tv Asia Business Report BBC News February 6, 2018 1:30am-1:46am GMT
japan's nikkei is down by a% after the dowjones closes down nearly 1200 points — its biggest fall since the 2008 financial crisis. the us vice president mike pence is starting a trip to asia which is meant to show solidarity with allies and help south korea celebrate the launch of its olympic games on friday. and this video is trending on bbc.com... home surveillance video shows a dog sneaking a leftover pancake, but by doing so, the ignition button on the stove came on, causing something on top to ignite. luckily the alarm system called first responders before the fire spread and a friendship ensued. that story is popular on bbc.com that's all from me for now. stay with bbc news. and the top story here in the uk... the eu's chief negotiator warns the uk faces ‘unavoidable‘ trade barriers — if it leaves the customs union and single market after brexit. now on bbc news, all the latest business news live from singapore. asian stock markets have lowered in
the wake of two days of heavy losses on wall street. i am here at the singapore air show as asian countries beef up defence spending i have a lie in chief executive. -- live interview. it is tuesday, glad you could join us for another exciting addition of asia business report. we start off with a very volatile and crazy global stock market. and the rout has deepened this tuesday with asian financial
markets heading lower this morning on the back of heavy losses on wall street. this is where things stand at the moment. as you can see, the nikkei is down by over 4%. the all ordinaries index is in the red by 2.6%. for a perspective on this sharemarket rout i'm joined now by oui’ sharemarket rout i'm joined now by our asia business correspondent. 1000 points on the nikkei today. this carnage, this fall continues from yesterday's rout. as we have been talking about all morning this has come about as a result of rather positive economic news coming from the united states. it must seem counterintuitive, right? healthy economic growth in the us and the jobs market picking up with wages growing slightly and then all of a sudden money is being pulled out of aus sudden money is being pulled out of a us dog market and correspondingly
here in asia. the reason for that is that as the economy strengthens in the us, the expectations for inflation, the price of goods going up, has increased. so traders are expecting the us federal reserve, the central bank bear, to increase interest rates at a faster and 30 pace than they expected initially. that means the cost of borrowing goes up and things could come more expensive and money is buff pulled out of the stock market. it is a delicate balance. it is like investors wait, they are excelling, that moment has not happened yet. many are probably selling as a result of the fact that they are up by so much. we have seen such a sharp rise in us stocks out here in asia as well. many people think let me get out now and enjoy some of that money. go on a holiday, maybe. another reason why people are selling is because other people are selling. a herd mentality? exactly.
there is a sense that maybe i should get out of the market could things could get worse. but many traders i have spoken to with a long—term ‘s perspective on us equities and asian equities they say if you have a horizon of rival ten years these blips in the market should be seen as healthy correction, especially in the us market, many were concerned it was quite frothy and overvalued. the dowjones was up 31% since president trump took over and you have the s&p 500 are by 23% and the nikkei or at 26 year high as. the big test now is monetary policy from asia—pacific central banks. australia today and then the philippines and india later this week. when the us central bank had lower interest rates over the last ten years, asian markets and the asian economy were some of the biggest beneficiaries of that cheap
monetary policy, the easy monetary policy. in reverse we now see that era disappearing. no—one should really be surprised, it has been signalled for a year or so. central banks and governments now need to find a delicate balance, tweak their interest rate policies to make sure they do not prevent growth but are in step with the us at the same time. thank you very much for that update on the business markets here in asia. the share markets are wobbly and bitcoin is showing even more volatility. the currency is falling over 15% on monday, slipping below $7,000 for the first time since november. meanwhile, a south korean intelligence agency reportedly told the country's national assembly that north korea likely played a part in last month's massive theft from a japanese cryptocurrency exchange service provider. moving out of the singapore air show and companies are
planning to beef up defence spending an aircraft because of the south china sea and north korean ballistic missile threats. but who is buying, what are they buying and how much are they expected to spend? joining me now is mariko. over are they expected to spend? joining me now is mariko. 0ver1000 companies are here and we're not just discussing commercial airlines defence sector as well. we have seen robust growth in defence spending in the region. i have a little report, let's have a look. while most western countries are slashing their defence budgets, many asian budgets, governments are throwing money at it. china and india have doubled their spending in the last 20 years as well southeast countries like
indonesia, vietnam and a poor. keeping some perspective here, the us still comfortably spend more on planes, missiles and tanks than anyone else. 0ver planes, missiles and tanks than anyone else. over 600 and $40 billion last year. asia now accounts for over one quarter of the world's defence spending. so what has changed? simply, there are economies are growing and in this part of the world there is a lot going on. think north korea's nuclear missile threat. china's actions in the east and south china seas. and insurgencies throughout south east asia like the fighting in morale we. so what are asian governments buying? —— fighting in the philippines. there is investment in combat aircraft as countries expand and modernise their air force. combat aircraft as countries expand and modernise their airforce. and with the repeated tests by north korea, many countries in north—east asia are beefing up their ballistic missile defence. and while asia is the biggest importer of weapons in
