14/12/2016

Download Subtitles

Transcript

:00:16. > :00:25.To hike or not to hike? The spotlight is on the US central bank

:00:26. > :00:27.and its final meeting of 2016. Efforts to save Nissan from

:00:28. > :00:43.collapse. Can also save Mitsubishi? Good morning, Asia. Hello, world. It

:00:44. > :00:49.is Wednesday, glad you could join us. It is the meeting that markets

:00:50. > :00:54.have all been waiting for. The US central bank has kicked off its

:00:55. > :00:57.two-day meeting and the Federal Reserve is widely expected to raise

:00:58. > :01:01.interest rates for the first time this year. Our correspondence in

:01:02. > :01:03.Singapore and India explained how this decision will affect their

:01:04. > :01:07.economies. Here in Singapore and around

:01:08. > :01:11.Southeast Asia, expectations have been rising that the US will hike

:01:12. > :01:16.interest rates. That led to money flowing out of Asia and into the US

:01:17. > :01:20.dollar, which has resulted in sharp declines in Asian currencies. One of

:01:21. > :01:25.the worst affected is Malaysia. It has seen its currency fall to record

:01:26. > :01:29.lows in recent weeks. This is all coming at a time when many Asian

:01:30. > :01:33.companies have to start paying back their debts, much of that is in US

:01:34. > :01:37.dollars and it will be far more expensive to do that now than it has

:01:38. > :01:41.been in the past. Here in India the stock markets have

:01:42. > :01:47.been volatile ahead of the Fed's meeting. A rate hike in the US could

:01:48. > :01:50.lead to a cash floating India, with foreign investors selling off their

:01:51. > :01:58.stocks and equities. That could weaken the Indian rupee as well. But

:01:59. > :02:02.compared to other emerging markets, it is expected to be limited.

:02:03. > :02:04.Earlier I spoke to a market strategist in Sydney who explained

:02:05. > :02:08.how investors have been preparing for this highly anticipated rate

:02:09. > :02:12.rise. I think the market since the

:02:13. > :02:15.election of Donald Trump have moved materially. We've seen big cash

:02:16. > :02:20.outflows from the region and we've seen the currencies of the region,

:02:21. > :02:23.under pressure, so 25 basis points tomorrow morning is pretty much

:02:24. > :02:28.baked into the cake. Now we just wait to see what Janet Yellen says.

:02:29. > :02:32.What do you think will Janet Yellen and defence a in their statements?

:02:33. > :02:37.Do you think Donald Trump's election has affected their outlook west I

:02:38. > :02:43.think it probably has, but only at the margin. Charles Evans, in

:02:44. > :02:48.Chicago, last week said it was too early to tell what the impact of

:02:49. > :02:53.Trump would be. What Janet Yellen will do is ignore that the cautious

:02:54. > :02:57.that we've had in 2016, the Fed that really found an excuse not to hike

:02:58. > :03:03.every time it could, is still the dead that we will see next year. She

:03:04. > :03:07.doesn't want to split stock markets on wants the US dollar to materially

:03:08. > :03:12.strengthen, because that would hurt US trade, but I think she will

:03:13. > :03:20.signal potentially three or four moves in 2017. And that would lead

:03:21. > :03:25.to a stronger dollar. Is this good or bad for Asia? At the margin may

:03:26. > :03:30.think it is bad for Asia, because it means capital flows. The a certain

:03:31. > :03:34.extent it into the exports from the region are much more competitive, in

:03:35. > :03:37.a stronger dollar environment, but the problem with that is that in the

:03:38. > :03:41.meantime we have to deal with investors reallocating their money,

:03:42. > :03:45.not only away from the cash that they make on the sidelines but from

:03:46. > :03:50.all the money that's been flowing into Asia over the last couple of

:03:51. > :03:52.years. I think India is especially vulnerable, given where it is

:03:53. > :03:56.inflation is and what Narendra Modi's cash crunch will do to the

:03:57. > :04:01.economy. But I think regionally capital flight in the next few

:04:02. > :04:10.months will eventually give way to stronger economy is benefiting from

:04:11. > :04:22.US nominal offshore growth. Over to Japan and it's a big day at

:04:23. > :04:27.Mitsubishi motors. There will be a new chairman of the company. They

:04:28. > :04:29.will vote on whether or not to triple the annual pay packages of

:04:30. > :04:36.Mitsubishi motors at' top executives. Nissan bought a

:04:37. > :04:44.controlling stake earlier this year, leading to the new post. Can he turn

:04:45. > :04:50.the struggling automaker a round? I asked that question. The problem is

:04:51. > :04:53.that Mitsubishi, because of the scandal we have seen, they have an

:04:54. > :04:58.uphill climb and the other problem is that even before the scandal it

:04:59. > :05:05.was a bit of an ulcer in Japan. You have Nissan, to Gotye, Mitsubishi

:05:06. > :05:09.was before or fifth choice. In a way that Brand has been dented. --

:05:10. > :05:14.Toyota. Perhaps the chairman is the only person at this point you can

:05:15. > :05:18.rehabilitate it to be she, but it won't be an easy job. -- Mitsubishi.

