Cambodian casinos pull in China`s high rollers

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© The Financial Times Limited 2015. All Rights Reserved. Not to be redistributed, copied or modified in any way.
Edition 2265 FT | 09 Mar 2015
ASIA GAMBLING
By Michael Peel in
Bangkok
Cambodia has long drawn
tourists to sights ranging
from the Khmer Rouge killing fields to the magnificent
temples of Angkor. Now the
country is looking to a new
market: Chinese gamblers
who are deserting Macau,
the region’s traditional casino hub.
“If you are Chinese, you
go to Macau and what’s
there? Gaming, shopping
and entertainment - that’s
all,” says Philip Lee,
chief financial officer of
NagaCorp,
Cambodia’s
dominant casino operator.
“If you come to Cambodia,
it’s not just hardcore gambling - it’s a more holistic
experience.”
The sales pitch is part of
a grab several Asian countries are making for Chinese
high rollers seeking a more
discreet alternative to Macau, after Beijing launched
a crackdown on money
laundering and ostentatious
wealth there.
But Naga’s story also
shows the risks facing gambling businesses in a region
where cultural sensitivities
still loom large - and where
the ever-keener rivalry for
itinerant wealthy clients
may soon make the business
a lot less lucrative.
“It’s going to become
more and more competitive
and less and less profitable
to get these players,” says
Michael Ting, Asia director of gaming research at
CIMB, the Malaysian bank.
“We think margins will decline.”
The Asian gambling market has been in flux since
the China crackdown started last year on Macau, a
gaming honeypot whose annual revenues of $44bn outstrip Las Vegas more than
six fold.
Gaming stocks in the territory, the only part of China
where casinos are allowed,
tumbled in February when
lunar new year takings fell
49 per cent year on year to
19.5bn patacas (USD2.4bn)
last month, according to
data from Macau’s Gaming
BLOOMBERG
Cambodian casinos pull in
China’s high rollers
If you are Chinese,
you go to Macau
and what’s there?
Gaming, shopping
and entertainment that’s all. If you come
to Cambodia, it’s not
just hardcore gambling
- it’s a more holistic
experience
PHILIP LEE
CHIEF FINANCIAL OFFICER OF NAGACORP
Inspection and Co-ordination Bureau.
That came on top of a 2.6
per cent drop in Macau’s
gaming revenues last year,
the first fall since records
began in 2002.
Rival locations are now
queuing up to take advantage in a region where nationals are still banned from
gaming in many countries -
including Cambodia, on
Buddhist religious grounds.
It emerged last month that
Chow Tai Fook Enterprises of Hong Kong plans to
invest $2.6bn in a casino
project in Incheon in South
Korea, as well as possibly
launching further ventures
in Vietnam and Australia.
Caesars
Entertainment
Corp, operator of Las Vegas’s Caesars Palace, is
eyeing a $1bn resort in the
Philippines to draw gamblers from across Asia.
Now Naga, which started
off as a riverboat casino on
the Mekong in Phnom Penh
in the mid-1990s, is pushing to capitalize on what
it describes as the “huge
opportunities” created by
Macau’s woes. The company plans to increase its
existing 1,700 hotel rooms
built or under construction
to 4,000, and is also using
two aircraft to fly in Chinese tourists - one of many
such “junkets” organized by
ambitious gaming operators
to tempt punters.
But the company ran
into a hitch late last year
when a project to expand
its flagship NagaWorld
complex into the grounds
of a neighboring Buddhist
library triggered protests
by monks. Naga describes
the incident as “rather unfortunate,” and says it has
shelved the plan, but some
of the monks involved remain concerned.
“We do not believe this
thing can stop forever,”
says Venerable Thong Narith, a demonstration leader.
“If things go negative and
they keep going with their
plan, we will protest again.”
Naga has also faced skepticism about its perceived
closeness over two decades
to the long-ruling Cambodian People’s party government, which awarded it a
70-year casino license and a
41-year monopoly on gaming within a 200km radius
of Phnom Penh.
