06/08/2014 Asia Business Report

debate ahead of the historic vote. Now on BBC News, all the latest

business news live from Singapore. We find out why Standard Chartered

is expected to close its second straight drop in profits today.

Making money from property. Capital And's chief executive talks about

the trends and the risks. Welcome to Asia Business Report. Standard

Chartered is one of the UK's biggest lenders but more than 75% of its

earnings actually come from Asia. With its first half results due

later today, the bankers want profits may fall by as much as

compared to levels one year ago. There has been speculation both the

chief executive and chairman are under pressure from some investors

to stand down. We take a look at what is behind the bank's change in

fortunes, starting in India. Standard Chartered is one of the

country's oldest banks, having set up its branch in 1858. Things have

come a long way from dealing in rubber, tea and oil. Today, it is

the country's largest lender, with its focus on corporate banking and

customers in a market that has been a huge source of profits for the

bank. But the slump in the Indian currency took its toll along with

slowing growth and corporate investment remaining week. India was

once Standard Chartered's most profitable market globally but it is

no longer so. Only perhaps if the new government can turn positive

sentiment into real investments both from India and abroad could things

look likely to pick up any time soon.

In Hong Kong, the Standard Chartered bank building stands tall in the

heart of the main business district. It is a testament to its

success in Asia, where it has seen ten straight years of profit growth.

But that winning streak came to an end last year because of market

volatility. Investors have begun taking their money out of relatively

risky emerging markets in Asia and putting it back in developed

economies. That has forced Standard Chartered to rethink its strategy.

It has had to sell some businesses in key markets such as Hong Kong and

South Korea. What is more, analysts say that ace global economy and

tighter rules in China could affect its bottom line in the coming

months. `` a slower economy. In Singapore, Standard Chartered has

already flagged a weaker performance. One of the problems is

competition. More than 120 commercial banks operate on this

island. There is another reason for Standard Chartered to pay attention

to Singapore because it is home to its biggest investor. The nation's

sovereign wealth fund has a big stake. At least publicly, is

refusing to join the debate about the future of the bank's senior

management but it is being vocal about corporate governance and wants

to see more independent directors on the board. Periodically, there are

rumours that the fund would like to sell its holding, but as many point

out, 18% is a lot to swallow and there are no obvious buyers.

Earlier, I asked about what investors wanted and Standard

Chartered. Investors want to see credible leadership at the top of

this organisation, whether that means a change or reinforcement.

This is the first job. In your view, should there be a change in

leadership? Or should there be a reinforcement? Personally, I think

it might be time for a more drastic change, however that is really up to

the board and the shareholders. That is only part of the story. The real

problem they have is competitiveness. Banking competition

in Asia has changed in a way that will never return to how things

were. The rise of strong national banks, banks like DVS in

particular, which is a great example. They have been taking

market share from both HSBC and Standard Chartered. How can they

rethink their Asia strategy 175% of their earnings come from region?

Yes, it is difficult. `` how can they rethink their Asia strategy

when three quarters of their earnings come from the region? Yes,

it is tough. The playing field is extremely level. They have the same

systems and quality and staff. How can a bank differentiate itself?

Perhaps the life cycle for the colonial banks is being. Thank you.

Rupert Murdoch's 21st`century fox has withdrawn its bid to purchase US

entertainment giant Time Warner. The offer had been for an estimated $80

billion. Time Warner rejected the initial offer in July. A merger

between the two companies would have significantly altered the US media

and film industry and created one of the world's largest entertainment

conglomerates. A US security company says a Russian group has hacked 1.2

billion usernames and passwords from more than 500 million e`mail

addresses. They security company says it is the largest data breach

known to date and that the information came from more than

420,000 websites, including virtually all industries across the

world. Shares in Toyota are trading slightly lower in Tokyo trade,

despite better`than`expected earnings reported on Tuesday. The

manufacturer saw profits rise by nearly 5% in the three months to

June because of higher sales in North America and Europe. Toyota has

been aggressively advertising new models such as the Siena minivan.

That is because despite relatively high gas prices, it seems Americans

still love their large cars. US sales of FUD is `` SUV 's have been

rising in recent months and that has helped profits at the Japanese car

giant. The world's largest carmaker made nearly $6 billion in the April

to June period, surprising analysts, who had forecast a lower

profit. The reason for the higher sales was Japan's currency, which

has helped make its vehicles cheaper to overseas buyers. North America

saw sales rise by more than 7%, while in Europe, they increased by

more than 9%. However, it had the opposite effect in Asia. Sales

slumped in Japan after a higher sales tax came into effect in

April. The company has also warned that conditions in Thailand, India,

Brazil and other emerging markets remain weak. Overall, Japanese

carmakers like Toyota are expected to benefit as long as the US, its

biggest market, continues to do well. It also depends on the

Japanese government maintaining its stimulus aimed at keeping the

currency low. But competition is getting tougher, not least from

rivals like Volkswagen and General Motors, who are hot on Toyota's

heels. South East Asia's just property

developer says that profits are up 14%. CapitaLand's chief executive

told us how he's trying to deal with the risk in those markets. If you

look at both Singapore and China, in Singapore, we remain very confident

in the medium to long`term that it will remain a hub in this part of

the world. In the short`term, some of the restrictions and measures

will have an impact on residential property prices as well as

residential sales volume. Similarly, in China, there is still this

underlying trend. We are talking about significant numbers of people

moving from the countryside into the cities. That will generate a strong

demand for housing. Chinese residential sales have fallen over

40% in the first six months of this year. How are you trying to deal

with these increased challenges for your business? There has been a lot

of talk about China potentially slowing down from 7.5% growth to

about 7% or possibly even 6.5%. But if you look at it, at 7% or 6.5%,

China is still the engine of growth in this part of the world. If you

put the two trends together, migration and high growth in China,

I foresee this to be a very strong market for the next few years and

CapitaLand is well positioned. We have been doing well in China for

the last few years and we have a team of people on the ground who

understand the local market. We know the large`scale picture may

sometimes not be as rosy but within that market, because the market is

large, there will be specific pockets of opportunities that

because we are in the market we will be able to take advantage of. That

was the chief executive of Singapore's CapitaLand stop before

we go, here is a quick look at the markets. Asian stocks are mostly in

negative territory. The Nikkei is giving back 110

points. The Hang Seng index is lower by 90 points. The Australian stock

market lost about eight points. Data out of China also suggests a

recovering economy may need further government support. Thank you for

joining us. Goodbye now. This is BBC News. The headlines: The

US Secretary of State John Kerry has urged Israel and the Palestinians to

take advantage of the continuing truce in Gaza to move towards wider

negotiations. An American army major`general