14/12/2015 Asia Business Report

China's factories have churned out the highest output in six months.

Beijing's stabilising the economy. Reports that one of China's

best-known businessmen has returned home after assisting with an

investigation. Good morning. Great to have you with

us. I am Rico Hizon in Singapore. The chairman of the Chinese

conglomerate has returned home after mysteriously disappearing last

week. Sometimes described as China's Warren Buffett, he was

assisting authorities with an investigation. Let's hear from our

Hong Kong correspondent. It is still a mystery what this was about. That

is right. Certainly, the latest, from the Chief Executive of that

group, in a conference call with investors yesterday, he gave more

details about him, but also sought to play down this incident. Of

course, the entire financial community in China was shocked last

week when a magazine broke the news he had seemingly disappeared. It

might have been that he was in police custody. Many questions still

about what investigation he might have been helping with. Last week,

an executive told me that he himself was not being investigated. Only

assisting. They confirmed that in a press release on Friday night. A few

more details, let me share them with you, what was said, according to the

Reuters news agency, a quote, we trust that the chairman is a wise

man and will actively fulfil his duties to assist the investigation

as soon as possible is. That is according to the company president.

-- possible. He also said the company itself is not in crisis. The

financial situation is very healthy. Rico Hizon, this comes at an

interesting time for the company. The group is a well-known Chinese

conglomerate and is really scouring the world for acquisitions. To date,

it has spent $30 billion on foreign acquisitions and intends to do much

more. In many ways, this company has to be much more transparent about

what is happening relative to other Chinese companies who have also been

affected by these types of investigations. We will have to

leave it there, thank you so much for updating us on that chairman.

Hong Kong. Alibaba will pay more than $265 billion for The South

China Morning Post. The deal was announced on Friday. The value of

the agreement has just been revealed in a statement to the Hong Kong

stock exchange. The sale of a newspaper to a Chinese company has

brought about concerns about the independence. A health check over

the weekend with new economic reports coming in. Stronger than

normal. A a six-month high of the growing at an annual 6.2%. -- A new.

The strongest expansion this year. Is this a positive sign? We have

this man's viewed. There is reason for optimism. -- view. We see them

coming out of this economic recession, but we think the first

quarter will be difficult again. It will be difficult. The numbers are

in the ballpark expected. That is positive. The month of November, you

had, what you call, Singles' Day. Millions of people shopping on

line. The likes of Alibaba made tons of money. $30 billion. The biggest

retail event in the world. Yes, that helps. But these are year-on-year

numbers. It was 14 billion Vizier and 10 billion last year. -- this

year. They are healthy. They are good signs. They are clearing out

his Elche inventories. It will take time to clear this out. -- this

inventory. What about what might happen in the US this week. How will

this impact economies and China in particular? The interest rate hike

itself will affect China's currency. It recalibrated its position on

Friday. That means, as the US hikes the interest rates and the dollar

becomes more valuable and appreciates, China may devalue their

currency slightly. They may break that pair with the US dollar. That

may make China more affordable to people outside of it quite also, the

falling oil prices. -- it. We are not quite there yet on the

commodities numbers. They will still continue to fall for a little while.

In the first half, they will continue to fall. That will impact

their import goods as well. If you have a falling Chinese currency, a

depreciating Chinese currency, and falling commodities prices, then,

Chinese exports should start to look up at some point in the second

quarter. Tony Nash. Confidence in Japan. Holding steady in the three

months till December. Some fear it may not last. Their index reveals

sentiment that they stood at plus 12. From the Fujitsu Research

Institute. We had a major deterioration in sentiment during

the summer and after that during Fall we had major slowdowns in Asia

affecting some companies. The companies are flat. -- fall. We

think it is basically not that bad. That is the sentiment. The outlook

for next year is much more tricky. Much of the good news, low oil

prices and a push from the micro policy side is out of the charts.

Next year, it might be, well, not that easy. We also saw a turnaround

in the GDP numbers for the July-September quarter. It was one

of growth. But the service is sector is also reflecting weak domestic

consumption. Domestic consumption has settled. It is settled. In

Japan, they are ageing gradually, they are preparing, not getting over

the top because of market policies, but they are not cutting back that

much. We saw major change in terms of investment outlook and what

companies are doing. That is where sentiment becomes important.

Companies did not buy the overall big impact of a slowdown in Asia.

They are protected by the comparatively weak yen. They have

settled and a growing again. They can invest in smaller economies.

Briefly, steady among manufacturers, has Japan already pulled out of a

recession? Yeah. Definitely. Martin Schulz. In the wake of the financial

crisis of 2008, interest rates were cut globally to produce growth. But

the US bank is looking set to raise the cost of borrowing for the first

time since the crash. Annual rate increases will be small and gradual,

but they will still have some knock-on effects. We report on how

this could affect India's economy. Here on the Bombay stock exchange

and Mumbai, the shares have fallen more than 5% in 2015. And, the

moment the interest rates go up in the US, they are likely to fall

further. That is because if the US offers better returns through higher

rates it is a good chance that investors will move more of their

money there and out of Indian businesses that are generally seen

as riskier. It is not just Indian shares that are falling. The value

of the Indian currency is at its lowest against dollar in more than

two years. That is because investors are selling emerging currencies,

including India's and buying dollars. That means imported

products become more costly. Expect to see imported items all costing

more. India's biggest import is oil. The country has done well out of the

dramatic fall in crude prices over the last two months, but the oil's

priced in dollars, that could get passed on through higher petrol and

diesel prices. -- price. What does this mean for businesses? Rising oil

prices will affect transport prices. Imported raw materials like

this will become more expensive, squeezing profit margins. Another

problem is that many Indian companies have high levels of dollar

debt. Rising interest rates will increase their costs, making them

more profitable. It is not all bad news. If you are an exporter, a

weaker rupee means that you can have greater export payments. It will be

decided here at the central bank of the country. They have already cut

interest rates to 6.7% this year. More cuts to make borrowing cheaper

and encourage more growth. The bank's governor is likely to be

hesitant to cut rates further as will it even less attractive for

foreign investors. When the US rate hike comes, it will not be a

surprise that the impact on India is not fully understood. Thank you for

investing your time with us. I am Rico Hizon. Goodbye for now.

Shaker Ahmer, the last British man to be released from Guantanamo Bay,