10/01/2017

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:00:00. > :00:12.Now on BBC News, all the latest business news live from Singapore

:00:13. > :00:23.Investors are loving it. Donald Trump sells a $2 billion stake in

:00:24. > :00:27.his trainees operations. And we take a look at whether it will be smooth

:00:28. > :00:34.sailing or choppy waters for the cruise ship industry in 2017. Good

:00:35. > :00:40.morning, Asia. Hello, world. I'm Rico Hizon. Welcome to Asia Business

:00:41. > :00:48.Report. It's a Tuesday. Glad you could join us. We start off with the

:00:49. > :00:53.fast food giant McDonald's and its decision to sell a controlling stake

:00:54. > :00:57.in its business in China and Hong Kong, a sign of another company

:00:58. > :01:02.admitting they need help in this huge and unique market. In a $2

:01:03. > :01:12.billion deal, the Chinese state owned conglomerate Civic will take a

:01:13. > :01:20.stake. Coni Group will take a 28% stake. McDonald's will be holding on

:01:21. > :01:26.to the remaining 20%. Earlier, I spoke to someone and ask them if the

:01:27. > :01:30.sale is a good move for McDonald's? This will help them a lot. If you

:01:31. > :01:34.look at how McDonald's has performed in China over the last couple of

:01:35. > :01:39.decades it has done quite well but is still looking to expand further

:01:40. > :01:43.into third and fourth tier markets. They need cash to do that so this is

:01:44. > :01:47.how they can do that without the bottomline taking a hit. Has China

:01:48. > :01:52.become a revenue burden for McDonald's? It has. If you look at

:01:53. > :01:56.the quick service restaurant space in the last two years consumers have

:01:57. > :02:00.been more concerned about their health and safety issues and have

:02:01. > :02:06.cut back on spending. That has helped to Mark Hurd McDonald's. But

:02:07. > :02:09.growth is coming back a little bit. There is still room to adapt and

:02:10. > :02:13.that is what McDonald's is banking on going forward. Do you think these

:02:14. > :02:17.two groups that have no experience in the food and beverage business

:02:18. > :02:22.will be able to grow the food and beverage business of McDonald's? The

:02:23. > :02:26.challenges they do not have a lot of experience in that market. On the

:02:27. > :02:29.flipside, they have a lot of experience in China and have good

:02:30. > :02:34.real estate connections in China. That is the name of the game in

:02:35. > :02:37.China. Can they get good locations and spend the money to refurbish

:02:38. > :02:42.their stores? They have a strong team in the Chinese market. They can

:02:43. > :02:46.use that to adapt the menu. They need the cash to allow them to open

:02:47. > :02:52.new restaurants quickly. Do you think the new ownership taking a

:02:53. > :02:55.majority stake in the China business will affect customers? I don't think

:02:56. > :02:59.the average customer is going to know or care that much. As long as

:03:00. > :03:06.the restaurants continue to work well. McDonald's is a good visual

:03:07. > :03:10.presence. Ordering is efficient in store. If they can maintain that,

:03:11. > :03:20.consumers will be happy to continue to go. China market research in

:03:21. > :03:23.Shanghai. Shares of Japanese pharmaceuticals are currently, as

:03:24. > :03:29.you can see, they are trailing for the first time and are up 1%. That

:03:30. > :03:35.is since they said they would buy another company for 4.7 billion US

:03:36. > :03:40.dollars. They make drugs for patients with rare cancer. They are

:03:41. > :03:46.paying for each added share. That is nearly 75% more than the previous

:03:47. > :03:54.closing price. It is a big day with Alibaba. 8.6 billion-dollar

:03:55. > :03:58.agreement with Hong Kong to privatise the department store. The

:03:59. > :04:04.company has accepted the chairman Jack met Donald Trump. The company

:04:05. > :04:08.claims it can create 1 million US jobs by helping small businesses

:04:09. > :04:13.sell their products to China and Asian consumers. Here is what he had

:04:14. > :04:18.to say about the meeting. We talked about small business and young

:04:19. > :04:22.people and American agriculture products in China. And we also think

:04:23. > :04:28.that China - US relationships should be strengthened and the more

:04:29. > :04:33.friendly. That was Alibaba's Jack Ma. The Chief Executive will not

:04:34. > :04:43.join the board of the newly created holding company once it has killed

:04:44. > :04:47.with Verizon completely. -- made a deal. They are creating a new

:04:48. > :04:52.company to handle its purchase of Yahoo e-mail, websites, and

:04:53. > :04:56.advertising tools. New figures suggest the association of Southeast

:04:57. > :05:00.Asian Nations is making an increasingly important contribution

:05:01. > :05:05.to the global economy. This year, it is estimated the combined economies

:05:06. > :05:09.of their ten members will be worth 2.6 trillion US dollars, which makes

:05:10. > :05:19.it bigger than India, the UK, and France. Also, it makes more than

:05:20. > :05:24.twice as much as Australia's economy. I asked what is driving

:05:25. > :05:30.this economic growth and will it continue? What we have seen for many

