24/11/2015 Asia Business Report

Now on BBC News all the latest business news live from Singapore:

Will bail or won't they? We look at expectations that the Fed will raise

the cost of borrowing next month -- will they? And we take you to the

tiny Pacific island of Kiribati to see how they're trying to claim a

little more of a big fish. Good morning Asia and hello world. Thank

you for joining us for Asia Business Report. There are wide expectations

that the US Federal Bank interest rate hike is just around the

corner, possibly as soon as mid-December. But the bank's Board

of Governors had a special meeting overnight to discuss the discount

rate which banks paid for borrowing directly from the Federal Reserve.

There has been no announcement on that so far but earlier I spoke to a

correspondent about what it means for next month's meeting. It is a

harmless way of signalling to the market that a rate hike is coming

up. There are two basic rates, the discount rate is one where the

second-tier banks borrow from, then there is the Fed fund bank where the

rest borrow from. Know what is really borrowing from the discount

rate right now -- no one. You have the European Central Bank, the Bank

of Japan and the people's Bank of China -- People's, and the Fed seems

like it is going in the opposite direction raising rates? The US is

looking healthy and pockets but you do have these other central banks.

The board of governors in the US, a number of them are going out and

saying very different things which is causing confusion in the markets

as well. The discount rate meeting today with a real chance for the Fed

to make a statement about what they're going to do. Would all of

these banks loosening their monetary policy, could this delayed the Fed

-- delay the Fed from raising interest rates in December? It

could. They put together a laboratory and in all their

quarters. Their quantitative easing measures? Yes but they don't have a

Leverkusen to get out of it and that worries many were watching the

markets -- they don't have a plan. If you look at the global economy,

60% of transactions globally are in US dollars, so it affects

everybody. It doesn't really matter if the Fed raises the cost of

borrowing by a quarter of a percent weighs will it have an impact on US

and Asian economies -- a quarter of a percent? Will it have an impact on

US and Asian economies? It is more the trends that people worry about

because there are many governments in this region and Africa that

borrow in US dollars. Even in some places, people have financed their

homes and mortgages in US dollars. This impact government finances and

personal credit and business lines of credit. So the cost of operating

becomes more expensive. Shares in Pfizer and Allergens have fallen in

the wake of their $160 billion merger deal -- Allergen. US

presidential hopefuls have joined in criticizing the merger that would

make them the world's biggest drug seller. Widgets at stake for the US

is of dollars in corporate tax revenue aspect what is. Now we go to

our correspondent. Pfizer snapping up Allergen is the biggest

pharmaceutical takeover -- Allergan. Pfizer would become the

world's largest drugmaker with an average revenue of $64 billion per

year. But there is another motivation. The newly merged Pfizer

can shift its legal base from the US to Ireland in what is known as an

inversion, a move that effectively slashes its tax rate. In the US,

corporations are taxed at 35%, among the world's highest rates. In

Ireland it is around a third of that at 35%, among the world's highest

rates. In Ireland it is around a third of that a 12.5%. Washington

has called in versions unpatriotic and has tried to crack down on the

practice. -- inversions. The price of iron ore is on the brink of

hitting a 10-year low as demand from China continues to weaken. It was

trading at less than 45 US dollars per ton on Monday. 1.8% from the

closing of the previous day but prices could dive even further.

Prices could fall below $40 per ton by the end of the year. The steep

decline in the demand for commodities in China has seen

shipping companies posting huge losses in the third quarter. This

company also published orders for -- cancelled orders for three new bulk

carriers. It has been the toughest year for the market in more than

three decades. This Hong Kong brokerage firm confirmed its chief

executive has been missing since last Wednesday. Shares in the

company fell by as much as 17% after the news. The firm's parent company

is listed in Shanghai and is one of the biggest stock brokerage

companies in China. Alibaba founder Jack Ma is reportedly in talks to

buy a stake in The South China Morning Post. If it is confirmed, it

would be a welcome addition to Alibaba's growing media empire. Many

people may not have heard of the tiny island nation of Kiribati, but

there was a good chance you could have eaten tuna from its waters --

is. The land area is smaller than greater London but it's fishing

grounds cover an area bigger than India. Its economy struggles partly

because most of the welts from its tuna flows out of the country. Now

just tried to keep more of that at home. Now we go to our

correspondent. Not every fishing venture in Kiribati has ended in

success. But fish provide a substantial part of the diet and

catching them is central to the culture here. Further out to sea,

fishing could be the key to the country's economic future. It is a

tiny country with huge fishing grounds and it is doing its best to

make the most out of them. These workers are unloading about eight

tons of massive yellowfin and bigeye tuna, taking great care as they go,

because a bruised face isn't worth quite as much. This is Kiribati's

attempt to move up the value chain. They hope that by processing the

fish here in the country, they can keep more wealth and more jobs at

home. At present, Kiribati mostly sells the right to fishing in its

waters to other countries. By negotiating access fees as a block,

the country's island nation has quadrupled its revenues over the

past few years but the potential income from processing is a much

bigger fish. If we process all the fish caught in our waters, our GDP

would trouble many times over. All the fish is now being taken to

Bangkok to be cleaned. Imagine all the jobs it is creating over there

but not here. So our objective, and I think it is fair, is that we want

to processing, we want to have greater participation in the

industry. Not just to be the source of the raw material. Kiribati only

keeps a 5% slice of the value of its fish. Kiribati Fish Limited is

attempted to change that by keeping jobs in the country which topped

that implement at 35%. -- which has unemployment at. It does face very

real challenges. It is a mere minnow compared to processing facilities

overseas and her isolation creates problems to. It means there is more

cost on labour and freight because the location is very far from the

market. So we have to include all these costs into the product prices

happy this makes the product more expensive. Even with these

challenges come of this tuna could be the best economic output

country's future -- even with these challenges, this tuna could be the

best economic possibility for the country. Markets are dragging their

feet in midmorning Tuesday trade. US stocks fell overnight amid

heightened expectations that the central banks would raise rate

prices next month. The Hang Seng just opened for trading. That is the

Asian stock market action at this hour. Thank you for investing your

time with us. Goodbye for