Retailers, caterers and people in the travel sector are those who will sport the biggest grins, generated by a windfall as an estimated 8.85 million people pass through border checkpoints. The estimate by the Immigration Department shows a 10 percent increase from the number of visitors last year during the Golden Week holiday period, when most factories in the mainland are closed. This year's holiday has an additional layer on top of Hong Kong's usual shopping and sightseeing come-ons and attractions, with the Mid- Autumn Festival adding zest on October 3.
Joseph Tung Yao-chung, executive director of the Travel Industry Council of Hong Kong, said most tours were 80 to 90 percent booked, and he expects a 10 percent increase in business. The Standard reported last week that the travel sector had forecast a 5-10 percent boost despite the strains of the human swine flu (H1N1).
There is certainly confidence across the retailing, catering and travel businesses that cash registers will ring merrily, with plenty of predictions about double-digit increases in business. Gearing for the rush from the mainland, many shops are hiring extra staff for the first two weeks of October. Officers of the Immigration Department are also bracing for busy times over the next 12 days. About 3.4 million passengers - a daily average of 262,000 - are expected to pass through Lo Wu alone.
The heaviest outbound day will be October 1, when 206,000 people are expected to head into the mainland, but there will be a solid stream flowing in the opposite direction for days. The heaviest inbound day is likely to be October 4, with 196,000 visitors expected to go through the checkpoint. Passenger traffic at Lok Ma Chau is also going to be heavy over the holiday period - an estimated 1.43 million, for a daily average of 110,000 - with October 3 looking like the busiest day.
On top of stopping all leave to handle the rush, the Immigration Department will have additional security guards to help in crowd control. And department officers along with police, customs and the MTR Corporation will be in a joint command center at Lo Wu to oversee traffic and handle any emergency. The department has appealed to would-be cross-border travelers to avoid the October 1-4 period if possible and in any event to be sure all their documents, such as home visit permits, are valid.
Asia (ex-Japan): Asian equities have outperformed mature markets in 2009 thanks to continuous foreign institutional investor (FII) inflows amid diminishing risk-aversion among global investors and relatively resilient macroeconomic fundamentals. Markets have gained 46% YTD as of August 31 (78% since October 2008) with India (68%) and Indonesia (75%) as the best performers, and China (39%) and Malaysia (36%) as the laggards. Sri-Lanka posted an exceptional 131% gain due to the end of the 26-year civil war, a $2.5-billion loan agreement with the International Monetary Fund and the government's positive stance on reforms and liberalization. Asian markets have recovered 54% of the losses incurred in 2008 (peak to trough, down 59%).
Latin America: Latin American equities has outperformed the other emerging markets regional indexes by rising 59% YTD to August 31 (99% since it hit bottom in November 2008), with strong performances in Brazil (71%) and Colombia (55%). The laggards are Argentina (41%) and Mexico (34%). Overall, LatAm equities market have recovered 46% of the 2008 crash (peak to trough, down 68%).
Eastern Europe, Middle East and Africa (EMEA): EMEA equities market have gone up 42% YTD to the end of August and 77% since it reached bottom in March 2009. Turkey (66%) and Russia (59%) lead the mark, while Morocco (-3%) and South Africa (16%) have underperformed. EMEA stock markets have recovered 39% of the sharp correction induced by the global crisis (peak to trough, down 66%)
Recent EM market Dynamics:
More than $13bn has been committed to an ambitious plan to create a metropolis at the southern tip of Malaysia three times the size of Singapore, says the chief executive of the state agency set up to drive the project.
Arlida Ariff, chief of Iskandar Investments, told the Financial Times in an interview that a further $2bn was likely to be committed in the next two years, including nearly $300m in retail investment expected to be announced over the next few months. Ms Ariff said the 2,217sq km project, launched in 2006 by Abdullah Badawi, former prime minister, was beginning to make “real progress” as contractors drove highways and other basic infrastructure through thousands of hectares of jungle and abandoned palm-oil plantations in the state of Johor.
