18/12/2015 Asia Business Report

Where will the money go? The US rate hike, where will it leave Asia's

property market? And questions over England's preparation, and whether

it was good enough, following devastating floods. Welcome to the

programme. With the US rate hike out of the box, the focus has moved to

the rest of the world. In Asia there has been little talk of raising

rates, with many central banks cutting and pumping money into their

economies to promote stronger growth. This divergence puts

emerging markets in a fairly tough spot. If they keep lower rates they

will continue to encourage investment or they risk capital

outflow, which is money leaving the country and devaluing the currency.

They could follow the lead of the US in raising rates, stemming the

outflow but possibly stifling investment. In the past 24 hours

since the decision, it has been completely mixed bag. Hong Kong has

raised rates, the Philippines held steady, and Taiwan, surprisingly,

have lower their rates. In a few hours we will hear from the bank of

Japan. One answer to the uncertainty over the currencies is of course

real estate. Put your money into bricks and mortar and you might be

less vulnerable to currency fluctuations. Our guest says

property investors have some certainty after waiting the decision

for years. Eventually it has happened, and it has been so well

signposted, I think there is a sense of relief within the markets. A lot

of equity markets have bounced back. In terms of the property markets

themselves, as you say we have seen Hong Kong lift interest rates,

although I don't think it will have too much of an impact in the short

term. It is all about next year, how fast and aggressively the Fed starts

to lift interest rates. The countries that have currencies

pegged to the US dollar, particularly Singapore, will be

particularly impacted. If you keep everything equal, an increase in

interest rates should have an impact on volumes and potentially pricing.

It is good to be looking into 2016. Volumes and pricing you say, and it

is just a slight hike, 25 basis points. What impact will that have

the of us? Obviously an increase in interest rates increases mortgage

costs, so for any new homebuyers the cost of buying property goes up, and

again, this can have a dampening impact on demand. Also in terms of

the debt for existing homeowners goes up. Monthly repayments will be

higher. That can also have an impact on the wider economy, through the

multiplier effect of people having less money to go out and spend on

consumer goods. It can have a wider impact, so probably what we have to

do is look at each of these markets individually and judge from the

local demand's price situation. Hong Kong will feel at the top of the

market. Floods in the Indian state of Tamil Nadu have killed more than

300 people in the last few weeks. The cost to the local economy has

been estimated at hundreds of millions of dollars. Now the cleanup

is under way, we went to the state capital of Chennai to find out how

people and businesses are getting back to normal.

The rain has stopped and now it is time to cry and salvage what they

can. At this paper company they are trying to get stock to a drier

location, away from the flooded factory. Diaries, calendars and

stationery were all made here, but most machinery and even the office

furniture is ruined. TRANSLATION: I have incurred a loss of nearly

$40,000. We cannot take any orders now. All the customers I had have

left us. Now I need to start from scratch. After all of the struggle

to run this factory, absolutely everything is gone. I have no idea

what I'm going to do next. You find all sorts of small businesses here,

from producers of car parts and pharmaceuticals to Robert processing

factories and exporters. At these unprecedented floods have left their

operations completely ruined. People tell me they have no idea how long

it will be until they can get it to work. Tamil Nadu is one of the most

industrialised states in the country, and an immediate

contributed to India's economy. Local car companies like Ford and

BMW have car factories here, so suppliers like this one have base

themselves here as well. It is also India's second-biggest hub.

Questions are now being asked about how so much can happen from just a

few days of rain. Some say it is because the city has been developed

without enough thought given to the environment. This is not an adequate

response, we need to see a long-term plan in place, and we need to invest

in research into many of the structures. Fort Chennai and other

parts of Tamil Nadu, it will take months for people and businesses to

pick themselves up and get back to normal. But the bigger question of

how to improve basic infrastructure to make sure natural disasters have

less devastating results will take much longer to cleanup.

You can watch that and other stories on India business report this

weekend at these times on BBC World News. Police in China have

reportedly detained ten company officials were fabricating pollution

data. The environment ministry said it has stepped up investigations

following public discontent over pollution. This comes just a week

after the red alert for smog in Beijing, which cut production in

that present limited cars on the road. The world's energy demand will

have grown by nearly one third by 2040, according to the International

energy agency. It predicts that growth will come entirely from

developing countries, but how will the energy be generated? We spoke to

an executive director of the IEA. Today we are releasing a report, and

the news after 20 years of strong growth of

global coal demand, now in 2014 we have found out that it has stalled,

and in 2015 we receive for the first time a decline in the global coal

consumption. This is mainly driven by China, because China is using

half of the world's coal, and it is restructuring, going to heavy --

going from heavy industry economy to lighter industry. But here in South

East Asia we see that main choice for many power

producers. Why? Because it is cheaper. The big

planets, which are low efficiency, sub critical plants. They should at

least be using high-efficiency coal plants

significantly lower. Obviously the price of oil is at a low at the

moment. How much is that effecting development and also

energy, renewable energy sources? It is a very risky development. What is

happening is that this expect all investments are declining

more than 20%, and next year, 2016, it will continue to decline. We have

never seen Thomas Ince 30 years, oil investment declining two years in a

row. In a few years we will have no more oil production. We will see

significant upward pressure on prices in the near future. The

may well be an excuse for some governments not to strongly push

renewable energy and energy efficiency, therefore as an energy

agency we are warning of 10 cents is reportedly taking

control of the incredibly popular online game, league of legends. It

is buying up the rest of the shares of the company, and the financial

terms of the acquisition had not been revealed.

Let's have a look at the markets, because we know Asian markets have

opened lower, including Hong Kong's Hang Seng, which is already down 1%.

Hong Kong also raised interest rates, taking their cues from the

Federal Reserve. We are seeing most markets lower, taking their cues

from the US, so oil prices remain low.

The top stories this hour: The first arrest is made in connection

with the San Bernardino shootings that killed 14.