10/10/2016 Asia Business Report


10/10/2016

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reveal how many foreign workers are employed. The data will be collected

:00:00.:00:00.

but not made public. More from the United States with the debates. But

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first, Asia Business Report. Hillary Clinton and Donald Trump

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countdown to the second Presidential Debate. We ask what a Trump

:00:18.:00:22.

presidency would mean for the global economy. Driverless cars will change

:00:23.:00:28.

the roads in a few years, but it may also cause a radical shift in the

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insurance industry. Good morning Asia, hello world,

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thank you for joining us on Asia Business Report. The second debate

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between US presidential candidates Hillary Clinton and Donald Trump

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will be starting very shortly with polls putting their neck and neck in

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the battle to the White House. There are worries that close race will

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spark volatility in the financial markets. We ask well-known emerging

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markets investor Mark Mobius if he is concerned. The key point is if

:01:10.:01:16.

Trump get selected he will act as a negotiator. He is a businessman. He

:01:17.:01:23.

knows how to negotiate. That is his strength. At the end of the day he

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will come to some agreements. He won't be afraid to fly to Mexico to

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come to some understanding. Same thing with Asia any other parts of

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the world. At the end of the day it will probably be positive. Federal

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Reserve, everyone is waiting for them to raise interest rates. People

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are making a mistake thinking that because the Fed will raise rates

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that the stocks will go down. This will not necessarily happen. And in

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addition to the fact that if there is a rate increase it would be very

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small. Very little impact. The direction, however, unfortunately is

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towards negative rates. If you look at what the Economists are saying,

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-1 doesn't work, let's go to -2, let's go to three or four, this is

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the reality of the mentality that we are seeing. This central bankers are

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being influenced by the central bankers. -- by the Economists. Could

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they go to negative rates? It could. They have threatened to raise rates

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many times but didn't do it. And it depends on the level of the

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economies. I know some of the governors want to raise rates. And

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there are many people in America who want to have rates higher,

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especially those on fixed income and pensions and so forth. At the end of

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the day is not clear that the Fed will do it. To negative interest

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rates were? We haven't seen an effect in Europe or Japan. They

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haven't worked. This central banks are given responsibility for growth

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which they should not have responsibility for, it is

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politicians, the reform programme that results in growth. So this is a

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real dilemma. There is too much dependence on central banks. Mark

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Mobius is speaking with our correspondent. AT has stopped

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replacement of the Galaxy Note 7 after reports of more replacement

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phones overheating. If confirmed that will be three in a week. This

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teenager in the US says her Samsung phone melted on her hand. Her father

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says the phone is a replacement for the Galaxy Note 7 that was part of a

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global recall last month. This comes after a US plane was evacuated last

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week after a Note 7 phone on board the plane started emitting smoke.

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India's e-commerce companies will have a bumper period as festival

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season approaches with the sector becoming fiercely competitive since

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US online giant Amazon started pouring money into India. That is

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not putting off the country's local brands. We catch up with the head of

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one of them, the Indian company Mintra. She started asking why the

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market is so promising. E-commerce as a space is here to stay because

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it provides services to our customer, which is convenient.

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Fashion and lifestyle is the number two category after mobiles and it

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will be for a while. However, it is very profitable because margins are

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much higher. You recently made one of the biggest acquisitions we've

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seen in this industry when you acquired a rival company, so what do

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you plan to do with it, will you consolidate or run them

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independently? We are $2.5 billion in online fashion and lifestyle

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services and that number will become 4 billion. That has happened

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everywhere else in the world and it will happen here as well, so the

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purpose of the acquisition, it is rare to buy their number two player

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as number one player, so the purpose was to look at how to grow the

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market. Companies like you have been growing fast however online reach in

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India is still very small. How do you respect it to grow further? The

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biggest problem in fashion is not reach, we have the problem of size,

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touch and feel, which we are solving through technology with a service

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called try and buy to order multiple clothes, the guy will wait for you

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and you return it, so we bring the trial room to you. That is what is

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going to grow the market. You have to think about other value, can I

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get better service, alterations, more selection, can I offer more

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international brands? You are owned by one of the ten most valuable

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start-ups of the world, so how does it help? Many different things. The

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first is capital, which is very important, and the second is the

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ability to make bold moves like what we have done. As a stand-alone

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company we couldn't do that. And third is we leverage with the supply

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chain, so if you focus on that you can provide better service. While

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you talk of opportunities in the market, surely there are challenges.

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The first is keeping up with scale and growth. Not so much the market

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but internally as a company, growing 80% year-on-year, how can you make

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sure the processors come along and the culture stays what it is

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supposed to be, how can we stay innovative, that is what I am

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worried about. The market will happen. We are focused on the

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customer and the market and making sure that we can keep pace with

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growth is the biggest challenge. We might be a few years away from

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consumers buying driverless cars but the technology is about to radically

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changes the insurance industry and according to one US report premiums

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could drop more than 40% want the autonomous cars are fully adopted.

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So how is the industry assessing risk? Chief executive of the

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insurance provider FWD Group spoke to us and said that is the billion

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dollar question. The technology is changing across the way we do

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business from the way we talk to the customer, the way we sell a product,

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the way we design a product, the way we serve them and the way we make

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claims. Everything is changing in the industry.

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The relationship of the insurance contract between an individual and

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the insurance company will evolve also. So at the moment it is

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individual customers, consumers still responsible for their own

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insurance coverage. In the next five to ten years I have no doubt that

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the relationship will evolve. It will become a contract with the

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insurance company and the car manufacturer or the software

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manufacturer and at that time the liability or shift from individuals

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into more of a group setting. The road will change. For example, now

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when you get on an aeroplane you don't think about the aeroplane

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insurance any more as a passenger. In the future we will change our

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behaviour accordingly and we will work with the car, it is Uber or

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Tesla, the relationship with the insurance company will be very

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different. That is a very relevant one, I think, the impact of the

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revenue model on one hand, certainly insurance and policy will go down

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but on the other hand are the insurance will probably fill the

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different need that the consumer wants. From our own perspective this

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will be much safer. The rate of the incidence of accidents in a

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driverless environment will be lower than the human controlled

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transportation. From a personal perspective I am quite excited

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because I have to make -- two teenagers and I am most worried

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about accidents with my kids, so this can bring a positive change to

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society and is just fantastic. The insurance industry during the era of

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driverless cars. Let's have a quick look now at the Asian markets and

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they could be moving sideways today. The latest US drops reports revealed

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that employers hired at a slower pace than forecast. Well, you have

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the Nikkei two to five in Japan closed due to public holiday --

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negate 225. The Hang Seng index in Hong Kong will open their trading

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doors for the trading week in about 15 minutes time. Thank you so much

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for investing your time with us. Have a great day, everyone. I'm Rico

:10:30.:10:37.

Hizon. Goodbye for now. You're watching BBC News. The second

:10:38.:10:42.

presidential debate is coming up at the top of the hour between Hillary

:10:43.:10:45.

Clinton and Donald Trump. Barbara Plett-Usher has been looking back at

:10:46.:10:50.

the candidates' first confrontation to get an idea of what we might

:10:51.:10:51.

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