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Now on BBC News all the latest business news live from Singapore. | :00:00. | :00:18. | |
Propping it up. South Korea unveils a stimulus package to help its | :00:19. | :00:24. | |
struggling economy. The deadline passes for Malaysian Airlines | :00:25. | :00:26. | |
passengers to cancel their tickets and get a refund. | :00:27. | :00:34. | |
Welcome to Asia Business Report. $40 billion. Will that be enough to | :00:35. | :00:39. | |
bolster South Korea's economy? The government is hoping the answer is | :00:40. | :00:44. | |
yes. The announcement of a massive stimulus package to try and increase | :00:45. | :00:48. | |
activity. With fragile domestic demand and weaker exports, the | :00:49. | :00:50. | |
economy expanded 0.6% in the past three months. That is the slowest | :00:51. | :01:02. | |
pace in over a year. The government has cut its growth forecast for | :01:03. | :01:15. | |
2014. It is now down to three `` 3.7%. The stimulus money will be | :01:16. | :01:19. | |
used to offer financial support to small and medium`sized companies. | :01:20. | :01:22. | |
Earlier I spoke to an economist from IHS and started by asking him about | :01:23. | :01:25. | |
the ferry accident and the effect it has had on the economy. That was an | :01:26. | :01:35. | |
important factor. The weak consumption in the second quarter | :01:36. | :01:37. | |
indicated that. Private consumption contracted in the second quarter. | :01:38. | :01:40. | |
That is very unusual. That was mainly because of the impact of the | :01:41. | :01:43. | |
ferry disaster which triggered a period of national mourning. People | :01:44. | :01:45. | |
cancelled festivals. Any kind of ostentatious spending was cancelled. | :01:46. | :01:49. | |
That is why consumption was very badly hit. Also we are seeing signs | :01:50. | :01:55. | |
that Korea is also struggling from headwinds of a strong currency. That | :01:56. | :02:04. | |
is affecting exports and corporate profits. How right is the government | :02:05. | :02:07. | |
to be throwing money at the problem? We know this is not the first | :02:08. | :02:12. | |
stimulus package. They have had others before but they continue to | :02:13. | :02:20. | |
miss their growth targets. I think the stimulus package will help to | :02:21. | :02:23. | |
some extent with recovery in the second half of the year. But the | :02:24. | :02:26. | |
headwinds from strong currency are likely to continue to affect growth. | :02:27. | :02:29. | |
There is a somewhat better global environment with the US and Eurozone | :02:30. | :02:32. | |
picking up. We will also see some recovery in private consumption as | :02:33. | :02:36. | |
well. The impact of the disaster should wear off on consumers. | :02:37. | :02:40. | |
Fundamentally, this stimulus will provide something of an offset to | :02:41. | :02:43. | |
the contractions in spending that we have seen. In other news making | :02:44. | :02:53. | |
headlines, Amazon has reportedly lost over $126 million in the second | :02:54. | :02:57. | |
quarter. It has also warned that sales could slow in this quarter. It | :02:58. | :03:02. | |
has survived on thin profit margins, with investors being reassured by | :03:03. | :03:08. | |
strong sales growth. The news did not help the company's shares. They | :03:09. | :03:16. | |
slumped 6% in after`hours trade. Meanwhile, General Motors earnings | :03:17. | :03:19. | |
have slumped on the back of costs related to the vehicle recalls. Net | :03:20. | :03:22. | |
profits fell 85% from a year ago to $119 million. The carmaking giant | :03:23. | :03:27. | |
has had to recall nearly 29 million vehicles this year mostly due to | :03:28. | :03:33. | |
faulty ignition switches. The deadline has passed for Malaysia | :03:34. | :03:35. | |
Airlines customers to cancel tickets without penalty and get a full | :03:36. | :03:38. | |
refund if they have decided not to fly. The airline is not saying how | :03:39. | :03:50. | |
many tickets have been cancelled. But there are still questions about | :03:51. | :03:53. | |
its future. It was struggling financially before the tragic | :03:54. | :03:56. | |
disasters of the next 370 and MH17. I spoke to an airline safety expert. | :03:57. | :04:02. | |
I started by asking if Malaysia airlines could survive the damage | :04:03. | :04:07. | |
caused by these tragedies. Ultimately, that is going to be | :04:08. | :04:09. | |
determined by the Malaysian government. The Malaysian government | :04:10. | :04:19. | |
has about 7% holding in the airline. `` 70%. It is related to the | :04:20. | :04:23. | |
appetite for how much money they are prepared to lose. What are they | :04:24. | :04:30. | |
likely to do next? The government owns a majority of Malaysia | :04:31. | :04:33. | |
Airlines. Will they look at privatising it? Could there be a | :04:34. | :04:44. | |
