20/03/2017 Asia Business Report


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20/03/2017

Live from Singapore, the essential business news as it breaks and a look ahead to the news that will shape the business day.


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He will also be questioned over the attempted murder

:00:00.:00:00.

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

:00:00.:00:13.

From a disgraced president facing prosecutors to Chinese leader

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heading down under, we take a look at the week ahead and how it impacts

:00:20.:00:25.

financial markets. And while food companies are trying to offer

:00:26.:00:30.

healthier options for Indian consumers. Good morning, Asia, hello

:00:31.:00:40.

world. Glad you could join us for this Monday at edition of Asia

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Business Report. I am Rico Hizon. It is set to be a busy week. Looking at

:00:47.:00:50.

what is on the news and business agenda and how this could impact the

:00:51.:00:54.

financial markets. The Korean impeachment saga is set to continue

:00:55.:00:58.

this Monday with prosecutors questioning ex-president Park

:00:59.:01:03.

Geun-hye. Later on in the week, the General Council of the European

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Central Bank meets on Thursday with many expecting a potential rate rise

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and to round out the week the Chinese Premier, Li Keqiang, heads

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to Australia on Friday. Earlier I discussed what we can expect from

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some of these stories with a market watcher. Most of them are macro

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news, which tend to affect all the stocks in the markets when something

:01:26.:01:28.

happens. And what have seen in the risk environment has changed since

:01:29.:01:33.

the Trump election. We used to worry a lot about macro news in the past

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several years but since then we are worrying more about company specific

:01:38.:01:41.

news and the dispersion across the stock market has led to a much

:01:42.:01:45.

healthier risk environment which has meant we can withstand more macro

:01:46.:01:50.

bad news than we had recently. What about the European Central Bank

:01:51.:01:54.

eventually raising the cost of borrowing, following in the

:01:55.:01:57.

footsteps of the US? Will it happen? Europe is going to be a hotbed of

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the next 12 months, the Brexit negotiations going on in the

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background, elections coming in France, and we just had some good

:02:05.:02:08.

news out of Holland, so Europe is going to be... The risk premium in

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Europe will continue to remain high in the next 12 months because of

:02:14.:02:17.

these things. I don't think talking about raising interest rates right

:02:18.:02:21.

now is the best thing. But of course, despite all this talk of

:02:22.:02:25.

protectionist policies from President Trump, we have seen the US

:02:26.:02:31.

market is continuing to rise. But raising the cost of borrowing has

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kept Asian stock markets on the sidelines. Some of the markets in

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Asia are worried about that, because some of the markets in Asia have US

:02:43.:02:47.

denominated debt, which will get more expensive for them. But there

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are plenty of countries in Asia with no debt problem, no deficits, and

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for them it is still just trying to figure out what is Trump about and

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which of our companies and sectors will benefit from his policies? But

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our investors concerned that the Fed could get aggressive this year in

:03:04.:03:10.

terms of raising by another 25 basis points, by another 0.5%, on interest

:03:11.:03:15.

rates? I think 0.5% is properly priced into the cost of doing

:03:16.:03:18.

business, but what investors have learnt about central banks in the

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last eight years or so is that they can be very accommodative when they

:03:23.:03:27.

need to. In other business news making headlines, the president of

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Uber has resigned less than a year after joining the country, Co. He

:03:34.:03:39.

has said that the beliefs and approaches to leadership which have

:03:40.:03:42.

guided his career are inconsistent with what he has seen at Uber. They

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have been a number of controversies over the country's work culture.

:03:48.:03:53.

Angela Merkel and Shinzo Abe have spoken up in defence of free trade

:03:54.:03:57.

despite the increasingly protectionist stance of the US. They

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were opening attack fear and the statement came after the G20 meeting

:04:03.:04:06.

which dropped a long-standing mention of open trade in their final

:04:07.:04:10.

communique, a move attributed to pressure from the US. While some

:04:11.:04:15.

businesses are worried about the potential for market volatility in

:04:16.:04:19.

2017, others are embracing it, and one of them is the currency trading

:04:20.:04:24.

platform. But as the company starts to gain market share in Asia, will

:04:25.:04:31.

investors be so eager to wade into the currency markets? As part of our

:04:32.:04:38.

series, Two Minutes With, I spoke to the company's chief executive. Thank

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you so much for joining us. Let's start. It is a very crowded market

:04:44.:04:49.

out there. How do you survive? We are constantly seeking feedback from

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our clients, and there are three big reasons why we are one of the top

:04:56.:04:58.

retail foreigners exchange brokers out there. One is clients are

:04:59.:05:01.

constantly looking for a trusted broker and we have been in the

:05:02.:05:05.

market for 21 years, and no fines and no citations. You are based in

:05:06.:05:10.

New York. We are based in New York. What are your plans for Asia? Big

:05:11.:05:15.

plans for Asia, it represents 50% of our business today and we continue

:05:16.:05:19.

to invest heavily. At the Asian markets are fragmented, do you feel

:05:20.:05:23.

their are enough investors here who are financially sophisticated?

