Return to Transcripts main page


World Business Today

Aired January 27, 2011 - 04:02   ET


PAULINE CHIOU, CNN ANCHOR: Hello from CNN Hong Kong. I'm Pauline Chiou.

CHARLES HODSON, CNN ANCHOR: Good morning from CNN London, I'm Charles Hodson.

JOHN DEFTERIOS, CNN ANCHOR: And live from the World Economic Forum in Davos, I'm John Defterios. A very warm welcome to WORLD BUSINESS TODAY from the bone-chilling Swiss Alps. Here are the top stories on Thursday, January 27th.

Kazakhstan Prime Minister tells CNN how he plans to become a major player in the oil industry by 2020.

CHIOU: From a new reality in Davos, the next generation in hand-held gaming. Sony promotes its powerful follow-up to the PlayStation Portable.

HODSON: And stock market surge after the Dow reaches the 12,000 mark for the first time in two years.

DEFTERIOS: The World Economic Forum is now underway here in the Swiss resort town of Davos and some of the biggest name in the political and corporate world are on hand to talk to us. President Sarkozy of France will take the stage in one hour to talk about his plans for the G-20. We've already heard from some of the key players including Russian President Dmitri Medvedev whose arrival was late because of Monday's airport bombing in Moscow.

Also, at the podium was the events founder Klaus Schwab who delivered this upbeat message.


KLAUS SCHWAB, EXECUTIVE CHAIRMAN, WORLD ECONOMIC FORUM: This meeting shall be a meeting of recognizing realities. We are not moving back to the old world. This meeting shall be a meeting of constructive optimism.


DEFTERIOS: Later in the program we'll be talking to the head of one of the biggest companies in India and we'll be hearing from Standard Chartered Bank chief economist Gerard Lyons and his ideas about an economic super cycle. HODSON: Let's take you on to the European stock markets now open for about an hour and interesting to see what's happening, following that decent run up on the Dow. We are actually seeing a little bit of money coming off the table. It started flat but we are now looking at loses of around about a quarter to a third of a percent for London, Paris and Zurich, slight gains for the Xetra Dax.

But we were going to have trades in Europe and the United States having an eye on some heavy hitters. Astra Zeneca, Ford and Nokia all due to report their earnings on Thursday and was noting actually Novartis is losing ground after its financial results outlook failed to excite. So that explains a little bit of why we're seeing loses on the Zurich SMI.

Moving on to the currency markets and the euro has been slipping a little bit against the dollar in (INAUDIBLE). But the main item here to look at is the Japanese yen. Pauline, I know, is going to have a little bit more on this in a moment. But S&P has done great in Japan from AA to AA minus in terms of its sovereign debt rating and that is hitting the yen. Currently, at 82.81 against the dollar. Pauline.

CHIOU: Yes, that's right, Charles. That news from (INAUDIBLE) just crossed about an hour ago and (INAUDIBLE) saying that it downgraded Japan's credit rating because it expects that Japan will struggle with its fiscal deficit for several more years but this came out after the markets closed. So we'll see how the Nikkei reacts tomorrow on Friday morning here on Asia. But for the meantime, here's how it looked at the end of Thursday session.

A weaker yen gave Tokyo quite a boost there. The Nikkei gained a 0.75 percent. New economic data shows that Japan's export rose more than expected in December, up 13 percent from a year earlier. Shanghai also got a lift from resource related stocks. It gained nearly 1.5 percent there but here's the thing, property stocks fell in Hong Kong and Shanghai after Beijing, on Wednesday, said it will increase minimum down payments again for second home purchases to 60 percent from 50 percent. Now this is in order to rein in that property bubble going on in China. The Hang Seng in Hong Kong feel about a quarter of a percent and Sydney finished relatively flat on its first day back from holiday.

Well, it was a big day on Wall Street on Wednesday. U.S. investors (INAUDIBLE) reports on better than expected new home sales and the U.S. Federal Reserve's decision to leave interest rates unchanged. Optimism sends the Dow above that psychologically important 12,000 mark earlier on in the session. The Dow and the S&P 500 finished both at their highest levels since 2008 and here's how it looked at the close.

