23/02/2016 Asia Business Report


23/02/2016

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All the latest business news live from Singapore.

:00:00.:00:14.

Digging a hole. A mining giant sees its first loss in more than 16

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years. Paying for plastic. Indonesia has a massive problem with plastic

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bags. Good morning. Glad you could join us

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for Asia Business Report. I am rigger he's on. -- I am Rico Hizon.

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BHP Billiton has a loss of 5.7 billion US dollars. It has slashed

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its dividend by 75%. The first loss in more than 16 years. Like many of

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its rivals it suffered from the collapse in commodity prices. They

:01:09.:01:14.

suffered a second downgrade. I spoke to David, a resource analyst from

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Sydney. I asked him about the main points he took. The first item, the

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primary driver for BHP, its first significant loss, is the fact that

:01:29.:01:36.

the nearly $8 billion in profit pulled out because of the lower

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commodity prices, that is a significant amount of profit they

:01:40.:01:43.

have lost. They could not make up the downward move. It clawed back a

:01:44.:01:49.

little bit through currencies and a little bit through the cost saving

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initiatives they have been undertaking for some time. Very

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challenging times indeed. Are these losses likely to pile up in the

:02:01.:02:03.

second half of the financial year from January to June? In the second

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half of the year we are looking for commodity prices to improve

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modestly. That improvement should be enough to see the second-half result

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being a little more positive. We would expect that after the

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full-year report for BHP it will be a tale of two halves. The first

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half, very poor, and the second with recovery. Iron ore and other metals

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have depressed the earnings of BHP Billiton. But one of that is they

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have over other rivals is that it has a major unit with 37% of

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earnings, from oil. -- one advantage. It is rebounding. We have

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seen an improvement in the oil price but also the iron ore price. Both of

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those commodities are key to their performance in the second half.

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Briefly, what if China's economic growth continues to slow down? This

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has been a linchpin for companies like BHP Billiton. Definitely. When

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you look at what China is doing, if you look at the imports of

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commodities China is bringing into that country, even though the

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economy has been slowing for a number of months, over 1.5 years,

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the amount of commodities they are importing is actually rising. We

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believe they are looking at the rest of the world and are maintaining

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their own domestic supply and are buying up very cheap imported in

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what it sees. -- commodities. Bad news for Qantas. They have a lower

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oil price and weaker Australian dollar. They have a record profit

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before tax of 665 million US dollars. That is more than double

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the profits for the same period last year. Virtual reality. A mobile

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industry in Barcelona believes connecting everything to the

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Internet is the next big challenge. Many mobile companies are betting

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that they will take off this year. -- virtual reality. It is an

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industry obsessed with getting connected. The Mobile world is

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turning to things. Cars are already going on line. The SIM card in this

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one turns it into a Wi-Fi hot what and tells the garage it needs a

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service. -- hotspot. And farmers can monitor their cows through their

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phones. Even this bike is on line. It has a light that flash is more

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when you are riding into danger. That makes the city streets safer.

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And what about your dog? It is soon to be hooked up to the Internet

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through its collar. It allows you to know were your dog is. A nice and

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simple application. It will be affordable and available. As well as

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connecting every object on earth they have another obsession,

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disappearing into a virtual world. Here we go. Wow. Virtual reality is

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everywhere. That is shown by the thrilling experiences you can have.

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It is the cheaper version where you slot a phone-in to your headset

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which first introduced people to the technology. -- phone in. For the

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first time you can take your phone that is always with you and put it

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into an affordable device and transport yourself anywhere around

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the world and get experience is A can't buy. -- experiences money

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can't. We want to turn any space into a car showroom? This

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application allows you to do that. It isn't for everybody. Not everyone

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can wear one of those headsets. Many people feel dizzy. With augmented

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reality it is a different experience we can take to everybody. Mobile

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phones is to be about making phone calls. Now, this industry feels that

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they can change every aspect of our lives. -- used to be. Do you use

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plastic bags to carry your shopping? In Indonesia, it is a massive

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problem, with rivers and oceans clogged with waste like this. It is

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damaging fishing and tourism. The government is trying to change

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consumer behaviour with shops introducing a fee for plastic bags.

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It is a trial before it goes nationwide. We are checking it out

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in Jakarta. A sea of plastic. Indonesia is the world's

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second-biggest ocean polluter. Every year, the country produces more than

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a million tons of traffic waste. -- plastic. Much of it ends up in the

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water. Now, the government is trying to cut the waste by taking people

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pay for plastic bags. It is only 14 cents a bag. The government should

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increase the price. 14 cents is too cheap. If it is more expensive,

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people will be reluctant to buy them. That is better. If shoppers

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are concerned about paying for banks, will this cut down their

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use? -- bags. And not everyone is following the rules. It has been

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implemented since Sunday but I just bought some biscuits and was offered

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a free plastic bag. Oil retailers implement the new plant? -- Will. --

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plan. The manager says that because it is only being trialled the

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company has decided to wait before making all their stores implement

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it. It takes effort and we have to train our staff. Retailers like this

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one say they are responsible for only eight Earth of Indonesia plus

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match waste. -- a small part. The next aim is supermarkets. The new

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policy does not apply to them. The government recognises the challenge.

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TRANSLATION: This is still a trial period. This is to influence peoples

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behaviour. -- people's. I hope people will use them wisely. It is

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clear there is a long way to go before Indonesian consumers decide

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to do away with plastic bags. But, environmentalists say that at least

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the government has taken the first step. Before we go, a quick look at

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the markets. Asian stocks are moving sideways.

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Giving up some early gains. This is despite US stocks jumping overnight

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and the price of oil surging again, lifting energy cost as well as

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mining company cost. -- costs. All Ords is down a ten of a per cent. --

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tenth. Wall Street, the major indixes, gaining 1.5%. Thank you for

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investing your time with us on Asia Business Report. I am Rico Hizon.

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Sport Today is coming up

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