Transcripts For BBCNEWS Asia Business Report 20170215

Front of the new congress. She hints at any rate hike in the next few months. And shares in toshiba nosedive yet again as the japanese conglomerate faces a 6 billion write down. It is Asia Business report. Good morning, asia. Hello, world. Markets have been buzzing overnight as the head of the Us Central Bank said an Interest Rate rise could come as early as next month. In the sme annual testimony to congress, janet yellen set of hawkish tone, saying it is unwise to wait too long to hike rates. Financial stocks in the us lifted. The broader s p index closing higher for a fourth consecutive session. This is how asian shares are trading in early trade on wednesday. All in positive territory. More analysis in a moment but that hear what she had to say. As i noted on previous occasions, waiting too long to remove accommodation would be unwise. Potentially requiring the fomc to raise rates rapidly which could risk disrupting Financial Markets and pushing the economy into recession. At our upcoming meetings, the committee will evaluate whether employment and inflation are continuing to evolve in line with these expectations in which case, a further adjustment of the federal funds rate would likely be appropriate. So what would be the impact of rate hikes on asia . For Monetary Policy in the region, this is going to be a very interesting cycle. I do not think the asian banks are going to be following the Federal Reserve s is much in the past. We only have one Asian Central back bank, the philippines, raising rates. Some, like south korea, might cut rates further. this is the case, seeing another rate rise as early as next month, could we see falls again in asias emerging currencies like what we saw in 2015 and 2016 . We think so. We think that is the risk for asia. I dont think the market had been pricing in how much of a chance there was of a hike in march. I think its probably 50 50 after Janet Yellens testimony and the possibility that there could be more than two hikes this year so the risk is, the asian currencies could wea ken is, the asian currencies could weaken and what that could do, it could lead to some foreign come foreign currency Debt Mismatch Problems in asia has built up since 2008 a lot of debt so that is a risk. Who could be the biggest asian victims . Malaysia 7 risk. Who could be the biggest asian victims . Malaysia . Indonesia . I, the philippines . Some of the Southeast Asian countries do have quite a bit of foreign bond holdings. Malaysia, indonesia. Some have current account deficits. Indonesia, india. But to be honest the biggest debt is in the north east Asian Countries like china and asia and south korea and taiwan and singapore as well. With these huge dollar denominated debts due to the strengthening us dollar, could we see potentially a financial Crisis Brewing in asia Going Forward . Crisis brewing in asia Going Forward . Thats a tricky one because what i would say is asia doesnt have huge hard currency debts. We learnt our lesson from 1997. But we have a lot of domestic debt. The risk is, we could see a little bit of d efa u lt risk is, we could see a little bit of default from currency mismatch. Not our biggest problem, which is domestic debt, but it could lead to tightening financial conditions. Bondholders and banks might start to rein in credit and it spills over to tighter domestic conditions and you start to see domestic defaults. There is a bigger risk than most people see of Credit Stress in asia later this year. All this could lead to slower asian growth Going Forward. Robert subbaraman there. Samsungs Chief Executive faces a potential arrest. An Arrest Warrant was issued. Mr lee is being looked to be put behind bars involving Bribery Incident involving the president. Shares in samsun are down over 1 . Facebook is launching an application which will allow users to Strea M Application Which will allow users to stream videos on their news feed through set top boxes such as apple tv so they can enjoy the videos on a bigger screen. Rivals such as hammers on and samsung have similar services. Shares in toshiba are falling by 10 in tokyo and that is after a plunge of nearly 50 since december and that is when the Company First warned investors about a massive write down in its us nuclear business. Yesterday the firm was supposed to be reporting its earnings but at the last minute, postponed the announcement and that wasnt the only surprise. At tokyo correspondent explains the days events. First we expected the announcement of big losses and then they cancelled the announcement and then we got a statement from the chairman saying he was resigning and finally we got these provisional figures which include a 6 billion loss at toshibas north American Nuclear division. We wont get the full results but it is clear that toshiba is in serious financial straits. What happens now to toshiba is unclear. The japanese government may step in to rescue the company, it could be broken up but the real question nobody is sure about is what will happen to its north American Nuclear division which is deepin American Nuclear division which is deep in debt and still is constructing for Nuclear Power pla Nts Constructing for Nuclear Power plants which are halfway through construction. What is really clear is nobody wants that business, there are no potential buyers apart from perhaps the japanese government. One unit that is attracting interested buyers is its memory chip business. It isa buyers is its memory chip business. It is a crown jewel of the firm but the boss of toshiba said in a Press Conference that he was willing to be flexible about its fate. Our memory chip business, we want to secure resources which will spur future growth. We are thinking very flexibly which means we will not fixate on having Majority Stakes in the