12/08/2014 World Business Report

Gaza. Those are the latest headlines. Now it is time for the

latest financial news. European farmers warned thousands of

tons of surplus pigmeat will be pushed on to world markets, causing

prices to slump. As the US and Asia push up prices, all eyes will be on

Asia where it reveals a second`quarter results.

Hello and a very warm welcome. Also in the programme, we look at New

Zealand's economy ahead of the elections. First of all, let's start

with pig farmers, who say they will suffer from the ban on pigmeat

exports to Russia. It was imposed by the Kremlin in response to Western

sanctions. Thousands of tons of surplus meat will be pushed onto the

world market, which farmers fear could lead to a slump in arises.

New life at this farm in Staffordshire. One of a chain owned

by middle pig producers. Every week, it breeds and sells 1200 pigs. The

problem for the chief executive is that the piglets are entering an

overcrowded market. Pig farmers in Canada and Brazil who have been

locked out of Russia will be trying to sell 150,000 tons of spear meet

on to other markets. Europe is one of the key markets. We cannot

quickly switch of the supplied to ease the capacity that is coming in.

There will be an effect on price. People will buy it but pay less for

it. If you have 5% supply into the market, this has a devastating

effect. This is the second blow that European pig farmers have taken from

Russia recently. 18 months ago, Russia banned the impact of European

produced meat on health grounds. `` import. That led to a fall in

prices. Since Christmas, the price that pig farmers get for produce has

fallen by one quarter. It has now fallen for that. Farmers want

stability in prices. If they do not get it, they stopped producing.

Then, prices rocket. Seeing prices go up and down is not in the

interest of consumers. A more long`term, stable market is what we

need. We need stable trading relationships. The recent import ban

was meant as a symbolic replied to Western sanctions on them. It has

become the number one worry for the industry in Europe.

Prudential releases second`quarter results in 60 minutes. All eyes will

be on Asian subsidiaries per analysts at the Chief Executive

Seymour 's future growth. The company has 30 million customers

across 12 Asian markets. It is a top three provider of life insurers in

the Hong Kong, India, Indonesia, Malaysia, the Philippines and

Vietnam. The Chief Executive has a call of 15% annual growth in the

region but is that really realistic? I joined by a senior analyst for

Insurers Credit Sites. It has done well. Since the new CEO came in

2010, he changed the focus. It is a success story. No doubt about that.

In 2010, the CEO wanted to acquire it in Asia. He was probably one of

the analysts who mentioned that. He has done much amend this job. That

is exceptional. You do not see that trend with many European companies.

What are the risks of ploughing ahead in the way in Asia? There is a

huge amount of potential. There must be some risks involved as well. They

are as strong GDP growth. You could argue that things would change if

the rate was changed. It would reduce the consumption of these

products. We do not have any fact records. There is a risk. Prudential

reports its earnings in sterling. There will be adjustments over time.

So, in countries like the Philippines, where the economy

sinks, it is not a priority. What about the United States? That is 50%

of its revenue at the moment. That is a big market. The focus never

days is on Asia for growth. Also, on the US. They are as a core economy.

It will benefit from a change in the credit rating. You need to be their

two enjoy the strong demand. `` there to.

Earnings will come out later this morning. It will happen when trading

ends. Let's go to Singapore. They are focused on New Zealand. They are

entering campaign period. Voters have got to decide what to do. There

are close on the horizon. Record he's on is in Singapore. Good

morning. If you look at the economy, there

are risks and rewards. Currently, if you take a look at it overall, it

has been strong. The numbers reveal that GDP and gross domestic product

has expanded by 1% every quarter. It has expanded by 3.3% in the March

quarter, compared to levels years ago. If you look at the data, it is

one of the highest in the developed world. With elections taking place

next month, in September, the National party led by John Key wants

a three`year term. It is highlighting this achievement. It

comes on the back of the fastest economic growth that the country has

seen in seven years. The budget is projected to be in surplus for the

first time in seven years. With the reward, there are risks that must be

addressed, including rising interest rates and falling prices. Borrowing

costs stand at 3.25%. It is expected to keep rising to try to stave off

inflation, due to strong economic growth. There are plunging prices

which may squeeze incomes and curb spending. Economic growth may slow

down moving forward. This is the risk. The opposition Labour Party is

looking for loopholes in the agenda. This is one of them. They are

pushing for a rate that is raising the minimum wage.

In other stories making headlines, it has been reported that the

international pharmaceutical client GlaxoSmithKline is facing new

allegations of bribery. This is about Syrian distributors who tried

to increase sales in the country. Writers says there have been

anonymous e`mails sent between top managers. It follows allegations and

Syria into corruption and bribery claims in China. GlaxoSmithKline

says it will investigate the claims. The Mexican president has put into

effect a new set of regulations that will allow foreign companies to

drill for oil and gas and produce electricity. He said the new energy

log will attract millions of dollars needed to boost declining oil

output. Financial markets are again very

robust today. Hong Kong is down slightly. This follows a good

session on Wall Street. The continued work going on between the

Ukraine and Russia is seemingly due to better relations which have

improved the market. That is all for now. Goodbye.