29/09/2014 World Business Report


29/09/2014

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Those are the latest headlines from BBC World News. Now for the latest

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financial news with World Business Report.

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Hong Kong markets fall as protestors stand up against police warnings and

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tear gas so the hang seng falls to a three`month low. Back to Work: Air

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France pilots call off their strike. But a deal still hasn't been struck

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with the unions over Welcome to World Business Report,

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I'm Sally Bundock. Also in the programme we take a look at whether

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Modi will successfully persuade America's millionaires to invest in

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India. As you have been hearing, pro democracy protests in Hong Kong are

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becoming increasingly widespread despite police firing tear gas into

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crowds. The main business district was paralysed ahead of the morning

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rush`hour and some businesses have asked their employees to stay at

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home. Standard Chartered and several other banks have suspended some of

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their operations with bank branches and ATMs out of action. The news has

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sent Hong Kong shares to their lowest level in nearly three months.

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Now let's cross over to our Asia business hub and speak to Sharanjit

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Leyl. It's quite a strong reaction but no

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surprise given what's going on in Hong Kong. That's right, you've

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pretty much set and it up. The hands saying falling in reaction to this

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weekend protests `` Hang Seng. The biggest crackdown on the city since

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it was returned to Chinese rule. Police using tear gas after

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protesters. They blocked off traffic in that crucial CBD as well. It is

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home to the world's fifth`largest stock market. The hang saying, as we

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mentioned. And the Hong Kong Central bank saying 16 branches of banks

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have suspended their operations today. So banking shares are taking

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a big hit over there in Hong Kong. The Hong Kong listed shares of the

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likes of HSBC, Standard Chartered, Hang Seng Bank have been sold off.

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The Hang Seng down 2% at the moment, 460 point bass there. And

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the closure of some of the city's busiest roads. That caused chaos for

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commuters trying to get into work. The Hong Kong dollar also taking a

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hit. There's also concern that this might lead to a long`term impact.

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Fitch ratings, the head of its Asia`Pacific soaring ratings, said

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the protests are unlikely to impact the creditworthiness of Hong Kong in

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the short term but would be negative if it had a wide enough scale and

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lasted long enough to have a material impact on the economy or

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the financial stability of Hong Kong. But of course Fitch saying

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that is unlikely to happen. There are also other concerns. Analysts I

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spoke to said this could spook Chinese tourists who contribute a

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lot to consumer spending and consumption in Hong Kong and that

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could be hit during the upcoming long weekend, Hong Kong celebrating

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a national day holiday this Thursday and Friday. Thanks very much.

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That talk about Air France. Pilots have called off a strike that has

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lasted for two weeks and cost the airline hundreds of millions of

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dollars. But as the pilots prepare to take to the sky's again, their

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union says they are still yet to reach an agreement over Air France's

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plan to expand its budget subsidiary, Transavia. Chloe Hayward

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reports. After 14 days and thousands of

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cancelled flights, Air France pilots have finally agreed to end their

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strike. Up to 50% of flights are now expected to operate on Monday with

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services gradually returning to normal from Tuesday. But the cause

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of the strike action and the resulting street protests still

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remain unsold. The pilots want the airline to cancel its plans to

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expand the subsidiary Transavia `` unsolved. They also want similar

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contracts for all across the board. But the boss made it clear on Sunday

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that meeting such demands was not an option. TRANSLATION: We're now going

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to get down to the developer and of Transavia in France on the scale

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planned. We're going to create 1000 jobs in France, including 250

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pilots. We are finally going to be able to face up to the competition

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from low`cost companies on an equal footing. This reform is vital. But

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unions hope talks will be calmer and more productive now pilots are back

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at work. Air France has agreed to expand its Transavia operations only

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within France as a concession to the unions. But it insists it must have

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the right to vary employment contracts for those working at the

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low`cost subsidiary. The walkout has cost Air France up to $350 million.

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An amount that means simply having their planes back in the skies will

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not mark the end of their financial woes.

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Now, on his first official visit to the US, Indian prime minister

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Narendra Modi received a welcome normally reserved for rock stars ` a

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sold`out appearance at New York's Madison Square Garden on Sunday. In

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addition he has taken centre stage at the United Nations General

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Assembly. But today, the focus is business. Prime Minister Modi is due

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to attend meetings with business leaders from several of the Fortune

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500 companies, including Boeing, Pepsico, Google, General Electric

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and Goldman Sachs among others. His aim? To persuade them to invest in

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India. But relations between the US and India have not been easy, even

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though Modi says India is open for business, business leaders want

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intellectual property protection to be strengthened and new commitments

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that Indian trade and investment barriers against a wide range of US

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industries will be dropped. But will his efforts work?

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Looking back at why and how he came into power, it was under Hope and

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claims that he is going to bring the economic resurgence back in India.

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For that to happen he needs investments and he needs companies

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to come back. Investments in infrastructure, energy extra. What

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he is doing here is telling American CEOs that India is open for business

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again and that's why he's meeting them. I am joined by Prashant

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Sawant, Senior Economist at risk advisory company, Maplecroft. How

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receptive is big business to his message? India's Prime Minister's

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visit to America has come at an interesting time. Standard and

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pause, the credit rating agency, revised India's outlook from

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positive to negative. He is carrying that face with him to strengthen

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economic ties with him. The US remains India's major trading

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partner, it is the highest destination for India's exports.

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Strengthening ties make sense for India's economy, especially to

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increase foreign exports, which are essential to kick off these

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infrastructure projects. That is why the US companies will be looking to

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get involved in India's economy. Especially for foreign investment,

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that is very much welcome in sectors including retail, also defence and

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insurance, and the financial sector. Let's talk about some of the

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concerns. You mentioned retail. I know we covered it as a story, some

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of the difficulties big foreign retailers had when they wanted to

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set up shop in India. What's happening with regards to some of

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the trade barriers? Are they coming down? When it comes to the retail

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sector there is still a lack of policy clearance. The people in the

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party are saying different things at different levels. Modi, with his...

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He is showing he is pro`business, he wants to welcome foreign investment

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in India. But the dark state within his party is holding him back at the

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same time. There's also another important angle, the state, which is

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also a very dominant player when it comes to doing business in India. I

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wonder... There are five states in India and it will be interesting to

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see how he deals with that when it comes to doing business in India.

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Interesting, thanks very much. We will keep an ion his visit. Russian

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energy giant Rosneft says it's discovered oil with its US project

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partner Exxon Mobil at a controversial well in the Arctic.

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Drilling was completed in record time but questions remain about how

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quickly the well can be developed. The boss of Rosneft says it could

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access up to 100 million tons of oil at the site. However, despite the

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size of this find, Exxon says it will "wind down" the project

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following US sanctions against Russia over its actions in Ukraine.

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SoftBank is in talks to buy DreamWorks Animation, the company

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behind the Shrek and Kung Fu Panda films. If the Japanese group seals a

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deal it would take control of Hollywood's largest independent

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animation studio. Its being reported the European Commission will accuse

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Apple of prospering from illegal tax deals with the Irish government

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later this week. The Financial Times says Brussels will unveil details of

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a probe that could result in the iPhone maker being fined several

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billions of euros. The European Commission's investigation claims

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the tech giant benefited from illicit state aid after striking

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backroom deals with Ireland's authorities. Apple maintains its

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Some of the day's UK news now. Last break any laws. That's

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Some of the day's UK news now. Last year the UK suffered one of

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