06/07/2016 Asia Business Report

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

All that glitters is not gold. Current global economic uncertainty

also has a silver lining. And hazy legalities. Singapore takes action

against Indonesian companies suspected of clearing land by

burning. Hello, and welcome to Asia Business Report. I am Sharanjit

Leyl. The stock markets have somehow calmed down from the surprising

result of the UK's decision to leave the EU. At traditional safe havens,

and we are talking about none other than what you see on screen here,

that is gold but also silver, they have both surged to two year highs

over concerns about political and economic stability. Let's take a

look at how they are treating right now. Gold as UC to gain. Silver just

$20. So really it is a lot of global concerns leading to these games,

what are these concerns likely to subside any time soon all will

investors continue to sink money into precious metals? I put that

question to the founder of the Silver trading company Silver

Bullion. As you have said, when you have things happening such as

Brexit, causing uncertainty in people's mines, what you are seeing

is a flight towards safe assets. And if you are looking at gold or silver

it is a way for you to hedge political risk, financial risk, as

well as the possibility of a currency crisis. Right. So in our

case we saw a 600% increase in sales after Brexit. 600%, that is an

enormous... That is a huge reaction there. Let's take a look at silver

now. We know that gold has been rallying for a few months since the

start of the year because of all these other global uncertainties

such as this slowdown in China. So what is it about silver that is

making it shown? Well, we have started seeing people sell gold and

by silver around two months ago and part of the reason is a measure of

how expensive silver is compared to gold, and it tends to vary between

around 40 and 80. So at the beginning of the year it was around

80, which means you can get 80 ounces of silver for one ounce of

gold. And traditionally that tends to reach its peak. Since the

beginning of the year silver has been rallying very strongly, 20%

last week. And silver has come down. And do you think it is just

investors looking at gold and thinking that is a bit expensive,

let's put our money into silver? Exactly. And where will these prices

had? Will continue to rally? I think people expect more uncertainty in

the future. Brexit has just added to that and so as we look towards the

future we are going to keep seeing demand for those assets. Meanwhile,

the pound has hit a fresh 31 year low against the dollar. That is as

markets continue to remain edgy in the wake of the Brexit vote. The

Bank of England has also warned that commercial property is a key risk to

the economy following the referendum. Foreign investors made

up almost half of all property bought and sold since 2009. But that

inflow of money to the UK is now slowing down. Of course, the fallout

from Brexit goes much further. Take India's textile exports to the UK as

an example. They are worth about $2 billion a year and the UK is the

most important market in Europe for garment traders in India. The

business is already hurt by the fall in the pound, as our correspondent

reports from Mumbai. Made in India, to be sold overseas. All the clothes

manufactured at this factory in Mumbai are for export. The company

produces 8 million garment every month at 60% of its business comes

from the UK. So, with the value of the pound falling sharply after the

vote for Brexit, its earnings are being hit. If I don't get a proper

pricing, we will be looking for a different market. I can go to other

countries in no time, like the USA or other European markets, or

Australia, or so on. And you can get the business. I can't take immediate

steps, I can't think of my strategy immediately, but in the long-term,

yes. If in one or two seasons I don't get the support from the UK

market then I will definitely shift. More than a third of India's textile

exports go to the European Union, and the UK is the biggest buyer.

Traders here have already been finding Europe a tough market to

sell to. A T-shirt that is made here, when a retailer in the EU buys

it, they have to pay a certain import tax on it. Whereas if a

similar T-shirt is bought in a country like say in the dash there

is 0% duty. That makes Indian clothes less competitive. --

Bangladesh. Now the UK has proposed to cut itself away from the EU, it

is expected to do more trade with other markets in the Indian

government is expecting a better deal. The benefits which were given

to Bangladesh and a few other countries, they do not extend to

India. And as a result of which, it is not just being lost in terms of

employment generation, but also the sector which had the strength, which

actually reached total market, global market, was, I would say,

unfairly pushed out of its traditional markets. So that I would

think gives us the advantage in a matter of a couple of years to be

able to serve the UK and the European Union. Ironing out such an

agreement will take time. For now, Indian factories will be looking for

answers from their UK partners. In other business news, Italian tycoon

and former prime minister Silvio Bernasconi is reportedly selling

soccer club a seem alarmed to a Chinese consortium. He told

reporters about the deal as he was leaving a Mallarme hospital. The

club posted a loss last year and it needs new capital to fund its

business and compete with top European clubs -- aggro two. The

owner of infidelity dating website Ashley Madison is being investigated

by US authorities. There is no detail about the investigation but

the trade Commission is possibly looking into cases where consumers

were told that information was secure but it was handled

inappropriately. Last year the website sold information from its

customers, which led to a shakeup. Singapore has served legal notices

to six Indonesian companies suspected of clearing land by

burning. The move highlights the delicate relations between the two

countries over the issue of haze. Our correspondent has questioned the

right to indict its citizens at Singapore's Minister told our Asia

business correspondent Singapore has the legal right to go after those

causing the problem. We can prosecute companies and directors

who have concessions and have somehow cost us by burning.

Environmentalists say that many of the companies allegedly involved in

starting this forest fires in Indonesia are actually listed and

headquartered in Singapore. Why are you not doing more to stop their

activities? Well, these companies are well separated from their

Indonesian companies. In fact, one of the companies we are pursuing

over here is so well separated from them, it is really difficult to get

to them, through their lawyers, through their walls of opacity, to

get them on that matter. But at the National and government level we are

working to stop the changes, to make sure that money is only being lent

to companies which are sustainable. And our stock is already implemented

in terms of comply and explain. Companies listed on the stock

exchange have to show they can comply with rules and taxes and if

they cannot they have to explain. Indonesia says that the quality of

air in Asean is not just a local problem, it is a regional issue.

Every country has the right to exploit the resources, to make sure

that the people benefit from the economy, activity that they can

produce there. But in doing so, they as a global, responsible citizens

should ensure they protect their environment for generations to come.

But more importantly, do not do anything that affects any of us.

Now, international law allows every neighbour to look for ways to

prevent such egregious acts from happening, from country to country

level, as well as to ensure that commercially the companies that have

these practices do not become viable. Has Singapore failed its

citizens by not being able to solve this problem for more than two

decades? Well, I think it is question of process. It is important

to recognise that for many years we have been put in the right processes

in place. But the processors do not always get compliance. And that was

Singapore's environment and water resources Minister speaking there.

Let's take a look at the markets before we go. We are seeing that

this is how US markets open but let's take a look at Asian markets,

because they have all opened lower amongst those that are currently

open. That is it for this edition of Asia Business Report.

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