:05:24.:05:28.

Definitely, definitely. We see investors in Singapore where we are

:05:29.:05:31.

the market leader but also across greater China and the Asean region.

:05:32.:05:41.

And investors want more engagement with the platform, and that is where

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we are really investing. In education courses, helping people

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understand the risks in the market, and that is what it takes. People

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are looking for how do I get my trading strategy. That is true

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everywhere in the world, definitely in Asia. And isn't it difficult for

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Asian investors to learn online trading? They would rather talk

:06:03.:06:05.

directly to their broker, rather than go online and trade. Actually,

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you would find in the case of electronic trading, given 24/7

:06:12.:06:17.

market access, or 24/5 market access, the way to consume

:06:18.:06:21.

information is so easy, and you can trade on the mobile platform. With

:06:22.:06:25.

the preponderance of mobile in Asia it is very good for investors. 2017,

:06:26.:06:30.

a lot of volatility in the markets due to uncertainty in global events.

:06:31.:06:34.

Does this bode well for your business? Definitely, it bodes well

:06:35.:06:38.

for our traders and our clients, because while there is volatility in

:06:39.:06:41.

the market they don't have trading opportunities, with more volatility,

:06:42.:06:46.

they will look for more information and use that to trade and be

:06:47.:06:50.

profitable. We are out of time, thank you so much for joining us,

:06:51.:06:55.

from Oanda. India has been the standout economic growth story in

:06:56.:06:59.

the past few years but increasing prosperity has a few downsides as

:07:00.:07:02.

well. India's waistlines are expanding as quickly as its bank

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account. The latest figures say 21% of women and 19% of men are obese,

:07:08.:07:14.

and India's home to more than 65 million people who are diabetic. As

:07:15.:07:21.

health concerns go, consumers are looking for healthier options and

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manufacturers are taking note, with the world's largest food company

:07:26.:07:29.

promising to make its most popular Indian products healthier. Our

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correspondent has the details. Some of India's most popular food

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products are going on a health kick. The company behind many of them,

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Nestle, has vowed to cut sugar in some chocolate and dairy products

:07:44.:07:50.

but its biggest gamble is a plan to cut salt and sodium content in Maggi

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noodles. Indians love these noodles. Nestle's product is back to leading

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the market in the category with a 60% share. That is despite a ban a

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few years ago over claims these noodles contained dangerously high

:08:04.:08:08.

levels of lead. Indians are over that controversy now, but what do

:08:09.:08:14.

they think of Nestle's plans to make their favourite Breakfast, lunch,

:08:15.:08:19.

dinner and snack healthier? I would rather prefer to buy something that

:08:20.:08:24.

is organic, as a healthy choice, over a product like Maggi. I still

:08:25.:08:29.

buy Maggi for the fact that it is Maggi and I like to have fun. You

:08:30.:08:33.

change products and within one month you find your sodium level or sugar

:08:34.:08:37.

levels are normal? I don't think so, but in the long run it is healthy.

:08:38.:08:41.

It is going to make a difference. Nestle isn't the only global food

:08:42.:08:45.

brand changing its strategy in India. Local brands are moving into

:08:46.:08:51.

the sector as well. Spiritual gurus in particular have recognised the

:08:52.:08:55.

potential of marketing flavours organically. These gurus have had

:08:56.:09:00.

natural medicine products for years, but their expansion into food and

:09:01.:09:04.

beverage retail is new. And, with hundreds of millions of followers

:09:05.:09:08.

already, turning them into customers shouldn't be too hard. Food and

:09:09.:09:15.

drink is a $57 billion industry in India, but alarmed by rising rates

:09:16.:09:19.

of obesity and diabetes, the government is cracking down on

:09:20.:09:24.

manufacturers. It plans to introduce rules on display in fat, sugar and

:09:25.:09:28.

salt content on packaging and is considering a nationwide tax on food

:09:29.:09:36.

products high in sugar and fat. There is more food news, this time

:09:37.:09:40.

from China, where lobster imports from the United States have hit a

:09:41.:09:44.

new high. American lobster is almost unheard of in most of the mainland

:09:45.:09:50.

until 2010, when the value of imports jumped by a whopping 250%.

:09:51.:09:55.

The market continues to grow, and last year China hit a new record,

:09:56.:10:01.

importing lobsters worth more than 108 million US dollars

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And before we go, here is a look at the markets, and Asia is starting

:10:04.:10:13.

the new trading week a little weaker due to the decision to drop a pledge

:10:14.:10:19.

to avoid trade protectionism at the G20. The All Ordinaries is down

:10:20.:10:22.

slightly. The Hang Seng is moving sideways and South Korea is lower as

:10:23.:10:33.

well. In UK is close for -- the Nikkei is ) of the colony.

:10:34.:10:41.

The top stories this hour: President Trump has again accused

:10:42.:10:47.

North Korea of acting very badly, after Kim Jong-un claimed

:10:48.:10:51.