:00:00. > :00:00.state and independent schools. Michael Gove says he wants all 13
:00:07. > :00:19.year olds to sit the entrance exams set by independent schools.
:00:20. > :00:36.Now it is time for Asia Business Report. Fast food giant Yum! Brands
:00:37. > :00:43.looks at its biggest market. We start off with the Asian markets,
:00:44. > :00:48.where share prices are falling due to a worse than expected US
:00:49. > :00:56.manufacturing report. Markets are all down, in negative territory at
:00:57. > :01:05.this hour. US equities tumbled their most since June of last year. The
:01:06. > :01:12.Dow Jones the S 500, were down more than 2% overnight. Let's talk
:01:13. > :01:19.for the chief market strategist at CMC. Thank you to joining us. What
:01:20. > :01:24.you make of this downturn in the US and Asian markets. ? Is this the
:01:25. > :01:33.start of a long return downturn? Or is this just a blip? The action in
:01:34. > :01:38.the US overnight was mainly for it weak reading on the ISM, and while
:01:39. > :01:48.manufacturing figures were Port, a lot of the downturn can be
:01:49. > :01:52.attributed to the poor weather. We have already seen a rally in US
:01:53. > :02:02.futures in our overnight session. Nonetheless, the souring of
:02:03. > :02:04.sentiment was led down by markets in Tokyo, will be sorry saturated
:02:05. > :02:11.movement in the highly volatile environment. Markets across the
:02:12. > :02:15.border town 1-2%. Much of the Asian region is still on holiday, and
:02:16. > :02:20.conditions are exaggerating it at this stage. You also have the weak
:02:21. > :02:25.factory growth report from China, plus the fact that there is also
:02:26. > :02:30.problems in other emerging markets, like Argentina, Ukraine, and South
:02:31. > :02:33.Africa. You think that if the situation goes from bad to worse,
:02:34. > :02:43.this could start of a contagion effect? That is worth the risk in
:02:44. > :02:49.markets, but the underlying fundamentals don't support that. All
:02:50. > :02:53.emerging markets shouldn't be put into one basket. The situation
:02:54. > :02:57.varies from country to country, and we see banks in China, once we have
:02:58. > :03:02.done the numbers, appear to have no foundation. That doesn't mean there
:03:03. > :03:06.are no concerns for us, particularly in countries like India, weather is
:03:07. > :03:11.high inflation, slowing growth, and a widening current account and trade
:03:12. > :03:17.balance. The chances of a wholesale slump appeared to be slim. Thank you
:03:18. > :03:23.for your views on the Asia-Pacific markets.
:03:24. > :03:28.Shares of Chinese computer manufacturer Lenovo slumped more
:03:29. > :03:34.than 14% in Hong Kong, adding to losses from last week was
:03:35. > :03:45.announcement that it had bought Google's Motorola mobility handset
:03:46. > :03:50.unit for more than $3 billion. This is China's biggest technology
:03:51. > :03:56.purchased to date. The US central bank has a new boss, Janet Yellen.
:03:57. > :03:59.She was sworn in on Monday, and will be the first woman to lead the
:04:00. > :04:05.Federal bank in its 100 year history. She faces the challenge of
:04:06. > :04:10.unwinding a massive stimulus programme without scaring the
:04:11. > :04:14.markets or hurting growth. Ben Bernanke stepped down last week
:04:15. > :04:32.after eight years in office, and has joined the Brookings Institute. HP
:04:33. > :04:39.claims Autonomy fraudulently inflated its numbers in 2010 and
:04:40. > :04:51.2011, which people at Autonomy deny. US car sales have slumped. People
:04:52. > :04:57.bought just over 1 million vehicles last month, with General Motors,
:04:58. > :05:04.Ford and Toyota all facing a bigger than expected fall in sales. The US
:05:05. > :05:07.is the world's largest car market. Brazil posting the biggest monthly
:05:08. > :05:12.trade deficit in its history due to the falling value of its currency.
:05:13. > :05:16.Brazil's trade deficit was more than $4 billion in January, after
:05:17. > :05:21.consumers bought more overseas products, while the value of its
:05:22. > :05:29.exports fell. That is largely because its currency has depreciated
:05:30. > :05:33.by about 18% in the past year. Shares in fast food find Yum!
:05:34. > :05:38.Brands, the owner of KFC and Pizza Hut, rising by nearly 4% in late
:05:39. > :05:44.trade after it confirmed its earnings forecast for next year.
