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
installation has now been found in around 200 high-rise buildings. --
installation. Let's get the business news from Singapore.
US banks will release second-quarter earnings later today. How do they
benefited from the improving US economy? -- how they benefited. And
find out why a Japanese giant is investing big in football.
Hello, and welcome to Asia Business Report. I'm Sharanjit Leyl. The US
economy has improved. The banks have passed their stress test and the
Federal Reserve chairman Janet Yellen, has said any rate hike will
be permitted gradually. So will all this translate to higher profits for
US banks? Che Citigroup, JP Morgan and Wells Fargo will all be
releasing their second-quarter earnings later today.
Friday marks the big kick-off of rank and earnings, when three big
financial institutions report. What can we expect? Analysts are not
expecting this past quarter to be much amazing. You'll remember when
Donald Trump was elected, US markets were downright euphoric. The tax
reforms and infrastructure spending were going to boost the economy.
Fast forward to July, and not much has happened. That is leading many
to believe the Trump ump may be dead. What does that mean for banks?
Bank stocks were a big winner when it came to be Trump bump. They were
one of the best performing spec is -- sectors. Now the reason for the
bump, Trump's legislative agenda, is no longer looking as plausible as
before, that has analysts wondering if this will mean the gains made by
tanks may start to come down. -- banks.
In news just in, the latest growth numbers from Singapore show that its
economy has dodged recession thanks to a pickup in the second quarter
and strong gains in manufacturing. The trade reliant economy grew 2.5%
in the three months to June, compared to the same period one year
ago. Let's go live now to our reporter in the heart of Singapore's
shopping district. Were these numbers pretty much in line with
forecasts? No, the numbers that you just cited, that 2.5% growth, missed
market expectations by 1%. We have narrowly dodged a technical
recession. To get some reaction I am joined by an economist. Thank you
for joining us. What do you make of the numbers? We can expect this,
primarily driven by the services sector, we expect it to do better
but it was not as strong a rebound as expected. First-quarter read both
-- growth was revised down for the same reason. So what are some of the
factors dragging on consumer spending on the services sector?
Uneven growth, obviously. Some sectors are doing better, led by the
exports side, which is why trade related to transportation and
logistics did better. But the labour market growth has been much softer
than any time over the last ten years. We have seen far more
cautious sentiment on the ground from local households. Generally
that causes constraint on the growth, and we have that foreign
worker policy as well. All of that contains sentiment on the ground. As
a result, the spending side constraints services in general. We
have seen a slight uptick in global trade, as well as Singapore's
manufacturing sector, at the government here is really concerned
about certain world politics factors like protectionism. How will that
impact Singapore going forward? In the near term, the rebound in trade,
at least for Singapore, certain exports and certain many faction
sector related chemicals -- certain manufacturing sector related...
Apologies about that, we seem to have lost that interview.
In other news:, there are reports that Singapore warehouse operator
global logistics properties has decided to start negotiations with a
Chinese consortium, in a deal that would value the company at $10
billion. If an agreement is reached it would mark the egos buyout of an
Asian company by a private equity firm. E-commerce companies like
Alibaba are driving a boom in demand for warehouse space here in Asia. A
proposed class-action lawsuit has reportedly been filed in New York
against the American aluminium company which supplied cladding
panels used at the Grenfell Tower in London. Dozens of people died in a
fire there last month. The complaint against Arconic says that
shareholders suffered losses as a result of its failure to properly
disclose its use of the highly flammable panels. Arconic shares
recently suffered their biggest intraday all sense it was spun off
from Alcoa last November. The head of Japan's largest e-commerce
company is broadening his reach to football, and not just any old
scene. These are the European champions, FC Barcelona. He has
signed a sponsorship deal signed $58 million to have his name, his
company's name, Rakuten, prominently displayed on their jerseys. Who is
the man willing to play such a premium? We caught up with him in
Tokyo. Did you purchase anything online
before you found the Rakuten? I did, yes. What was your first ever online
purchase? I think it was Japanese udon noodles. There was a very
popular online bookstore. What is your most recent online purchase.
Most recent? What did I buy... I bought some screen. Do you actually
go to any stores to buy anything, or do you buy everything online? I do,
I go to supermarkets. Some people think everything will be online. I
am more of a believer of the hybrid. Drones. When will we get everything
delivered by drones? Not everything, but it will start taking place in
2-3 years. This is what I think. I never expected anything would be --
never expected there would be 100% autonomous driving cars. Nobody
imagined that ten years ago. Attic is going to take place. So we are
seeing the impossible becoming possible. You have introduced in
which is the official office language. How has it been? Do you
think you made the right choice? Definitely. Already, 80% of new
engineers and scientists we hire a non-Japanese. 60% of existing
engineering and scientists a non-Japanese. Many of them do not
speak Japanese at all. I think it is very difficult, if you want to
compete against global companies, to be just Japanese.
That was Mariko Oi speaking to the CEO of Rakuten. Now, au and is
tempered two -- now, tuktuks and tuktuks can be found all of India,
but now they are being found more in Africa. An Indian manufacturer is
building assembly plants across the continent. We spoke to managers at a
factory in the South African city of Port Elizabeth.
Behind me are the vehicles on the condition in which they arrived from
India. They flow into a full manual assembly line
Here. It creates employment and gives us the necessary controls in
the assembly line. Coincidentally, after doing this, this little
vehicle tick Sorbus important boxes. We want to tackle unemployment, we
want to empower people to start small businesses, not only locally
in metropolitan areas by General areas as well. And thirdly, Vic
contribution -- the contribution to society. The idea is to get a
different vehicles to provide specific services to these
communities. What we are trying to do with these vehicles is ensure
that in those communities, what you do not have that infrastructure, we
have smaller vehicles that can penetrate and navigate those areas.
This is a response to these problems that we have seen. This happens all
over South Africa. That was a manufacturer of tuktuks
in South Africa. Let's look at the markets. This is how the Asian
markets have opened. The Nikkei making some gains. They are taking
their cues from Wall Street, where the Dow Jones closed that yet
another record high. That is all from this edition of Asia Business