13/02/2014 Asia Business Report


13/02/2014

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forms the next government. The Scottish government has accused

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Westminster of bullying and intimidating. Now, time for Asia

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Business Report. Lenovo beats expectations for its December

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quarterly earnings. At the Singapore airshow, we get on board an aircraft

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like no other. We begin with the world's biggest PC maker, Lenovo.

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Its shares are currently down slightly in early Hong Kong trade

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despite the company exceeding expectations for its quarterly

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numbers ending in December and posting record results. It comes in

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the wake of the company's $5 billion shopping spree to purchase IBM's

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low-end server business and Motorola mobility from Google. Lenovo really

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touted its strong earnings period from October to December. Profits

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were up almost 30%. Revenue across the board is up 15%. 32.6 million

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units were shipped. That's one every five seconds. The market share

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figure is 18.5% of the global market. Two of Asia's biggest

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economies will be announcing their interest rates decisions in a few

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hours. The central banks of South Korea and Indonesia are expected to

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keep the cost of borrowing steady. Much attention is being paid to

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these economies as the US Central Bank looks set to continue winding

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back its massive stimulus initiative. We explain why the

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Fed's moves are being felt here. It was not long ago that emerging

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economies were excited investors. Their growth rate outpaced that of

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developed economies. In fact, they still do. Developing economies are

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growing nearly twice as fast as developed economies. Asia is

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predicted to grow at 6%, China at over 7%. Compare that to the US at

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around 3%. Why are some investors leaving the emerging markets? The

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main reason is there is a big downside risk to that growth. Some

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emerging economies have grown accustomed to plentiful cash. They

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have large external deficits. After all, the Fed has been injecting cash

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for the past five years. But now, it's winding down. And that is why

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some countries have raised rates to attract investors with higher

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returns. The problem there is that it hurts gross but they worry that

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if they don't act, they risk a crisis if the cash dries up -- it

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hurts gross. Emerging economies have huge potential. Just look at their

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large populations. But they are more volatile economic re- and

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politically. Only 17 countries have grown well enough to become rich in

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the entire past 50 years. That gives us a sense as to why it has always

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been risky to invest in them. With the US and Europe recovering,

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investors are reconsidering where to spread their cash. Earlier, I spoke

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with a senior economist from Barclays Bank. What is the outlook

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for emerging countries globally and in Asia? It has been a challenging

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beginning of the year to the emerging markets in Asia. The

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interesting thing is that from the beginning of the year, these

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countries have outperformed in -- as consensus trades have come under

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pressure. Has the volatility in the regional economy stabilised? There

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has been some stabilisation. It is worth saying, however, that over the

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next you months, we will get regular about of emerging market stress.

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It's important for investors to be very nimble in their positions. What

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are the positives amid all of this stress happening to the Asian

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emerging economies? Globally, the manufacturing cycle continues to

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improve. The US still has strength within its economy and that is

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benefiting countries like the North Asian countries like South Korea,

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which is very much gaining from the manufacturing cycle, especially in

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the field of electronics. China and South Korea are less vulnerable in

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an environment with concerns around emerging markets. Thank you. The

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South Korean central bank has just released its monetary policy

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decision. According to its governor, it was a unanimous vote to keep

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interest rates unchanged at 2.5%. In Myanmar, more than two thirds of the

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population live without electricity. As the country opens up

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to international investments, basic facilities and infrastructure are

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the highest concern. A US -based energy supplier has now struck a

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deal with the Myanmar government. APR will bring electricity to 6

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million people. Earlier, I spoke with the company's head of business

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development in the Asia-Pacific. I asked when his company's project

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would start delivering actual power. We are doing fast track

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power. We build large-scale, fast track power plants in three months

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or less. This power plant is already under construction and it will

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deliver power to the people of Myanmar by the end of the month. --

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the end of next month. How many households and how many people will

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get reach? 6 million people. It's one of the largest and it will be

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one of the cleanest and most efficient power plant in Myanmar.

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The price is competitive with other power plants in Myanmar. It will use

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Indigenous fuel from the country and it will be built in three months

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time. -- it will use local fuel. How much was this deal worth and how

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much of your company is investing in Myanmar? I can say this is a

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substantial investment. It's one of the largest investment in an

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American company in Myanmar for a long time. This is the first

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American power contract with Myanmar for many years and this is the

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beginning of, we hope, a number of investments in the country. At the

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Singapore Air Show, airline manufacturers are keen to tap into

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the growing defence market in Asia. Del Helicopters has its unique V-22

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Osprey aircraft on display. -- Bell Helicopters. Saving lives in times

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of distress. The V-22 Osprey played a key role in rescue and relief

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operations after Typhoon Haiyan struck the Philippines last year.

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Bell Helicopters, the maker of the aircraft, has now brought in to the

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Singapore Air Show four countries other than the US to take a closer

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look at it and see if they would like to buy the plane. I got the

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opportunity to experience its capabilities firsthand. What makes

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the V-22 Osprey unique is the fact that it combines the capability of a

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helicopter with that of a traditional plain. The helicopter

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aspect allows it to take off vertically. It can take off at a

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rate of 5000 feet per minute, ten times what you could do in a civil

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aeroplane. The traditional aeroplane aspect allows it to achieve speeds

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faster than what a helicopter can. But the V-22 Osprey is not just

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about combining the two capabilities. One of the pilots who

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flew one to the Philippines says that high-end technology on board

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gives it the advantage over other aircraft. It has weather radar

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capabilities. In the operation where we went to the Philippines for

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Typhoon Haiyan relief, we were able to navigate through the weather to

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provide relief into some of the outlying islands that some of the

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other aircraft may not have been able to navigate through. However,

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it is only the Americans who use these. They have bought more than

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270 of them and have ordered another 100. Bell Helicopters says it is

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ready to sell them abroad. We are looking at lots of different

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countries. We have around one dozen countries here to see the V-22

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Osprey and we expect interest to increase dramatically. It does not

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come cheap. It costs nearly $90 million to buy one and that is

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before maintenance and training. There are only a limited number of

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countries that will be able to afford that. And we will continue to

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bring you the latest from the Singapore Air Show. We have also all

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the latest information on our website. Today, we are looking at

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the race to become the world's best airport. Thank you for joining us.

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The headlines: Much of Britain is still experiencing some of its worst

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weather in years, with high winds driving rain and widespread

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