Sunday, January 31, 2016

Macau gambling revenue drops in Jan, analyst say worst may be over

Macau gambling revenue drops in Jan, analyst say worst may be over

[HONG KONG] Gambling revenues for the Chinese territory of Macau dropped 21.4 per cent in January, ahead of a Lunar New Year week-long holiday which is expected to boost the number of visitors to the world's largest casino hub.
Revenue in the former Portuguese colony fell for the 20th consecutive month to 18.7 billion patacas (S$3.31 billion), government data showed on Monday, in line with analysts'expectations of an 18-26 per cent decline.
Macau, which relies on the casinos for revenue, has been battered by a two-year-old anti-corruption campaign and slowing growth in China's broader economy.
Gambling revenues are hovering around five-year lows but there are signs the worst may be over.
Casinos operated by Las Vegas magnates Las Vegas magnates Steve Wynn and Las Vegas Sands Corporation's Sheldon Adelson reported stronger-than-expected fourth quarter revenues, largely due to an increase in the more middle class, so-called mass market gamblers.
Appealing to these gamblers has become a priority for casinos that once relied on the wealthier VIP gamers for most of their revenues - a category that has been the hardest hit by the crackdown on corruption and illicit money flows out of China.
New casino resorts set to open this year, will include features such as a miniature Eiffel Tower and large lake fronted with a gondola ride, to draw in China's burgeoning middle class.
On Monday, Chinese gamblers milled around the huge gaming room of the Sands China Venetian casino while families shopped and ate at the resorts' multiple restaurants and boutiques.
Analysts and executives expect the Lunar New Year holiday, which starts on Feb 7, to further boost the number of mass market gamblers to Macau from China, which accounts for up to two-thirds of overall visitors.
Billy Ng, analyst at Bank of America Merrill Lynch, forecast total revenue growth to remain flat this year, compared to 2015 when revenues dropped 34 per cent on the year. Other analysts have forecast revenues to fall by up to 10 per cent or rise by up to 1 per cent.
REUTERS

Yen loses further ground after surprise BoJ stimulus move

Yen loses further ground after surprise BoJ stimulus move

[TOKYO] The yen sank again Monday, extending losses after the Bank of Japan unveiled shock stimulus last week, while emerging currencies took a hit as weak China manufacturing figures stirred worries about the world's number two economy.
Japan's central bank on Friday announced it would adopt a negative interest rate policy, meaning it would effectively start charging commercial lenders to park their cash with it.
The move - intended to ramp up lending in order to kickstart the economy and fend off deflation - spurred a rally across world markets and sent the yen tumbling.
"The BoJ decision will have a lasting negative impact on yen because speculative positioning was the wrong way," Sean Callow, a Sydney-based foreign-exchange strategist at Westpac Banking, told Bloomberg News.
He added that expectations that it would make even more cuts in the coming months would weigh on Japan's currency.
In Tokyo, the dollar advanced to 121.27 yen from 121.12 yen Friday in New York. The greenback was trading around 118.60 yen on Friday before the announcement.
The euro strengthened to 131.51 yen from 131.19 yen in US trade, while it also advanced to US$1.0844 from US$1.0831.
On Monday, an official index of Chinese manufacturing activity fell to a more than three-year low in January.
The news follows a string of data indicating that the once-mighty growth rates in the Asian giant - the world's number two economy and a key driver of global growth - are fading fast.
The weak reading weighed on the commodity-linked Australian dollar, which declined 0.24 per cent against the greenback, while other emerging currencies also fell.
South Korea's won slumped after data showed the country's exports, the main driver of the economy, suffered their steepest decline since August 2009, extending what is now a 13-month losing streak.
The won weakened 0.48 per cent, while the oil-linked Malaysian ringgit was down 0.14 per cent.
Taiwan's dollar ticked down 0.08 per cent and the Singapore dollar lost 0.04 per cent.
However, the Indonesian rupiah surged 1.15 per cent on speculation that the BoJ move and more possible easing by the European Central Bank will push investors into higher-yielding, riskier assets.
AFP

OCBC opens new fintech and innovation unit

OCBC opens new fintech and innovation unit

OCBC Bank is staking its claim on financial technology (fintech) territory with its new fintech and innovation unit called The Open Vault at OCBC.
Through this units, fintech startups can work with in-house OCBC Bank experts such as its credit risk management specialists and wealth management advisers to come up with solutions for its employees and customers, the bank said on Monday.
The Open Vault at OCBC will focus on five key areas: wealth management, credit and financing, insurance, cybersecurity and artificial intelligence.
The unit is led by Pranav Seth, OCBC Bank's head of e-business and business transformation.
"We are investing heavily in the areas of mobile, data and analytics, bio-metrics and security to provide superior customer-centric solutions," said Mr Seth. "At The Open Vault at OCBC, we seek to experiment with a larger set of new technologies, business models and applications in a controlled environment to find tangible, value-added services that our customers can benefit from."
OCBC's fintech unit is housed in a 2,400-square foot space on New Bridge Road that the bank said had been specially created for the division.
"Our key focus is to deliver tangible outcomes and value; without this, we would not want to play in the fintech arena," said Samuel Tsien, OCBC's CEO. "The Open Vault at OCBC has great potential. I see it helping us to come up with digital solutions that will make banking with OCBC even simpler, faster and more secure, our internal banking processes more efficient, and our banking systems even more robust."
The fintech unit has also struck up a partnership with Nest, an investment and startup incubation firm, to draw local and foreign innovators to the bank's inaugural accelerator programme that begins in April. This programme will give selected startups access to business mentorship and technical expertise from OCBC, as well as guidance from Nest experts and partners.
Innovators and fintech start-ups can apply for OCBC Bank's accelerator programme at www.theopenvaultatocbc.com. Applications will close on March 17, 2016.

