09/12/2015 Asia Business Report

Resources sector digging a hole? And the key industries best known

families. -- tea. Glad you can join us. There has been a global sell-off

in commodity stocks as Brent crude fell to below $40 per barrel in

almost 30 years and I and all hit a ten year low. -- iron ore. A slight

recovery fall crude. A gain of 1.7% from the close in New York. Brent

crude also higher. At one point, we saw these prices fall below $40 per

barrel and at the lowest level since the collapse of Lehman Brothers in

2009. The price of red crude oil fell below $40 per barrel on

Tuesday, a 60% drop over the past 18 months. Companies are warning that

profits will not be as good and demand for oil - the lifeblood of

the economic system - is waning but despite this, on Friday, the major

group OPEC refused to cut back production and instead members in

Iran and Iraq promised to ramp up production. Since then, the dollar

has strengthened putting more pressure on the price of commodities

like oil. Vic continuing slide of iron ore and the mining stocks

sinking. -- the continuing price. Plans to cuts to staff to 50,000

from 2017. Prices are now at a ten year low having fallen sharply from

August when they were at $140 per ton. Some fear they could still go

lower. Analysts saying companies will struggle to break even if

prices fall below $30. I asked which will be most at risk. Probably the

smaller ones. The bigger ones have staying power. For some it cost $18

per ton to bring the material out off the ground. They are also in

eight consolidation phase. What is it like to come back? China has the

biggest piece of demand and eye on all - they are the biggest steel

producer. -- eye on all. -- iron ore. It is losing its lustre. Where

do we see it by 2016? It could head lower because, if you look at the

big companies and everything they are doing to drive cost efficiency

and production costs being $18, let's say, it can head towards that.

What about the price of oil at 70 -- seven Ye lows? US production is

expected to decline for the first time in eight years. It has seen on

average 1 million in its production tanks, from next year it is expected

the 100 thousand less. But Russia is producing bowl and demand is going

nowhere so pretty much the same scene will or you'll. Iran and Iraq,

if you add them to the equation, putting the oil in the market would

depress prices? That is one of the problems in OPEC. As a result,

nobody wants to cut and everybody wants prices higher. The slump in

commodities is also affecting Morgan Stanley, it has dropped a quarter of

its staff. It is closing its basemetal trading desk globally

because of pressure from the slump in commodities and smaller profits.

China's economy not only has brought about the worst colicky downturn in

close to a decade - commodity. But it has also affected other sectors.

Real estate developer talks to us. It is humongous. Roughly 20% of the

economy isn't related to this industry so, in the old days, when

we sold prices go up, many other industries benefited but now as it

slows down, 20% of the economy is affected and said the government

will have to have other means of spurring the economy. There is a

probability the US central bank will raise interest rates in December,

what impact will it have on Asia's property market and in Hong Kong and

China in particular? In Hong Kong very little because all of the major

players have very low debt. I company for the last nine years has

had zero net debt. In China it matters more because companies in

general are far more in debt had but if you over borrow, you deserve to

be hurt. Right? Any developer who is only a market developer is not a

good developer. In other business use, shares in Yahoo! Jumping after

reports it will not sell off its $32 billion stake in Chinese company

Alibaba. Pressure from a potentially huge tax bill from the sell-off. It

is looking at spinning its core Internet business instead. Myanmar

is launching its first stock exchange. With a reported investment

of $24 million, it is a joint venture by the economic bank, double

securities and the Japan exchange group. In China, tea it is a

medicinal remedy, in India note on the station is complete without tea

and in the UK there is no conversation without tea.

Competition is tough. We go and meet one famous tea family. It is one of

Sri Lanka is big as the companies. Began in the 1950s when the

departure of the family decided to bring Sri Lankan tea to the world.

It is now expanding to the Middle East and Europe and facing stiff

competition from cheaper brand. I caught up with the men behind the

family business to find out what makes the company tick. Did you know

that it was going to end up becoming in this family run business? What

did you tell the children as they were growing up? When they reached

11 years of age, our country was in political turmoil and I saw no

future so I sent them to the best Christian school in England, for

their education, hoping they would nullify well and find jobs but quite

contrary to my expectations, both of them, after graduation, joined the

family business and that brought me strength and that provides me with

so much great ambition for the consumer and for the industry. This

is a family run this as. How are you changing or evolving it? --

business. There is an emerging niche market interested in the natural

goodness relating to the world is in the product they consume. Are also

in terms of the ethics and integrity, things that my father

share. Ultimately, we are not looking to address the mass market

but rather developing a niche. They have been steeped in the tradition

of tea making for generations but finding the perfect cup for two days

consumers is likely to be a far more challenging affair. Falling bristles

and oil stocks will be pressuring Asian equities once again today.

Japan is down but Australia is flat. Thank you for now.