Critics says the cosiness
is symbolized by NagaWorld’s prime position next to
the country’s parliament and by what the company
describes as an emergency
exit gate that links its premises to the foreign ministry.
In 2001, Chen Kip Keong,
Naga’s chief executive and
controlling shareholder, became an economic adviser to
Hun Sen, Cambodia’s prime
minister of 30 years.
Naga’s Mr Lee retorts that
the company secured its
Cambodian permits in 1995
in an “absolutely above
board” process overseen by
the UN, which had mounted
a peacekeeping operation
in the country in 1992-93
to prevent a return to the
devastating conflict of the
Khmer Rouge years.
“Over the years we have
grown and are part of nation
building,” Mr Lee says, citing the company’s contribution to tourism and employment in one of the region’s
poorest states. “We are part
of the economic fabric of
the country.”
But even as Naga doubles
down in its home market,
a hint of the wider competition to come lies in the
faraway battle it is waging
with a rival consortium
to tap the Chinese market
with new developments in
the Russian city of Vladivostok. Other analysts
highlight perhaps an even
greater threat just across
Cambodia’s frontier, as still
more countries seek to tap
the Asian gaming bonanza.
“Vietnam could allow
Vietnamese to gamble,” say
analysts at Morgan Stanley,
referring to proposals floated in Hanoi to allow tens of
millions of Vietnamese people to bet legally at home.
“This could have a negative structural impact on
NagaCorp’s mass market.”
Copyright The Financial
Times Limited 2015
09.03.2015
Syndicated articles from
F2
© The Financial Times Limited 2015. All Rights Reserved. Not to be redistributed, copied or modified in any way.
GENERAL RETAILERS | GROWTH HURDLES
By Patti Waldmeir in
Shanghai and Andrea
Felsted in London
As Prince William arrived in Shanghai last week on a rare royal visit
aimed at boosting British business in
China, two of the UK’s most famous
retailers demonstrated just how hard
it is to succeed in the country - even
for well-known brands.
Marks and Spencer announced the
closure of five stores in and around
Shanghai, and said it would revamp
its strategy in China. At the same
time, China Resources, Tesco’s
joint venture partner in the country,
warned on profits, in part because of
the costs of integrating the struggling
UK grocer.
The dispiriting news has raised fresh
questions among investors about the
future prospects in the world’s most
populous nation for another big British name: House of Fraser.
The UK department store chain
was last year acquired by Chinese
conglomerate Sanpower and is set
to enter the blighted Chinese department store market with three stores in
unfashionable second-tier cities next
year.
China’s love affair with quintessential British names such as Burberry
and Cath Kidston’s chintz prints has
never extended to M&S and Tesco,
the two biggest UK names in China.
But local retail analysts say the Britishness is not to blame: foreign retailers from around the globe have also
faced humiliating reversals in China
in recent years. US household names
Best Buy and Home Depot have both
pulled out of the country, along with
Germany’s Media Markt.
Even some of China’s best-loved
fast-food brands, like Yum’s KFC and
McDonald’s, have recently struggled
to keep up with local competition and
changes in dining tastes. And foreign
businesses from hypermarkets to department stores have failed to keep
pace with the rapid shift from offline
to ecommerce shopping.
Yan Qiang, retail analyst at Beijing’s Adfaith Consulting, believes
that the problem for most foreign retailers, not only UK ones, is that they
did not pay enough attention to what
Chinese consumers want. “They were
too proud of the good quality of their
products and assumed that as long
as the products were good, Chinese
consumers would buy them,” says
Mr Yan.
“It always takes more time than
most companies want to acknowledge to deeply understand the culture and behaviors,” says Patrick
Bousquet-Chavanne, international director at M&S, who first visited China in 1989, when he was with Estée
Lauder.
Over the past six years M&S has
learnt valuable lessons, he adds.
For example, temperatures between
different cities can vary by up to 20
degrees. This has a big impact on
the range of products those different
stores carry.
