25/07/2017 Asia Business Report

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

The parent company of Google sees its quarterly profits slump after a

massive fine from the European Commission. A start-up CEO, one man

cashing in on the transfer business. Hello. Welcome to Asia Business

Report. I'm Sharanjit Leyl. It's a Tuesday. Alphabet has scored D for

disappointing on its report card, falling 3% in late trading after

quarter earnings missed market expectations. It makes most of its

money from Google. Profits slumped by 28% after it was fined a record

$2.7 billion by European regulators in June for alleged anti-trust

behaviour. Google denies the charges. Alphabet also has bets in

other sectors like biotech, autonomous vehicles, and their

mysterious Moonshot project. Spending fell sharply in the

quarter. I spoke to someone who said the news is not as bad as some are

making it out to be. It is not as disappointing as the markets have

reacted. Look at Alphabet. Most of their money comes from advertising.

36 billion is coming from advertising. Alphabet has been able

to capitalise on video ads. You see many more of them coming in. Another

thing that is big for cost is traffic is increasing. That

acquisition has increased from 3.9 billion to 5.2 billion over this

quarter. We saw that shares were down in after-hours trade. That is

despite having risen 26% this year. How has the $2.7 billion fine by the

European Commission impacted it? They have made their own provisions

for it to contradict that and will make an appeal against it. Beyond

the monastery amount, it is a big one, what is a bigger implications

for that is the impact for other regions. -- monetary. The EU has to

be able to convince people it was cannibalising other areas. The other

regions will take it and there will be litigation from other regions,

including APEC, which can have wider implications for Google. We know

that Alphabet is the second most valuable US company behind Apple. Of

course, Google makes most of its profit, yet it has stiff competition

with Facebook when it comes to advertising revenue. Who will win

the contest? Google has a better advantage. Facebook has a bigger

base, but Google, in terms of overall platforms, it is stable.

Facebook, look at the strategy for Google and Facebook. Facebook has a

mobile strategy. Facebook wins in a few regions. But Google has a

traditional base and a lot more happening in advertising, at least

for now. Staying with US earnings, toymaker Hasbro has reported a 30%

bump in profits due to strong sales of Transformers action figures and

Monopoly games. However, its revenue miss the market expectations because

of weak sales in the UK and Brazil. Rio Tinto is being investigated for

possible corruption by the UK's Serious Fraud Office. They say the

probe is related to business dealings in Guinea in Africa. Rio

Tinto says it will fully co-operate with the investigation. This comes

several months after Australian authorities looked at patents with

the 20 billion iron ore project in Guinea. Samsung is known for making

smartphones and appliances, but they are now investing in

pharmaceuticals. Samsung and Merck have just launched a generic version

of the Johnson Johnson arthritis drug which is going to be 75%

cheaper. The government in the Philippines has issued a deficit of

$3 billion for the first half of the year, exceeding its own target by

around 7%. The Southeast Asian country is one of the

fastest-growing economies in the region. But is there spending a

cause for alarm? I talked to ANZ Research. It has overshot its

monthly target. What is more important is January- June and its

deficit is only 32% of the annual target for the deficit. If you are

thinking about what would be the outlook for the next half of the

year, there is still a lot of room to spend. Room to stand. Rodrigo

Duterte has signalled plans to have spending move to $34 billion to

usher in what he calls a golden age of infrastructure. How might this

help the economy of the country? Think about it. Infrastructure

spending in the Philippines is relatively quite low in comparison

to the rest of the region. Right now, the infrastructure by the plan

is only 5% of GDP. His medium-term target is to raise that to 7% of

GDP. If you compare that to the rest of the region, averaging around 20%,

that is still very low. However, infrastructure has always been the

problem, and it is actually growth positive. In a speech yesterday he

said he wants all mineral resources extracted from the Philippines to be

more ethical and responsible. What does that mean? Well, there has been

a lot of destruction and it has also negatively affected the local

communities. What he effectively said was that he would raise taxes

in the mining sector is there are no sustainable practices. Very quickly,

we know the Philippines is one of the fastest-growing in terms of GDP

in this region, second to China. Were wristed heading? We are

expecting 6.5% growth in 2017, followed by 2.5% in 2018. It is one

of those good performers. The next decade could bring major changes to

the International Monetary Fund, including moving its headquarters

from Washington, DC to Beijing. The managing director, Christine

Lagarde, said the move is a possibility because the IMF wants to

increase representation of emerging markets that become more influential

and get larger. It has been based in the US since it was established in

1945. Being the first employee at Skype can be an oppressive thing to

have on a regimen. He has since gone on to become an adviser to the Prime

Minister of Estonia. He has also build up Transfer, an on line

remittance service which has built up more than $1.5 billion. What led

him to his latest venture? It was during Skype that I realised how

banks are undeserving and overcharging customers for many

services, including transferring. I realised it was a problem that

needed to be fixed and I found a better way of doing it. I realised

hundreds of millions of people around the world would benefit. Big

established names in this business include western union and Moneygram.

How do you compete? We are based on doing something great for customers.

It is the reason people use it, because we are fast, low cost, and

we are very easy to use on your mobile. Looking at these parameters,

it is fast and superior to any of those other businesses. The thing is

that global remittances seem to be on the decline. For the past two

years globally, with the exception of the Philippines, we have seen the

amount being transferred on the decline. The remittance market is

classically seen as money going from first world to developing world. We

look at the market as slightly bigger, going from first world to

first world. Singapore to Australia, Australia to the US, the US to

Germany. And we look at small businesses. If we combine these

three markets, we are looking at a market of between 5-10 trillion

dollars a year, significantly big enough for any company to build a

business. And before we go, do you remember trying to draw shapes and

pictures on Microsoft Paint? It looks like we may have to read a

fond goodbye to the programme launched first in 1985. -- bid it.

Microsoft say it is no longer in active development and will be

phased out. The markets have opened. The Nikkei and the All Ords Index

are flat at the moment. A breather in the Japanese yen, giving a lift

to export stocks in Tokyo. And that is it for this edition of Asia

Business Report. I am Sharanjit Leyl in Singapore. Thank