18/09/2014 Asia Business Report


18/09/2014

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Now on BBC News, all the latest business news live from Singapore.

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America's central bank makes it clear it is in no rush to raise the

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cost of borrowing. The largest e`commerce site in the world,

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Alibaba, gets set for what could be the biggest ever public share

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listing. Welcome to Asia Business Report.

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Is the American economy strong enough to survive without emergency

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help Western interest rates have been at record lows since 2008 and

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billions has been pumped into the economy. In Washington, the US

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Federal Reserve made it clear while stimulus measures might be ending,

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it's not rushing to raise the cost of borrowing.

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Here at the central bank, the focus was on whether change would be

:01:09.:01:10.

occurring in the language to describe a rise in interest rates.

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That's because the Fed has insisted it won't raise rates until

:01:18.:01:20.

considerable time after the end of its economic stimulus programme.

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With that expiring next month, tension shift to when rates might

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rise. The chair of the Fed insisted that guidance of considerable time

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shouldn't be linked to a specific date. I want to emphasise that there

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is no mechanical interpretation of what the term considerable time

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means. As I have repeatedly said, the decisions the committee makes

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about what is the appropriate time to begin raising its target for the

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federal funding rate will be dated depending. What's the point of

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forward guidance if not linked with a date? The Fed needs to adapt to

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changing economies. Unemployment is falling, inflation coming back in

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line, but it needs the flexibility to adapt to changing economic

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conditions. Raising rates too quickly could choke an economic

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recovery. Keep them too low for too long and the economy could spiral

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out of control. America has been awash with cheap cash through low

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interest rates and economic stimulus. Those emergency measures

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can't last indefinitely. Shares in Sony have fallen by 12% in

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Tokyo today after they said it stands to lose $2 billion this year.

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That's more than four times its forecast of just a few months ago.

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The company blames a downturn in mobile phone business for the

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estimated net loss. Sony has promised a turnaround but will it

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deliver? I spoke earlier with a partner at frost and telephone and

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asked him if Sony's troubles were linked with a smart phones `` Frost

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and Sullivan. It is a balance sheet. They are taking the goodwill they

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had in the business. Having said that, the forecast has been lowered.

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The positioning is muddied. They aren't at the top end. They aren't a

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follower. They aren't acting at the low end. They are in a muddled

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position. It isn't the first choice of the customer. Zero at the mass

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market. Any indication they are addressing the issues? Apple has

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released new products. Samsung will react. There are so many other

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brands in the market. I don't see that changing. They are launching a

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new product. I don't see anything that will make it a category leader.

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I don't see anything that will attract it for the small market.

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They don't have a strategy if you look at what they have done. They

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will continue to muddle, begging the question, should they be in the

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business? Official figures in Japan show exports fell by 1.3% from one

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year ago. The data shows Japan shipments to the US declined in

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August, adding to concerns of the third`largest economy mightn't be

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able to rely on a pick up in trade to help recover from the April tax

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hike. News Corp demands of the European Commission have a tough

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approach with Google. They say the search engine has

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become a platform for piracy and that powers increase in every day

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with Google. Google said it tackles piracy rigourously.

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EBay has been compromised with users who clicked on some links diverted

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to a site designed to steal their credentials.

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It was set up to look like eBay's welcome page. Motorists in the UK

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are warned about the dangers of using smart watches while driving.

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The wrist device are covered by other laws designed to stop people

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checking gadgets on the move but officials say any accidents caused

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wide drivers distracted by the device will result in severe

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penalties. Currency and market watchers are

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waiting to see how Scotland votes in its referendum on Friday. Some tip

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the pound to head for a fall if it is a yes vote. I spoke earlier with

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Tony Nash from Delta economics. If there is a yes vote there will be

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volatility, some say 10%. It depends on how people calibrate the value of

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that pound. What is the GDP contribution? What stays with

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England? The separation isn't for some time. The volatility we will

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see is people figuring out the calculation. There are so many

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unknowns. The issue of currency and what Scotland users, sharing the

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pound, the euro, that isn't decided. That isn't decided yet. Until it is,

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it will be difficult to assign a value. Do you see the pound falling

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as much as 10% as some predict? It is possible but it depends on the

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tone from both sides. If you assume a yes vote, is there an agreeable

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tone? Many small countries don't have their own country, it currency.

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`` their own currency. Discussion has said that Scotland can't use the

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pound when a lot of other countries do that with other currency. An

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agreeable tone would help to calm the market and ease volatility. Lots

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of countries hold foreign currency in the pound. What impact in the

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region? Depending on the value and volatility, if there is a devalued

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pound, countries could look at their allocation of the pound, the

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third`largest reserve currency globally. If people retain a certain

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value to their reserve holdings, they might up their holdings or

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switch to other currencies. Not too long and we will know the outcome of

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the referendum. One of the world's biggest offerings will take place in

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New York with China's leading e`commerce site Ali Bubba expected

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to complete it they'll all shares to investors on Thursday `` Alibaba.

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Trading opens on Friday to the public. What can the company expect

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from investors? The big apple, America's financial

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centre. New Yorkers have a reputation as a tough crowd to

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please especially with investment as massive Chinese company at Alibaba,

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will soon discover when shares begin trading here at the New York stock

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exchange. In 20 years trading, it has been one of the biggest events I

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have witnessed. Inside this emblem of capitalism, Alibaba, trading and

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Alibaba, is about to have what could be the biggest stock offering on the

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planet, bigger than Facebook. Such is the anticipation for this trader

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who has had a request for shares by a Chinese social media. I am active

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on Chinese social media and I have had people chatting with me asking

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if I can connect them with their IPO team because they want to buy two `5

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million shares of the IPO. Why all the hype? This internet analyst

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explains. The company is poised to take advantage of the largest

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emerging middle class in the world, China, and the largest consumer

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class in the history of the world, China. Alibaba's success has made it

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the biggest force in Chinese internet. It's helped turn its

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founder Jack Meagher from a teacher into one of China's richest men. ``

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Jack Ma. Investors have been told to trust Jack, but should they? This

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company comes with unusual risk, including a unique owning structure,

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giving Mr Ma control. Despite the risk it appears there isn't a

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shortage of investors in the world largest economy covering for Alibaba

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in the rise of the world's second`largest economy.

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A look at the market and you can see the turnaround in trade this

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morning. The Nikkei is up, the Hang Seng and Australia are down despite

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those comments from the Federal Reserve in the US. That is it from

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this edition of Asia Business Report. Thank you for watching.

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Report. I am Mike Embley with the main news

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stories. With hours to go before polls open,

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both sides in the Scottish referendum campaign have held

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rallies as they made their final efforts to win over undecided

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voters. President Obama says American forces

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won't have a combat mission in Iraq, the day after his top general

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