14/07/2017 Asia Business Report


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14/07/2017

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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of the Grenfell Tower disaster. Combustible cladding and

:00:00.:00:00.

installation has now been found in around 200 high-rise buildings. --

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installation. Let's get the business news from Singapore.

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US banks will release second-quarter earnings later today. How do they

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benefited from the improving US economy? -- how they benefited. And

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find out why a Japanese giant is investing big in football.

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Hello, and welcome to Asia Business Report. I'm Sharanjit Leyl. The US

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economy has improved. The banks have passed their stress test and the

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Federal Reserve chairman Janet Yellen, has said any rate hike will

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be permitted gradually. So will all this translate to higher profits for

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US banks? Che Citigroup, JP Morgan and Wells Fargo will all be

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releasing their second-quarter earnings later today.

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Friday marks the big kick-off of rank and earnings, when three big

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financial institutions report. What can we expect? Analysts are not

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expecting this past quarter to be much amazing. You'll remember when

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Donald Trump was elected, US markets were downright euphoric. The tax

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reforms and infrastructure spending were going to boost the economy.

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Fast forward to July, and not much has happened. That is leading many

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to believe the Trump ump may be dead. What does that mean for banks?

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Bank stocks were a big winner when it came to be Trump bump. They were

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one of the best performing spec is -- sectors. Now the reason for the

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bump, Trump's legislative agenda, is no longer looking as plausible as

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before, that has analysts wondering if this will mean the gains made by

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tanks may start to come down. -- banks.

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In news just in, the latest growth numbers from Singapore show that its

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economy has dodged recession thanks to a pickup in the second quarter

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and strong gains in manufacturing. The trade reliant economy grew 2.5%

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in the three months to June, compared to the same period one year

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ago. Let's go live now to our reporter in the heart of Singapore's

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shopping district. Were these numbers pretty much in line with

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forecasts? No, the numbers that you just cited, that 2.5% growth, missed

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market expectations by 1%. We have narrowly dodged a technical

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recession. To get some reaction I am joined by an economist. Thank you

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for joining us. What do you make of the numbers? We can expect this,

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primarily driven by the services sector, we expect it to do better

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but it was not as strong a rebound as expected. First-quarter read both

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-- growth was revised down for the same reason. So what are some of the

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factors dragging on consumer spending on the services sector?

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Uneven growth, obviously. Some sectors are doing better, led by the

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exports side, which is why trade related to transportation and

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logistics did better. But the labour market growth has been much softer

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than any time over the last ten years. We have seen far more

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cautious sentiment on the ground from local households. Generally

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that causes constraint on the growth, and we have that foreign

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worker policy as well. All of that contains sentiment on the ground. As

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a result, the spending side constraints services in general. We

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have seen a slight uptick in global trade, as well as Singapore's

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manufacturing sector, at the government here is really concerned

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about certain world politics factors like protectionism. How will that

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impact Singapore going forward? In the near term, the rebound in trade,

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at least for Singapore, certain exports and certain many faction

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sector related chemicals -- certain manufacturing sector related...

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Apologies about that, we seem to have lost that interview.

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In other news:, there are reports that Singapore warehouse operator

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global logistics properties has decided to start negotiations with a

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Chinese consortium, in a deal that would value the company at $10

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billion. If an agreement is reached it would mark the egos buyout of an

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Asian company by a private equity firm. E-commerce companies like

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Alibaba are driving a boom in demand for warehouse space here in Asia. A

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proposed class-action lawsuit has reportedly been filed in New York

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against the American aluminium company which supplied cladding

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panels used at the Grenfell Tower in London. Dozens of people died in a

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fire there last month. The complaint against Arconic says that

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shareholders suffered losses as a result of its failure to properly

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disclose its use of the highly flammable panels. Arconic shares

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recently suffered their biggest intraday all sense it was spun off

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from Alcoa last November. The head of Japan's largest e-commerce

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company is broadening his reach to football, and not just any old

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scene. These are the European champions, FC Barcelona. He has

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signed a sponsorship deal signed $58 million to have his name, his

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company's name, Rakuten, prominently displayed on their jerseys. Who is

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the man willing to play such a premium? We caught up with him in

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Tokyo. Did you purchase anything online

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before you found the Rakuten? I did, yes. What was your first ever online

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purchase? I think it was Japanese udon noodles. There was a very

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popular online bookstore. What is your most recent online purchase.

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Most recent? What did I buy... I bought some screen. Do you actually

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go to any stores to buy anything, or do you buy everything online? I do,

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I go to supermarkets. Some people think everything will be online. I

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am more of a believer of the hybrid. Drones. When will we get everything

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delivered by drones? Not everything, but it will start taking place in

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2-3 years. This is what I think. I never expected anything would be --

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never expected there would be 100% autonomous driving cars. Nobody

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imagined that ten years ago. Attic is going to take place. So we are

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seeing the impossible becoming possible. You have introduced in

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which is the official office language. How has it been? Do you

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think you made the right choice? Definitely. Already, 80% of new

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engineers and scientists we hire a non-Japanese. 60% of existing

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engineering and scientists a non-Japanese. Many of them do not

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speak Japanese at all. I think it is very difficult, if you want to

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compete against global companies, to be just Japanese.

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That was Mariko Oi speaking to the CEO of Rakuten. Now, au and is

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tempered two -- now, tuktuks and tuktuks can be found all of India,

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but now they are being found more in Africa. An Indian manufacturer is

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building assembly plants across the continent. We spoke to managers at a

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factory in the South African city of Port Elizabeth.

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Behind me are the vehicles on the condition in which they arrived from

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India. They flow into a full manual assembly line

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Here. It creates employment and gives us the necessary controls in

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the assembly line. Coincidentally, after doing this, this little

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vehicle tick Sorbus important boxes. We want to tackle unemployment, we

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want to empower people to start small businesses, not only locally

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in metropolitan areas by General areas as well. And thirdly, Vic

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contribution -- the contribution to society. The idea is to get a

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different vehicles to provide specific services to these

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communities. What we are trying to do with these vehicles is ensure

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that in those communities, what you do not have that infrastructure, we

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have smaller vehicles that can penetrate and navigate those areas.

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This is a response to these problems that we have seen. This happens all

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over South Africa. That was a manufacturer of tuktuks

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in South Africa. Let's look at the markets. This is how the Asian

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markets have opened. The Nikkei making some gains. They are taking

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their cues from Wall Street, where the Dow Jones closed that yet

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another record high. That is all from this edition of Asia Business

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Report.

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