05/02/2014 Asia Business Report


05/02/2014

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in September's referendum would increase costs for the company. Time

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for Asia Business Report with Rico Hizon.

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Microsoft installs a new chief executive and chairman, ushering in

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a new era for the technology giant. And, Thailand's politically

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sensitive rice scheme is dealt a blow.

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We begin with silicon valley, where a long and dissipated changing of

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the guard has taken place at Microsoft -- Silicon Valley. Satya

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Nadella has been tagged as the third ever CEO of Microsoft. He started

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working there more than two decades ago. He will replace Steve Ballmer

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who announced his retirement last year. Bill Gates will become

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technology advisor to the company. Earlier, I spoke to Todd Bishop,

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asking him how the tech world was receiving the management change. A

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lot of shareholders wanted someone who could come in from the outside

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can shake the company down. I think that is why there was so much

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excitement about Alan Mullally, and the prospect of him coming in. I

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think they will take a fresh look at Microsoft. I think they will be

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disappointed by one of Steve Ballmer's the tenants coming into

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takeover. -- lieutenants. Tell me about him. History well respected

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inside the company. He is not a household name in the broader tech

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world. He is a quiet but strong individual, with a lot of principle.

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According to people who look at him, he will look at the data

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closely and not be afraid to make bold decisions. He needs to

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translate that respect into the broader world and into the stock

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market. Analysts are saying that it will basically be a triumvirate

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running the company. There will be John Thompson running the board,

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Bill Gates as the advisor, and Satya Nadella. I think the fact that you

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see John Thompson, the former CEO, rising so quickly, this suggests he

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will be giving the CEO a longer chain to make changes. To that

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extent, I think we will see change, but I don't think it will be the

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radical change that we have seen. Over time, I think we will see Satya

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Nadella make his own mark on the Co. Morgan Stanley reached a $1.25

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billion settlement. The investment bank was sued by the Federal Housing

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agency over mortgage-backed securities it sold in the years

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leading up to the financial crisis. Shares in Panasonic have surged more

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than 15% after closing stronger than expected earnings. -- posting. Its

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quarterly profit more than tripled to $2.4 billion, and it was near the

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end of a multi-year restructuring process. Sony's price has also been

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rising. Share prices rise 8% to a one-week high on news that it may

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unload its Vaio brand to Japanese industrial partners. The government

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witness in Thailand has said that China has cancelled a contract to

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buy more than a million tonnes of rice. It would have been the first

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age of a much bigger sale and Thailand's rice scheme is now being

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investigated by a corruption commission.

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For more than two years, Thai farmers have been able to sell their

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entire rice crops to the government for a guaranteed price. It has been

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an understandably popular policy with them, but it has left the

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government holding an immense and growing rice mountains, estimated at

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more than 15 million tonnes, which has proved hard to sell overseas

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without making a huge loss. When I met the minister now in charge of

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the rice scheme 12 days ago, I asked him whether he was having any

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success and loading the stocks. We have been doing pretty well lately.

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At the beginning, we had some problem, but that was only a short

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time. We have been doing quite well, and we are still doing the

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normal sales. But you are selling at a much lower price than you paid for

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it? Significantly lower? With this kind of programme, you need some

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budget for this. You may say, this is the loss. Even if the last

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government's scheme, they also provided a budget for this. The

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amount of the subsidy is not that much different. Really? Yes. You

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actually know how much this rice scheme has cost since you have been

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in government? Can you put a figure on it? We haven't closed the account

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for the year, so we don't know exactly, but we can estimate that

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the amount of money the subsidy, the loss that you are calling, is not

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much different. At the time, he was still in talks with China over a

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deal to export more than a million tonnes for yet undisclosed price,

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with a hope of selling a further 6 million tonnes. That would help to

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fill a gaping hole in the national budget, but now it has fallen

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through. This leaves the government with few options for people to sell

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the last crop. Until the government intervenes, it has limited chance to

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make a difference. Protesters have joined the anti-government movement

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in Bangkok. Critics now believe the government will have two abandon the

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rice scheme if Thailand is to recover its previous position as a

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rice exporter and as a benchmark for quality.

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India's car sales dipped for the first time in over a decade last

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year, and the entire industry is feeling the effect of the slowdown.

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As the country gears up to host one of the biggest auto expos in Asia,

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can the come out of the slump? Trying to get back into the

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spotlight, these are the first new cars from Tata Motors in three

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years. It is one of the country's biggest carmakers, but sales fell by

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more than a third last year, worse than any of its Indian rivals. It

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wasn't meant to pan out like this. This was the ultracheap small car

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Tata created, supposed to revolutionise the industry. But the

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$2000 car has disappointed since its launch in 2009. The company now

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wants to change it selling strategy. If you get the buyers, and the

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demographic of the buyers, you see more younger buyers coming to the

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market. Obviously, cheap is not what they are looking for. They are

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looking for the right value, and something that announces their

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identity. We embarked on a repositioning of the Nano. It is not

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just Tata. Every other car maker in the country is try to tempt the

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consumers, in a market down 10%, one of its worst years in over a decade.

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Customers are hardly walking into the showrooms these days, borrowing

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has become more expensive in the last couple of years. About two

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thirds of all cars are livid in India are being sold, and purchasing

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decisions are delayed. The market is not uniformly bad.

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Foreign firms like Ford are sitting on months of orders. Launching a new

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prototype of the existing compact car, the company says getting India

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right is critical for Ford's global success. Arie investments are on

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track, we are committed to investing $2 billion in India. Part of that is

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for a new facility which will be operational by the end of this year.

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While India's urban roads may be struggling with traffic jams, there

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are millions of people still looking to buy their first car. So,

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carmakers in Asia's third largest auto market are hoping that the auto

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show will drive interest rates down and help drive the improvement of

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the market. Stock will thank you for investing your time with us on Asia

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Business Report. -- thank you for investing your time with us.

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Our top stories: The Pakistani Taliban have condemned government

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representatives who failed to turn up for long planned talks. The group

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say they are still willing to negotiate. Government sources say

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