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was cancelled because it was behind schedule. Now on BBC News all the | :00:00. | :00:00. | |
latest business news live from Singapore. | :00:00. | :00:21. | |
$1 billion, that's the amount of money Indonesia is aiming to raise | :00:22. | :00:24. | |
by reaching out to a new pool of investors. And, doing business in | :00:25. | :00:33. | |
China, Mercedes`Benz is the most recent company to face penalties on | :00:34. | :00:41. | |
the mainland. Thanks for joining us for this | :00:42. | :00:45. | |
edition of Asia Business Report on BBC World News. Indonesia is on a | :00:46. | :00:52. | |
drive to raise funds. Today is the first of a roadshow for a $1 billion | :00:53. | :00:58. | |
global Islamic bond, and Islamic bond is different from a | :00:59. | :01:02. | |
conventional government bond because it complies with Shari Law. | :01:03. | :01:06. | |
Indonesia needs to raise cash to finance its budget deficit and by | :01:07. | :01:11. | |
making the Islamic bonds available globally, they hope to reach a nuke | :01:12. | :01:15. | |
all of investors that are not tapped yet `` Sharia. Although it has the | :01:16. | :01:21. | |
biggest Muslim population in the world, its industry lags behind | :01:22. | :01:25. | |
Malaysia which is the biggest issuer of these bonds in South East Asia. I | :01:26. | :01:30. | |
speak with 80 that capital markets lawyer about these bonds. `` debt | :01:31. | :01:40. | |
capital. These are Sharia compliant products, including the prohibition | :01:41. | :01:43. | |
on payment of interest. Investors want to receive a return so we have | :01:44. | :01:50. | |
to structure the arrangement in a way that gives that return and in a | :01:51. | :01:56. | |
way that the market has done that is to invest the assets, the funds that | :01:57. | :02:00. | |
investors put into the product in various assets which either create a | :02:01. | :02:05. | |
profit or an income stream, which is then used to give a return to the | :02:06. | :02:08. | |
investors are. Why would a government to 80 Dominique Gisin | :02:09. | :02:14. | |
state of a conventional bond? Lots of reasons. They want to diversify | :02:15. | :02:25. | |
those investments, they want to tap a broader range of investors and | :02:26. | :02:31. | |
that would include issuing a variety of investors. Countries which have a | :02:32. | :02:39. | |
large Muslim population would have an interest in providing a Sharia | :02:40. | :02:43. | |
compliant investment product to support the ethical concerns of the | :02:44. | :02:49. | |
population. That was Vicki Jones, debt capital market lawyer. Reports | :02:50. | :02:53. | |
from China that the German car maker, Mercedes`Benz, was found | :02:54. | :02:57. | |
guilty of price`fixing has given foreign businesses and other reason | :02:58. | :03:00. | |
to question whether it is being unfairly targeted by the | :03:01. | :03:04. | |
government. China is the world's largest car market and other brands | :03:05. | :03:10. | |
like BMW, Chrysler and others have been accused of anti`competitive | :03:11. | :03:14. | |
behaviour. I spoke earlier with our correspondent, John Sudworth, for an | :03:15. | :03:18. | |
update on the fine Mercedes could face. We don't know yet what level | :03:19. | :03:24. | |
of fine the authorities will level of Mercedes`Benz. Ahead of the | :03:25. | :03:32. | |
announcement, under the shadow of the investigation, Mercedes and the | :03:33. | :03:36. | |
other carmakers you mentioned have already been engaging in heavy | :03:37. | :03:42. | |
cost`cutting. They have slashed the prices of spare parts after sales | :03:43. | :03:46. | |
services. Too little avoid the attention of the | :03:47. | :03:53. | |
authorities. There are some suggestions that a 20% reduction in | :03:54. | :03:58. | |
the cost of spare parts in China might cost a carmaker around 1% of | :03:59. | :04:06. | |
net profit. China has been saying that it doesn't discriminate between | :04:07. | :04:09. | |
domestic and overseas companies. The European chamber in China feels | :04:10. | :04:15. | |
otherwise. There is concern about this, not only in | :04:16. | :04:21. | |
but across foreign business sector. We have seen a number of industries | :04:22. | :04:25. | |
targeted, pharmaceuticals, technology companies, food | :04:26. | :04:30. | |
companies, all under the spotlight. There is a worry that foreign | :04:31. | :04:32. | |
business is singled out for political reasons. The cost`cutting | :04:33. | :04:38. | |
in the car industry shows that margins are high, the Chinese | :04:39. | :04:41. | |
authorities will suggest that proves there a point, that there is a case | :04:42. | :04:46. | |
to be answered. People think that in many ways these companies are | :04:47. | :04:50. | |
victims of their own success. The reason they can charge these prices | :04:51. | :04:54. | |
is because the real monopoly they have in China is a perceived | :04:55. | :04:58. | |
monopoly on quality. John Sutton worth in Shanghai. In other news, | :04:59. | :05:07. | |
making headlines, US `based oil and gas giant says it has discovered a | :05:08. | :05:12. | |
big oil well over the coast of Western Australia. Estimates say it | :05:13. | :05:15. | |
could be the largest find in Australia in decades. It is said | :05:16. | :05:19. | |
