24/07/2014 Asia Business Report

territories will be taking part in the Games.

Those are the headlines. Time for Asia Business Report.

A big like for Facebook, posting better`than`expected results,

sending its shares to an all`time high. Talk about Thai Airways, we

ask what is ahead for the company as it tries to turn itself around.

Hello and welcome to Asia Business Report.

Social networking giant Facebook has announced a 138% rise in their

income for the second quarter ending in June, sending its shares to an

all`time high in extended trading hours in the US. The company has

more than one billion users but it has had to work out a way to make

money from them. These latest numbers show that the company's

advertising model must be working, with advertising revenue up 67%

compared to one year ago. I spoke earlier with a tech analyst to ask

more about these owning. `` earnings. What has happened is the

rise of mobile. We have seen the amount of mobile revenue from

Facebook jump up to 60%. It has been amazing. An amazing rise for mobile

advertising, but is Asia part of that equation? Are Asian Facebook

users just using the social media platform for their selfies and

photographs and status updates? I certainly get a lot of ads on my

Facebook feed. Facebook does not break the numbers down by geography.

It is emerging markets like Asia that are the biggest users of

Facebook. It is not cheap. If you advertise... And that is just to

boost your status. It can cost up to $50 just to do that. There are a

whole range of advertisers including individuals. The corporate sector

can target a certain demographic of people right down to very specific

information about people. That is what Facebook allows them to do.

This is indeed a frontier for advertising on Facebook in Asia,

with countries like India and the Philippines being big users. What

about China? Facebook would love to be everywhere. But China likes to

promote their homegrown social media companies.

Japan posted an unexpended 2% fall in exports. Imports rose 85%. It

left the country with a shortfall of $8 billion. Policy makers hoped

exports would offset the introduction of a sales tax increase

in April which is waiting on the economy. A survey finds factory

activity in China has accelerated at its fast as since January. HSBC

manufacturing index shows manufacturing output reached 52 in

July, a reading above 50 indicates an expansion while a reading below

50 means retraction. The result beats expectations and need a raft

of government stimulus initiatives. THAILAND Thailand's political system

has faced turbulent times of late and so has the national carrier.

Thai Airways is in the red, suffering massive losses last year.

Its performance was inconsistent prior to that as well. A board

meeting today will consider a detailed restructuring initiative

for the struggling airline. However, the changes could be a little bit

unusual. Thailand's military government says

repairing the economy is a high priority. Repairing the flagship

airline could be a test. Ticket sales have been weak, operating

costs high and competition is increasingly fierce. Last year, Thai

Airways lost nearly $4 billion and they have been in the red for the

first two quarters of this year as well. `` $400 million. The chief of

the Royal Thai air force has the job of fixing the airline. A detailed

restructuring plan aimed at returning the airline to profit will

be considered at a board meeting today. The board is reduced from its

original size because several members resigned, including some

with ties to the former regime. It seems politics is never far away.

While Thai Airways's new management structure is unique among national

carriers, its cash flow problems are not. Qantas is attempting to save $2

billion in the next few years and relax 5000 jobs. There are reports

it is considering splitting its domestic and international arms as

part of a restructure. Malaysia Airlines has problems that are

tragic and all well`documented. There are questions hanging over its

future. Aviation analysts say it might be

difficult for Thai Airways to turn things around it head of the Thai

Air Force, without management experience, continues to run the

carrier. He is just the acting president. They will appoint a

full`time president over the next few months. He will be chairing the

meetings for now, but obviously this is just the first of several moves.

Eyes are on the government to see if they can fix an airline that,

honestly, the previous government had trouble fixing as well. An

unusual move. A permanent move would be bringing in a person who might

know something about the aviation industry. What kind of person should

they be hiring? Hopefully they will consider someone with significant

airline industry experience, significant commercial experience.

Possibly someone from outside Thailand, which is not something

they have done traditionally. There will be many candidates but whoever

gets the job will have a lot of hard work to do. A lot of hard work

indeed, Brendan. They lost nearly $400 million last year. What must

they do to turn things around? They will need to put in a restructuring

plan. They will have to potentially cut their network and some

unprofitable destinations. Other airlines did that a couple of years

ago, like Malaysia Airlines. Thai Airways has not had such a network

restructure in a while. They will have to trim the fat and cut costs.

They might have to accelerate fleet renewal and get rid of some of their

older aircraft. Like the 747 400s. Other carriers have retired them.

There is also the political crisis and the tough competition,

especially from Air Asia. That is also hurting its bottom line. There

is a lot of competition especially from the low`cost airlines. Thai

Airways has been hit with its European operation. European tourist

figures are increasing to Thailand but its market share has gone down.

Thank you. In other news, South Korea recorded

its weakest growth in more than a year. GDP increased by 0.6% quarter

on quarter for the April to June period, down from the last report.

The IMF has downgraded economic forecast for the US for the second

time this year, saying that overall growth would be disappointing at

1.7%. It blames a contraction at the start of the year and suggests a

boost in the minimum wage and an expansion of tax credits to help the

poorest in the country. In June, it predicted growth of 2%.

In India, vegetable prices have once again hit the headlines, soaring

over the past month. It has proven to be a big challenge for the

country's newly elected government to bring the prices down. Our

correspondent reports from Mumbai. These vegetables are not just being

consumed on dinner tables. They have also become part of the

conversation. That is because the cost of buying them has gone up so

steeply. This month alone, the price of tomatoes have trebled and that of

onions has doubled. These vegetables are key ingredients in meals across

the country and that is why this is really hitting domestic budgets

hard. Last month, inflation came down sharply. Much of that was

because of food prices. Nobody expects that to continue. There is a

forecast of less than normal rainfall during the monsoon season

and if that happens, it will inevitably hit food production.

Already, wholesalers in some parts of the country have been holding

onto their stocks and this has been blamed for the rise in prices. Last

month, the government took some steps to bring down the cost of

food, putting export controls on onions and limiting the quantity of

vegetables that can be stocked up by wholesalers. So far, the effects of

those measures is yet to be seen on the ground. PM Narendra Modi and his

team promised to bring the cost of living down for ordinary citizens

here. People in India will be hoping they can do more to live up to that

promise. Before we go, here is a look at the

markets in Asia. Stocks remain in positive territory in mid`morning

trade. US equities ended mostly higher overnight, with the broader

SNP 500's index closing at a record high. Conflict in Ukraine and the

Gaza Strip keep the market gains in check. The Nikkei is up 23 points

despite a trading deficit which was expected. China's better than

expected factory output numbers, gaining 71 point four. Australia's

index gained 7.5. Thank you for joining us.

This is BBC News. The headlines: The UN High Commissioner for Human

Rights has said Israel may be committing war crimes in Gaza. Navi

Pillay has also condemned Hamas rocket attacks on Israeli civilians.