19/12/2016 Asia Business Report

Japan and the EU try to carve out a free trade pact in a new age of

protectionism. And what do people in Asia want to

know about? Google fills us in on the top business search words in

2016. Welcome to Asia Business Report, I'm

Karishma Vaswani. This week finance leaders from Japan and the EU want

to reach an agreement on a free-trade pact, it comes at an

uncertain time to say the least, though, for international trade as

US President elect Donald Trump speaks of rising protectionism and

the UK decision to split from the European Union. Japan is the EU's

second biggest trading partner in Asia after China and together the EU

and Japan make up more than a third of the world's GDP. How important

are the negotiations in light of how Donald Trump has been so vocal about

getting the US to withdraw from the TPP? That was a question I put to

Richard Jeremy, the chief economist from the bank of Singapore a little

earlier. More important they have been talking for years about this

and not making a lot of progress, no sign of urgency. The US TPP is dead

in America with Trump. They are both looking for a new partner. At a time

when it looks like free trade, globalisation, all that is on the

backburner, what can they hope to achieve, these two massive parts of

the world's GDP? On one level they are big economies and if they

improve trade relations there are economic benefits from that. On

another level they want to send a signal to push back against the

protectionist views coming out of America and also to some degree the

UK as well. Looking specifically at the UK, we have heard from Japanese

companies in the light of Brexit that some are considering moving

headquarters out of London, they are concerned about passport Inc writes

for financial services. Japanese firms are some of the biggest

foreign employers in the UK, what does that mean for the UK economy

and Japan's prospects? It's a big risk for the UK because clearly some

foreign investment into the UK has been to access the broader European

market. If you lose that access or if you worry you might you will be

looking to relocate your investments, and last week we saw

some Japanese financial institutions suggesting they might need to start

moving some of their businesses to Continental Europe because they were

worried about what might happen after Brexit. Turning to other

business news, talks at aimed at averting a British Airways cabin

crew strike over Christmas are to be held later today. Members of the

crew's union, Unite, are due to walk out on Christmas Day and Boxing Day

in a row over pay and conditions. The industrial action, if it goes

ahead, could involve up to 4500 staff. Staying with the airline

industry, Etihad Airways will be cutting jobs in some parts of the

business in a restructure. The airline says a majority of those

affected are through natural attrition and the vacancies will not

be filled. Etihad has denied to comment on the number of jobs that

will go. There's no denying 2016 was an unpredictable year, but could

investors look to emerging markets for some semblance of stability next

year? Sharanjit Leyl posed to that question to the chief executive of

the international arm of Goldman Sachs's asset management. I think

when you look back at 2016 you see it as the year of volatility and

surprises but there's a tendency when you apply volatility to

emerging markets to throw out the baby with the bathwater. In some

ways the emerging markets have been most stable in 2016 and we look at

emerging markets as a tale of two cities. One has to look for the more

stable markets where you see reform is progressing and the ones where

you see less impact from some of the changes we saw in 2016. Markets like

India, where reforms are progressing and we see potential growth, select

areas within China, like Internet, the new economy, lifestyle,

investments people are making, places like Brazil where reforms and

the new government might be making constructive change. A new report

put out by your firm, your economists suggesting higher oil

prices will be a boom for the global economy. We know that higher oil

prices aren't good for Asia, a lot of Asian countries have huge oil

bills. Oil prices have been a commander for people over the last

few years. Obviously when we look at it from an asset management

perspective I think the signalling factor is what's important. People

have started to take extremely low oil prices as a sign of poor global

growth. The reflection you see here in the thought process is somewhat

higher oil prices, but not at the extremes we saw approaching $150 or

200 US dollars, is a positive in the sense that it indicates there is

global growth. We have to reflect on oil prices for two different

reasons. One, it costs Asian economies but the other, a somewhat

marginal increase in oil prices normally means growth is improving

as well. Sheila Patel from global sacks Asset Management. It's that

time of year when we find out what's hot and what's not when it comes to

Internet searches -- Goldman Sachs. So what were the most popular

searches in 2016? It was an event in the US that obviously had global

implications. What am I talking about? The US presidential election

and how Donald Trump ranked among the most widely searched names on

the Internet. Robin Maroney from Google explained why. The idea is

this represents how people are searching for a candidate in the US

elections, Donald Trump or Hillary Clinton, and another topic. When

we're looking at this we are seeing Asia is incredibly interested in his

take on the Trans-Pacific Partnership. If you look at other

charts you would see Asia is much less prominent on this one, JP

Japan, Singapore, Vietnam. That makes sense because those were the

countries most affected and the ones that had the most to lose in a

situation where Donald Trump did pull out of the TPP. Exactly, this

meant a lot to Asia and other topics that mattered a lot to other

countries, like the US, Europe, the UK, things like Brexit and even

Black Lives Matter got more searched in Europe and outside the US. But

not so much in Asia. TPP was the only topic Asia was searching when

it came to Donald Trump searches. Fascinating. Let's move on to south

Asia and India in particular, a really important year in terms of

the economy, reflected in some of the search phrases that we saw. Tell

us more about this. This is a big year for India in terms of world

financial markets. At the start of the year everyone was focused on the

Chinese stock markets when they had that incredible meltdown but beyond

that Indian stocks began to rise on the world stage and that was

something people were searching for but that got thrown out of the

window when they decided to do monetise and say you have to have

certain cash in certain amount is. Look at that figure, up until that

moment, we start seeing those keywords being searched. -- amounts.

They have to get their cash sorted out so they are rushing to the cash

machine to get it figured out. What's interesting is that gold is

the de facto savings of India along with cash, and what you saw is at

the same time people are looking for cash machines, you're looking for

gold as well. On the one hand people are trying to get their cash back

into their account and putting into their other form of savings, Gold.

Looking at the final chart, smart phones, what about this? It says

Apple is the most searched brand for smart phones in the world. What you

would have seen in another year is also this is the year the Chinese

brands came in. Far behind Apple but coming in. Robin Maroney from Google

with a look back at the year and the search words via the search engine.

Uber has said it will defy demands to take its self driving cars off

the road in San Francisco. The company started testing the vehicles

this week but the US department of motor vehicles has said the firm

must have a test permit. Uber said it didn't need one as they have a

safety driver at the wheel. Other companies testing autonomous

vehicles like Google and Tesla have applied for and been given the

permits. Abu Dhabi has become one of BP's biggest shareholders under a

deal which gives the oil company a much bigger stake in the Emirates

oil output. BP will take a 10% share in ad code, which owns onshore

oilfields that account for most of Abu Dhabi's production. In return

Abu Dhabi will receive a 2% stake in BP, worth almost $2.5 billion. A

quick look at the markets here in Asia today, Asian markets this

Monday looking like this, they have steadied from Friday when we saw a

lot of time in Asian markets. We have also seen the Japan Leyte down

a tad. -- chaos. All eyes on the US dollar and what it impact it will

have on emerging markets. That's it for me. Thanks for joining us.