28/01/2016 Asia Business Report

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

Samsung Electronics' business earnings estimates because of a

slump in smartphone sales. Energy of the future or an environmental

catastrophe? We will look at why coal seam gas is so controversial in

Australia. Good morning, Asia. Hello, world.

Glad you could join us for this Thursday edition of Asia Business

Report. I'm Rico Hizon in Singapore. We start with Samsung and

the Korean technology giant just released its latest results. And

after years of record profits, things appear to be slowing down.

Its profits falling by about 40% to $2.7 billion in the three months to

December. And that was significantly below analysts' expectations. What

is happening to the world's biggest smart phone maker? Earlier I asked

Jake Saunders. It's been a squeeze, should be a

fabulous number, but the markets aren't impressed. The revenue number

overall increased, the profit has been squeezed, it shows they are

under pressure. That squeeze, when you think about half their revenue

comes from mobile advice is, that the net result, other companies

getting traction traction in places like India, a very strong smartphone

market, the smart phone market growing a little over 2% in 2015.

They will have a tough time and with these economic headwinds they will

have a tough time. Not only challenging for Samsung but all the

other smartphone app makers. How should Samsung compete against the

iPhone and other cheaper rivals? They are trying to clean up their

portfolio and the F six didn't do particularly well. The one with the

curved screen came along and that helped them get some traction in the

second half of 2015. In February they are planning to come up with

the S7, that could go head to head with the top end of the market. But

there are challenges at the bottom end as

well. Jaque unders. The Federal Reserve kept interest rates on hold

after a two-day meeting in the US but has left the day open to more

gradual rate heights this year -- Jake Sanders. Janet Yellen, the

central bank chief, and her board members increased borrowing costs

for the first time in almost a decade last December and markets are

closely watching its next move. Michelle Fleury has more from New

York. America's Central Bank is keeping

its options open, even as it said growth in the world's biggest

economy had slowed. Weeks after raising rates Bramham record lows,

it stay the same on Wednesday. They said they wanted more time to study

the increased weakness in the economy. In a statement published

after the two-day policy meeting, it said it is closely monitoring global

economies and markets. Some economists said they now expect

three quarters point rate increases this year rather than the Force that

had been pencilled in. But no one can be sure -- four. The Fed did not

commit to slowing its place of rate increases. That perhaps explains why

US markets fell on the news. US investors hoping for a clear single

that the Fed would move more slowly this year were disappointed.

Michelle Fleury in New York. Another business news making headlines,

shares of Facebook have jumped by 6% in extended US trading after it

reported better than expected earnings. The world's biggest social

network software first-quarter revenue rose to a record $5.8

billion, due to high advertising sales on mobile devices. Profits

coming in at 79 cents per share, beating analyst predictions by 68

cents. The collapse in oil prices is hitting the central Asian nation of

Azerbaijan, particularly hard. The oil exporter is facing a currency

crisis and could require a financial bailout. Officials from The

International Monetary Fund and the World Bank are ported Lee heading

there this week to discuss a possible $4 billion emergency loan

package -- are reportedly. It's a natural gas which could power and

other resources boom in Australia. Coal seam gas is banned in coal

deposits and it has supplied 90% of domestic gas in the state of

Queensland over the last two decades. But activists want to stop

exploration in neighbouring New South Wales because they say it is

an environmental catastrophe. The BBC's film so went to a protest near

the farming town of Nehra bright. Desperate measures. With the lock

around his neck, a farmer demonstrates against an industry

that he says has the potential to ruin some of Australia's prime

agricultural land. We're being forced to do this because the

government are backing this people and the government will not listen

to the people. We have made it clear we don't want this coal seam gas. In

this part of the world in the dry scrub of New South Wales, water is

critical to the survival of farming families. Anti-coal seam gas

industry here near Narrabri has faced community opposition for more

than five-year is. And the main concern is the effect on

groundwater. This is a risky, dangerous industry. Invariably we've

seen in other jurisdictions, Queensland, the United States,

groundwater contaminated. Water is more precious than short-term

profits from unconventional gas. Under my feet are the also seems

that contain the gas. It's trapped by the pressure of underground water

-- are the coal seams. For some the protest, process amounts to

environmental vandalism. For others it's an economic boom. $50 million

has been spent developing coal seam gas reserves in Eastern Australia.

Exports to Australia have also begun. Santos, the energy company

hoping to start production near Narrabri, said the project could

provide half of the natural gas used in the state of New South Wales.

Business leaders in the region say the community is mostly supportive

of the scheme. It's our duty now as leaders here to develop whatever we

can in a suitable, Safeway for the future. Narrabri has done extremely

well out of coal seam gas, particularly out of Santos, who have

been a model of corporate citizens in this area. They generally care

about the community, that's the truth. Despite concerns from

campaigners, the petroleum industry says that any credible scientific

study in Australia, Britain and the United States confirms

is safe when properly regulated. But Australia must find a way to balance

its economic necessities with its environmental obligations.

For more on this issue we are joined now by Steve Wright from the energy

resource centre, an industry funded group that promotes gas projects in

Australia. Great to have you with us on Asia Business Report. We heard

from Phil Mercer that there is a huge domestic market for coal seam

gas, but what is the potential to export this in Asia? Good to be

here. It is a very big potential and that is why it has been such a great

investment by Santos and other Australian companies as well as

global names. As we've seen in the US, investment in LNG can be very

good for the reduction in greenhouse gases. The development of a strong

industry of LNG into Asia in the developing countries and the

established countries will help as an interim towards a more heavily

renewable energy future. But Mr Wright, opponents are saying coal

seam gas poses threats to water and agriculture in particular. Why is

the industry so sure it is safe? Well, that is a claim that is made

but the claim that there is evidence of groundwater contamination is not

backed up by science or any respected analysis either in

Australia or in the United States or in Europe. There have been many

claims but none have been substantiated. In fact, the New

South Wales chief scientists conducted an 18 month enquiry and

studied in Australia, New South Wales and Queensland, and overseas,

and came to the conclusion that there was a lot of misinformation

about coal seam gas and natural gas. But a lot of companies have

already been sanctioned for water contamination and other violations

in the past. Why should we issue regulations are strong enough? In

New South Wales the regulations are regarded as one of the strongest in

the world, if not the strongest in the world. While there have been

reports of surface water, water sitting on the surface of the ground

having had accidental spills, they have been very small and they have

been cleaned up quickly without damage to the environment. As you

mentioned in the introduction, Queensland has been operating

successfully producing natural gas now for almost 20 years. In South

Australia, it's been going since the nineteen sixties. And a first

natural gas was actually put to use 100 years ago in Queensland --

nineteen sixties. Steve Wright from the Energy Resource Centre. I'm Rico

Hizon. Thanks for joining us. Goodbye for now.

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