14/07/2017 Asia Business Report

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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