04/08/2016 Asia Business Report

what the Metropolitan Police called a show of determination to protect

the public from terrorism. Now it is time for the Asia Business Report.

Looking under the bonnet. We see if they are in gear for the latest

earnings. And India sweeps aside taxes. Good morning, Asia. Hello,

world. This is Asia Business Report. It is Thursday. I am glad you could

join us. I am Rico Hizon. By some measures it is the world's largest

carmaker and has sold more than 10 million cars last year. They report

their latest reports today and there could be trouble ahead. We explain.

After the last quarter results they flagged possible earnings had been.

They sold under 5 million cars in the first half of the year, down

slightly from last year. We have already had a taste of what is to

come from Toyota. Five firms took a hit from earthquakes in April. That

could have a flow on effect to Toyota's results. A strong yen has

affected exports, hurting companies like Toyota, depending heavily on

overseas sales. I asked an analyst how the recall might affect the

results. What has happened is that this has affected them, Hyundai in

particular. But the supplier has been hurt. Everyone is suffering

from this scandal. Will that reflect on Toyota's numbers in the first

quarter of their financial year? Will they be making an announcement?

For this particular boss, the scandal has been going on for a long

time. I am sure they would have advertised this amount everywhere.

It will not hit this particular quarter but it is definitely

impacting the bottom-line. What about the yen and the earthquake in

April? How much will this affect Toyota 's bottom-line? It will hurt

them and all Japanese makers and auto companies. It has been

unexpected. That has caused a big challenge. I won't say the

earthquake has a big impact. The past earthquake had already done a

stress test on their supply team. The impact may not the as high on

the bottom-line. Toyota faces many challenges, the emissions, the

airbags scandal, the strong yen, the earthquake, anything positive that

could lift up there earnings? Yes. They are doing well with pick-up

trucks in the US. That is where they make their money. That is where they

earn their dollars. That is doing very well. They have done well in

emerging market. That is the silver lining to the black cloud. From

April, they changed their corporate structure to increase efficiency of

the work process. Will these efforts positively impact earnings? This has

an impact on the long-term. Just because the reorganisation happened

doesn't mean they will make money from tomorrow. They will be sped up

and they will become more responsive to the market. That will impact the

market. Staying with the auto sector, has lower is reporting yet

another loss for the second quarter. -- Tesla. That means they have been

losing money for more than three years now. Chief Executive Elon Musk

has promised investors repeatedly they will make money eventually.

They say the market seems to want to give him the benefit of the doubt.

It has taken a decade of political wrangling, but India's government

has finally passed a bill to overhaul their taxation system. The

Goods and Services Tax, GST, will replace many taxes levied by both

the central and state governments. Economist predicts it could be a

real boost to the economy stop it we have a report. Voting time starts

now. Ten years in the making, and after hours of debate, this is the

moment Indian politicians voted for the country's most revolutionary tax

change its independence. -- since. But while all eyes are on

Parliament, it is places like this that will really feel the impact.

The auto sector. This firm employs dozens of people just to file the

paperwork associated with countless taxes. This should be a thing of the

past now. That will make staff more productive. A lot of time was wasted

on all these things. Paperwork, collecting forms. There was no point

wasting energy on all of those things. It is better to do something

to give business a boost and pick up on sales. It will. It will reduce

costs. Products made in one state in India gets taxed multiple times

before they reach the consumer in another corner of the country. That

means delays and added cost. Experts say GST will be a welcome change. It

will be definitely better than what it was with efficiency for the

industry. Especially in the case of manufacturing. Fundamentally, I

believe there will be a change to efficiency. The degree of efficiency

is what we will have to wait and see. India's actual GST rate has not

been set yet, but is expected to be 18%. Some products, fuel and

alcohol, won't be affected. They RPI revenue raisers for the states and

the government had to let them through to get it done. -- are big.

At the same time, a huge ID system will need to be set up and people

will have to be trained. -- IT. For companies, it will be an overhaul.

This is just the beginning of the biggest tax reform India has ever

attempted. BBC News, Delhi. It has been nearly six weeks since Brexit.

This was one sector hit hard immediately after the vote. As the

dust is settling and the Bank of England considers a rate decision on

Thursday, what is the mood? London was the top investment destination

last year. We have a global head of real estate. Real estate is what

we're talking about. I asked him whether deals in the pipeline before

Brexit have been done. For the most part, yes, there has been a pull

back. 10- 15% of the deals that were in the pipeline. On the other hand,

the other 85, you know, 90%, we still see being done and moving

forward. What will happen in the future? It seems like there are twin

forces at work. You have a weaker pound, making real estate in the UK

more affected. On the other hand, more uncertainty about real estate.

You have concern about corporate demand. Will people need office

space? People with investment are already facing some write-downs in

the short-term. Maybe it is time for a little bit of pause. We see an

number who see it as an opportunity. The week pound is down 10- 11%

against the dollar. Maybe 15% against the Singh dollar. And many

clients are interested. Maybe this is an opportunity. Especially real

estate clients. Specifically what are they telling you? You have

hundreds of people working in the real estate division across this

region. What our the China Sea -- what are the Chinese, Indonesians,

Malaysians, what are they saying? They are looking at the UK and are

seen, roughly speaking, it is not going away. They have a short-term

impact from their spite in the long-term, many of these investors

are looking into the long-term and they see it as even more of an

opportunity. Either think the traditional, large, Asian sovereign

wealth fund type of investor is, umm, see concerned about the, you

know, the long-term. Do you think the prisoners, the doom and gloom,

was overdone? -- pessimism. Is a continuing to be overdone? The

short-term, it has been overdone. It has been subdued. Growth, GDP, over

the next 18 months, we will have to see how things play out in terms of

trade deals and otherwise. But, umm, most folks, again, people you talk

to in the region in Europe, they are still interested in the UK. Real

estate expert Howard Ross. A quick look at the market. As you can see

on your screens, positive gains for Asian markets. Haiyan oil prices and

solid jobs growth boosting the markets overnight. -- Higher. The

Nikkei up and be All Ordinaries Index up as well. Doors will open in

15 minutes tone. A good day so far for the regional financial markets.

Thank you for investing your time with us. I am Rico Hizon. Sport is

up next. A High Court judge has