01/12/2017 Asia Business Report

in the year to June.

Now on BBC News, all the latest

business news live from Singapore.

Oil cartel OPEC extends its supply

cut arrangements. We find out what

this means for oil prices. And world

leaders focus on a major challenge

to the global economy, getting more

women into the workforce. Good

morning, Asia, hello, world. It is a

Friday. A weekend just ride around

the corner. Glad you could join us

for another exciting addition of

Asia Business Report. I'm Rico

Hizon. Let's start off with oil, and

OPEC has wrapped up its meeting in

Vienna. Saudi Arabia's Energy

Minister told members of the press

they have finally hammered out a

deal.

The decision has been

unanimous. It is a solid decision,

that I think many of you have been

urging us to make, which is to roll

over and extent the deal through

December 2018.

Oil prices remaining

steady after the news of the

announcement. OPEC members say the

decision to keep oil production cuts

in place moving forward will be

based on prevailing market

conditions and the progress achieved

towards rebalancing the oil market.

But they may have their work cut out

for them. Earlier, I spoke to senior

analyst Geoff Haley about why the

decision did not have a greater

impact on oil prices.

To a certain

extent it was priced in. Brent,

which is what most international oil

is priced in, not WTI, was up

overnight. Really it was priced into

the market.

But as you say, the

nine-month extension has already

been priced into the market. What

could move oil prices from current

levels?

I think a very large

expansion in US production, which

may be driven by the pricing that we

are seeing now. Also geopolitical

tensions. You mentioned Saudi Arabia

and Iran. There are any number of

permutations of that among the OPEC

members. Also I think the direction

of the US dollar going into 2017 -

2018 may have a part to play as

well.

And you mentioned about US oil

production, and it is currently

soaring, fast approaching 10 million

barrels per day. And this is a

concern for OPEC.

Yes, and I think

this is part of the reason they

don't want prices to climb too much

further from here, because that

would encourage more US production

and probably weigh on declines among

the OPEC members themselves as they

fight to hold their market share.

But how serious are these OPEC

members with compliance?

I think

they have been very good so far.

When you have a look at what their

compliance levels have been over the

previous parts of the agreement so

far it has been in the high 90s. So

complaint has been excellent but a

year is a long time.

But the

producers, Jeff, also signal a

possible early exit from the deal if

the market overheats. At which level

do you think are they looking at for

an overheating of the market?

I

think if you saw oil heading up

towards the $75 - $85 a barrel you

would start seeing a lot of noise

from the group in about an early

exit from the deal. They don't want

oil to go too high, because that

would encourage more US shale

production. So they are trying to

balance a few things in the air at

the moment.

Geoff Haley, upmarket

specialist. In other news, New

Zealand dairy giant has been

required to pay a competitor damages

over a baby formula scare. The huge

pay-out came after fears about

contamination in supplied

ingredients forced global formula

recalls, including these brands. The

US Federal Reserve meets later this

month to decide whether to raise

interest rates for a third time this

year. The US ventral bank's policy

is meant to keep the American

economy on track, but it has a

significant impact here in Asia,

especially on the Hong Kong real

estate market. For more on the

property market in Hong Kong, we're

joined now by bike colleague and

business reporter Matt Morrison --

my colleague. So what is the state

of the residential property market?

The residential property market is

booming and overvalued. Now, you and

I have both lived in Hong Kong and

every month we have to pay our

housing cost.

Not cheap!

Not cheap

at all and it has been going up for

about nine consecutive years. So

where do interest rates play into

all of this? This is what the IMF

have been warning about, saying that

if interest rates go up that could

cooldown housing values. This is to

do with this balancing act of

monetary policy, would be tied to

the US dollar it is acting in a bit

of a lockstep. So when US rates go

up Hong Kong is slowing although

there is still a gap. It is closing

the gap and therefore borrowing

costs are more expensive for

would-be owners. You would think

this would make prices go up, but it

is on top of an 11% rise this year.

I should also point out this is not

the first time the IMF has made such

a warning. They warned of a

dangerous bubble in 2009, during the

financial crisis. Prices have been

going up ever since.

Many mainland

buyers purchasing property in Hong

Kong. What about the commercial

property market?

Also redhot. In

fact, a new report out saying Hong

Kong is overtaking London for the

first time since 2013 as the most

expensive office real estate. A

workstation, one employee for the

course of the year, will cost

$27,000. That is about $5,000 more

than London, with the currency and

Brexit and all of that. And Japan,

the next Asian city, come down at

around $9,000 below Hong Kong.

Familiar names at the end, New York,

Paris and Sydney here in the

Asia-Pacific. When you look at that

in terms of employee numbers, 100

employees in Hong Kong equates to

about 300 in Toronto, 500 in Madrid,

and 900 in Mumbai. Here in

Singapore, we may do a little mental

calculation, the numbers add up.

Maybe even not enough space to sit.

Thank you so much. Well, the Indian

city of Hyderabad has been in the

spotlight, where the US President's

daughter, Ivanka Trump, made her

debut in the world stage. Along with

1500 delegates, Ivanka called for

getting more women into the

workforce as a way to improve

economic growth. But how bad is the

problem? Our correspondent went to

find out. This 35-year-old woman is

a software engineer, and loves her

job. But, a few years ago, she was

ready to join 19 million women

living in India who are educated,

but choose not to work.

Previously I

said that, the thought of quitting

the job, because of this hectic

traffic.

According to one study,

just 27% of women in India are

informal employment. The main reason

is a lack of adequate infrastructure

to commute to and from work. For

Naveena, and many other women,

working in Hyderabad, this small

start-up has become something of a

lifeline. The private bus service

cuts down Naveena's travel time by

half. But also gives her time to

relax. According to a World Economic

Forum report, it will take two

century is to bridge the equality

gap between men and women in the

workplace. India is taking this

issue very seriously. In the global

entrepreneurship summit organised

here, the majority of business

leaders were women. One issue

discussed was the pressure to raise

a family. Something the delegates

agreed is common in emerging

economies. Few child-care options,

and a higher crime rate, also deters

women from pursuing their careers.

This Afghan entrepreneur says one

solution is to provide tailored

funding and support to women looking

to found start-ups.

Once the woman

has started to make money, with the

respect for the tradition and the

culture, then they have the power.

Products like this baby monitor

could help women manage their

families and careers. It allows

mothers to track their children even

when they are at work. Technology

and women focused funding is a

start, and engaging such a large

chunk of the population into the

workforce can only mean good things

for business.

workforce can only mean good things

for business. And before we go, here

is a look at the markets, and Asia

is in positive territory before the

weekend break, after the Dow Jones

industrial average skyrocketed more

than 330 points, to finish above

24,000 points for the first time

ever. Also surging, the broader S&P

500 index, as the Senate tax cut

plan moves closer to passage. And

let's have a look now at the Asian

markets, currently all in positive

territory. Thank you so much for

investing your time with us. Happy