30/01/2014 Asia Business Report

America's central bank continues to reduce its supply of cheap money,

reining in its massive on buying scheme. As China becomes the

world's biggest market for red wine consumption, we find out how

producers are making the most out of it.

We kick off with America's central bank reducing its monthly bond

buying stimulus programme by another $10 billion. Staying with its plan

to cut back the supply of cheap money. The Federal Reserve said

economic growth had picked up since it last met in December. The move

was expected, but US share prices still fell overnight. In Asia, Tokyo

is down more than 3%, following the tumble in New York. Worries over

turbulence in emerging markets. Australia is also in negative

territory by 45 points. That is about 1%. Hong Kong also in negative

territory. South Korea is closed today due to the lunar New Year

holidays. I spoke to our correspondence in New York.

I think what this suggests is that the struggles in the emerging

markets, while important to keep an eye on, in terms of the US economy

it doesn't pose a very big threat, which is why I think you are seeing

that the Federal Reserve has continued on with a reduction in its

asset purchases. It went on to talk about the strength in the US

economy, that it is actually economic activity gaining steam,

consumer confidence is increasing, corporations are starting to higher

again, and there is a real sense in this country that the economy is

getting a little bit better. -- hire. They are seeing that to be

happening in the future. We can see the Federal Reserve are beginning to

scale back the support of the economy. With a scaling back of the

bond buying programme, there were no surprises. The Fed stayed the

course, but the market is still reacted, even though they were

expecting this. It is interesting, because one of the reasons some

analysts have commented, the reason the Fed felt comfortable with this

reduction, the last time they announced a $10 billion reduction,

the stock market took the information quite well. This time,

we saw that the markets in the US fell by 1% or even a little bit

more. Much of that has to do with some corporate earnings here in the

US, it was a little bit less than anticipated. Also, the strain that

we are seeing in emerging markets, that is also putting some pressure

on the markets here in the US. Also making headlines, in a a surprise

move, Google has sold Motorola. Google bought the company in 2012,

but the search engine drives will keep several lucrative patents,

including the smart phone and software.

Shares in the Nintendo Co have fallen, after they said the top

executives would take a pay cut to make amends for poor performance.

Shares in Facebook soared more than 10% in after hours trading the US,

after the company reported better than expected profits for the three

months ending in December. The company reported revenues of $523

million for the quarter, which is a 63% increase from the year before.

The boost came from stronger mobile advertising sales, which is a

priority of the chief executive. Fresh growth data from the

Philippines revealed its economy expanded by six x 5% in the final

quarter of 2013, compared to one year ago. -- six .5%. The expansion

comes despite the impact of Typhoon Haiyan which hit in November, and

cause a temporary slowdown in the economy. Going forward, the

reconstruction effort, which is costing $8 billion over four years,

could provide a further boost the economy in 2014. Earlier, I spoke to

a guest about it. Private consumption needs to remain very

strong. It is one of the strongest in the region, and that could

continue to help support the economy in 2014. One of the other positives

is we are seeing some revival in manufacturing. Manufacturing growth

last year came into double digits, and it should benefit from a

slightly better than anticipated growth this year. Manufacturing has

in one of the weaker points of the Philippine economy, and the surging

growth of the outsourcing industry. You made all the right points. We

also need to remember that there is some infrastructure overhaul taking

place in the Philippines that could continue to drive investment growth

in the country. Investment growth has been stellar for the last couple

of months, and we expect that to continue this year, especially with

reconstruction efforts taking place in affected areas.

Moving to South Africa, wearing a surprise move the central bank

raised the of rolling to 5.5% -- borrowing. The bank's governor said

the global financial crisis was in a new phase, and was creating new

opportunities for emerging markets. US airspace giant, owing, --

Boeing, has delivered more commercial aircraft. Future revenues

and profits will be lower than analysts expected. The company said

it forecast to deliver up to 725 aircraft this year, a 10% increase

from 2013. China has overtaken France and Italy

to become the world's biggest consumer of red wine. Asia's one

market is set to become nearly as big as America within three years.

We look at how some companies try to crack into the market as the

region's appetite for wine develops. Preparing for a dinner party isn't

always easy, especially for this woman, who wants to serve an unusual

dish called Fish head curry. It is popular in Singapore, but like many

Asian specialties it is difficult to pair with wine. So, she is turning

to a bespoke intranet site to ask producers for help. I'm not a wine

connoisseur myself, I'm more of a social drinker, so it is great to

help you with planning dinner parties for my friends. Asia's first

for wine is growing, fuelled by demand from China, South Korea and

Japan, sales across the region amount to $7 billion per year. Here

in Asia, red wine is a lot more popular than white, even in the

tropics. One reason for that is that the colour red is seen as more

suspicious, so the demand for red over white is something that

produces looking to increase their market share here need to keep top

of mind. 29 -year-old Paul is the founder of a website where producers

from around the world can showcase and sell their products for free.

With global intranet sales now worth $5 billion a year, he says it is

crucial for them to connect with buyers online. Was consumption of

wine is relatively low, use of social media is very high. This is

how people want to be marketed towards. 15 wine makers and

distributors now use the website. At this restaurant, one of the world's

biggest producers, staff are looking to add new wines to their online

store, because last year's sales in Singapore rose 4%. This was just by

being part of the website for a month. Our consumers tend to be

younger, and they tend not to be engaged in the more traditional

media forms, like print. Despite Asia's preference for red, back at

Kelly's apartment, they are having white wine with their curry, since

she got the recommendation. This highlights the potential of the

internet in changing Asian palates. Make sure you look at our revamped

Asia business news homepage. Happy lunar New Year. I Rico Hizon,

goodbye for now.