19/12/2013 Asia Business Report

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

Slowing down. Asian markets are up after the US Federal Reserve winds

back its bond buying programme. New ads on Facebook. Many users are

not happy. We ask if the move could spur a backlash.

Welcome to Asia Business Report. We start off with the Asian markets.

They are all in positive territory in midday trading, after the US

Central Bank announced it will start winding back its bond buying

initiative from January. It's a sign of confidence that the US economy

has finally strengthened. The decision taken by those inside

this building will have consequences around the world. But their actions

were driven by what's going on right here in the US. In fact, Ben

Bernanke talked about the improvement in the US economy, in

particular what's going on in the jobs market. Reflecting progress and

an improved outlook for the jobs market, the committee decided to

reduce the monthly pace at which it is adding to the long-term

securities on its balance sheet. If incoming information supports the

expectation of further progress towards objectives, it's likely to

reduce the pace of monthly purchases in further measured steps. The

Federal Reserve does not believe this is job done. In fact, Ben

Bernanke talked about how many Americans had dropped out of the

workforce completely. So, they will continue to support the US economy,

buying up around $75 billion worth of bonds each month. In exchange,

they will keep interest rates lower for longer. If you look at the

reaction by the financial market, it seems they have managed this change,

this shift in policy, quite successfully.

What impact will tapering have on Asia? The impact will be relatively

low in some sense because the tapering was taking place very

cautiously. They were careful about making sure the forward guidance in

short was understood in markets, and would be pulled back in terms of

easing policies. So that's number one. There will, over time, be some

transition to potential capital flows being impacted. But if the

tapering takes place in the sense of the US economy recovering, there

will be positive spillovers through trade flows going forward. So I

won't expect a significant impact on top of that. Also, the Fed isn't the

only game in town. We have the bank of Japan easing monetary policy.

They could ease it further. Let's take a look at some of the

countries impacted. India and Indonesia. How will this impact

than? -- them? What's your outlook for 2014? These are the two

economies that are more exposed in the region, but they have high

current account deficits. The capital flow is more global. In both

cases, they have taken steps on policies, to reduce vulnerabilities.

The current account deficit in India, for example, has been reduced

quite significantly. Indonesia has tightened policies. I think the

impact on that front will be quite insignificant. But in both cases

their currencies will find it difficult to make headwinds. The

Philippine economy has been a stellar performer this year, despite

the major calamities. That's right. It stands out as one of the

countries that is more resilient. They have a high current-account

surplus. They have resilient growth. I think they would fare relatively

well with the tapering process. Now a look at the specific markets

in Asia that are in positive territory. Plus signs for Japan,

Australia and Hong Kong. Japanese exporters benefiting from the weak

yen versus the dollar, its weakest level since 2008. Let's move on to

other business news making headlines. The value of the coins

has plunged by almost half in China, after new moves to restrict trade.

-- bitcoins. Deposits were banned following new restrictions imposed

by the central bank. The dollar price of a bitcoin surged from $5 at

the beginning of 2012 to 1200 in early December. Yesterday, it was

trading just above $500. India's reserve bank has frozen the

cost of borrowing, despite rising inflation. Food prices have been

going up sharply. Asia's there is biggest economy is slowing. -- third

biggest. Some fear companies will be discouraged from investing and

generating much-needed wealth. In a view -- in aviation, Air Asia's

long-haul division has sealed a record-breaking $6 billion deal with

Airbus to buy 25 A380 planes. -- A330. It's the largest single order

for the planes and it's part of its long-term goal to eventually fly to

Europe. The carrier will start taking deliveries of its new fleet

in 2015. The two Koreas are to hold a fourth

round of talks to develop their industrial park in the North's

border city. Negotiations have been stalled since September. The meeting

coincides with an unprecedented visit to the complex by dozens of

foreign officials and financial experts from institutions, including

the IMF and the Asian development bank.

New Zealand's booming dairy industry has helped boost the economy, with a

1.4% increase in growth for the September quarter. It is the biggest

quarterly rise in four years and beats forecasts by the central bank.

Good weather is the main factor behind improvement in the

agricultural sector. Moving to social media.

How far will Facebook go to grow its advertising revenues? Many are

asking that, as it tests its first video advertisements. But will it

turn users away? We found out the views of some people from Singapore.

I wouldn't mind. Facebook has to earn money. It depends on what kind

of video. If it is about fashion tips or maybe sales, I don't mind.

But if it's something that's not relevant to me, I won't like it.

Probably I will just close the browser or I will move on to the

next page. Irritated. I do feel a lot of these advertisements can

distract. There is a fine line between presenting a product and

overdoing it. It won't make me want to buy a car or shampoo. We have TV

for ads. Don't put it on Facebook. It's annoying. I have someone from a

digital marketing company. I ask whether the social media site is

facing a backlash. Everytime Facebook does something different,

there is a reaction from users. The thing about video ads is that

Facebook has thought about it. It is auto-play but the sound isn't

enabled. It doesn't have pop-ups, flashing banners, that a lot of

websites and online ads use. I think users are going to respond in a

difficult way initially perhaps but I think it will be all right. It

will be an adjustment period between the user using and looking at the

service on Facebook. But do you think Asian companies and users will

use this new service of Facebook? I hope so. I hope people make use of

this opportunity. From a consumer brand's perspective, it's a new way

to advertise. It's not like a TV ad. We have a chance to interact with

users. Create video ads which bring that interactivity alive. I hope

consumer brands will use this effectively. How important is Asia

to Facebook? Facebook is incredibly popular here in Asia. A lot of users

are accessing Facebook through their mobile platforms. It's fantastic to

know Facebook has thought of this before launching the video ad

service. If you are accessing Facebook from a mobile platform, the

video ads won't display until you have a Wi-Fi connection.

As you say, this will be an advantage for Asian consumer brands.

What about individual users? Will they use the service? I think they

will. We have had lots of sponsored stories, which the individuals are

now accessing and using, outside of brands. So, Facebook has been in

incredible intelligent in moving this forward.

Let's have a quick look at the currency markets. The Japanese yen

is weaker against the dollar. The US central bank surprised

markets by trimming its bond buying programme and said it expects to

keep reducing it if the economy continues to improve.

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

The main stories: A panel set up a President Obama has recommended

significant curbs