:05:31. > :05:37.years is that the ASEAN region has been growing strongly. But it has

:05:38. > :05:40.been below investors' radar because until ten years ago, it was less

:05:41. > :05:45.than 1 trillion. In the last decade we have seen phenomenal growth,

:05:46. > :05:52.particularly because Indonesia is a key driver for us when it comes to

:05:53. > :05:57.accounting for 40% of ASEAN. Private consumption is fuelling the growth

:05:58. > :06:00.of ASEAN more and more, with the big population is of Indonesia, the

:06:01. > :06:07.Philippines, and so on. Domestic consumption is a key driver of

:06:08. > :06:15.growth, but 2017, there will be a lot of red flags, vulnerabilities,

:06:16. > :06:17.for the ASEAN economy, like the new Donald Trump policies, Brexit, and

:06:18. > :06:22.the slowing Chinese economy. There are headwinds, like last year as

:06:23. > :06:29.well. But we expect their GDP to reach 2.6 trillion in this current

:06:30. > :06:35.year with a growth rate of about 4.6%. I think exports already were

:06:36. > :06:39.facing headwinds in the last two years. Many countries last year saw

:06:40. > :06:42.some negative growth in exports. More and more it is depending on

:06:43. > :06:48.private consumption and infrastructure investment. Quickly,

:06:49. > :06:53.what will be the top three ASEAN economies this year? In terms of

:06:54. > :06:56.pure economic rapid growth, it will be the frontier economies, plus the

:06:57. > :07:01.Philippines. The Philippines is doing well, which you will be glad

:07:02. > :07:08.to hear. Also Vietnam, Cambodia, Laos, they will be very strong. From

:07:09. > :07:14.IHS. One industry set to ride the waves of economic uncertainty in

:07:15. > :07:17.2017 is the cruise ship industry. 25 million people are expected to

:07:18. > :07:21.cruise this year. An increasing number of them are from Asia.

:07:22. > :07:29.Karishma Vaswani caught up with the boss of a cruise to find out more. A

:07:30. > :07:34.red carpet welcome for every guest. This is the boat here docking in

:07:35. > :07:38.Singapore for the first time. Cruising is still relatively new in

:07:39. > :07:44.Asia. It is seen as a holiday for retirees. Most of the passengers are

:07:45. > :07:49.from the US, Europe, or Australia. This ship, according to the company

:07:50. > :07:54.that owns it, is one of the most luxurious in the world. It is on its

:07:55. > :07:58.maiden for it to Asia. Asia is a massive market for the cruise liner

:07:59. > :08:02.industry. In China has become a particular focus, despite the fact

:08:03. > :08:07.that economic growth is slowing down there. Asia is a huge market. A

:08:08. > :08:17.large part of it is completely and penetrated, that is China. Plus the

:08:18. > :08:23.rest of Asia is growing. The middle-class is growing. Australia

:08:24. > :08:26.has been one of the fastest growing markets, growing almost 30% a year

:08:27. > :08:30.for the last ten years the bite economies in Asia are slowing down.

:08:31. > :08:40.China is still slowing down. Do you feel you have missed the boat? It is

:08:41. > :08:46.so and penetrated -- unpenetrated it almost doesn't matter. You can only

:08:47. > :08:51.produce so fast. They were unpenetrated. Even though things are

:08:52. > :08:55.slowing, there are many millions of people who can still and will

:08:56. > :09:00.cruise. It has not all been smooth sailing. A few years ago, more than

:09:01. > :09:07.30 people died after one of Carinval's ships, the Costa

:09:08. > :09:11.Concordia, thank. It spent years trying to build back its reputation.

:09:12. > :09:15.That was eight terrible tragedy. We learned some things from it.

:09:16. > :09:22.Something that had nothing to do with us. But we still want to

:09:23. > :09:26.examine it closely. We look at every incident that happens anywhere in

:09:27. > :09:31.the world. Since that time, of course, we have advanced a number of

:09:32. > :09:37.safety systems on the ships, which we do on a continuous basis anyway.

:09:38. > :09:41.Safety concerns do not appear to be dampening their prospects in the

:09:42. > :09:47.industry. At least a dozen new ships are set to hit the seas this year,

:09:48. > :09:50.and profits are soaring. They are finding new and younger passengers

:09:51. > :09:55.willing to take a cruise. But they might find that a challenge. BBC

:09:56. > :09:59.News, Singapore. And before we go, let us have a quick look at the

:10:00. > :10:02.Asian financial markets. As you can see right now on the screens,

:10:03. > :10:08.lacklustre in early Tuesday trading. This is after energy and financial

:10:09. > :10:12.stocks weighed on the US markets overnight ahead of the earnings

:10:13. > :10:16.season. You have Japan back in action after the holiday break. It

:10:17. > :10:22.is currently done by two fifths of 1%. Wall Street, they slept

:10:23. > :10:28.overnight by 76 points. The NASDAQ was up wide ten and three quarters.

:10:29. > :10:33.Thank you for in the thing your time with us. I am Rico Hizon. The sport

:10:34. > :10:34.news is coming up