16/12/2013 Asia Business Report


16/12/2013

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ago in Oxfordshire. Ben Blakeley, who is 22 and from Reading, is due

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to appear before magistrates later this morning.

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Now on BBC News, all the latest business news live from Singapore.

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One year on, the Japanese economy. Is it a hit or miss?

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To hike or not to hike, the dilemma facing India's central bank.

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Thank you for joining us. We start off with Japan and business

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confidence among big manufacturers has increased. A survey revealed

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that the sentiment index for big manufacturers improved by four

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points from the September quarter to a six-year high. The data comes

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after the President marks his one-year in office. He promised

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economic reforms. This morning 's survey also showed that large

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companies planned to increase capital spending by just 4.6% in the

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financial year to March 2014. That is lower than what economists were

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hoping for. The government also plans to go ahead with the higher

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sales tax from 5% to 8%, starting April. I asked if the upcoming

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consumer tax will create a dent in wealth prospects for the Japanese

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economy. We will certainly see demand being

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brought forward and we will have strong consumer spending in the

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first quarter. And then it will slump. The survey showed that

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manufacturers are quite confident and will only see out mild

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deterioration in the second quarter. What are the three top

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things in your wish list that you hope that Shinzo Abe at will

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implement next year? We want to see more easing. So far, we see that

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piece is insufficient to reach the deflation target. We want to see

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some reforms in the labour market and in the TPP negotiations to

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succeed. We want to see agricultural production to be lowered.

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For more on the progress of the Japanese economy, log onto our

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website and check out the latest commentary.

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In the airline industry, Singapore -based budget carrier is joining

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with Thailand's low-cost airline. The two are coming together to

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create a new low-cost carrier. It will be based in Bangkok. It will

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have a 51% 's -- it will be split 51% to 49%. The investment is over

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-- with over $60 million. Australian Prime Minister Tony

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Abbott has supported calls from Qantas for a level playing field

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against Virgin Australia. Qantas called for a change in rules as it

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faced a record loss. The Qantas sales act, which came into place in

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1992, limits foreign ownership of the carrier to 49% and requires

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Qantas to keep the majority of its maintenance operations in Australia.

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The airline has long complained that Virgin Australia and its majors

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shareholders provide virgin to access -- access to foreign funding,

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that by denying at the level playing field.

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In New Zealand, consumer confidence is bouncing back to a four-year high

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as consumers got to talents there finances. More jobs are being

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created and it is one of the reasons that a reading of the consumer

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confidence index Rose to 120, from 150.

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India's central bank will revealing whether or not whether it will

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change interest rates over the following month. It has increased

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borrowing twice to try to keep soaring prices in check. It is also

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doing a time when growth has remained slow.

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

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

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

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

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

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

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The interest rate just keeps going up. Might budget cannot make it

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happen in the current scenario. High interest rates coupled with the

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slowing economy has made it difficult for consumers to buy

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homes. It has hit sales in a big way, forcing many real estate

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developers to offer discounts. That has not helped much. It is not only

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consumers that are feeling the pressure of high interest rates.

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Businesses to our feeling the heat. -- are feeling the heat. This

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factory based in Mumbai and makes switchgears, which are used in

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housing apartments and apartment complexes desperate housing

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competence. The slowdown means it has not been getting many orders

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over the past few years. Rising labour and energy prices have impact

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that its costs. If that was not bad enough, high interest rates have

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squeezed its profit even further. We have to look for some alternate way

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of financing. We may have to look for some cheaper funds from a rule

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-- from abroad, if it is available. The banking industry here cannot

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provide us and we have to look for alternatives if we are to stay in

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business. It will be a big challenge for us. The Indian central bank,

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also known as the RBI, has increased key lending rates twice in the last

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three months. This is mainly due to high inflation, driven by rising

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food prices. The government and industry have been clamouring for a

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rate cut to revive the slowing economy, but so far, the bank is

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showing no signs of getting the pressure.

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The rates decision from the Indian Reserve Bank is due later this

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week, on Wednesday. December is traditionally one of the

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best months. Markets because of the so-called Santa Claus rally. That is

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when the sharemarket rise over the ten days before the New Year.

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Overall volatility would best describe 2013. I spoke to the stock

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exchange president in Philippines, which has experienced some major

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bumps. I think the year has been quite good

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for the Philippines and for the stock market for 2013. Good in the

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sense that we have a lot more activity on the exchange, more

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liquidity, more IP growth and new products and services be launched.

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How have the regional conflicts, the bribery scandals and the natural

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rate cashback natural cork at these impacted -- bribery scandals and

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natural calamities impacted customer they have contributed to the

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volatility that you talk about. I would say there have been some

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overreactions. But overall, I would say that the basic fundamentals

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prevail when you take a look at trends. This year has been a

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milestone for the Philippines. It got an investment-grade status from

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

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bringing new investors? Tremendous. We are seeing a lot of first time

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portfolio managers who have never invested because they could never

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invest in an investment-grade investment and that rating has given

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a third-party cheque in terms of saying the country is okayed, the

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financials OK, and the fundamentals are looking decent. When you take a

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look at who we are seeing, a big influx, for example, in what I would

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call Japan Inc. An amazing number of portfolio flows coming in from that

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sector, which was not present before. In 2014, what would be the

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red flags for the Philippine economy and for the capital markets?

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The biggest red flag on the ground will be how this reconstruction

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

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build will the company -- country be able to do, something people have

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been looking forward to for quite sometime. The capital market, the

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real question is what will be the impact of the US Federal cup talk.

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

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that could be a swing back in how markets are perceived, including the

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Philippines. Thank you for investing your time

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with us. Goodbye for now. I'm Adnan Nawaz. The top stories

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this hour: the actor Peter O'Toole, renowned for playing 'Lawrence of

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Arabia' in the

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