05/08/2013 World Business Report


05/08/2013

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will eventually reduce the cost of meat production.

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Another record high. Some global indices hit dizzy new heights, but

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the stock markets of Brazil and Russia failed to join the party.

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The sick man in Europe. Crucial medicines run short in Greece.

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Pharmaceutical companies blamed the government's outdated pricing

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system. A very warm welcome to World

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Business Report. In just a minute, we will go to Athens to hear about

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the mounting health crisis in Greece, the first let's talk some

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markets. Record highs, at that is where we are expect the markets in

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America to start the new week. The Federal reserve is continuing to

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stimulate the country's economy and there is a flood of positive darter

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from the US and Europe . Leading market indices have been on the

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rise. Its three of the world's key stock indices, it has been

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staggering. The S&P 500 has gained 20%. London's FTSE 100 is up 13%. To

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put that into perspective, if you had invested $100 back in January,

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it would now be worth $140. But it is not all plain sailing. It has

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been a very different story in emerging economies. Shanghai

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Composite index is down 11%. Your $100 investment in Brazil could be

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worth only $80 now. To discuss what is driving this divergence in

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investor sentiment, I am joined by a market analyst. Let's begin by

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talking about the States. We saw the S&P 500 hit a special mark. What

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were the special key factors? have got a very stimulative Federal

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reserve, with quantitative easing every month. That has really

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stimulated the US stock market. That concern had been that it was going

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to start to taper, but we have the payroll numbers on Friday, which

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were slightly disappointing, only 162,000 jobs have been added, which

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now means the market may not get tapering at the beginning of the end

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of GE, we may have to wait until the end of the year. Good economic news

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is great news for the stock market, bad economic news means the Federal

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reserve will continue for longer. Within the job David told, we also

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had some unemployment numbers. -- job done some. It can down to the

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lowest level that we have seen in months. Would effect would you say

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that hide in the positive rise that we saw on the FTSE 100, the decay in

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Japan as well, it is that down to internal figures? -- the Japanese

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stock market. In the UK, we did not have a triple-dip recession, we did

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not have a double dip, if you look at the d'etat, it has been getting a

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head of steam. The economy seems to be getting past escape assault --

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velocity. We have got the new governor of the Bank of England, he

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has a very big speech this week, it is his first information report, and

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he is expected to talk broadly about what he wants to do with monetary

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policy. A lot of people are expecting him to keep the rate is

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lower for much longer, and in Japan, it is Shinzo Abe's economics.

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see the emerging economies not faring so well. What is going on?

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One of the big concerns is the slowdown in China. We get a lot of

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economic data from China this week. We will have a stronger sense as to

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what is happening. That if you can invest your companies in highly

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liquid, strong economies, with very good shareholder protection, such as

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the states or the UK, why would you take the additional risk of

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countries where you do not know where -- what is going on? If you

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can make great use in the US, highly liquid, brilliant comedies, you do

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not need to go to the developing countries. It is if you are feeling

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more positive, you can go and make a lot of money in the States and Japan

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and the UK. Let's get more on the impact of the

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Chinese ban on milk products from New Zealand. China is yet to release

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an official announcement on the seat -- about the impact is Roddy being

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sold with the New Zealand dollar falling across the board. -- is

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already being felt. What more do you have on this? You have the Chief

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Executive of Fonterra, which is one of the largest's dairy suppliers

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having a press conference as we speak in Beijing. He is urging

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customers to basically check their supply chains. They found the strain

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of bacteria causing botulism in some of its products, including baby

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formula and sports drinks, which has led to a global recall of up to 1000

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tonnes of baby products across seven countries, including China. The

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Fonterra chief executive say that they are acting quickly. So that it

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can be taken of supermarket shelves, and where it has a ready been

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purchased, it can be returned. Basically, the impact is

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significant. 90% of China's milk powder imports originated from New

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Zealand. If the ban is over a period of time, it could have a certificate

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impact on the country's economy. It could have only a minimal effect on

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the sector and the economy if it is addressed immediately. It will have

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some short-term damage. The share prices of some of the dairy

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companies has fallen today. Full pretty obvious reasons. But at the

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end of the day, you hope the New Zealand values of transparency and

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openness will pay date -- play out in their favour. As the chief

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executive talks to consumers and the governments, to make sure that

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confidence returns, just as quickly as possible.

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In Greece, it seems that even finding aspirin can be a pain.

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According to officials, the country is running short of almost halved

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500 of its most used drugs. It seems it is because of the way the State

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prices its medicines. Millions of euros worth of drugs set at low

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prices by the State have been sold to other countries. The regulators

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have been trying to tackle the problem with fines and export bans,

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but the industry in Europe says it is Greece's outmoded pricing system

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that is the problem. Essential drugs are not available

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hard to find. Greek patients waiting in line for donated medicines to

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keep them going. So who is to blame? As the armed -- crisis unfolded,

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multinational companies said -- were accused of cutting supplies. But the

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chaos also has its roots in the basic state reforms. Athens is yet

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to adopt an EU study all pricing system. In Europe, Greece maintains

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a constantly changing Master pricelist, to ensure that it pays

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the lowest possible prices. The sleeves Greek wholesalers with stock

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they can easily resell profitably and legally in the single market. So

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the wholesalers are profiting from price differences. It is better

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business for them, because hospitals and pharmacies are often nonpayers,

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because they have been reimbursed. The nasty side effects, gaps on the

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shelves. The multinational drug companies have countered with supply

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quotas to try to limit exports, but the insulin shortage has left Greeks

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struggling to obtain about 300 critical jobs. -- drugs. They have

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responded with export bans and fines. Industry chiefs are pressing

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for all and more realistic pricing system. The Greek price is put it

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percent below any price. -- 20%. People drive lorries up to Northern

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Europe and they make a lot of money. It is all very irrational. Produce

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is in Greece point out that drug exports are not confined to their

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country. The health Ministry plans changes, at a time, says the

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pharmacists. TRANSLATION: Those who export are not the pharmacies. They

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are the companies. They cannot make money here so they sell their

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medicines abroad. Perfectly legally. We are the recipients of policies

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