:00:02. > :00:06.Thursday. Those are the latest headlines from
:00:07. > :00:16.BBC News. Now for the latest financial news,
:00:17. > :00:22.
:00:22. > :00:25.World Business Report. Wall Street marches on to new
:00:25. > :00:29.record highs but are stock markets living on borrowed time?
:00:29. > :00:39.After thousands of job cuts and billions of dollars of losses, Sony
:00:39. > :00:43.
:00:43. > :00:46.is poised to return to profit. Welcome to World Business Report.
:00:46. > :00:51.Also in the programme: South Korea's central bank announces a
:00:51. > :00:55.surprise cut in interest rates. We will have the latest on that.
:00:55. > :01:01.Wall Street's record-breaking run continues but are we heading for a
:01:01. > :01:05.fall? The S&P 500 index closed last night and yet another all-time high
:01:05. > :01:12.for the fifth day in a row. A new record high for the DOW Jones as
:01:12. > :01:19.well. Let's have a look at the closing numbers so you can see
:01:19. > :01:27.where they ended the day. The broader market, the DOW Jones and
:01:27. > :01:34.the S&P 500. The Nikkei in Japan is still hovering around a five-year
:01:34. > :01:37.hire and the DAX is remaining high. Where is the optimism coming from?
:01:37. > :01:45.Not from the stage of the global economy because growth this week to
:01:45. > :01:50.say the least in Japan and the USA and it is virtually non-existent in
:01:50. > :01:55.Europe. In previous slumps, in 1974,
:01:55. > :02:03.economic slowdown prompted investors to sell shares. Prices
:02:03. > :02:07.began to rise as the world economy revived. In 2013 it is not so. The
:02:07. > :02:13.DOW Industrial Average has risen nearly 15% since the start of the
:02:13. > :02:23.year. Japan's Nikkei has risen by around 37% up and the FTSE is up as
:02:23. > :02:28.well. The US economy is estimated to be growing at 2.5% a year.
:02:28. > :02:33.Exuberance could not be the driving factor so what is? If we are
:02:33. > :02:38.entering in a period where we expect to anaemic growth for five-
:02:38. > :02:43.ten years and we expect interest rates to remain low for that period,
:02:43. > :02:51.we expect the bond markets to have healed satire very Laura. The
:02:51. > :02:54.earnings yield on equities becomes more and more attractive. Some
:02:54. > :03:04.stockbrokers think share price indexes in London and New York
:03:04. > :03:09.
:03:09. > :03:15.could rise by a further 20-30% over the next two months. But what are
:03:15. > :03:19.the risks it will collapse again? The biggest risk will be
:03:19. > :03:25.disappointment in US economic recovery more than an expected
:03:25. > :03:29.slowdown in Chinese goas, something going wrong in the eurozone Ward
:03:29. > :03:35.general investor sentiment starting to wonder if we have come too far
:03:35. > :03:40.too fast in the first few months of this year. One thing that could
:03:40. > :03:45.really harm the share prices is if leading economies like America
:03:45. > :03:48.start to motor again. Governments will start to increase interest
:03:48. > :03:55.rates and that would make other investments look much more
:03:55. > :04:00.attractive than shares. That is a story we will be
:04:00. > :04:07.discussing more women look at the papers. The record highs do feature
:04:07. > :04:15.in the newspapers around the world. We have seen a surprise cut in
:04:15. > :04:18.interest rates in South Korea. We joined Rico Hizon. Not many were
:04:18. > :04:22.predicting South Korea would cut rates but they did.
:04:22. > :04:32.That is right. It caught the markets and investors off guard.
:04:32. > :04:34.
:04:34. > :04:41.That is why we are seeing the bond and shock -- stock markets... The
:04:41. > :04:51.first reduction in seven months. The weak industrial growth and the
:04:51. > :04:56.weaker yen include ingredients for this. It will jump-start the
:04:56. > :05:02.economy and ease the pressure on the currency. Economists had
:05:02. > :05:08.different views on the rate cut. One has said the Bank of Korea
:05:08. > :05:13.admits that the economy is as good as they think. The central bank's
:05:13. > :05:17.decision comes after a central banks in Europe and Australia Low
:05:17. > :05:23.Wood rates. This could be the last rate reduction from the Korean
:05:23. > :05:28.central bank until the end of the year.