:05:19. > :05:26.What should the strategy be to rehabilitate it? He is claimed off

:05:27. > :05:31.reapplying the Nissan handbook from 1999 to Mitsubishi. There will be

:05:32. > :05:37.talks today about adjustment in salary caps, but I think one of the

:05:38. > :05:43.most interesting thing is the way that he is trying to make Mitsubishi

:05:44. > :05:50.more of... He's trying to do away with the priority system, and look

:05:51. > :05:53.at executive pay based on performance, which is a novel idea

:05:54. > :05:58.in Japan. He will create what is calling a performance officer. In

:05:59. > :06:03.many ways this is what Japan needs more broadly. Abenomics is four

:06:04. > :06:08.years in and we haven't seen a lot of corporate reform, a lot of change

:06:09. > :06:11.from the corporate level. Here is you have Carlos Ghosn through

:06:12. > :06:14.Mitsubishi joined the rest of Japan what they should be doing in many

:06:15. > :06:19.ways to make Japan more competitive, to make companies more vibrant, and

:06:20. > :06:24.this is an interesting moment as 3017 approaches. even though

:06:25. > :06:26.Mitsubishi has been hit by this omission scandal, they still have

:06:27. > :06:31.their strengths, especially in markets like Southeast Asia, where

:06:32. > :06:37.Nissan is weak? In many ways they have strength externally.

:06:38. > :06:41.Domestically not so much, in many ways the Mitsubishi brand has taken

:06:42. > :06:45.a big hit in the last several months, just as Volkswagen has in

:06:46. > :06:50.the past year, and the question is whether Carlos Ghosn can shake up

:06:51. > :06:55.this corporate climate and that's really an open question. We will

:06:56. > :07:00.see. Singapore is one of the sunniest

:07:01. > :07:05.places in Asia, but space is hard to find and solar energy has been slow

:07:06. > :07:11.to catch on. Now the world's largest solar testbed has been set up, doing

:07:12. > :07:17.something never done before. Right near the equator, it is always

:07:18. > :07:23.some in Singapore. Yet less than 1% of the power is generated by the

:07:24. > :07:27.sun. The adoption of solar energy in Asia has been a bit slower than in

:07:28. > :07:34.Europe, so the market over their has been booming over the last 10- 15

:07:35. > :07:40.years. Most countries in Southeast Asia have to wait until the global

:07:41. > :07:45.market builds up the capacity and learns from economies of scale.

:07:46. > :07:50.Solar energy is cheaper now. China has become Asia's leading user of

:07:51. > :07:54.solar power. Japan is also a big adopter and India is pushing to be.

:07:55. > :07:59.Southeast Asia is slowly catching up, led by Thailand. Trouble is, in

:08:00. > :08:04.places like Singapore, there's not much land for installing solar

:08:05. > :08:09.panels, so scientists are looking for alternatives. Ten floating solar

:08:10. > :08:12.panel systems have been set up in this remote part of Singapore,

:08:13. > :08:18.divided by companies from all over the world. Each is designed

:08:19. > :08:22.differently. The way they float, for instance, to the type and size of

:08:23. > :08:26.the panels used, to the way the panels are arranged. The goal is to

:08:27. > :08:30.find out which one works the best. The more direct sunlight solar panel

:08:31. > :08:36.gets, the more it heats up. But the more it heats up, the less power it

:08:37. > :08:40.produces. So floating systems are being tested to see if they are more

:08:41. > :08:45.efficient. In a building environment like Singapore, which is a

:08:46. > :08:54.citystate, then you have a lot of heat from the buildings. If you go

:08:55. > :08:59.out to the waters, for example, that we are trying to test here, how much

:09:00. > :09:04.is the cooling effect from the water on the solar panels and how much

:09:05. > :09:10.more electricity can regenerate, compared to a system on the rooftop,

:09:11. > :09:13.for example? Experts say the region's governments need to stop

:09:14. > :09:17.subsidising conventional electricity and get incentives -- give

:09:18. > :09:24.incentives to companies wanting to harness the power of the sun.

:09:25. > :09:28.Solar power indeed. In other business news making headlines,

:09:29. > :09:35.Asahi shares are continuing to fall in early Tokyo trade, extending a 5%

:09:36. > :09:39.drop from yesterday when it announced it is having its biggest

:09:40. > :09:44.ever overseas deal. Well, Japan's largest grower is paying eight

:09:45. > :09:56.billion-dollar is for some of the beer brands as part of its expansion

:09:57. > :09:59.strategy. -- largest brewer. Basically Asahi shares mirrored the

:10:00. > :10:05.lacklustre mood in the Asian financial markets. Japan is down by

:10:06. > :10:13.27 points. The Hang Seng opening up 150. The All Ords up 40. People are

:10:14. > :10:17.waiting for the imported information from the US Federal Reserve, as to

:10:18. > :10:22.whether they will raise the cost of borrowing. No impact whatsoever on

:10:23. > :10:27.the Dow Jones industrial average. It was up, together with the NASDAQ, at

:10:28. > :10:40.a record high. Thanks for joining us. Goodbye for now.

:10:41. > :10:44.The top stories this hour: Aleppo has fallen to the Syrian government