21/04/2016 Asia Business Report

The Prime Minister has described Wood

Now on BBC News, all the latest business news live from Singapore.

Cheating on its tests. We look at the fallout from Mitsubishi's

admission that it falsified fuel efficient data.

KFC sales in China used in profits, but it is going ahead with the

sell-off of its local operations. Good morning. It is Thursday. Glad

you could join us. We start with Mitsubishi. The

Japanese car manufacturing giant has admitted to falsifying fuel economy

data to make its emissions look more favourable. This is the company's

president apologising in the traditional Japanese way. The news

is wiping $1.2 billion off its market value on Wednesday and

currently the stock has a lot of sellers, but not enough buyers. So

will investors be more forgiving and how damaging the B for his

company's reputation. -- will it be. Some say it will have a

detrimental impact but it isn't as impactful as the VW scandal. The

number of vehicles in fact it is far lower. I would say it is a lesser

scale, compared to Volkswagen. But Mitsubishi is not in the best of

shape financially. How damaging be to their bottom line going forward?

I think, as you said, there are $1.2 billion off their market cap. They

will have to rebuild confidence. The reputational damage is massive.

That's what will hurt them the most. There will be legal risks, they will

take it. But the reputational damage is long-term and that is what will

impact them the worst. Their competitor was the one that

discovered this falsification of data. Could they also be affected by

the fallout from Mitsubishi? They must be having some kind of

arrangement, because these vehicles were assembled by Mitsubishi. So I

am sure they would have some legal agreement to pass on. To that extent

Nissan's damage is less, but Mitsubishi needs to pick up the bill

for whatever they have done. This also impacts that Japanese car

industry, even though the likes of Toyota and Honda are not included in

this scandal. Could they also be impacted in one way or another? If

you bought the car now you would probably ask ten more questions

before you do it. Because it is done in a manipulative way, that's what

are the most. That was an auto analyst. In other news, lower

first-quarter earnings have been reported off the back of weaker gold

and copper prices. The US -based Newmont group is the world's second

biggest gold miner by market value and it says its income is down from

one year ago, but still well ahead from expectations. Results were

helped by higher production and lower costs.

Shares in the owner of off KFC says they are up I nearly 4% after the

company reported better than expected quarterly numbers in New

York. -- up I nearly. The Chinese company was tightlipped about the

progress of its planned sale of its local operations. Here is our New

York correspondent. The US investors greeted its latest

earnings release with enthusiasm. Shares rose some 5% in after-hours

trading, here in New York. Investors may have been especially pleased

with the news from China. The Chinese division, which has

struggled with everything from food scares to falling market share, has

seen store sales grew 6% compared with one year ago. It's huge KFC

operation did especially well. The performance of that business is

likely to strengthen the hand in negotiations with potential buyers.

China investment Corp is leading a group of investors reportedly in

talks with Yum about buying a large stake or even complete ownership of

the unit. Yum isn't ready to give any details about such a deal yet.

Other than to say it is making progress with the plans to spin off

the Chinese business first announced last year.

While companies like Yum are planning to open more stores in

Asia, many other Chinese companies are focusing their expansion plans

on the West. But what are they buying and what does it tell us

about the direction of the economy? How Asia business correspondent

filed this report. -- our Asia. Everyone loves a good bargain and as

economies in this part of the world slowdown prices have fallen as well.

Which is one of the reasons why Chinese companies have been on a

massive global shopping spree of, spending $80 billion buying up

companies all over the world in the first three months of this year

alone. That's at more than 300% in value terms. A record, but even in

terms of volume the number of deals signed is up 51%. So, to put it

simply, Chinese companies are buying up a lot more stuff this year than

they have in previous years. But how are they slicing up the sectors?

Nichols, consumer businesses and real estate stuck up the top. --

chemicals. Part of that is skewed by a state owned firm's takeover of an

agricultural company, worth some $43 billion. It is also a sign of how

China's economy is transforming. It is a change in the Chinese economy,

more towards a consumer driven economy, a services orientated

economy and probably also a reflection of the growth of the

middle class. Europe and the EU saw the biggest inflow of Chinese money,

some 35% of their share. But again that's because of the agricultural

deal. Asia also saw similar action, despite the political tension China

has seen with neighbours in this part of the world. I think there's a

pragmatism to the investment direction. I think there is a

reflection of a longer term strategy, so a lot of those

geopolitical issues arise from time to time. China's economic growth

strategy, the one gold, one road strategy is a lot more long-term. As

you came, Chinese companies are stepping -- snapping up assets all

over the world to remain competitive. In the face of a

slowing domestic economy, this is one way to remain profitable in

other markets and if the first three months of this year are anything to

go by Chinese companies are set for a record global shopping spree.

Here is another opportunity where Chinese buyers are among the

potential purposes. -- purchasers. Look at this, an entire town in

Tasmania is up for sale. That's 145 hectares. And image you have 35

Highland cattle, the church, a pub and a trout fishing dam and 33

buildings! It was built in the 1920s and 30s for the workers of a nearby

hydroelectric power station, but was largely abandoned in the 1990s.

Recently the town in central Tasmania has been used for tourism.

Now the owner is basically selling up and the interest is global. The

manhandling the real estate says there has been an international

interest, including a group of Chinese investors who view the site

-- viewed the site last week. We've got a group of Chinese heading up

there tomorrow. We've had interest from Singapore, as well as Dubai. So

the interest has gone worldwide and yes we are certainly getting a lot

of coverage. Tell us, what are the current bids for the village? We are

expecting somewhere between 11 and 13 million. The actual real estate

value of the whole town would be substantially more. The owner is

certainly motivated to sell and our expectations are somewhere between

that bracket. But there is some concern in Australia about selling

off major properties to foreign investors. Will there be any

concerns with this one in Tasmania? No, not in Tasmania. The property

values are less than the ceiling of around 50 million, which means the

purchaser from overseas will probably not be subject to the same

approvals. Briefly, when do you think this village will be sold?

When will it be signed and delivered? The expressions of

interest close on the 19th of May. Hopefully we will receive a number

of bids and we should know in a couple of weeks as to whether we

have a buyer. Gains for Asian stock markets today after a rise in US

equities overnight. Tokyo is up by 1.9%. Korean trade numbers are

coming up. Thank you so much for investing your time with us.

The top stories this hour: A Norwegian court decides that the

authorities have violated the human rights of mass murderer Anders