:00:00. > :00:00.it took during the financial crisis. It has also announced that top
:00:00. > :00:14.management will not get bonuses this year. Now for Asia Business Report.
:00:15. > :00:26.Emerging markets and investor concerns. We find out what is
:00:27. > :00:29.driving the fall in Asian markets. All eyes on India. What will the
:00:30. > :00:34.country's central bank do next to spur on economic growth while
:00:35. > :00:46.keeping inflation in check? Welcome to the programme. This is Asia
:00:47. > :00:54.Business Report. We begin with a look at the Asian stock markets and
:00:55. > :01:02.how they are doing in Tuesday trade. Shares fell overnight after concerns
:01:03. > :01:05.about the US Federal Reserve. There has also been trouble in Latin
:01:06. > :01:08.America and Argentina, where the country's sliding currency sparked a
:01:09. > :01:22.sell-off on Wall Street, which has spread all the way to the region.
:01:23. > :01:30.Most of the markets are in positive territory. It feels like those
:01:31. > :01:33.concerns have waned somewhat. It's the Australian stock market that
:01:34. > :01:37.continues to wallow in negative territory, lower by 45 points. On
:01:38. > :01:57.Wall Street... Are emerging markets in real
:01:58. > :02:04.trouble? Earlier, I spoke with our guest analyst. 2013 was a great year
:02:05. > :02:09.for everyone. Right now, we have a hangover. It was a great party and
:02:10. > :02:15.people are feeling some pain. We believe this hangover will soon go
:02:16. > :02:22.away and the situation is not dire. Emerging markets have many
:02:23. > :02:25.problematic points. But in general, the contagion effect of 1997 and
:02:26. > :02:33.1998 - we just don't see that happening in this environment. Let's
:02:34. > :02:36.breakdown the factors. Focusing on the current crisis in Argentina, how
:02:37. > :02:39.important are the Latin American markets to Asian companies? Certain
:02:40. > :02:42.individual companies can have increased exposure but overall, the
:02:43. > :02:53.effect of Argentina on the Japanese economy is frankly negligible. How
:02:54. > :02:56.China is doing? How the US is doing? Japan's first and second largest
:02:57. > :02:59.trading partners are the most important. For south-east Asian
:03:00. > :03:04.nations, it's about Japan, China and India. They are the three drivers of
:03:05. > :03:19.the emerging economies in the region. Could swings in Latin
:03:20. > :03:25.American currencies trickle down to other small economies in the region?
:03:26. > :03:29.Some companies can be impacted, yes, but this is part of our overall
:03:30. > :03:37.theory that 2014 will be a stock picker's year. Individual stock
:03:38. > :03:40.movements up and down will be much more dramatic and we believe there
:03:41. > :03:56.is a chance that the indices may potentially reach the low negative
:03:57. > :03:59.single digits. Volatility is back. Apple has reported better than
:04:00. > :04:09.expected earnings for the October to December quarter. Just over $13
:04:10. > :04:12.billion. The company's shares were down in extended trading in the US
:04:13. > :04:17.after it failed to reach expectations for sales of its
:04:18. > :04:23.iPhone. 51 million units were sold, down from 55 million expected by
:04:24. > :04:27.many analysts. The sales outlook is also lower for 2014, concerning
:04:28. > :04:37.investors. However, double-digit revenue growth was recorded for the
:04:38. > :04:43.period in China and Japan. Where is the investor disappointment coming
:04:44. > :04:47.from? This is less about current results as it is about the upcoming
:04:48. > :04:49.quarter. Having made announcements about the partnership in China,
:04:50. > :05:04.analysts were expecting continued growth in iPhone sales in the
:05:05. > :05:06.Chinese market. Apple has indicated slightly lower than expected growth
:05:07. > :05:10.in numbers for that coming quarter, and that is what is bothering the
:05:11. > :05:23.stock market. But investors should not be bothered about the growth in
:05:24. > :05:28.China going forward. These gains are before China Mobile starts selling
:05:29. > :05:30.the iPhone in earnest. It is a tremendous opportunity there and it
:05:31. > :05:35.will drive iPhone sales over the next quarter. However, in the
:05:36. > :05:38.announcement, Tim Cook was cautious about the growth of iPhones in the
:05:39. > :05:41.upcoming quarter and that is what has kept analysts worried about the
:05:42. > :05:48.future of Apple and growth in the coming quarters.
:05:49. > :05:50.And lower iPhone sales will cast a long shadow over the smartphone
:05:51. > :05:56.industry because we also have Samsung warning of weak earnings.
