18/07/2017 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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Some head-teachers have warned of staff cuts to make ends meet.


Labour's welcomed the extra money, but says it's not enough.


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


Netflix beats expectations by adding more than 5 million new users, but


what about the bottomline? And, Grexit talks. The European Union is


asking for one thing, clarity. Good morning, Asia, hello, world. I'm


glad you could join us. Netflix beat Wall Street expectations after


adding over 5 million new users, mostly from overseas. It has been


put down to including non- English Netflix Provisionals are alongside


its Western popular television shows. It's shares have jumped


nearly 9%. Our North American technology reporter told me why


investors are so up the. This is typically not a great quarter for


them, normally it is quite slow and they told investors as much. But we


have seen a huge growth in users, particularly in the US. You


mentioned overseas subscriber growth, but hearing the US, they


over 1 million new subscribers, much more than analysts had thought. They


will be very pleased. It is a sign that their strategy of creating lots


of original shows does seem to be working. But they must keep on


making those, and to keep them very popular, they are investing $6


billion in making original programmes over the next year. They


need to keep up the quality to keep people coming to Netflix, rather


than any of the other video streaming services. 104 million


subscribers now for Netflix. Have these subscriber numbers peaked, or


are there still more on the way? I think we will see a saturation here


in the US. Many people think we have reached that already. It's's about


international expansion. They are investing a lot into non-English


programming. They are also investing in feature films, while they have


the bench watching the side of television under wraps, they are


looking at longer form films. They are working on about 40 films at the


moment. I think that is where they will see their future growth come


from. But the competition is huge, especially from Amazon, who are


investing just as much in their original programming because they


think they can muscle in on Netflix. When you compare the amount of


people watching Netflix, subscribing, it is more than the


number of people that subscribe to traditional cable television. That


is a milestone I don't think we will see goal in the reverse direction.


Everything is heading towards this new industry of video streaming,


right now, Netflix was in front. But it may not be for the rest of time.


Rio Tinto have aborted one of its primary areas of production. I nor,


a major contributor to its earnings, matched last year's levels, but


shipments were down by 6%. That has followed a typhoon in the first


quarter of the year. This resource analyst told me that there were no


surprises that that would affect their upcoming earnings report. I


and all was down about 2% on the same half last year. That is on the


back of what we would call cyclones here, which affected magnets on


their rail network. Rail maintenance can be made up, but some of its


kindly. We have now seen production for 2000 and 1714 and about 30


million tons. That is at the bottom end of the range they were


forecasting. From an iron ore perspective, a fairly satisfactory


result. Copper was down about 21% at 209 million tons, that was primarily


on the back of a strike. Not such a good result for cop. 12 weeks to go


before the year ends, figures coming out in August. Could we see some


exceptional numbers? With the half-year result, the operational


side will not impact significantly on their half-year result,


financially. We do think that when you have a look at the commodity


prices, that is where they are going to get significant leverage for


their first half results. We are expecting some very good numbers.


Unfortunate, volumes will take a little bit away. Pricing is going to


be the reverse of what we have seen in many years.


In other headlines, the Trump administration has outlined calls


for renegotiating the North American Free Trade Agreement. Getting access


for American products to Canada and Mexico to improve the trade deficit.


They are worried that too many Americans have been hurt by closed


factories, exported jobs and what they call broken political promises.


Formal talks to renegotiate the deal are expected to begin next month.


Ministers from the EU and the UK have been getting down to business.


Wretched negotiations continue in Brussels. The clock is ticking for


the deadline in March 2019 for Britain to leave the EU. Several


issues are on the agenda. Number one, the rights of more than 3


million EU citizens, currently living in the UK, and about 1


million living in the EU. -- 1 million Britons. The British


chancellor confirmed that Britain would honour its's debt. And


finally, how they will address the traffic of people across borders.


So, a mixed bag. You can see hear how that has affected the markets. I


asked why this response has been so muted. Investors don't really like


uncertainty, so until we get a resolution, you always have this


hanging over the market. The UK is an outstanding geopolitical issue.


We still have the US and potentially, trade tax against the


Chinese. GDP was up yesterday, and the UK, EU and US markets shrunk


back. We look at flows, there is still a somewhat negative sentiment


towards China. That is correct. A lot of factors for investors to


digestive. Even though we had better than expected growth. What could


really turn the tide in these Brexit negotiations? Perhaps some kind of


trade agreement. We saw a trade agreement in terms of the Japanese,


but that took years to be finalised. We need some agreements like that


from an economic perspective to alleviate some of the tension and


perceived stress. Why are we seeing is doubt about the Chinese economy,


despite 6.9% growth? I think it is concerned about the underlying debt


situation. The people's Congress is going to be important to the


Chinese. Investors did not take the news positively. And liquidity


access in China and Hong Kong? Yes, it is a wait-and-see approach. Given


all these landmines in the investment landscape, where do you


tell your investors to put their money? The Chinese consumer, it


makes a lot of sense, companies that can access strategies in China.


Chinese companies are becoming more innovative. Some very good


opportunities in that part of the market. Uber is facing more trouble,


they are halting business in Macau as of Saturday because of local


regulations. It faced problems in Taiwan earlier in the year, it


suspended operations but resumed after setting up a partnership with


a local company. Another recap of the markets. Japan and Australia are


in negative territory because Chinese markets are depressed. We


will watch how that welfare when it opens in about 45 minutes. Black


Monday yesterday, nearly 500 shares suffered steep falls. The plunge


came after regulators flagged an extended crackdown on the financial


system. Investors were rattled even though China had better than


expected growth numbers, 6.9% in the April- June quarter. The rest of


Asia is currently in negative territory. Having a look now at Wall


Street. The NASDAQ continues to break record highs for an eight


consecutive session. Thank you for investing your time with us.


Senior Russian and US officials have been locked in talks,


over whether to hand back two diplomatic compounds seized


by the Obama administration last year.