04/04/2017 Asia Business Report


04/04/2017

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Russia is in mourning after a suspected terrorist

:00:15.:00:18.

More than 40 others were injured in an explosion at a train station

:00:19.:00:22.

Another homemade device was disabled by a bomb disposal experts.

:00:23.:00:26.

President Putin has laid flowers at a makeshift shrine

:00:27.:00:28.

He said all causes were being investigated.

:00:29.:00:33.

The US president, Donald Trump described it as a "terrible

:00:34.:00:36.

South Korea's tallest building, the 123-story Lotte World Tower,

:00:37.:00:43.

has officially opened in Seoul, with a truly spectacular fireworks

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A total of about 30,000 rounds of fireworks lit up

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suggestions that Britain might be prepared to go to war with Spain

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More from me coming up, but first, here is Marika with Asia Business

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Report. Britain's finance minister heads to

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India, looking for a new partnership as the Brexit process gets under

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way. And find out why Australia's top real estate firm says the

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property market there is set for a slow down.

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Good morning. Welcome to Asia Business Report, live from

:01:55.:02:04.

Singapore. One week after the UK triggered the process of leaving the

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European Union, Chancellor Philip Hammond is on his way to India.

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Businesses there are concerned about what kind of impact it could have on

:02:14.:02:19.

them. Our colleague in New Delhi spoke with the President at the

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European bank for Reconstruction and develop it. -- development. If it is

:02:24.:02:30.

a Brexit which results in the UK leading the single market and maybe

:02:31.:02:33.

not making any further contributions to the EU budget, if you take that

:02:34.:02:37.

extreme, that has significant potentially negative impacts on some

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of our operations, especially in south-eastern Europe. Bulgaria,

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Greece, those sorts of countries would be heavily affected. But it is

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a milder form of Brexit, where even if the UK leads the single market it

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is able to mimic some of the single market attributes in the new trading

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relationship, if it still makes some contributions to the EU budget, then

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the impact is actually pretty marginal. British Chancellor Philip

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Hammond is bringing a large delegation of British businesses

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here to try to drum up trade in India. You think India can really

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fill in that gap is a strong business partner for the UK. It

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certainly can. We have noticed in the country 's operating where we

:03:18.:03:20.

work, they used to depend, ten or 15 years ago, very much on western

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Europe as an economic locomotive. So you saw lots of supply in the supply

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industries, growing up to serve the German, French, Italian, British

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markets. That is changing as these countries increasingly look to Asia,

:03:37.:03:40.

including India and the Gulf of Persia, and the Far East, for new

:03:41.:03:45.

sources of investment. India was traditionally seen as a large

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recipient of international aid. You think that could change and India

:03:49.:03:52.

could become a significant donor? I think India needs to become more of

:03:53.:03:56.

a common aid donor. Lots of that aid in the past was tied to Indian

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suppliers, and most countries have moved away from tied aid to open

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market German. India should move in the same direction. -- open market

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procurement. India is a major shareholder in international

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institutions, and I think it should use that leveraged to ask questions

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about how the international, multilateral system, how does it

:04:19.:04:22.

need to reform and change to help these countries? India is one of the

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biggest importers of coal, and as you increasingly engage with the

:04:28.:04:31.

government here, how can use your expertise in clean energy to change

:04:32.:04:35.

that? We are helping them build up their renewables industry through

:04:36.:04:38.

projects that we have financed. It is interesting to see the Indian

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companies here also pushing on renewables, but also working with

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Indian companies now in the power sector, the renewables sector,

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outside of the traditional area of operations. There is plenty of

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opportunity for India to move on this front.

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In other business news, making headlines this morning, Kaesler has

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become the second guessed it US carmaker in terms of market

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capitalisation. -- Tesla has become the second biggest. At the end of

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Monday, Tesla stock was up by over 7% to close just below $300. That

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gives the firm and market cap of nearly $49 billion, which puts it

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ahead of Ford. This is despite the fact that the company only delivered

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25,000 of its high-tech vehicle so far this year into a car market

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which sold 60 million units in March. Inflation in South Korea has

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accelerated to any five-year high driven mostly by higher food and oil

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prices. On a year-on-year basis, inflation came in at 2.2%, which

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exceeds the bank of Korea's 2% inflation target.