The Dow gained just eight points to finish at 11,985 so just 15 points shy of that 12,000 mark. The NASDAQ gained 0.75 percent and the S&P 500 added about 0.5 percent there. And as expected the U.S. Federal Reserve said it would leave interest rates at historic lows while moving forward with $600 billion in bond purchases or QE2 and we got reaction from the New York Stock Exchange trading floor on that.


KENNETH POLCARI, MANAGING DIRECTOR, ICAP CORPORATES: They were waiting to see if they were getting bearish in their commentary which they did not although the QE2 is going to go right through its completion. So it's going to take us until April or May. So I think the traders were much more worried about what the fed was going to say in terms of what's happening with jobs than what's not happening with jobs at the back of Obama's speech last night and so I think today that traders and the investors were actually kind of unfazed. I don't think it took anyone by surprise.


CHIOU: Meanwhile, earnings will continue to play out in the markets as AT&T, Procter and Gamble and Microsoft prepare to report on Thursday. And right now, the U.S. market looks at a lower open when trading begins later on today and this is where U.S. futures stand in pre-market action, just slightly down to the downside by just about two-tenths of a percent for all the indices.

Well, the U.S. government continues to struggle with the budget it can't afford. Our big number today is $1.5 trillion. That's how much the U.S. federal deficit is expected to reach this year, which is the biggest shortfall in history. The U.S. Congressional Office says tax cut extensions and a generally weak economic recovery are driving it higher. Charles.

HODSON: Adding to the U.S. budget deficits are the billions of dollar that it appropriates for overseas aid. Egypt is one of the countries that benefits. The United States provides Egypt with more than $1.3 billion in military aid every year. Egyptian President Hosni Mubarak has been a U.S. ally, a staunched one. But now, many of its citizens want him out.

Protests and political unrest have plagued Egypt this week and its hurting business as well. The Egyptian trade and industry minister cancelled his visit to the World Economic Forum in Davos without saying why and the country's stock market tanked more than six percent on Wednesday. It's down about 12 percent for the year.

So let's have a quick check in. I will look at the EGX30, the top 30 Egyptian stocks. No we don't seem to have that. Anyway, investors are worried about government stability after similar demonstrations that forced out Tunisia's president.

Here we are - off by another six percent, it would seem today. So that (INAUDIBLE) it means that it's off by nearly 20 percent this year. Meanwhile, another large protest is being planned in Egypt for Friday.

Well, let me bring in John actually over there in Davos because I know that the Egyptian minister, the Egyptian trade minister has been quite a friend of the program over the years there but he's staying away.

I guess, John, the thing that must worry the Egyptians most is the fact that really now Washington is saying "You better shape up, you better reform" and now that there's a question mark coming from that direction, it does put a lot of pressure on Mr. Mubarak, I would say.

DEFTERIOS: That's for sure, Charles. And it's a discussion here in the halls of Davos. There are two interesting parallels, obviously, because I cover the Middle East. Number one, the economy there, the government has been reforming an Egypt on the economic front and that's been the same case with Tunisia on the economic front for the better part of seven years, a growth of five to six percent a year but the problem is we haven't seen the political reforms.

So they've been very frustrated by the fact they have not seen this trickle down. A quarter of the population is still below the poverty line in Egypt despite the fact they have been reforming over seven years and the headline growth numbers looked very good.

The other interesting parallel is that Tunisia only has a population of about nine million. Egypt the most populous country in the Middle East had 80 million. And perhaps word doesn't spread as fast. And the discussion here in Davos right now is that the security apparatus that President Mubarak has is much more fortified and ready to respond. There are 850 arrests already yesterday.

So business leaders are watching it very carefully. And the question that comes up time and time and time again, they have to declare the transition. What's going to happen to the presidential elections in November 2011? And that's the big question right now. Is (INAUDIBLE) Mubarak on the scene? They think it's going to change dramatically as a result of what we've seen over the last three or four days and what people are calling a Twitter and Facebook revolution.

I also understand from sources that Facebook and Twitter were shut down and most people relying on SMS transmissions to communicate with each other. So Charles, a very tenuous situation. From the business standpoint, they want to know what's going to happen, of course, in the autumn, during the presidential elections.

