01/08/2014 Asia Business Report


01/08/2014

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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happened near Dubrovnik. A woman and a third trial are in hospital. Now

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on BBC News, let's go to Singapore with Rico and all the latest

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business news. After Wall Street suffers its

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steepest falls in months, Asia's markets stumble. And new data shows

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manufacturing in China surging to its highest level in more than two

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years. Thanks for joining us for this edition of Asia Business

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Report. Some good news out of China this morning, manufacturing activity

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surging to its highest level in more than two years. Factory output

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hitting a 27 month high in the month of July on adding to signs that the

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economy is indeed regaining momentum after a burst of government stimulus

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initiatives. But the news has not been enough to lift Asian stock

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markets. It comes after the US equity markets

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had their worst trading day since April. The defaults follow

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Argentina's default on its debt for the second time in 13 years. Pulling

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sentiment down, Russia and Ukraine tensions and US economic data that

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has sparked concern that the central bank in the US could raise the cost

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of borrowing sooner rather than later. The Dow and the NASDAQ

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slumping about 2% overnight. From the New York Stock Exchange,

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Michelle Flowrider. Investor nerves were clearly

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frazzled on Thursday. There are a host of reasons why, starting with

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the situation in Ukraine. We heard from companies like BP talking about

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the impact it's starting to have on their business. Of course there's

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also that default in Argentina. Closer to home in the US on Thursday

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there was a report on wage inflation. This raised the prospect

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that perhaps America's central bank would shift its focus from battling

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the weak labour market to fighting inflation, and that could mean

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higher interest rates. Now, as former central banker Alan Greenspan

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noted, the stock market here has been rising for some time and

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perhaps it was due for a significant correction. Investors will be

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wondering if that has now begun. An economist at OC EBC says this

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will make investors reassessed risks for Asian economies. On top of that

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we have to look more importantly at the issues, the expectation that the

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bank might raise rates earlier than expected. They might raise rates in

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mid`2015, we are seeing better jobs data. If those labour conditions

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proved to be better than expected, better than the Fed expected, then

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we are likely to see the market recalibrating. Back to China, it is

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not just manufacturing that is up, consumers are spending as well. From

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Shanghai John Sudworth reports on the effect of government stimulus

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measures. China's so`called mini stimulus continues apace. Banks are

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lending, the government is spending and so far it seems to be working.

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And uptake in second`quarter GDP, for example, and manufacturing data

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suggesting factories have put the gloom of a year or so firmly behind

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them `` and oh update. The only thing that matters, at least for the

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government, is if people feel richer in their pockets. So how does the

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man in the street, or in this case the market, feel about things?

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TRANSLATION: It's much easier to make money nowadays. The economy is

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picking up, my income is up and I'm spending more. I don't know the

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precise figures but year`on`year people are spending more. Those

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sorts of comments will be music to the ears of China's economic policy

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planners, who are desperately trying to unleash the power of the consumer

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and the private entrepreneur and move away from growth based on big

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infrastructure spending. The problem is the current mini stimulus fits

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that latter category exactly. It is big banking, big commerce and big

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government acting as the engine of growth. And as many a critic as

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pointed out, people may be basking in this warmth, but re` balancing

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remains as tough as ever. We look at what is driving this consumer

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spending. There definitely are higher levels of... There is more

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personal credit card debt. How big a worry is that, now there is a lot of

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credit card debt. It's not a big worry because the banks are watching

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it carefully. They have been cautious. What other growth drivers

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are there now apart from the domestic economy? Manufacturing

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remains very strong. We have a lot of products coming in. For domestic

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spend the key point would be there's increasing focus on digital spend,

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online traffic. What consumer goods companies are trying to balance now

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is how can I manage my online physical stores with the online

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trend, and getting that end to end the seamless customer experience. We

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are seeing the likes of Ali Babar .com doing very well. That is why

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they will be listing very soon in the US. Exactly. The Ali Babar

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business model has expanded in terms of the services they provide but

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also the portfolio of help for their providers. It is no longer just

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about a market for selling products, it is also helping vendors

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to actually build up credit accordingly as well. In other

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business news, March, 2011. The finding follows an

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appeal against a prosecutor's decision last September to drop the

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case over a lack of evidence. Sales have been hit by a slowdown in China

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and other emerging markets. The British drink maker of spirits,

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including Johnnie Walker and Smirnoff vodka, seine net sales fell

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by 9% to $17 billion for the year to June `` seine net sales. China and

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Southeast Asia volumes fell by nearly 20%. `` say net sales. China

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is expected to have the biggest increase in billionaires over the

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next few years. We look at the phenomenon.

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Spinning to the beat of a luxurious June. This is a charity gala

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organised by some of Indonesia's richest wives and girlfriends ``

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song. To enter one of these clubs there is a monthly fee and it can be

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extravagant. It starts from 1 million every month until 100

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million every month. So that's like $10,000? Yeah. This woman's business

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depends on the indulgences of the Aris handset. I can meeting new

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people and they can introduce me to their friends as well. This is her

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studio where she buys, sells and rents luxury handbags too well the

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status conscious Indonesian women. They can spend $20,000 to buy a

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bag. It is ridiculous. We could buy a car or a house in Jakarta with the

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cost of the bags. But for many in the Indonesia life runs on a

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different track. I'm in one of hundreds of slums peppered across

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Jakarta. This woman lives here with her seven children and husband. They

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rent this tiny shack for about $45 a month. Every day it is a struggle to

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make ends meet. This tin shack is home to her entire family. Just one

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luxury handbag could pay her rent for two years. She has seen the

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fancy cars and houses that have cropped up just a few hundred metres

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away, but they might as well be on a different planet. Her reality is

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filled with feeding seven mouse. Sometimes my husband can't find

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work. We have to eat everyday. When he doesn't bring home any money it

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is very tough, we have a lot of children and I'm very tired ``

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mouse. Her story is not unique. Two thirds of Indonesia is population

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lives on $2 every day, perilously close to the poverty line. The ranks

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of Indonesia's billionaires may be growing, but so does the gap between

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the rich and the poor. With that, thank you so much for investing your

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time with us. I'm Rico Hizon, goodbye for now.

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You're watching BBC News, these are the main headlines: Israel and Hamas

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have agreed a

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