16/12/2013 Asia Business Report

Oxfordshire 13 days ago. No body has yet been found. Ben Blakeley, who is

22 and from Reading, is due to appear before magistrates later this

morning. The Japanese economy - a hit or a

miss? To hike or not to hike, the dilemma

facing India's central bank. We start off with Japan. Business

confidence among manufacturers show that improvement in the three months

until December stimulate -- signal that the government stimulation

policies are working. Sentiment among manufacturers improved by four

points to plus 16, a six-year high. We also saw a rise in the index. It

comes as Shinzo Abe at Marks is one year in office. He has pledged

economic reforms. The survey also showed that large companies planned

to increase capital spending by just 4.6% in the financial year to March

2014. That is lower than what economists were hoping for. Next

year, the government hopes to go ahead with a higher sales tax, from

5% to 8% starting in April. I asked if the upcoming sales tax will

create a dent in the prospects for the Japanese economy.

It will have an impact on spending. We will see demand being brought

forwards. The first quarter will have strong consumer spending and

that it will slump in the second quarter. The business outlook survey

covers a forecast for two quarters and it shows that manufacturers are

quite confident that we will see a mild deterioration in the second

quarter. What are the three top things in your wish list that you

hope that she is a bit will -- Shinzo Abe it will implement is ? .

We want to see some quantitive easing. And we want to see some

structural reforms. We want to see something in terms of the TBB

negotiations succeeding. We want to see that agriculture protection will

be lowered. For more on the progress of the

Japanese economy, log onto our website. Check out the latest

commentary from our chief business, -- correspondent.

Singapore -based budget airline is joining forces with Thailand's

low-cost airline. The two are coming together to create a new low-cost

carrier. It will be based in Bangkok. The Thai company will have

a 51% in the partnership, while the Singaporean one will own the

remaining. Investment in the project will total just over 60 million US

dollars. Austrian Prime Minister Tony Abbott

has supported calls from Qantas for a level playing field -- Australian

prime minister. They face a record loss and rising competition. The

Qantas sale act, which came into place in 1992, limits foreign

ownership of the carrier to 49% and requires Qantas to keep the majority

of its maintenance operations in a straight. The airline has long

complained of Virgin Australia and is major shareholders providing a

virgin access to foreign funding, thereby providing an unfair playing

field. India's central bank will be

revealing whether or not it will be changing interest rates. In the past

three months, the bank has increased the cost of borrowing twice to try

to keep soaring prices in check. It is also, at a time when growth has

remained slow -- it has also come at a time.

This man has lived in this building all his life. In the next few

months, he has to move out. Like most old buildings in the city, his

home is going to be redeveloped. Even though the developer is

providing him with compensation, he says it will not be enough to buy a

new home. The prospect of taking a loan is not very appealing. I was

looking for a home loan, but I cannot take the burden right now.

The interest-rate just keeps going up and never comes down. It has to

fit my budget, and that is not going to happen with the current scenario

of real estate and home loan interest rates. High interest rates

coupled with the slowing economy has made it difficult for consumers to

buy homes. In fact, it has hit sales in a big way, forcing many real

estate developers to offer discounts. That has not helped much.

It is not only consumers that are feeling the pressure of high

interest rates. Businesses are also feeling the heat. This factory based

in Mumbai makes switchgears, which are used in housing apartments and

industrial complexes. The economic slowdown means it is not getting

many orders -- not has not been getting many orders over the last

couple of years. Rising labour and energy prices have impacted its

costs, which have gone up sharply over the same period. If that is not

bad enough, high interest rates have squeezed its profit even further. We

have to look for some ultimate way of financing. Maybe we have to look

for some cheaper funding from abroad, if it is available. The

banking industry here cannot provide us, and we may have to look for

alternatives if we are to stay in business. It will be a big challenge

for us. The Indian central bank has increased key lending rates twice in

the last three months. This is mainly due to high inflation driven

I rising prices. The government and industry have been clamouring for a

rate cut to revive the slowing economy. But so far, the bank has

shown no signs of giving in to the pressure. The rate decision from the

Indian central bank is due to come out on Wednesday.

December is traditionally one of the best months. Is because of the

so-called Santa Claus rally. That is when share prices rise of the final

ten days of training before the New year. Overall, volatility would

probably best described it doesn't get it. I spoke to the Philippines

stock exchange president, who told me how the stock exchange and the

Philippines has performed this year. I think the year has been quite good

for the Philippines and for the stock market. Good in the sense that

we have a lot more activity on the exchange, more liquidity, more IPOs,

and new stocks and products being launched. How have the bribery

scandals and the natural calamities impacted sentiment of investors?

There has always been a short-term dip. A big contributor to the

volatility that you talk about. The same thing happened when the tape a

story first came out. There was an overreaction. It contributes to the

volatility. Overall, I would say that the basic fundamentals prevail

when you take a look at trends. This year has been a milestone for the

Philippines. It got an investment-grade status from some of

the key ratings agencies. How much has this helped in terms of bringing

in new investors into the Philippine capital markets? Tremendous. I would

say that we are seeing a lot of 1st-time portfolio manner --

managers who are investing in the first time because they could not

invest in investment-grade investments. This rating has given a

third-party cheque in terms of saying the company is OK, the

financials are OK and the fundamentals are looking decent.

When you take a look at who we are seeing, a big influx for example has

been from Japan. An amazing amount of interest and portfolio flowing

from that sector, which was not present before. What could be the

big flags for the economy and the capital markets? I think how the

reconstruction relating to the storm will be, in terms of how much

infrastructure building will the company be able to do, something

that the people have been looking forward to for some time. For the

capital market, the big question is what will be the US Federal talk.

That created so much volatility last year in the local market and that

could be a factor in how markets are perceived, including the

Philippines. Investors continue to remain on the

sidelines amid concerns that the US Federal bank could change policy

this week. Thank you for interesting your time

with us. Goodbye for now. -- investing your time with us.

The top stories this hour - the actor Peter O'Toole, renowned for

playing Lawrence of Arabia in the Oscar-winning film has died, aged