04/02/2014 Asia Business Report


04/02/2014

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to sit the Common Entrance exams used by private schools. Now on BBC

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News, all the latest business news live from Singapore.

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Asian stock markets followed the week US manufacturing data.

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Fast food giant Yum! Brands looks at its biggest market.

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Welcome. The kick off with the market in Asia, where share prices

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are falling due to a worse than expected US manufacturing report.

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Marcus in Japan, Hong Kong and Australia are in negative territory

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-- markets. This follows a down day on Wall Street, which saw US stocks

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tumble the most since June last year. The Dow Jones and the S 500

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were down by more than 2%. My feeling now is that at the end of

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last year, markets, especially in the US, Japan, had gains and that

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led to invest exuberance, which left them vulnerable to a correction.

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This is what we have seen. It is probably just a correction.

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Obviously the emerging market worries that we have seen in some

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parts, like Turkey and Argentina, have helped trigger that. The bad

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weather has added to the woes. But, at the end of the day, this is

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probably just a correction. It may have a couple more percent to go but

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we have been selling and giving a good buying opportunity.

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Moving on. We have news just in. The Australian central bank has decided

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to keep the cost of borrowing steady, at 2.5%. We can cross to our

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Sydney correspondent. Why are they keeping rates on hold? Predicting

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interest rates in this country is a bit of a sport. A survey of

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economists in the last few days reflected a view that the reserve

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bank was likely to change interest rates. Economists were unanimous in

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their view that they would stay at the historic low of 2.5%. What the

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reserve bank is trying to do is assume a neutral position. Not too

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hot, not too cold, in order to guide the Australian economy through what

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will likely be a very challenging year, even the mining boom at the

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Australian economy has relied upon for the past decade or so is

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cooling. At the moment, it seems the reserve bank, in its first board

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meeting of the year, has decided that it is steady as she goes. Also,

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the Australian economy is still by jesting past interest rate cuts from

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the Reserve Bank of Australia -- digestive. This will have an impact

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on the economy? What we are seeing is that, in August of last year, the

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rates went to these historic lows, 2.5%. You would have to be over 50

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years of age in this country to remember a time and interest rates

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were this low. Economists are telling us that the housing,

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construction and retail sectors in this country are showing some decent

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signs of life, the cause of these low interest rates. But there is a

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feeling that the jobs market in Australia isn't responding so well,

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so perhaps there will be another interest rate cut later in the year.

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But of course only the reserve bank will know that. One thing that might

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stop the reserve bank cutting rates further in the next few months is

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inflation. Inflation in Australia has edged up over 2.5%. The game, we

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will have to wait and see. Thank you.

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Shares of Chinese computer manufacturer Lenovo slumped more

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than 14% in Hong Kong, adding to losses from last week was

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announcement that it had bought Google's Motorola mobility handset

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unit for more than $3 billion. Sony called the report inadequate. Five

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brokerages have downgraded stock, after the company announced it had

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bought motor roller. Investors are not happy with these recent business

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decisions. Of course, last week, we had then by Motorola. A lot of the

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concern that is going on is, can they digestive all of these

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businesses? Some of them not being the most profitable. But our

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investors not really seeing the true value of these purchasers? In some

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cases. If you were to focus on Motorola, yes. If you look at it on

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paper, the business wasn't very profitable. But if you look at what

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Lenovo's long-term strategy was with that, they needed a way to get into

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the US. What Motorola provided was not just the channel relationships

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and operator relationships but the patents that they needed, or access

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to the patents. In order to help detect themselves as they go into

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that market. But what if these rumours are true, that they would

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want to buy part of Sony's business? Is that a good fit? Merret in

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theory, yes. There are a number of assets that Sony would bring to the

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table. -- in theory. On the consumer side, we haven't necessarily being

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seen as much of a premium brand. It would be interesting to have that

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aspect added. But, nonetheless, we are talking about a market where

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consumer PCs are just under fire from tablets and smartphones and

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that's why there are so many challenges. US regulators are said

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to approve the deal with Lenovo. Will it really happen? Could we see

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this deal not materialising? Should go through. When you look at when

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Lenovo a quiet part of the PC division many years ago, that went

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through. Many US government businesses, broadly, still continue

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to use Lenovo or IBM products. If anything, the server deal might be

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under scrutiny because, will you trust having your data sitting on

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back-end servers? Even that is likely to go through. Mobile phones,

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which you could argue as Telecom, could that be an issue? We will

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leave it there. Thank you. We will have to wait and see if this indeed

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will materialise. Lenovo buying part of Sony's business. Moving on to

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other business news making headlines. The world's biggest

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central bank has a new woman leading it, the first in its 100 years.

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Janet Yellen will unwind the stimulus programme without hurting

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economic growth, she says. Then the bank is stepped down last week after

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eight years in office. He has joined a Washington think tank. Shares of

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Yum! Brands, the owner of KFC and Pizza Hut, rising by nearly 4% in

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late US trade, after the firm reaffirmed its forecast for next

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year. It posted weaker than expected profits after part of its food was

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said to be contaminated in China. It is now hopeful the worst might be

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over. More from Beijing. It is Chinese New Year in China. Are

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times when many families will be going out to eat. But it seems many

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people will be avoiding chicken at KFC. Concerns over avian flu means

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many people are dropping chicken from their diets, even though

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experts say there's no risk. Some Chinese poultry suppliers are

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accused of misusing antibiotics. We don't go to KFC because it is junk

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food and not good for children. So, we seldom eat it. TRANSLATION: I

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don't pay much attention to KFC because we really eating. But I am

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worried about food. Anything going into my mouth is important and I am

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worried about food safety. TRANSLATION: I don't often eat KFC.

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IDE it sometimes because it is convenient. KFC had less sales but

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it has a new advertising campaign called trust in every bite. They say

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they have tightened the supply chain in China. Analysts say it is vital

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that young brands turn to sales in China. The corporation is so heavily

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dependent on the Chinese market and on KFC in particular, it is vital,

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they say, that the new campaign work in order for the corporation's

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global finances to improve. Thanks for investing your time with

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us. Goodbye for now. The top stories this hour: The World

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Health Organisation has warned of a "tidal wave" of cancer sweeping the

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globe. It says more needs to be done to tackle the disease.

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A priest in the Central African Republic says in the past week at

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least 75 Christians have

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