21/02/2017 Asia Business Report


21/02/2017

Live from Singapore, the essential business news as it breaks and a look ahead to the news that will shape the business day.


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the force be with your wallet. Why parents in Asia are spending so much

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a birthday parties like this. It is Tuesday. Glad you could join us for

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this edition of Asia Business Report. I'm Rico Hizon. The new Tata

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group chairman takes up office today, ending one of India's most

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public boardroom spats. A bitter feud was sparked with its

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predecessor, when he was fired last year. Tata owns more than 100

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companies and is one of the oldest businesses in the country. So what

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are the top issues waiting for the new boss?

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Seeking divine help, this man is all set to lead one of India's oldest

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businesses, the Tata Group. He is the first person out of India's

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community to be appointed to the post. After an acrimonious stand-off

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with its previous chairman, it will be a huge shift here at the

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headquarters of Tata. He is the seventh chairman of the Tata Group.

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He spent his entire professional life inside the group. He is popular

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amongst employees and has long in the favourite for the new role. It

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is lower -- it is largely accepted that the task ahead of him is

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nothing more -- short of monumental. The Tata Group has interests ranging

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from steel and cars to salt and tea. But many other companies have been

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struggling in recent years. Luxury car maker Jaguar Land Rover and TCS

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are generating enough profits to keep the group afloat. Together they

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account for more than half of the combined revenues. So Natarajan

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Chandrasekaran's first challenge would be to reduce the dependence on

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these two businesses and turnaround others.

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His second big challenge will be making a decision the future of Tata

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Steel in the UK, when it has suffered heavy losses. Union workers

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backed the move towards saving Britain's largest steel producer.

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His other challenge will be the global uncertainty are round the IT

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industry. TCS is the jewel in the crown for Tata Group, contributing

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40% of its profit. But that's now threatened as a new US bill aims to

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limit the entry of high skilled workers. With over 100 group

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companies, many analysts compared the Tata Group to a lumbering

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elephant, but Mr Chandrasekaran has the experience and many hope he will

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have success with a conglomerate. There is indeed a gift for

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shareholders, as he takes over today. The group's outsourcing

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company says it will spend a whopping 2.4 million dollars to buy

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back shares. TCS shares jumped on Monday after the company said it

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would buy back their shares at a price 20% higher than on Friday.

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Moving to other news making headlines. Trading in shares of

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Fairfax media have been halted this morning news that the company is

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considering is reeling off domain. That is its online real estate

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classified business. Major shareholders have been asking

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management to sell Domain, which they believe could be worth billions

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of dollars. Toshiba wants to raise nearly $9 billion by selling a

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majority stake in its business, according to Reuters. The troubled

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Japanese companies under pressure to raise money after revealing a $6

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billion write-down due to its US nuclear business. Part of the

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company has been reluctant to sell a majority stake.

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Unilever's rejection of a merger with Heinz has seen the stock fall

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by 9%, before clawing back some losses to close about 7% lower. The

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sharp fall follows the collapse of a takeover deal which would have been

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the biggest in corporate history. Banking giant HSBC reports its

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full-year numbers later today. The shares have surged over the past six

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months in part course of a $2.5 billion buyback programme. Also a

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weaker pound since Brexit mail, it was the UK-based lender does most of

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the business abroad. Andrew Sullivan explained what we can expect. They

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would have turned to profit in the last quarter, which will be

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encouraging. A lot of that is because the year-on-year basis is a

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very bad quarter in 2015. It was a disaster, the last quarter. Yes. But

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things have been improving. We put a lot of structures in place.

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Cost-cutting was one of the majors things mentioned last year, so it

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will be interesting to see how far they've got with that. Will the bank

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react to potentially 2-3 rate hikes in the US this year? A rate hike

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should be good for them. That interest margin should increase as

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the rates go up, but it is still a very competitive with us. It is not

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like they can immediately erase the rates. It is competitive and they

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will have to stay on their toes. What about return in equity in their

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Hong Kong business? The Hong Kong business has held up quite well and

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one of the key thing is what they will do with the US. You mentioned

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share buybacks. A lot of that has come out of cash they taken out of

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US operations, but obviously with Trump saying you have to be in

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America to deal with America that could be problems with that.

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Speaking of President Trump, trade finance is an integral part of

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Asia's business and they have major businesses in China and Mexico,

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which are currently the focus of President Trump. -- HSBC's business.

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What will they do? I think they will focus on saying we still have the

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household industry, we are still HSBC USA, which will be crucial.

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Obviously a lot of the money last year came out of the share buybacks.

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The question is that it opens them up to the regulators as well. That

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was Andrew Sullivan on HSBC. How much money did your mum spend on

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your fifth birthday party? These days children's parties are becoming

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increasingly more elaborate and expensive. As part of our business

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of kids series, we met some top-notch party planners who are

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cashing in on the opportunity. Laser lighting, storm troopers,

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Darth Vader. It looks like a big old way production, but it's not. It's a

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kids birthday party in Singapore, which cost $150,000. Planning such

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parties has become big business. Meet Tanya, the party plan behind

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this costly soirees. She sorts everything out from the Cape to the

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venue and even doubles up as an entertainer. Are you ready to have

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some fun? Boast of them have an idea of how much they will spend. We

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don't mention money to the kids, as the kids are just kids and they

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don't understand that concept. But if the kids really want to have a

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particular thing, then the parents might go, OK, we will have it. On

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average parents coming to her have budgets of just over $2000 for kids

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as young as one. But it would always need a party planner. For parents

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like this, a party for their 100 day old baby is more than just a fun

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celebration. It is part of tradition. Historically, it is kind

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of like the Chinese one-month party, a celebration to say we are out of

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the woods, the baby made it. These days it's a little bit more like the

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parents are still alive after 100 days. They've invited their friends

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to an ice cream themed party and are giving it the personal touch. In

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line with the trend of big budgets, it is being held at one of

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Singapore's most luxurious hotels, where celebrities like Madonna have

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stayed. High end event planner augur offers advice. I think it's a bit of

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peer pressure. -- plan A Olga. If one person holds a big party is an

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indication for other parents to do a similar thing. So as parents strive

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to create memories of that special day, it could also mean a lot of

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money going up in a puff of smoke, law and after the candles are blown

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out. Expensive parties for young kids!

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YouTube plans to scrap the 32nd advertisements that you normally can

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skip. You won't have to watch them on the video stream service from

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next year. Google confirmed the plans want to focus on formats that

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work well for users and advertisers. Before we go, a quick look at the

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markets. As you can see on the screen is trading is very thin in

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Asia at the moment. This is because US markets remain shut for the

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holidays. Wall Street reopens and investors await reports on economic

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data and minutes from the Fed's meeting. Thanks for investing your

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time with us. Sport Today is a

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