30/12/2013 World Business Report

Those are the latest headlines from BBC World News. Now for the latest

financial news with World Business Report.

It's been a stellar year for equity markets with Japan's Nikkei

outshining its peers, but what will 2014 bring? We get the view of a

market expert. Fewer but bigger airlines - that

seems to be the model for Europe's airspace. The process could start in

the new year. We have a special report.

Welcome to World Business Report. I'm Sally Bundock. Also in the

programme: As European governments look to encourage entrepreneurs we

focus on the role venture capital has to play.

We've come to that part of the year when it is time to look back and

reflect on what 2013 was like for financial markets. And it's been a

bumper year for most of the world's stock markets. In the US, the Dow

jones industrial average is up 26% so far this year, and the tech heavy

Nasdaq is doing even better, it's gained 38%. But that is nothing

compared to Tokyo's Nikkei, which sees its last trading day for the

year today. The index has surged more 56% over the last 12 months,

its best annual performance since 1972. But one of the best performing

markets of 2013 is Dubai, where the index soared 102%. Overall the

biggest disappointment has probably been China, where markets have been

stagnant at best. With me is Louise Cooper, market

analyst at Cooper City. I would imagine anyone who is put

money into sharemarket at the beginning of the year are rubbing

their hand at the moment, depending on which one. Tell us why these

markets have done so well? First of all, the world 's economically is a

much better place than it was 12 month ago. The UK has recovered

significantly. Much better-than-expected. Even the

Eurozone is now back on the track to recovery. Celibate behind the UK.

The US, the economic recovery is well on track there. Globally, if

you look at global forecasts for GDP, they are looking a lot better

now than they were a year ago. It is interesting, I did not mention the

European markets, but they have done well as well. It would seem that the

developed economies and markets have done better, and share markets have

outshone bond markets. We have had a 30 year boom market for bonds,

record low interest rates. The price of a bond goes up as interest rates

go down. With an economic recovery, we will see interest rates going up,

which means bond prices will fall. It is the stage in the cycle where

bonds should underperform. Equity should overperformed. It is very

interesting. It has been the year of the fightback for the developed

world. After years of financial crises, the developed world has been

amassed. This is the year where we fight back. The developing markets

are down this year. The developed world, prices were up. Even Europe,

will sit a great performance as the state, but still up 15 to the

present. Not the 30% we saw the states, but a good return. Quickly,

what about Twitter 14? -- 2014. There are some trends that will

continue. Better growth will drive stock prices higher, it will help

companies. At the end of the day, companies are exposed to growth.

Companies should do well, their profits will do well. It should

drive prices. This is the beginning of the end of the bull market for

bonds. I would not be involved in the bond market sometime. The big

question is Japan, with the stunning performance of the Nick Cave last

year, -- Nick Cave, can Abenomics continue to drive vehicle it

forward. Is the economy turned the corner? Thank you. We will talk to

the newspaper headlines shortly. In Japan and how the new sales tax

kicking in the early in the New Year.

Entrepreneurs and their new companies are often seen as the best

way to drive economic growth for a country and generate new jobs. In

fact, currently in Europe there are nearly 9,000 startup companies which

employ over 750,000 people. But for an entrepreneur to turn a product

idea into reality, he or she often faces the hard decision of opting

for help from venture capital investors or retaining full

ownership of their companies. Chloe Hayward went to meet two

entrepreneurs to find out how venture capital money changed their

business prospects. Meet Rowlands, and his invention. 14

years ago he was a monk, today he is on the road to becoming a

millionaire with his new musical instruments. The complete lack of

piano that you can play it like a piano. You can bend the pitch by

moving along rows. Thanks to an investment of a few hundred thousand

dollars, he has been able to hire 30 staff and fine-tune his product. As

a first time entrepreneur, I felt like I was underground, digging

furiously. I did going was going in the right direction. Having a

venture capital firm coming, they give you a periscope to see the

larger world, to understand that you are digging in the right direction.

Why was an unproven product and an unproven entrepreneur worth

investing in? You have to take risks if you are looking for returns of

50, 100 times your money. All the ones we invest in, it is about one

in ten that the ball out of the park and returns a lot of money to fund.

Not all investments are as risky. In Twitter -- in 2012, this company

received $16 million from venture capital firms. This company, the

terms private homes and short-term hotels, now employs 200 people and

is expanding around the world. Claims can rent homes like this one

in London, but can also book short-term stays in Paris, Los

Angeles, and New York. That is all thanks to venture capital

investments. Venture capital money comes with strings attached. The

price you pay when you raise money from third parties is that you give

up some control, you give up some of the returns of the company is sold

or goes public. It can also mean you make better decisions. Sometimes an

out site influence can be guiding. That is the goal. If a company does

listed shares, early investors will make millions. That is how a monk

could become a millionaire in a few short years.

We are just going to update you on a story that has been breaking in this

last half-hour. An explosion on a trolley bus in the Russian city of

Volgograd. It has killed at least ten people. That is why we are

hearing. We have some pictures to share with you of these events. They

have just come in to us. The blast comes only one day after 17 people

were killed in a suicide bomb attack at the Central Station in the city.

The explosions have fuelled security concerns ahead of February's Winter

Olympics and Sochi. The venue was close to the volatile North caucuses

region. It is something we will be discussing in more detail during the

paper review. Those are the latest features of the attack. Last

October, one of Europe's best-known airlines, the former flag carrier of

Greece - Olympic - fell into the hands of its rival, Aegean. The

question that everyone in the airline world is asking is whether

this could mark the start of a series of further mergers and

acquisitions amongst Europe's airlines. Some think that profits in

the industry are so thin that companies desperately need to

consolidate. They're hoping that 2014 will be the year that the

process starts. Jeremy Howell has this report. It was three years ago

when there was a buyout of Olympic. Finally, last October, the European

commission approved the deal on competition grounds. Olympic and

Aegean is the tip of a relatively decrepit iceberg. There are several

other larger carriers in Europe that have no economic rights to be in

business. They are all the so-called legacy of national flag carriers,

with the support of government and national interests. An Italian

airline was rescued from collapse when the Italian government

persuaded private investors to pay off its $1.5 billion debts. It is

fast running out of cash again. A front is considering whether to buy

it out. A Scandinavian carrier is facing competition from low-cost

carriers. They may be a takeover target. The airline's lobby group is

urging the European commission to let deals like this go ahead

quickly. Our advice to regulators would be to let the market decide,

don't drag your feeds a long and we believe it is ridiculous, the way

that the regulators are looking at potential mergers and acquisitions.

In recent years, three large airline groups have emerged in Europe. IAG,

the air France, KLM alliance, and Lufthansa. They have Twitter percent

of the continent's and market. In the USA, the three biggest airlines

have 80% of the market. There is scope in more consolidation. It may

push up fares. We may see an upward drift in prices. Large carriers will

face that downward pressure from low-cost carriers. They will keep

the big boys honest. The stage is set for the big boys of European air

travel to start snapping up smaller, weaker rivals. It may take some time

before they act. That is because groups like Lufthansa and IAG have

their hands full sorting out the problems of airlines they already

own. They may hesitate before deciding to take on more.

Now that is World Business Report. See you soon.

Overseas visitors and migrants are set to face controversial new

charges for some NHS services in England. Ministers say they're keen

to clamp down on any abuse of the system, but doctors have expressed

concerns. Here's our health correspondent, Adam Brimelow.

The NHS is free for ordinary UK residents. Some doctors have warned

that new checks to see