that the world is being evaluated could result in as many as 300 | :05:20. | :05:24. | |
million barrels of crude. A company says the potential of the world is | :05:25. | :05:29. | |
extraordinary. The largest mining company in the world, BHP, is | :05:30. | :05:32. | |
preparing to release its results on Tuesday, and is considering | :05:33. | :05:37. | |
restructuring, announcing that a demerger is its preferred option, | :05:38. | :05:42. | |
which is the company is keen to spin off assets which aren't big | :05:43. | :05:47. | |
earners. An announcement is expected on the restructuring process as | :05:48. | :05:51. | |
early as today. We will get a sense of global trade when we get half | :05:52. | :05:56. | |
year results from China's big shipping company, Costco | :05:57. | :06:00. | |
international. Revenues last year totalled $9 billion, down 7% from | :06:01. | :06:05. | |
2012. Investor sentiment has recently taken a positive swing. I | :06:06. | :06:10. | |
spoke earlier with our correspondent in Hong Kong and asked for an out | :06:11. | :06:14. | |
lock on the industry and Costco international. That industry has | :06:15. | :06:18. | |
been struggling since the financial crisis of 2009. They are struggling | :06:19. | :06:28. | |
to pay that down. Also, there has been a slump in global trade. There | :06:29. | :06:33. | |
are too many ships around so rates one can charge for shipping on those | :06:34. | :06:38. | |
vessels are lower than they once were. This is something the industry | :06:39. | :06:47. | |
is struggling with overcapacity. The Dyer Cosco say this is a problem | :06:48. | :06:51. | |
that could continue `` Cosco say. They didn't have a great year, its | :06:52. | :06:57. | |
profits were down by almost one third. We will see how they fared in | :06:58. | :07:01. | |
the first six months of the year and for the whole year. Indeed, a very | :07:02. | :07:08. | |
challenging environment for the industry. Surely, the focus is on | :07:09. | :07:13. | |
cost`cutting. Absolutely. There is huge pressure in the industry to cut | :07:14. | :07:18. | |
cost. The parent of Cosco International, the China Ocean Group | :07:19. | :07:23. | |
has already cut some routes to Europe and America. Some developers | :07:24. | :07:27. | |
are looking to developing ghost ships, ships without captains on | :07:28. | :07:33. | |
board, where captains would sit on shore in an effort to cut costings. | :07:34. | :07:40. | |
Family business is integral to developing nations and that is no | :07:41. | :07:45. | |
different in South East Asia's largest economy, Indonesia. | :07:46. | :07:50. | |
According to the latest Rich list, Indonesia's wealthiest million has | :07:51. | :07:54. | |
come from family run companies. Keeping it all in the family can | :07:55. | :08:00. | |
have its disadvantages. In the final instalment of the series, our | :08:01. | :08:03. | |
correspondent reports from a plantation in western Indonesia. | :08:04. | :08:10. | |
Survey in his empire from the clouds, this massive factory complex | :08:11. | :08:16. | |
belongs entirely to the Kinoto family, with an estimated wealth of | :08:17. | :08:22. | |
more than $2 billion, they are amongst Indonesia's top ten | :08:23. | :08:26. | |
wealthiest families. This is the young man in charge on the ground. | :08:27. | :08:35. | |
Only 25 years old, Anderson is a manager at a pulp and paper company | :08:36. | :08:39. | |
whose product is sold in more than 75 countries. US educated, he is the | :08:40. | :08:48. | |
younger son of the owner. This is a family business that has been handed | :08:49. | :08:53. | |
down for two generations. The company realised on solid | :08:54. | :08:59. | |
foundation. Working in a multigenerational team can bring its | :09:00. | :09:03. | |
challenges. It isn't easy but it is our culture and our company that is | :09:04. | :09:06. | |
not only about that but about fresh ideas. We have mutual respect. The | :09:07. | :09:13. | |
more senior people in the company have respect for the younger people | :09:14. | :09:17. | |
and the younger generation with fresh ideas. Likewise, the younger | :09:18. | :09:21. | |
generation need to have mutual respect for the people they work | :09:22. | :09:28. | |
with. My father said don't forget how lucky you are so you can | :09:29. | :09:31. | |
appreciate where you come from. Anderson is the only son in the | :09:32. | :09:36. | |
family business but he hasn't let his fast tracked career go to his | :09:37. | :09:40. | |
head. You are no different to anyone else, yes? The day that you feel | :09:41. | :09:48. | |
your sense of entitlement is the beginning of the decline, because | :09:49. | :09:51. | |
everything that you have, you need to work for. You are not entitled to | :09:52. | :09:57. | |
anything. This is the value that was imparted by my father and that is | :09:58. | :10:04. | |
close to the whole family. This is the nervously dull at nursery | :10:05. | :10:08. | |
growing the next generation of saplings. `` this is the nursery. | :10:09. | :10:15. | |
This business is firmly rooted in family values and says that has been | :10:16. | :10:23. | |
a key to its success. Thank you so much for investing your | :10:24. | :10:28. | |
time with us. I am Rico Hizon in Singapore. Goodbye for now. | :10:29. | :10:40. | |
I am Mike Embley in London with the main news stories | :10:41. | :10:43. |