02/03/2017 Asia Business Report


02/03/2017

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has suffered its first defeat over the Brexit bill. The House of Lords

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backed a cross-party amendment saying that ministers should

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guarantee EU nationals' right to stay in the UK.

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He comes bearing gifts. The Saudi Arabian king riots in Indonesia

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where he is expected to pump money into the country's oil sector. And

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the owners of Snapchat see their company valued at $24 billion in a

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share sale. Welcome to Asia Business Report. It has been a highly

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anticipated state visit. Saudi Arabia's King Salman is in Indonesia

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as part of multi- stop tour around Asia. The Saudi king is expected to

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announce investment deals totalling more than $20 billion. Around $6

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billion of that will be pumped into state owned refineries, and it is

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the second oil deal we over Saudi Arabia this week. Earlier the

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country invested $7 billion into a refinery project over in Malaysia.

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Saudi Arabia is the world's biggest exporter, much of its crude going to

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customers in Asia. I asked why Saudi Arabia is so particularly interested

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in this region. Saudi Arabia has a lot of money to throw around. It

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would like to diversify its own economy and bring some of the

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expertise it has in oil refining to this region, Malaysia and Indonesia

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are producers of crude oil, but they don't have that much refining

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capacity. Indonesia in particular has very little. So if Saudi Arabia

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can bring some of that expertise to Indonesia, and capital... What is

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crucial about this visit is he is making this multi- stop tour around

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Asia, rather ironically he is not coming to Singapore at going just

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about everywhere else. Is this to tie in with the possibility of

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Saudi's listing? Absolutely, it is a preview to that, spreading the word

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about Saudi Arabia, Ling ties to some of the economies of this

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dynamic region that the Saudis have frankly neglected for 50 years --

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building ties. It has been 50 years since the Saudi king visited Japan

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and Indonesia. Japan is a potentially large investor in that

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IPL, and is a significant buyer of oil. All of that makes this a

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worthwhile trip to be making. Singapore, of course, would like to

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have Saudi listing in Singapore as well. Japan's sharemarket has

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followed Wall Street to climb to levels that are extremely high. As

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you can see, it has not hit this level in more than a year. The

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Japanese market following on Wall Street's lead after the Dow Jones

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rose well passed the 21,000 mark, as you can see, and the dollar rising

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on expectations the US Federal Reserve will raise US interest rates

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at its March meeting. The surge followed President Trump's speech to

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Congress outlining his agenda. The markets have been on a winning

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streak since Mr Trump took office but former Federal Reserve chairman

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Alan Greenspan says he is not surprised by the strength of the

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market. I don't think it is too much of an exaggeration to say that

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virtually all market response is a removal of uncertainty. We are

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turning our back in the direction of higher levels of price earnings

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ratios, which have been suppressed. That was former Federal Reserve

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chairman Alan Greenspan. Snapchat is a popular app that lets you create

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and send pictures or videos with a brief shelflife. Some of you may be

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using it, in fact. Shares will begin trading on the US stock exchange on

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Tuesday, and overnight the shares were priced at $17 per share, above

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the $40 price range it had previously indicated, that values

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the company at $24 billion, despite the fact that Snapchat is yet to

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turn a profit. In fact, it lost over $500 million last year alone. So

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what has investors so excited? Our correspondent has the answer. In

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just five years, Snapchat has gone from a little app that was created

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by a couple of college kids to a virtual giant in the world of social

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media, with a 160 million daily active users and on Thursday it will

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start trading on the US stock exchange. So why are investors so

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excited about a company that is valued at $20 billion but has yet to

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make a profit? Well, they are hoping it will see the same success as

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companies like Google or Facebook. Of course, the worry is they will

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end up looking a little bit more like Twitter or Groupon, companies

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which came with the lot of hype but not much else. Snapchat

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fundamentally is kind of a new breed of social network. It is not like

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Facebook, where there is a big public war and your whole family is

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on there. It is not like Twitter, necessarily, you are broadcasting to

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the whole world. It is very much its own animal and I think if you are a

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parent of a child completely addicted to this product, you might

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very well see it has a future. I know what Snapchat is but I don't

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use it. Usually when I see something I snap it. I have it but don't use

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it. My kids use it. I am not really the right demographic for it. I use

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it all the time, I love Snapchat, it is great. I don't what it is, I

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don't use it. Snapchat is the talk of Wall Street even though it is an

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app geared to teenagers but that will be the key to its success, if

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it can still attract the young users and advertise to them, then great.

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If it can, Snap Inc risks becoming just another overhyped tech company

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which grew too big too fast. South Korea's industrial output has surged

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33% in January compared to the previous month. The figure outpaced

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analyst expectations, it is the fastest growth since September 2000

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nine. Service sector output also rose 0.5% which is a slight

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improvement over December's figures. McDonald's has outlined a plan for

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winning back customers. The burger chain has lost around 500,000

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customer visited the US since 2012. Of those visits have gone to other

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fast food restaurants. The world's largest restaurant chain plans new

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look restaurants and delivery services, as well as more aggressive

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marketing for items like coffee and pastries. Over in Indonesia, wealthy

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households are well-known for spending money on all sorts of

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luxurious things in life, like fashion beauty. Well, the spa

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business is also flourishing, but they are not just for adults any

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more. Kids are getting a little pampering, would you believe, and as

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part of our Business of Kids series, we found one children's spa in

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Jakarta which is doing so well it is set to go international.

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Three-year-old Jasmine is a regular customer here at this spa in

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Jakarta. Her mother spends up to $200 a month on spa treatments and

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massages for her honour that is almost the minimum monthly wage

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here. TRANSLATION: I take my child here once a week. During school

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rakes I also take her siblings and that is why I decided to buy a

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package of 50 visits. On offer are massages and chocolate spa

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treatments for children as young as six days old. The baby spa was

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founded in 11 years ago and now has 23 branches throughout the country.

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The session costs around $15, and it generates up to $130,000 per month.

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TRANSLATION: Our service is unique because we offer services for

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pregnant women, children and babies and it is not just a lifestyle

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choice. It is also about looking after the health of our babies and

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our children. Business here could double in the coming years, she

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thinks. Indonesia's households have an estimated $500 million a year to

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spend on the item, and that is growing. Baby massage has long been

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a tradition for Indonesia. We know a lot of masseuse specialists for

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babies. It is part of our local wisdom, actually. So you can say

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Baby Spa is taking it to the next level, lifestyle wise. And parents

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are happy to pay if they think it is worth it. TRANSLATION: I have

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brought Orlando here every week since he was six days old. I have

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never missed an appointment. I have seen an improvement in his motor

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skills and he doesn't cry a lot at night. In the most rewarding thing

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for me as I can see his weight keeps increasing. With business doing so

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well in Indonesia, it is set to open its first international branch later

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this year. I want to join those babies and have a massage, but I

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have to tell you about the markets, the Nikkei continuing to make those

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strong gains. It hasn't reached these levels is December 2015, and

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that is because of the strong US dollar helping exporters, all of

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that because of Wall Street's gains. That is it for this edition of Asia

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Business Report. Thank you for watching.

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The top stories this hour: President Trump's optimistic speech

:10:40.:10:43.

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