13/01/2017 Asia Business Report


Similar Content

Browse content similar to 13/01/2017. Check below for episodes and series from the same categories and more!



Indonesia changes its tune on mining exports, relaxing two year ban. And


how the art world has lost its lustre, as buyers from China shy


away. Good morning Asia, hello world. It is a Friday, almost a


weekend. Glad you could join us for this edition of Asia Business


Report. I am Rico Hizon. We start off with Indonesia where the


government has done an about-face on its ban on raw mineral exports.


Indonesia will now allow exports of more unprocessed minerals, a big


change from two years ago when the government banned most exports to


force mining companies to process minerals within the country. The


President, Joko Widodo, explained his decision. TRANSLATION: We need


to make sure that our natural resources benefit our own people.


That's the founding principle, and our mining needs to be sustainable


and done with respect for the environment. Here is more now on the


change in the ruling from our Indonesia correspondent. Joko Widodo


they're talking about the environment, sustainable mining. It


is very unclear how these changes will actually protect the


environment. What this is really about is improving the economy and


creating jobs, it was one that ban on export of raw minerals was


introduced, two years the idea was that companies would build smelters,


employ Indonesians to process these minerals and keep more of the value


from Indonesia's mining in the country. But that hasn't happened.


What did happen was mines were closed across the country. There


were mass layoffs, companies very reluctant to build smelters, saying


it wasn't financially viable and so now this has had to be reviewed. The


government saying that now it will allow under some conditions of the


exporting of raw minerals to companies, but they need to show


that they will build a smelter in the future. So a kind of relaxing


out of a reality of a situation that didn't work. So what has been the


reaction, Rebecca, in the mining industry? Well, the nickel prices


have plummeted as a result, Indonesians are now back in the


market. The smelter Association and those involved in smelters are very


upset, as you can understand. A lot of Chinese companies did invest


billions of dollars into building smelters and their reaction has been


that this change of policy shows that Indonesia can't be consistent,


and doesn't send a concise message to the investment community. So they


are very upset. It is a mixed bag for the US mining giant Freeport.


They did stop the exporting of their partly processed copper as a result


of this ban. It now looks as if they will be able to resume so they will


be quite pleased with these changes. India's Tata group has named this


man as the conglomerate's new chairman. He replaces the previous


leader who was sacked last year. We are joined by the BBC's


correspondent. Tell us more about the new man at the top job. Did it


come as a surprise? No, actually, it didn't. When the previous chairman


was ousted last year and names were doing the rounds about who would


replace him, Natarajan Chandrasekaran was always a front


runner. He is someone who has spent his entire life in the Tata group,


he joined their IT firm in 1987 and rose through the ranks to become the


chief executive of that company in 2009, and now on 21 February it will


take over as the chairman of the Tata Group. But in many ways he is


an outsider as well, it was in the 150 year long history of the Tata


Group, he is actually the first chairman who is not from this very


close-knit Farsi business community which for decades has dominated


Indian business and even today holds great sway over business here. He is


well respected and lots of corporate bosses welcomed him becoming the


chairman. But of course, we will know how shareholders react to this


in about 2.5 hours from now, when markets open here. A self-made man


indeed. So what challenges of this new chairman face with leading the


largest conglomerate in India? Well, firstly, Tata Group has taken a


beating over the last several months because of this very public spat


over the ouster of the previous chairman. Serious questions have


been asked about corporate governance in the company, and so


that image is something Natarajan Chandrasekaran will have to look at


closely and work towards rebuilding. But of course his biggest challenge


actually comes from the business of Tata Group companies, this is a


group that owns more than 100 companies, they make tea, they make


cars, they make steel. And except for Jaguar, Land Rover and the IT


firm which Natarajan Chandrasekaran was heading, except for those


companies, all of the other companies, the business is in


trouble. It is about getting that business in order. That will be the


big challenge for him. We will have find out how he will fare in 2017.


Well, shares in Japanese airbag maker Takata jumped in Tokyo trade


on reports the company has reached a $1 billion settlement with the US


Justice Department. It is over the company's handling of airbags


rupturing, linked to 16 deaths worldwide and is part of the


agreement Takata will plead guilty to criminal wrongdoing. The


settlement includes a criminal fine as well as compensation cost. Shares


of fear Chrysler tumbled 15% on news the company has violated vehicle


emission laws. The company failed to disclose software in some of its


vehicles, which made it possible for access diesel emissions to go


undetected. Fear has denied the allegations. After years of


record-breaking gains, the art world is losing its shine. The economic


slowdown in China which caused rapid growth in the art market now means


no one wants to pay top dollar for the works of contemporary art is.


Our correspondent went to South Asia's largest art show to have a


look at how the slump is affecting the mood. There is all kinds of art


on display here, appealing to all kinds of tastes, including this one


by a Japanese artist. This is South East Asia's largest art fair, but


this year there are fewer galleries taking part and even the organisers


acknowledge that records are not likely to be broken. Over 130


galleries are here, but that is down from the 173 that the part last


year. At that is not worrying the man who put the show together. And


art market is always the mirror of a social and economic reality. In


other words, that is one thing. The other thing is we had in the last


year a hike in the market. What you have now in the future is going back


to normality. That means it is no more what is the biggest price or


the highest price, and I will tell you frankly, I'm glad we speak a bit


more about art and not about numbers. And, as an investment, art


is tricky because unlike equities or currencies the market is


unregulated. We don't know how prices are fixed. How they are


defined. And there are people inside the art world who are very well


informed, because they are in the inner circles of the art world. And


they know there are quite a lot of practices that are not transparent


and not very rational. One Asian collector who has come here for


years is this Indonesian man who has a collection of nearly 1000, mainly


by Indonesian artist. At the very beginning I started collecting


because of investment purposes but as a spent time with artists and


communicators, I realise that art is really about changing the


perspectives about life. Much more than those dollar signs. Between


July 2015 and June 26 in the contemporary art market shrank by


more than one quarter. Global auction turnover was down on the


previous year. The sharpest fall is in the Chinese market, where sales


were down by 23%, to 11.8 billion. These figures don't paint a pretty


picture, but the conventional wisdom is that if one of these catch your


eye, right now may not be a bad time to buy. Nintendo is betting its new


hybrid game console will be a hit. The Japanese game maker is releasing


more details on its console later this Friday, including how much it


would cost. Switch allows users to play games on the TV but with a few


adjustments it also becomes a portable device. Let's have a look


at the markets. We have about 30 seconds to tell you about it and as


you can see, the Nikkei 225 is up by about 100 points, and this is due to


a stronger dollar against the Japanese yen in Asian trade, which


is benefiting exporters. The Hang Seng index is also up by 50 points,


and the all ordinaries down by 47. Thank you for investing your time


with us. Have a great


Download Subtitles