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Now on BBC News all the latest business news live from Singapore. | :00:00. | :00:14. | |
Thinking positive. We ask a business leader about the economic prospects | :00:15. | :00:24. | |
in Singapore and around Asia. Made in North Korea no more, we look at | :00:25. | :00:29. | |
what the closure of the manufacturing Park means for one | :00:30. | :00:30. | |
South Korean company. Thank you for joinging me | :00:31. | :00:37. | |
for this Wednesday edition of The first story is about the | :00:38. | :00:51. | |
citystate which has announced growth numbers which were stagnant. GDP | :00:52. | :00:56. | |
came in at 1.8% for the three months until December year on year, weighed | :00:57. | :01:03. | |
down by poor global demand, lower oil prices and Chinese slowdown. The | :01:04. | :01:07. | |
citystate is the latest country in the region facing weak economic | :01:08. | :01:12. | |
expansion. What is the outlook for the big local companies? One | :01:13. | :01:19. | |
correspondent spoke to the boss of a bank which is one of the largest | :01:20. | :01:22. | |
lenders in Southeast Asia about his company. I think growth was slow. We | :01:23. | :01:29. | |
grew 12% topline in 2015. We would be hard pressed to get seven or | :01:30. | :01:35. | |
eight next year but seven or 8% topline growth can lead to 6% bottom | :01:36. | :01:42. | |
line growth which is not bad at this point. How badly good you be | :01:43. | :01:47. | |
affected by the slowdown in China? The exposure at this point in time | :01:48. | :01:52. | |
is unlikely to be materially impacted, even if it slows down | :01:53. | :01:56. | |
more. The large part of China exposure is trade finance backed by | :01:57. | :02:01. | |
a Chinese policy banks and we don't expect that to be impacted at all. | :02:02. | :02:07. | |
Investors seem stressed. Your share price is down 35% since July. They | :02:08. | :02:14. | |
don't appear to be convinced. That is true. It is hard to understand | :02:15. | :02:18. | |
why. I went on record that investors are pricing in another Lehmann | :02:19. | :02:25. | |
crisis. If you factor in that crisis, looking at how Singapore | :02:26. | :02:29. | |
performed, it wasn't that bad. At the current price I would have to | :02:30. | :02:38. | |
burn through 15 or $20 billion in losses to justify this company. We | :02:39. | :02:41. | |
have not seen those losses cumulative in -- cumulatively in the | :02:42. | :02:50. | |
last 20 years. Barclays management business in Asia, can you confirm | :02:51. | :02:53. | |
you are interested or looking to buy? We don't comment on speculation | :02:54. | :02:59. | |
about activity but I can say that we are always open to the possibility | :03:00. | :03:03. | |
of bulking up on wealth management and private banking. Moving to other | :03:04. | :03:13. | |
news making headlines. Resilient authorities have charged the | :03:14. | :03:18. | |
president of the mining company San Marco and six others for the | :03:19. | :03:24. | |
homicide of 19 people, which also caused widespread environmental | :03:25. | :03:28. | |
damage in November. A police report included the accident was caused by | :03:29. | :03:31. | |
a lack of proper monitoring and 40 equipment. San Marco is owned by | :03:32. | :03:40. | |
Brazil's Vale and BHP Billiton. Australian mining company for disk | :03:41. | :03:47. | |
is said first half profits fell following the mounting global supply | :03:48. | :03:58. | |
glut -- Fortescue. Fortescue, along with BHP and others, posted a profit | :03:59. | :04:03. | |
of $319 million US down from $330 million US a year ago. Much faith do | :04:04. | :04:09. | |
you have in your central bank? Let's look at recent developments. The US | :04:10. | :04:11. | |
Federal Reserve is backpedalling on plans for more rate hikes in 2016. | :04:12. | :04:18. | |
As for the Bank of Japan, they introduced negative interest rates | :04:19. | :04:21. | |
despite promising not to, and of course there is uncertainty about | :04:22. | :04:25. | |
Chinese ability to push the right buttons. Ali Moore asked the | :04:26. | :04:29. | |
governor of the Sri Lankan central bank whether the loss of faith was | :04:30. | :04:35. | |
justified. I think the central bankers are being asked to do all of | :04:36. | :04:39. | |
the heavy lifting and to a large extent they are hamstrung by the | :04:40. | :04:43. | |
fact that governments, ranging from the government of the US all the way | :04:44. | :04:47. | |
down to emerging market governments, have been reluctant or | :04:48. | :04:55. | |
unable to increase fiscal stimulate that would accompany the monetary | :04:56. | :05:02. | |
stimulatory unleashed by central banks which is part of the problem. | :05:03. | :05:06. | |
What is happening as a consequence is access liquidity which has been | :05:07. | :05:09. | |
created by these central bank is not filtering into the real economy. | :05:10. | :05:15. | |
That problem cannot be solved by central banks alone. You say their | :05:16. | :05:17. | |
hands are effectively tied? Effectively, yes. They are | :05:18. | :05:26. | |
desperately seeking alternative props to make sure that original | :05:27. | :05:29. | |