In the long-run, the biggest single source of investment is likely to be Singapore, whose central business district is not much more than half an hour’s drive from Iskandar’s proposed financial district. The attraction for Singapore is the low cost of land, office space and housing, which are currently about 80 per cent cheaper in the Iskandar economic zone. Lee Hsien Loong, Singapore’s prime minister, has joined Najib Razak, his Malaysian counterpart, in backing the project.
However, a surge of Singapore investment could raise nationalist hackles in Malaysia, which has had a prickly relationship with the island state since the two split in 1965 after a brief union.
Mahathir Mohamad, prime minister of Malaysia for 22 years until 2001, last year dismissed Iskandar as little more than a platform for Singapore to extend its sovereignty into Malaysia, warning that Malays would be “driven to live at the edge of the forest”. Ms Ariff said such fears were overblown, pointing out that Singapore had always been the largest investor in Johor because of its physical proximity and requirements for crucial goods from the state, including food and water supplies.
Much of the investment Iskandar is seeking would help Singapore companies by allowing them to expand locally at low cost, she said, suggesting that the initial ambitions of the financial centre were limited largely to attracting back-office activities such as data processing centres.
“This means we can work in collaboration with Singapore rather than competiting for the same brands and the same products to come across [to Malaysia]. Some of this [fear of Singaporean involvement in Iskandar] is to do with the traditional rivalry. Singapore used to be part of Malaysia and it’s like watching your kid brother grow up and become more successful than you.”
The project has attracted a clutch of Middle Eastern investors including Mubadala Development, Abu Dhabi’s state investment vehicle; Kuwait Finance House and the Kuwaiti Bank. Other investors include Newcastle University of the UK, which is setting up a medical school, and UK-based Merlin Entertainments, which is building a $220m Legoland theme park.
Ms Ariff said several other investors were in negotiations, with three more university campuses dedicated to engineering, logistics and leisure industries likely to be announced before the end of the year. Investors are being offered a raft of incentives, including a 10-year corporate tax holiday and exemption from rules requiring local participation in foreign-owned projects. However, the project remains well short of the target of M$383bn over 20 years that will be needed to finance the planned doubling of the local population to 3m, a 1.5sq km financial district, eight university campuses, theme parks, hospitals, schools, retirement homes and a resort.
Mingfa Group, which is aiming for HK$8 billion, will also have its hearing tomorrow and Yuzhou Group, which is seeking up to HK$3.9 billion, may present its case later this week. Meanwhile, the directors of United Company Rusal - the world's largest aluminum producer - will decide this week whether to approve an IPO plan to float a 10 percent stake in Hong Kong, the Sunday Times reported. The Russian aluminum giant is expected to start bookbuilding in November and list in December. According to the British newspaper, Rusal is in talks with potential cornerstone investors including sovereign wealth funds China Investment Corp and Singapore's Temasek.
Wilmar International, the world's largest palm oil processor, plans to raise as much as HK$31.2 billion from listing 733 million shares of its mainland business. The firm is chaired by Kuok Khoon-hong - nephew of Robert Kuok Hock-nien, known as "sugar king of Asia."
Greens Group, a maker of waste heat recovery products had its listing hearing last Thursday. It plans to raise as much as HK$1 billion. Shenguan Holdings, a mainland sausage casing maker, starts bookbuilding today and will open its retail book on Wednesday, eyeing up to HK$1.17 billion. The firm plans to invest 240 million yuan (HK$272.38 million) this year and 469 million yuan in 2010 to expand production capacity. Its first-half net income surged 66.5 percent to 129 million yuan. Shenguan's clients include Yurun Group, an unit of China Yurun Food (1068).
Yingde Gases, Ausnutria Dairy Corp and China Vanadium Titano-Magnetite Mining, which will close their retail book tomorrow, had their retail tranche oversubscribed 3.5 times, twice and 5.6 times respectively, according to margin financing orders at nine brokers as of Friday.
