05/05/2014 Asia Business Report


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


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


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


battle between the two technology giants? Investing in Myanmar will


stop why businesses are drawn to the frontier markets despite the


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


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


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


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


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


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


technology correspondent in San Francisco and ask him if this


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


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


infringing their patterns, one of which was wilful infringement.


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


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


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


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


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


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


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


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


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


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


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


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


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


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


inside Apple and Samsung that were revealed in the process of


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


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


into what the companies were thinking as they brought these


products out. Interesting perspective. Did this decision


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


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


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


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


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


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


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


involved in this worthy previous generation products. Even if an


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


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


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


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


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


earnings as the country's low interest rate environment encourages


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


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


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


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


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


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


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


foreign investment rules for its pharmaceutical and car industries


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


example. The banking sector is extremely basic by modern


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


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


But the two main obstacles to companies coming here and investing


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


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


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


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


conglomerates here, and those big companies almost always are


connected with either the Burmese military all the Burmese government.


But the biggest single obstacle, particularly to Western and American


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


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


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


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


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


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


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


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


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


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


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


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


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


that uncertainty is perhaps the largest challenge, the question of


whether reforms will continue. How do businesses cope with that


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


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


continue with this reform and Edmonton and whether the reform can


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


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


uncertainty and the physical challenges of infrastructure and


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


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


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


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


complexities of doing business in Myanmar. Currently, we all


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


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


Thank you for joining us. Sport is next.


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


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


murder committed more than 40 years ago. Ukrainian prosecutors


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