25/02/2016 Asia Business Report

The tumbling price of col hits Asia's largest commodities trader

hard. -- coal. It report its first loss in two decades.

And Australia and Japan dominate the latest list of the most liveable

cities. Welcome to Asia Business Report. Asia's largest commodities

trader Global Group has posted its first loss in nearly two decades.

The collapsing call price led to it issuing a statement, saying it

expected loss of $1.2 million -- 1.2 billion dollars. Share prices also

dropped by 70%. I asked how much of a concern this was. We need to look

at it in the context of what commodity traders are. Commodity

traders such as Noble are leaders. They are like DHL or FedEx.

match buyers and sellers. Playing the role of intermediaries. In doing

so they take on a tremendously large amount of risk. Many carry a large

amount of infantry on their books and this makes them vulnerable to

the ups and downs of commodity prices and that's exactly what Noble

is facing at this point. As you say, commodity traders have had to deal

with these things. Noble was accused of various things last year,

controversial accounting scandals, over inflating assets, how much will

the slide in this 4G be blamed on that? The stock has fallen very

sharply in value. We need to focus on the company's cash flow

generation. This is a factor we need to look at for a number of

companies, not just Noble. Many companies in this industry need to

generate cash to generate confidence from the investors and it is that

factory that we need to focus on intensely as they announce results

this evening. You talk about the share price, a huge fall in the past

year. Part of this as it also became a target for short sellers. How much

do you think the share price will ever recover from this? When a

company has fallen to 30% of its book value it is often the case that

investors can see value, rather we can see a long-term perspective in

this. You talked earlier about generating cash. How was the company

going to do this with all the problems it has had, and also given

the climate talks and to say we need to move away from coal fuelled power

generation? This is something Noble does a lot of. What do you see this

company heading for? The aversion towards fossil fuels has much more

resonance when prices are at an elevated level. When they are

depressed it is difficult for people to look for cheaper, cleaner

alternatives, so the clean energy lobby would be under pressure in

this price environment. In other news, the International Monetary

Fund has warned that the world economy is highly vulnerable and

they are calling for new mechanisms to protect the most vulnerable

countries. The report ahead of the Shanghai G20 meeting later this week

said there should be co-ordinated programme as world growth slows. The

oil price crash and the geopolitical conflicts on the" those.

The Crown resort has seen profits fall. -- contributing factors. The

firm, part owned by billionaire James Packer, posted a net profit of

148 million US. Some of India's best-known tech

entrepreneurs have been meeting with start-ups and potential investors in

Bangalore this week. It was the first event running India by the

organisers of the summit, believed by many to be the biggest and most

influential gathering of start-ups in the world. From virtual reality

to robots of every kind, this is heaven for a technology enthusiast

and modelled on one of Europe's largest technology conferences. It

has been one of the biggest gatherings of entrepreneurs and

investors that India has ever seen. India's banking on new businesses

like this to boost the economy and create many more jobs and it seems

to be working. Last year over 4000 start-ups were registered. That's a

40% on 2014, creating an estimated 80,000 jobs. We started off with

something simple... Kevin is one that entrepreneur. His messaging has

now got over 1 million users. -- messaging app. But it has it isn't

an easy country to find success. It is important to solve a problem. A

lot of people don't realise that India changes all the time, which

means you have to modify the product as the users grow because India is

very diverse. The potential rewards mean plenty are prepared to give it

a go. But while there's lots of Torquay, to events like this -- lots

of talk here, is it really significant? It is a good chance to

meet different investors from all over the world, and that doesn't

happen every day. Usually you have to get on a plane and fly to other

parts of the world. This is an opportunity to meet all of the

people who have flown into India for this conference. Many Indian

entrepreneurs complain that rules around tax and investment mean they

have to base themselves abroad to get their idea of the ground. But

investors pumped in more than $9 billion into start-ups last year

and, with no shortage of engineers and tech talent, most expect

India's reputation as a fast-growing start-up hub to continue.

You've probably heard it before and the of course there's proof again to

say that Singapore is the region's most liveable city. Or -- Osaka

comes in second. It is all published by a company online. I spoke with

the Asia regional director of and started by asking what sort of

criteria they used for the rankings. We look at all factors which we

think have an impact on a person's day-to-day lifestyle. On the one

hand that could be the quality and availability of things that you

might buy in supermarkets, all the way through to factors such as

quality of medical infrastructure, air pollution levels and all the way

through the crime rate and social political tensions. You mention air

pollution. That's been a big factor, especially as it seems to be

concentrated among Asian cities. What are the health risks of living

in the cities? Air pollution is a big issue and it has been... It was

during our research that we undertook last year. In spite of the

fact that Singapore remains the most liveable location in these rankings,

we did see that air pollution effect locations like Singapore, Malaysia,

Indonesia, so on and so forth. And Asia is actually home to some of the

locations with the highest level of air pollution, especially China,

India as well, even Hong Kong. So that does have an impact and that's

one of the reasons why Hong Kong, for example, in spite of the fact

that it is one of the most liveable locations, still ranks very low

because of the impact of air pollution. That is fascinating. That

is take a look at a lot of Southeast Asian cities. Islamabad, Pakistan,

they rank lower than North Korea's Pyongyang. Why? The main reason is

all of these cities might score poorly in terms of factors such as

infrastructure levels, social political tensions and so on. But

the main differentiator, which causes places like Pakistan to be

lower than Pyongyang is that crime rates are higher. That's the main

issue. Let's have a look at the markets and what they're doing in

Asia. It has been a fairly cautious start. We are seeing gains in Japan

with the Nikkei. There is a slightly weaker yen against the US dollar and

that is helping exporters. There's also a fragile recovery in oil

prices. Investors are watching that very closely. The Hang Seng has

opened flat. A lot of them taking cues from the US, where we saw Mark

Rutte is turning around. They actually saw gains. -- where

markets. Australia is a tad lower, despite the slight recovery in the

oil prices and commodity stocks are being helped by that. That's it for

this edition of Asia Business Report. Thanks for watching.

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