24/02/2016

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:00:00. > :00:14.Now on BBC News all the latest business news live from Singapore.

:00:15. > :00:24.Thinking positive. We ask a business leader about the economic prospects

:00:25. > :00:29.in Singapore and around Asia. Made in North Korea no more, we look at

:00:30. > :00:30.what the closure of the manufacturing Park means for one

:00:31. > :00:37.South Korean company. Thank you for joinging me

:00:38. > :00:51.for this Wednesday edition of The first story is about the

:00:52. > :00:56.citystate which has announced growth numbers which were stagnant. GDP

:00:57. > :01:03.came in at 1.8% for the three months until December year on year, weighed

:01:04. > :01:07.down by poor global demand, lower oil prices and Chinese slowdown. The

:01:08. > :01:12.citystate is the latest country in the region facing weak economic

:01:13. > :01:19.expansion. What is the outlook for the big local companies? One

:01:20. > :01:22.correspondent spoke to the boss of a bank which is one of the largest

:01:23. > :01:29.lenders in Southeast Asia about his company. I think growth was slow. We

:01:30. > :01:35.grew 12% topline in 2015. We would be hard pressed to get seven or

:01:36. > :01:42.eight next year but seven or 8% topline growth can lead to 6% bottom

:01:43. > :01:47.line growth which is not bad at this point. How badly good you be

:01:48. > :01:52.affected by the slowdown in China? The exposure at this point in time

:01:53. > :01:56.is unlikely to be materially impacted, even if it slows down

:01:57. > :02:01.more. The large part of China exposure is trade finance backed by

:02:02. > :02:07.a Chinese policy banks and we don't expect that to be impacted at all.

:02:08. > :02:14.Investors seem stressed. Your share price is down 35% since July. They

:02:15. > :02:18.don't appear to be convinced. That is true. It is hard to understand

:02:19. > :02:25.why. I went on record that investors are pricing in another Lehmann

:02:26. > :02:29.crisis. If you factor in that crisis, looking at how Singapore

:02:30. > :02:38.performed, it wasn't that bad. At the current price I would have to

:02:39. > :02:41.burn through 15 or $20 billion in losses to justify this company. We

:02:42. > :02:50.have not seen those losses cumulative in -- cumulatively in the

:02:51. > :02:53.last 20 years. Barclays management business in Asia, can you confirm

:02:54. > :02:59.you are interested or looking to buy? We don't comment on speculation

:03:00. > :03:03.about activity but I can say that we are always open to the possibility

:03:04. > :03:13.of bulking up on wealth management and private banking. Moving to other

:03:14. > :03:18.news making headlines. Resilient authorities have charged the

:03:19. > :03:24.president of the mining company San Marco and six others for the

:03:25. > :03:28.homicide of 19 people, which also caused widespread environmental

:03:29. > :03:31.damage in November. A police report included the accident was caused by

:03:32. > :03:40.a lack of proper monitoring and 40 equipment. San Marco is owned by

:03:41. > :03:47.Brazil's Vale and BHP Billiton. Australian mining company for disk

:03:48. > :03:58.is said first half profits fell following the mounting global supply

:03:59. > :04:03.glut -- Fortescue. Fortescue, along with BHP and others, posted a profit

:04:04. > :04:09.of $319 million US down from $330 million US a year ago. Much faith do

:04:10. > :04:11.you have in your central bank? Let's look at recent developments. The US

:04:12. > :04:18.Federal Reserve is backpedalling on plans for more rate hikes in 2016.

:04:19. > :04:21.As for the Bank of Japan, they introduced negative interest rates

:04:22. > :04:25.despite promising not to, and of course there is uncertainty about

:04:26. > :04:29.Chinese ability to push the right buttons. Ali Moore asked the

:04:30. > :04:35.governor of the Sri Lankan central bank whether the loss of faith was

:04:36. > :04:39.justified. I think the central bankers are being asked to do all of

:04:40. > :04:43.the heavy lifting and to a large extent they are hamstrung by the

:04:44. > :04:47.fact that governments, ranging from the government of the US all the way

:04:48. > :04:55.down to emerging market governments, have been reluctant or

:04:56. > :05:02.unable to increase fiscal stimulate that would accompany the monetary

:05:03. > :05:06.stimulatory unleashed by central banks which is part of the problem.

:05:07. > :05:09.What is happening as a consequence is access liquidity which has been

:05:10. > :05:15.created by these central bank is not filtering into the real economy.

