13/08/2014 World Business Report


13/08/2014

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Those are the latest headlines from BBC World News. It is time for the

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latest financial news with World Business Report.

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Japan suffers its biggest economic contraction since the devastating

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March 2011 earthquake, as a sales tax hike takes a heavy toll on

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household spending. Investors are hoping for a big surge

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in profit for Asia's biggest technology company China's Tencent.

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Welcome to World Business Report. Also in the programme, we will talk

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about Cathay Pacific Airways. It is revealing more about its financial

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health and has been investing in a company in the United States. Let us

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focus on Japan's economy. Japan's economy has seen its biggest

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contraction since 2011 when it was devastated by an earthquake and

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tsunami. Japan's gross domestic product` or the total output of

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goods and services ` shrank by an annualised 6.8% in the second

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quarter` but that is smaller than economists expected. Many economists

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argue this is down to the hike in sales tax at the beginning of April,

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which held back consumer spending. Buyers of major purchases, such as

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cars, rushed to beat the tax jump, somewhat inflating spending in

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earlier months. The government, under Prime Minister Shinzo Abe and

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his Abenomics strategy, has been trying to revive the world's

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third`biggest economy by freeing up regulations and encouraging the yen

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to rise, a move that helps exporters. So is it working? We will

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go to Singapore. It is an interesting scenario. On the one

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hand, the economy shrunk by a big amount, but it is not as bad as

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economists were predicting. That is right. The sales tax is a

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double`edged sword. We may see household and corporate spending

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slumping after Tokyo raised taxes from five to 10%. This could

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increase by 2% in 2015. On the other hand, it is basically trying to

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solve the massive mountain of debt that Japan has. It is one of the

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highest in the world. When you speak with economists and analysts who say

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many Japanese consumers slowed down their purchases after a Kinglake in

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many `` accumulating many items. At this moment, when we analyse the

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situation, many are saying that Japan will not be going through a

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technical recession, two consecutive contractions. They say we will see a

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recovery in consumer and household spending this quarter. It would

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offset the contraction during the April`June period. We will keep our

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fingers crossed. That would explain why the markets are muted, they are

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not wobbled by these news. They were expecting a worse number. 1.9% on a

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quarterly basis. This was that are expected. Let us talk about the

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Cathay Pacific Airways. We are expecting some news to tell us how

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they are doing financially. They have been on a spending spree. What

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have they been doing? Before they report their half`year earnings

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results, if we take a look at this agreement with this company Fulcrum

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BioEnergy. , this agreement is about sustainable aviation fuel towards

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the next decade. Cathay Pacific Airways is Fulcrum BioEnergy's first

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Caroline investor. They have also negotiated a long`time supplier

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agreement with Fulcrum BioEnergy for an initial 375 million gallons. This

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represents approximately 2% of the airline's current annual fuel

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consumption. Fulcrum BioEnergy, which is in partnership with Cathay

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Pacific Airways, plans to construct its first commercial facility later

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this year and build large scale waste to fuel renewable plants. I

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merrily in North America. `` primarily. Let us stay in Asia and

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talk about its biggest technology company, Tencent. It is updating

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shareholders on its financial performance as well. Investors are

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expecting net profit to have surged by more than 50% over the spring

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months. The Chinese company got its start by providing an instant

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messaging service called QQ, before making its name in online games.

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Now, it is throwing its efforts behind mobile offerings, an area

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where there is keen competition. The BBC's Hong Kong correspondent

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Juliana Liu reports. The games arena. Let players have

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come to sharpen their skills in league of legends, and online game

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where teams battle to defeat their opponents. It is owned by the

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Chinese Internet giant Tencent. The biggest technology firm in Asia.

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Almost half of its business comes from computer games. While this is

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one of the most popular computer games on the planet, it costs

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absolutely nothing to play. Instead it makes money through online

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transactions. Players can spend their cash on purchasing new

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characters or outfits for those characters. This man explains its

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appeal. TRANSLATION: While you do not need a powerful computer to

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plate, there is high awareness of the game. It is regularly updating

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with new characters and situations. Computer games still have a massive

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fan base. Even the most hard`core players are beginning to spend more

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time their smartphones. Tencent launched a mobile games to its

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messaging applications. And that is not all. They have had to integrate

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things like mobile payments, online banking, games, even a blogging

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platforms to appeal to the Chinese consumer. They have had to offer

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many more channels. Tencent may be ahead, but it has tough competition.

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Alibaba has offered its own messaging app. Back at the arena,

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players are getting ready for the World Championships in South Korea.

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Tencent has profited from league of legends. But the future lies in

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profiting from smartphones. In other news. China's biggest

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e`commerce firm Alibaba has sold off its loan business ahead of a

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forthcoming share sale. In a recent filing with US regulators, Alibaba

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said it is selling off its small and medium enterprise loan business to

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Small and Micro Financial Services Company, in a cash deal for $518

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dollars. `` 500 $18 million. `` 500 $18 million. `` $518 million.

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In a few hours the Bank of England Governor Mark Carney sets out the

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latest forecast for growth and inflation. The city will be looking

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for hints on the timing of the first rise in interest rates.

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Australia's biggest bank, the Commonwealth, has posted a 13% jump

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in full`year net profit to a record $8.63 billion Australian ` which is

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$8 billion US. It has gains across each of its core divisions. The

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country's top home lender and biggest company by market

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capitalisation says net profit for the 12 months ending in June was

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above analyst expectations. A huge archive of hitherto

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let us look at the markets and see how the markets have dealt with

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Japan's contraction. To a degree it was expected that consumer spending

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would fall. You can see a dollar buying over 102 yen at the moment.

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Just a slight decline for the main markets. That is all for me from

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now. I will see you again when we look at the papers.

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A huge archive of unknown material relating to World War I tribunal 's

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has been discovered in Staffordshire. They were held after

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conscription was introduced in 1916 and when people asked not to be

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called up. Some were conscientious objectors, most had other reasons.

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At the end of the war the government ordered all but two areas' documents

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destroyed. This cache of 20,000 documents has laid undiscovered

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since 1920 and researchers have just

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