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it took during the financial crisis. It has also announced that top | :00:00. | :00:00. | |
management will not get bonuses this year. Now for Asia Business Report. | :00:00. | :00:14. | |
Emerging markets and investor concerns. We find out what is | :00:15. | :00:26. | |
driving the fall in Asian markets. All eyes on India. What will the | :00:27. | :00:29. | |
country's central bank do next to spur on economic growth while | :00:30. | :00:34. | |
keeping inflation in check? Welcome to the programme. This is Asia | :00:35. | :00:46. | |
Business Report. We begin with a look at the Asian stock markets and | :00:47. | :00:54. | |
how they are doing in Tuesday trade. Shares fell overnight after concerns | :00:55. | :01:02. | |
about the US Federal Reserve. There has also been trouble in Latin | :01:03. | :01:05. | |
America and Argentina, where the country's sliding currency sparked a | :01:06. | :01:08. | |
sell-off on Wall Street, which has spread all the way to the region. | :01:09. | :01:22. | |
Most of the markets are in positive territory. It feels like those | :01:23. | :01:30. | |
concerns have waned somewhat. It's the Australian stock market that | :01:31. | :01:33. | |
continues to wallow in negative territory, lower by 45 points. On | :01:34. | :01:37. | |
Wall Street... Are emerging markets in real | :01:38. | :01:57. | |
trouble? Earlier, I spoke with our guest analyst. 2013 was a great year | :01:58. | :02:04. | |
for everyone. Right now, we have a hangover. It was a great party and | :02:05. | :02:09. | |
people are feeling some pain. We believe this hangover will soon go | :02:10. | :02:15. | |
away and the situation is not dire. Emerging markets have many | :02:16. | :02:22. | |
problematic points. But in general, the contagion effect of 1997 and | :02:23. | :02:25. | |
1998 - we just don't see that happening in this environment. Let's | :02:26. | :02:33. | |
breakdown the factors. Focusing on the current crisis in Argentina, how | :02:34. | :02:36. | |
important are the Latin American markets to Asian companies? Certain | :02:37. | :02:39. | |
individual companies can have increased exposure but overall, the | :02:40. | :02:42. | |
effect of Argentina on the Japanese economy is frankly negligible. How | :02:43. | :02:53. | |
China is doing? How the US is doing? Japan's first and second largest | :02:54. | :02:56. | |
trading partners are the most important. For south-east Asian | :02:57. | :02:59. | |
nations, it's about Japan, China and India. They are the three drivers of | :03:00. | :03:04. | |
the emerging economies in the region. Could swings in Latin | :03:05. | :03:19. | |
American currencies trickle down to other small economies in the region? | :03:20. | :03:25. | |
Some companies can be impacted, yes, but this is part of our overall | :03:26. | :03:29. | |
theory that 2014 will be a stock picker's year. Individual stock | :03:30. | :03:37. | |
movements up and down will be much more dramatic and we believe there | :03:38. | :03:40. | |
is a chance that the indices may potentially reach the low negative | :03:41. | :03:56. | |
single digits. Volatility is back. Apple has reported better than | :03:57. | :03:59. | |
expected earnings for the October to December quarter. Just over $13 | :04:00. | :04:09. | |
billion. The company's shares were down in extended trading in the US | :04:10. | :04:12. | |
after it failed to reach expectations for sales of its | :04:13. | :04:17. | |
iPhone. 51 million units were sold, down from 55 million expected by | :04:18. | :04:23. | |
many analysts. The sales outlook is also lower for 2014, concerning | :04:24. | :04:27. | |
investors. However, double-digit revenue growth was recorded for the | :04:28. | :04:37. | |
period in China and Japan. Where is the investor disappointment coming | :04:38. | :04:43. | |
from? This is less about current results as it is about the upcoming | :04:44. | :04:47. | |
quarter. Having made announcements about the partnership in China, | :04:48. | :04:49. | |
analysts were expecting continued growth in iPhone sales in the | :04:50. | :05:04. | |
Chinese market. Apple has indicated slightly lower than expected growth | :05:05. | :05:06. | |
in numbers for that coming quarter, and that is what is bothering the | :05:07. | :05:10. | |
stock market. But investors should not be bothered about the growth in | :05:11. | :05:23. | |
China going forward. These gains are before China Mobile starts selling | :05:24. | :05:28. | |
the iPhone in earnest. It is a tremendous opportunity there and it | :05:29. | :05:30. | |
will drive iPhone sales over the next quarter. However, in the | :05:31. | :05:35. | |
announcement, Tim Cook was cautious about the growth of iPhones in the | :05:36. | :05:38. | |
upcoming quarter and that is what has kept analysts worried about the | :05:39. | :05:41. | |
future of Apple and growth in the coming quarters. | :05:42. | :05:48. | |
And lower iPhone sales will cast a long shadow over the smartphone | :05:49. | :05:50. | |
industry because we also have Samsung warning of weak earnings. | :05:51. | :05:56. | |