Cheap oil less of a boon for US growth than in the past

Cheap oil less of a boon for US growth than in the past

[WASHINGTON] US consumers are cautious about spending their windfall from cheap gasoline and are saving more, according to a Reuters/Ipsos poll and official data, suggesting low oil prices are less of a boon for the US economy than in the past.
Commerce Department data shows that the crude's 70 per cent drop since mid-2014 cut households' annual spending on gasoline and other energy products by US$115 billion, equivalent to roughly 0.5 per cent of gross domestic product.
At the same time, however, savings increased by US$121 billion and while the data gives no indication where the money has come from, the survey suggests the windfall accounted for a significant part of the sum.
The Reuters/Ipsos poll shows 75 per cent of 3,068 Americans who answered questions on gasoline savings said the extra money helped them cover basic needs and the majority have not used their windfall to buy big ticket items. Over 40 per cent of respondents said the savings had helped them pay down debts, according to the Jan 15-27 online poll, which had a credibility interval of plus or minus 1.8 percentage points.
"It obviously hurts less when I go to the grocery store,"said Karen Joines, a recruiting firm product manager from Peachtree City, Georgia. Ms Joines, who participated in the survey, estimates she saves US$30 a week thanks to cheaper gasoline but has no plans for big purchases, in part because she worries low prices will not last.
Some economists say such doubts and the still-fresh scars of the 2007-2009 recession could explain the muted effect of cheap gas on consumption. For example, the economy only in mid-2014 recovered the more than 7 million jobs lost during the downturn. "We don't seem to be getting the benefits from cheaper gasoline that we did when the economy was healthier," said veteran oil economist and independent consultant Phil Verleger.
Dallas Federal Reserve President Robert Kaplan said another reason Americans appeared wary of spending what they saved at the pump could be that more and more of them were approaching retirement. "They are conscious of that (and) they need to save more,"Kaplan told Reuters in an interview.
HALF THE BENEFIT
The Dallas Fed, whose area includes the oil patches of Texas, Louisiana and New Mexico, estimates that a 50 per cent fall in oil prices now adds around 0.5 per centage points to economic growth over a year, half of the impact seen before America's oil boom.
One reason is that the oil sector has grown over the past decade, so spending and job cuts there weigh more on the whole economy. Cheaper oil also helps less because cars and machinery have become more fuel efficient, according to the Dallas Fed.
Thanks to hydraulic fracturing and shale drilling boom that made the United States the world's top oil producer in 2014, the nation also imports less oil than ever.
That goes to explain why in the public eye the modest benefits of cheap energy enjoyed by all get overshadowed by the havoc the oil slump wreaked in the energy sector and the nation's oil patches.
Tumbling prices forced producers and oilfield services companies to slash budgets, driving some into bankruptcy and many deep into the red. Markets have grown so bearish about the sector that when oil producer Hess reported a fourth quarter loss of over US$1.8 billion, its shares have risen because investors had braced for even more damage.
Yet even as job losses and lost tax revenues hit oil-producing states such as Texas or Alaska, the drag on the US economy as a whole has been limited.
The oil-dominated mining sector accounted for just 1.6 per cent of GDP in the third quarter and jobs in oil and gas extraction and services account for 0.3 per cent of US employment, down from 0.4 per cent during the boom years.
The investment in US mining structures, which is dominated by oil and gas exploration and well drilling, has fallen at a US$70 billion annual rate since the fourth quarter of 2014, according to Commerce Department data. Yet as Goldman Sachs estimates the overall drop in energy investment subtracted only about 0.3 percentage points from 2015 economic growth.
Barclays economist Michael Gapen forecasts that a further decline in energy investment could knock another 0.2 per cent from this year's US economic output.
The US job market also appears robust enough to absorb job losses in the energy sector and related industries. Goldman Sachs estimates such losses at 30,000 to 35,000 a month, but that compares with 292,000 jobs US economy as a whole added last month.
REUTERS

