02/05/2014 Asia Business Report


02/05/2014

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disgraced former cabinet minister, Chris Huhne, over a scandal

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regarding his speeding points. Political crisis and a shrinking

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economy, how much more damage than Thailand's political stalemate do to

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the country's finances? And, air Asia revs up for takeoff in India,

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we find out how it plans to compete. Work to Asia Business Report.

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Thailand may be a step closer to ending its long`running political

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crisis. PM Yingluck Shinawatra's caretaker government has agreed to

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hold a new election in July, following months of street protest.

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The PM still faces the risk of being removed from office by the courts.

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She has been given until today to submit her defence against

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allegations of abuse of power, but she is not expected to testify in

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court. The crisis has taken its toll on Thailand's economy, and we speak

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to an Asia economist. The key factor will be to what extent we see a

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rebound in domestic confidence, and there has to be some clarity on the

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political front. Without clarity, investment can't take place and

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commerce will stagnate. US confident as the finance ministry, which is

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sticking to its forecast of growth of 6.4% for this year? It is only

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forecasting one quarter of retraction, you think could get 2/4

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of contraction? I think officials like to be optimistic, any

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assumption that hopefully political clarity could become clearer in the

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next weeks and months. For that to happen, exporters to recover, the

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global economy has to be firm, and investment in consumption has to

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take place. I'm not sure that will happen just yet. How big an impact

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as it had on investment and consumption? Water companies

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businesses doing? We are not quite sure how the political uncertainty

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can drag on, let's hold onto investment decisions, holding onto

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expansion, because consumers are not doing anything, the companies are

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not going to take the lead. What risks that a new election will not

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resolve anything? If companies are still set on the goal, but they do

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not want Yingluck Shinawatra or taxi near what are in power, then it is

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something that could go on for months. After eight years at the

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helm, the boss of the Ford Motor Co, Alan Mullaly, is stepping down. His

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era came to an end with much fanfare, as he is credited with

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rescuing the country from the global financial crisis. Mark Fields is set

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to replace him. I will build on their success, we would like to

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accelerate our pace of progress, because we are just starting to see

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the benefits and the power of the one Ford plan. To China, where

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possible new rules on the use of commodities to back loans are

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pushing down the price of iron ore, and could in turn cause problems for

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the steel mills. Steel mills have been one side of

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China's dynamic economy. They are the backbone of China's skyscrapers

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and factories. The key ingredient of steel is iron ore, which has seen

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its price pushed up, by China's insatiable demand. China is the

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biggest importer of iron ore in the world, taking approximately 60% of

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the iron ore market. At the moment it is very much demand driven,

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rather than the supply side of the balance sheet. Export out of

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Australia, that is fine, and we are really looking at what is happening

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in China. We are looking at macro growth, whether China can maintain

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its growth targets, which have been set above 7%. The Margaret is very

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set on what is happening `` market. And, whether it can be facilitated,

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which is the availability of credit. Since the economy slowed, stocks of

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iron or built up and prices fell. The problem is, many of these steel

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mills not only possessed iron ore, but used it as a form of trade

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finance. In other words, they used it as collateral for loans.

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Authorities are now concerned about the risks behind such deals. To

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address these fears, regulators have asked banks to re`examine how iron

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ore imports are paid for. That could make matters worse. On the back of

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this announcement, the price of iron or futures fell dramatically in

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recent days. Investors are now concerned that a flood of iron ore

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stocks may be dumped in the market, which would push prices down even

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further. Microsoft says users of its Windows

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XP operating system will also get the security update it has issued to

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fix a flaw in the Internet Explorer browser. It issued the update on

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Thursday to fix the bug, that could let hackers gained access and user

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rights to computers. Microsoft ended support for Windows XP earlier this

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month, which means no bug fixes and security updates for it. But, they

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decided to make an exception, as the flaw was decided just days after it

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ended. Sony is warning it could have losses of nearly $1.3 billion this

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year. The Japanese electronics giant is planning a costly exit from the

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personal computer business. It has also slashed its earnings outlook in

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the face of a major restructure that will see 5000 jobs cut from its

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struggling computer and television division. Opponents to the

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government have demonstrated in Kuala Lumpur.

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Malaysian budget carrier Air Asia is thought to be the first

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international brand to fly domestic routes in India. Low`cost airlines

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have struggled in India, so how does Air Asia plan to compete? We caught

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up with the chief executive of Air Asia India, to find out. We're

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dealing with a cost structure that is significantly higher than most

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other countries. We have fuel, which is extremely expensive, tax on fuel

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which is very expensive. Bundle those together, and 50% of your P

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is blocked in. Then, we have issues around payroll, salaries, and

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infrastructure costs. The areas in which you can optimise that had to

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do with pushing revenues up, and that is not by raising fares, but by

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making sure the volumes are being catered to. It is by constantly

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looking at your costs in bringing back down. How has the competition

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welcomed you? They weren't happy when you announced your plans of

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entering in their. That is a good question! I think we welcome the

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competition, and I truly believe in that. I think competition is a great

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thing, and no competitor is going to just let us walk in through the

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front door. It has not been easy, there has been a lot of fighting

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going on, and I think it is going to be a beautiful thing, and the only

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people who will benefit other people India. You can see more on that and

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other business stories from across India this weekend on India Is this

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Report. Apple and Samsung could get the

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verdict in their crucial patent infringement case as early as this

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weekend. The world's two largest smartphone makers have been battling

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it out in a Californian court over the past month. As Richard Taylor

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reports, millions of dollars are at stake.

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This is just the latest feud between these technology titans, and unlike

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the trial of a few years back, this one is focused much more on the

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software inside the devices. Apple value their patents at over $2

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billion. Because the arguments have centred around software, another

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Silicon Valley giant, Google, has been invoked. Google make the

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Android operating system that runs inside the Samsung handsets. As

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such, a primary strand and Samsung's argument is in effect that

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Apple are fingering the wrong target. Google executives have taken

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the stand to argue that they developed the software, not Apple.

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Apple have disagreed with that, and tried to convince the jury that

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Samsung are to blame, because they are wilfully using it inside their

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handsets. Regardless of the verdict, you can be sure that, if past

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experience is anything to go by, this trial will run on a lot

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longer, with appeals and counter appeals set to ensue. Even when the

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saga ends on the West Coast of America, you can ensure it will

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continue in courtrooms around the globe.

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Asian shares have started the day on a subdued note. It is a mixed bag,

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but pretty much on hold, waiting for key US payroll numbers, which are

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due out later today. They could show employment writing at its fastest

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clip in five months. Our top stories: Police in Nigeria

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are saying that 19 people have been killed, and 60 injured, in an

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explosion at a bus station in the capital, Abuja. Syrian activist

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state government aircraft have dropped a barrel`bomb on a busy

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market in the Syrian help district of Aleppo. The barrister and

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part`time

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