02/08/2016 Asia Business Report

Record low interest rates, that's what investors in Australia are

hoping for. But will they get them? And not long until fans of Samsung's

Galaxy get to see the latest model, but can the company continued its

strong growth and the more competition from China?

Good morning, Asia. Hello, world. It's Tuesday and glad you could join

us for this edition of Asia Business Report, I'm Rico Hizon. Pressure is

on the central bank of Australia to give a jolted economy a boost when

it reveals its interest rate decision in a few hours. Week wages

and a strong currency are causing inflation to fall earlier. I asked

Phil Mercer earlier if anyone is expecting a rate cut.

That's the view of many economists in Australia. They believe the

Reserve Bank of Australia will pull the trigger on another rate cut.

That would take the cost of borrowing in Australia from its

current level of 1.75% to a new record low. If the bank decides to

reduce interest rates in this country it will be an attempt to

increase the flow of money in the economy, to remove any blockages

that may be hindering economic growth and providing a boost for

employment. There are some economists in this

country, though, Rico, who believe the Reserve Bank won't cut rates

today, instead saving their powder should the Australian economy in any

real trouble in the next few months -- hit.

Phil Mercer in Sydney. In other business news making headlines,

Cathay Pacific and Dragonair, its affiliate, cancelled all of their

flights in and out of Hong Kong last night for 16 hours as Typhoon Nida

swirls towards the region. The cancellation will last until 2pm

today and it will involve more than 100 flights.

South Korea will decide whether to revoke the certification of

Volkswagen vehicles because of allegations the firm fabricated

emissions test documents. It could result in the suspension of their

sales and a fine on the German automaker. The decision is expected

in a few hours time. Samsung will unveil its Galaxy seven

today and investors will hope stocks continue to soar above expectations.

The South Korean conglomerate posted its best profit in over two years

last quarter, while its main rival Apple saw a sharp fall in profits

due to tumbling iPhone sales during the same period. I asked Jake

Saunders what the latest model is expected to offer.

That's one of the things they are trying to emphasise with this

release, the curved screen and the curved edge. With the S7 they had an

edge to the screen but the phone was flat, so there will be a economics

there as well. It will be 5.7 inches as well. Is it a marketing gimmick

for Samsung because they are skipping the model number six, which

it had with the smart phone, it is a five and now it is a seven? It seems

like they can't count but also Microsoft did something similar with

Windows, they went from eight all the way to ten. If Microsoft can do

it then why not Samsung? It's about bringing the phones into

synchronisation. You had the S7 and the S7 edge, which came out in

March, so they want the linearity with the modelling. Could this

sustain their profitability into another quarter? They have been

hammered over the past two years by the Chinese manufacturers. Certainly

in 2015, second quarter of 2015 was very tough for them and they

experienced heavy conditions due to the new iPhone that came out last

year. Yes we have seen while way, out with its P9 putting pressure on.

But they have to innovate. They have to make the whole service tighter

and they have to benefit the profitability, which you mention, in

to a fairly positive second half to to a fairly positive second half to

the year. A marriage made in Silicon Valley,

Tesla merging with the Zola installer Solar City. The move is

considered a game changer as the joint company prepares to launch its

massive plan for the future later this week. Earlier I asked Dave lead

if everyone thinks it's a good idea. Elon Musk actually has a big stake

in both Tesla and Solar City. Wild Hasler is known as an electric car

maker, one side of their business is creating energy storage units. --

while Tesla. You can buy them for your home or your business. Solar

City make solar panels. Joining the two countries they hope to have

literally a top to bottom solution, people having solar panels on their

roof and a storage unit in the building. By bringing the companies

together Elon Musk thinks they can streamline that, saving $150 million

a year by doing that. That's the thinking behind this Foreteller.

Dave, this is a merger of two money-losing enters these, depending

on borrowing from the market -- entities. This is a risk reward kind

of deal? It really is. Many investors have shared their

concerns. This is a company... They are calling it a KERS lurve backed

bailout of Solar City -- Tesla backed. The stock was heading

downwards. Tesla taking them over. Many think it is Elon Musk's way of

saving a company he had a large interest in, owning 20% of their

stock. A lot of criticism of Elon Musk to do that.

Uber has made a deal to merge its loss-making operation in China with

local rival Didi Chuxing. The ride sharing app has been battling to win

a bigger share of the Chinese market since launching two years ago

Stoppila Sunzu at what's at stake. -- two years ago. Let's look at

what's at stake. Joining me now from New York is a

CEO of Task Ventures and a strategic advisor to Uber. Thank you for

joining us on Asia Business Report. Was this a good deal for Uber or was

it lopsided for DD? At least from Uber's perspective, whenever you

invest $2 billion and less than two years later you get $7 billion value

back, that's a good deal. I make investments in tech companies all

the time and if I could do that I would do it any day of the week. But

by signing off on this deal, doesn't Uber basically raised the white

flag, we've given up on China? I think Uber came a lot further in

China than a US tech company ever has by a longshot and now they are

part of a company within China that has the potential to go from its

current valuation of $35 million to five or ten times that, which will

make Uber vastly wealthier and more successful than it is right now. To

be you have to operate different league in different parts of the

globe and Uber thought the best way to do that was to consult with Didi

in this case -- differently. But tell us, losing $1 billion a year,

why was it different to make money in China -- difficult? Almost every

tech company, you did a report on Tesla and SolarCity, to scale

globally you have to invest a lot of resources before you get the

profitability. That's true of Facebook and Google and other

companies and Google is already profitable all over the world. Uber

now by emerging with Didi it can be profitable in China too. It takes

the most valuable start-up in the entire world and making it more six

at and better. The deal with Didi Chuxing, does it pave the way for

the Uber IPO -- make it more successful and better. I've been

doing business with Travis for five years now and whenever I think he

will go left, he goes right, and whenever I think he goes right, he

goes left. I remember when Facebook bought WhatsApp for $19 billion, I

remember thinking, while, if Uber had $19 billion I would be so happy.

We are now worth 3.5 times that -- while. Would you like it to happen

now? I don't know -- plough. When I let Travis do his job he makes me a

lot of money cash while. I will let him do that whenever he wants. --

wow. There is plenty more on the Didi

Uber deal on the website including an analysis from our ABI

correspondent Richmond Ridge Warnie -- AVR correspondent -- AVR.

Days before the opening of the Rio Olympics,

research suggests that pollution levels remain worryingly high.

South China is braced for powerful Typhoon Nida,