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Now on BBC News: All the latest business news live from Singapore. | :00:00. | :00:15. | |
Myanmar head to the polls in a historic election. What will it mean | :00:16. | :00:23. | |
for invests this and the economy? Sniffing out new opportunities. -- | :00:24. | :00:29. | |
investors. We look at a Singapore perfumes business. Good morning. | :00:30. | :00:38. | |
Welcome to Asia Business Report. The countdown is on. Myanmar head to the | :00:39. | :00:44. | |
polls this Sunday in a historic election. After almost half a | :00:45. | :00:49. | |
century of isolation in their economy is slowly opening up. | :00:50. | :00:53. | |
Banking is one sector benefiting. Foreign banks deal complained they | :00:54. | :01:00. | |
are not getting enough access. -- are still complaining. We talked to | :01:01. | :01:06. | |
one of the biggest domestic banks. In terms of what many foreign | :01:07. | :01:12. | |
investors think about most is oil and gas and raw materials. What you | :01:13. | :01:18. | |
are seeing here is the development of a consumer economy. Real estate | :01:19. | :01:22. | |
is growing quickly. It is a reflection of the wealth in Myanmar. | :01:23. | :01:27. | |
People are prepared to pay for apartments at a healthy price. In | :01:28. | :01:33. | |
that regard, the economy is healthy. There has been a lot of criticism | :01:34. | :01:38. | |
from foreign investors who say that this country is far too protected | :01:39. | :01:42. | |
and it is very difficult, especially with banking, for foreign banks to | :01:43. | :01:47. | |
come. Grumbling of foreign investors is a global phenomenon. I would | :01:48. | :01:52. | |
argue you see that in China and other emerging market. Myanmar is no | :01:53. | :01:58. | |
different. The government has been quite liberal in many respects given | :01:59. | :02:02. | |
the timeframes we are talking about. As far as the banking sector | :02:03. | :02:07. | |
goes, it is safe to say that the issuing of nine foreign banking | :02:08. | :02:14. | |
licences is sufficient. 52 million in the population, nine foreign | :02:15. | :02:18. | |
banks with 29 local banks, it is more than sufficient. I think there | :02:19. | :02:23. | |
is no shortage of foreign banks or local banks in that regard. What | :02:24. | :02:29. | |
about political uncertainty? How does a bank like yours mitigate | :02:30. | :02:38. | |
risks? As a bloke will balance sheet dealing with local currency we | :02:39. | :02:43. | |
understand the reality on the ground. -- local. We listen to staff | :02:44. | :02:48. | |
and managers who have deemed through, to be quite frank with you, | :02:49. | :02:54. | |
worse times. -- have been through. If we look at the history of Myanmar | :02:55. | :02:59. | |
this coming election is really a wonderful opportunity. In the great | :03:00. | :03:05. | |
scheme of volatility in Myanmar this is a blip. Barack Obama has formally | :03:06. | :03:11. | |
notified Congress of its intent to sign the Trans-Pacific Partnership. | :03:12. | :03:14. | |
It is one of the world's most extensive trade agreements | :03:15. | :03:20. | |
accounting for about 40% of the global economy and the text has | :03:21. | :03:24. | |
finally been released. But there is uncertainty about what it might mean | :03:25. | :03:27. | |
for labour laws and intellectual Robert Key. -- property. Lawyers and | :03:28. | :03:33. | |
investors are looking over the details but opposition remains | :03:34. | :03:37. | |
strong in some quarters, including from Hillary Clinton, the | :03:38. | :03:45. | |
presidential hopeful. Some people question, what rights does Barack | :03:46. | :03:49. | |
Obama have to sign a deal that he will not actually be implementing | :03:50. | :03:54. | |
when he steps down from the presidency. The next president will | :03:55. | :03:59. | |
have to carry the can for this particular deal. If Hillary Clinton | :04:00. | :04:01. | |
says she is not that interested in this TB partnership then what is | :04:02. | :04:08. | |
going to happen? -- TPP. Will they signed the deal and at some later | :04:09. | :04:13. | |
stage say, we will not implement it ? They cannot do that. An agreement | :04:14. | :04:21. | |
is an agreement. Singapore airlines is making eight takeover offer for | :04:22. | :04:27. | |
Tiger Airways in an effort to delist the company. It owns more than half | :04:28. | :04:39. | |
of its stake in Tiger. -- a takeover. Shares opened lower for | :04:40. | :04:50. | |
Toyota. Sales have been declining everywhere but North America. The | :04:51. | :04:54. | |
world's top-selling carmaker has been ramping up productivity and | :04:55. | :04:59. | |
cutting costs. It has been helped by a sharp fall in the Japanese yen | :05:00. | :05:03. | |
which made them more competitive abroad. India's Tata Steel has shown | :05:04. | :05:12. | |
a surprise jump of more than 20% to over $230 million. It is thanks to | :05:13. | :05:17. | |