Tycoons Tan Sri Quek Leng Chan and Tan Sri Chua Ma Yu have agreed to take part in the initial public offering (IPO) of Wynn Macau Ltd on the Hong Kong Stock Exchange by investing US$80mil and US$70mil respectively. Quek’s investment is via Guoco Management Co Ltd and GuoLine Group Management Co Ltd, which are indirect subsidiaries of Hong Leong Co (M) Bhd, while Chua’s vehicle is CMY Capital Markets Sdn Bhd. It is learnt that these Malaysian parties are going in independently. Chua is an investor and the attraction in Wynn is purely seen as a China play. But Wynn Macau's HK$12.6 billion offering was only 61.3 percent covered with subscription via margin financing hitting HK$773 million.
Powerlong Real Estate also got a lukewarm. response Both will close their retail book on Wednesday.
KUALA LUMPUR, Sept 25 — Criticism in cyberspace is mounting against a plan to privatise the country's most established publishing company, the New Straits Times Press (NSTP).
The plan, which was presented to NSTP's board a month ago, proposes that free-to-air television station Media Prima completely take over NSTP through a share swap. In the process, NSTP will be delisted from the stock exchange.
Media Prima is NSTP's single largest shareholder with a 43.3 per cent interest. The other large shareholders include the Employees Provident Fund (EPF) and another state agency which together hold around 13 per cent.
The sticking point could be Media Prima's ownership. Its single largest shareholder is private company Gabungan Kasturi, which is owned by business nominees of Umno, the dominant political party in the ruling Barisan Nasional. As a result, top editors of the paper have always been appointees of the prime minister of the day.
Writing in his blog on Wednesday, Datuk A. Kadir Jasin, a former editor-in-chief of NSTP who still has strong Umno links, called the plan a “plot” to use “the goodwill and stronger financial position of NSTP to shore up” Media Prima.
Kadir argued that the publisher's brand name “must never be allowed to be destroyed or undermined”.
Blogger Ahiruddin Atan, the editor of the Malay Mail tabloid, wrote yesterday that the move could provoke a political backlash against Prime Minister Datuk Seri Najib Razak. He said that the plan “would provide his detractors with the firepower to accuse Najib Razak of trying to put the media under his direct control”.
For all the criticism, however, the deal is likely to go through as Najib is said to be amenable to the idea. More to the point, the main minority shareholders — the EPF and the other state agency — have endorsed the plan. The only remaining hurdle remains consent from Umno's powerful political bureau which will meet some time this week to consider the plan.
Analysts generally agree that the deal favours Media Prima as the underlying value of the newspaper group is more than twice the value of its debt-heavy controlling shareholder. Even so, NSTP has not been performing: its share price (RM2.15 yesterday) has been below its net asset value (RM4.52) for the longestThe deal would also transform Media Prima, which owns all of the country's free-to-air television stations, into Malaysia's most powerful media company and allow it unhindered access to all of NSTP's earnings.
The newspaper group has relatively low debt but has increasingly seen its fortunes flagging. Once the premier English-language daily, its flagship publication the New Straits Times has seen its circulation plummet amid declining advertising revenues. The NST's circulation is just under 120,000 now from its peak of 280,000 in the 1980s.
Indeed, NSTP's earnings are now largely driven by its Malay publications, Berita Harian and Harian Metro, a racy tabloid with the highest audited circulation in the country. The group reported a net profit of RM47.4 million for the year to Dec 31, 2008.
Media Prime, meanwhile, reported a net profit of RM86 million for the same period. — Business Times Singapore
Industry executives now expect the Macau casino sector to bring in record gaming revenues in October, boosted by the looser restrictions and the upcoming Golden Week holiday, Reuters reported.
Galaxy Entertainment (0027) jumped 9.5 percent to close at HK$3.79, defying a 0.7 percent decline in the benchmark Hang Seng Index.
