01/03/2018 Asia Business Report

Now on BBC News, all the latest

business news live from Singapore.

Music do investor's years, streaming

giant spotlight goes public in a

billion-dollar listing. Vietnam's

government is hoping its young tech

savvy population will Jenna and

generate new sources for growth.

Good morning, welcome to Asia

Business Report, live from

Singapore. The world's biggest music

streaming service, Spotify, has gone

public on the US Stock exchange. Of

the ten-year-old company's planning

to do in a rather unique way.

Spotify plans to hold a direct

listing, selling up to $1 billion's

worth of shares on the New York

Stock Exchange. Our US business

correspondent explains why they

chose this method.

Everyone is

watching us closely because it is

very unusual for a company to list

in this manner. Normally, when a

company does when it lists or goes

public is there are new shares

traded on the stock market, and

there is a broker or investment bank

in between. What is happening this

time is actually, Spotify is not

going to the markets to make money,

it is not going to the markets to

generate money. What it seems to be

doing is giving current investors,

so people who already own the shares

in Spotify. It is giving those

people an opportunity to share those

-- sell their shares. It is unclear

if it is heavily oversubscribed,

what happens to the price of the

stock. At the moment, what we know

is that about $1 billion, the value

of the stocks, will be sold at $1

million. We do not know what

percentage of stock in the company

will be traded in the market -- $1

billion.

The company is the world

leader in industry, but are there

risks in its business?

One of the

key risks they have pointed out his

rivals, like Apple and Google. They

say that these companies actually

produce devices which could have

their streaming service is built in.

The other thing they pointed out

quite clearly is they do not own the

content, nor do they have any

control over the providers of the

content. The way it works is Spotify

has to pay royalties to the people

who provide the content, so that is

music companies, production

companies, artists who make the

songs, and when you go public you

must reveal what your revenues are,

where your money comes from, where

it goes, and the risk is that

artists and production companies

could then start asking for more

money from Spotify.

Staying with the

US, Exxon Mobil will pull out of

exploration and research joint

ventures with the state owned Royal

Dutch oil companies. Timothy

McDonald has been following this

story. Why have they made this

decision that?

Is sanctions, because

there are sanctions on one of the

major oil companies in Russia, it is

half owned by the Government. The

issue is the sanctions were imposed

in 2014. At that time, the head of

Exxon Mobil was no other than Rex

Tillerson. Interestingly, he was the

one who pushed for Exxon Mobil to

get into Russia, but the stations

have now, online and they have been

there since 2014. For a very long

time, Exxon opposed to them, they

see these operations as fairly

untenable now now the sanctions are

in place. There is an entirely

different set of sanctions, mainly

on Russian individuals, but that

does not seem to be the issue here,

it is the ones that apply to the UK

-- Ukrainian Crimea issues, as

opposed to the ones from the US

election last year. As to whether he

will mean anything to Exxon,

probably not. This is a company that

makes $200 billion in revenue, and

this is maybe a $200 million loss.

Thank you. In other business is

making headlines, India has

reclaimed the title of the world's

fastest growing economy from China.

Their economy grew by 7.2% on an

annual basis in three months to

December. China's economy grew by

6.8% in the same period. The iconic

motorbike manufacturer,

Harley-Davidson, is caught in the

middle of a trade spat between India

and the United States. Makers of two

vehicles have been eyeing India for

a long time, more bikes are sold

there than anywhere else in the

world. But President Trump's latest

comments threatened to hurt American

companies hoping to wrap up sales

there. At an event in Delhi,

Harley-Davidson unveiled its latest

models, new and shiny bikes for a

very promising market. Of imported

goods from manufacturing... The

launch comes at a very different --

difficult time for Harley-Davidson

in India. The motorcycle maker found

itself at the centre of controversy

after the US president said that the

US was being taken for a ride. He

was criticising Indian Prime

Minister's recent decision to lower

import taxes on motorbikes to 50%,

half of what they used to be.

I said

OK, but so far, we are getting

nothing. We get nothing, he gets 50,

and they think they're doing us a

favour? That's not a favour.

Donald

Trump may want zero import taxes for

these luxury bikes, but that is not

likely. The Indian government makes

a lot of money from the luxury

segment, and wants to continue

earning high revenues from these

taxes. And with India being the

world's biggest two wheeler market,

companies like Harley-Davidson will

not want to miss out entirely

either. The bike maker sold more

than 3000 chrome and steel rides in

India last fiscal year, and despite

President Trump's comments, the

company says it will use the lower

import duties to win over more

writers.

If there is a reduction in

import, we'll see a reduction in

pricing. We welcome any reduction

that allows more people to access

this motorcycle.

While it has been

all smiles between President Trump

and the Prime Minister, this is a

warning sign that there could be

more trouble ahead. President Trump

has warned of it and aggressive tax

on Indian bikes in the United

States. That could affect any hopes

of expansion between the two

countries. To Vietnam, the

Government there has been trying to

bring back the Vietnamese who have

gone overseas to study and work, and

that has resulted in creating a

vibrant tech entrepreneur scene,

where many startups are focusing on

solving everyday problems. In the

country's Young and highly delete

this highly literate young base is

looking to make this city one of

Asia's silicon valleys.

I'm 33 years old. I studied in

Canada and came back to Vietnam in

2009. One of the reasons I started

my company is I went to of shows in

Canada, so I have been able to buy

tickets online, but there was no

online ticket company Vietnam. That

is why I started it. Vietnam needs

to attract more talent to computer

work. Vietnamese who used to work

overseas coming to Vietnam can bring

a lot of fresh ideas, and they

understand how a successful overseas

business works, and they can apply

that expertise here in Vietnam.

My

goal is to invest in the promising

tech start here in Vietnam. Vietnam

has most of the lucky, which is

programmers. A lot of them instead

of aiming for big companies, they

want to do startups. One of the main

challenges, there are lots of

graduates who come out of the system

but are not of a global mindset yet.

So there is a tremendous amount of

training and coaching that needs to

take place to help develop them, but

I think with investment and learning

the culture, you can really do it.

Let's take a quick look at markets

before we go. Asian shares are down

this morning. Japan's Nikkei is down

again, China has is open for trade

as well, and it is down again after

having the worst monthly fall in

over two years. That is it for this

edition of Asia Business Report,

thank you for joining us.