15/02/2017 Asia Business Report


15/02/2017

Similar Content

Browse content similar to 15/02/2017. Check below for episodes and series from the same categories and more!

Transcript


LineFromTo

Janet Yellen makes her debut in front of the new Congress. She hints

:00:16.:00:22.

at any rate hike in the next few months. And shares in Toshiba

:00:23.:00:26.

nosedive yet again as the Japanese conglomerate faces a $6 billion

:00:27.:00:38.

write-down. It is Asia Business Report. Good morning, Asia. Hello,

:00:39.:00:44.

world. Markets have been buzzing overnight as the head of the US

:00:45.:00:47.

Central Bank said an interest-rate rise could come as early as next

:00:48.:00:51.

month. In the SME annual testimony to Congress, Janet Yellen set of

:00:52.:00:57.

hawkish tone, saying it is unwise to wait too long to hike rates.

:00:58.:01:02.

Financial stocks in the US lifted. The broader S index closing higher

:01:03.:01:10.

for a fourth consecutive session. This is how Asian shares are trading

:01:11.:01:15.

in early trade on Wednesday. All in positive territory. More analysis in

:01:16.:01:20.

a moment but that hear what she had to say. As I noted on previous

:01:21.:01:25.

occasions, waiting too long to remove accommodation would be

:01:26.:01:33.

unwise. Potentially requiring the FOMC to raise rates rapidly which

:01:34.:01:37.

could risk disrupting financial markets and pushing the economy into

:01:38.:01:44.

recession. At our upcoming meetings, the committee will evaluate whether

:01:45.:01:47.

employment and inflation are continuing to evolve in line with

:01:48.:01:55.

these expectations in which case, a further adjustment of the federal

:01:56.:01:58.

funds rate would likely be appropriate. So what would be the

:01:59.:02:07.

impact of rate hikes on Asia? For monetary policy in the region, this

:02:08.:02:14.

is going to be a very interesting cycle. I do not think the Asian

:02:15.:02:19.

banks are going to be following the Federal Reserve 's is much in the

:02:20.:02:24.

past. We only have one Asian central back -- bank, the Philippines,

:02:25.:02:29.

raising rates. Some, like South Korea, might cut rates further. If

:02:30.:02:35.

this is the case, seeing another rate rise as early as next month,

:02:36.:02:40.

could we see falls again in Asia's emerging currencies like what we saw

:02:41.:02:47.

in 2015 and 2016? We think so. We think that is the risk for Asia. I

:02:48.:02:51.

don't think the market had been pricing in how much of a chance

:02:52.:02:56.

there was of a hike in March. I think it's probably 50- 50 after

:02:57.:03:02.

Janet Yellen's testimony and the possibility that there could be more

:03:03.:03:06.

than two hikes this year so the risk is, the Asian currencies could

:03:07.:03:09.

weaken and what that could do, it could lead to some foreign come --

:03:10.:03:15.

foreign currency debt mismatch problems in Asia has built up since

:03:16.:03:21.

2008 a lot of debt so that is a risk. Who could be the biggest Asian

:03:22.:03:30.

victims? Malaysia? Indonesia? I, the Philippines? Some of the Southeast

:03:31.:03:35.

Asian countries do have quite a bit of foreign bond holdings. Malaysia,

:03:36.:03:40.

Indonesia. Some have current-account deficits. Indonesia, India. But to

:03:41.:03:45.

be honest the biggest debt is in the north-east Asian countries like

:03:46.:03:49.

China and Asia and South Korea and Taiwan and Singapore as well. With

:03:50.:03:54.

these huge dollar denominated debts due to the strengthening US dollar,

:03:55.:03:58.

could we see potentially a financial crisis brewing in Asia going

:03:59.:04:04.

forward? That's a tricky one because what I would say is Asia doesn't

:04:05.:04:10.

have huge hard currency debts. We learnt our lesson from 1997. But we

:04:11.:04:16.

have a lot of domestic debt. The risk is, we could see a little bit

:04:17.:04:22.

of default from currency mismatch. Not our biggest problem, which is

:04:23.:04:27.

domestic debt, but it could lead to tightening financial conditions.

:04:28.:04:30.

Bondholders and banks might start to rein in credit and it spills over to

:04:31.:04:35.

tighter domestic conditions and you start to see domestic defaults.

:04:36.:04:38.

There is a bigger risk than most people see of credit stress in Asia

:04:39.:04:43.

later this year. All this could lead to slower Asian growth going

:04:44.:04:49.

forward. Robert Subbaraman there. Samsung's Chief Executive faces a

:04:50.:04:58.

potential arrest. An arrest warrant was issued. Mr Lee is being looked

:04:59.:05:08.

to be put behind bars involving bribery incident involving the

:05:09.:05:12.