HODSON: Yes, that does indeed seem very unclear. Well, John Defterios, we'll be back to you later but meanwhile, you've mentioned Tunisia, John. And that country has issued an arrest warrant for its deposed president, his wife, several other family members. Zine El Abidine Ben Ali fled Tunisia as mass protests against his rules spread across that country. The International Police Agency, INTERPOL, is on the lookout for him worldwide.

Protesters fought with riot police again on Wednesday even as the embattled interim government struggled to end persistent demonstrations. In the old part of Tunis, young protesters threw stones at officers who responded with tear gas. The protesters want every member of the old regime removed from government. Interim leaders are still promising to reshuffle the cabinet but that appears to being delayed. The country's deep economic problems led to the political upheaval and those problems are getting worse.

Tunisia is heavily dependent on tourism. It's an important part of the economy and the tourists are staying away and pictures like these aren't going to get them there very quickly. Some say if Tunisia can achieve civility and democracy, it could become a right location for future investment, future probably, I think, underlined in the minds of many people in business.

Well, Lebanon is also trying to pick itself back up after violent demonstrations against the newly designated Hezbollah-supported prime minister. While few are predicting Lebanon will seek back into all- out conflict, there's worry that its resilient economy could not falter again.

Nic Robertson shows us a real world example.


UNIDENTIFIED MALE: Thanks for coming.

NIC ROBERTSON, CNN SENIOR INTERNATIONAL CORRESPONDENT (on camera): Thank you. That's an amazing view.

DANNY KHARRAT, REAL ESTATE CONSULTANT: Yes, this is one of our tower buildings.

ROBERTSON (voice-over): I'm getting a look at the side of Beirut that rarely makes the headlines.

KHARRAT: It's a bit foggy but you can see the snow, you can see the new phase two of (INAUDIBLE) coming in. And this is in (INAUDIBLE). So this is really a unique location.

ROBERTSON: Booming development from the city's civil war bomb sites. This one a top end apartment overlooking the Mediterranean.

(on camera): How much will you sell to me for?

KHARRAT: For you, for nothing.


ROBERTSON (voice-over): Just a joke. Real price, $8 million. Although I'll never be one of them, no shortage of buyers until the government began to fall apart.

(on camera): So in the last 10 days, your phone rung less?

KHARRAT: It rung less but we're confident and (INAUDIBLE).

ROBERTSON (voice-over): (INAUDIBLE) has the (INAUDIBLE) realtors worldwide and with good reason. Over the past decade, Beirut has been a buoyant market with healthy margins but even this seasoned optimist is worried about today's political divisions.

KHARRAT: Really, really today you're coming at a very critical time but if you come, let's say within a month from (INAUDIBLE) you will find our phones ringing, we're fine. We're going back to normal life.

ROBERTSON (on camera): You don't have to go far from this new construction to get an idea of what's at stake here in Lebanon. Look up there, that's the old Holiday Inn Hotel. It bears all the scars of 15 years of civil war. (voice-over): Veteran banker Francois Bassil made money in those years. His fear of the current crisis, not the fighting but the political vacuum.

FRANCOIS BASSIL, CHAIRMAN, BYBLOS BANK: The state can't continue. We have a weak (INAUDIBLE), huge of amounts of debt maturing this year.

ROBERTSON: Almost $16 billion, and no government to take decisions.

(on camera): How long can it last before the economy starts to go into freefall?

BASSIL: Frankly, we don't know. Frankly, we don't know. We are hoping to (INAUDIBLE). We are hoping to have happen something.

ROBERTSON (voice-over): That something building a new government and fast.

Nic Robertson, CNN, Beirut, Lebanon.



DEFTERIOS: Welcome back to WORLD BUSINESS TODAY. I'm John Defterios in Davos, Switzerland.

CHIOU: Sony has announced that it will debut a new handheld portable PlayStation gaming device just in time for the 2011 holiday season, quite a way though at a Tokyo media event. It showed a video of a prototype but it didn't actually unveil what it's calling its next generation portable entertainment system. As some analysts have predicted, Sony said the PlayStation will feature high end graphics, 3G, Wi-Fi connectivity, a touch screen interphase and two analog sticks to help you play a wider range of games. The company did not reveal the price, however.