:05:16. > :05:17.That problem cannot be solved by central banks alone. You say their

:05:18. > :05:26.hands are effectively tied? Effectively, yes. They are

:05:27. > :05:29.desperately seeking alternative props to make sure that original

:05:30. > :05:35.intention is achieved, but that's very difficult because there is no

:05:36. > :05:41.real push out there in terms of actual spending of this money. So

:05:42. > :05:44.what is effectively happening is banks are very conveniently parking

:05:45. > :05:49.the access cash in their central banks themselves, and that's why for

:05:50. > :05:54.instance the Japanese are now applying negative rates, other

:05:55. > :05:58.central banks are applying negative rates, because they want to make it

:05:59. > :06:02.not economical for banks to park their cash conveniently in the

:06:03. > :06:05.central bank. Those rates didn't seem to be working, all we see is a

:06:06. > :06:09.fall in bank shares and an increase in the yen, not what the Japanese

:06:10. > :06:18.were hoping for. Well, that is another issue. A lot of this money

:06:19. > :06:22.which has been around has been creating excessive exuberance in

:06:23. > :06:26.some of the capital markets. So this money that was pumped in by the

:06:27. > :06:31.central banks, which was initially supposed to stimulate the real

:06:32. > :06:35.economy, in the meantime the asset prices are coming down and we have a

:06:36. > :06:39.problem of whether liquidity goes. You talk about the need to look for

:06:40. > :06:43.props for other mechanisms. Is part of the problem that there is a

:06:44. > :06:46.perception that banks are out of ammunition, more accurately, it out

:06:47. > :06:52.of ammunition they are prepared to use, which leads to Alice of faith,

:06:53. > :06:57.if the armoury is there? -- leads to a loss of faith. That is partially

:06:58. > :07:01.true but you can't expect them to do all of the heavy lifting. They don't

:07:02. > :07:09.have much left. Not many bullets left. They have to be fired by the

:07:10. > :07:14.commercial banks and the governments as well. What happens when your

:07:15. > :07:21.business loses a key manufacturing hub Bass that is a challenge facing

:07:22. > :07:27.South Korean companies after the shutdown of the Gaesong zone in the

:07:28. > :07:30.north where 124 southern firms employing 54,000 North Korean

:07:31. > :07:34.workers their -- hub? -- That is. Seoul pulled the pin on the venture

:07:35. > :07:38.two weeks ago after John Yan's recent rocket launch. Steve Evans

:07:39. > :07:47.spoke to one company about the impact on his business. --

:07:48. > :07:52.Pyongyang's. This is a promo video for Jin, a paraglider, a product

:07:53. > :07:56.without a factory now. 220 northern workers lost their jobs, North Korea

:07:57. > :08:04.stopped the finished product being removed. It's just mean one day,

:08:05. > :08:09.let's say in 24 hours, we lost everything, so we couldn't do

:08:10. > :08:15.anything, we couldn't bring the materials and products, no one was

:08:16. > :08:20.able to bring them, so a lot of companies now have big Dublin. In

:08:21. > :08:25.the ten years the factory was running the owner saw a change in

:08:26. > :08:30.the workers. I was quite shocked the first day when I visited the

:08:31. > :08:35.factory. First meeting them. I see them, the smell was so bad, their

:08:36. > :08:40.skin was quite bad, and skinny, and then I realised that they couldn't

:08:41. > :08:50.wash. So then we give them two times a week showers and there we provide

:08:51. > :08:55.food for them, lunchtime we provide them big suits on Monday, and then

:08:56. > :08:58.Saturday at different menu, beef, chicken, you know, protein. There is

:08:59. > :09:01.debate about whether you should engage with North Korea or whether

:09:02. > :09:08.you should cut them off on the house sanctions. What is your view? For me

:09:09. > :09:16.the most important is all of the people who work with me is, yeah,

:09:17. > :09:24.the same humans. You know, the lady who work, they already asked me what

:09:25. > :09:29.is South Korean women doing? You know, the women are really women,

:09:30. > :09:38.and they want to have cosmetics and they want to have plastic

:09:39. > :09:44.surgery... It is normal. This is really... Before they never thought

:09:45. > :09:48.about it but today you see them change, at least, you know,

:09:49. > :09:54.communication is a bit more free. The company still has its testing

:09:55. > :09:57.and design centre in South Korea. As the peak of demand pressures with

:09:58. > :10:06.the norm in summer it will try to produce in China but ten years of

:10:07. > :10:10.hard-working North Korea has ended. And before we go, a look at the

:10:11. > :10:15.markets, and most Asian stocks are in negative territory after US

:10:16. > :10:19.equities lumped overnight on signs of a proposed deal to freeze oil

:10:20. > :10:23.output by major producers will not happen, and as you can see

:10:24. > :10:31.everything is red at the moment, the Nikkei two -- Nikkei 225, the All

:10:32. > :10:33.Ordinaries, down about 2%.