccination rates. Macau has been slower than either the mainland or Hong Kong at dispensing vaccines, despite the small size of the city. Around 37% of the population have received both jabs. The latest lockdown measures do not differentiate between those and the unvaccinated.

Gaming stocks listed in Hong Kong plunged for a second day on the news. They are now mostly below their lows seen soon after the start of the Covid-19 outbreak in February 2020.

More at Macaunews.org

Could Macau be ‘gifted’ Hengqin?

Macau Chief Executive Ho Iat Seng has set tongues wagging with comments to local media concerning Henqin, the island in neighboring Zhuhai, suggesting the central government could be preparing to transfer control over all or part of it to the Macau Special Administrative Region.

Ho said in an interview at an event in Macau today that “there is good news” for the specific progress of the so-called Guangdong-Macau Intensive Cooperation Zone, the parameters of which have not yet been clearly defined. “It will be announced within this month or next month”, Ho said, when asked about the details, adding that “it’s not convenient to disclose the relevant information now, as this is a central government policy.”

The Guangdong-Macau Intensive Cooperation Zone concept was first announced around the time of Macau’s 20th anniversary celebrations in December 2019, presided over by President Xi Jinping. One idea floated by political observers since then is that Macau would use this framework to expand the administration of its University of Macau campus on Hengqin. The campus currently has a fence running around it and is accessed only via a tunnel from the Macau side. But other analysts see a joint administration of the entire island being more likely, as its border controls could easily be moved back from the current Hengqin crossing to two bridges connecting Hengqin to the rest of Zhuhai. These already have customs checkpoints, because Hengqin is a New Area, a kind of special economic zone.

Ho went a bit further in today’s press conference, again hinting at what lay in store for Macau in Hengqin. The whole country hopes that Macau will be stable, develop at an appropriate pace, and diversify its economy, he said. When a reporter asked if this meant Hengqin could help in this mission of diversification, he said: “That is the road the country has paved for us.”

 More on GoodNews

Guangdong visitors all clear in Macau

All travelers from Guangdong may now visit Macau without needing to go into quarantine, according to Macau’s government. The change took effect at 6pm on July 7, as the Dashi subdistrict in Panyu, Guangzhou, was the last district to be lifted from the quarantine list. That leaves Ruili, in Yunnan, the sole place in mainland China on Macau’s quarantine list.

Guangdong has been the largest source of Macau’s inbound tourists in recent months, according to official data. The gambling mecca has been hammered by the recent rebound of cases in Guangdong, but is expected to resume growth in the second half of this year now that the outbreak has been brought under control.

More on GGRAsia

Melco invests in non-gaming resort in Zhongshan

Melco International, the Hong Kong-listed parent company of Macau casino operator Melco Resorts, has decided to step across the border by investing in a non-gaming project in Zhongshan. In a joint venture with Hong Kong-listed property giant Agile Group, Melco will build and operate a theme park within the development, which is a “premium residential, entertainment and hospitality mixed-use complex,” carrying an initial investment of 4 billion yuan in the land.

The land plot in Zhongshan covers an area of approximately 504,000 square metres (5.43 million sq feet), and includes various plots with land-use authorisations ranging from 40 years to 70 years, depending on specific utilisation, according to a separate filing to the Hong Kong bourse.

Although fellow gaming group Galaxy Entertainment has a plot of land in neighboring Hengqin, a special zone known as a New Area, it has not yet started work on the project. Melco would be the first of Macau’s gaming license-holders to open an operate a resort on the mainland once the project is completed in 2025.

More on GGRAsia

Macau court hears Sands US$12bn case

A former partner of the Las Vegas Sands Corp. is suing its local subsidiary in Macau over the 2002 awarding of its license in Macau, in a claim worth a staggering US$12bn.

Lawyers for the Asian American Entertainment Corp. are claiming that LVS broke their joint-venture contract unlawfully just before pairing up with Galaxy Entertainment in February 2002 for the license bids. The LVS-Galaxy venture went on to win one of two new licenses that were awarded just weeks later (the other one went to Wynn Resorts). AAE is claiming the astronomical amount because it says it is entitled to 70% of the profits of LVS subsidiary Sands China in Macau from 2002-2018.

In recent testimony, the former head regulator of Macau’s gaming industry said the addition of LVS to the Galaxy bid was clearly advantageous to Galaxy’s success, given the American company’s experience in Las Vegas. (The two companies split their license later that year, citing irreconcilable differences. This led to the creation of sub-licenses, two of which later were sold, by Wynn Resorts to Melco Resorts, and by SJM to MGM China.)

More on GGRAsia