:00:00. > :00:07.Political figures have paid tribute to Martin McGuinness,
:00:08. > :00:09.the former IRA commander who played a key role
:00:10. > :00:14.in the Northern Ireland peace process.
:00:15. > :00:22.Asian stock markets fall after Wall Street had its worst trading day
:00:23. > :00:28.this year. A steady result for New Zealand dairy giant Viterra. We will
:00:29. > :00:38.hear what their chief executive has to say. -- Fonterra. Good morning
:00:39. > :00:46.Asia, hello world. It is Wednesday. Great to have you with us on Asia
:00:47. > :00:55.Business Report. Rico Hizon. Stocks are retreating following US stocks
:00:56. > :01:02.lowering today. Here is what they are doing. The Nykea is down by 332
:01:03. > :01:10.points. And the All Ordinaries is giving up 75 points, that is 1.3%.
:01:11. > :01:15.US markets had the worst session of 2017. -- Nikkei. It is the first
:01:16. > :01:22.decline of at least 1% since October last year. Investors are nervous
:01:23. > :01:27.that Donald Trump will not lower taxes and push through with the
:01:28. > :01:31.socket layers. I asked market strategist Mike McCarthy if jitters
:01:32. > :01:35.in America would further in that regional market. The market was
:01:36. > :01:39.ready set up a bit of a sell-off. We are looking at stretched valuations
:01:40. > :01:41.in the US and a maximum amount of optimism about the new
:01:42. > :01:46.administration's ability to similar the economy. That means we are
:01:47. > :01:50.seeing good support to equities, and here in the Asia-Pacific region. So
:01:51. > :01:53.although in valuation terms, local embassies and share markets are
:01:54. > :01:58.looking healthier than the US, if we get a short-term downdraught in US
:01:59. > :02:01.shares, that is likely to drag us down in the short-term. Which
:02:02. > :02:06.particular markets are healthy and Asia? In particular in valuation
:02:07. > :02:11.terms of the Hang Seng index looks very strong. We are also seeing
:02:12. > :02:14.strength across markets like India and Indonesia. And those highly
:02:15. > :02:19.engaged in trade with China. So overall, the outlook is positive.
:02:20. > :02:27.Japan possibly the exception, they are. But how concerned are Asian
:02:28. > :02:31.investors now that the Fed could still raise the cost of borrowing
:02:32. > :02:43.and maybe once or twice before the end of the year and this economic
:02:44. > :02:51.programme protectionism? --. As always, people can treat these in
:02:52. > :02:55.different ways. They can respond to be signalled that the reason rates
:02:56. > :02:58.are going higher is because the economy is improving. So what are
:02:59. > :03:05.you telling your clients right now? Given the Asian market landscape,
:03:06. > :03:09.how should they respond? For a start, volatility is very low. That
:03:10. > :03:13.meant option prices are cheap. Investors are taking on one-sided
:03:14. > :03:16.risk profiles using options. Others are taking a daily to the fact that
:03:17. > :03:20.markets are very much about picking the right stocks at the moment. I
:03:21. > :03:24.like in key, high-quality stocks, and investing in those, regardless
:03:25. > :03:31.of their outlook in the country's index. What about Mr Trump following
:03:32. > :03:39.through on his threat to eventually brand China as a currency
:03:40. > :03:44.manipulator? Udinese will ever materialise? It is one of the Keath
:03:45. > :03:48.is that Asian investors? It is a concern. -- key fears. Behind closed
:03:49. > :03:52.doors, there is a clear message being delivered to Donald Trump that
:03:53. > :03:57.when your own Federal reserve has pumped more than $3 trillion into
:03:58. > :04:01.the currency system, to label anyone else as a currency manipulate is
:04:02. > :04:05.fraught. This could hurt not only this region but also the US economy.
:04:06. > :04:16.Call ahead might prevail when it comes to the heads up on this issue.
