10/02/2016 Asia Business Report

Flirting with the bears following Tuesday's sharp drop - we have the

latest on the Japanese sharemarket. And we find out how low prices and

the spirit of giving has been good for one Hong Kong restaurant. Good

morning Asia, hello world. Glad you can join us. We start with the

Japanese stock market. We are 1.5 hours into the trading day,

monitoring movements in the Nikkei. We see a continuation of

yesterday's fall. It is down 1%, adding up to the 5.4% loss

yesterday. 6.5% down in two trading days for the Japanese stock market.

In Australia, the all ordinaries index giving back 1.6%. So, more bad

news, or will the market turnaround? I put that question to

Shane all of us got on let worries about global growth will linger for

longer -- I put that question to Shane Oliver. I figure there could

be a downturn of five to 10%. Mind you, Japanese shares are down 23%

from last year. It is the US sharemarket that has had a much

smaller fall. This could be much more concentrated on the US shares,

rather than Japanese or Asian shares going forward. Many regional stock

markets are flirting with their market territory, or if not they are

in it already, which means a 20% stock plunge from its highs. As a

market strategist, how can you deal with this volatility and the steep

downside of the markets? That is a good question. I guess it is a case

of your portfolio. You have to try to avoid getting too short term. You

don't want to take on too much risk because the volatility is still

there. By the same token, when sharemarket fall 20% or so you can

see value re-emerge. It is 20% fell -- better value in Japan. Likewise

in Asia, 27% lower than last year's highs. You have to look at long-term

and that's what we try to do, we have to look at opportunities which

will emerge in a couple of months. For we let you go we spoke with a

couple of experts in Feng Shui, in this year of the fire monkey, and

they said they light -- like the metal related industries. Those have

been sold aggressively. If you are going for value, better performance

to the end of the year, you would be looking at those value stocks. I

would add in energy stocks and machinery. That is where a lot of

the carnage has come from. That is where the value is starting to

emerge. Shane Oliver in Sydney. In other news making headlines, despite

the blockbuster release of the latest Star Wars film, Disney

reports a fall in profits for the last three months of 2015. Shares

were down nearly 4.5% in after-hours trading forced Japanese airlines

announces it will cancel surcharges on international flights in April

and May due to falling oil prices, the first such move in sequence five

years. It is rival, Nipon, is expected to follow suit. Shares in

Australia's stock market lender Commonwealth Bank rising 4% after

reporting strong profit. This is the biggest jump in stock because they

had been under pressure due to rising bad debt charges. British

luxury fashion brand Burberry is suing JCPenney, accusing the

retailer of trademark infringement, selling clothes with the same exact

copy of the Burberry pattern. Yesterday we looked at the

challenges faced by Rice farmers in the Philippines and how technology

might protect them against Typhoons -- rice farmers. Today we look at

insuring. Only 5% of Filipino farmers cover their crops. The

German insurer Alliance hopes to change that. Along with partners,

they are using satellite to provide the missing information

which previously made it difficult to ensure small farmers. I asked

Thomas Hines from Alliance how this would help. Crop insurance work that

the insurer guarantees a yield but in order for him to be able to do

so, we need to know a lot of out the yield of a farmer and the history in

order to make a sensible proposal -- Allianz. And to come up with a

tariff. The insurer has to have the means to also adjust the losses. In

many markets, like in South East Asia in general, where you have

hundreds of millions of smallholders, it has been a huge

operational hurdle to serve every farmer down to the village level,

and the economies of scale didn't stack up. How soon do you think will

crop insurance be introduced in the Philippines and when will the

Filipino farmers benefit from it? The rice project we are undertaking

is backed by the International Rice Research Centre, funded by donors

like the Swiss Development Agency. We are feeling the data gap with

their satellite technology. And that data gap was the major bottleneck to

this delivery system of this remote sensing -based insurance system.

Isn't this at a disadvantage when Filipino farmers are hit by more

than 20 Typhoons and storms every year? Obviously, the frequency of

the claims is also translating into the price of the insurance. And what

we are only considering with this technology, it enables us to deliver

a product with the right price, and we would be able to adjust their

losses quickly. What benefits can be Filipino father gain from crop

insurance? It would be a game changer, in the sense that if

disaster strikes tomorrow, one week later we could really map out what

is the extent of damage and pay outs would be much quicker than it

once was. What is the potential, Mr Heinz, of expanding this insurance

to other rice growing areas in the region? We are running pilots at the

moment in seven countries - Thailand, Cambodia, the Philippines,

Indonesia, southern India, Bangladesh and Vietnam and the

technology is globally applicable. So, what we are learning in the

project in the Philippines is a learning curve for us that, as a

global player, we want to apply globally. In the restaurant

business, owners generally raise vices when the costs rise, namely

rent and ingredients. -- raise prices. One man has kept the pricing

at his eatery and changed for around seven years. He tells us why he is

in the business of giving. TRANSLATION: Our business wasn't

doing too well in 2008. To supplement our income I started

working with a charity to supply meal boxes. They cost of less than

$3 US. A private company covered most of the cost. Four years later

the game ended and so it was a difficult time financially. At the

group of young people heard about us and found out we were having a tough

time and so they put their money together for us to continue making

meal boxes -- but the group. They spread word and more people joined

them. After that my business improved a lot. I may be promised -

because society has helped me to survive, I would contribute to

society. As long as I can cover my cost, I will not raise my prices. We

started out by helping homeless people, and then the elderly, and

now also ethnic minorities, including refugees.

When I was still a child, living in China, I had to work to support my

family to pay the rent and to buy rice. There was no money for

anything else, so we ate only plain rice. I know what it's like to live

in poverty. I've been a business owner for a long time but found it

hard to make money. After taking part in charity work, I figured out

it was because I am just not a hardhearted businessman. I will

always stay in this district. We will carry on, no matter what, no

matter if it's cold or stormy, we will never stop. The business of

giving in Hong Kong. Let's have a recap of the markets. Mounting

losses for the Japanese stock market, down another 1% on top of

the 4.5% loss yesterday. Thank you so much for interesting your time

with us.