26/08/2016 Asia Business Report

Searching for clues and. Wilbert Federal Reserve chair dropped any

hints about a rate rise? -- will the. And look, no hands. The world's

first self driving taxis hit the road in Singapore -- drop. --

searching for clues. Welcome to Asia Business Report, I'm Sharanjit Leyl.

It's the speech that is being billed by Wall Street as must see TV. This

lady, the US central bank governor Janet Yellen will be speaking at

Jackson hole symposium later today. Markets have been eerily quiet.

Investors are waiting for any hints of a next rate rise. Let's look at

how US markets closed on Thursday, fairly flat and in fact Asian

markets have opened in a similar way. For his views earlier I spoke

to a representative from the national university of Singapore.

Today's meeting isn't a ratesetting meeting but it's about looking for

clues as to what Janet Yellen says. The expectation is there's just over

a 50-50 chance there will be one hike this year, it could be in

September but more likely December. The bigger question is not whether

there will be one more hike or not, the bigger question is what is the

Fed up to? I think the Fed needs a radical reboot in its communication

strategy, it's forward guidance hasn't been very helpful, it's been

worse than no guidance at all and I think something needs to be done to

communicate the framework they are using for these decisions, even more

than whether they will all want at the next meeting. Ultimately traders

are focused on interest rates -- will all white. 42% chance of a rate

rise in December -- will or won't. You say it's more about these

communications, what should they be doing? Something structural has

happened to interest rates, the natural habitat for interest rates

is a lot lower now than it used to be, even three or four years ago. We

haven't seen much indication the Fed has accepted that, that the stable

rate of interest is somewhere much lower. And therefore we flip-flopped

between dovish and hawkish. I think they need to say that we do have a

backdrop of growth that isn't fantastic, we have a problem with

global inflation. It is buying to be behind the curve than trying to jump

the gun and do something too drastic to quickly. It's about the global

concerns and what is interesting is you have policymakers from places

like Europe, and Japan, where there's negative interest rates.

What is the impact really globally, how do you see it briefly? Complete

divergences, the rest of the world are smack in the middle of their

stimulus programmes, negative rates, negative yield on about a third of

the world's government bonds right now so that's another reason why the

Fed and the US can't divert and breakaway entirely. It's also

important to see what the Fed does because the global economy is

concerned with the dollar and the dollar is what matters.

The world's first self driving taxis hit the road right here in Singapore

this week and the company behind it has said they have actually beaten

other ride hailing services like Bluebird to roll out these

autonomous cars. But it is still a limited trial with select passengers

riding for free on select roots in a small area -- Uber. A fully fledged

service would be launched for two years. We caught up with Doug Parker

and asked him how the ride compares to a regular taxi.

They are fairly conservative and they might drive like your

grandmother might drive. They are careful, stop for pedestrians and

pass slowly. How can a passenger be confident the cars are safe? We have

driven hundreds of thousands of kilometres, we have a good safety

record especially around collisions with other cars and pedestrians. It

will make the right choice, it has a 360 degrees view continually, it

sees what's going on in the world and it acts at the speed of a

computer, not at the speed of a human. How does the technology work?

It is a robot and it has to do three things, see the world, decide what

to do and then decide to move an act. Those are the sensors you see

on the outside. Today they are very expensive lasers, camera and radar

to create a detailed image of the world. It is continually updating

itself 20 times a second or more 360 degrees, creating a detailed picture

of pedestrians, trucks and buses, all the things a car sees, and it

builds a map of it. Then we have a decision engine that decides

navigating. How can the business model be applied outside Singapore,

especially when the government highly restricts how many cars are

here and there is lots of regulations? First it will develop

in places like Singapore with well structured streets, well marked

streets, people generally obey the rules of the road. We think we can

find appropriate markets but we probably won't start with downtown

Manhattan Orman by. How hard will it be to get insurance for these cars?

We have a global insurance policy that covers all our operations

around the world -- Manhattan or Mumbai. We will get more safety

records as we get more kilometres. What kind of reaction do you expect

from the industry? There will be an amazing amount of disruption. If you

think about it, we will be launching fleets of cars that will replace

your individual car. That will mean fewer personal car sales and

insurance and maintenance. All those things for individuals will be

disrupted. Drivers will also be disrupted initially and that's what

we need to work with, especially with governments to make sure that

drivers and other people that are disrupted in the industry have a

safe landing. Doug Parker from the company behind

those driverless taxi is. In other news, Air New Zealand profits are at

42%. The airline posted record profits of $330 million -- taxis.

That is due to a tourism boom to New Zealand. The country had 3.3 1

million visitors in the last year, up 11% from last year.

India's Tata motors is set to report its latest results, once again

expected to show strong sales for the carmaker. You are seeing other

brands doing reasonably well as well, so what is behind the

resurgence? We have more from Delhi. Buying a

car in India is much like bringing a new member of the family home. Cakes

are cut and congratulations are offered. And carmakers are more than

willing to give out big discounts to help woo customers like Ranjit, who

is upgrading his old vehicle to a bigger model. Right now there are

good schemes in the market, the best thing I thought they are taking my

old car back, which is value for money, and interest rates are also

low right now. After a slow few years for India's

car market, sales are powering ahead. The nation's top-selling

carmaker Maruti Suzuki had growth in the last quarter, as did Heidi and

I. Indian customers are traditionally ones who buys smaller

cars and stick with their purchase for years -- as did Hyundai. Now

people are being courage to buy more. They include Hyundai, which

has ten models in India with over 100 variations, ranging from $5,000

to nearly $50,000. So what is the Indian customer looking for? He is

seeking global products, global quality, global designs, global

features. But yes, he is also seeking strong value for money but

packed with strong assurances and reliability. The scale of the

challenge was highlighted last month when Tata motors and said it was

rethinking a $1 billion investment into India as it reassessed which

cars could do well in the local market. There are now strong rumours

it will try to sell one of its two factories here. And Nissan,

Volkswagen and Ford are increasingly seeing India as a manufacturing hub

as they struggled for domestic market share. -- struggle. Ranjit

hopes that his car is a sign of more prosperity to come and for India's

car makers, a fast moving economy and booming middle-class promises

plenty of good times for those who know what their customers want.

Let's have a look at the markets before we go because Asian markets

have opened reasonably unchanged, as you can see, the Nikkei down 1%, the

all All Ords down as well. We waiting for the Hang Seng. On Wall

Street overnight there was a lot of caution and wariness ahead of the

symposium, that is echoed here. That is the meeting where the Fed

potentially hints at interest rates. That's it for the show.

There's been an unprecedented rise in killings in the Philippines