01/02/2017 Asia Business Report

the death of Anthony Skelly, but was blocked by the Senate Republicans

and we have more reaction to this. As India struggles with a lack of

cash, there is plenty at stake ahead of today's budget. And selling more

iPhones, but making less profit - we break down the latest results from

Apple. Good morning, Asia. Hello, world. I am glad you can join us for

a Asia Business Report. We start with India and in a few hours the

Finance Minister will unveil his budget at a trying time for the

economy with less than three months ago the government ban of 90% of

bank notes in circulation. As a result of GDP growth might dip below

7%. We have this report from Samir Hashmi. In many ways India's 2017

budget is a gamble, the first since withdrawing two of the most widely

used routine. A lack of cash in circulation hurt people and

businesses. So, what bets will Narendra Modi put in place to put

the momentum back into India's the economy? Income tax could well be

cut, which would put more money in the hands of customers who in turn

will spend more money. But there is a risk it could incur inflation.

Investing in roads, railways and infrastructure, especially in rural

areas, would create jobs. It is another way to put money into the

economy. And while the inflation risk remains, these policies

wouldn't hurt the government's popularity. Getting foreign

investment into India is another way the economy can keep growing

strongly. But it is still ranked as one of the hardest places in the

world to do business. And despite measures to reduce regulation, the

situation hasn't improved much. The easier it becomes to trade and in,

the more money it will attract, so watch out for the details the budget

to help it happened. India's government might have to keep some

cards close to its chest, at least for now. After the pain of a cash

crunch, it needs some of its big bets to pay the returns. And, for

the latest on the budget, we are joined from Delhi by our

correspondent, and will this budget try to ease the pain from the cash

crunch? All right. It looks like we are experiencing some communication

problems. Right in front of parliament, Shilpa, where, in a few

hours the budget will be announced by the Finance Minister. Well, ten

years after the iPhone took the world by storm, is Apple losing its

shine? The company released latest results and iPhone sales were better

than expected. But forecasting for the current quarter is below

estimate and revenues in China are down 12% from last year. I asked our

North America reported Dave Lee E of 2016 was a good year for Apple. For

the first time we saw the iPhone declining as we saw any times and

talked about on the programme -- Dave Lee. There were three quarters

of decline, which relies heavily on iPhone success. This quarter they

will be pleased to report that has been a return to growth for the

iPhone and the company, but, yes, as you mentioned, they are forecasting

what is coming up and it is quite downbeat, basically saying they

expect many people to be holding off upgrading their iPhone until the new

iPhone comes out later this year. The significance of course is it is

the 10th anniversary year of the iPhone and many fans expect

something quite impressive from Apple when they bring out the

anniversary phone, which could have an impact on sales. So, Dave, is

Apple relying too much on the iPhone? What about other services?

Guess, for a period of time it has been a huge Moneymaker, two thirds

come from the iPhone -- yes. There are other things coming up, so from

services like the App Store, paintings, Apple Pay, those

services, that was up again year on year -- pay things. And the success

Pokemon Go and super Mario, which I know you are a fan of. Those games

really drove income in the App Store and helped the service is part of

the business to grow, which is important for Apple. Why a decline

in sales in the Chinese market? Well, Apple, like several other US

tech companies, are struggling to grow in China as well as first

hoped. There was a time over a year ago when China was a huge growing

market for Apple. They were opening stores at a really quick rate. They

have not been able to capitalise. They have blamed currency issues on

why they are not making as much money but, yes, it seems that Apple

is struggling to continue in China, and they were relying on that

country to help continue with growth, but they are having trouble.

And that was Dave Lee in Silicon Valley. US president Trump criticise

China and Japan for playing the money market and devaluing the

currency for years. He was meeting with executives of pharmaceutical

companies when he made the statement. We look at if he has

labelled China as a currency manipulator, here is what he has had

to say. I have seen it over the years but a lot of companies have

moved out and don't make drugs in our country any more, a lot has to

do with regulation and the fact other countries take advantage of us

with their money and their money supply. And devaluation. Because we

don't do anything like that. Our country has been run so badly we

know nothing about devaluation. Every other country lives on

devaluation. Look at what China is doing. Look at what Japan has done

over the years. They play the money market, they play the devaluation

market and we sit like a bunch of dummies. So... You have to get your

companies back here. Well, it is February that it is a trading month

coming up in January, with a lot of other and downs, the US presidential

transitions or the Dow on Wall Street rally passed the 20,000 mark,

but it fizzled out over worries over Mr Trump's policies. In Australia

the oddities index closed out the month in the red. It was also a

similar story in Japan with the Nikkei 245 finishing lower. And the

Shanghai Composite index was up almost 2% but we have to point out

that markets had a shorter session with the lunar New Year holidays. I

asked David from the Motley four how he described the month of January. I

think the month of January has been a fairly cautious month. What we saw

towards the end of last year was the market was giving Donald Trump the

benefit of the doubt, saying he could make America great again. What

has happened is they don't want Donald Trump to make America wait

again. They have said, show us what you are going to do. If you can do

it, then of course the market could rally higher. If he doesn't, we

could actually see most of the gains evaporate. So is this a sign, then,

for Asian investors to stay on the sidelines? I don't think so. I think

you need to look at valuation. Look at markets and say, are they keep

more expensive? If they are cheap and I think you should go and buy.

There is an old saying that as January goes, so goes the rest of

the year. Personally, I don't buy that. If it is cheap, buy it. So,

which sectors in your view do you favour and which ones are under

threat? OK, the ones I like is anything to do with banks and I will

tell you why, Rico, it is no big secret the Federal Reserve will

increase interest rates this year, it could be two, three or four times

this year. If they go up, banks love it, they like interest rate

increases because it is an easy way to make money. They just charge more

interest. And then interest margin is going to widen and they will make

a lot of money that way. So I like those. And what don't you like? I am

cautious about anything to do with commodities. I have a feeling if

interest-rate increase than the US dollar might strengthen. A strong US

dollar might not do well for anything to do with commodities.

Commodity players I think will find it quite tough this year and less of

course we have economic growth. What is the unknown for investors in

2017, is it Donald Trump? I think it is the Donald, yes, we don't know

what the Donald will do. He is very volatile, unpredictable, as we saw

in the first month, and he will continue to be very, very

unpredictable, and keep everyone on their toes, Rico. Let's look at the

first trading day of February and currently, as you can see, it is

lacklustre after Wall Street closed lower overnight. In Japan, the

Nikkei is trending down just slightly. Nintendo shares lower 4%

after cutting the full year profit forecast on Tuesday. Thank you so

much for investing your time with us. I'm Rico Hizon. Sport Today is

coming up next. You are watching BBC News. Our Our

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