:04:17. > :04:23.-- cooler heads. New Zealand dairy giant Fonterra said its net
:04:24. > :04:27.profitability after tax rose. This is a steady result for the world's
:04:28. > :04:31.largest dairy exporter. But its high-value products like butter and
:04:32. > :04:36.yoghurt have delivered strong returns. The company has also shown
:04:37. > :04:41.strong growth in the Chinese market. Earlier, I spoke to Fonterra's chief
:04:42. > :04:45.executive and asked if it would be a tough year for the company's
:04:46. > :04:53.shareholders. No, it is going to be a strong year, because that is all
:04:54. > :05:00.on the back of 54% higher milk prices. So the 54% higher milk
:05:01. > :05:04.prices are at translated author a cost of goods sold. So we are
:05:05. > :05:08.delivering more net profits. In that sense, when you look at cash cows to
:05:09. > :05:13.our farmers, this is a significant step up from the last two years. For
:05:14. > :05:17.our Cheryl does, it is good news. Why did you then downgrade your
:05:18. > :05:23.full-year earnings forecast? First of all, like last year, around this
:05:24. > :05:29.time, we decided to not focused too much on the earnings, but to go to
:05:30. > :05:34.dividends. Last year, we announced our half-year results that we would
:05:35. > :05:39.get 20 cents dividend half year, and we forecasted ten plus ten. So 40
:05:40. > :05:43.cents. Now we are forecasting 40 cents. So in that sense, it is a
:05:44. > :05:49.similar result in pay-out, but your question as to why the bracket has
:05:50. > :05:53.shifted, that is because we had a very bought Spring Hill with very
:05:54. > :05:59.poor grass growth, so a shortage of melt. Is still realistic to have
:06:00. > :06:06.this projected milk pay-out of $6 per kilogram? -- a very poor spring,
:06:07. > :06:18.here. It is the best possible market for us. Your partner, they have been
:06:19. > :06:23.bleeding red. Losses have doubled in 2016. You plan to drop them all
:06:24. > :06:27.continue this partnership? This is a strategic partnership in China. We
:06:28. > :06:32.go through a new set of regulations. The people who are there, they
:06:33. > :06:36.suffer at the moment. All the strategic players are suffering. The
:06:37. > :06:45.people who are going to leave China because of regulation, they are then
:06:46. > :06:50.benefiting. This is what we want for our product. This is a highly
:06:51. > :06:57.private business for us in China. It is our largest market. Fonterra's
:06:58. > :07:04.chief executive there. In other news:, Uber has promised to become a
:07:05. > :07:11.more humane company. This comes amid a wave of ugly developments, at
:07:12. > :07:14.including reports of sexual harassment and video over a
:07:15. > :07:24.confrontation between the CEO and a disgruntled driver. Tencent is
:07:25. > :07:31.hitting its results today. These are expected a 40% increase to $30
:07:32. > :07:39.billion. It is China's biggest social media company. It has about
:07:40. > :07:43.850 users per month. It also has a problem of games business. But how
:07:44. > :07:49.much longer can it remain leader of the pack? -- it also has a
:07:50. > :07:53.profitable games business. I asked if there were any areas where the
:07:54. > :07:56.company might struggle. Overall, I think for Tencent in the gaming
:07:57. > :07:59.industry, they are doing well. I think the only thing that might be
:08:00. > :08:07.concerning is when Tencent started actually expand to other online -
:08:08. > :08:11.off-line business. This is a very competitive business, especially in
:08:12. > :08:14.China. The gunmen have placed in lots of investment and there
:08:15. > :08:17.competing with other companies that at the very beginning thou not
:08:18. > :08:23.looking for profitability. So that probably is the only challenge for
:08:24. > :08:28.Tencent at this moment. But by looking at the gaming industry as
:08:29. > :08:31.well as what they are looking out for the video and the music
:08:32. > :08:37.industry, they are actually do very well. But isn't the online gaming
:08:38. > :08:42.space getting too crowded in China? I actually think that there is still
:08:43. > :08:45.a lot of room to grow. I think a particular when you move to the
:08:46. > :08:49.mobile gaming industry, because you need to remember that there are a
:08:50. > :08:54.lot of people in China that actually own a smart phone. You are talking
:08:55. > :08:58.about 800 million people that have a smart phone. Gaming is actually one
:08:59. > :09:03.of the major entertainment for a lot of the people who live in the
:09:04. > :09:07.cities. Even now going into the rural areas. I think there is still
:09:08. > :09:12.a lot of room to grow, especially for the sport area, as well. So the
:09:13. > :09:15.thing is for Tencent, because they are already dominating the market,
:09:16. > :09:27.it is difficult for the gaming industry, for the next three to the
:09:28. > :09:35.next 3000 developers. It is challenging. They have 850 million
:09:36. > :09:39.users. Gisin at saturation point? There are still in use is coming to
:09:40. > :09:45.the portfolio. -- isn't that a saturation. There is any one
:09:46. > :09:55.platform for Tencent. But now they have a number platform, which is a
:09:56. > :10:06.very good complement to each other. Their new product, QQ, is aimed at
:10:07. > :10:12.the teenage generation. That is confident current platform. Let's
:10:13. > :10:19.and a quick look now before we go at the financial markets. As you can
:10:20. > :10:24.see, all red arrows. The Nykea, the Hang Seng, and the all Ord is all
:10:25. > :10:32.down. This is after the US sought the worst slump yet this year. --
:10:33. > :10:34.saw. -- Nikkei. Norcia again pride in early on Thursday. I'm Rico
:10:35. > :10:39.Hizon.