:05:45. > :05:52.Yum! Brands had posted weaker than expected profits after food safety
:05:53. > :05:58.scares and outbreaks of avian flu. Investors are now hopeful that the
:05:59. > :06:01.worst may be over for Yum! Brands. It is Chinese New Year in China, a
:06:02. > :06:06.time when many families will be coming out to eat, that it seems
:06:07. > :06:11.increasing numbers will be avoiding chicken on offer at KFC. Concerns
:06:12. > :06:16.over avian flu mean that many people in China are dropping chicken from
:06:17. > :06:23.their diets, even though experts say that cooked meat has no risk of
:06:24. > :06:26.infection. People are avoiding KFC after some Chinese poultry suppliers
:06:27. > :06:31.were accused of misusing antibiotics. We don't like KFC
:06:32. > :06:40.because we think it is junk food and it is not good for children. So we
:06:41. > :06:44.sell them eat it. -- seldom. I don't pay much attention to KFC because we
:06:45. > :06:47.rarely eat it, but I am worried about food. Anything going into my
:06:48. > :06:54.mouth is important and I am worried about food safety. Ring that I don't
:06:55. > :07:03.often it KFC. I choose it sometimes because it is convenient, when I
:07:04. > :07:12.don't want to cook for myself. KFC has a new marketing campaign, with a
:07:13. > :07:16.slogan " trust in every bite" . Yum! Brands wants to turn around sales in
:07:17. > :07:20.China, because it is so heavily dependent on the Chinese market, and
:07:21. > :07:30.particularly on KFC, and they say it is vital that for this new campaign
:07:31. > :07:35.to work. Earlier, I spoke to a food and
:07:36. > :07:39.beverage specialist in Shanghai, and asked him whether the worst was over
:07:40. > :07:44.for Yum! Brands. They have had a very rough year in China, with
:07:45. > :07:49.reports about their poultry suppliers using antibiotics really
:07:50. > :07:55.hurting consumer trust. It is up to them to rebuild their brand. Is
:07:56. > :08:02.consumer trust back? I don't think it is. I think consumers are still
:08:03. > :08:20.wary, as you saw in the segment that you just and, they are worried about
:08:21. > :08:32.them. -- aired. There are also other options, with Burger King and
:08:33. > :08:35.several Chinese food establishments. You think the Chinese are turning
:08:36. > :08:43.their backs on Western food outlets? Nutrition and health are
:08:44. > :08:47.increasingly important. I wouldn't say they are turning their backs, as
:08:48. > :08:53.you heard there is still a need for quick and convenient meals as well
:08:54. > :08:57.as food that is healthy and balanced. You are right, the issue
:08:58. > :09:02.is about health are definitely driving people towards other, more
:09:03. > :09:10.premium restaurants, as well as restaurants that offer more of what
:09:11. > :09:14.is considered balanced food. Asian chains, with country style cooking
:09:15. > :09:21.in western China, and other chains like that which are coming up. In
:09:22. > :09:25.India, and auction of licences for the two G mobile network is under
:09:26. > :09:27.way. Some of the biggest telecommunication companies are
:09:28. > :09:32.taking part, and the government hopes it will raise a considerable
:09:33. > :09:38.sum. This is the third time that India
:09:39. > :09:46.has tried to sell the rights to use these major networks. The first two
:09:47. > :09:49.failed, because companies felt the price was too high, and they
:09:50. > :09:56.boycotted the options. Some of the top players need to win permits, as
:09:57. > :10:01.they have to renew their licences in key cities, like Mumbai and Delhi.
:10:02. > :10:06.Why was this option needed? Two years ago the Supreme Court
:10:07. > :10:11.cancelled 122 licences that had been awarded to Telecom companies. This
:10:12. > :10:17.was amidst allegations that they were misallocated. The companies
:10:18. > :10:24.claimed that there were losses to the June $14 billion, because many
:10:25. > :10:27.licences were sold at their value. Several businessmen have been
:10:28. > :10:31.charged, a court case is under way, and all of them deny wrongdoing. The
:10:32. > :10:35.government hopes there is better success this time, in fact they are
:10:36. > :10:39.hoping to raise as much as $1.8 billion from the option this year.
:10:40. > :10:47.Stock will thank you for watching. Up next, Sport Today.
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