31/01/2012 World Business Report

country. Those are the latest advice from

BBC World News. Now it is time for World Business Report. -- latest

headlines. Welcome to World Business Report.

The headlines: European leaders promised a more disciplined future,

but what will happen to Portugal? Weak results are expected from

Amazon as it fails to tap into new businesses.

European leaders who are keen to talk up their achievements but last

night's summit under the new treaty known as the fiscal compact,

countries will not be able to wriggle out of sanctions if they

run up big deficits. But that agreement does not help resolve

Europe's more pressing problems. Leaders discussed one of those

problems, Greece, late last night. There is still no agreement on

reducing its debt, although it is thought that could come by the end

of the week. Meanwhile, fresh fears about Portugal have emerged. Its

borrowing costs had soared, and there is concern it will have to go

through a painful reorganisation of its debt, similar to Greece. It is

the 16th summit in two years, they did agree on some things, but what

was missing? And well, of course, we did not get the final agreement

on Greece. That is the most obvious thing that was missing. They say it

will be here by the end of the week but these deadlines keep moving,

and they have still not sorted out the funding issue. I think that is

why Portuguese yields have risen, we have not settled for markets.

Really, I think it is that they're the implementation of the European

stability fund, but that is supposed to start in July, they are

not even talking about whether they have got enough adequate resources

and they won't start until the summit in March. This has giving

Europe a bit of time, but not enough. It is quite tricky, because

in terms of what is ahead for Greece, it is hard to know what is

around the corner. Portugal looks like it is coming back into the

forefront, certainly with its interest rates at 70% on ten-year

bonds. That is incredible, isn't it? There is a fear that they will

have to be a restructuring of Portuguese debt. We are just

getting Greece sorted out but now it looks like it will be Portugal.

So nobody wants to hold Portuguese debt, in fact, they want to sell

LED. We mentioned does two. We have not even look at Italy and Spain.

But in the meantime, at the end of February, the ECB is going to

auction money at a fairly cheap rate to balance again. There is a

lot of talk of whether there will be a huge take-up of that? Well, in

December when they did it, we had 489 billion euros taken up by the

banks. It is very cheap funding. But of course now they will all be

looking for more funding. One of the big problems is the banks in

Europe, and to whether they can be kept on track. They have got a lot

of exposure to the Sovereign's in Europe and bad debt. So looking for

more money to take up, in fact the expectation is that it could be

three times as much as last time. We will have to leave you there,

but we will talk some more about this when we look at the day's

newspapers. Amazon has been busy pushing into

new markets, but investors are concerned the expansion is coming

at the expense of profit. The world's largest internet retailer,

which reports its figures today, is expected to have made barely any

money in the final months of last year.

Amazon has transformed the way we buy books. Now it has set its

sights on the publishing end of things. Its goal is to publish

best-selling books by big-name authors. And, like local

booksellers before them, not everybody in the publishing world

is happy. Let me put it this way. Americans are devout capitalist.

And American capitalism is rooted in competition. If we only have one

entity, at the end of the day, not only selling the books but only one

entity making the books - well, what have we got them? No

competition. I feel that that is the death of the culture. These

days, Amazon's ambitions are not just limited to books. There is the

new kindled tablet, which is meant to be a portal to many of its new

services. As well as video streaming and cloud computing

services. But these ventures not only require lots of cash. But they

are also squeezing profit margins. This came to a head in October,

when Amazon want it could make a loss of as much as $200 million in

the final Mods of last year. That sent its share price down more than

10%, and it has continued to fall since then. This technology analyst

warns that some investors in Amazon are losing patience. They are

investing in tablets, mobile phones, and in content that does not

necessarily have a clear pale. So I think convincing investors why that

is important is a challenge for the company right now. And if holiday

sales of the Kindle Fire disappoint, Amazon will face even more

questions about its ability to make money.

Two Japanese auto parts companies have been dealt a hefty fine in the

West for price fixing. Who is in trouble? Yazaki Corporation will be

paying 470 million US dollars, while Denso Corporation will be

paying about 80 million US dollars. There are also four Yazaki

Corporation executives serving two years each in the US prisons as

part of this plea bargain. According to the US Justice

Department, the companies sold parts in Canada, Japan, the US and

Europe at inflated prices over a decade. At this point it is not

immediately clear how many auto makers are could -- are affected by

this conspiracy. Nor is it clear how inflated the price is worth.

The charges are part of an ongoing federal anti-trust investigation in

the US into beat Reading, price- fixing and other anti-competitive

conduct in the Auto parts industry in the United States. So it is an

ongoing investigation. Let's look at Honda and to she but now, both

are coming out with their earnings in about an hour. What is expected?

Well, numbers are expected to look die out for two of Japan's leading

companies. Honda is forecast to unveil a double-digit profit

dropped during the October-December quarter, and the forecast is for an

even larger fault for full year earnings, which ends this March. --

larger fall. The company has it been hit by a range of issues,

ranging from the Japanese tsunami to be floods in Thailand. As for

Toshiba, it is forecasting a 10% fall in profit for the financial

year ending in March, compared with a previously expected 25% gain.

Falling sales of LCD television sets, this demand for their memory

chips, the appreciating yen and the effect of the Thailand floods have

had a big drag on the profitability of the electronics giant.

Let's take a look at some of the stories in the news today. British

computer chip company to sign up armed is expected to report a surge

in fourth-quarter profits. Its technology is found in mobile

phones, washing machines and digital televisions. It is a big

day for results in the pharmaceuticals industry. Both

Pfizer and Eli Lilly are due to update us of what they're doing.

And Exxon Mobil will is releasing its quarterly results.

Markets today are slightly up. They are seemingly powering ahead

despite the lack of visibility about what is going on the increase

as far as debt restructuring is concerned. Fears about the future

of Portugal also do not seem to be having an effect as yet. Of course

there is a lot of sensitivity about the breach structuring in Greece