12/02/2014 Asia Business Report


12/02/2014

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flood warnings are in place - 14 affecting the River Thames and two

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in the Somerset Levels. Now on BBC News, all the latest business news

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live from Singapore. No emerging market relief for the Federal

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reserve chief. They will continue winding down the stimulus programme.

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Day two of the Singapore airshow. We find out more about the first DT

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you'll is -- deals being made at Asia's biggest aviation event. We

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kick off with the first congressional testimony of Janet

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Yellen who is becoming chair of the US Federal reserve. She made it

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clear the central bank is on track in pulling back in stimulus

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programme. It will continue to gradually reduce the amount of money

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it pumps into the US economy as long as there is no slowdown. US stocks

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rallied overnight on her statement with the Dow Jones and NASDAQ also

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gaining. Ms Yellin's comments come despite a rocky start to the year

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that saw a sharp sell-off. It has been a little over a week since

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Janet Yellen was sworn in as chair of America's central bank. She is

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already made the trek to Capitol Hill. The US has seen some weak

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economic data. Including some lacklustre unemployment numbers. Has

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the weak jobs report caused you to consider slowing the pace of the

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Fed's 's tapering? I was surprised that the reports in December and

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January, the pace of job creation was running under what I had

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anticipated. But we have to be very careful not to jump to conclusions.

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The Fed believes that the US economy may still be on the path to

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recovery. The gradual reduction in asset purchases is wreaking havoc in

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emerging markets. As investors pull money out. We have been watching

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closely the recent volatility in global financial markets. Our sense

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is that at this stage these developments do not pose a

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substantial risk to the US economic outlook. We will, of course continue

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to monitor the situation. The Federal reserve believes its primary

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responsibility is to this country's economy. While it is watching very

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closely what happens in emerging markets, unless it negatively

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effects America's economic recovery, we can expect the Federal reserve to

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stay the course. As you heard, the house of Representatives have voted

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to suspend the debt limit until March 2015. The move raises the

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government authority to avoid a default at the end of the month. The

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outcome is a victory for President Obama who has lobbied for weeks to

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have the debt ceiling reached. Positive reactions from Asian

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markets regarding Janet Yellen's testimony. Currently they are all in

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positive territory. In other business news making headlines,

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fresh official trade numbers from China revealed. The country's

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exports in January rose by just over ten and a half percent compared to

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last year. That is well above most forecasts. The Asian giant imports

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also exceeded expectations, growing by 10% and leaving the country with

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a surplus of $32 billion. In Australia, one of the big lenders,

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Commonwealth Bank gained 14% to about $3.8 billion. The results of

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the period came in better than analysts' expectations. The results

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show that the bank is focused on its long-term priorities. Staying with

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banking and to the UK lending giant, Barclays. It says it is set to cut

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12,000 jobs. The bank has a global staff including teams in Asia. The

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staff cuts come at a time when the bank is increasing its staff

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bonuses. Its bonus pool is rising by 10% to nearly $4 billion. One of the

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things that we do when we look at bonuses is we have to be competitive

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on pay and we have to pay for performance. We operate in countries

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from Singapore to San Francisco and we compete for talent in global

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markets so we have to be competitive and our judgement was this year, it

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was important that we increase the bogus pull by 10%. The profits are

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down for the reasons that I said. It is in the interest of our

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shareholders that we pay the compensation that we are. People

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don't understand that? Aside from our investment, two of our

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businesses have done really well. Equities and the banking division

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grew by 3%. Our fixed income business was down. We have paid for

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performance as it is aligned with our principles. Earlier I spoke to

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the managing editor at eight Asian bank to ask him his thoughts on the

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bonus scheme. On the surface of it, it raises a number of questions at a

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time when topline and bottom-line numbers are down. As you mentioned,

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Barclays is in the process of transition. A transformation. The

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CEO and board of directors obviously have to look at what this means for

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the business. They are trying to grow their business and retain

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staff. He mentioned one point two billion in restructuring costs. It

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is substantially higher. With this mindset there has been a lot of

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backlash against banks and their higher paid CEOs since the financial

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crisis in the UK. Do people in financial centres like Hong Kong

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share this feeling? In Singapore, we have observed that the culture in

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Asia is much more conservative. The first deals to be made at Asia's

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largest aviation event, the Singapore Air Show has just been

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revealed. Airbus has said that it had 20 orders for its super jumbo

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worth about $8.3 billion. Other deals announced this week. Myanmar's

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national carrier also announced a deal worth nearly $1 billion. I

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spoke earlier to our reporter who is at the airshow. Myanmar is seen as

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having huge potential. Some even describing it as the next frontier

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in aviation. Myanmar has had some of the highest passenger rates in Asia.

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There are many challenges. Thank you, Andrew for joining us. There

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are already eight carriers in Myanmar. Is there a risk of

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overcapacity? Until recently, it has been a small market. There were a

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number of small airlines that are looking to grow with the opening up

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of the market. We are seeing exciting developments. It is very

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competitive. Do you think with the domestic market being so fierce but

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there are foreign players coming on board. Do you think the country and

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its infrastructure are ready? It is a fantastic tourist destination. The

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tourist numbers are growing rapidly but the key challenges are, while

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the infrastructure keep up? That involves new investment and the

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Myanmar government is talking to new investors and bringing foreign

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expertise. The potential is there but it needs to be carefully

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co-ordinated to make sure we can satisfy that demand effectively.

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Very exciting times for the Asia Pacific, particularly Myanmar. The

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challenge will now be will be whether infrastructure be able to

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keep pace with the growing demands? We will be bringing you the latest

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from this major airshow events throughout the day and this week.

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You can go to our website for the latest news. Today, the competition

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to have the best in-flight entertainment. We have a new Twitter

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ID. That is BBC News Asia at BBC News Asia.

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The top stories this hour. Officials from South Korea have left Seoul for

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the border village of Panmunjon where they will hold the highest

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level talks with the North for several years. Hundreds of civilians

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remain trapped in the Syrian city of Homs after attempts to get them out

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of the besieged centre failed. Many of the country's top scientists are

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warning that in some communities the floodwaters will

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