01/02/2017

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:00:00. > 3:59:59the death of Anthony Skelly, but was blocked by the Senate Republicans

:00:00. > :00:18.and we have more reaction to this. As India struggles with a lack of

:00:19. > :00:26.cash, there is plenty at stake ahead of today's budget. And selling more

:00:27. > :00:39.iPhones, but making less profit - we break down the latest results from

:00:40. > :00:48.Apple. Good morning, Asia. Hello, world. I am glad you can join us for

:00:49. > :00:54.a Asia Business Report. We start with India and in a few hours the

:00:55. > :00:58.Finance Minister will unveil his budget at a trying time for the

:00:59. > :01:03.economy with less than three months ago the government ban of 90% of

:01:04. > :01:12.bank notes in circulation. As a result of GDP growth might dip below

:01:13. > :01:19.7%. We have this report from Samir Hashmi. In many ways India's 2017

:01:20. > :01:24.budget is a gamble, the first since withdrawing two of the most widely

:01:25. > :01:30.used routine. A lack of cash in circulation hurt people and

:01:31. > :01:33.businesses. So, what bets will Narendra Modi put in place to put

:01:34. > :01:39.the momentum back into India's the economy? Income tax could well be

:01:40. > :01:43.cut, which would put more money in the hands of customers who in turn

:01:44. > :01:52.will spend more money. But there is a risk it could incur inflation.

:01:53. > :01:55.Investing in roads, railways and infrastructure, especially in rural

:01:56. > :02:00.areas, would create jobs. It is another way to put money into the

:02:01. > :02:04.economy. And while the inflation risk remains, these policies

:02:05. > :02:10.wouldn't hurt the government's popularity. Getting foreign

:02:11. > :02:15.investment into India is another way the economy can keep growing

:02:16. > :02:22.strongly. But it is still ranked as one of the hardest places in the

:02:23. > :02:27.world to do business. And despite measures to reduce regulation, the

:02:28. > :02:31.situation hasn't improved much. The easier it becomes to trade and in,

:02:32. > :02:40.the more money it will attract, so watch out for the details the budget

:02:41. > :02:45.to help it happened. India's government might have to keep some

:02:46. > :02:50.cards close to its chest, at least for now. After the pain of a cash

:02:51. > :02:56.crunch, it needs some of its big bets to pay the returns. And, for

:02:57. > :03:01.the latest on the budget, we are joined from Delhi by our

:03:02. > :03:18.correspondent, and will this budget try to ease the pain from the cash

:03:19. > :03:21.crunch? All right. It looks like we are experiencing some communication

:03:22. > :03:29.problems. Right in front of parliament, Shilpa, where, in a few

:03:30. > :03:34.hours the budget will be announced by the Finance Minister. Well, ten

:03:35. > :03:39.years after the iPhone took the world by storm, is Apple losing its

:03:40. > :03:43.shine? The company released latest results and iPhone sales were better

:03:44. > :03:47.than expected. But forecasting for the current quarter is below

:03:48. > :03:54.estimate and revenues in China are down 12% from last year. I asked our

:03:55. > :03:59.North America reported Dave Lee E of 2016 was a good year for Apple. For

:04:00. > :04:03.the first time we saw the iPhone declining as we saw any times and

:04:04. > :04:07.talked about on the programme -- Dave Lee. There were three quarters

:04:08. > :04:11.of decline, which relies heavily on iPhone success. This quarter they

:04:12. > :04:15.will be pleased to report that has been a return to growth for the

:04:16. > :04:20.iPhone and the company, but, yes, as you mentioned, they are forecasting

:04:21. > :04:24.what is coming up and it is quite downbeat, basically saying they

:04:25. > :04:28.expect many people to be holding off upgrading their iPhone until the new

:04:29. > :04:32.iPhone comes out later this year. The significance of course is it is

:04:33. > :04:35.the 10th anniversary year of the iPhone and many fans expect

:04:36. > :04:39.something quite impressive from Apple when they bring out the

:04:40. > :04:45.anniversary phone, which could have an impact on sales. So, Dave, is

:04:46. > :04:55.Apple relying too much on the iPhone? What about other services?

:04:56. > :05:01.Guess, for a period of time it has been a huge Moneymaker, two thirds

:05:02. > :05:06.come from the iPhone -- yes. There are other things coming up, so from

:05:07. > :05:10.services like the App Store, paintings, Apple Pay, those

:05:11. > :05:20.services, that was up again year on year -- pay things. And the success

:05:21. > :05:27.Pokemon Go and super Mario, which I know you are a fan of. Those games

:05:28. > :05:31.really drove income in the App Store and helped the service is part of

:05:32. > :05:36.the business to grow, which is important for Apple. Why a decline

:05:37. > :05:41.in sales in the Chinese market? Well, Apple, like several other US

:05:42. > :05:45.tech companies, are struggling to grow in China as well as first

:05:46. > :05:48.hoped. There was a time over a year ago when China was a huge growing

:05:49. > :05:53.market for Apple. They were opening stores at a really quick rate. They

:05:54. > :05:58.have not been able to capitalise. They have blamed currency issues on

:05:59. > :06:03.why they are not making as much money but, yes, it seems that Apple

:06:04. > :06:06.is struggling to continue in China, and they were relying on that

:06:07. > :06:11.country to help continue with growth, but they are having trouble.

