16/01/2014 Asia Business Report

restrict bonuses to a maximum of two years salary. Now time for all the

latest business news, live from Singapore.

Skyhigh property prices. We look at where the cooling measures in Hong

Kong are working. And by business leaders in Asia favour of the

mainland of other major choices. Property prices in Hong Kong have

skyrocketed since 2009 as Asia was spared the worst of the global

financial crisis and Chinese buyers have come in. But is Hong Kong in

danger of another property collapse? The most expensive properties in the

world are found here. A household for a record 70,000 US dollars per

square foot. It is the most expensive property in all of Hong

Kong. And overall prices hit a new high last spring. No capital gains

tax and Chinese money mean that Hong Kong is an attractive place to

invest. To deter speculation foreigners have to pay a tax equal

to a quarter of the transaction price. It has become so high that it

has made Hong Kong a less attractive place to speculate. Also, the Fed is

trimming its cash injections, which heralds I global interest rates and

mortgage costs. -- higher. It is hard not to wonder, is a bubble?

House prices are estimated to be overvalued by 40%. When the last

bubble burst in 1997 during the Asian financial crisis, house prices

fell by 60% and continued to decline by 60 -- for 60 years. But the party

developers say it is different this time. The interest rate was in

excess of 10%. Now it is only 3%. The buyers or owners will find it

affordable. House prices are 13 times the average salary. Higher

than during the last bubble. I work in health. We spend about 60% of

salary to pay for the mortgage. Even if I spend nothing I have had to

save for the deposit. Adding further pressure, public housing is

inadequate. It covers only 30% of the population. This woman and her

family live in a 400 square feet flat. The size of the studio.

TRANSLATION: The rent is the be high. It is our biggest expenditure.

It takes up half of our monthly income and we do not make much

money. She is still one of the lucky ones. Illegal sites have sprung up

to cope with the unaffordable and inadequate housing. This is the dark

side of being a property hotspot. Some other Asia business this --.

Air New Zealand will be allowed to fly the Auckland to Singapore route.

In return, Singapore airlines will be able to operate in New Zealand.

And in regular Tory approvals, flat could start as early as December. --

pending a regular Tory. JCPenney will close 33 jobs and cut

2000 as part of its turnaround. The store closures will generate cost

savings of $65 million per year. The struggling department store chain

operates more than 1000 stores across America.

The International monetary fund expects global growth to pick up

this year, echoing the view from the World Bank. But the head of the IMF

also had a warning. We have to watch out for deflation.

With inflation running leap in the central bank targets in most

corners. We are seeing rising risk of deflation. That could prove

disastrous for the recovery. If inflation is the Genie, deflation is

the over. Business leaders in Asia are feeling

rather optimistic about prospects for this year compared to 2013. That

is according to a survey by an economic research group. They say of

the 500 companies interviewed, 46% say their expectations have

improved. The Asia-Pacific is delivering better profit margins,

especially in South East Asia. The investment of parity is China. It

has overtaken India. I cast more about these findings. If you look at

2013, it was a turbulent year. In China we had concerns about debt and

government attempts to transfer the debt built up. The other main global

engine, America, is skipping back on quantitative easing. Economic

performance suffered. Last year was tough. 2014 is looking much better.

The rich parts of the world for the first time in a long time have a

synchronised recovery. Japan, Europe and North America are all growing.

The concerns of the past few years are receding. Let us break it down.

Indonesia has come up as the second port for investment after China.

What is driving the settlement sentiment? Multinationals are

investing in Asia. China has always been the number one market. Behind

China traditionally is India. That is because of the population. It had

quite good at rates. But this year, Indonesia has leapfrogged into

second place. A lot of companies are betting on China. The second that is

not India, but Indonesia. Indonesia is not doing things right, but it is

doing less things wrong. What is India doing wrong? There has been a

lot of policy and political mismanagement of the economy. Growth

rates have fallen. They have been mismanaging the economy and the

investment climate of things like foreign direct investment

restrictions. It has businesses being fed up that India has got its

act ghetto. Indonesia is not a paragon of excellence when it comes

to creating an investment landscape. Let us take you to Malaysia, where

the Prime Minister has come under criticism on social media for his

comments on the price of water spinach. He said it is not fair for

the government to be blamed for rising prices. We have more from the

capital. It is a popular vegetable, commonly

known as morning glory and water spinach. It is delicious in

stirfried with chilli or garlic. The price has recently gone down by

50%. That has the Prime Minister thinking, how come he is not getting

pressed for it? If he sounds like he is desperate for a compliment, there

is good reason. Since he cut down on subsidies, his popularity has

dropped in the polls. Despite the fact he has given out cash handouts

and announced stores are selling items for below market price. A lot

of Malaysians say there would not need to go through cuts if the

government was able to manage money properly and not let it leak through

corruption and waste. There is a difficulty of getting a sense of the

market. Those who do not appreciate the price hikes to not want to come

on camera. This man tells me Malaysians should be thankful and

not blame the government for everything. He says people need to

learn to save. A lot of the criticism the Prime Minister has

come online with interesting photographs. If you are worried

about the cost of living rising, this T-shirt might have some wisdom.

This vegetable is popular. It is definitely not a staple. Malaysians

feel the Prime Minister is disconnected to everyday lives. Even

at this night market although a lot of the products have kept their

prices there are signs that the price problems are to come. This

chilli has increased by 30% overnight. Prices may have come

down, but this latest comment shows that the Prime Minister could be

disconnected and is clueless about the hardships of Malaysians.

Goodbye.