20/02/2014 Asia Business Report

fell by 125,000 in the last three months of 2013. Now all the latest

business news, live from Singapore. $19 billion. Facebook buys messaging

service WhatsApp. Why Walmart is not finding success

in China. Hello and welcome to Asia Business

Report. I'm Sharanjit Leyl. These start with social networking site

Facebook which is buying WhatsApp in cash and stock. The deal is valued

at $19 billion. Facebook will pay $4 billion in cash and the rest will be

financed by shares. The FICCI includes $3 billion worth of shares

for WhatsApp founders and employees. -- the shares include.

WhatsApp reportedly has more than 450 million users and handles over

10 billion messages daily. Let's break down whether this is a good

deal. What do we think? It is an expensive deal but probably

necessary. Facebook needs to be where people have conversations,

they do that. It is really a third way that Facebook can have people

interacting with each other. Over 400 million people. I think it is

necessary for them. It's interesting you say it is seen to be fairly good

but of course we have seen the shares falling in after-hours

trade, when the announcement was first made. Mark Zuckerberg said he

has no plans to put advertising on WhatsApp. We note the advertising

revenue is important. How will they make money? There's a lot of date

information they can get. With Facebook, they know who you are and

what you are talking about. -- data. With WhatsApp, it's based on your

phone number. Suddenly they can do everything you are talking about on

WhatsApp. If they wanted to, they could move back into the Facebook

universe. I don't think that's their current plan but that can be done.

They want to make sure people are communicating through Facebook, not

other people. That also brings up issues around privacy. There has

been criticism of Facebook around this in the past. Certainly people

are concerned about what they write through Facebook messenger. People

are more personal about what they do with their mobile phone. Facebook

will have to be careful with how they use that and reassure people.

But if all of your friends have WhatsApp, that's what you chat on.

The next big competitor is Wii. Thank you.

Of course you can get a lot more on that Facebook story and other

business headlines from around the world at the BBC website.

Japan's trade deficit has ballooned to a record $27 billion to January.

The figures show exports rose 95% in January, competitive one year ago.

-- 9.5%. There was weakness in the Japanese yen and strong demand for

fossil fuels. That made up of the nuclear power the country lost due

to the four cushion disaster. Asia's largest retailer wants to

sell up to 30%, at a time of the Chinese government is promoting

investment in the oil industry. The retail and wholesale division

operates more than 30,000 petrol stations across China.

Walmart is the world's biggest retailer by volume and is ultimately

the vehicle for injecting cheap Chinese goods into the US market.

But it hasn't has as much luck selling back to the Chinese. It is

due to announce its annual results later today but has already tried to

temper expectations, partly due to a number of store closures, some in

China. Why has a model that was so successful in big US struggled to

catch on in Asia? I have someone from a China market research group.

I remember when Walmart still entered -- first entered China about

15 years ago. It created a lot of excitement. Here was a great, big,

trusted American brand coming into a country where, at the time, about

70% of sales were made through Mum and par stores. -- Mom and Pop. The

Chinese, who were first attracted to come to Walmart, were affluent

consumers. Tony wealthy consumers didn't want to be in a place where

they were being bombarded with discount signs, not very nice

lighting. What you've seen in the last 3-5 years is a lot of domestic

Chinese retailers have moved up value chain and they are really

going at the premium end. We expect Walmart is losing market share from

about 7.5% down to about 7.2% over a few years. Earlier, you said it was

a well-known American trusted brand but is that trust still there? We

just saw recently the scandal involving donkey meat, that was

painted with fox meat. Is it having problems with its supply chain? If

you are a trusted brand and you lose that trust, it's hard to regain it.

As you say, they were trying to sell donkey meat that was really fox

meat. They've mislabelled pork as organic. So, it's a problem where it

you are trusted by the Chinese consumer, if you lose that it's

really hard to regain it. I actually think Walmart could bounce back. But

the Walmart issue will be tough. Singapore's economy has reported

that it has grown over 4% in 2013, beating the government's

expectations. Tomorrow, the government will set up its budget

for the coming year. Singapore has become one of the wealthiest

countries in the world and boasts a greater proportion of millionaires

than everywhere else. There is also a less admirable health gap. How do

you live in a city so expensive? I met one family finding it tough.

With its 5-star hotels, casino and a vibrant financial centre,

Singapore's glitzy skyline is the envy of many. It's low taxes and

efficient infrastructure has attracted so many of the world's

wealthy that, in less than a decade, it has become a playground for the

rich. One of them was this man, Anton Casey. He made headlines last

month were calling Singaporeans who take public transport poor. The

backlash against him on social media was so extreme that he lost his job

and fled the country with his family. The life he led was very

different to the one experienced by Singaporeans who live here. Here is

a part of Singapore that most people don't see. Iron in a block of

apartments where each flat averages just around 30 square metres. The

families who live here pay rent to the government might depending on

how much they can afford. They are Singaporeans struggling on the

margins of one of Asia's wealthiest countries. This woman is 29. She

lives here with her six children. They get by on groceries, donated by

charities, and the government subsidises the children's' education

and rent. But the tiny flat has one bedroom and she can't afford a

dining table. Edison to treat her daughter's asthma is also out of her

reach. She hasn't been able to buy it for months. -- medicine to treat.

I don't think I can afford any medical bills. In this house, though

one can afford to get sick. -- though one. Our finances are too

tight. People having to sleep rough is not something you see regularly

in Singapore. But, according to one Member of Parliament who has been

raising awareness, the number of Singaporeans struggling on the

margins is higher than most people think. Poverty exist in Singapore.

Social researchers have estimated it is 10%- 50% of households that are

low income. -- 15%. You don't see it in your face, there's no abject

poverty. It happens behind closed doors.

The contrast outside those close to doors couldn't be more different.

Singapore is ranked as the sixth worst expensive city in the world in

a recent survey. On average, each person contributes more than $50,000

to the economy. But for this woman and her family, the benefits are

trickling down yet. More perks for the poor mate -- might be unveiled

in Friday's budget for now she will struggle to make ends meet.

A quick look the markets. All Asian shares are considerably lower. The

Nikkei lost more in the past hour. That's after a report on Chinese

factory output, that came out. HSBC index fell. Of course we know any

level below 50 suggests a contraction. Lots of concern out

there about developing nation on rest and how that might impact

growth globally. We also heard from the Federal Reserve. -- nation

unrest. There were declines on Wall Street. In its showing members of

support are continued tapering of the stimulus. That's it for now.

The top stories this hour: the Ukrainian president, Viktor

Yanukovych, says he's agreed a truce with opposition leaders after two

days of deadly clashes in the capital, Kiev.

North and South Korea are set for six days of reunions for families

and relatives separated for more than 60 years since the Korean War.

The partner of a former Guardian journalist, who was