18/05/2017 Asia Business Report


18/05/2017

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

:00:00.:00:20.

Asian stock markets sell-off from Wall Street. Why investors in the US

:00:21.:00:27.

and Asia are worried. A big push out of China, how long will it take for

:00:28.:00:31.

Alibaba to succeed in the American marketplace? Good morning, Asia.

:00:32.:00:42.

Hello, world. Thank you for joining us that this Thursday edition. We

:00:43.:00:49.

start off with the markets. As you can see right now, the Nick A

:00:50.:00:53.

kicking off the first day trading session down by 1.4%. 270 points,

:00:54.:00:59.

tracking falls on Wall Street overnight on worries about

:01:00.:01:03.

Washington. We also have the All Ordinaries index giving back 1.2% in

:01:04.:01:09.

early trade. US shares extending losses following reports of a memo

:01:10.:01:13.

by James Comey suggesting that President Trump had tried to

:01:14.:01:16.

interfere with a federal investigation. That has made the US

:01:17.:01:24.

investors depressed. Down by 1.8% overnight and the NASDAQ losing a

:01:25.:01:30.

hefty 2.6%. That leads to concerns that political turmoil could get in

:01:31.:01:33.

the way of the business friendly policies of the President, such as

:01:34.:01:38.

the much anticipated tax cuts and infrastructure spending. For more

:01:39.:01:45.

were joined in our studio. Karishma, all of these controversies from

:01:46.:01:53.

Donald Trump, they are depressing the sentiment of investors?

:01:54.:01:56.

Absolutely. You don't even need to watch house of cards any longer,

:01:57.:01:59.

just turn on the news every morning. In all seriousness, look at the way

:02:00.:02:04.

it that stocks and shares in Asia have reacted to the USA. Earlier on,

:02:05.:02:09.

the Japanese stock exchange was down and that is despite the fact that

:02:10.:02:13.

economic growth figures out of Japan coming out today were better than

:02:14.:02:19.

expected, up by about .5%. Quarter on quarter they continue to show

:02:20.:02:22.

strong growth. Investors are struck off the good news instead taking

:02:23.:02:28.

their cue from Wall Street. A lot of this is, of course, because of the

:02:29.:02:33.

rush to save face and like the Japanese yen. Overnight we saw the

:02:34.:02:37.

Japanese yen strengthening as a result of the anxiety among

:02:38.:02:39.

investors. That is typically what happens. As a result, the big

:02:40.:02:46.

exporter stocks in Japan on the Nikkei, tended appreciate because

:02:47.:02:50.

there earnings are affected by a stronger yen. Overall this is

:02:51.:02:53.

current political sentiment in the US which affects and makes Asian

:02:54.:02:59.

markets nervous. This negative mood, is it all about the Trump

:03:00.:03:04.

controversy was to mark how about European politics and the North

:03:05.:03:10.

Korea issue and US earnings? Does that play into the picture still?

:03:11.:03:14.

The main focus right now is very much what is happening in

:03:15.:03:17.

Washington. In a sense, Asia can take some heart from that because at

:03:18.:03:22.

some point, investors here are going to say hold on, our economic

:03:23.:03:26.

fundamentals are still strong and they are still company proffered

:03:27.:03:29.

earnings reporting solid results. The ongoing political situation in

:03:30.:03:33.

the US does not appear to have any end in sight but while that trundles

:03:34.:03:38.

on, Asia will start looking to the other big partner, the neighbour,

:03:39.:03:41.

the giant in the neighbourhood, and that is China. I expect to see more

:03:42.:03:46.

deals in our relationship growing in the days and months to come. Thank

:03:47.:03:50.

you grew much for that update on the Asian market story. Moving out

:03:51.:03:57.

corporate news and Alibaba, the e-commerce giant from China will be

:03:58.:04:02.

reporting today. A key part of its strategy is connecting the huge

:04:03.:04:05.

consumer market in China with US entrepreneurs. It is something that

:04:06.:04:11.

Jack Marx spoke about with the US President is we report from New

:04:12.:04:24.

York. -- Jack Ma. He is a great entrepreneur and he loves China. For

:04:25.:04:28.

President Trump, the best way for Jack Ma to show is lots of this

:04:29.:04:32.

country is to make it easier for Americans to their goods to China.

:04:33.:04:37.

This sneak a shot in Manhattan is an example of just that. Stadium goods

:04:38.:04:42.

has a physical store but 90% of its business is done online. Since

:04:43.:04:46.

August, they had been selling on Alibaba and it has been a big boost

:04:47.:04:50.

to their sneaker empire. We do over $100 million this year and it is

:04:51.:04:56.

about 20% of our business. They run a start-up which has refreshing. We

:04:57.:05:01.

can channel partnerships with other large marketplaces. We deal with...