Tastes are also changing. The
emerging middle class in China has
become more sophisticated, demanding products such as good quality red
wine. Consequently, M&S has expanded its range of imported wines,
including French Merlots.
At the same time, it has developed
its baby and childrenswear ranges, where foreign brands appeal to
Chinese parents concerned with the
safety of goods. M&S’s baby and
childrenswear are doing “disproportionately well”, according to Mr
AP PHOTO
Ambitious China plans may need more
than mere Britishness
Prince William paints the eye of Shaun the Sheep at the British Ambassador’s official
residence in Beijing
They [most foreign
retailers] were too proud
of the good quality of their
products and assumed that
as long as the products were
good, Chinese consumers
would buy them
YAN QIANG
RETAIL ANALYST
Bousquet-Chavanne.
“It’s fair to say that since 2008,
M&S has greatly progressed on
that learning curve,” he says. The
far-from-optimal location of stores
has been another issue for British
retailers. “The sheer vastness of the
country means that there are so many
customer types, in so many different
regions and cities,” says one British
retailer with experience of the market.
Grocery is a notoriously local
market, with Chinese consumers
still favoring the feel of a traditional
street market. While Tesco sought to
localize its offer - from live seafood
in tanks to recreating the market atmosphere - it also opened scores of
hypermarkets and developed “Lifespace” malls anchored by big supermarkets. But it gradually scaled back
its ambitions, before striking the deal
with China Resources in 2013.
Addressing an audience at UK
Trade and Investment’s Great Festival of Creativity in Shanghai this
week, Nigel Oddy, HoF’s chief executive, declared that Britishness will
be an advantage in China.
“We represent everything that is
good about Britain, and that will give
us a point of difference with other
stores currently trading in China,” he
said. At the same event, HoF’s chief
operating officer Peter Gross, argued
that it would be wrong “to compare
us to another retailer, we are different from other department stores: we
don’t want to be luxury we want to
be mid-market, that should lead us to
succeed”.
Additional reporting by Zhang Yan
Copyright The Financial Times
Limited 2015
Asia expansion: Aga hopes wok burner will take heat off pensions
By Claer Barrett and
Naomi Rovnick in London
Aga Rangemaster is hoping a
move into China - where it is
about to launch an upmarket
oven with wok burner - could
slice a chunk off its pension
deficit, which has doubled in a
year.
The 175-year old British
brand’s one millionth modern
Rangemaster oven rolled off its
UK production line this week,
and the group said at its results
yesterday that it hoped rising
sales at home and overseas
would enable a “rebalancing” of
its £883m pension scheme. “We
would like to have an ‘Evoque
moment’ in China,” said William McGrath, Aga Rangemaster’s chief executive, referring
to Jaguar Land Rover’s success
selling luxury cars to the Chinese.
But Mr McGrath admits the
Aga concept is alien to Chinese
consumers. “As menus and di-
ets evolve, more people will
want ovens,” he forecasts.
Analysts are not so sure. “In
China, if you have the kind of
money to spend on an Aga,
you generally have someone
who cooks for you,” said Paul
French, the independent Chinese consumer analyst. “People tend to entertain in private
rooms of expensive restaurants,
not at home. Luxury blenders
haven’t taken off for the same
reason - you can just pay some-
one to chop something.”
If the Chinese do splash out
on new kitchen appliances, the
trend leans towards bling rather
than country kitchen, as seen
with eHaier’s sparkling golden-glass fridge freezer.
Two-thirds of Aga’s £261m
annual revenues are generated
in the UK where 60cm-wide
ovens for young urbanites are
taking off amid signs of rising
consumer spending.
A business with substantial
fixed costs, Aga is aiming to increase international sales in China and Germany (which is also
a key target market) to improve
productivity. Aga’s Leamington Spa factory produces about
65,000 ovens a year. Get this
above 75,000, Mr McGrath
said, and the level of profitability from those sales rises 30 per
cent.
This could help offset damage done by rock-bottom gilt
yields, which have produced an
accounting deficit of £72m in
Aga’s pension fund.
