19/02/2018 Asia Business Report


19/02/2018

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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LineFromTo

into education in England

for those over 18.

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Now on BBC News, all the latest

business news live from Singapore.

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Raising taxes. It's rarely a popular

decision but that's what Singapore

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is expected to do when it announces

the 2018 budget later today.

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And Cambodia grapples with how to

provide enough affordable housing to

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a fast-growing population.

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It's Monday, everyone. Good morning,

Asia. Hello, world. Glad you could

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enjoy enjoin us for another exciting

week on Asia Business Report, I'm

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Rico Hizon.

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week on Asia Business Report, I'm

Rico Hizon. In Singapore taxes are

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Rico Hizon. In Singapore taxes are

the focus when the citystate

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announces its new budget. The

government has flagged it will need

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to increase tax revenues as spending

on healthcare and infrastructure is

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expected to rapidly rise. One

possible idea, attacks on

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e-commerce, which would make

Singapore among the first in Asia to

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do so. Earlier I spoke with Amy from

Ernst and Young and I asked her if

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we're likely to see tax increases.

Really it's what the government has

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been messaging up to today. There's

increased need for our social

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spending with an increasing and fast

ageing population.

What will be

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e-commerce tax structure look like?

It's likely it will be in the form

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of a goods and service tax on online

transactions, it's with online

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purchases of goods and services.

The

government is also rethinking its

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current goods and services tax

structure, which is currently at 7%,

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is there a need for an e-commerce

tax and a GST tax or at the same

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time when the Singapore budget is at

a surplus?

There's always a balance,

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you have to look at the balance

between raising tax revenue in a

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competitive way while not affecting

the practices of Singapore to work

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and do business in. --

attractiveness. Looking and a GST

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

the lowest in the world -- looking

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

in line with the rates in

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Asia-Pacific.

Will this tax binge

immediately materialise?

We do not

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expect it to immediately kicked in

because the government has said it

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has enough money for this term,

which is up to 2020. It's really

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planning for the long-term and we

expect the government to give us

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advanced notice for the businesses

and people to basically make

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adjustments and build in their

budget in terms of coping with the

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increase.

Aimee, we also saw the

United States reducing its corporate

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

we likely to see something in this

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kind of form from this budget?

Singapore corporate tax rate has

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been one of the lowest in the world

at 17%. We are the four runner in

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bringing it down to 17%.

Can't you

bring it lower?

-- four runner.

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Possibly but the scope for bringing

it down is very limited so we are

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going to focus on GST and e-commerce

transactions. It's one of the most

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competitive rates in the world

already.

What other features are you

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expecting from this budget?

There is

still a small possibility of

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additional new tax, possibly in the

form of wealth tax, keeping our

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fingers crossed, it's a balance

between raising revenue and

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Singapore's competitiveness as a

leading financial hub. The other

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areas will be increased help for

globalisation and innovation.

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Amy Ang from Ernst & Young.

A bit week four cuppa, corporate

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earnings with more than 50 companies

on the S&P 500 due to report this

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week -- bigwig for. Walmart and home

Depot will be reporting on Tuesday

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-- big week for. HSBC will be

reporting annual earnings tomorrow

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and we will see if it can build on

last quarter's earnings results --

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home Depot. In Australia Qantas are

due to release their earnings

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numbers this week. Earlier I spoke

to June from Tribeca investment

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partners in Sydney and I asked her

if Qantas would have strong results

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despite stiff competition and rising

oil prices.

I think the company will

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deliver a good result in that

environment given the benign

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environment in ticket pricing and it

should announce a buyback, we expect

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a strong performance.

And BHP

Billiton, will it produce strong

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results because of commodity prices?

And we expect a consensus upgrade at

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this result, should be a strong

price performance.

You have the

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likes of Home Depot and Walmart

announcing their results this week

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with the economy expanding in the

US, will be retailers have good

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results?

They will deliver strong

results and give a positive guidance

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into next year.

What about the likes

of HSBC? They had strong results the

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previous quarter, will it outperform

this quarter?

I think they should

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deliver a good result given it's the

last result for the current CEO and

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looking forward they will need to

give advisers on the tax. It's a

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good company to be at the moment.

It's been a crazy two weeks in the

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global financial markets, are we

likely to see a calmer mood among

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investors this week? Will there be

more volatility yet again?

We think

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this week should be generally led by

the results and we don't expect

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anything that is out of

extraordinary to shake at. We do

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have FOMC meeting minutes this week,

and potentially if they turn more

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hawkish that could shake the market

but based on experience from last

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week, we think the market is on the

right page and there shouldn't be

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any surprises.

At this point, our

investors getting comfortable with

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the idea that growth is sufficient

to withstand the expected rate

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hikes?

Absolutely. Investors are

well aware, growth picking up and

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things are getting better so it's

time to get into those cyclical

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sectors.

What are the red flags in

the market that you would want to

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avoid?

Avoid sectors like property,

utilities and high-growth sectors.

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They have been outperformed recently

and they will underperform.

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Japan is seeing global demand for

its products according to trade data

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today, exports jumping more than 12%

in January to compare it to a year

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ago. To mark a 14th straight month

of games -- compared to. The trade

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balance came to a deficit of almost

$9 billion -- gains. Cambodia has

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one of the region's fastest growing

economies and its capital, Phnom

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Penh, is going through a building

boom. Is though it is a poor city by

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global standards and affordability

is a serious issue, so how do you

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house a growing population on a

limited income? -- it is, though.

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Phnom Penh is growing.

Phnom Penh is in the middle of a

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building boom, cranes in the sky,

new apartment blocks all over town,

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but many are simply out of reach for

everyday Cambodians even though the

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city is pretty cheap by global

standards. Affordability is still a

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major issue here. Developers tend to

make most of their money from

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high-end apartments, but where do

you put everyone else? Well, maybe

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here on this sandy soccer pitch

where more than 2000 homes for lower

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and middle income Cambodians will be

built.

This is the showroom of the

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project.

So could this be Cambodia's answer

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to white picket fences?

The pricetag from 70,000 to 75,000

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US dollars. I think for the people

who have low and medium incomes,

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they can come and buy in this

project.

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By one estimate fewer than 15% of

new houses cost under $50,000, which

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is significant in a country where

the minimum wage is less than $200 a

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month. Cambodia will need more cheap

mass housing like this for its

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growing population.

This project must be able to sustain

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itself so we can continue the second

project for more Cambodians who need

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a home.

Of course delivering cheap homes

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means finding ways to reduce costs,

and another local company has a few

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ideas about how to do that.

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These bricks fit together like Lego

blocks, which means they require

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less mortar and labour, and that

means lower costs.

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It's a small scale factory for now,

but there are plans to scale up to

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make enough bricks for 100 houses

every day. The demand should be

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there, the government estimates the

country will need 1.1 million new

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homes by 2030. Timothy McDonnell,

BBC News, Phnom Penh.

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Before we go, here's a quick look at

the Asian stock markets and

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currently in positive territory

after last week's gains in US

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markets. The Nikkei 225 up by 248

and the All Ordinaries index gaining

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27. The Hong Kong and Chinese stock

markets are closed today due to the

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Lunar New Year holidays. Thank you

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