23/07/2014 Asia Business Report


23/07/2014

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into so`called Trojan Horse schools. Those are the headlines. Now on BBC

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News, all the latest business news live from Singapore. Nearly a week

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after the crash of MH17, we hear from passengers questioning the

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safety of global flight paths. And China is becoming an increasingly

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important market for Apple, with a surge in profits thanks to iPhone

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sales. Thank you for joining us for Asia Business Report. Six days after

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MH17 went down, the bodies of many passengers killed on the Malaysian

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Airlines flight are finally on their way to the Netherlands. In the

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Malaysian capital, a small number of protesters gathered. They demanded

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justice outside the Russian and Ukrainian embassies. Passengers are

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questioning who is responsible for the safety of global flight paths.

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Our correspondent reports. It is one of the world's busiest passenger air

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routes. 60 to 80 million people fly between Asia and Europe each year,

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and the path over Ukraine is one of the fastest. So not only Malaysia

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airlines, but many other carriers, including Lufthansa and Air India,

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were flying over the area last week, while others avoided the area.

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Carriers such as British Airways and Qantas avoided the route. This man

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was on a flight which also flew over Ukraine on the day of the crash. I

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am still in a strange emotional state about it. It was like, it

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could have been our flight. It could have been any flight. Within hours,

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flights started to avoid Ukraine, but the question is, why were they

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flying over Ukraine to begin with? Well, all the airlines we contacted

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said they were only using internationally approved flight

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paths, pointing the finger at air control and the Civil Aviation

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Organisation, but they both say that this is a sovereign issue, and it is

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up to the national authorities to declare any unsafe areas of

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airspace. I was really surprised they were allowed to fly over there.

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It is known as a war zone, they are having trouble there anyway.

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Lefevre, obviously, is a little `` the faith, obviously is a little

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shaken, but not destroyed. We take a lot of things for granted, and trust

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the regulators in whatever they decide for us. Airlines are keen to

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reassure passengers that their priority is to keep them safe, but

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the debate continues over whether this tragedy could have been

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avoided. And with no independent organisation taking direct

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responsibility for the safety of global flight paths, questions

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remain. And keeping you up`to`date with developments in the

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investigation into the crash, log onto our website, where you will

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find a special coverage including the latest news the remains of

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victims still at the crash site. Joko Widodo has officially been

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declared the winner of the Indonesian election, but his

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opponent is not giving up and has alleged that widespread fraud has

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taken place, and that he will challenge the result in the courts.

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Andrew White is the managing director of the American Chamber of

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Commerce in Jakarta, who said his investors are optimistic about the

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new President, but have expectations of him. Investors have already

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factored in the possibility of a constitutional challenge. They

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expect that by August at the latest there will be a decision. When the

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new president takes over in October, what should be his priorities, amid

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fuel corruption, and a slowing economy? One of his first priorities

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will be to get experts in the Cabinet, and investors will be

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looking at that. One of his first priorities in office is to deal with

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the US subsidy issue that is accounting for 15% of the Budget

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today. If that money could be freed up, it could go into infrastructure

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and other social programmes. So I would say those are his first two

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priorities. Getting the Cabinet right and dealing with the subsidy

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issue will be the most important things. How do you think he should

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handle the ongoing issue in mining? He needs to bring the companies to

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the table, with a contract of work that needs to be respected. And

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there needs to be a win`win solution for investors and the government. If

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that issue is not dealt with, it has tremendous implications for

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employment, and the loss of export earnings. Despite Indonesia's

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problems, many investors are honing in on the large population of

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individuals under 30, which could basically spur domestic demand going

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forward. That is one of the great assets that Indonesia has. They

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have, as you mentioned, a huge population under the age of 30, and

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a productive one, but that window is fairly tight. 20 years from now, the

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population will age, so the decisions that are made today will

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have tremendous ramifications 20 years down the line. Andrew White in

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Jakarta. In other business is making headlines, Credit Suisse received a

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huge fine following altercations on tax evasion charges from American

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authorities, but it was not all bad news. The loss was largely due to a

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large fine, following a settlement of a tax evasion charges. It was not

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all bad news. The private banking unit won more than $11 billion of

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new money in the quarter, which is a key indicator of future revenues.

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Microsoft saw revenues rising, but profits fall in the first quarter.

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It is in part due to incorporating the handset business of Nokia. It

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bought Nokia in April, and is down $5 billion from the same period last

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year. This comes after Microsoft last week said it will axe up to

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18,000 jobs, the largest in the company's history. Apple made a

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jumping profit of nearly $4.6 billion due to iPhone sales and

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computers. It is down to strong growth of sales in its iPhone is and

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computers. In particular, what was interesting, was that we heard from

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the chief executive, who talked about the strong performance in one

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specific region when it came to be sales of iPhones. That was the BRICS

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region, where sales rose 48%. I spoke to an analyst about the

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results, and this is what he had to say. So we saw them sell over 35

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million phones in a quarter. That is roughly 12 million a month, which is

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staggering given the high price point, and given that all the

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smartphone growth is in the developing world, where they are

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most expensive. $800 could easily mean a third of GDP per capita. But

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people are still willing to pay due to the status symbolism. The value

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of learning and iPhone and flashing it `` owning an iPhone. What about

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the iPad? Disappointing sales numbers for the second quarter in a

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row, down 9%. What did he say? Is he concerned? Well, I would be

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surprised if he wasn't. Only a few years ago Apple was described as an

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iPad company. These figures underscore how important the iPhone

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is to the firm. It is where the bulk of its profits come from, and we are

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reflecting on the fact that iPad sales were less than stellar, and we

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have not discussed its computer sales. And is now analysts are

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looking forward to this quarter. With the release of the iPhone six,

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and their partnership with IBM. What has been the share price reaction to

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these numbers? Initially, the shares moved down slightly. I think people

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were disappointed on some of the numbers, some of the sales figures

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that have come out. Looking forward, I think everyone will have their

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eyes to some timber, that is when we are awaiting an announcement on its

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new updated iPhone `` September. You mentioned wearables. There has been

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a lot of expectation given to the iWatch. Can Apple live up to that

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type? That will be the challenge for the company going forward, both on

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the operating system front and in terms of its hardware. The oil`rich

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kingdom of Saudi Arabia has given the green light to opening up its

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stock market to foreign investors. The move will allow the Middle

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East's biggest economy to bring in international investment and reduce

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its dependence on oil revenues. And speaking of the regional markets,

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share prices are currently in positive territory. US stocks rose

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amid some positive earnings and economic data. Investors continue to

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pay close attention to an stable regions overseas. The Hang Seng is

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up by 115.1 points, and the ASX in Australia is up by about 50 points.

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Earlier, Japan's market opened in positive territory. Thank you for

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investing your time with us. Goodbye for now. You're watching BBC News.

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The top stories this hour: Senior American intelligence officials say

:10:44.:10:46.

the most likely explanation for the Malaysia Airlines disaster over

:10:47.:10:48.

Ukraine is that pro`Russian separatists shot it down by mistake.

:10:49.:10:52.

All American airlines and a number of their European counterparts have

:10:53.:10:55.

suspended flights to Israel's international airport in Tel

:10:56.:10:56.

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