the biggest importer of weapons in the wild, countries such as china and south korea are starting to become major arms exporters. it is not easy when your neighbours are increasing their defence spending. no country wants to be left behind. you will take a brave government in asia to slow down. 0ne company that is likely to benefit from that is salas and i'm joined by their chief executive. were talking about robust growth in defence spending in asia. how has that affected your company and can we expect some announcement this week? defence spending is have started to increase almost all over the world and in particular in this region. why would it be? is that because of growing economies all territorial disputes in the region? yes. and this generates a greater
needin yes. and this generates a greater need in terms of protection and safety. we have countries like china and india are doubling their spending in the last 20 years as well a south east asia. were starting to see some slow down. it is still growing but we are heartened to see a little slow down recently. are you concerned about this lowdown in the region? not really. we a re this lowdown in the region? not really. we are acting on long—term contracts and our markets are long—term. we are not concerned at all. what kind of things are asian countries interested in buying? in layman ‘s terms? countries interested in buying? in layman 's terms? as far as we are concerned, investment in their infrastructure. aviation, air traffic control, high—speed lines, this investment is there to sustain urbanisation and globalisation of the world. and while asia is still the world. and while asia is still the biggest importer of of those
weapons, countries like china and south korea are starting to export as well. and australia just announced they want to boost export as well. are you worried that they could potentially pose a threat to your business? not really because we are more local. we have seven or eight singaporeans working here and we benefit from a highly talented base here in the region. we recruit the best engineers to develop a local solution for the market and for regional economies and markets. at this hour show we are seeing many of the latest technologies. are you worried about cyber security? yes and no. it is a direct consequence of digitalisation. we inject more and more artificial intelligence into our wine markets and as a consequence you need to deal more
and more with cyber security. thank you so much forjoining us. that is all from us here at the singapore airshow. join us later. she will be joining us all week from the singapore airshow and we are looking forward to that. a quick look now at the asian market. a big hit after overnight falls in the united states. thank you so much for investing your time with us. sport todayis investing your time with us. sport today is coming up next. the top stories this hour. japan's nikkei index sinks more than 4% in early trading, its lowest level since the end of october. there have been further sharp falls in share prices in the united states, with the dowjones down by nearly 596. ministers have admitted they may have to renationalise the east coast main line as the current franchise is close to collapse. the transport secretary
chris grayling told mps the company is making significant losses but said there could be no question of a bailout. he insisted there would be no impact on day—to—day operations. the national audit office has already launched an investigation into the government's handling of the franchise which provides services between london and edinburgh, as our business editor simonjack reports. the east coast mainline has been heading for trouble for years. stagecoach owns 90% of the franchise, and virgin 10%. both companies wanted to walk away from the losses they were making in 2020, three years early. today it became clear they will be getting to the point of collapse even earlier. it has now been confirmed the situation is much more urgent. it is now clear this franchise will only be able to continue in its current form for a matter of a very small number of months and no more. that is because stagecoach has already lost £200 million running the line.
this company cannot be allowed to run this franchise and simply make a profit given what's happened. they got their sums wrong and they will pay the price for that, not the taxpayer. he said the option of full nationalisation was very much on the table. it wouldn't be the first time. the government profitably ran the east coast mainline from 2009 to 2015, after national express admitted defeat two years into a 10—year deal. the secretary of state was very clear that he didn't think either the travelling public or the taxpayer would be affected. stagecoach is the big loser. but that won't dampen the debate about whether a system that allows stagecoach to potentially keep on running this line, and get awarded an extra year on a profitable contract on the west coast mainline, is a system that is fit for purpose. you've got people over bidding, over promising, and then not delivering. and on the east coast mainline, we're saying that from 2020 to 2023, that's £2 billion that the treasury are not going to receive over that
period, as virgin and stagecoach promised. so the system is completely flawed and should be stopped. stagecoach admitted they got their sums wrong on the east coast. but the profitable west coast franchise was extended today from another two years. good news for its operators — who happen to be virgin and stagecoach. simon jack, bbc news. time now for all the sports news in sport today. hello, i'm gavin ramjaun and this is sport today — live from the bbc sport centre. coming up on the programme: chelsea are stung by the hornets — antonio conte's team are hammered 4—1 by watford in the premier league.
he's got the keys to the magic kingdom — the super bowl‘s most valuable player, nick foles, celebrates his match winning performance. and a loss of identity. the difficulties of adjusting to life after sport. we start in the english premier league — and the pressure is piling on chelsea boss antonio conte. after his side conceded three late goals in a defeat at watford — blowing the chance to go third. chelsea had a miserable start to the game — midfielder tiemoue bakayoko was sent off for two bookable offences. watford were then awarded a penalty. when thibaut courtois brought down gerard deulofeu. troy deeney converting. eden hazard equalised for chelsea.