China new home prices up in January

China new home prices up in January

[BEIJING] China's new home prices increased in January for the sixth straight month, a survey showed Monday, positive news for the key sector following a series of stimulus measures aimed at boosting lending.
The gains come as authorities have sought to stabilise China's property market - a main driver of the world's second-largest economy - and rolled out new measures intended to encourage migrant workers to buy homes in the cities where they work.
The average price of a new home in China's 100 major cities rose 0.42 per cent month-on-month in January to 11,026 yuan (S$2,385) per square metre, the China Index Academy (CIA) said in a report, a slight easing from December's 0.74 per cent rise.
On a year-on-year basis, prices rose 4.37 per cent.
The property market fuelled much of China's spectacular growth in recent decades but hit the doldrums in the past two years, with new buyers priced out despite government borrowing restrictions reining in soaring costs.
The economy grew at its slowest pace in a quarter of a century in 2015, expanding 6.9 per cent.
The National Bureau of Statistics said in January that total property market turnover jumped 16.6 per cent in 2015 as volumes rose, but added that growth in new construction slowed, limiting the positive effect on the overall economy.
Worries over a weakening currency and a shaky economy have caused capital to storm out of China, and raised questions among investors about the government's ability to stave off a "hard landing" this year.
At a policy conference in December the government pledged to encourage property developers to "moderately cut housing prices" and ordered local authorities to "revoke obsolete restrictive measures".
CIA, the research unit of real estate website operator Soufun, expected demand to rebound after the Lunar New Year holiday, with steady price growth, and more rapid expansion in some key cities.
AFP

Renault opens first China factory

Renault opens first China factory

[WUHAN, China] French car giant Renault opened its first car factory in China on Monday, the last major manufacturer to set up a plant in the country as it looks to tap into the world's biggest auto market.
The factory in Wuhan, a carmaking hub in the central province of Hubei, is a joint venture with Chinese manufacturer Dongfeng and will be able to produce 150,000 vehicles a year at full capacity.
China remains "a growth driver for the global auto industry", Renault CEO Carlos Ghosn said at the inauguration.
The factory was a "first big step" for the development of the Dongfeng-Renault joint venture and for the growth of Renault, he added.
China is crucial to foreign auto makers, both as the world's largest market and a key source of revenue outside Europe and the United States, but until now, the French firm has largely left it to its Japanese alliance partner Nissan.
At first the Wuhan factory will build Kadjars, Renault's latest crossover model, a key sector for Chinese consumers.
"We see this niche exploding in China, and it's not going to stop," said Jacques Daniel, CEO of the joint venture. "We're arriving late, but with the right product." But he acknowledged that the current situation in China is challenging. Sales grew at their slowest pace in three years in 2015, as a slowing economy and a stock market rout slammed into demand.
A total of 24.60 million cars were sold in 2015, according to the China Association of Automobile Manufacturers (CAAM) up 4.7 per cent on the previous year, but only about a third of the near-14-per cent growth seen in 2013.
Also, the economy, the world's second largest, grew 6.9 per cent in 2015, its slowest pace in 25 years.
Car makers responded by slashing prices while some even cut production.
The market for high-priced luxury cars has been hit by a government crackdown on corruption and an austerity campaign, launched after President Xi Jinping took office three years ago.
The Chinese industry group forecasts sales will still gain around six percent to top 26 million units this year.
US auto giant General Motors was the top foreign brand in China last year, delivering a record 3.61 million vehicles, to beat German rival Volkswagen which is struggling with a global scandal over emissions cheating.
AFP

Singapore shares open higher on Monday after Japan's surprise stimulus

Singapore shares open higher on Monday after Japan's surprise stimulus

SINGAPORE share prices opened 0.37 per cent higher on Monday, with the Straits Times Index (STI) up 9.61 points to 2,638.72 at 9.01am.
It took cue from US markets on Friday and Asian markets on Monday, which rose after the Bank of Japan on Friday adopted a below-zero interest rate policy, essentially charging lenders to park their cash with it.
US stocks jumped 2.5 per cent on Friday, joining a global rally after Japan's surprise stimulus. The Dow Jones Industrial Average gained 396.66 points (2.47 per cent) at 16,466.30. The broad-based S&P 500 advanced 46.88 (2.48 per cent) to 1,940.24, while the tech-rich Nasdaq Composite Index rose 107.28 (2.38 per cent) to 4,613.95.
In Asia, Tokyo stocks opened sharply higher on Monday, as exporters were lifted by a weaker yen and investors reacted positively to last week's surprise interest rate cut.
The benchmark Nikkei 225 index at the Tokyo Stock Exchange advanced 1.03 per cent, or 181.30 points, to 17,699.60 in opening deals, while the broader Topix index of all first-section shares gained 1.12 per cent, or 15.97 points, to 1,448.04.
On Monday morning, among the most active counters on Singapore's bourse were Noble (up 4.8 per cent to S$0.325), Singtel (up 0.3 per cent to S$3.52), and Thai Beverage (flat at S$0.68).
Last week, global investment firm Franklin Templeton became a substantial shareholder of Noble after picking up its shares on the cheap. The fund manager on Wednesday bought 2.5 million shares for S$712,500, or 28.5 cents a share, through the market. This brings its stake in the company to 5.03 per cent, up from 4.99 per cent, previously.
It was also announced last week that Thai Beverage has used its Singapore-listed unit Fraser and Neave (F&N) to bid for London-headquartered SABMiller's Peroni and Grolsch beer brands. The deal could be worth up to three billion euros (S$4.6 billion).
Overall on the stock market, 69.5 million shares worth S$96.6 million changed hands, with gainers outnumbering losers 118 to 44 at 9.01am.

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