This was considered unimaginable 15 years ago, but a group from LDP finally managed to push through the new bill. The new bill proposes allowing large-scale projects that will combine casinos with hotel, shopping and conference facilities. Attracting tourists is one of the key economic policies of Japan's Prime Minister Shinzo Abe and supporters say these developments will bolster the country's flagging economy and help support tourism after the 2020 Tokyo Olympics. The law urges the government to prepare legislation within one year to deal with problems connected with casino resorts, including gambling addiction and ways to prevent the involvement of organized crime groups.
Beneficiaries: Although the top operators' share prices went up slightly on the news, there are really only two serious contenders for the two casinos. Sands and Genting, fullstop. Why? Balance sheet strength (very important to the Japanese).GENS has cited potential passing of the Japan integrated resorts bill as one of its main reasons to sell its Jeju casino stake and get back S$588 million ($413.60 million) of capital. The other reason has to be the "Singapore experience" - which the Japanese can see, watch and follow. They would have liked the detailed planning, great execution, good rules to govern and restrict local population from over-gambling. They will probably frown on the Vegas experience - too gaudy, too bawdy and anything goes. They would have frowned at the Macau experience as well - uncontrolled chaos, overbuilding, soul-less, not family oriented enough, only bringing in "real hard core gamblers" (when they really want a more holistic family thing).
The KEY: In things like these, it is what ISN'T said that is more important. In order for Sands and Genting to nail the deal - its the partners they go with. The committee will have a handful of "important enough" local partners on their list, but will probably not enunciate them. It is up to the two to guess. It is always important for the Japanese to "balance the scales", i.e. who loses out in this new development should be "compensated somewhat. Currently the pachinko gaming has the biggest pull in gambling plus horse racing. Will need to "appease" the two. How big is pachinko gambling you say ... in 2015 it was approximately US$190bn.
The other key is selecting the location/partner - should not be near major cities, but accessibly via bullet trains/express rail because with 19.7m annual tourists a year, this will boom towards 30-40m a years when it actually opens, hence the need to divert. Plus it should not be near Disney's two resorts.
One should never never punt on warrants with less than 1 year to expiry, especially covered warrants. I can safely bet that anyone who trades in covered warrants in the course of a year will have a 90% chance to sustain losses.
Unfortunately, our markets have been in the doldrums for the past 6 months or so and that has caused some die hard players to only consider covered warrants, esp those index covered ones, in particular the highly volatile HSI covered (which kind of acts as a proxy to the even more volatile China exchanges).
Just have a look at the daily volume rankings, its always the covered warrants for the past few months. Strange as it may seem, if things continue, our local exchange will be trading mostly other countries' covered index warrants for the longest time - esp if the big guys introduce the Nikkei covered as well.
Why investors will lose big in the long run:
1) Time Value - These covered warrants are usually short in terms of time to expiry, usually less than 12 months. Investors are usually lured into covered warrants when their absolute price are less than 30-40 sen because they think they get a lot of leverage. But to get to 30-40 sen, it also usually meant that there is less than 6 months to expiry, and trust me, the time value diminishes rapidly. Even if the linked product stays stationary, you will find the price of the CW dropping.
2) Your opponent - Unlike a company's warrant, in CWs there are teams of experienced traders (issuers) with sophisticated models fighting you on the other side. If you think the role of issuing house is to MANAGE their gammas and betas, YOU'D be very wrong. The safest way to make money for issuers is just to manage and capture the premium, manage free float, and make sure you are well hedged. MUCH LIKE THE CASINOS - they almost never ever lose... so guess who wins and loses in the end. Better to go Genting, seriously.
Even when you keep wanting to buy, they will keep giving you the volume to buy. They can keep throwing new shares at you as long as the equation is right. What you see on the screen being offered is never what they "really can sell" to you.
3) Volatility - The die hards will say they trade only the highly volatile CWs such as HSI. Yes, thats a better strategy but I can also tell you that the higher the volatility, the higher the premium that is priced into these CWs, and it will take a hefty whack in movement to erase the premium before you see good gains.
4) One Sided - You know very well the issuers KNOW you can only take ONE SIDE of the equation. So overtime you show up on the screen, either you are buying or buying. At any point in time, they know how many people are long or short out there. Imagine playing black/red, but you can only bet red and the odds are always 0.7 to one instead of 1 to 1.