The group stressed it was able
to meet its current funding obligations, but said it faced making
deficit reduction payments of up
to £10m a year from 2016. This
makes Aga’s 17 per cent rise in
operational profit to £9.6m for
2014 look less impressive.
Mr McGrath said. “Our first
priority is to get the appliances
business growing faster, and
linking internationally with
other parties to help do that. We
have aspirations to be bigger in
Germany and we’re about to
launch in China. If we can win
some of these away games [and
boost production at existing Aga
factories] then operational gearing kicks in,” he added. But if
these measures do not provide
the right ingredients for growth,
asset sales have not been ruled
out, he said.
In the year to December 31,
Aga took a pension charge of
£4.1m. On a statutory basis, the
group recorded a pre-tax profit
of £0.7m after a £3.3m fair value rise to its Fired Earth business, and ended the year with a
net cash balance of £9.2m.
Copyright The Financial
Times Limited 2015
mon 09.03.2015
FEATURE
F3
BLOOMBERG
特刊
By Peter Elliot
W
BLOOMBERG
HAT makes a city
a great place to
have your convention on high-yield
bonds or consumer electronics?
The easy answer for respectable
business folk is: plenty of places
to eat and shop, an abundance of swimming pools to sun
themselves by, and a few places
to let their hair down and hit
the clubs.
Las Vegas provides it all. Over
the past 15 years the city has
transformed its convention
center to become America’s
third- largest. Besides the center itself, the hotels have vast
spaces. And whether it’s a mild
winter or a broiling summer,
you almost never have to go
outside. Each hotel complex is
a world to itself; at Caesars it’s
perpetually dusk on the Italian
coast. The Cosmopolitan hides a
retro-pizza parlor called Secret
Pizza. Decide which suits your
style best. The biggest change
is the City Center complex with
its array of starchitect towers. It
marks a clear shift away from
pulsating lights to chic modern and better restaurants like
Jean-Georges Steakhouse and
Bardot. In a way, Las Vegas is
now more like Hong Kong with
its series of interconnected, airconditioned malls.
The rule on restaurants is simple: if it’s off a casino floor, raise your antennae. Exceptions
to this rule are L’Atelier de Joel
Thirteen pro-tips for
visiting Las Vegas
Las Vegas
provides it
all. Over the
past 15 years
the city has
transformed
its convention
center to
become
America’s thirdlargest
Robuchon, Le Cirque, Wolfgang Puck and Jose Andres.
Almost everything else are mediocre, expensive copies to be
avoided. You’d play your hand
better at Danny Meyer’s new
Shake Shack or Bobby Flay’s
Burger Palace.
Top Hotel Complexes
The Cosmopolitan: Smack
in the center of everything.
Huge. Tons of good restaurants and hipster shops, plus
interiors by David Rockwell.
It gets the balance between
Old and New Vegas just right.
Spending big? Get a terraced
penthouse. Blackstone purchased the complex in 2013.
That means: “smartly run.”
Mandarin Oriental: Part of the
stunning and vast Aria center,
this is one of the few non-gambling hotels. A perfect antidote.
Encore: Steve Wynn is LV’s
reigning King and this is his latest mega-hotel. It’s less kitschy
than the Venetian, and more
refined than the Bellagio with
some of the best retail shops
and golf.
Caesars Palace: The oddest
and at the same time most authentic mega-hotel. Its over the
top-everything typifies the city.
A unit of Caesars Entertainment Corp. may have filed for
bankruptcy, but don’t worry:
the champagne is still flowing.
SLS: The new kid on The
Strip, this is closest to the
Ace Hotel/Chateau Marmont
experience. North but on the
monorail.
Top Restaurants/Clubs/
Brunches
Bartolotta: A spectacular
room facing an artificial lake
is the setting for one of the
best fish-focused spots in
America. It’s surreal to have
Italian fish flown daily to the
Nevada desert.
Bouchon: One of the few copies of a famous restaurant that
works in part because the room
is set apart from the casino
floor.
Guy Savoy: Go to a four-star
Paris restaurant without leaving the U.S. Bar seats are available at short notice.
