16/01/2017 Asia Business Report

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

The pound is falling sharply in Asian trade ahead of the big Brexit

speech by Theresa May. The billion dollar fine and admission of guilt -

is this the end of the Takata nightmare? Hello and welcome to Asia

Business Report. The British pound is under pressure, falling on

speculation the UK is moving closer to exiting the single market of the

EU. Trading just below a dollar 20. The first time it has fallen that

level since October. I think it is a confluence of not just expectation

about the speech, and it seems some of the key details have been leaked

over the weekend, but it segues nicely to Philip Hammond's comments

that if the UK needed to recalibrate its economy, it would. Taken

together has meant traders in Asia have taken at the signal we are in

for a hard Brexit and that is what Theresa May will signal. We know

that the pound has really been the one asset subject to all kinds of

volatility whenever there is talk of a hard Brexit - will there be any

stability for the currency? I think there is a self curing element to

the sterling weakness. Before Brexit, we even got up to $1.50. Now

we are down around a dollar 20, a big list to the UK economy. Traders

will be focusing on the October line. We could see some heavy

selling but if that level can hold, people can recognise that the UK

economy was in good shape over the last six months of 2016 relative to

expectation and sterling weakness continues to give expert, British

industry and services, a lift as we go forward. It is a self curing

element that traders are still wary. Takata shares are slumping after

announcing a deal with the US government which will pay $1 billion

and plead guilty to criminal wrongdoing due to those bags. We saw

the shares rising over 60% on Friday, they are now slumping by as

much as 10%. -- 16% on Friday. It shows you the difference in

sentiment in Tokyo as compared to the US will is not on Friday, the

shares trade at up seeing %. A big drop in Tokyo. This is a reflection

of the fact that people think the company is not out of the woods as

far as its troubles are concerned. It is facing a billion-dollar fine-

$25 million to the US government, 100 and $25 million compensation to

the victims of the faulty airbags. And also a fine to the makers. It

has to come within the next 30 days - $150 million. We do not know how

bad its financial situation is that it must be presumed it is not good

because it has a ready set in need is to find a new finance to help it

through this crisis. What happens next to this company? Will they have

to file for bankruptcy? They need to get new financing and they said

after this deal with the US government, they are hoping to draw

a line under this problem and to move on to find new financing for

the company but to put the problems in perspective, 12.5 million bags

have been replaced. Up to 40 million have to be replaced and 70 million

worldwide full of that is a huge bill for the company. It seems to

suggest there will be further problems to follow fault Takata. The

company shares and down 4% at the moment. Prosecutors in South Korea

have delayed the decision whether to arrest the air to Samsung until

Monday. He has been investigated over a scandal linked with a Park

Geun-hye. China's President, Xi Jinping will attend is a summit in

Switzerland. We explain the significance of his attendance. He

really will be the star of the show. It is a time when not many world

leaders are coming. A weakening Chinese economy and a weakening

Chinese currency. The President will be under great pains to tell the

world that they should have confidence in China's economy and

that they will play an important and responsible role on the world stage.

This is how the Chinese currency has fared. There is a battle between

market forces and what the Chinese central bank has been trying to do.

The Chinese currency has really weekend against the US dollar

because market forces are trying to push the currency lower. At the same

time, the People's Bank is trying to strengthen the currency because a

weak currency, though good for experts, is bad for the confidence

of the economy and we have seen millions, if not billions of dollars

poured out because of concerned citizens. One of the biggest themes

will be growing inequality which may be growing even further. Oxfam

claims a group of men they can fit into one golf buggy on the same

wealth as half the world. The top eight billionaires have as much

wealth as 3.6 billion people who make up the poorest half of the

world. India's first international stock exchanges have started

trading. It will allow foreign investors to trade on products

listed in one is expanding bond markets. Mestalla bonds are hoped to

be traded. First off, but are they and how will they help? There were

some bonds and then from China. We had a club and then came along the

Indian version - marsala, named after the word for spice in India.

What are they? Bonds are a form of debt, essentially the investor

serves as the bank. A company, a government or a city some money and

they promised to pay you back in full with regular interest payments.

The problem for Indian banks is that they could only raise money and we

pay in foreign currencies like the dollar but that is a risky because

currencies fluctuate. Entering Mestalla bonds - the investor takes

on the currency risk by trading in rupees. Well overseas investors join

the party? While India's national income is rising and the economy is

expected to grow rapidly, Mestalla bonds are the high your returns for

investors compare to the US and Europe where interest rates are

still low and it works out well in there as well. It means money to

spend on things India really needs, like roads. Infrastructure, they

plan to spend more than $1.5 trillion. Long-term investment could

be the potential depreciation of rupees which could hurt the returns.

The Indian companies, too much reliance on debt is risky. Sometimes

too much spice is not very good. Let's take a look at the markets. In

Asia we are seeing declines stop women talking about the losses in

the shares of Takata, the airbag manufacturer. Sentiment is also

impacted by the fall in the British pound ahead of the crucial speech by

the Prime Minister of the UK. Thank you for