:06:12. > :06:16.And that was Dave Lee in Silicon Valley. US president Trump criticise

:06:17. > :06:19.China and Japan for playing the money market and devaluing the

:06:20. > :06:22.currency for years. He was meeting with executives of pharmaceutical

:06:23. > :06:29.companies when he made the statement. We look at if he has

:06:30. > :06:33.labelled China as a currency manipulator, here is what he has had

:06:34. > :06:37.to say. I have seen it over the years but a lot of companies have

:06:38. > :06:41.moved out and don't make drugs in our country any more, a lot has to

:06:42. > :06:44.do with regulation and the fact other countries take advantage of us

:06:45. > :06:48.with their money and their money supply. And devaluation. Because we

:06:49. > :06:53.don't do anything like that. Our country has been run so badly we

:06:54. > :06:56.know nothing about devaluation. Every other country lives on

:06:57. > :07:01.devaluation. Look at what China is doing. Look at what Japan has done

:07:02. > :07:05.over the years. They play the money market, they play the devaluation

:07:06. > :07:11.market and we sit like a bunch of dummies. So... You have to get your

:07:12. > :07:16.companies back here. Well, it is February that it is a trading month

:07:17. > :07:20.coming up in January, with a lot of other and downs, the US presidential

:07:21. > :07:25.transitions or the Dow on Wall Street rally passed the 20,000 mark,

:07:26. > :07:31.but it fizzled out over worries over Mr Trump's policies. In Australia

:07:32. > :07:34.the oddities index closed out the month in the red. It was also a

:07:35. > :07:42.similar story in Japan with the Nikkei 245 finishing lower. And the

:07:43. > :07:46.Shanghai Composite index was up almost 2% but we have to point out

:07:47. > :07:53.that markets had a shorter session with the lunar New Year holidays. I

:07:54. > :07:58.asked David from the Motley four how he described the month of January. I

:07:59. > :08:02.think the month of January has been a fairly cautious month. What we saw

:08:03. > :08:06.towards the end of last year was the market was giving Donald Trump the

:08:07. > :08:11.benefit of the doubt, saying he could make America great again. What

:08:12. > :08:16.has happened is they don't want Donald Trump to make America wait

:08:17. > :08:20.again. They have said, show us what you are going to do. If you can do

:08:21. > :08:24.it, then of course the market could rally higher. If he doesn't, we

:08:25. > :08:29.could actually see most of the gains evaporate. So is this a sign, then,

:08:30. > :08:32.for Asian investors to stay on the sidelines? I don't think so. I think

:08:33. > :08:37.you need to look at valuation. Look at markets and say, are they keep

:08:38. > :08:41.more expensive? If they are cheap and I think you should go and buy.

:08:42. > :08:45.There is an old saying that as January goes, so goes the rest of

:08:46. > :08:49.the year. Personally, I don't buy that. If it is cheap, buy it. So,

:08:50. > :08:55.which sectors in your view do you favour and which ones are under

:08:56. > :09:00.threat? OK, the ones I like is anything to do with banks and I will

:09:01. > :09:03.tell you why, Rico, it is no big secret the Federal Reserve will

:09:04. > :09:08.increase interest rates this year, it could be two, three or four times

:09:09. > :09:11.this year. If they go up, banks love it, they like interest rate

:09:12. > :09:17.increases because it is an easy way to make money. They just charge more

:09:18. > :09:22.interest. And then interest margin is going to widen and they will make

:09:23. > :09:27.a lot of money that way. So I like those. And what don't you like? I am

:09:28. > :09:31.cautious about anything to do with commodities. I have a feeling if

:09:32. > :09:36.interest-rate increase than the US dollar might strengthen. A strong US

:09:37. > :09:40.dollar might not do well for anything to do with commodities.

:09:41. > :09:44.Commodity players I think will find it quite tough this year and less of

:09:45. > :09:49.course we have economic growth. What is the unknown for investors in

:09:50. > :09:55.2017, is it Donald Trump? I think it is the Donald, yes, we don't know

:09:56. > :09:59.what the Donald will do. He is very volatile, unpredictable, as we saw

:10:00. > :10:02.in the first month, and he will continue to be very, very

:10:03. > :10:09.unpredictable, and keep everyone on their toes, Rico. Let's look at the

:10:10. > :10:14.first trading day of February and currently, as you can see, it is

:10:15. > :10:19.lacklustre after Wall Street closed lower overnight. In Japan, the

:10:20. > :10:25.Nikkei is trending down just slightly. Nintendo shares lower 4%

:10:26. > :10:29.after cutting the full year profit forecast on Tuesday. Thank you so

:10:30. > :10:31.much for investing your time with us. I'm Rico Hizon. Sport Today is

:10:32. > :10:46.coming up next. You are watching BBC News. Our Our

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