05/08/2014 Asia Business Report

100th anniversary of the entry of Britain into the World War I. Now on

BBC News, all the latest business news, live from Singapore.

Checking on Indonesia's economy. We look at the job that lies ahead for

the new President`elect. Shares in the world's because pork supplier

begin trading today on the Hong Kong stock exchange. Indonesia has been

one of Asia's best performing markets this year but its overall

economic growth has been slowing and as the nation prepares to deliver

its second`quarter growth numbers for the year, we find out why there

are hopes its new government, led by President`elect Joko Widodo, will

find a way to push through with some much`needed reforms. From furniture

maker to Jakarta Governor to Indonesia's President`elect. Joko

Widodo has seen his political star rise rapidly. There are hopes his

business friendly attitude will help spur growth in South East Asia's

largest economy. But as the euphoria wears off, Joko Widodo has a long

list of challenges to address. Rampant corruption, rising prices,

slowing foreign investment, poor infrastructure and a stubborn fiscal

deficit. Key to fixing the finances is cutting the bill brought by fuel

subsidies. They take up 16% of the government's budget. On the campaign

Trail, Joko Widodo promised to do away with the subsidies within four,

five years, but it is a sensitive five years, but it is a sensitive

topic and previous attempts to raise the price of fuel have led to huge

protests. He will also have to play tough politics. His main rival in

the election is contesting the result, claiming massive fraud. His

party does not have a large majority in parliament, meaning it is harder

to pass laws. Combined with his relative inexperience in national

politics, some experts warn that Joko Widodo's efforts to get the

economy back on the fast track may be a slow slog. Earlier, I asked

about Indonesia's economic prospects and what we can expect to see later

in the day when the country unveils its latest GDP numbers. We expect a

similar number for this quarter and it is part of a broader, cyclical

slowdown that we expect to last for some time. A number similar to the

first quarter. But what about the election spending of the

presidential candidates? Went it has an effect on the economy? Yes,

indeed, we have seen retail sales go up, which means an increase in

consumption. But we have seen a fall in public spending and only a slight

rise in imports. Even with higher consumption, we will see a slower

number. But we are already in this third quarter. Will that be similar

to the first and second ones? It is part of an adjustment process which

is currently lagging. As that unfolds, we will see these numbers

lower because the economy needs to fix its current deficit and fiscal

budget. Joko Widodo has to fix a lot of things in the economy he takes

over in the fourth quarter of the year. One of his proposals is

pushing growth to 7% in two years. He has to focus on boosting

investment, infrastructure spending and reforms. Structural reforms must

be addressed. Some of that will come later but we first expect him to

begin with infrastructure spending as well as governance issues when he

takes office. LinkedIn, the professional networking site, has

agreed to pay damages and wages after a court found it failed to

account for all of the work done by its employees. The figure includes

$3 million in unpaid wages and $2.5 million to be paid in damages to

former and current employees. Much Donald says the food scare it is

experiencing in China and Japan is having a significant negative impact

on sales in the region. It says it might not meet its forecast for this

year. McDonald's last week suspended sales of its nuggets in Hong Kong

amid concerns relating to a Chinese meat supplier. Now, moving to

Australia. Thank you for joining us. Looking at the trade balance in the

month of May, it deteriorated sharply and there was a fall in

expert earnings. What are you looking at for June? Unfortunately,

we have seen that earlier number revised down even further. It looks

like the deficit was more than $2 billion. And so we are looking into

the June results, which has come into as a deficit of $1.7 billion.

Imports fell, possibly due to be maintained higher level of the

Australian dollar. But it is the commodity mix of exports that the

market is really focusing on. Last month, the weakness was in coal and

metals. Will that continue? Yes. Iron ore is the main issue. Volumes

have increased but lower prices. It is the value of those exports that

have driven this better than expected result as well as the

pickup in natural gas exports. Apart from the trade numbers coming out

today, you also have the attention of the markets firmly on the Reserve

Bank of Australia with their policy decision. Will interest rates remain

steady at 2.5%? Will there be a move? Very unlikely we will see a

move. The Reserve Bank of Australia has clearly flagged its markets. We

are looking at a sustained period of interest rate stability. It would be

very surprising if we saw a move. It is almost universal consensus that

there will be no change. The market is looking very carefully at the

status of the currency. Thank you. Shares in the world's biggest pork

supplier, WH Group Ltd, have begun trading in Hong Kong. It is $6.80

per share. It raised more than $2 billion in one of the biggest

initial public offerings in Asia this year. That is much less than

the $5 billion the company had hoped to raise. A steaming wok full of

freshly cooked pork and vegetables. It is by far China's favourite meat.

Every region has its own special recipes. Here in Hong Kong, in south

China, besides fragrant stirfries, there is also roast pork and juicy

barbecue pork buns. This country consumes half of the world's pork

and is expected to account for 75% of growth in consumption over the

next five years. That is why an initial public offering by China's

WH Group Ltd, the biggest supplier of pork on the planet, is attracting

so much attention from investors. The company made headlines last year

when it purchased America's largest pork producer, Smithfield foods. It

was the biggest deal of its kind and left the company deeply in debt. To

pay that back, WH Group Ltd turned to the Hong Kong stock market,

trying to raise $5 billion in April. After a few weeks, it had to

cancel the listing when investors decided it was much too expensive.

The stockbroker said it was wise for the company to return several months

later with a much more modest deal. They lowered the price, essentially,

and it is a better... And they cut the amount of raised money by 50%,

so it is much easier to digest. Others agree. This my beliefs have

the shares trade over the next few months will affect the entire

industry. This is big and eye`catching and how it trades and

if significant trading volumes develop will have a bearing on

decisions in August, September and October. It was supposed to be the

biggest listing of the year in Hong Kong. It did not happen. But this

resurrected deal may still help drive investor appetite for major

offerings. Before we go, here is a quick look at the Asian markets. It

is quite mixed despite a US equities rally overnight. Investors had some

good news reports. Hong Kong is in positive territory. However, Japan

and Australia are in negative territory. We are now seeing a shift

in sentiment. Japan is up by more than four points. Basically flat to

hire. Thank you for joining us. `` flat to higher. Thank you for

joining us. This is BBC News. The headlines: Israel and Hamas have

agreed on a new three`day ceasefire in Gaza. There have been more

civilian casualties. Israel is