11/05/2016 Asia Business Report

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

The global airbag recall widens, Canon Takata weather the financial

fallout? As China economy's slows, we look at the changing face of

investment is -- investors in Chinese art. Good morning Asia,

hello world. It is Wednesday, thanks for joining us for this addition of

Asia business reporter, I am Rico Hizon. It is one of the car

industry's highest profile global recalls, and Japanese airbag maker

Takata is at the centre of it all. Later today the company is expected

to announce that it lost money in the second year, and the estimate is

a loss of $120 million. That figure does not take into account other

major costs it could face from the scandal. He was a look at some key

numbers. The final cost to the company is

expected to run into the billions of dollars, and Aliir I asked an auto

analyst how this is in backing the firm's reputation. Currently they

are at the highest recall by Takata globally. The numbers affected are

across the next. It is the highest profile recall ever we have seen.

The reason why they are going to face more and more financial

troubles is that the brands that are doing the recall on behalf of

Takata, they will charge back Takata about the cost. That is not

integrated into their financial forecasts, and that is the big

downside that they have in the profit. At this point it cannot be

quantified, the volume of how much this will impact Takata airbags, do

you think with this major problem, but the airbag manufacturer is

facing, they could close shop? Potentially. Because of the

financial trouble, it can happen. Although technology clear that --

technologically they could call back. We have started to see

customers turn away from them, and they have re-evaluated whether they

should be working with them not. Reputational damage is indeed

humongous, could there be a buyer for Takata? I think that is the only

way out, because you cannot just close shops, there are so many

people working there, so many intellectual property available with

the company, so many plants running, so the company could be bought out

and other airbag manufacturer. Stay with the sector, the world's biggest

car maker, Toyota, is expected to report it and used, its third

straight year of record profits. It is estimated to have made $22

billion last year, which is a jump of 8% compared to levels year ago.

Its bottomline is likely to have been hit by the strong yen, airbag

rentals and last month's earthquakes in Japan, which disrupted

production. -- recall. It is turn our attention now to the world's

biggest oil exporter Saudi Arabia, and its state-owned giant Aramco.

The company's what has been finalising plans for by, after the

state government said it wanted to rely less on oil and diversify its

economy. The BBC was invited to the company's headquarters and sent this

report. This is a south-eastern outpost of Saudi Aramco's sprawling

energy empire. An empire they now want to controversially sell a slice

of to foreign investors. But why now? We have seen volatility in the

oil market before back in 1998, oil prices were below $10 a barrel. In

2007 they were $147. What makes this juncture different? Is it because

they want to put the Americans out of business with their industry, is

it that they want to hamstring Iran as it re-emerges into the oil

industry, or do they worry that because we are moving towards a low

hydrocarbon future, other time they get the stuff out of the ground it

will not eat worth much, so let's pump as much of it as long as we

can. These are the questions for the Saudi government and Saudi Aramco,

Wendy IP comes along it will be worth three apples by some

calculation is. They have a lot of people in the country who need

something to do, and this industry with its trajectory cannot sustain

the young people coming into the workforce. Whatever reason, there

are some epic things going on in the oil industry, in this epic

landscape. What role does a postal service have in the age of the

Internet? That is the question Singapore Post has been grappling

with in recent years. It looks like the new strategy is paying off. It

posted a record full-year profit of more than $180 million.

The humble letter has been going out of fashion for a while, that is why

Singapore's mailing service and many others in Asia are looking to

reinvent themselves. As more people switch to e-mail, Singapore Post is

now focusing on Internet commerce and logistics. It says the average

household in Southeast Asia receives just 2-3 parcels per year, compared

to 30 in developed nations. That is expected to grow though, which is

why it has partnered with China Alibaba group, which has become its

second-biggest shareholder. It has not been business as usual in recent

months, some of the company's deals have come under scrutiny over

corporate governance issues. It is also undergoing a top-level

reshuffle, after is Chief Executive and chairman unexpectedly quit. The

saga has hit its shares over the last few months as Singapore Post

now hopes that its new management is going to send the scandal away. Over

the past decade, buying fine art has been one of the most talk about

alternative ways to grow your investment portfolio. But the art

world has not been immune to the crisis. Last year as the economy

showed -- slowed, China's art market dragged significantly.

Old or new, big or small. Sometimes, it is in a category on its own.

There are plenty of reasons why people buy art. The bottomline, it

is often about money. The global market shrank by 7% in 2015, the

European fine Art foundation says it is the first contraction in four

years. The Chinese market, once the world's number two after the US, has

contracted by nearly a quarter. Chinese fund manager has become much

more capable about -- careful about where he put his money. Before I was

very impulsive. If I thought it was beautiful I would buy it. Now I am

much more logical. I will consider its artistic value and artistic

content, and also I consider the artist much more. Investors are

still buying, but they are looking at younger artists, with great

potential, over more established names, says this billionaire

collector. Collectors become much more cautious, but also more

sophisticated, as a result, they do more research, they want artists who

have full credentials, who had exhibitions in museums, instead of

being more impulsive in speculating, they are actually more

for a longer term collection. Auctioneers have been hit even

harder. The once booming auction market has been directly affected by

the slowdown. Both sales and the number of works being offered by top

Chinese artists have halved in the last year. To boost interest,

auction houses like Sotheby's art offering blockbuster pieces by

eminent artists. Sold! After furious bidding, the hammer comes down on a

record price. Even in tough times, the best still sells. But you have

to pick your market. Let's have a look now at the markets, and so far

so good, a positive day the Asian share prices. In early Wednesday

trade after US equities surged to their biggest gain in two months

after the Chinese commitment to stimuli at the economy, the Nick

Hayes surging -- the Nikkei. On Wall Street, the key industries were

gaining as well, by 1.3%, led by energy stocks, chemicals and

machinery companies. A great day for the markets, think if your time,

have a great Wednesday, I Rico Hizon, by far now. -- by now.

this hour. US officials say President Obama

won't apologise for the bombing of Hiroshima, when he makes a historic

visit to the Japanese city later this month.

The British Prime Minister has been overheard describing Nigeria and