13/05/2014 World Business Report

the daughter had lost her job at the regional council. Those are the

latest headlines from BBC World News. Now for the latest financial

news with Maryam Moshiri and the World Business Report. Facing the

politicians, the bosses of Pfizer and Astrazeneca will be grilled by

face British lawmakers today as the US firm says any commitments to

retain UK jobs will be legally binding. Breaking records, as the

largest election in the world comes to an end the stock markets in India

surge to record highs. We head to Mumbai to find out why. Welcome to

World Business Report. I'm Maryam Moshiri. Also in the programme, we

take a look at how what is expected from the Australian Budget that will

be announced in a few hours' time. But first: On Tuesday, Members of

Britain's parliament start an investigation into the controversial

bid by US drugs giant Pfizer to acquire its Anglo`Swedish rival

AstraZeneca. What is worrying the MP's is that if Pfizer's bid

succeeds eventually, it could pare down AstraZeneca's research bases in

Britain and Sweden. That, in turn, could jeopardise dozens of other,

smaller, biomedical companies. The areas around London and the

university cities of Oxford and Cambridge are known as the golden

triangle of biomedical research in Europe. Jeremy Howell begins this

report in Cambridge. I am in the laboratories of Discover, small

company based in Cambridge, one of the cities in the so`called Golden

Triangle of biomedical research. Tee up working on developing drugs to

counter the so`called super bugs. Bacteria common in hospitals right

now which are currently drug`resistant. The prospect of a

merger between Pfizer and AstraZeneca worries Discover's chief

executive. He sells his discoveries to companies did turn into

marketable drugs. If AstraZeneca and Pfizer merge, it would be one less

company in Europe for him to sell to. What does that mean for a

company like Discover? It means we need to look elsewhere in terms of

where we market. It could win `` it could mean we have to move to the US

where there is more critical mass. More customers are interested in the

product and there is a big market. The past decade has seen a decline

in UK medical research. Pfizer left research base and AstraZeneca closed

its centre. AstraZeneca still does research in Sweden and is building a

new research based in Cambridge, which Pfizer says it would keep

open. Many politicians and scientists are sceptical about that.

But this professor from Oxford University says Britain needs to

grab the offer that Pfizer is making to invest in the country. I would

rather see them put that money in the UK as opposed to investing it in

Germany, Singapore, China. If we push them away from the UK, that is

exactly what will happen. They have all these offshore funds, and they

are looking to invest them. If we do not give them the opportunity in the

UK, they will go elsewhere. Here's hoping that Pfizer and AstraZeneca

merging might be matched by a new wave of investment in British

biomedical research from fund managers and venture capitalists.

But that depends a lot on confidence and Pfizer's play for AstraZeneca

seems to have created a lot of uncertainty in the sack. India's

stock market the Sensex surged to a record high on Monday, and the rupee

rallied to its strongest level in ten months, as voting in the

country's election drew to a close. `` uncertainty in the sector. It is

a sign investors are confident that Narendra Modi's pro`business BJP

group will win, as exit polls suggest a large majority following

the phased elections that have been taking place in the country over the

last five weeks. Sameer Hashmi joins me now from the stock exchange in

Mumbai, the Sensex. I know the markets have opened, has the

momentum continued? Absolutely, the momentum has continued. In fact, I

would say the party is still on as far as the stock markets are

concerned. Friday, Monday, and is now today, they have reached

all`time high levels. This is because last night on Monday, the

latest exit polls showed that Narendra Modi will be the next Prime

Minister come Friday. But some investors are cautious as well,

because in the previous two elections, the exit polls have been

wrong. But at the moment, Narendra Modi is on course to be the next

Prime Minister. Narendra Modi has pledged to boost the Indian economy

at which has been going through difficult times, but that is an

uphill struggle, is he going to be able to keep the promises he has

made to the electorate? That's right, he has been able to imply he

has the solutions, but he has an uphill task. If you look at the

recent economic data, whether it is inflation of 9%, which they are

trying to keep down to 5%, that is one big challenge. The second is the

investment climate it in the company, vote domestic and foreign

investors need to revive the investment climate. And economic

growth, how that has affected economic growth of around 5%. The

slowest growth rate India has seen in the last decade. It is clearly a

huge uphill task. In the market are not the only thing is driven by

sentiment at this point in time. Not logic. Because people here will tell

you that they believe Narendra Modi is the right man for the job and can

provide for the economy. Koke, sentiment over logic. In the very

much. `` thank you very much. How big a Budget problem does Australia

have? We'll find out later today, when the country's government

details its first Budget since coming to power late last year. With

warnings of a crisis for the nation's finances, Australians are

being told they'll all have to do the heavy lifting needed to balance

the books. So while the local economy is picking up speed.. Locals

are bracing themselves for higher taxes, and cuts to welfare as well

as a rise in the retirement age. However, despite people expecting a

tough Budget, Shane Oliver points out that it's not all doom and gloom

Down`Under. We have had the biggest boom in our history, we should be

running Budget surpluses now, not deficits. There is a problem there,

but we don't have the sort of emergency that we have had over the

last years. Joining me now for more on what we can expect is Rico Hizon,

live from our business hub in Asia. So Rico, pressure is on for the

government to start balancing the books and spending less. It is

described as brutal. It is expected to contain the harshest spending

cuts in years. Tax cuts for the rich, the raising of the retirement

age to 70, are all expected to be included in this latest economic

blueprint jobs will be axed, while government agencies such as the

Australian renewable energy agency and National water commission are

being reported to be shut down. The Prime Minister Tony Abbott has

insisted that the accounts are in need of urgent repair, but has come

under criticism for backtracking on a key election promise that there

will be no nasty surprises. It looks like we are expecting one when the

announcement is made in Canberra later today. What about giveaways?

Any tax breaks, helping hands for sectors that are struggling? At the

moment none. They will likely use this Budget to promise better times

ahead. But we can expect that massive nation`building

infrastructure projects are likely to be announced such as new suburban

roads and a second airport in Sydney. The Australian financial

review said that government owned assets will be put up for sale and

privatised. This could include the Royal Australian Meant. Overall, the

government is looking to the billions of dollars cut from its

ballooning Budget deficit which is tipped to reach hundreds of billions

of US dollars in the next few years `` Royal Australian Mint. In other

news: Citizens Financial Group, the US unit of Britain's Royal Bank of

Scotland, has filed with US regulators for an initial public

offering. The bank hopes its share sale will raise $100 million. RBS

had said last year that it would sell 20`25 percent of Citizens by

the end of 2014 through an US IPO, as the bank faces pressure from

British regulators to bolster its capital and sell off non`core

assets. Citizens provides retail and commercial banking services to about

five million customers. The Dow and the S 500 ended the session at

record highs on Monday, as shares of internet and biotech companies

advanced. The biggest gainers in the US yesterday included Twitter and

travel site, TripAdvisor. Internet stocks have been particularly

volatile in recent weeks, after concerns that valuations had gone

too high. But, with Monday's move, it seems these concerns have been

put aside, at least for now. And that's it from me and the team on

World Business Report. Stay with us.