On another note, Sony also announced a new suite of software to enable PlayStation games to play on portable devices with the Android operating system on some tablets. So exciting news for gamers coming out of Asia, Charles.

HODSON: Well, indeed. Well, let's stay with Asia and perhaps no one on earth is feeling the new realities of the global economy more than China, gamers or otherwise. Its remarkable growth, of course, has empowered a generation of young people who love to spend on those devices and other things and they have the money to do it, what's more. But that doesn't mean that they're spending freely as Eunice Yoon shows us from the city of Ningbo, Shanghai. They're teaming up to drive a hard bargain.


EUNICE YOON, CNN CORRESPONDENT (voice-over): Like most people Chinese office worker Jin Feng loves cruising for a good bargain. And in China, he has a new way of finding them. Every day he surfs the internet, buying almost everything at a discount, including his new Audi. He saved $1,500 on his car.

JIN FENG, GROUP BUYER (through translator): My family was so thrilled to save that much money, he says. They told all their friends and now they want me to help them score good deals.

Reporter: Jin is part of a growing number of young Chinese obsessed with discounts and deals. These new spenders are also clipping coupons giving them the nickname the coupon generation.

PT BLACK, CONSUMER RESEARCHER: People have gotten wealthier but we're still not talking about necessarily buying luxury goods across the board. So every penny counts and using their money smartly is definitely something to look up to.

YOON (on camera): Group buying is the latest craze. People are coming together to buy things in bulk even big ticket items like cars and houses.

(voice-over): To buy his car, Jin connected with four strangers on one of over 1,000 web sites across China, competing to be like Groupon in the U.S.. These sites hook up people looking to buy the same thing so they can lobby for hefty discounts, an irresistible draw for China's 140 million on-line shoppers.

FENG JUNMENG, MANAGER, TEAMBUY.COM NINGBO (through translator): People here have a tradition of haggling and nowadays just one person can't get prices down much, this manager says. With group buying you go in together and get far better deals.

International brands like Mercedes are benefiting from the frenzy. The luxury automaker arranged a group sale of its smart cars on Chinese e-retailer, (INAUDIBLE). It sold more than 200 cars in less than four hours. With so many new startups, the government is talking about regulating the boom but for people like Jin, discount shopping is already a new way of life.

FENG: I'm at that age about time to get married, he says, so I've got to start looking for a house, which he plans to buy once he finds a cut rate group deal.

Eunice Yoon, CNN, Ningbo, China.



DEFTERIOS: Welcome back to WORLD BUSINESS TODAY. We're in Hong Kong, London and Davos, Switzerland.

The former Soviet state of Kazakhstan is on its way of becoming a major factor in global oil production. Huge oil deposits have been discovered in Russia's number two producers investing billions of dollar in the country. Kazakhstan goal is double production by the end of the decade. I asked the prime minister Karim Massimov here in Davos whether that's realistic.


KARIM MASSIMOV, PRIME MINISTER KAZAKHSTAN: Kazakhstan is exporting now 1.5 million barrels a day. This is the real figure and within our program by 2020, in the next decade, we are going to double the size of our export to three million barrels a day. And the major impact for the development of Kazakhstan project which is a huge project, $160 billion investment. And this plan is realistic.

DEFTERIOS: You're trying to tap into a much wider market. Customs union with Russia and Belarus (ph). This is a market of 15 million consumers and the size of western Europe to play a much larger field in the next three to four years.

MASSIMOV: First of all our target is to join WTO within a short period of time and our ambitious plan is to be part of OECD, to be within the club of OECD countries. And custom union is a good opportunity for us, for our export markets because we are small (INAUDIBLE) country and it is difficult for us to develop with our potential markets.

DEFTERIOS: How do you balance the demands of China wanting the pipelines, Russia wanting some of the energy and western Europe, geo- politically, are you balancing that?

MASSIMOV: Kazakhstan is situated in the (INAUDIBLE) with Russia on the north, China on the east, Middle East countries around us, western Europe and with the three million barrels a day, we can have export everywhere and even this market is not big enough for us. We have plans of even further expansion.