5) Timing - The nature of the product necessitates the need to TIME your entry point accurately. So, unless you are the type that can walk between raindrops to avoid getting wet - fergedaboudit.
The next time you think of trading a CW... just picture the trading/hedging teams at the banks, you can almost invariably see them laughing and chuckling to themselves at how easy it is to make money from the market (that means you and me).
p/s my first 8 years of my career was spent placing, trading and managing the house book on Japanese corporate warrants for Nomura and James Capel
I like TVB series generally but most are nothing much to shout about. But I must strongly recommend this one, Law Disorder ... about a bunch of lawyers in a firm. Its conniving, devious, thrilling, plot thickening with every episode and plot twisting till your stomach turns ... a place where no one is obviously the hero, a place where no one is entirely blameless or evil.
I must commend on the new bunch of writers. Human relations are callous, no more Mr. Nice Guy TVB feel-good touchy-feely stuff here, everyone has their inner motivations and not all are grand and altruistic at all. There are no permanent friends or enemies, its gripping... if only every boardroom meeting in reality were like that.
Morality is always not set in cement, values can be argued, and there is no black or white, just different shades of grey. Watch it it, its better than Suits and Boston Legal.
What can we surmise from the major asset classes table below? A lot. Bear in mind that these returns are priced in USD, which has generally performed well against most currencies this year.
Major developed equity markets had a largely rough first few months in 2016, thanks to Brexit. However the recovery was quite sharp too in July, compared to the overall YTD performance. Are there anything the markets are not afraid of anymore. There is a running theme across the asset classes - negative interest rates in some developed nations. You can literally see that impacting across the board.
Emerging markets equity had an even better performance YTD, and rallied alongside developed markets last month. When priced in USD, it also meant that the actual returned were further enhanced in local currency (for most).
Where you find the greatest impact of the negative interest rates theme - REITs, foreign, US and emerging markets bonds... look at their YTD gains in USD.
As you are beginning to see the movement and adjustments by bond funds into "other bonds" away from negative interest rates zones, you are also seeing the movement of "new money" NOT away from bond funds gradually. Those funds that had to be in bonds are already swishing and realigning themselves.
The bastardisation of currency (excessive QE) also meant that there is a major shift into "real assets"... in our case REITs and gold. Gold has surged 27% YTD and I do not see that ending anytime soon.
Oil has given back half its rally in just last month. Even then, it was not enough to roil the markets anymore. We are shifting into the negative interest rates zone, whereby hot money are now having to look elsewhere for yields.
This was a surprisingly good movie... Thought I give it a chance to see Mila Kunis, the lovable Kristen Bell and the ever gorgeous Christina Applegate ... but its Kathryn Hanh who stole the show as the loose single mum who's game for anything. Its 18+ so you know its a lot of fun. Tackling real issues with brutal honesty and there were plenty of laugh out loud and long moments. Touching piece at the end when all the stars talked with their real mothers. Excellent 9.5/10.
Chinese movies are right up there with the very best when they put their hearts and souls into them. Take the cops/thriller/crime category, some of the best include Infernal Affairs, Cold War I, the amazing PTU series by Johnnie To Kei Fung ... all were amazing and right up there with the very best. So it would be a big thing for me to pronounce Cold War II as the best ever, bettering those that I have just mentioned.
It is not essential to have watched Cold War I, but if you did you will appreciate the underlying motivations and bad blood among the characters better.
Why was the movie so good... good vs evil, when they are not so clearly defined, its varying shades of gray, no one is completely blameless, even the good guys. The conversation was well scripted, it builds the mystery, the gravity of the situation .. so good. The storyline was magnificent, at every crossroad there were plenty of options the director, writer could have taken ... You get the nuances, you feel for the characters' underlying motivations.
The breakdown in what motivates a person: money, personal, family and power ... power=money. Mixed in the police force and the politicians trying to control every facet of the heirarchy, you have a potent mix. In any democratic country, the institutions that must be independent: THE JUDICIARY, THE POLICE FORCE and THE CENTRAL BANK ... if any of the institution's integrity of independence is compromised ... you get ... (you know the answer).
The return to the screen proper in a proper serious role by Chow Yun Fatt, was easily the best performance by him for a long while... if the eyes could talk. Aaro Kwok was great as usual, Tony Leung Ka Fai had the best role, more excruciating this time around and he nailed it.
My previous review of Cold War I:
http://malaysiafinance.blogspot.my/2013/03/must-watch-movies.html