:05:57. > :06:09.It indicates that they may have reached a plateau. At the top end.
:06:10. > :06:12.People are not replacing their smartphones as quickly as the
:06:13. > :06:18.analysts and the vendors would like. There is a slowdown in the
:06:19. > :06:25.replacement cycle. We have seen that in North America as well. I believe
:06:26. > :06:29.the pace of innovation has slowed. We have to accelerate that pase if
:06:30. > :06:33.we need to keep the top end of the market. On the one hand, we have not
:06:34. > :06:36.done enough in the emerging markets like China and India, where there is
:06:37. > :06:43.a large population still yet to be tapped for smartphones. The pricing
:06:44. > :06:50.of the phones are way beyond the reach of average citizens in these
:06:51. > :06:55.countries. The operators of the virtual currency Bitcoin have been
:06:56. > :07:01.arrested in the US. Robert Faiella and Charlie Shrem has been charged
:07:02. > :07:05.with money-laundering. Authorities said the pair were engaged in a
:07:06. > :07:08.scheme to sell more than $1 million of Bitcoins to users of the Silk
:07:09. > :07:18.Road website, which was shut down last year. The charges, while
:07:19. > :07:25.serious, should not mean the end of virtual currencies. This is a
:07:26. > :07:29.nascent industry and we always have to be concerned if there are
:07:30. > :07:36.criminal charges. If the allegations are to be believed, there was some
:07:37. > :07:40.serious misconduct that went on. I don't have the details yet. It's
:07:41. > :07:43.always of concern but I don't think it should mean that we have to say
:07:44. > :07:48.we should never have virtual currencies. We have arrests in the
:07:49. > :07:53.banking industry from time to time. It does not mean we will give up on
:07:54. > :07:59.the banking industry. There will always be bad apples in an industry.
:08:00. > :08:03.The question is, do we have the protections in place to weed out
:08:04. > :08:08.those bad apples? The majority of people are doing the right thing and
:08:09. > :08:12.want to succeed in their businesses. We don't assume that every banker or
:08:13. > :08:20.every person on Wall Street is bad. In fact, they are usually great. We
:08:21. > :08:25.believe we will move in the same direction. The Indian economy comes
:08:26. > :08:28.into focus today as the central bank decides on the cost of borrowing in
:08:29. > :08:31.its battle against rising prices. It will also present its report card on
:08:32. > :08:35.how the economy performed in the final three months of last year. We
:08:36. > :08:37.look at the challenges to the country's economic prosperity.
:08:38. > :08:40.Stitching together the various pieces of the economy, that is the
:08:41. > :08:43.basic task of any central bank. It's no different in the case of India
:08:44. > :08:46.but unfortunately for the Reserve Bank of India, the pieces it is
:08:47. > :08:52.trying to put together have not been cut to the same design. India's
:08:53. > :08:58.manufacturing sector is the key driver of the economy. It has slowed
:08:59. > :09:04.over the past few years, dragging down overall growth. Among the
:09:05. > :09:07.issues that have hit the sector are high interest rates. India's central
:09:08. > :09:10.bank has raised interest rates twice since September last year, making it
:09:11. > :09:15.more costly for businesses as well as consumers to borrow money.
:09:16. > :09:22.Critics argue that the moves have dented domestic demand. For its
:09:23. > :09:27.part, the central bank has so far resisted calls to lower rates to try
:09:28. > :09:30.to spur on the economy. Its reason is the stubbornly high inflation in
:09:31. > :09:33.the country. Rising consumer prices have been a major issue in Asia's
:09:34. > :09:39.third-largest economy and the country's key gauge of inflation hit
:09:40. > :09:42.a 14-month high in November. A weak Indian currency has only added to
:09:43. > :09:50.the central bank's headache as it looks to keep price rises in check.
:09:51. > :09:56.Some experts argue that lower borrowing costs may do more harm
:09:57. > :10:01.than good. The central bank has a difficult decision to make. Does it
:10:02. > :10:08.move to encourage economic growth or does it stand firm to keep price
:10:09. > :10:12.rises in check? It will somehow have to fit together a compromise to
:10:13. > :10:28.please most of the stakeholders. However, that is easier said than
:10:29. > :10:31.done. And the Reserve Bank of India will be releasing those results
:10:32. > :10:44.later this afternoon. Thank you for investing your time with us. Goodbye
:10:45. > :10:52.for now. The headlines: Ukraine's president Viktor Yanukovych has
:10:53. > :10:53.agreed to scrap controversial anti-protest laws. Egypt's top