27/03/2017 Asia Business Report


27/03/2017

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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Carrie Lam will become Hong Kong's new chief executive. But what the

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new leadership mean for the economy? And what to look for in buying a

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piece of art. We get a few tips from the experts.

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Hello and welcome to Asia Business Report. I'm Sharanjit Leyl. A 1200

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strong committee dominated by pro- Beijing executives have elected

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Carrie Lam as the new Hong Kong chief executive. She has promised to

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heal wounds over Beijing's industry. With a slowing economy in mainland

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China, she could be facing economic headwinds. I spoke with research at

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Peter Church at that the issues that will be at the top of her agenda. In

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Hong Kong, the affordability question on housing has been a huge

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economic and political hot button in Hong Kong. And if you look at it

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rationally, it is really a supply it generated a problem. Hong Kong has

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been producing less than half of the long-term average supply of housing

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in the last decade. So there is a massive shortfall of housing that

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has built-up. You put that in context of very low interest rates,

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and you can see, you don't have to be an economics Ph.D., to understand

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that prices will go up. And besides property, there are other issues.

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There are a lot of concerns about whether Hong Kong, which has always

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been seen as the gateway to China, can remain relevant as a financial

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hub. Especially as there are many Chinese cities perfectly capable of

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playing that role as gateway to China. So how will they remain

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relevant? There are a lot of areas. Hong Kong, as you say, has always

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been the conduit of Finance and financial services into and out of

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China. That role should continue. But probably what needs to be done

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is more of a focus on areas such as wealth management and harnessing the

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flows of capital out of China and into the rest of the world through

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what is in fact a rule of law economy that can't really be

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replicated in China. I think we can also expect to see the government

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pushing for improvements in legislation, which allows Hong Kong

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to participate in change issues like the one built one road and the Asian

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investment banks. So those areas where we expect to see the

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government puts focus that was Peter Church speaking to me earlier.

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Shares in Toshiba are higher on news that Westinghouse could file for

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bankruptcy protection as early as Tuesday and is seeking support from

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Korean alleged power. Toshiba's gains come against a backdrop of a

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broader market downturn this morning. The fund now has 70 member

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countries, with 13 joining just last week. Including Canada. The former

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British minister Danny Alexander told me the international make-up of

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the 80 I ID means it is not possible for the Chinese to promote their own

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interest. Above others. -- AIIB. People can actually see now that

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this is an institution that has very high standards of international

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governments. All members are involved in our decisions. We have a

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well functioning board of directions. John has one seat

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amongst well. Many other countries are represented on that board as

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well. -- China has one seat amongst 12. Most important, the standards we

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set for our projects, in terms of environment will impact and how

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social issues like population resettlement are dealt with. The

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access of countries to access these issues and affect how we deal with

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them in funding. -- AIIB. There has been a lot of focus on the Chinese

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one belt, one road process, which is a push to develop like the silk

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road. Those are projects that you are funded. It seemed to suggest,

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though, that this is closely and lined to China's international

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interest. If you look at the projects that we find, so we

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wondered that a slum upgrade project in Indonesia. We funded a new

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gas-fired power station in Myanmar, upgrading hydroelectric power

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schemes in Pakistan. With these sorts of projects all over the Asia

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region. Some of those things will overlap with the one belt, one road

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policy. Many are different from it. At the end, the bank meets its own

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decisions, about what are the appropriate things to find. There

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are important policies of many different governments that are

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considered. All the member countries have a role in that. So we must make

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sure that in each country we are working according to the direction

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that the government has set and the international agreements that they

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have signed up to. And that was Danny Alexander speaking to me.

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History will be made in Europe this week as a new entrant into the

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mobile market appears. Britain will trigger Article 50 on Wednesday.

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This will officially begin the process of breaking away from the

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European Union. Also on that same day, you have Samsung, they are

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scheduled to release the Galaxy S8, which was the U replacement for the

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Galaxy Note 7 that was recalled for exploding batteries. I spoke earlier

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with Andrew Staples and asked if the Brexit honours will have an

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immediate effect. Just in the process, this is something we have

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been waiting for for the last nine months. This will trigger a two year

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period of negotiation for UK to leave the EU. Here in Asia, I think

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the impact will be minimal. Certainly in the short term, there

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could be some volatility around the pound sterling. But that has been

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priced into the market over the last months and weeks. Longer term, there

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will be continuing questions over the UK's attractiveness as an

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investment destination. Of course, a lot of Asian investment goes to the

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UK, particularly thinking about the Japanese auto sector and so on. But

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we have seen positive news from people like Toyota and Nissan who

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have confirmed their commitment to the country. There will be

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uncertainty over what kind of relationship the UK will have with

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the European Union following this two year period. You have mentioned

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Toyota there, at Nissan, and Toyota said they would invest in Britain,

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but they are warning that they need terror free access to the continent.

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Is that something our businesses should be looking out for?

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Absolutely. But that will not become clear any time soon. There is this

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two year period of negotiation. There is scepticism as to whether we

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will reach a deal in that time. If we don't, then we will revert to WTO

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access to the EU. Which would not be preferential for people like Toyota.

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And the other news of course is the S8, which comes after the exploding

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Galaxy Note 7 is, and comes in a political crisis in which there are

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factor boss has effectively been put in jail. Will this be everything

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they hope for? Certainly hoping so. They need to pull something out of a

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hat given the political situation in Korea and the difficulties that

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Samsung have had over recent months, as well. Let's see how the market

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response that, especially consumers. Nearly 80,000 people visited Asia's

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biggest art fair in Hong Kong this weekend. The organisers of Art Basil

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said sales were strong and tapped into a grey market in Asia for

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high-end art. We asked to art experts for their tips on buying. --

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Art Basel. The first thing I will tell a young collector is to take

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your time. Don't rush into anything. Find a good dealer, a good adviser,

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you can trust. Trust is very important. And then engage with

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them. You should know the artist's basic background, such as where they

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were educated or how they started. What is, how he developed to this

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style. Then you make a combination of judgement. A work of art is not a

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cheap thing to get involved with. And I will always tell them, by the

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best quality. And if it doesn't hurt when you purchase it, don't buy it.

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I encourage the young collector to buy artists more or less the same

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age. The reason is I think after 30 years or 40 years, you will look

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back and you will have grown at Canterbury to the others. I think

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this is a wonderful and special memory for the collector. And that

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was investing in art. Let's look at investing markets. Not great this

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morning. You can see the Nick Cave and a stratum markets have opened

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lower. -- Nikkei. That is it for Asia Business Report. Thank you for

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watching. -- Australian. Welcome back. You're watching BBC

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News. We bring you up with the

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