DEFTERIOS: You had one percent growth or just over that in 2009 and then phenomenal growth of eight percent coming out of the global economic crisis and after the bank restructuring, what is realistic would you say going forward?

MASSIMOV: According to our estimate plan, growth for next three, five years will be about five percent, this is very conservative -

DEFTERIOS: It is a conservative approach.

MASSIMOV: I think it will be a much bigger growth but what is important is not growth itself but continuation of a structure in institutional reforms, to make this growth sustainable.

DEFTERIOS: Final question, the Asian winter games launching this weekend, Russia got the World Cup, Qatar for 2022. A symbol, I think you hear at Davos, of all these discussion about emerging markets, but capturing the Asian Winter games is quite a landmark for you, I would imagine.

MASSIMOV: This is right and especially after this economic crisis, the role of emerging markets is increasing. You see winter games in Russia, Soccer cup in Russia, Qatar, Kazakhstan is a smaller country and our first goal is successfully launch Asian winter games this weekend and this will be successful and then we have even more ambitious plan. (END VIDEOTAPE)

DEFTERIOS: Once again, Karim Massimov, the prime minister of Kazakhstan and this march by Kazakhstan to go from 1.5 to three million barrels a day. The other interesting news out of that interview is the target to be an OECD member and also complete its membership to the WTO.

We have some breaking news coming out of Cairo today. After the protests that we saw and the sharp fall of the stock market yesterday, one of the emerging markets, one of the emerging markets that we're talking about here in Davos, has now suspended trading. 10:40 local time, the Egyptian stock market was down another 6.25 percent after the fall of six percent yesterday on top of the very sharp falls that we saw after the Tunisian revolution as it is being called now unfolded.

So now, the breaking news out of Egypt. The authorities there have suspended trading with a fall of 6.25 percent. We're talking about this with Charles a little bit earlier. We're looking to see what's going to be the plan near term, of course, with the presidency of Mr. Hosni Mubarak who has been in power there for 30 years. But longer term, presidential elections due in November of this year. What's the plan? Is it going to be a hand over, an attempted hand over to his son, Gamal Mubarak, open elections and we know that the Muslim Brotherhood party has about a quarter of the seats in the Egyptian Parliament. We're watching to see what's going to happen there. Events unfolding very quickly.

In fact, during the halls here - in the halls of Davos, there's a discussion about the suspension of Facebook and Twitter in Egypt. And in fact, some of the CEOs here, I've talked to technology CEOs from Silicon Valley, how things have changed so dramatically it even surprised them, the influence it's having on north Africa.

When we take a break, right now, we're going to come back and look at one of the fast growing economies in the world as well, growing 9.5 percent for 2010, going from $1.6 trillion to $30 trillion by 2030. A closer look at India when we continue on WORLD BUSINESS TODAY.


CHIOU: Welcome back to WORLD BUSINESS TODAY. I'm Pauline Chiou at CNN Hong Kong.

DEFTERIOS: From the World Economic Forum in Davos, Switzerland. I'm John Defterios.

HODSON: And I'm Charles Hodson at CNN London. Let's look at the European stock markets, 92 minutes into the trading day and we were seeing after flattish start. We're seeing a bit of money coming off the table.

A little bit less money it seems coming off the table in the case of the London FTSE. Still looking at losses about a fifth of a percent Paris CAC 40, Zurich SMI off about a third of a percent, Novartis has been losing ground there of its results and that look disappointed and just edging up a tiny there for the Xetra DAX in Frankfurt.

Well, the Greeks or at least their government will be on tent hooks today as a team of European Union and International Monetary Fund inspectors head for Athens. They're visiting to decide whether to pay Greece a fourth installment of bailout money.

Their decision will depend mainly on how much the government has reformed labor relations. They're also be looking for change at Greece laws making public companies polling.

CHIOU: Well, here in Asia. The market looked pretty good for the most parts. The Nikei in Tokyo gained three quarters of a percent. New economic data shows Japan's exports rose more than expected in December, up 13 percent from a year earlier.

But after the close, Standard & Poor's announced its downgrading Japan's sovereign credit rating to AA minus because of its fiscal deficit problems.

