26/04/2012 World Business Report

Pakistan today. If convicted, he could face jail.

Let's get you up-to-date with the latest financial news.

Thanks for joining us on World Business Report.

Nintendo is ready to report its first ever annual loss as it

battles a strong yen and loses ground to the smartphone.

The Federal Reserve boost its outlook for growth but warns that

housing market is holding back the recovery. We take a closer look.

South Korea's economy picks up speed, boosted by strong industrial

output and government spending. Nintendo is expected to post its

first ever full year loss in the next few hours. The Japanese gaming

company posted a sharp drop in quarterly profits back in January

and forecasted that it would rack up bigger than usual annual losses

as it battles a strong yen and loses ground to gadgets like

Apple's iPhone. It is now struggling to keep up as more

versatile smartphone and tablet sales boom. Joining us from Tokyo

is our correspondent. Give us your understanding of why Nintendo has

got itself into this difficult position.

Essentially the problem for Nintendo has been that it is being

overtaken. It is losing out to the likes of Apple and other tablet

make us, because people are playing games differently. Instead of

playing the Wii in their living rooms they are increasingly playing

games on their iPhone or other devices. Instead of playing in

their living room they a plane while commuting or in the bedroom.

People's lifestyles are different. -- they are playing. This means

that Nintendo had to radically revised its forecast. They had

expected to sell 30 million Wiis, now they are looking at 10 million.

This will push Nintendo into its first ever operating loss. It was

forecasting 45 billion yen. That is just over $550 million. We will

find out in 1.5 hours or so when the Stock Exchange in Tokyo closes

and the announcement is made. It is one thing to radically re-

adjust your forecast - what investors would like to see his

Nintendo coming up with some way of combating the problems.

In the financial year we are in now, Nintendo should do better, they

have some popular games coming along that should put them back

into the black. It also has the Wii YOU coming along, which should what

it on better standing against its rivals. That should help it along

as well. Some analysts are saying that if you can't beat the tablets

and smart phones, then maybe Nintendo should join them. They

should try to sell their games or other devices, not just its own

hardware. I think one positive thing is this - unlike the likes of

Sony, they have a large cash pile of about $14 billion from the

success of the Wii, so they have some time to think about whether

the company needs to change its strategy and where to go next.

Thank you for that, and we will bring you those results as soon as

we get them. Let's talk now about South Korea,

economic growth there picked up speed in the first three months of

the year. We are in the BBC Singapore office. Industrial output

is one of the factors for that growth?

Absolutely. We are seeing improving governm

government spending. When you talk to analysts, they are warning the

outlook remains uncertain. There is slowing expansion in Europe and

China, bringing growth 2.9 % in the three months to the end of March,

up from a 0.3% in the first quarter.... Economists say that the

data at face value may appear healthy, but the picture becomes a

little more bleak when it is broken down by monthly performance where

growth is seen to slow down strongly in February and March

after a strong January. They say it is too early to judge whether the

economy is on a path of steady recovery.

I want to ask you a little bit about how the Asian markets have

been reacting to the latest update from the head of the US Federal

Reserve, because he delivered a fairly upbeat message about the

world's largest economy. Absolutely. That upbeat report from

the head of the US Federal Reserve saying that interest rates will

remain low in the US until 2014 gave a big lift to Asian markets in

early trading. After the strong start we are seeing Asian shares

losing ground with afternoon trade. Share prices are moving low laugh.

Earlier they were led by gains in US stocks -- moving love....

Investors in Japan as a Korea have given up their earlier games and

are in negative territory. Australia and Hong Kong are still

seen some minor gains in late trade. As we said there, the chief of the

US Federal Reserve raising his forecast. The one sticking point,

he says, it is the sluggish housing market. Millions of house owners

are still struggling with their mortgages four years after the

housing bubble burst. We report from Long Island in New York.

Charles is behind on his mortgage payments. He has lived in his Long

Island house for more than 20 years, now he could lose his home. If I

walk away from my house I will be losing everything - nothing. I will

have nothing. The about he goes on his mortgage far surpasses the

value of his home. He is not alone. More than 10 million home owners

across the USA it no more money on their mortgages than their homes

are worth. People say their options are limited. The deputy mayor of

this city says that they have been hard hit by the housing crisis and

he is not immune. The valley of his house is less than what he does on

his mortgage -- value. I can maintain my mortgage, where other

people are losing their homes. troubled borrowers and people tried

to help them, a housing recovery seems a long way off. -- trying.

think we are still in the middle of the crisis. Some experts say the

housing recovery is on the horizon, even if it doesn't happen right

away. The latest data over the last few months suggests that a recovery

may be starting. We have had better levels of sales and prices appear

to be stabilising. Things are pointing in the right direction, we

hope that will continue as long as the economy continues to improve.

But with millions of home owners still struggling with their

mortgages, a sustained recovery for the wider US economy could be out

of reach. Volkswagen, the world's second

largest carmaker, is expected to report a fall in second-quarter

operating profits, even though Audi is doing well at the luxury end of

the market. It has been a challenging start of

the Year. Volkswagen's home market in Europe has been battered by the

debt crisis and slower economy. It still managed to sell over 2

million cars around the world. This is the first time the two million

quarter of an ear. Volkswagen is quarter of a year. It has a

particular focus on the Asian market now. The strong sales

figures are down to demand in China, North America and Russia. In fact,

sales in China are now more than double Volkswagen sales in Germany.

Having a range of friends right up to Lamborghini means that

Volkswagen can continue turning over no matter what conditions are.

Even though conditions might dent its bottom line out, it hopes for

continued economic improvements across the board. Every company

would love to have the struggle that Volkswagen is having - they

have everything lined up correctly, they are set to dominate the market.