President. Shares in Samsun are down over 1%. Facebook is launching an

:05:13.:05:17.

application which will allow users to stream videos on their news feed

:05:18.:05:22.

through set-top boxes such as Apple TV so they can enjoy the videos on a

:05:23.:05:28.

bigger screen. Rivals such as hammers on and Samsung have similar

:05:29.:05:33.

services. Shares in Toshiba are falling by 10% in Tokyo and that is

:05:34.:05:40.

after a plunge of nearly 50% since December and that is when the

:05:41.:05:44.

company first warned investors about a massive write-down in its US

:05:45.:05:49.

nuclear business. Yesterday the firm was supposed to be reporting its

:05:50.:05:53.

earnings but at the last minute, postponed the announcement and that

:05:54.:05:58.

wasn't the only surprise. At Tokyo correspondent explains the days

:05:59.:06:03.

events. First we expected the announcement of big losses and then

:06:04.:06:06.

they cancelled the announcement and then we got a statement from the

:06:07.:06:10.

chairman saying he was resigning and finally we got these provisional

:06:11.:06:17.

figures which include a $6 billion loss at Toshiba's North American

:06:18.:06:21.

nuclear division. We won't get the full results but it is clear that

:06:22.:06:27.

Toshiba is in serious financial straits. What happens now to Toshiba

:06:28.:06:32.

is unclear. The Japanese government may step in to rescue the company,

:06:33.:06:36.

it could be broken up but the real question nobody is sure about is

:06:37.:06:39.

what will happen to its North American nuclear division which is

:06:40.:06:44.

deep in debt and still is constructing for nuclear power

:06:45.:06:46.

plants which are halfway through construction. What is really clear

:06:47.:06:52.

is nobody wants that business, there are no potential buyers apart from

:06:53.:06:59.

perhaps the Japanese government. One unit that is attracting interested

:07:00.:07:03.

buyers is its memory chip business. It is a crown jewel of the firm but

:07:04.:07:08.

the boss of Toshiba said in a press conference that he was willing to be

:07:09.:07:17.

flexible about its fate. Our memory chip business, we want to secure

:07:18.:07:21.

resources which will spur future growth. We are thinking very

:07:22.:07:25.

flexibly which means we will not fixate on having majority stakes in

:07:26.:07:29.

the business and will consider introducing external capital with a

:07:30.:07:37.

flexible mindset. Journalists expressed frustrations with one

:07:38.:07:42.

saying, what also you hiding? If you want to read about it, go to our

:07:43.:07:49.

Asian business correspondence's blog and she explains the official

:07:50.:07:53.

results will be released on the 14th of March and if the company's debt

:07:54.:07:58.

and corporate governance situations aren't improving, its shares could

:07:59.:08:03.

be demoted with a second section of the Tokyo stock exchange or even

:08:04.:08:09.

delisted. The Indian space agency is attempting a world record by

:08:10.:08:12.

launching 104 satellites in the one go. Its commercial launch operations

:08:13.:08:16.

are much cheaper than any other country and it's creating a thriving

:08:17.:08:20.

ecosystem for privately space programmes. We visited one of them.

:08:21.:08:33.

It's a race to the moon to put the privately funded space craft and

:08:34.:08:42.

India's Team Nimbus is one of the finalists. They are betting they

:08:43.:08:47.

will get there first. This is a small rover built I team Team Indus

:08:48.:08:54.

and it has been to simulate the moon's service. I will try to

:08:55.:08:58.

control it with my phone. It's not meant to be fast. If it is

:08:59.:09:04.

successfully achieving this for 500m on the moon's surface, it stands to

:09:05.:09:11.

win a prize of $20 million. The team is taking part in the lunar price

:09:12.:09:17.

challenge funded by Google. It has signed a deal to hitch a ride on one

:09:18.:09:21.

of the Indian government's rockets. Mission Control is already in place.

:09:22.:09:26.

Target launch date, December this year. Once we accomplish this and

:09:27.:09:32.

prove what we can do by way of design and integrated -- integration

:09:33.:09:37.

and prototyping, we can turn around and offer these services to other

:09:38.:09:40.

folks who might be interested in space exploration. They will have

:09:41.:09:48.

tough competition. For other teams are also in the race. Israel's space

:09:49.:09:57.

cell, Synergy moon and a team from Japan also have contracts to launch

:09:58.:10:03.

this spacecraft. Go into the moon is not cheap. Team Indus says their

:10:04.:10:09.

mission costs about $60 million so even if they win, they have still

:10:10.:10:13.

lost money. Prestige and national glory is priceless. Thank you for

:10:14.:10:25.

investing your time with us. See you next hour. By the now. Daesh goodbye

:10:26.:10:30.

for now. The headlines this hour. The half

:10:31.:10:49.

brother of Kim Jong-un

:10:50.:10:50.

Download Subtitles

SRT

ASS