Shun Tak Holdings (0242), a Macau- focused conglomerate controlled by the family of Stanley Ho Hung-sun, jumped 9 percent to HK$6.69. SJM Holdings (0880), Ho's casino flagship, rose 5.1 percent to HK$4.52. Melco International Development (0200), which is owned by Lawrence Ho Yau-lung, jumped 7.7 percent to end the day at HK$5.87.
The authorities now allow mainland travelers from Guangdong to visit Macau once a month under the Individual Visit Scheme, instead of just once every three months, Reuters quoted industry sources as saying. The restrictions started to be relaxed 2 months ago and were loosened even further since September 1. "Gaming revenues for the first two weeks of the month have been good," one executive said. Another unnamed casino executive said September gaming revenues will be "very good" and October will likely set a new record high. Now is it just kind timing or what??? Just when the 3 major operators in Macau have filed for IPOs in HK, we see these restrictions being lifted??!!
The casino operator attracted six high-profile investors who poured US$250 million (HK$1.95 billion) to subscribe for shares with a six-month lock-up period. They include Lifestyle International (1212) managing director Thomas Lau Luen-hung who subscribed for US$50 million worth of shares and Sun Hung Kai Properties (0016) non-executive director Walter Kwok Ping-sheung who is seeking US$20 million worth.
Wynn Macau plans to offer 1.25 billion shares at HK$8.52 to HK$10.08 each, which is 29.4 to 34.8 times its estimated earnings per share of 29 HK cents this year. Wynn Macau's net income slumped 34.8 percent to HK$903.7 million for the first half ended June 30 as Macau's gaming industry contracted.
These developments will pave the way for a spectacular listing of Wynn Macau and Macau Sands - and guess what, Genting Singapore will be an indirect beneficiary, followed by Genting Berhad, but the former is a much better play.
NEW YORK (Fortune) -- .... from journalist Duff McDonald's new book, Last Man Standing, Fortune offers up the account of an embarrassing confrontation that led to Jamie Dimon's ouster from Citigroup by Sandy Weill.
--Editor's Note: This story contains profanity.
Citicorp CEO John Reed didn't quite know what he was in for when he agreed to a meeting with Sandy Weill in early 1998. He thought Weill was going to ask him to spend $25,000 on a table at a charity dinner, or something of that sort. Instead, Weill proposed a merger of equals between the Travelers Group and Citicorp, a combination of the two firms that would sit powerfully atop the financial world. He proposed sharing the leadership role as co-CEOs, and splitting the board 50/50 with directors from both companies.
Reed did not reject the idea out of hand, and the two companies' deal teams agreed to meet at the Travelers' Executive Conference Center in Armonk, New York on March 20 and 21. Over the next two days, the deal teams hashed out much of the conceptual framework for a merger, including a name -- Citigroup -- and a plan that the company would have three main divisions: the Corporate Investment Bank, the Consumer Business, and Asset Management. Given the regard in which executives from both sides held him, Jamie Dimon would be president of the parent company, beneath co-CEOs Weill and Reed. But that was just a corporate job. When it came to operations, Dimon quite reasonably assumed that he would be put in charge of running the corporate investment bank, the same job he had shared with Deryck Maughan at Salomon Smith Barney. Instead, Reed suggested (and Weill agreed to) a power-sharing arrangement in which Dimon, Maughan and Victor Menezes, Citicorp's head of commercial banking, would be co-CEOs. (Weill first suggested Dimon and Maughan. Then Reed suggested the three-way power-sharing arrangement, so as to not alienate the Citicorp crowd by putting two Travelers people in charge. )
This was bad enough for Dimon, but what he did not even consider, given his place on the boards of Travelers and its predecessor companies, was the possibility that he would not be on Citigroup's board. So he was shocked when in mid-March, as Weill went over details of the deal, that he informed his long-time lieutenant, "Jamie, you're not going to be on the new board."
Dimon protested, making the argument that he would be one of the only presidents of a major public company not on its board. In other words, it was an embarrassment, a snub. But Weill was resolute. "We've decided." Frustrated as Dimon was with what he saw as the unfairness of the situation, he somehow failed to grasp the larger implication of Weill's remark. Weill had begun to dismantle what had been corporate America's longest-running, best-known, and widely lauded succession plan.
