24/07/2014 Asia Business Report

territories will be taking part in the Games. Those are the headlines.

Time for Asia Business Report. A big like for Facebook, posting

better`than`expected results, sending its shares to an all`time

high. And Indonesian man becomes the first person to be convicted for

selling fake wine. Thank you for joining us. Social networking giant

Facebook has announced a 138% rise in their income for the second

quarter ending in June, sending its shares to an all`time high in

extended trading hours in the US. The company has more than 1 billion

users but it has had to work out a way to make money from them. These

latest numbers show that the company's advertising model must be

working, with advertising revenue up 67% compared to one year ago. What

has happened is the rise of mobile. We have seen the amount of mobile

revenue from Facebook jump up to 60%. It has been amazing. An amazing

rise for mobile advertising, but is Asia part of that equation? Are

Asian Facebook users just using the social media platform for their

selfies and photographs and status updates? I certainly get a lot of

ads on my Facebook feed. Facebook does not break the numbers down by

geography. It is emerging markets like Asia that are the biggest users

of Facebook. It is not cheap. If you advertise... And that is just to

boost your status. It can cost up to $50 just to do that. There are a

whole range of advertisers including individuals. The corporate sector

can target a certain demographic of people right down to very specific

information about people. That is what Facebook allows them to do.

This is indeed a frontier for advertising on Facebook in Asia,

with countries like India and the Philippines being big users. What

about China? Facebook would love to be everywhere. But China likes to

promote their homegrown social media companies. South Korea reported it

weakest growth in more than a year. GDP increased by 0.6% quarter on

quarter for the April to June period, down from the last report.

General Motors is recalling close to 718,000 vehicles over a range of

issues, including loose bolts in its front seats. The carmaker has

recalled nearly 29 million vehicles this year. A majority of those

problems related to faulty ignition switches. The records cover several

models such as the Chevrolet, Cadillac, Buick and GMC models. GMC

says it was aware of two crashes and for injuries relating to these

recalls. Thailand's political system has faced turbulent times of late

and so has the national carrier. Thai Airways is in the red,

suffering massive losses last year. A board meeting today will consider

a detailed restructuring initiative for the struggling airline. However,

the changes could be a little bit unusual. Thailand's military

government says repairing the economy is a high priority.

Repairing the flagship airline could be a test. Last year, Thai Airways

lost nearly $4 billion and they have been in the red for the first 2/4 of

this year as well. A detailed restructuring plan aimed at

returning the airline to profit will be considered at a board meeting

today. The board is reduced from its original size because several

members resigned, including some with ties to the former regime. It

seems politics is never far away. While Thai Airways's new management

structure is unique among national carriers, its cash flow problems are

not. Orders is looking to save $2 billion in the next few years and

relax 5000 jobs. There are reports it is considering splitting its

domestic and international arms as part of a restructure. Malaysia

Airlines has problems that are tragic and all well`documented.

There are questions hanging over its future.

Aviation analysts say it might be difficult for Thai Airways to turn

things around it head of the Thai Air Force, without management

experience, continues to run the carrier. He is just the acting

president. They will appoint a full`time president over the next

few months. He will be chairing the meeting is for now but obviously,

this is just the first of several moves. Eyes are on the government

has yet they can fix an airline that, honestly, the previous

government had trouble fixing as well. An unusual move. A permanent

move would be bringing in a person who might know something about the

aviation industry. What kind of person should they be hiring?

Hopefully they will consider someone with significant airline industry

experience, significant commercial experience. Possibly someone from

outside Thailand, which is not something they have done

traditionally. There will be many candidates but whoever gets the job

will have a lot of hard work to do. They lost nearly $400 million last

year. What must they do to turn things around? They will need to put

in a restructuring plan. They will have to cut their network and some

unprofitable destinations. Other airlines did that a couple of years

ago. Thai Airways has not had such a network restructure in a while. They

will have to trim the fat and cut costs. They might have to accelerate

fleet renewal and get rid of some of their older aircraft. Other carriers

have retired them. There is also the political crisis and the tough

competition, especially from air Air AsiaX. There is a lot of competition

especially from the low`cost airlines. Thai Airways has been hit

with its European operation. European tourist figures are

increasing to Thailand but its market share has gone down. Thank

you. The International Monetary Fund downgraded its US economic growth

forecast for the second time this year, saying overall growth in 2014

will be disappointing at 1.7%. It blames a contraction at the start of

the year. It suggests increasing the minimum wage and expanding tax

credits to help the nation's poorest. In June, it had predicted

growth of 2%. A leading Democratic lawmaker has warned that up to 24 US

companies are considering relocating overseas to cut their tax bills this

year. Concerns are mounting in Washington over an increase in

Madrid deals. Most recently, Walgreens, Mylan and Pfizer tried.

`` an increase in merger deals . In India, vegetable prices have once

again hit the headlines, soaring over the past month. It has proven

to be a big challenge for the country's newly elected government

to bring the prices down. These vegetables are not just being

consumed on dinner tables. They have become part of the conversation.

That is because the cost of buying them has gone up so steeply. This

month alone, the price of tomatoes have travelled and that of onions

has doubled. These vegetables are key ingredients in meals across the

country and that is why this is really hitting domestic budgets

hard. Last month, inflation came down sharply. Much of that was

because of food prices. Nobody expects that to continue. There is a

forecast of less than normal rainfall during the monsoon season

and if that happens, it will inevitably hit food production. All

sales in some parts of the country have been holding onto their stocks

and this has been blamed for the rise in prices. Last month, the

government took some steps to bring down the cost of food, putting

export controls on onions and limiting the quantity of vegetables

that can be stocked up by wholesalers. So far, the effects of

those measures is yet to be seen on the ground. Prime Minister Narendra

Modi and his team promised to bring the cost of living down for ordinary

citizens here. People in India will be hoping they can do more to live

up to that promise. Before we go, here is a look at the

markets in Asia. Positive territory in mid`morning trade. US equities

ended mostly higher overnight, with the broader standard and Poor 's 500

index closing well. `` SNP 500's index closing well. Thank you for

joining us. This is BBC News. The headlines: The

UN High Commissioner for Human Rights has said Israel may be

committing war crimes in Gaza. Navi Pillay has also condemned Hamas

rocket attacks on Israeli civilians. The first bodies from the downed

Malaysia Airlines plane have