19/02/2018 Asia Business Report

into education in England

for those over 18.

Now on BBC News, all the latest

business news live from Singapore.

Raising taxes. It's rarely a popular

decision but that's what Singapore

is expected to do when it announces

the 2018 budget later today.

And Cambodia grapples with how to

provide enough affordable housing to

a fast-growing population.

It's Monday, everyone. Good morning,

Asia. Hello, world. Glad you could

enjoy enjoin us for another exciting

week on Asia Business Report, I'm

Rico Hizon.

week on Asia Business Report, I'm

Rico Hizon. In Singapore taxes are

Rico Hizon. In Singapore taxes are

the focus when the citystate

announces its new budget. The

government has flagged it will need

to increase tax revenues as spending

on healthcare and infrastructure is

expected to rapidly rise. One

possible idea, attacks on

e-commerce, which would make

Singapore among the first in Asia to

do so. Earlier I spoke with Amy from

Ernst and Young and I asked her if

we're likely to see tax increases.

Really it's what the government has

been messaging up to today. There's

increased need for our social

spending with an increasing and fast

ageing population.

What will be

e-commerce tax structure look like?

It's likely it will be in the form

of a goods and service tax on online

transactions, it's with online

purchases of goods and services.

The

government is also rethinking its

current goods and services tax

structure, which is currently at 7%,

is there a need for an e-commerce

tax and a GST tax or at the same

time when the Singapore budget is at

a surplus?

There's always a balance,

you have to look at the balance

between raising tax revenue in a

competitive way while not affecting

the practices of Singapore to work

and do business in. --

attractiveness. Looking and a GST

rise of Singapore at 7%, it's one of

the lowest in the world -- looking

at. Even if we go to 9% or 10%, it's

in line with the rates in

Asia-Pacific.

Will this tax binge

immediately materialise?

We do not

expect it to immediately kicked in

because the government has said it

has enough money for this term,

which is up to 2020. It's really

planning for the long-term and we

expect the government to give us

advanced notice for the businesses

and people to basically make

adjustments and build in their

budget in terms of coping with the

increase.

Aimee, we also saw the

United States reducing its corporate

tax rate from 35 to 21%. -- Amy. Are

we likely to see something in this

kind of form from this budget?

Singapore corporate tax rate has

been one of the lowest in the world

at 17%. We are the four runner in

bringing it down to 17%.

Can't you

bring it lower?

-- four runner.

Possibly but the scope for bringing

it down is very limited so we are

going to focus on GST and e-commerce

transactions. It's one of the most

competitive rates in the world

already.

What other features are you

expecting from this budget?

There is

still a small possibility of

additional new tax, possibly in the

form of wealth tax, keeping our

fingers crossed, it's a balance

between raising revenue and

Singapore's competitiveness as a

leading financial hub. The other

areas will be increased help for

globalisation and innovation.

Amy Ang from Ernst & Young.

A bit week four cuppa, corporate

earnings with more than 50 companies

on the S&P 500 due to report this

week -- bigwig for. Walmart and home

Depot will be reporting on Tuesday

-- big week for. HSBC will be

reporting annual earnings tomorrow

and we will see if it can build on

last quarter's earnings results --

home Depot. In Australia Qantas are

due to release their earnings

numbers this week. Earlier I spoke

to June from Tribeca investment

partners in Sydney and I asked her

if Qantas would have strong results

despite stiff competition and rising

oil prices.

I think the company will

deliver a good result in that

environment given the benign

environment in ticket pricing and it

should announce a buyback, we expect

a strong performance.

And BHP

Billiton, will it produce strong

results because of commodity prices?

And we expect a consensus upgrade at

this result, should be a strong

price performance.

You have the

likes of Home Depot and Walmart

announcing their results this week

with the economy expanding in the

US, will be retailers have good

results?

They will deliver strong

results and give a positive guidance

into next year.

What about the likes

of HSBC? They had strong results the

previous quarter, will it outperform

this quarter?

I think they should

deliver a good result given it's the

last result for the current CEO and

looking forward they will need to

give advisers on the tax. It's a

good company to be at the moment.

It's been a crazy two weeks in the

global financial markets, are we

likely to see a calmer mood among

investors this week? Will there be

more volatility yet again?

We think

this week should be generally led by

the results and we don't expect

anything that is out of

extraordinary to shake at. We do

have FOMC meeting minutes this week,

and potentially if they turn more

hawkish that could shake the market

but based on experience from last

week, we think the market is on the

right page and there shouldn't be

any surprises.

At this point, our

investors getting comfortable with

the idea that growth is sufficient

to withstand the expected rate

hikes?

Absolutely. Investors are

well aware, growth picking up and

things are getting better so it's

time to get into those cyclical

sectors.

What are the red flags in

the market that you would want to

avoid?

Avoid sectors like property,

utilities and high-growth sectors.

They have been outperformed recently

and they will underperform.

Japan is seeing global demand for

its products according to trade data

today, exports jumping more than 12%

in January to compare it to a year

ago. To mark a 14th straight month

of games -- compared to. The trade

balance came to a deficit of almost

$9 billion -- gains. Cambodia has

one of the region's fastest growing

economies and its capital, Phnom

Penh, is going through a building

boom. Is though it is a poor city by

global standards and affordability

is a serious issue, so how do you

house a growing population on a

limited income? -- it is, though.

Phnom Penh is growing.

Phnom Penh is in the middle of a

building boom, cranes in the sky,

new apartment blocks all over town,

but many are simply out of reach for

everyday Cambodians even though the

city is pretty cheap by global

standards. Affordability is still a

major issue here. Developers tend to

make most of their money from

high-end apartments, but where do

you put everyone else? Well, maybe

here on this sandy soccer pitch

where more than 2000 homes for lower

and middle income Cambodians will be

built.

This is the showroom of the

project.

So could this be Cambodia's answer

to white picket fences?

The pricetag from 70,000 to 75,000

US dollars. I think for the people

who have low and medium incomes,

they can come and buy in this

project.

By one estimate fewer than 15% of

new houses cost under $50,000, which

is significant in a country where

the minimum wage is less than $200 a

month. Cambodia will need more cheap

mass housing like this for its

growing population.

This project must be able to sustain

itself so we can continue the second

project for more Cambodians who need

a home.

Of course delivering cheap homes

means finding ways to reduce costs,

and another local company has a few

ideas about how to do that.

These bricks fit together like Lego

blocks, which means they require

less mortar and labour, and that

means lower costs.

It's a small scale factory for now,

but there are plans to scale up to

make enough bricks for 100 houses

every day. The demand should be

there, the government estimates the

country will need 1.1 million new

homes by 2030. Timothy McDonnell,

BBC News, Phnom Penh.

Before we go, here's a quick look at

the Asian stock markets and

currently in positive territory

after last week's gains in US

markets. The Nikkei 225 up by 248

and the All Ordinaries index gaining

27. The Hong Kong and Chinese stock

markets are closed today due to the

Lunar New Year holidays. Thank you