the sale of some investments, including part of its stake in Tata | :05:18. | :05:25. | |
Motors. But it is cutting more cost. A cut more than a thousand | :05:26. | :05:32. | |
jobs last month. -- costs. In India foreign supermarkets are banned from | :05:33. | :05:38. | |
they are part of a joint-venture. Businesses that only sell their own | :05:39. | :05:44. | |
brand of products can apply to own 100% of their Indian operations. | :05:45. | :05:47. | |
Among the first to win that approval was Swedish furniture giant Ikea. | :05:48. | :05:54. | |
Its first store opens next year but it has been making products in India | :05:55. | :05:58. | |
for decades. We spoke to the Chief Executive of the company. This is | :05:59. | :06:01. | |
very much a long-term investment that we are doing. Buying the land, | :06:02. | :06:07. | |
owning the buildings, investing in that, and, it is several 100 million | :06:08. | :06:16. | |
euros that we are putting in here in a short period of time. It will take | :06:17. | :06:21. | |
many, many years before we will have a payback on that. What has China | :06:22. | :06:32. | |
had an impact on it? Not much. -- what impact has China had? We are | :06:33. | :06:36. | |
continuing to invest in China and have built about three stores to | :06:37. | :06:40. | |
year. That is the way we will continue to expand. We will see | :06:41. | :06:45. | |
solid growth in existing stores. What are Ikea's future plans and how | :06:46. | :06:50. | |
important is expansion into new markets? They are import and. -- | :06:51. | :06:58. | |
important. We opened up career and Croatia last year. -- Korea. One of | :06:59. | :07:07. | |
the most exciting in the coming period will be India. Of course it | :07:08. | :07:10. | |
is important. It creates more opportunities on the supply chain. I | :07:11. | :07:15. | |
am sure the products and the sourcing drive we are doing in India | :07:16. | :07:21. | |
will support our Indian retailing operation but it will also set ought | :07:22. | :07:29. | |
Ikea globally. -- support. Many of the suppliers grow with Ikea, of | :07:30. | :07:33. | |
course. So, expansion is important. It is one important cornerstone in | :07:34. | :07:43. | |
the way that we grow Ikea. Ikea's CEO. Singapore has long been | :07:44. | :07:47. | |
regarded as the best place in the well-to-do business but it can also | :07:48. | :07:52. | |
present its own challenges, especially for key players. -- in | :07:53. | :07:58. | |
the world to do business. This man grew up in a family business but | :07:59. | :08:02. | |
soon set up in competition to his father. The business has been | :08:03. | :08:07. | |
growing but it is a tough road. I had seen 20% year-on-year growth | :08:08. | :08:15. | |
since I set up seven years ago. But that is still not where I would like | :08:16. | :08:21. | |
it to be because the cost associated just being in Singapore and this | :08:22. | :08:26. | |
area have risen dramatically. I think my father's business is | :08:27. | :08:31. | |
definitely doing better. In his time, Singapore actually had rent | :08:32. | :08:34. | |
control. These houses, the rent by choice from year to year. He could | :08:35. | :08:39. | |
have slow growth. He has definitely built up his reserve, his clientele, | :08:40. | :08:46. | |
his pool of labour. I guess one of the challenges of actually being in | :08:47. | :08:50. | |
the business over here is... The value of the property far | :08:51. | :08:54. | |
outstrips, you know, what a small business can generate unless you are | :08:55. | :09:01. | |
an instant hit. Another challenge is craft people. People who don't mind | :09:02. | :09:05. | |
getting their hands dirty. That doesn't exist any more. While it | :09:06. | :09:13. | |
seems very romantic and sentimental to be doing things that we are rich | :09:14. | :09:18. | |
in a league did, but at the end of it, what I do end up producing is is | :09:19. | :09:32. | |
better goods. -- originally did. But I know that it is inefficient in a | :09:33. | :09:36. | |
modern world. Tradition, culture, heritage, they all have costs add | :09:37. | :09:44. | |
that to it. So the only way I have been able to continue doing what I | :09:45. | :09:49. | |
am doing is to play up the luxury aspect of it. -- attached to it. I | :09:50. | :09:54. | |
have had enquiries from people who want to set up their business in the | :09:55. | :09:58. | |
city and it has been as varied as, and you should come to Shanghai, | :09:59. | :10:05. | |
they appreciate luxury, or, you should come to New York. -- you | :10:06. | :10:09. | |
should. I guess that is part of the journey. I will consider it. A look | :10:10. | :10:15. | |
at the markets before we go. Markets in Japan, Australia and South Korea | :10:16. | :10:18. | |
opened half-an-hour ago. Hong Kong started trading. A mixed picture. | :10:19. | :10:22. | |
You have been watching Asia Business Report. Sport Today is coming up | :10:23. | :10:26. | |
next. | :10:27. | :10:30. |