09/09/2014 Asia Business Report


09/09/2014

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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business news live from Singapore. As we await fresh numbers on

:00:18.:00:21.

household spending in Japan, a look at the prospects for the next

:00:22.:00:26.

planned tax rise. Apple shares dip on the eve of its

:00:27.:00:31.

big launch. Is it a sign of what is to come?

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Thank you for joining us for this addition of Asia Business Report.

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After posting its worst performance since the end of the financial

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crisis, we are expecting fresh data on the state of the Japanese

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economy. We will be getting a measure of consumer confidence. It

:00:54.:00:56.

comes after news that the third`largest economy shrank at a

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rate of 7.1% in the three months ending in June compared to the same

:01:02.:01:06.

period in 2013. Japanese households have been cutting back spending

:01:07.:01:11.

following a 3% increase in the sales tax in April. I asked if today's

:01:12.:01:20.

numbers would be as bad as the GDP. We think it is quite possible that

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is some negative sentiment. But as investors, this does not give us so

:01:30.:01:33.

much cause for concern as an opportunity. The bank of Japan will

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respond forcefully if consumer confidence goes down too much. But

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in the meeting last week, the bank of Japan held back on monetary

:01:50.:01:53.

policy and did not make any moves in terms of stimulating the economy.

:01:54.:01:58.

When I we likely to see a boost in consumer confidence. You will see

:01:59.:02:04.

them move if there is a panic. But when the bad GDP figure came out,

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the stock market still went up. The fact that second`quarter numbers

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were going to go down, everybody had accepted that. If we have a

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third`quarter rebound as we expect, we will be back towards 2.5%, then

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probably the bank will not take any action. With the current state of

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consumer confidence, do you think that Shinzo Abe will push through

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with the next planned tax hike next year? That is a bit more of a

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challenge. We will have to see how the third and fourth quarter go. We

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will have to see where he is politically to see if that becomes a

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priority one of the things he puts aside in 2015.

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After a decade of delay and disagreements, fresh hope in

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Australia and China that a free`trade deal could be signed by

:03:10.:03:14.

day's end. Trade has already doubled and a free`trade arrangement could

:03:15.:03:25.

boost this even further. China's demand for iron and other

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natural resources help the Australians avoid the worst of the

:03:30.:03:33.

global recession. The trade between the nations is only growing. Today

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China is Australia's largest trading partner. 2`way trade is worth more

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than $140 billion. Australia is china's sixth`largest trading

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partner, with almost a quarter of Australian exports going to China.

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Future prosperity will depend in large part on the education and

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tourism is. They hope to attract more of china's wealthy middle

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classes. In Sydney, the Foreign Minister has held talks with his

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counterpart, who says the bilateral relationship is mature and strong.

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We are on track to sign a free trade agreement with China later this year

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which will further strengthen this relationship. Over the past year,

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Australia has sealed a free`trade agreements with Japan and South

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Korea. Canberra's close ties with Tokyo have caused some annoyance in

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China. Although not enough to derail a prosperous economic relationship.

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TRANSLATION: China may not be Australia's closest friend at the

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moment, but we can truly become your most sincere. Australia says it

:04:55.:04:58.

often challenges China over human rights in Tibet. Canberra's military

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alliance with the United States might be another source of tension.

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But some diplomacy has allowed Australia to call the closer

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economic ties with China while pursuing a closer security

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relationship with Washington. Best of's market value has stopped

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at $200 billion, making it one of the world's biggest companies. This

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followed investor optimism about the future of mobile advertising. That

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makes Facebook the 22nd largest company in the world, ahead of

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Toyota. For Apple enthusiasts, the wait is

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almost over. The new iPhone will no longer be shrouded in secrecy. Along

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with all the hype, should we expect a bounce in Apple's share price?

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Actually, no. It typically dips on the day it releases a new phone. A

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market strategist said this is part of a trend. We always see a rally

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ahead of the announcement and a buildup of expectations. I had we

:06:17.:06:25.

are going to have new size, expectations, built up, and then

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excuses. If the announcement does not meet expectations, we have got a

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lot of problems. Rivals, the iPhone crowd leak, a price cut on the new

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phone from $200 to 99. So competition is becoming more this.

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You still have the competition from Samsung. It is seeing its revenues

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falling due to competition from cheaper manufacturers. It is similar

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to what we have seen before. We have got the Chinese telecoms cutting

:07:16.:07:20.

back on marketing subsidies to the tune of $5 billion. That means bad

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for handsets and more leveraged for new makers. The advantage of apple

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is that it has its own operating system, as opposed to its

:07:38.:07:41.

competitors to use android. What is the future of Apple? We will have to

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see if Apple will come out with differentiating features. And also

:07:49.:08:01.

whether we will see I payments. How that will play out. That should lock

:08:02.:08:11.

in more users. Could this be the most expensive

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video game ever created? Destiny is reported to have cost $500 million

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to make and it is said to be the most significant release since the

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next`generation consoles arrived late last year.

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Destiny is a games at 700 years in the future. But it is the next ten

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years that the producers will be most concerned about. Call of duty

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and while the four craft are not selling as much as they used to. So

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they are relying on Destiny to be a big hit. It has spent $500 million.

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It is going to be a blockbuster. It is not a risk. We have marketed the

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game and worked with retailers. We think we have done all of that.

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Destiny is a massive new title for Activision. What is it going to be

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like? It is a first person shooter. You will be involved in a lot of

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firefights, on your own or with friends. They will be multiplayer

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activities. You will also be exploring different planets and

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fighting the enemy of us. At its essence, it is a game where you are

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a Guardian protecting the last known city on earth. You have to go out

:09:37.:09:41.

and explore planets and become legend. What happens is that the

:09:42.:09:49.

service cannot cope for many games. How confident are you that this will

:09:50.:09:54.

not happen to Destiny? It is critical. We are confident that once

:09:55.:09:58.

the servers are turned on, because they already have been, it will be a

:09:59.:10:07.

great game and experience. We had in excess of 4.6 million people on the

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open beta. We wanted to make sure we could test the robustness of the

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server. We are confident everything will be fine.

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You can read more about Destiny by logging onto our website. Before we

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go, a quick look at the markets. Asian stocks are lacklustre in early

:10:35.:10:41.

trading. Japan continues to be on the rise as the yen continues to

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weaken against the dollar. Thank you for investing your time with us.

:10:46.:10:53.

Goodbye for now. Here are the headlines: Iraq's

:10:54.:10:55.

parliament has endorsed a new, more representative government. The

:10:56.:10:59.

United States has called it a crucial step towards defeating the

:11:00.:11:01.

group known as Islamic

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