:00:00. > :00:00.Those are the latest headlines from BBC World News. Now for the latest
:00:00. > :00:17.financial news with World Business Report.
:00:18. > :00:22.It's been a stellar year for equity markets with Japan's Nikkei
:00:23. > :00:29.outshining its peers, but what will 2014 bring? We get the view of a
:00:30. > :00:33.market expert. Fewer but bigger airlines - that
:00:34. > :00:36.seems to be the model for Europe's airspace. The process could start in
:00:37. > :00:46.the new year. We have a special report.
:00:47. > :00:52.Welcome to World Business Report. I'm Sally Bundock. Also in the
:00:53. > :00:54.programme: As European governments look to encourage entrepreneurs we
:00:55. > :00:58.focus on the role venture capital has to play.
:00:59. > :01:02.We've come to that part of the year when it is time to look back and
:01:03. > :01:08.reflect on what 2013 was like for financial markets. And it's been a
:01:09. > :01:14.bumper year for most of the world's stock markets. In the US, the Dow
:01:15. > :01:18.jones industrial average is up 26% so far this year, and the tech heavy
:01:19. > :01:24.Nasdaq is doing even better, it's gained 38%. But that is nothing
:01:25. > :01:29.compared to Tokyo's Nikkei, which sees its last trading day for the
:01:30. > :01:32.year today. The index has surged more 56% over the last 12 months,
:01:33. > :01:39.its best annual performance since 1972. But one of the best performing
:01:40. > :01:45.markets of 2013 is Dubai, where the index soared 102%. Overall the
:01:46. > :01:51.biggest disappointment has probably been China, where markets have been
:01:52. > :02:01.stagnant at best. With me is Louise Cooper, market
:02:02. > :02:03.analyst at Cooper City. I would imagine anyone who is put
:02:04. > :02:05.money into sharemarket at the beginning of the year are rubbing
:02:06. > :02:09.their hand at the moment, depending on which one. Tell us why these
:02:10. > :02:15.markets have done so well? First of all, the world 's economically is a
:02:16. > :02:19.much better place than it was 12 month ago. The UK has recovered
:02:20. > :02:24.significantly. Much better-than-expected. Even the
:02:25. > :02:30.Eurozone is now back on the track to recovery. Celibate behind the UK.
:02:31. > :02:35.The US, the economic recovery is well on track there. Globally, if
:02:36. > :02:40.you look at global forecasts for GDP, they are looking a lot better
:02:41. > :02:43.now than they were a year ago. It is interesting, I did not mention the
:02:44. > :02:52.European markets, but they have done well as well. It would seem that the
:02:53. > :02:58.developed economies and markets have done better, and share markets have
:02:59. > :03:03.outshone bond markets. We have had a 30 year boom market for bonds,
:03:04. > :03:08.record low interest rates. The price of a bond goes up as interest rates
:03:09. > :03:12.go down. With an economic recovery, we will see interest rates going up,
:03:13. > :03:16.which means bond prices will fall. It is the stage in the cycle where
:03:17. > :03:22.bonds should underperform. Equity should overperformed. It is very
:03:23. > :03:30.interesting. It has been the year of the fightback for the developed
:03:31. > :03:35.world. After years of financial crises, the developed world has been
:03:36. > :03:39.amassed. This is the year where we fight back. The developing markets
:03:40. > :03:45.are down this year. The developed world, prices were up. Even Europe,
:03:46. > :03:50.will sit a great performance as the state, but still up 15 to the
:03:51. > :04:00.present. Not the 30% we saw the states, but a good return. Quickly,
:04:01. > :04:04.what about Twitter 14? -- 2014. There are some trends that will
:04:05. > :04:08.continue. Better growth will drive stock prices higher, it will help
:04:09. > :04:12.companies. At the end of the day, companies are exposed to growth.
:04:13. > :04:16.Companies should do well, their profits will do well. It should
:04:17. > :04:20.drive prices. This is the beginning of the end of the bull market for
:04:21. > :04:25.bonds. I would not be involved in the bond market sometime. The big
:04:26. > :04:34.question is Japan, with the stunning performance of the Nick Cave last
:04:35. > :04:38.year, -- Nick Cave, can Abenomics continue to drive vehicle it
:04:39. > :04:45.forward. Is the economy turned the corner? Thank you. We will talk to
:04:46. > :04:48.the newspaper headlines shortly. In Japan and how the new sales tax
:04:49. > :04:49.kicking in the early in the New Year.
:04:50. > :04:53.Entrepreneurs and their new companies are often seen as the best
:04:54. > :04:56.way to drive economic growth for a country and generate new jobs. In
:04:57. > :05:03.fact, currently in Europe there are nearly 9,000 startup companies which
:05:04. > :05:06.employ over 750,000 people. But for an entrepreneur to turn a product
:05:07. > :05:09.idea into reality, he or she often faces the hard decision of opting
:05:10. > :05:16.for help from venture capital investors or retaining full
:05:17. > :05:18.ownership of their companies. Chloe Hayward went to meet two
:05:19. > :05:34.entrepreneurs to find out how venture capital money changed their
:05:35. > :05:39.business prospects. Meet Rowlands, and his invention. 14
:05:40. > :05:41.years ago he was a monk, today he is on the road to becoming a
:05:42. > :05:49.millionaire with his new musical instruments. The complete lack of
:05:50. > :05:56.piano that you can play it like a piano. You can bend the pitch by
:05:57. > :06:01.moving along rows. Thanks to an investment of a few hundred thousand
:06:02. > :06:05.dollars, he has been able to hire 30 staff and fine-tune his product. As
:06:06. > :06:10.a first time entrepreneur, I felt like I was underground, digging
:06:11. > :06:14.furiously. I did going was going in the right direction. Having a
:06:15. > :06:19.venture capital firm coming, they give you a periscope to see the
:06:20. > :06:24.larger world, to understand that you are digging in the right direction.