potential restructuring? It could be all of those possibilities. A merger | :04:45. | :04:50. | |
is less likely. That is because of the cost structures in the airline. | :04:51. | :05:03. | |
They have a very high cost base. It is unlikely that any other airline | :05:04. | :05:06. | |
would be racing to join it. It basically means that if the airline, | :05:07. | :05:09. | |
if the government was to continue to back it, I suspect what they are | :05:10. | :05:12. | |
going to do is an absolute radical restructuring of the airline. That | :05:13. | :05:16. | |
includes a change in the profile and the culture of the airline. The | :05:17. | :05:20. | |
perception of safety is not going to be an issue. That is likely to be | :05:21. | :05:33. | |
enduring. Tell us, are the historical precedents to this? Have | :05:34. | :05:38. | |
airlines managed to survive these circumstances? There has been | :05:39. | :05:42. | |
instances both ways. One example was in America, there was an accident | :05:43. | :05:47. | |
back in 1995 with one company. But they rebranded it and became very | :05:48. | :05:59. | |
profitable within about a year. The year after it got the best low`cost | :06:00. | :06:10. | |
carrier award for domestic carriers. In other news... The IMF is lowering | :06:11. | :06:15. | |
its forecasts for global economic growth this year from 3.7% to 3.4%. | :06:16. | :06:19. | |
It reflects a weak start to the year, particularly in the US, as | :06:20. | :06:22. | |
will as a number of downgrades the outlook for some of the countries. | :06:23. | :06:30. | |
The global forecast remains unchanged. Growth is predicted to | :06:31. | :06:34. | |
come at 4%. Google has met with data regulators from across the European | :06:35. | :06:36. | |
Union to discuss the implications of the recent right to be forgotten | :06:37. | :06:40. | |
ruling. An EU court ruled that links to the relevant and updated data | :06:41. | :06:42. | |
should be erased from searches on request. The BBC understands that | :06:43. | :06:46. | |
Google has informed the watchdogs that it has received more than | :06:47. | :06:51. | |
91,000 requests. The EU ruling has led to censorship concerns. | :06:52. | :07:00. | |
In India, Mumbai's cafes have long been a symbol of the city's diverse | :07:01. | :07:05. | |
cuisine and culture. The cafes were open on the 19th century with | :07:06. | :07:10. | |
communities that have roots in Iran. But they are slowly dying out. | :07:11. | :07:19. | |
For more than 90 years, this has been the perfect place to take | :07:20. | :07:23. | |
shelter from the Mumbai monsoon. And from the looks of the walls and | :07:24. | :07:26. | |
furniture, the restaurant has not changed much since it first opened. | :07:27. | :07:34. | |
The 91`year`old proprietor, the second`generation owner, took over | :07:35. | :07:36. | |
the business in 1944 after his father died. Immediately, he changed | :07:37. | :07:44. | |
strategy. Until a few decades ago, cafes were | :07:45. | :08:23. | |
all the rage in Mumbai. Most of them were family businesses. Over the | :08:24. | :08:29. | |
past few years, most of them have shut down. Now less than 20 remain. | :08:30. | :08:39. | |
His son, who runs the restaurant now, says so many cafes are closing | :08:40. | :08:43. | |
because the next generation are not interested in taking over the | :08:44. | :08:51. | |
business. Most of them prefer to take up high`paying jobs or go | :08:52. | :08:53. | |
abroad after receiving good education. And in fact, he is facing | :08:54. | :09:04. | |
the same problem. With my children? Yes, definitely. They are not | :09:05. | :09:07. | |
impressed with this kind of business. My daughter and my son. | :09:08. | :09:14. | |
They do their own things. They say it is monotonous. There is a lot of | :09:15. | :09:27. | |
labour. He plans to sell this restaurant, but says he will not do | :09:28. | :09:32. | |
it while his father is still alive. The reality is, these cafes are | :09:33. | :09:38. | |
waning. With just a few of them left, lovers of the food can only | :09:39. | :09:41. | |
hope that the remaining places will keep serving their specialities for | :09:42. | :09:44. | |
as long as possible before becoming part of history. A quick look at the | :09:45. | :09:58. | |
markets. They are fairly mixed at the moment. The Nikkei strong in | :09:59. | :10:16. | |
exports. We are seeing a fall in gold prices in Australia although | :10:17. | :10:21. | |
metal prices are climbing elsewhere. A bad day in Hong Kong, | :10:22. | :10:32. | |
finishing up in negative territory. That is it for this edition of Asia | :10:33. | :10:39. | |
Business Report. I'm Adnan Nawaz. The top stories this hour. | :10:40. | :10:46. | |
13 people have been killed and hundreds wounded | :10:47. | :10:48. |