It indicates that they may have reached a plateau. At the top end. | :05:57. | :06:09. | |
People are not replacing their smartphones as quickly as the | :06:10. | :06:12. | |
analysts and the vendors would like. There is a slowdown in the | :06:13. | :06:18. | |
replacement cycle. We have seen that in North America as well. I believe | :06:19. | :06:25. | |
the pace of innovation has slowed. We have to accelerate that pase if | :06:26. | :06:29. | |
we need to keep the top end of the market. On the one hand, we have not | :06:30. | :06:33. | |
done enough in the emerging markets like China and India, where there is | :06:34. | :06:36. | |
a large population still yet to be tapped for smartphones. The pricing | :06:37. | :06:43. | |
of the phones are way beyond the reach of average citizens in these | :06:44. | :06:50. | |
countries. The operators of the virtual currency Bitcoin have been | :06:51. | :06:55. | |
arrested in the US. Robert Faiella and Charlie Shrem has been charged | :06:56. | :07:01. | |
with money-laundering. Authorities said the pair were engaged in a | :07:02. | :07:05. | |
scheme to sell more than $1 million of Bitcoins to users of the Silk | :07:06. | :07:08. | |
Road website, which was shut down last year. The charges, while | :07:09. | :07:18. | |
serious, should not mean the end of virtual currencies. This is a | :07:19. | :07:25. | |
nascent industry and we always have to be concerned if there are | :07:26. | :07:29. | |
criminal charges. If the allegations are to be believed, there was some | :07:30. | :07:36. | |
serious misconduct that went on. I don't have the details yet. It's | :07:37. | :07:40. | |
always of concern but I don't think it should mean that we have to say | :07:41. | :07:43. | |
we should never have virtual currencies. We have arrests in the | :07:44. | :07:48. | |
banking industry from time to time. It does not mean we will give up on | :07:49. | :07:53. | |
the banking industry. There will always be bad apples in an industry. | :07:54. | :07:59. | |
The question is, do we have the protections in place to weed out | :08:00. | :08:03. | |
those bad apples? The majority of people are doing the right thing and | :08:04. | :08:08. | |
want to succeed in their businesses. We don't assume that every banker or | :08:09. | :08:12. | |
every person on Wall Street is bad. In fact, they are usually great. We | :08:13. | :08:20. | |
believe we will move in the same direction. The Indian economy comes | :08:21. | :08:25. | |
into focus today as the central bank decides on the cost of borrowing in | :08:26. | :08:28. | |
its battle against rising prices. It will also present its report card on | :08:29. | :08:31. | |
how the economy performed in the final three months of last year. We | :08:32. | :08:35. | |
look at the challenges to the country's economic prosperity. | :08:36. | :08:37. | |
Stitching together the various pieces of the economy, that is the | :08:38. | :08:40. | |
basic task of any central bank. It's no different in the case of India | :08:41. | :08:43. | |
but unfortunately for the Reserve Bank of India, the pieces it is | :08:44. | :08:46. | |
trying to put together have not been cut to the same design. India's | :08:47. | :08:52. | |
manufacturing sector is the key driver of the economy. It has slowed | :08:53. | :08:58. | |
over the past few years, dragging down overall growth. Among the | :08:59. | :09:04. | |
issues that have hit the sector are high interest rates. India's central | :09:05. | :09:07. | |
bank has raised interest rates twice since September last year, making it | :09:08. | :09:10. | |
more costly for businesses as well as consumers to borrow money. | :09:11. | :09:15. | |
Critics argue that the moves have dented domestic demand. For its | :09:16. | :09:22. | |
part, the central bank has so far resisted calls to lower rates to try | :09:23. | :09:27. | |
to spur on the economy. Its reason is the stubbornly high inflation in | :09:28. | :09:30. | |
the country. Rising consumer prices have been a major issue in Asia's | :09:31. | :09:33. | |
third-largest economy and the country's key gauge of inflation hit | :09:34. | :09:39. | |
a 14-month high in November. A weak Indian currency has only added to | :09:40. | :09:42. | |
the central bank's headache as it looks to keep price rises in check. | :09:43. | :09:50. | |
Some experts argue that lower borrowing costs may do more harm | :09:51. | :09:56. | |
than good. The central bank has a difficult decision to make. Does it | :09:57. | :10:01. | |
move to encourage economic growth or does it stand firm to keep price | :10:02. | :10:08. | |
rises in check? It will somehow have to fit together a compromise to | :10:09. | :10:12. | |
please most of the stakeholders. However, that is easier said than | :10:13. | :10:28. | |
done. And the Reserve Bank of India will be releasing those results | :10:29. | :10:31. | |
later this afternoon. Thank you for investing your time with us. Goodbye | :10:32. | :10:44. | |
for now. The headlines: Ukraine's president Viktor Yanukovych has | :10:45. | :10:52. | |
agreed to scrap controversial anti-protest laws. Egypt's top | :10:53. | :10:53. |