12/02/2018 Asia Business Report


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12/02/2018

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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its recruitment procedures.

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Now on BBC News all the latest

business news live from Singapore.

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Is the wild ride over or is it just

the beginning? We find out where the

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global markets may end after the

volatility of last week. And and

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enduring sports legacy. We find out

about triathlon's plans for Asia.

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It's Monday, everyone. Good morning,

Asia. Hello, world. Thank you for

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joining us for this edition of Asia

Business Report. We begin the

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programme with the Asian markets

that are offered from heavy selling

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last week following volatility on

Wall Street. We had the bench mark

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indices in Japan, Hong Kong and

Shanghai falling at least 10% from

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recent highs. Chinese equities in

particular were under pressure,

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partly due to the weakening of their

currency. Should we be bracing

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ourselves for another wild ride this

week? I asked that question earlier.

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Investors seem to be responding to

increased expectation that in

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flirtation will pick up -- inflation

will pick up. The strength that we

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are seeing in global economy that is

driving market and as we may be in

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the midst of this shift, I expect

investors will see more volatility

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that has the workers went through

the market.

Inflation and potential

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increases in interest rates are

basically feel all of this

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volatility in the stock market over

the last week. On Wednesday, you

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have the consumer price index coming

up in January in the United States.

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Could this add more fuel to the

fire?

It could add more fuel to the

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fire or it could dampen it somewhat

if we saw a softer than expected

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reading. Traffic returns to the

issue that we will not see any real

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closure in terms of this debate as

to what is driving markets over the

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next several days and I don't think

that the CPI is going to do Edi

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there. As the volatility works its

way through I think that investors

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will be somewhat more defensive.

When we look across currency, I

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think that means that nondollar safe

havens will outperform the smaller

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and riskier currencies.

Last year,

many economists were predicting

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three or four more interest rate

hikes from the Fed in 2018. At that

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time, the market didn't move. Why

the reaction now?

That is an

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interesting question as we have been

seeing rises in yields for sometime.

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I think when it comes down to is the

difference in terms of what is

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motivating that rise. If you had

asked most investors several weeks

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ago what was driving, they would say

was growth expectations and that is

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the ninth of the market. It is

probably less benign if risk arises,

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is volatility arises and if

investors are more concerned with

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inflation.

Briefly, how much of this

volatility on stocks is due to the

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weakening dollar and stocks being

affected in China by their currency?

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I think it is circular. A large

component is both each market drives

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the other.

Remember the airbag maker

Takata? There are reports that its

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US unit has reached a settlement to

end their bankruptcy. I'm joined now

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by our colleague.

Is this a good

thing? It is and it is not,

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depending on who you why. Basically,

the US unit of the company was

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gearing up for a court fight this

week to get a judge a judge's

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approval for its plans to exit

bankruptcy because there has been

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strong opposition from injured

drivers as well as creditors. There

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have been hundreds of injuries

related to these airbags. They also

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caused at least 21 deaths around the

world. Over a dozen carmakers as

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well is the new owner of Takata's

air bag business, they have managed

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to agree a deal with them over the

weekend. They will establish a trust

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to pay compensation and if the

agreement is approved by the US

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bankruptcy court it will mean

injured drivers will not be allowed

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to sue the carmaker. They will

monitor whether they gets approved.

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We will have to wait and see if this

will push through. Thank you very

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much. India's latest Federal budget

has drawn criticism from luxury

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carmakers. The government has

increased taxes for foreign

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automakers and that has affected

global brands like Audi, Mercedes

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and others are doing business in

India. Our reporter speaks from

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their auto show.

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Luxury cars on display in the

world's third-largest auto market.

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And emerging young and growing

middle class has attracted major

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global high-end auto brands to set

up a shop in India. But after doing

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so, with promises of tax incentives

from the government, car

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manufacturers say the government

backtracked on its plans when it

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announced a plan to hike tax on

imported auto-parts. Most global

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luxury brands in India import beer

engine in different parts from their

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countries and assemble at here. They

do that with a tax benefit promised

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earlier by the government. Now that

incentives is withdrawn and

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investment is in doubt. For this

man, who heads Germany in India --

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Tarlee in India, this is a blow.

Currently very assemble within the

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country almost 95% of its cars sold

here. Under the new regime, the cost

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of doing so will rise substantially.

splashback we are making substantial

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investments in the country.

We

believe in the growth of the marker

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but we also need to make sure that

there is this growth scenario that

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is now being restricted.

Luxury cars

make up 2% of the total vehicle

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market in India. Foreign brands here

fear that further protectionist

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measures could hurt their expansion

plans in the country.

Overall in

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context I see that India will have

to review their policy as well on

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bringing cars into the country. A

short-term hopeful gain of winning a

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few revenues on taxation is not in

line with the positioning yourself

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as a market welcoming foreign

investors. For now, luxury carmakers

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say they will pass on most of the

tax sites to car buyers. And while

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that may be a small difference to

those paying thousands of dollars

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for rape high-end car, the shaken

trust between foreign brands and the

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government will be a big hurdle to

overcome. -- thousands of dollars

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for a high-end car.

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A lawsuit has been filed against the

Weinstein Company alleging that it

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failed to protect employees from

Harvey Weinstein. Becomes after the

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Mogul's career ended in disgrace

over allegations of sexual

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misconduct from over women. A royal

commission into Australia's banking

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is set to get under way in Melbourne

they have faced scandals and

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concerns over money laundering,

legislation accusations that some

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institutions withheld legitimate

health-insurance pay-outs and gave

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misleading financial advice. There

is no other sporting event in the

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world where athletes and you are a

four kilometre swim, a 180 kilometre

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bike ride and a 42 kilometre

marathon back-to-back. And did I

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mention a 17 hour limit? Ironman

celebrated its 40th anniversary and

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its popularity is growing in the

region. It was recently purchased by

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a Chinese company. The chief

executive of ironman told us how the

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sport started.

Ironman started from

the most modest beginnings. 15

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people deciding to do the Waikiki

rough water swim, a bike race and

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Marys on on the same day. Since that

day in 1978, every year more people

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have crossed a ironman finish line

than the year before. We are now

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truly a global sport. We have 235

event weekends in 50 countries

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around the world. Despite us being

the dominant global player we think

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that we have about 13% of the global

mass participation market and we

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think there is an opportunity for us

to continue to grow are creating new

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events and by acquiring other

events.

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He has been extremely useful in the

Chinese market. He has deep

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connections, not just within the

Central government but due to their

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real estate development, they have a

presence and relationships in 100

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Chinese cities. Those are helpful

for us as we think about getting

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races off the ground, getting roads

closed, having direct relationships

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with the cities and with the party

is vital and essential in China.

And

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in the markets, it could be another

week of volatility in Asia. We can

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already see it on the board here.

The Hang Seng is currently up by

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0.7%. The All Ordinaries is down by

91 points. And the South Korean

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market is currently mixed to lower.

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