:06:25. > :06:28.Why was an unproven product and an unproven entrepreneur worth
:06:29. > :06:36.investing in? You have to take risks if you are looking for returns of
:06:37. > :06:41.50, 100 times your money. All the ones we invest in, it is about one
:06:42. > :06:50.in ten that the ball out of the park and returns a lot of money to fund.
:06:51. > :06:56.Not all investments are as risky. In Twitter -- in 2012, this company
:06:57. > :07:00.received $16 million from venture capital firms. This company, the
:07:01. > :07:06.terms private homes and short-term hotels, now employs 200 people and
:07:07. > :07:10.is expanding around the world. Claims can rent homes like this one
:07:11. > :07:15.in London, but can also book short-term stays in Paris, Los
:07:16. > :07:18.Angeles, and New York. That is all thanks to venture capital
:07:19. > :07:23.investments. Venture capital money comes with strings attached. The
:07:24. > :07:27.price you pay when you raise money from third parties is that you give
:07:28. > :07:31.up some control, you give up some of the returns of the company is sold
:07:32. > :07:45.or goes public. It can also mean you make better decisions. Sometimes an
:07:46. > :07:52.out site influence can be guiding. That is the goal. If a company does
:07:53. > :07:58.listed shares, early investors will make millions. That is how a monk
:07:59. > :08:06.could become a millionaire in a few short years.
:08:07. > :08:11.We are just going to update you on a story that has been breaking in this
:08:12. > :08:15.last half-hour. An explosion on a trolley bus in the Russian city of
:08:16. > :08:20.Volgograd. It has killed at least ten people. That is why we are
:08:21. > :08:26.hearing. We have some pictures to share with you of these events. They
:08:27. > :08:31.have just come in to us. The blast comes only one day after 17 people
:08:32. > :08:37.were killed in a suicide bomb attack at the Central Station in the city.
:08:38. > :08:41.The explosions have fuelled security concerns ahead of February's Winter
:08:42. > :08:47.Olympics and Sochi. The venue was close to the volatile North caucuses
:08:48. > :08:51.region. It is something we will be discussing in more detail during the
:08:52. > :08:57.paper review. Those are the latest features of the attack. Last
:08:58. > :09:00.October, one of Europe's best-known airlines, the former flag carrier of
:09:01. > :09:07.Greece - Olympic - fell into the hands of its rival, Aegean. The
:09:08. > :09:10.question that everyone in the airline world is asking is whether
:09:11. > :09:12.this could mark the start of a series of further mergers and
:09:13. > :09:17.acquisitions amongst Europe's airlines. Some think that profits in
:09:18. > :09:19.the industry are so thin that companies desperately need to
:09:20. > :09:22.consolidate. They're hoping that 2014 will be the year that the
:09:23. > :09:38.process starts. Jeremy Howell has this report. It was three years ago
:09:39. > :09:41.when there was a buyout of Olympic. Finally, last October, the European
:09:42. > :09:47.commission approved the deal on competition grounds. Olympic and
:09:48. > :09:52.Aegean is the tip of a relatively decrepit iceberg. There are several
:09:53. > :09:58.other larger carriers in Europe that have no economic rights to be in
:09:59. > :10:03.business. They are all the so-called legacy of national flag carriers,
:10:04. > :10:08.with the support of government and national interests. An Italian
:10:09. > :10:11.airline was rescued from collapse when the Italian government
:10:12. > :10:17.persuaded private investors to pay off its $1.5 billion debts. It is
:10:18. > :10:23.fast running out of cash again. A front is considering whether to buy
:10:24. > :10:27.it out. A Scandinavian carrier is facing competition from low-cost
:10:28. > :10:32.carriers. They may be a takeover target. The airline's lobby group is
:10:33. > :10:36.urging the European commission to let deals like this go ahead
:10:37. > :10:40.quickly. Our advice to regulators would be to let the market decide,
:10:41. > :10:45.don't drag your feeds a long and we believe it is ridiculous, the way
:10:46. > :10:52.that the regulators are looking at potential mergers and acquisitions.
:10:53. > :11:03.In recent years, three large airline groups have emerged in Europe. IAG,
:11:04. > :11:10.the air France, KLM alliance, and Lufthansa. They have Twitter percent
:11:11. > :11:15.of the continent's and market. In the USA, the three biggest airlines
:11:16. > :11:23.have 80% of the market. There is scope in more consolidation. It may
:11:24. > :11:27.push up fares. We may see an upward drift in prices. Large carriers will
:11:28. > :11:35.face that downward pressure from low-cost carriers. They will keep
:11:36. > :11:39.the big boys honest. The stage is set for the big boys of European air
:11:40. > :11:46.travel to start snapping up smaller, weaker rivals. It may take some time
:11:47. > :11:50.before they act. That is because groups like Lufthansa and IAG have
:11:51. > :11:54.their hands full sorting out the problems of airlines they already
:11:55. > :12:03.own. They may hesitate before deciding to take on more.
:12:04. > :12:13.Now that is World Business Report. See you soon.
:12:14. > :12:17.Overseas visitors and migrants are set to face controversial new
:12:18. > :12:22.charges for some NHS services in England. Ministers say they're keen
:12:23. > :12:28.to clamp down on any abuse of the system, but doctors have expressed
:12:29. > :12:36.concerns. Here's our health correspondent, Adam Brimelow.
:12:37. > :12:40.The NHS is free for ordinary UK residents. Some doctors have warned
:12:41. > :12:41.that new checks to see