:05:02.:05:08.

They treat us like we are trusted, you know, multibillion dollar

:05:09.:05:14.

company. The leader of China's biggest e-commerce retailer has big

:05:15.:05:17.

ambitions. He wants to bring 1 million American businesses to China

:05:18.:05:22.

and 2 billion customers in the next decade. They have been talking about

:05:23.:05:26.

making a big push outside of China for the last few years. Since they

:05:27.:05:31.

became a public company, really, and perhaps even prior to that when they

:05:32.:05:35.

filed to come public a number of years ago at this point. When you

:05:36.:05:39.

look at their revenue base, it is almost entirely contributed by

:05:40.:05:43.

China. So they may very well have aspirations and they may very well

:05:44.:05:47.

talk about that but the numbers suggest there is a lot of work to be

:05:48.:05:52.

done on that front. Mr Ma is not afraid of hard work. He will be in

:05:53.:05:57.

the US next month to make his pitch directly to US businesses. It just

:05:58.:06:05.

may be an uphill battle. Some of the biggest defence contractors in

:06:06.:06:08.

Singapore this week that the maritime defence exhibition and

:06:09.:06:13.

conference. Is taking place against a backdrop of heightened uncertainty

:06:14.:06:16.

about regional security. My colleague was at the event and she

:06:17.:06:22.

met with an Italian contractor. This is the kind of patrol vessel on sale

:06:23.:06:31.

here. This goes at 55 knots it has antiship missiles as will on the

:06:32.:06:35.

back and it is built by an Italian manufacturer that is also known from

:06:36.:06:42.

their luxury yachts. I am speaking to Juliano. Who are you selling

:06:43.:06:48.

these crafts to? All the countries of this region are facing an

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increasing threat from very aggressive attacks to their

:06:55.:07:00.

economies, their people and their safety and our boats are

:07:01.:07:03.

specifically designed for this purpose. And you are finding that

:07:04.:07:07.

there are more people purchasing from this region because there are

:07:08.:07:12.

concerns around South China Sea and disputed territories? Well, the

:07:13.:07:15.

disputed territories of course is a subject and I think that all of

:07:16.:07:20.

these countries are facing more direct economic issues, direct

:07:21.:07:25.

threats because they believe that there economy has to be defended

:07:26.:07:30.

from illegal traffic. And that is what our boats are built for. And

:07:31.:07:35.

who are you selling specifically to? Which countries have shown interest?

:07:36.:07:42.

The countries are Singapore where the exhibition takes place.

:07:43.:07:44.

Thailand, the Philippines, Indonesia, Malaysia, all these

:07:45.:07:49.

countries have the same issues and all these countries are showing a

:07:50.:07:55.

lot of interest in our product. That was the maritime defence exhibition

:07:56.:07:58.

in Singapore. Chinese online giant 10 cents has defeated expectations

:07:59.:08:04.

with a 15% jump in its quarter profitability thanks to strong

:08:05.:08:07.

growth in gaming and digital payments. The company looks set to

:08:08.:08:12.

expand its digital music services. It has signed a deal with universal

:08:13.:08:16.

music for exclusive rights to its catalogue in China. Will the deal

:08:17.:08:21.

merely be popular instead of profitable?

:08:22.:08:32.

So here I am, like so many people in this city, grooving through my daily

:08:33.:08:43.

existence, listening to music available via phone. All completely

:08:44.:08:48.

free. Now I'm not talking about piracy. In China, technology do

:08:49.:08:54.

giants operate platforms which offer a huge amount of music, all

:08:55.:09:01.

completely free. So why would I pay for it? Well, little by little, 10

:09:02.:09:10.

cents is trying to win its customers -- wean its customers off free

:09:11.:09:20.

music. The extent to which it is ultimately successful in this

:09:21.:09:24.

endeavour is going to be crucial for universal music which has just

:09:25.:09:28.

signed on with the company to have its product delivered by their

:09:29.:09:33.

platforms in China. To get on board as a paying customer is not what of

:09:34.:09:37.

money. Only a couple of dollars a month. But our people willing to

:09:38.:09:43.

part with our hard earned cash for better access to music?

:09:44.:09:58.

Universal signed this deal with Tencent knowing that it has 15

:09:59.:10:03.

million subscribers. More significantly, it also knows that

:10:04.:10:14.

Tencent has hundreds of millions of active users each month waiting to

:10:15.:10:25.

become paying customers. Dance into the music there. Thank you for

:10:26.:10:27.

investing your time with us.

:10:28.:10:30.