06/11/2015 Asia Business Report


06/11/2015

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Now on BBC News: All the latest business news live from Singapore.

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Myanmar head to the polls in a historic election. What will it mean

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for invests this and the economy? Sniffing out new opportunities. --

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investors. We look at a Singapore perfumes business. Good morning.

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Welcome to Asia Business Report. The countdown is on. Myanmar head to the

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polls this Sunday in a historic election. After almost half a

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century of isolation in their economy is slowly opening up.

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Banking is one sector benefiting. Foreign banks deal complained they

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are not getting enough access. -- are still complaining. We talked to

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one of the biggest domestic banks. In terms of what many foreign

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investors think about most is oil and gas and raw materials. What you

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are seeing here is the development of a consumer economy. Real estate

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is growing quickly. It is a reflection of the wealth in Myanmar.

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People are prepared to pay for apartments at a healthy price. In

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that regard, the economy is healthy. There has been a lot of criticism

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from foreign investors who say that this country is far too protected

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and it is very difficult, especially with banking, for foreign banks to

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come. Grumbling of foreign investors is a global phenomenon. I would

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argue you see that in China and other emerging market. Myanmar is no

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different. The government has been quite liberal in many respects given

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the timeframes we are talking about. As far as the banking sector

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goes, it is safe to say that the issuing of nine foreign banking

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licences is sufficient. 52 million in the population, nine foreign

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banks with 29 local banks, it is more than sufficient. I think there

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is no shortage of foreign banks or local banks in that regard. What

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about political uncertainty? How does a bank like yours mitigate

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risks? As a bloke will balance sheet dealing with local currency we

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understand the reality on the ground. -- local. We listen to staff

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and managers who have deemed through, to be quite frank with you,

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worse times. -- have been through. If we look at the history of Myanmar

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this coming election is really a wonderful opportunity. In the great

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scheme of volatility in Myanmar this is a blip. Barack Obama has formally

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notified Congress of its intent to sign the Trans-Pacific Partnership.

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It is one of the world's most extensive trade agreements

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accounting for about 40% of the global economy and the text has

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finally been released. But there is uncertainty about what it might mean

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for labour laws and intellectual Robert Key. -- property. Lawyers and

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investors are looking over the details but opposition remains

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strong in some quarters, including from Hillary Clinton, the

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presidential hopeful. Some people question, what rights does Barack

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Obama have to sign a deal that he will not actually be implementing

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when he steps down from the presidency. The next president will

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have to carry the can for this particular deal. If Hillary Clinton

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says she is not that interested in this TB partnership then what is

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going to happen? -- TPP. Will they signed the deal and at some later

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stage say, we will not implement it ? They cannot do that. An agreement

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is an agreement. Singapore airlines is making eight takeover offer for

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Tiger Airways in an effort to delist the company. It owns more than half

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of its stake in Tiger. -- a takeover. Shares opened lower for

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Toyota. Sales have been declining everywhere but North America. The

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world's top-selling carmaker has been ramping up productivity and

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cutting costs. It has been helped by a sharp fall in the Japanese yen

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which made them more competitive abroad. India's Tata Steel has shown

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a surprise jump of more than 20% to over $230 million. It is thanks to

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the sale of some investments, including part of its stake in Tata

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Motors. But it is cutting more cost. A cut more than a thousand

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jobs last month. -- costs. In India foreign supermarkets are banned from

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they are part of a joint-venture. Businesses that only sell their own

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brand of products can apply to own 100% of their Indian operations.

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Among the first to win that approval was Swedish furniture giant Ikea.

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Its first store opens next year but it has been making products in India

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for decades. We spoke to the Chief Executive of the company. This is

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very much a long-term investment that we are doing. Buying the land,

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owning the buildings, investing in that, and, it is several 100 million

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euros that we are putting in here in a short period of time. It will take

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many, many years before we will have a payback on that. What has China

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had an impact on it? Not much. -- what impact has China had? We are

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continuing to invest in China and have built about three stores to

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year. That is the way we will continue to expand. We will see

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solid growth in existing stores. What are Ikea's future plans and how

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important is expansion into new markets? They are import and. --

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important. We opened up career and Croatia last year. -- Korea. One of

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the most exciting in the coming period will be India. Of course it

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is important. It creates more opportunities on the supply chain. I

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am sure the products and the sourcing drive we are doing in India

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will support our Indian retailing operation but it will also set ought

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Ikea globally. -- support. Many of the suppliers grow with Ikea, of

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course. So, expansion is important. It is one important cornerstone in

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the way that we grow Ikea. Ikea's CEO. Singapore has long been

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regarded as the best place in the well-to-do business but it can also

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present its own challenges, especially for key players. -- in

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the world to do business. This man grew up in a family business but

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soon set up in competition to his father. The business has been

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growing but it is a tough road. I had seen 20% year-on-year growth

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since I set up seven years ago. But that is still not where I would like

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it to be because the cost associated just being in Singapore and this

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area have risen dramatically. I think my father's business is

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definitely doing better. In his time, Singapore actually had rent

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control. These houses, the rent by choice from year to year. He could

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have slow growth. He has definitely built up his reserve, his clientele,

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his pool of labour. I guess one of the challenges of actually being in

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the business over here is... The value of the property far

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outstrips, you know, what a small business can generate unless you are

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an instant hit. Another challenge is craft people. People who don't mind

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getting their hands dirty. That doesn't exist any more. While it

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seems very romantic and sentimental to be doing things that we are rich

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in a league did, but at the end of it, what I do end up producing is is

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better goods. -- originally did. But I know that it is inefficient in a

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modern world. Tradition, culture, heritage, they all have costs add

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that to it. So the only way I have been able to continue doing what I

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am doing is to play up the luxury aspect of it. -- attached to it. I

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have had enquiries from people who want to set up their business in the

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city and it has been as varied as, and you should come to Shanghai,

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they appreciate luxury, or, you should come to New York. -- you

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should. I guess that is part of the journey. I will consider it. A look

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at the markets before we go. Markets in Japan, Australia and South Korea

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opened half-an-hour ago. Hong Kong started trading. A mixed picture.

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You have been watching Asia Business Report. Sport Today is coming up

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next.

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