business and will consider introducing external capital with a flexible mindset. Journalists expressed frustrations with one saying, what also you hiding . If you wa nt to saying, what also you hiding . If you want to read about it, go to our asian business correspondences blog and she explains the official results will be released on the 14th Of March and if the companys debt and Corporate Governance situations arent improving, its shares could be demoted with a second section of the Tokyo Stock Exchange or even delisted. The Indian Space Agency is attempting a world record by launching 104 satellites in the one go. Its commercial Launch Operations are much cheaper than any other country and its creating a thriving ecosystem for privately space programmes. We visited one of them. Its a race to the moon to put the privately funded space craft and indias team nimbus is one of the finalists. They are betting they will get there first. This is a small rover built i team team indus and it has been to simulate the moons service. I will try to control it with my phone. Its not meant to be fast. If it is successfully achieving this for 500m on the moons surface, it stands to wina on the moons surface, it stands to win a prize of 20 million. The team is taking part in the Lunar Price Challenge funded by google. It has signed a deal to hitch a ride on one of the indian governments rockets. Mission control is already in place. Target launch date, december this year. Once we accomplish this and prove what we can do by way of design and integrated integration and prototyping, we can turn around and prototyping, we can turn around and offer these services to other folks who might be interested in space exploration. They will have tough competition. For other teams are also in the race. Israels space cell, synergy moon and a team from japan also have contracts to launch this spacecraft. Go into the moon is not cheap. Team indus says their Mission Costs about 60 million so evenif Mission Costs about 60 million so even if they win, they have still lost money. Prestige and National Glory is priceless. Thank you for investing your time with us. See you next hour. By the now. Daesh goodbye for now. The headlines this hour. The half brother of kim jong un has the headlines this hour. The Half Brother Of Kimjong Un has been killed in relation capital of kuala lumpur. He is believed to have been poisoned. The white house as the Donald Trumps National Security adviser, michael flynn, discussed nothing illegal with his contact with the Russian Ambassador but resigned over an erosion of trust. Inflation reached a 2. 5 year high in january. The Consumer Prices index rose to 1. 8 january. The Consumer Prices index rose to1. 8 up january. The Consumer Prices index rose to 1. 8 up from 1. 6 . The rise has been driven in the increases in the cost of food and fuel. The price of Raw Materials and fuel the factories is up 20 because of the fall in the value of the sterling since the brexit boat. Prices may be up, but it is not yet the consumer who is being squeezed hardest. It is the company that sells you the goods, and even more so the companies that produce them. This east london brewery has boosted prices by 5 , but its costs have risen twice as fast. Weve got Auto Enrollment for the pensions coming in this year, we have a huge Business Rate increase this year. Our staff overheads are significant. And, on top of that, weve now got a weaker pound, so our imported Raw Material Price is going up and up. In the shops, prices rose by 1. 8 , but further up the supply chain, Inflationary Pressure is building. The price of goods leaving the factory, wholesale prices, are up by 3. 5 . And producers arent yet passing on the much higher cost of Raw Materials up by more than a fifth. The Inflation Figure announced this morning, at 1. 8 , is still below the Bank Of Englands target. The Bank Of England Monetary Policy committee is seeking to manage inflation to maintain itself at or around 2 . So, when inflation is at this level, the economy should be working well. It is worth remembering weve been through one of the tamest periods for inflation since the 1960s. The price of food overall is down 2 on two years ago, and if you take vegetables, like potatoes, down by 4 . The key question is, with Petrol Prices rise by 17 , when will these prices start to go up again, and will our wages keep up . In a report to be released tomorrow, the anti Poverty Charity thejoseph Rowntree Foundation fears they wont. All over the country, people are really struggling right at the moment to make ends meet. Theirfuel prices are going up, theirfood costs are going up, their Heating Bills are going up. And, if we see this increase in inflation keep going, we predict we could cost rises of nearly 10 . That means we could see almost 4 million more people tipped from just managing into poverty. Hello, this is sport today, live from the bbc sport centre. Coming up on this programme birthday delight, as Angel Di Maria and Edinson Cavani score in a 4 0 Champions League win Over Barcelona. While benfica secure an opening leg advantage, winning1 0 at home to borussia dortmund. And tempers explode at boca juniors training, with the new season due to get under way in argentina. Hello and welcome to the programme, where we start with news from the opening legs in the last 16 of the uefa Champions League from tuesday. Paris st germain were comprehensive 4 0 winners Over Barcelona at parc des princes, and will go into the second leg knowing no side has managed to overturn a four goal first leg deficit in the history of the Champions League. Angel di maria, on his 29th birthday, grabbed the first and the third goals for the french side, with Julian Draxler also on the scoresheet. And it was another player celebrating a birthday, Edinson Cavani, who turned 30 grabbing a fourth