03/01/2017 Asia Business Report


03/01/2017

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Now on BBC News, all the latest business news live from Singapore.

:00:00.:00:12.

The bell for 2017. Where should you put your money this year, and will

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economists or fortunetellers have the upper hand on predictions? And

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remember when the latest technology looked a little like this? We take a

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look back at 50 years of the world's biggest Consumer Electronics Show.

:00:31.:00:40.

Hello, and welcome to Asia Business Report. 2016 was a mixed year for

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the global economy, and for the markets as well. The Dow Jones is at

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record highs, approaching 20,000, and the US dollar is very strong.

:00:53.:00:57.

The British pound on the other hand took a beating after the country

:00:58.:01:01.

voted in a referendum to leave the EU. Now, in this region it was the

:01:02.:01:06.

Chinese markets that actually ended up underperforming in 2016, while

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Thailand's stock exchange was the standout, closing at around 20%

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higher despite economic uncertainty there. Now, most markets are

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reopening for the new year today. So what should we expect, and where

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should we put our money in 2017? Earlier I spoke to Mike McCarthy of

:01:29.:01:34.

CMC Markets in Sydney and asked whether we will see the US rally

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this year. Certainly in the short term that seems likely and ahead of

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the inauguration in January it looks like markets are likely take a

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positive trajectory. They have been very cautious although we saw some

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enthusiasm and buying toward the year end. Last day of trading was a

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bit of a visit for most markets and that restrained positioning gives us

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confidence that we will hold ground or go ahead in the short term.

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Longer term, potential for policy changes in the US are of concern, we

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are expecting extreme volatility this year. Do you think that

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volatility will extend it to this region as well? Rather unusually we

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saw markets like Thailand and Indonesia performing well. Will they

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continue to do so? It seems quite likely, in particular Indonesia

:02:23.:02:25.

where we have seen narrowing account deficits and improvements in

:02:26.:02:28.

interest-rate environment. It seems the settings are right for further

:02:29.:02:33.

gains for the sharemarket. There is less participation in the Thai

:02:34.:02:37.

market, but nonetheless coming from a very modest base after many years

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of political uncertainty, and there is once again potential for further

:02:41.:02:44.

gains. They might not be the regions again this year but there is no

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reason to think they will give up their gains -- might not lead the

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region again. And another market with strong international

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participation is the Chinese market, we saw them going gangbusters in

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25th team but that wasn't the case in 2016. It wasn't, and there was a

:03:02.:03:06.

bit of a diverges from the steadying we saw in the overall economy

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against what was a weak performance from the sharemarket but as many

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pundits will point out the economy is not the markets and the markets

:03:14.:03:17.

it are not the economy. Over the long-term we expect the two to move

:03:18.:03:21.

in rhythm. So we see some catch up on Chinese markets, as investors on

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the ground in China recognise that they have been underperforming, and

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that there might be a case for higher share prices in China itself.

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That is the view of the markets in the year ahead. What of global

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economic events? After all the surprises of 2016, Asia business

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correspondent has been trying to find out who might have the best

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predictions. It is that time of year when many Asians head to the temples

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to pray for good luck and figure out what is in store in the year ahead.

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Neither financial forecasters nor fortunetellers accurately predicted

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what happened in 2016, so if everyone is guessing, who is to say

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what is going to happen in 2017? Well, this area is filled with

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fortunetellers and numerology, and I am here to meet one of them. Master

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Alex. As well as an economist at a private bank, I will be talking to.

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The US and China, what kind of relationship will these countries

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have in 2017? It will be interesting to say the least, you are talking

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about the two largest economies in the world. You are talking about

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China, who is ascending in terms of looking to play a larger role in

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global politics, and global trade. So how it will play out really all

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depends on how Mr Trump is going to deal with some of his contentious

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campaign pledges, especially targeting towards China. As you

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know, next year is a fire Rooster. From the fire risk you will have a

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lot of problems that are going on. That means you will find that this

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will give a lot of problems, which means to say that there will still

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be hiccups between the US and China. So I think Trump has to put in a lot

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of effort to make it work. What about the biggest driver of growth,

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though? What are they going to be next year? Looks like maybe next

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year the driver will be the recovery in consumer demand, on the back of

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recovery and jobs. That could translate into investment recovery,

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perhaps with a later lag towards the end of the year. Five years is 1.0,

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1.3, 1.5, 1.6, 1.7. So next year is the last year of the five-year

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cycle. So on the first half you will see things still on a downside,

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before it picks up. What are the big surprise in 2017? The risk will be

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one we are mindful of, coming from popular push back against

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antiestablishment itself. The Rooster is never a good year, to be

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very frank with you. There are a lot of troubles between families,

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between companies, even between couples. Well, that doesn't bode

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particularly well for any of us. I think it is time for me to get my

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fortune taken for the many 17. Take it away, Master Alex. -- 2017. In

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other business news, for the first time in more than half a century,

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Sweden's is selling car of the year was not a model by the country's

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owned Volvo Rand, instead it was the VW golf. The last time this happened

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was years ago, when the Beetle was the top-selling car. The Swedish car

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manufacturer is owned by a Chinese automaker. China's 63,000,000-dollar

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football player Oscar arrived to cheering fans in Shanghai as he

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starts playing in the Chinese Super League. Chinese football clubs have

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been paying record fees to lure top talent to China. The former

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Manchester United player Carlos Teves recently signed with a rival

:07:08.:07:13.

club in a deal worth $86 million, making Carlos Teves the highest paid

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footballer in the world. In the Consumer Electronics Show, getting

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under way in Las Vegas later this week, we will be sure to see a whole

:07:21.:07:26.

number of new mobile devices, gaming consoles and lots of other gadgets

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being unveiled. It is an annual fixed for most major tech companies

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and it is now in its 50th year, would you believe -- annual fixture.

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It is a different show that it was when it all started back in 1967.

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Enriching the lives of Orion, education and entertainment at a

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very, very reasonable price -- enriching the lives of everyone. It

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is phenomenal. It is absolutely show.

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It is an event called the National Association of music merchants, the

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NAMM show, and we attended the consumer electronics portion, and

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the guy who hired me said that is really unacceptable, and he

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convinced the board of this non-profit trade association that

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they should launch the show, and they did in 1967 in New York, called

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the Consumer Electronics Show. It was successful, at its launch it had

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70,000 people and 100,000 square feet and it generated a lot of news.

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There were only really three main products, TVs, radios and

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photographs. -- phonographs. I do believe that the human touch,

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the live experience of being with a real person, is something that will

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not be replaced in 50 years. And as long as we will take honeymoons with

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our loved ones, live, there will be opportunities for business events

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like CES where you actually physically are with other people and

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get to know them on a personal basis. And you can catch more of our

:09:40.:09:53.

CES coverage online. A very quick look at the markets now. Amongst

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those that have opened here in Asia we can see that the All Ordinaries

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over in Australia, that has been doing pretty well. It is pretty much

:10:02.:10:05.

taking its cues from European markets, which mostly rose on Monday

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after stronger GDP data from the likes of Italy. Speaking of GDP

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data, I should tell you a little bit about Singapore because it has come

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out with its annualised GDP at 3.7% forecast, while GDP on the quarter

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rose 91% so that may give the markets here a little bit of

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positivity. That is it for this edition of Asia Business Report.

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Thank you for watching. The top stories this hour: Turkish

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police say this is the suspect they are hunting over the deadly

:10:36.:10:38.

Istanbul nightclub attack. So-called Islamic State says

:10:39.:10:41.

he is one of its followers.

:10:42.:10:46.

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