:05:28. > :05:35.It was once the biggest name in the world of consumer electronics but
:05:35. > :05:39.Sony has recently been elbowed out by the likes of Samsung and Apple.
:05:39. > :05:47.And now the fall in Japanese giant could confirm in a few hours its
:05:47. > :05:52.confirm to profit last year. The good news is it looks like Sony
:05:52. > :05:58.has finally returned to profit. Later today it is expected to
:05:58. > :06:04.report around a 400 million US dollar operating profit for 2012.
:06:04. > :06:08.That contrasts with the operating loss of more than 2.5 billion US
:06:08. > :06:17.dollars in 2011. Since then Sony has gone through a painful
:06:17. > :06:27.restructuring and has lost 10,000 jobs, it has cut TV 10 production
:06:27. > :06:28.
:06:28. > :06:33.in order to get things manageable. But the bad news is it has not
:06:33. > :06:42.worked. The consumer electronics division is not making money and it
:06:42. > :06:46.is now selling its corporate headquarters, life insurance.
:06:46. > :06:51.Without the sale of its US Office it would not be reporting a profit.
:06:51. > :06:56.Sony does have some much better electronic products on the market.
:06:56. > :07:01.It has a tablet and smartphone line that is considered to be better
:07:01. > :07:10.than its predecessors. The PlayStation for is due to come out
:07:10. > :07:13.later this year. But the simple truth is that when it comes to a
:07:13. > :07:21.head-to-head competition with the likes of Apple and Samsung, Sony is
:07:21. > :07:24.still not making much headway. In its home market in Japan last year
:07:24. > :07:29.the iPhone wasn't the single biggest selling smartphone.
:07:29. > :07:33.We will get an update later when they do report their results. We
:07:33. > :07:38.will tell you if the profit came through.
:07:38. > :07:44.In South Africa there are more than 1000 top politicians and business
:07:44. > :07:50.leaders gathered in Cape Town for the World Economic Forum in Africa.
:07:50. > :07:54.One of them is a Nigerian energy entrepreneur who has been telling
:07:54. > :08:04.the BBC about the importance of the private sector in tackling
:08:04. > :08:05.
:08:05. > :08:13.corruption. One of the key to Sieders is privatisation. -- key
:08:13. > :08:23.drivers. The power sector reform is coming in, the government is
:08:23. > :08:24.
:08:25. > :08:29.privatising the power or -- power plants. Moving on to the
:08:29. > :08:33.infrastructure with the deficits of building roads, water systems. The
:08:33. > :08:37.minute this infrastructure is put in place and privatisation takes
:08:37. > :08:42.hold you will see an effective position where the private sector
:08:42. > :08:48.is driving this for profitability, not take charity. That is the
:08:48. > :08:52.differential we are seeing across the Continent. You did not answer
:08:52. > :08:57.the question I asked earlier about corruption and governance impeding
:08:57. > :09:02.investment in Nigeria. What is being done to address this? I do
:09:02. > :09:08.not think corruption will be wiped away overnight but I can assure you
:09:08. > :09:12.that it is getting much better. This generation of Africans, my
:09:12. > :09:18.generation, are doing things differently. We are doing things
:09:18. > :09:21.properly. The more of us that have driving the economies of this
:09:21. > :09:27.continent, the better business environment it will be.
:09:27. > :09:32.We will have more fun that forum as the week progresses.
:09:32. > :09:39.Slovenia's parliament is it due to pass an economic reform programme
:09:39. > :09:44.today, aimed at avoiding a bail out. The plan will be sent to Brussels
:09:44. > :09:53.later. The government is battling to stay solvent and rescue state
:09:53. > :09:58.owned banks that were sinking. The Bank of England wraps up its latest