05/05/2014 Asia Business Report


05/05/2014

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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is due to start. Members of the RMT union are set to walk out from nine

:00:00.:00:00.

o'clock in the evening. Time for Asia Business Report.

:00:00.:00:18.

Apple against Samsun. Have we seen the end of the long and drawn`out

:00:19.:00:20.

battle between the two technology giants? Investing in Myanmar will

:00:21.:00:25.

stop why businesses are drawn to the frontier markets despite the

:00:26.:00:32.

hurdles? Welcome to Asia Business Report. When a jury in California

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ordered Samsung to pay Apple $120 million over the weekend, it was

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viewed by some as a defensive victory for Samsung. Apple had been

:00:45.:00:49.

seeking more than $2 billion, claiming that the South Korean

:00:50.:00:53.

company had infringed its patents. Where does this leave the legal

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battle between the smartphone giants? Earlier, I spoke with our

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technology correspondent in San Francisco and ask him if this

:01:01.:01:07.

signals a victory for Apple. It is hardly a victory. The only thing

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Apple can say is that Samsung were found guilty on two counts of

:01:12.:01:14.

infringing their patterns, one of which was wilful infringement.

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Samsung were rewarded a small amount of money for what the jury found was

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one case of Apple having infringed one of their patterns. Frankly,

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something of a stalemate yet again. Could you say it is a victory for

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Samsung? In some ways, although the jury had found that Samsung had

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wilfully `` wilfully infringed the patents on Apple's smartphone. It

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does lend credibility to Apple's claimed that Samsung had copied the

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software inside the device. In that sense, not great for Samsung but

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clearly, the damage is much less than Apple 's claiming and it's

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highly unlikely there will be a sales ban on any handsets, which

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again is what Apple was seeking. Who is benefiting from this battle? You

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could argue that the lawyers are the big winners in all of this. One of

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the other victors that you could argue is a competitor. These

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companies are going into trial in a court like this, so it is all in the

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public. There are a lot of internal discussions that were happening

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inside Apple and Samsung that were revealed in the process of

:02:38.:02:41.

testimony. How Apple felt about its advertising agency, how Samsung felt

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it had to compete in the marketplace. It has provided insight

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into what the companies were thinking as they brought these

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products out. Interesting perspective. Did this decision

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surprise you? Not really. I did not think it would stop any of these

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companies from selling their products in the US. But on the other

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hand, it did reveal how small the monetary amounts turn `` turned out

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to be. In the end, the companies keep making the money. And it will

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have no impact on the product itself? Features will not change?

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Samsung has been doing a lot more that is quite different from Apple

:03:31.:03:34.

in that sense. In addition, keep in mind that the products that were

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involved in this worthy previous generation products. Even if an

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injunction were put in place, it would not have that much of an

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impact. Australia's Westpac bank has reported an 8% jump in profits in

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the six months to March. That's a record profit for Australia's

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second`biggest bank, following robust lending and a fall in bad

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debt. Banks in Australia are on track for another year of record

:04:03.:04:06.

earnings as the country's low interest rate environment encourages

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borrowers to take up loan. A Chinese still company is partnering with an

:04:11.:04:16.

Australian rail company in an attempt to take over and iron ore

:04:17.:04:19.

developer in the country. The two parties have made a bid for

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acquittal of resources. China's largest listed steel maker already

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owns 20% of the company. Indonesia will be releasing its first`quarter

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growth figures later today, expected to show an expansion of almost 5% in

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the first three months of the year. The government has already eased

:04:40.:04:41.

foreign investment rules for its pharmaceutical and car industries

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and the economy will play an important role in July's

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presidential elections. Indonesia's new shopping mall is just one sign

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of the country's gross. In the last five years, the biggest economy in

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South East Asia has expanded by an average of 6%, and in the coming

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months, and whether voters believe can maintain that growth may be

:05:09.:05:12.

voted in as the next president. Currently, the governor of Jakarta

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is leading in the popularity polls. He is ahead of the former minister

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of the economy and a former military general. But they face significant

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challenges. Rising power among the country's trade unions. Last week,

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thousands gathered to demand higher wages and better benefits. They say

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it has become harder to keep up with the rising cost of living. The gap

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between the rich and poor is also growing. Millions of people live in

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slums and experts warn that as inequality rises, so does the risk

:05:50.:05:55.

of social unrest. The growth figures for the last few months will set the

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tone for the election campaign. Major reforms are needed to maintain

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economic growth. The voters will decide who can deliver them.