Despite Weill trying to sweet-talk him into believing that the president title meant he was well positioned, Dimon saw the empty title for what it was. "I should have left the company at that point. You'd think by then I might have figured it out, but I didn't. I accepted that too, didn't I? Sandy knows exactly how far he can go. I loved the company. It was my family. I couldn't leave them. But Sandy doesn't always think about just right or wrong; he thinks about his options down the road. The board decision was the sign, and I should have known better. But look, you live and learn."
Dimon and Maughan, who had been openly hostile before the merger, were now engaged in full-scale warfare. Salomon was getting destroyed in the bond markets -- it was during that fall that the collapse of hedge fund Long-Term Capital Management had sent global capital markets into a tailspin -- and Dimon criticized Maughan at every turn. While Dimon quite likely assumed that he would eventually work his way through this predicament and reclaim his position as Weill's heir, he was definitely playing with a weaker hand than in years past. Sandy had other courtiers now, including Maughan and general counsel Chuck Prince, the company's future CEO. (Mary McDermott, Weill's longtime head of public relations, remembers Prince as "the quintessential ass-kisser" during this time.) Finally, Dimon's constant nay-saying also hurt him in Reed's eyes, especially considering the nonconfrontational ethos Reed had so meticulously installed at Citicorp. (Both Reed and Prince declined to comment).
On the weekend of October 24, 1998, the 15-year partnership between Jamie Dimon and Sandy Weill collapsed in a way that almost nobody saw coming. The occasion was a five-day retreat for 150 top executives and their spouses at The Greenbrier, the luxury resort in White Sulphur Springs, West Virginia. During presentations by various business heads, Weill recalls being struck by the difference between a polished Maughan presentation and an "incoherent" one by Dimon, including "a strange analogy with the Peloponnesian War." Weill felt that Dimon's apparent lack of preparation was insulting and that he seemed anything but "presidential" as a result. Dimon's memory about the quality of his presentation is hazy, but the suggestion that his career be judged on one presentation at an executive retreat rankles. "Maybe I didn't give a good presentation," he says. "But do you think it's acceptable to judge a 15-year career on one presentation?"
Then, during a black-tie ball on Saturday night, Dimon and his wife Judy sat with Salomon Smith Barney capital markets head Steve Black and his wife Debbie. In a gesture that could have moved things in another direction entirely, Black turned to Debbie and told her he was going to ask Maughan's wife, Va, to dance as a peace overture. The couple went over together to where the Maughans were dancing, and he politely cut in. Maughan, however, failed to return the gesture, leaving Black's wife standing alone on the dance floor. Embarrassed, Debbie Black began to cry.
As if that weren't sufficiently "high school", the situation quickly devolved further. After comforting his wife, Black lost his temper, marching over to Maughan -- who is not a small man, standing some 6'3" -- and seized him by the flesh of his arm. "You fucking asshole," he said. "You can do whatever you want with me, but if you ever do something like that to my wife again, I will drop you where you stand."
Expecting a fight, Black was surprised when Maughan simply turned and walked away. Black had momentarily forgotten who wore the pants in the Maughan family. Moments later, an enraged Va Maughan came steaming across the dance floor headed right for him. Sticking her finger in his chest, she said, "Don't you ever talk to my husband like that again. You can't talk to my husband like that."
At this point, Dimon tuned in. "What was that all about?" he asked Black after Va Maughan had retreated. After hearing Black's side of the story, Dimon himself became enraged, and went off to find Maughan. "Deryck," he said, when he tracked him down. "If you snubbed her by accident, explain it. If you did it on purpose, that's a whole different thing." Once again, Maughan responded by turning away, at which point Dimon grabbed him and spun him around, tearing a button from his jacket in the process. "Don't you ever turn your back on me while I'm talking!" he shouted. "You popped my button!" was all Maughan offered in reply. (Maughan declined to comment).