intention is achieved, but that's very difficult because there is no | :05:30. | :05:35. | |
real push out there in terms of actual spending of this money. So | :05:36. | :05:41. | |
what is effectively happening is banks are very conveniently parking | :05:42. | :05:44. | |
the access cash in their central banks themselves, and that's why for | :05:45. | :05:49. | |
instance the Japanese are now applying negative rates, other | :05:50. | :05:54. | |
central banks are applying negative rates, because they want to make it | :05:55. | :05:58. | |
not economical for banks to park their cash conveniently in the | :05:59. | :06:02. | |
central bank. Those rates didn't seem to be working, all we see is a | :06:03. | :06:05. | |
fall in bank shares and an increase in the yen, not what the Japanese | :06:06. | :06:09. | |
were hoping for. Well, that is another issue. A lot of this money | :06:10. | :06:18. | |
which has been around has been creating excessive exuberance in | :06:19. | :06:22. | |
some of the capital markets. So this money that was pumped in by the | :06:23. | :06:26. | |
central banks, which was initially supposed to stimulate the real | :06:27. | :06:31. | |
economy, in the meantime the asset prices are coming down and we have a | :06:32. | :06:35. | |
problem of whether liquidity goes. You talk about the need to look for | :06:36. | :06:39. | |
props for other mechanisms. Is part of the problem that there is a | :06:40. | :06:43. | |
perception that banks are out of ammunition, more accurately, it out | :06:44. | :06:46. | |
of ammunition they are prepared to use, which leads to Alice of faith, | :06:47. | :06:52. | |
if the armoury is there? -- leads to a loss of faith. That is partially | :06:53. | :06:57. | |
true but you can't expect them to do all of the heavy lifting. They don't | :06:58. | :07:01. | |
have much left. Not many bullets left. They have to be fired by the | :07:02. | :07:09. | |
commercial banks and the governments as well. What happens when your | :07:10. | :07:14. | |
business loses a key manufacturing hub Bass that is a challenge facing | :07:15. | :07:21. | |
South Korean companies after the shutdown of the Gaesong zone in the | :07:22. | :07:27. | |
north where 124 southern firms employing 54,000 North Korean | :07:28. | :07:30. | |
workers their -- hub? -- That is. Seoul pulled the pin on the venture | :07:31. | :07:34. | |
two weeks ago after John Yan's recent rocket launch. Steve Evans | :07:35. | :07:38. | |
spoke to one company about the impact on his business. -- | :07:39. | :07:47. | |
Pyongyang's. This is a promo video for Jin, a paraglider, a product | :07:48. | :07:52. | |
without a factory now. 220 northern workers lost their jobs, North Korea | :07:53. | :07:56. | |
stopped the finished product being removed. It's just mean one day, | :07:57. | :08:04. | |
let's say in 24 hours, we lost everything, so we couldn't do | :08:05. | :08:09. | |
anything, we couldn't bring the materials and products, no one was | :08:10. | :08:15. | |
able to bring them, so a lot of companies now have big Dublin. In | :08:16. | :08:20. | |
the ten years the factory was running the owner saw a change in | :08:21. | :08:25. | |
the workers. I was quite shocked the first day when I visited the | :08:26. | :08:30. | |
factory. First meeting them. I see them, the smell was so bad, their | :08:31. | :08:35. | |
skin was quite bad, and skinny, and then I realised that they couldn't | :08:36. | :08:40. | |
wash. So then we give them two times a week showers and there we provide | :08:41. | :08:50. | |
food for them, lunchtime we provide them big suits on Monday, and then | :08:51. | :08:55. | |
Saturday at different menu, beef, chicken, you know, protein. There is | :08:56. | :08:58. | |
debate about whether you should engage with North Korea or whether | :08:59. | :09:01. | |
you should cut them off on the house sanctions. What is your view? For me | :09:02. | :09:08. | |
the most important is all of the people who work with me is, yeah, | :09:09. | :09:16. | |
the same humans. You know, the lady who work, they already asked me what | :09:17. | :09:24. | |
is South Korean women doing? You know, the women are really women, | :09:25. | :09:29. | |
and they want to have cosmetics and they want to have plastic | :09:30. | :09:38. | |
surgery... It is normal. This is really... Before they never thought | :09:39. | :09:44. | |
about it but today you see them change, at least, you know, | :09:45. | :09:48. | |
communication is a bit more free. The company still has its testing | :09:49. | :09:54. | |
and design centre in South Korea. As the peak of demand pressures with | :09:55. | :09:57. | |
the norm in summer it will try to produce in China but ten years of | :09:58. | :10:06. | |
hard-working North Korea has ended. And before we go, a look at the | :10:07. | :10:10. | |
markets, and most Asian stocks are in negative territory after US | :10:11. | :10:15. | |
equities lumped overnight on signs of a proposed deal to freeze oil | :10:16. | :10:19. | |
output by major producers will not happen, and as you can see | :10:20. | :10:23. | |
everything is red at the moment, the Nikkei two -- Nikkei 225, the All | :10:24. | :10:31. | |
Ordinaries, down about 2%. | :10:32. | :10:33. |