10/01/2017 Asia Business Report

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

Investors are loving it. Donald Trump sells a $2 billion stake in

his trainees operations. And we take a look at whether it will be smooth

sailing or choppy waters for the cruise ship industry in 2017. Good

morning, Asia. Hello, world. I'm Rico Hizon. Welcome to Asia Business

Report. It's a Tuesday. Glad you could join us. We start off with the

fast food giant McDonald's and its decision to sell a controlling stake

in its business in China and Hong Kong, a sign of another company

admitting they need help in this huge and unique market. In a $2

billion deal, the Chinese state owned conglomerate Civic will take a

stake. Coni Group will take a 28% stake. McDonald's will be holding on

to the remaining 20%. Earlier, I spoke to someone and ask them if the

sale is a good move for McDonald's? This will help them a lot. If you

look at how McDonald's has performed in China over the last couple of

decades it has done quite well but is still looking to expand further

into third and fourth tier markets. They need cash to do that so this is

how they can do that without the bottomline taking a hit. Has China

become a revenue burden for McDonald's? It has. If you look at

the quick service restaurant space in the last two years consumers have

been more concerned about their health and safety issues and have

cut back on spending. That has helped to Mark Hurd McDonald's. But

growth is coming back a little bit. There is still room to adapt and

that is what McDonald's is banking on going forward. Do you think these

two groups that have no experience in the food and beverage business

will be able to grow the food and beverage business of McDonald's? The

challenges they do not have a lot of experience in that market. On the

flipside, they have a lot of experience in China and have good

real estate connections in China. That is the name of the game in

China. Can they get good locations and spend the money to refurbish

their stores? They have a strong team in the Chinese market. They can

use that to adapt the menu. They need the cash to allow them to open

new restaurants quickly. Do you think the new ownership taking a

majority stake in the China business will affect customers? I don't think

the average customer is going to know or care that much. As long as

the restaurants continue to work well. McDonald's is a good visual

presence. Ordering is efficient in store. If they can maintain that,

consumers will be happy to continue to go. China market research in

Shanghai. Shares of Japanese pharmaceuticals are currently, as

you can see, they are trailing for the first time and are up 1%. That

is since they said they would buy another company for 4.7 billion US

dollars. They make drugs for patients with rare cancer. They are

paying for each added share. That is nearly 75% more than the previous

closing price. It is a big day with Alibaba. 8.6 billion-dollar

agreement with Hong Kong to privatise the department store. The

company has accepted the chairman Jack met Donald Trump. The company

claims it can create 1 million US jobs by helping small businesses

sell their products to China and Asian consumers. Here is what he had

to say about the meeting. We talked about small business and young

people and American agriculture products in China. And we also think

that China - US relationships should be strengthened and the more

friendly. That was Alibaba's Jack Ma. The Chief Executive will not

join the board of the newly created holding company once it has killed

with Verizon completely. -- made a deal. They are creating a new

company to handle its purchase of Yahoo e-mail, websites, and

advertising tools. New figures suggest the association of Southeast

Asian Nations is making an increasingly important contribution

to the global economy. This year, it is estimated the combined economies

of their ten members will be worth 2.6 trillion US dollars, which makes

it bigger than India, the UK, and France. Also, it makes more than

twice as much as Australia's economy. I asked what is driving

this economic growth and will it continue? What we have seen for many

years is that the ASEAN region has been growing strongly. But it has

been below investors' radar because until ten years ago, it was less

than 1 trillion. In the last decade we have seen phenomenal growth,

particularly because Indonesia is a key driver for us when it comes to

accounting for 40% of ASEAN. Private consumption is fuelling the growth

of ASEAN more and more, with the big population is of Indonesia, the

Philippines, and so on. Domestic consumption is a key driver of

growth, but 2017, there will be a lot of red flags, vulnerabilities,

for the ASEAN economy, like the new Donald Trump policies, Brexit, and

the slowing Chinese economy. There are headwinds, like last year as

well. But we expect their GDP to reach 2.6 trillion in this current

year with a growth rate of about 4.6%. I think exports already were

facing headwinds in the last two years. Many countries last year saw

some negative growth in exports. More and more it is depending on

private consumption and infrastructure investment. Quickly,

what will be the top three ASEAN economies this year? In terms of

pure economic rapid growth, it will be the frontier economies, plus the

Philippines. The Philippines is doing well, which you will be glad

to hear. Also Vietnam, Cambodia, Laos, they will be very strong. From

IHS. One industry set to ride the waves of economic uncertainty in

2017 is the cruise ship industry. 25 million people are expected to

cruise this year. An increasing number of them are from Asia.

Karishma Vaswani caught up with the boss of a cruise to find out more. A

red carpet welcome for every guest. This is the boat here docking in

Singapore for the first time. Cruising is still relatively new in

Asia. It is seen as a holiday for retirees. Most of the passengers are

from the US, Europe, or Australia. This ship, according to the company

that owns it, is one of the most luxurious in the world. It is on its

maiden for it to Asia. Asia is a massive market for the cruise liner

industry. In China has become a particular focus, despite the fact

that economic growth is slowing down there. Asia is a huge market. A

large part of it is completely and penetrated, that is China. Plus the

rest of Asia is growing. The middle-class is growing. Australia

has been one of the fastest growing markets, growing almost 30% a year

for the last ten years the bite economies in Asia are slowing down.

China is still slowing down. Do you feel you have missed the boat? It is

so and penetrated -- unpenetrated it almost doesn't matter. You can only

produce so fast. They were unpenetrated. Even though things are

slowing, there are many millions of people who can still and will

cruise. It has not all been smooth sailing. A few years ago, more than

30 people died after one of Carinval's ships, the Costa

Concordia, thank. It spent years trying to build back its reputation.

That was eight terrible tragedy. We learned some things from it.

Something that had nothing to do with us. But we still want to

examine it closely. We look at every incident that happens anywhere in

the world. Since that time, of course, we have advanced a number of

safety systems on the ships, which we do on a continuous basis anyway.

Safety concerns do not appear to be dampening their prospects in the

industry. At least a dozen new ships are set to hit the seas this year,

and profits are soaring. They are finding new and younger passengers

willing to take a cruise. But they might find that a challenge. BBC

News, Singapore. And before we go, let us have a quick look at the

Asian financial markets. As you can see right now on the screens,

lacklustre in early Tuesday trading. This is after energy and financial

stocks weighed on the US markets overnight ahead of the earnings

season. You have Japan back in action after the holiday break. It

is currently done by two fifths of 1%. Wall Street, they slept

overnight by 76 points. The NASDAQ was up wide ten and three quarters.

Thank you for in the thing your time with us. I am Rico Hizon. The sport

news is coming up