Nobody came out of the night's events looking good -- not Black, not Dimon, not Maughan. And all three paid a steep price. Maughan would be kicked upstairs at Citigroup; Black would resign. (Judy Dimon looks back on the entire weekend as a bit of an out-of-body experience, the kind of thing you can't bring yourself to believe is actually happening.)
Remarkably, Dimon failed to see that the incident had sealed his fate. On Friday evening, October 30, he sat in his office with his assistant Theresa Sweeney and asked her what changes she thought would come out of a Sunday management meeting in Armonk. It was his belief that the management structure would finally be adjusted to his advantage at the meeting. It never crossed his mind that his own ouster was in the works. He was so oblivious that he had invited 100 Salomon Smith Barney brokers over to his apartment at 1185 Park Avenue on Sunday for brunch. Then Weill called, asking him to come up to Armonk early.
In Armonk, Weill and Reed sat Dimon down in a small conference room. "We've done a lot of thinking about the organization...and John and I have decided to make the following changes," said Weill. "Deryck is going to move to a strategy job, Victor will take the Global Bank, and Mike Carpenter will run Salomon Smith Barney." That last one threw Dimon for a loop, as that was his job. But Weill wasn't quite done. "And...we want you to resign."
Dimon offered only a one-word reply: "Okay." Weill asked him if he wanted to know why. "Nope," replied Dimon. "I'm sure you thought it through." Reed was stunned. "Is that it?" he asked. "Well, yeah," replied Dimon. "You've obviously decided."
In February 1999, Dimon filed with the Securities & Exchange Commission to sell 800,000 shares of Citigroup worth some $42.5 million, thus formally severing his ties with Citigroup...and Weill. Dimon also severed ties with most people he considered Weill partisans. A year later, he moved to Chicago to head the struggling Bank One. In 2004, he returned in triumph to New York in a merger that made him the CEO and Chairman of JPMorgan Chase. And five years later, he is a titan of the banking world, one of the victors of the financial crisis.
For his part, Sandy Weill retired as chairman of Citigroup in 2006. A retirement party was held in the Egyptian Room at the Metropolitan Museum, and the guest list included former president Bill Clinton and Saudi Prince Alwaleed bin Talal. Dimon attended, but kept a low profile. Although a few dozen people spoke in tribute to Weill's lengthy career, Dimon was not among them. He wore a regular business suit to the black tie event, and though he did greet people beside Weill for a bit, he left before the party got going. "You know what they say about cars that have been in a wreck?" muses a former colleague about the relationship between two men. "You can send them to the body shop, but they're never going to be the same."
Today, if and when the two men do run into each other, things are civil, but no longer warm. The days when they'd plan on drinks once or twice a year are over. Still, enough time has passed that each will grudgingly admit that the other has traits worth praise. "Sandy wasn't a mentor in the traditional sense," Dimon recalls. "In the sense of people giving you advice and sitting you down. That's what most people mean. I got none of that. Sandy was much more sink or swim and he just shed people left and right who didn't meet his standards, but it wasn't really a mentoring thing. He had a tremendous work ethic, and he was always thinking about how the world was going to change. He was brave and bold. I learned a tremendous amount from him. To do the deals that we did? I look back at those and think, 'God, Sandy, you had guts.'"
In December 2008, in his corner office in the General Motors Building, Weill was subdued. The markets were in complete and utter turmoil, and Citigroup, the company he built, was on the verge of being broken apart. A few blocks away, Dimon presided over JPMorgan Chase, the bank widely considered the sole standout of the financial crisis. During the interview, Weill came close to admitting the biggest mistake of his career: firing Jamie Dimon. "I think I made a very bad decision on succession," he said. Today, he only has the highest compliments for his one-time protégé. "Jamie obviously has far fewer blind spots than most people in this business. He's outperformed most of them."
Part two of two parts excerpted from Last Man Standing: The Ascent of Jamie Dimon and JP Morgan Chase, by Duff McDonald, to be published by Simon & Schuster on October 6, 2009. © Duff McDonald