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Many big multicast shall -- multinational companies say they are

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leading the way in providing benefits to lesbian, gay, bisexual

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and transgender or LGBT employees. But according to one of the world's

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biggest human resources consultants, much more still needs to be done for

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the changing workforce. A recent survey showed roughly one third of

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companies globally have no policies at all on LGBT employees. Only 28%

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have a separate policy that caters specifically to their needs.

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Earlier, I spoke with a representative from Mercer, the

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consultancy which ran the survey, and asked her if Asian employees are

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lagging behind in this area. You are right, diversity and inclusion is

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becoming an egg topic for many organisations. -- agenda topic. Asia

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has to play catch up, especially with respect to LGBT policies. In

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Asia we are faced around some constraints around cultural norms

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and religious constraints, and of course regulatory constraints as

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well that we have to battle with. If those big multinational companies

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face those challenges, how why the regional and local companies doing

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when it comes to those policies? It really needs to start with company

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philosophy around diversity inclusion, regardless of what topic.

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It needs to start internally a round HR policies, what you want to stand

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for when it comes to your benefit philosophy, your total rewards

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philosophy, how you want to practise equality, and what that actually

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looks like locally on the ground. So there are lots of things

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organisations can do internally despite having these constraints.

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You have mentioned some issues, such as religious beliefs, which can be a

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sensitive topic. Your study showed that 93% of companies offer the same

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benefits. Do you think Asia could ever get to that level. Definitely,

:07:48.:07:52.

I think so. Like I said, it needs to stand internally within the

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organisation about how they approach this and how they view it. It is the

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same with any diversity inclusion policy, even if it is the same as

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offering the same benefits, for example, to different agendas. We

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have seen lots of progress when it comes to offering the same maternity

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and paternity policies here in the region. I think this is something

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else that will also, we will eventually get there, that it needs

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to begin internally, and we need these organisations that are the

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trailblazers or that are leading the way and are a bit more progressive

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and are willing to push the boundaries.

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Let's turn our attention to Australia and its property market,

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as part of our week-long series. Home prices in Sydney are at 12

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times the household income, and the government is under pressure to help

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homebuyers. At the chief of the country's biggest real estate group

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says the market is already set to slow down. Hywel Griffith examines

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how the hot property market is affecting those looking for a home.

:08:54.:08:59.

Welcome to Sydney, where depending on who you believe, the housing

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market is either built on solid foundations or nestled on a cliff

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edge. In the last year, prices have gone up 18%. Melbourne and Canberra

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were not far behind. Swelled by investors, some fear Australia's

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uppity market will soon come crashing down. -- property market.

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For Heidi and Duke, that might not be a bad thing. Unable to buy, they

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have come up with a temporary fix, offering to renovate other people's

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houses in lieu of rent. As things are, they cannot afford to buy their

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own. It seems to be out of control. Every week we look at what is being

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sold and what is on the market and it is just going up and up and up.

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If you sit down and think about it, it is depressing. The prices keep

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escalating. It feels like they have almost doubled in five years.

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Worrying about house prices is a Sydney staple. When one newspaper

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suggested people should give up that smashed avocado breakfast in order

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to save for a place it provoked an outcry. The Australian government

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has been urged to come up with more palatable solutions in May's budget.

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One idea is to cut the tax breaks available to investors, who buy to

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rent and keep prices rising. A really obvious strategy is simply to

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reduce the generosity of the tax subsidies available to investors

:10:23.:10:29.

through negative gearing, and also a very sharp discount on the capital

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gains tax which is available to investors. If we do that, we have

:10:33.:10:35.

removed some investors from the demand side of the equation and I

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think we would probably see an immediate price relief. But from his

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unique vantage point, the head of the country's biggest real estate

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business thinks that would be catastrophic, having worked through

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several boom and bust cycles, he is convinced a price correction is

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coming and the government should be cautious. There is a huge sector in

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the community which says we have to do things to bring prices down, and

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they are expressing this quite happily. Any time government has

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done that it has been catastrophic in terms of the community response.

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People who own homes normally do not hit the streets, but they certainly

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start to, if they feel, my property value is going down, if it is being

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put at risk. Next month's budget will be the government's opportunity

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to calm the waters and try to make sure the market doesn't crash out.

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In the markets, though this is how Asia started trading. Japan's Nikkei

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down by 0.6%. Shares in Toshiba continue to fall by over 4% on

:11:44.:11:47.

reports it might miss its earnings deadline again. That is all from

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this addition of Asia Business Report. Thank you for watching.

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