Marquee: The hottest nightclub in town at the Cosmopolitan. Pay for VIP tickets; it
makes the “velvet rope” scene
easier.
Aria: After a night of slamming tequila shots, the all-
you-can-eat brunch is the traditional hangover cure. Aria
is the most pleasant and best
quality of all the deals for sale
and there are many. SLS is a
close second. The Bellagio is a
distant third.
Insider Tips
Cash Is King: In a city where
gambling remains at the heart
of everything, tip big. Bellmen, doormen, even the maid
in your hotel room. Closed
doors at hot bars/clubs miraculously open. Keep a tidy
roll of USD10s and $20s. At
restaurants/clubs $50/$100.
The Monorail Works: The
LV Monorail connects the
Convention Center to the
heart of The Strip. There’s
another system that connects
the hotels on the lower strip.
Otherwise you pay for taxis to
take you not very far for too
much money.
Leave Las Vegas: Some good
restaurants are off The Strip,
like Lotus of Siam — one of
the best Thai places in America. Go see “old” Las Vegas —
the northern Strip. This is
where the wedding chapels
and original casinos are and
it has a Downtown LA vibe.
It’s also worth the drive to
Hoover Dam. If you’ve scored
at Blackjack, take a helicopter to see the Grand Canyon.
Bloomberg
F4
NATURE
09.03.2015 mon
自然
Christie accepts USD225m to
end Exxon Mobil litigation
By David Voreacos
and Terrence Dopp
BLOOMBERG
N
EW Jersey Governor Chris
Christie’s
administration agreed to accept USD225
million from Exxon Mobil Corp.
to end litigation over decadesold pollution, a settlement that
Democratic lawmakers and environmental groups called inadequate.
Christie’s acting attorney general and top environmental
regulator defended the accord
after the state sought damages of $8.9 billion in a 2004
case over the company’s refinery and petrochemical plant
in Bayonne and Linden. The
accord pays for Exxon’s damage to natural resources. Exxon
agreed in 1991 to clean up almost 1,600 acres near the New
York Harbor.
“This important settlement,
which came about because this
administration
aggressively
pushed the case to trial, is the
result of long-fought settlement negotiations,” acting Attorney General John Hoffman
said last week in a statement.
“It ensures the continuation of
the Exxon Mobil-funded remediation work at those contaminated sites.”
The resolution has drawn criticism since the New York Times
reported on Feb. 27 that the
Department of Environmental Protection settled for $250
Chris Christie, governor of New Jersey
million. A state court judge still
must approve the settlement,
which came as he was weighing
damages after an eight-month
trial last year.
“This was a case that the state
was going to win,” said Jeff Tittel, director of the New Jersey
Sierra Club. “They settled it for
3 cents on the dollar. That’s the
biggest corporate subsidy in
state history and it hurts every
taxpayer and the environment.”
DEP Commissioner Bob Mar-
tin said in the statement that
the settlement is the largest in
state history and is six times
greater than the previous biggest corporate accord for natural resources damages.
Former DEP Commissioner
Bradley Campbell, who filed
the case in 2004, called the accord an “embarrassment,” and
“even more troubling are the
circumstances surrounding the
decision.”
“Governor Christie left billions
on the table, if the testimony of
the state’s own experts is to be
believed,” Campbell said in a
New York Times op-ed article.
Kevin Roberts, a spokesman
for Christie, called Campbell’s
comments “irresponsible, disingenuous, and baldly political,” and said they came from
someone who worked for Democratic administrations.
“The notion that this settlement represents something less
than what is fair for New Jerseyans is absurd and baseless,”
Roberts said in an e-mail.
Lee
Moore,
Hoffman’s
spokesman, didn’t immediately return calls seeking comment on the settlement. Alan
Jeffers, a spokesman for Irving, Texas-based Exxon, didn’t immediately reply to a call
and e-mail.
