05/07/2016 Asia Business Report

Now on BBC News, all the latest business news live from Singapore.

Indecision, 2016. What will a hung parliament mean for Australia's

economy? And efforts to stop people stuffing cash and mattresses. --

under. Spreading banking to rural areas. Hello, and welcome to Asia

Business Report. I am Rico Hizon. Thank you for investing your time

with us. Thank you for joining us. I am Rico Hizon we start off in

Australia. The Electoral Commission is resuming counting today. More

than 20% of ballots remain. It is likely the election could result in

a hung parliament. Neither major party can form a government without

support of third parties or key -- or independents. What does that

mean? It is bad news for the economy. It will drag. It will be

bad for the Conservative government if they can get in because it will

be hard to pass tax cuts without control of the Senate. That could

negatively impact business confidence. That good also impact

investment in the economy and economic growth overall. -- could.

We saw a hung parliament back in 2010 with the mining boom is still

in-flight. It wasn't a problem because of that. This time, it is

not helping. A major concern for corporate tax. You also have other

key reforms that have to be passed by the Parliament. Potentially,

tensions. That is right. For example, if the Coalition forms

government, they recently had a budget that announced changes with

superannuation, tax cuts for middle income workers, and also budget

savings longer term to get the budget back under control. All of

those things would be in doubt because they would not have control

of the Senate. Alternatively, if the opposition Labour Party wins, and

you are looking at more government spending in other areas and higher

tax rates in some areas, they may be able to pass those. Put all those

things together that is a worse outlook for the budget. If that is

the case, is it inevitable that Australia will have a credit rating

downgrade? I won't say it inevitable, but probable. The

reality is most scenarios coming out of the election in terms of who

governs and the ability to pass laws through the Senate points to a

worsening of the budget outlook. Getting towards surplus will be

harder. The rating agencies have been getting nervous about

Australia... So, with a nation left hanging, could this and their growth

pattern of over 25 years? I don't think so. There is enough in the

economy, interest rates are low, a poor Australia dollar over the last

five years, that has helped. There is enough in the economy to keep it

going. But it will be lower growth. Bangladesh is reeling from a terror

attack on Friday which killed more than 20 people, including many

foreigners. Already, Japan's UNIQLO has halted flights to the country.

Could it affects the textile sector? We spoke to the vice president of a

wrangler do see garment association. -- Bangladeshi. He says the latest

violence won't stop foreign investors. I don't think so. We have

spoke to some brands. The want to continue business because they

believe this is an isolated incident. We have talked with our

government, we have talked with security people of our country.

Recently, there were several incidents that happened, including

in Europe, Turkey, India, and other countries. So, we have to work

together with all the stakeholders. We are talking about that. I believe

there are some concerns for the brands. But they are here. And they

have confidence in us. Bangladesh is a hospitable country. We are good

with our brands and the foreigners. So, I believe we can overcome this

image problem and the brands will have confidence in us.

MUSIC PLAYS. I don't think so. I don't think there is any problem for

security. That is because they are travelling here. We have had several

meeting with the brands. -- meetings. We feel they have

confidence in us and our security system. I do think there will be any

problems in the future. In other business news, making headlines, the

United States has surpassed Saudi Arabia as the biggest holder of oil

reserves. That is according to a consultancy group. More than half of

the reserves in America are Shell Oil with Texas hold 'em much of it.

In the UK, there is a massive tax cuts suggestion for business to get

more investment in the UK following the decision to leave the EU. George

Osborne wants to slash it from 20% to under 15%. That would give the UK

the lowest corporation tax of any major economy. Here is what he and

the Shadow Chancellor had to say about it. In my view, the strongest

signal we could send the world that Britain, after this referendum, is

open to the world, and ready to do business, is to cut corporation tax

still further. We should aim for a rate of 15% and hopefully lure. I

have to say that a lack of planning for the lever vote is becoming

evident in all policy areas. Instead of a good plan of action we have

just had these rubbish statement. The most populous country on the

planet. India. Fewer than half of all Indians have a bank account.

That is something that the government wants to change. A plan

to open up more simple banking services seems to be a stumbling

block. We have more. A typical bank branch in typical Indian village. At

least they have one. More than 800 million people live in India's

countryside. Most of them have nowhere to put their cash. Many

wonder why they don't have one. How do they change that? They are trying

to open simple banks were people can put money and pay bills but not get

loans or have credit cards. Instead of building credit branches like

these, it will reach people through a kiosk and a mobile phone. That

will help get people to the banking system. But it isn't going to plan.

11 companies, non- finance specialists, have been given

licences. But already three have pulled out. These are those three.

All have decided the scheme does not make business sense. That is

frustrating for firms like PayPoint India. It's licence was rejected.

They say the criteria to choose firms was too narrow. They should

have been part of it. The companies granted licence, they lack customer

understanding. The only difference between those who did not get it and

those who were offered it was networks. The Reserve Bank of India

has defended the suggestion. They said they were unhappy with

companies dropping out. We gave out licences to anybody we thought had

the appropriate qualifications to run a payment bank. Therefore, when

you go forward, do a proper assessment don't just go for a

licence because it is a valuable property to have. Instead, do to

diligence on your own. When you apply it should be with proper

intend. -- Maicon. The first payment bank will launch in August with the

opening next year. It is time to look at financial inclusion and

whether it is on the right path. A quick look at the markets. Asia is

wobbly in early Tuesday trading. The first loss in about a week. This is

after investors still await more clarity on Britain's life outside

the European Union. Their markets lost overnight. Trading volume has

been kept. Japan is trading down a fall per cent. The All Ords Index

losing half a percent. The hon Sang index will be opening in about 50

minutes. -- hung Sang PayPoint India Hang Seng.