01/03/2018 Asia Business Report


01/03/2018

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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Now on BBC News, all the latest

business news live from Singapore.

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Music do investor's years, streaming

giant spotlight goes public in a

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billion-dollar listing. Vietnam's

government is hoping its young tech

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savvy population will Jenna and

generate new sources for growth.

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Good morning, welcome to Asia

Business Report, live from

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Singapore. The world's biggest music

streaming service, Spotify, has gone

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public on the US Stock exchange. Of

the ten-year-old company's planning

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to do in a rather unique way.

Spotify plans to hold a direct

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listing, selling up to $1 billion's

worth of shares on the New York

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Stock Exchange. Our US business

correspondent explains why they

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chose this method.

Everyone is

watching us closely because it is

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very unusual for a company to list

in this manner. Normally, when a

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company does when it lists or goes

public is there are new shares

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traded on the stock market, and

there is a broker or investment bank

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in between. What is happening this

time is actually, Spotify is not

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going to the markets to make money,

it is not going to the markets to

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generate money. What it seems to be

doing is giving current investors,

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so people who already own the shares

in Spotify. It is giving those

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people an opportunity to share those

-- sell their shares. It is unclear

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if it is heavily oversubscribed,

what happens to the price of the

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stock. At the moment, what we know

is that about $1 billion, the value

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of the stocks, will be sold at $1

million. We do not know what

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percentage of stock in the company

will be traded in the market -- $1

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billion.

The company is the world

leader in industry, but are there

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risks in its business?

One of the

key risks they have pointed out his

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rivals, like Apple and Google. They

say that these companies actually

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produce devices which could have

their streaming service is built in.

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The other thing they pointed out

quite clearly is they do not own the

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content, nor do they have any

control over the providers of the

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content. The way it works is Spotify

has to pay royalties to the people

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who provide the content, so that is

music companies, production

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companies, artists who make the

songs, and when you go public you

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must reveal what your revenues are,

where your money comes from, where

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it goes, and the risk is that

artists and production companies

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could then start asking for more

money from Spotify.

Staying with the

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US, Exxon Mobil will pull out of

exploration and research joint

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ventures with the state owned Royal

Dutch oil companies. Timothy

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McDonald has been following this

story. Why have they made this

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decision that?

Is sanctions, because

there are sanctions on one of the

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major oil companies in Russia, it is

half owned by the Government. The

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issue is the sanctions were imposed

in 2014. At that time, the head of

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Exxon Mobil was no other than Rex

Tillerson. Interestingly, he was the

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one who pushed for Exxon Mobil to

get into Russia, but the stations

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have now, online and they have been

there since 2014. For a very long

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time, Exxon opposed to them, they

see these operations as fairly

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untenable now now the sanctions are

in place. There is an entirely

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different set of sanctions, mainly

on Russian individuals, but that

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does not seem to be the issue here,

it is the ones that apply to the UK

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-- Ukrainian Crimea issues, as

opposed to the ones from the US

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election last year. As to whether he

will mean anything to Exxon,

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probably not. This is a company that

makes $200 billion in revenue, and

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this is maybe a $200 million loss.

Thank you. In other business is

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making headlines, India has

reclaimed the title of the world's

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fastest growing economy from China.

Their economy grew by 7.2% on an

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annual basis in three months to

December. China's economy grew by

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6.8% in the same period. The iconic

motorbike manufacturer,

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Harley-Davidson, is caught in the

middle of a trade spat between India

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and the United States. Makers of two

vehicles have been eyeing India for

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a long time, more bikes are sold

there than anywhere else in the

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world. But President Trump's latest

comments threatened to hurt American

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companies hoping to wrap up sales

there. At an event in Delhi,

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Harley-Davidson unveiled its latest

models, new and shiny bikes for a

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very promising market. Of imported

goods from manufacturing... The

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launch comes at a very different --

difficult time for Harley-Davidson

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in India. The motorcycle maker found

itself at the centre of controversy

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after the US president said that the

US was being taken for a ride. He

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was criticising Indian Prime

Minister's recent decision to lower

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import taxes on motorbikes to 50%,

half of what they used to be.

I said

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OK, but so far, we are getting

nothing. We get nothing, he gets 50,

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and they think they're doing us a

favour? That's not a favour.

Donald

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Trump may want zero import taxes for

these luxury bikes, but that is not

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likely. The Indian government makes

a lot of money from the luxury

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segment, and wants to continue

earning high revenues from these

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taxes. And with India being the

world's biggest two wheeler market,

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companies like Harley-Davidson will

not want to miss out entirely

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either. The bike maker sold more

than 3000 chrome and steel rides in

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India last fiscal year, and despite

President Trump's comments, the

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company says it will use the lower

import duties to win over more

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writers.

If there is a reduction in

import, we'll see a reduction in

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pricing. We welcome any reduction

that allows more people to access

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this motorcycle.

While it has been

all smiles between President Trump

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and the Prime Minister, this is a

warning sign that there could be

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more trouble ahead. President Trump

has warned of it and aggressive tax

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on Indian bikes in the United

States. That could affect any hopes

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of expansion between the two

countries. To Vietnam, the

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Government there has been trying to

bring back the Vietnamese who have

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gone overseas to study and work, and

that has resulted in creating a

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vibrant tech entrepreneur scene,

where many startups are focusing on

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solving everyday problems. In the

country's Young and highly delete

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this highly literate young base is

looking to make this city one of

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Asia's silicon valleys.

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I'm 33 years old. I studied in

Canada and came back to Vietnam in

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2009. One of the reasons I started

my company is I went to of shows in

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Canada, so I have been able to buy

tickets online, but there was no

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online ticket company Vietnam. That

is why I started it. Vietnam needs

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to attract more talent to computer

work. Vietnamese who used to work

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overseas coming to Vietnam can bring

a lot of fresh ideas, and they

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understand how a successful overseas

business works, and they can apply

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that expertise here in Vietnam.

My

goal is to invest in the promising

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tech start here in Vietnam. Vietnam

has most of the lucky, which is

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programmers. A lot of them instead

of aiming for big companies, they

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want to do startups. One of the main

challenges, there are lots of

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graduates who come out of the system

but are not of a global mindset yet.

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So there is a tremendous amount of

training and coaching that needs to

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take place to help develop them, but

I think with investment and learning

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the culture, you can really do it.

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Let's take a quick look at markets

before we go. Asian shares are down

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this morning. Japan's Nikkei is down

again, China has is open for trade

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as well, and it is down again after

having the worst monthly fall in

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over two years. That is it for this

edition of Asia Business Report,

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thank you for joining us.

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