Senator Raymond Lesniak
and Senate President Stephen
Sweeney, both Democrats, said
this week that they will try to
block the deal. Two Assembly Democrats, Speaker Vincent Prieto and John McKeon,
chairman of the Judiciary Committee,said they will hold a
hearing on March 19 about the
settlement.
Lesniak, who grew up near the
refinery’s smokestacks, said the
settlement is “even worse than
we thought.”
“This was the single greatest
environmental damage done
to this state,” Lesniak, of Elizabeth, said in an interview.
Exxon contributed $500,000
to the Republican Governors
Association last year when
Christie, a Republican, was
chairman, according to the
Washington-based Center for
Responsive Politics website
OpenSecrets.org.
The state sued in 2004 and
2005 under the New Jersey Spill Compensation and Control
Act. Exxon and its predecessors
ran the Linden facility, known
as Bayway, on 1,300 acres from
1909 to 1972, according to a
2008 Superior Court decision.
The Bayonne refinery, on 288
acres, was run by Exxon and
its predecessors from 1879 to
1972, according to the opinion.
For decades, they were connected by pipeline and known as
the Jersey Works. Bloomberg
ASK THE VET
by Dr Ruan Du Toit Bester
Symptoms of
Canine Heart Murmur
A
canine heart murmur is caused when
the blood flows abnormally in a canine heart. The abnormal change in the dog
heart can cause the right side of the heart
to not communicate well with the left side,
sometimes affecting a dog’s health. Symptoms of a Heart Murmur in Dogs
- The dog’s heartbeat seems irregular - A hacking cough that does not seem to
go away. - Breathing that seems laboured (excessive panting) even while the dog is resting - The dog tires easily - Lack of energy - Collapsing or fainting - The gums or tongue have a bluish colour - A racing pulse - Severe water retention - Lack of appetite
All of these symptoms may indicate health risks that are serious, but not necessarily
a murmur. Only a qualified veterinary doctor can diagnose heart murmur’s in dogs,
do not go to a pet shop to get it diagnosed
treated as many people do in Macau. CAUSES OF HEART MURMURS
IN DOGS
Dogs can develop heart murmurs for a
number of reasons. Some dogs may de-
velop heart disease as they age, causing
them to have an irregular heartbeat. Blood
leakage from the heart valves to the atrium
or high blood pressure could also be a cause. Some puppies are born with a birth defect that causes murmurs or they may be
more genetically prone to this condition.
Dogs that have anaemia or a disease that
affects the heart or blood vessels could
make a canine more prone to developing a
heart murmur. Mitral valve stenosis, a condition in which the heart’s valves leak, can result in a
heart murmur in dogs. A condition where holes are present in the chamber that
pumps blood, ventricular septal, can cause
the blood to flood too rapidly in puppies,
resulting in an irregular heartbeat. Pulmonary or aortic stenosis, the narrowing of
the pulmonary or aortic artery, can cause
an irregular blood flow, resulting in murmurs in dogs. DIAGNOSING HEART MURMURS
When there is suspicion of a heart murmur in a canine, doctors will perform several different tests to confirm their diagnosis. - Listening to the heart with a stethoscope
- Chest x-rays
- Heart ultrasound: to see all almost all of
the functions of a dog’s heart in real time
and see if the heart has any irregularities
- Blood and urine tests: to check for any
abnormalities in liver and kidney function
- Electrocardiogram (ECG): an assessment of the dog’s heart activity over a period of time
TREATING HEART MURMURS
IN DOGS
Heart murmurs in dogs can be nothing to
worry about or a condition that can progressively get worse. If a puppy is found
to have a murmur, it may not be treated
until health problems are present. Heart
murmurs cannot be cured, but they can be
treated surgically, with medication, or die-
tary changes. If you suspect your dog may have a problem with his or her heart, see your veterinarian as soon as possible. Share your
concerns and questions with your vet and
tell them about any lifestyle and activity
changes.
Till next week Dr Ruan Ask the Vet:
Royal Veterinary Centre
Tel: +853 28501099, +853 28523678
Emergency: +853 62662268
Email: royalveterinary@gmail.com