04/12/2015 Asia Business Report


04/12/2015

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they've held for almost 50 years, beating UKIP into second place.

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

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How low can or you'll go? Now at $40 per barrel, we will look at the

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reasons why. And what happens when reviewers of

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one of the world's most prestigious food guide tuck into street food.

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Welcome to Asia Business Report. For the past year, the oil producing

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members of opaque have driven down prices in an attempt to elbow aside

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competitors from other nations. But could it be about to change course?

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OPEC meet amid a backdrop of prices that have fallen to $40 per barrel.

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Arabia is reportedly set to argue for cuts of up to 1 million barrels

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per day. One member is hoping to join the organisation. I asked an

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oil analyst with the reversal is likely.

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Saudi Arabia is the leader of this strategy. It has a short window of

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opportunity to show other members of the organisation that to this

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strategy works. That window is basically next year. When the

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production is forecast to fall. It is unlikely we will see a U-turn at

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this point. And a lot of this depends on Saudi Arabia. They might

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consider cutting oil production by 1 million barrels per day. How

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realistic is that? We saw prices rise just a tad. That shows the

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degree of division in OPEC and within Saudi Arabia about this

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strategy. With the financial strain that is generating on all of these

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economies. They have to balance their budgets with prices of $120

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per barrel, except for Kuwait and Qatar, who can balance their budgets

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with $60 or a bit less. The pressure is growing to a level that pushes

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these countries to call for a cut, but they are not in a position to

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cut themselves. That is where the once to pump as much as possible, as

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well as Iraq, to compensate for the low price. The lower price was part

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of the strategy a year ago to try and price out US shale. The notion

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they could go a lot cheaper. Shale production is a lot more expensive.

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Has the tactic worked? If you look at the numbers, it is too early to

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say whether it is working. We suspect next year OPEC production

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will fall by about 500,000 barrels per day. If you think in the global

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context, that is less than 0.5% of output. OPEC's market share in China

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continues to decline. If you look these numbers, it does not look like

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the new strategy has worked. And very briefly, what are the changes

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in Indonesia? The organisation is much more than a cartel trying to

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defend prices, it is cooperation between consumers and corporations.

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Now you see the benefit to come back.

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In other news, the euro searched to a one-month high and stock markets

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in Europe and the US tumbled after the European Central bank announced

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a stimulus package that fell short of expectations. It is extending its

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stimulus programme in a move aimed at full strength the eurozone

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economic recovery. Many analysts forecast much tougher measures.

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Three electronic Japanese giants are considering merging their

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operations. Cheaper, Fujitsu and Sony aim to combine as a company

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next April. The three electronic sons were not available for comment.

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A US court has rejected a bid by Kaunda to turn out a class action

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case involving a -- Karabakh and platers.

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The Japanese companies have agreed to undisclosed settlements.

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China's rapid development over the past few decades has been helped by

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billions of dollars spent on infrastructure. Now African

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countries are pinning their hopes on a similar strategy, with help from

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China for ambitious building projects. One example is a massive

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shopping mall in Nairobi. Our Africa correspondence in this report.

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Once a poppy plantation, now a construction site.

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This massive mall is part of a string of projects with

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The Chinese state corporation has a 40% share. We are going on to a

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construction site, so the obligatory hardhat. They have not seen anything

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like this before, shops, gyms, restaurants, bars, luxury

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accommodation and office suites. All on 100 acres of prime real estate.

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There are some 2000 people working around the clock to get things ready

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for the opening date of March next year. There has been criticism that

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it has been mainly Chinese labour used in the past. But for every 20

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of the local workers, there is one Chinese super -- supervisor.

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Eventually, they want to mirror the skills of the Chinese.

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Christopher's team are putting the finishing touches to the flooring in

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what will eventually be a restaurant. With thousands of people

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expected here every single day and was Kenya's history of terrorist

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attacks, security is one of the key considerations. $12 million has been

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invested into the latest state-of-the-art technology to make

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sure this place is safe. In many ways, this is a metaphor for an

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increasingly confident, globalised Kenya. An image of the Chinese

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partners are keen to endorse. China says it will cut emissions in

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the power sector by 60% by 2020. The state news agency says there will

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also reduce animal carbon dioxide by 180 million tons at the same time.

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This week an orange level alert was issued for the smog in Beijing.

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Australia thinks bigger is better when it comes to exports. This is

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believed to be the largest export grain train in Australian history.

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It is more than one kilometre long and will reduce costs by up to $10

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per ton for Australian growers. What is in a star? That is a

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question that Singapore will be asking as it will be covered by the

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Michelin guide. It can change the fortunes of a restaurant every

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night, and it is not just about fancy establishments as I met

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Michael Ellis. It is premature to say. You can have

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a team of inspectors here over a week. They have confirmed that there

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are some exciting things going on. What percentage will be from the

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whole selection is too early to tell. When the inspectors come in

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they do not have any preconceived guidelines or rules. They are all

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full-time employees, food experts, they eat anonymously and they always

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pay their bill. This formula has been the way we have been

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functioning for over a century now. I have no guarantees, but I think it

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will certainly be a part of the selection for 2016. How much will it

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transform Singapore's Street culture? We do not keep statistics

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on the impact of being in the Michelin guide. I can tell you

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this, travels around the world, the Michelin guide rings and

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international spotlight when any restaurant is featured in the

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selection. It will bring people from all over the world. You said

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yourself that a lot of the focus is on Asia. Where next? China? Asia

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today is one of the regions that has the most dynamism and interest in

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food. We have a number of different projects and they cannot confirm

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anything today, but I see a long and exciting future for the Michelin

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guide in Asia. A quick look at

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tracking Wall Street after that disappointing decision from the

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European Central bank. That is it for Asia Business Report. Thank you

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for watching.

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