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Myanmar, formerly known as Burma, has only recently opened its economy

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to foreign investment after decades of military rule but it is already

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becoming one of the region's hottest investment destinations. Seven out

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of ten Asian businesses plan to expand into Myanmar within the next

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year, according to a recent survey. But there are still a number of

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challenges to setting up shop there. Myanmar has a population of about 55

:06:36.:06:40.

million people and over the last several decades, they have had very

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limited access to modern consumer goods and services. There is a ready

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market for foreign companies to come in, particularly if they are looking

:06:49.:06:53.

to sell consumer goods and people here. There is also a sense that

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there is an un` exploited resource sector particularly in gas, so many

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companies are looking to invest in resource extraction. But this is a

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far from easy place to do business. Just look at the infrastructure, for

:07:08.:07:14.

example. The banking sector is extremely basic by modern

:07:15.:07:18.

standards. The things people need to operate businesses, the internet,

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mobile phones, all of them do not work very well here at the moment.

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But the two main obstacles to companies coming here and investing

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in a big way our corruption and uncertainty. If you are going to

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come and start a big operation here in Myanmar, it is generally accepted

:07:37.:07:41.

that you do need to have connections and local partners, and almost

:07:42.:07:44.

always, that will involve doing this with one of the big local

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conglomerates here, and those big companies almost always are

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connected with either the Burmese military all the Burmese government.

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But the biggest single obstacle, particularly to Western and American

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companies, is uncertainty. There is an election scheduled for the end of

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next year and it is far from clear that the reforms we have seen over

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the last few years will continue. If the military decides to reassert

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itself, that could mean a return to isolation and a return of

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sanctions. And of course, that would not be good for business.

:08:22.:08:27.

Earlier, I spoke with someone who worked on that survey for the

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overseas banks, and I asked why businesses were keen to set up in

:08:32.:08:38.

Myanmar. We have seen strong economic growth. This year, the

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country is expecting economic growth of 7%, 8%, which makes Myanmar one

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of the fastest`growing economies in Asia. And the other attraction is

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that it has a very good strategic location, located at a crossroads in

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mainland South East Asia. That adds a huge asset to the consumer market

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with a combined population of 2 billion people. Another point is

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that uncertainty is perhaps the largest challenge, the question of

:09:11.:09:15.

whether reforms will continue. How do businesses cope with that

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uncertainty? One has to understand that the reform in Myanmar is

:09:22.:09:24.

unprecedented and still in its early stage. Whether the country can

:09:25.:09:31.

continue with this reform and Edmonton and whether the reform can

:09:32.:09:39.

be sustained... `` reform momentum. Business will have to grapple with

:09:40.:09:43.

this as it invests in Myanmar. How do businesses deal with that

:09:44.:09:46.

uncertainty and the physical challenges of infrastructure and

:09:47.:09:52.

communications? What is the best way to work around those challenges? We

:09:53.:09:57.

always advise our clients that one of the main ways to help them

:09:58.:10:02.

overcome those challenges is to find the right local partners. People

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have good local connections that can help them overcome and navigate the

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complexities of doing business in Myanmar. Currently, we all

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acknowledge that there are still challenges like... There are

:10:19.:10:23.

challenges to foreign companies that intended to operate in that market.

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Thank you for joining us. Sport is next.

:10:30.:10:41.

The headlines: Police in Northern Ireland have released the Sinn Fein

:10:42.:10:46.

leader Gerry Adams, who has been questioned in connection with a

:10:47.:10:52.

murder committed more than 40 years ago. Ukrainian prosecutors

:10:53.:10:53.

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