On the other hand, Shanghai got a lift from a resource related stock that gained nearly one and a half percent, but property stocks fell in Hong Kong and Shanghai after Beijing said it will increase minimum down payments for second home purchases to 60 percent from 50 percent. This is the draining that housing bubble going on there.

The Hang Seng in Hong Kong fell about a quarter of a percent and Sydney finished relatively flat on its first day back from holiday from Australia day.

In the meantime, Australia's prime minister just introduced a one-time income tax to help cover cost from the recent flooding disaster. Half a percent will be levied on anyone earning more than $50,000 to $100,000 and one percent income tax from income of anyone earning $100,000 or more.

Now the tax will not apply to those directly hit by the floods and after this, Charles and John, the Aussie dollars slipped after the announcement was concern about pressure on domestic spending in Australia.

HODSON: Let's - let's - John, let's bring you in. You were told - telling us a moment ago about the decision to suspend trading on the Cairo Stock Exchange this morning after a sharp drop.

In fact, I think we just checked in on that exchange. Now, I think that the losses were 6.2 percent. On top of 6 percent since the crisis erupted and - the markets down by about 20 percent or more, kind of a full conclusion that they should suspend trading I would have thought. What would you say?

DEFTERIOS: Well, it's interesting Charles - because this is unfolding exactly the way many of the business community here at Davos who have investments in the largest market (INAUDIBLE) of 80 million people did not want to see happen.

They've been this trial a couple of years ago when President Mubarak fell ill when he had a very severe flu and everybody was eager to see what the response would be and the military stepped in very quickly at that stage.

But events are unfolding very, very quickly because of the social media on Facebook and in Twitter. I was talking about is it's cool (INAUDIBLE) the opposition very, very fast. So right now, in the last three or four days, it seems it changed so quickly. We don't know what the game plan is going into the presidential elections for November of this year.

Now the understood plan within the business community is the Gomal Mubarak, his son, was going to take the reign of power beforehand or after the election. But for the business community it was predictable what was going to be the transition.

Now after what's unfold in the last week throughout North Africa that has changed completely. It's also worth noting, even though the party was not listed as an official party, the Muslim Brotherhood, it commands about 25 percent of the Egyptian parliament.

So we're in the unknown, literally, the unknown for Egypt right now and something that many of the business community here in Davos were fearing to be very, very candid. Egypt, the population of 80 million consumers has been reforming for seven years, its average growth of five percent during that timeframe.

The stock market one of the better performance stock markets in North Africa as well, Charles, as you know and it's been growing five sometimes as high as seven percent and sucking in a lot of foreign direct investment because many of the global international companies have been wanting to leverage that market of 80 million consumers.

It's also worth noting that Egypt had a very good relationship with the United States in terms of the support it gets financially, but also with its agreement with the U.S. in terms of lower customs. And it has a customs agreement within the European Union, which has made it more attractive to the multinationals that go into that market.

So again, not to over play it, but a drop of six percent after the drop of yesterday of six percent and now suspending trading is a territory nobody thought we would been in just three or four days ago.

HODSON: Yes, well, John. Thank you. It seems we're not going to be in there for very long and that after a pause we are going to see that trading resume. But I have to say that if the lesson from both Egypt and from Tunisia is that you can reform politically, but don't imagine that that will sure up your position in the longer term politically.

That is the lesson that I think will have to be learned in one or two places in Asia. John joining us - we'll be - we'll be back with you again. Pauline, meanwhile, back to you.

CHIOU: All right, thanks so much, Charles. We're going to check out how Wall Street did on Wednesday. The U.S. markets all finished higher then, and the Dow and the S&P 500 hit levels, they haven't seen since 2008. Alison Kosik wraps up the day on Wall Street. ALISON KOSIK, CNN CORRESPONDENT: A return to a milestone for the Dow. The blue chip average crossed 12,000 for the first time since June 2008. It's the latest benchmark for an impressive rally that begun back in August when the Federal Reserve started hinting at new stimulus measures.

The fed released its latest policy decision Wednesday. The Central Bank said the economic recovery is trudging along, but not in a fast enough rate to bring down unemployment. In its effort to lower the jobless rate, the fed says it will continue its policy of quantitative easing and leave interest rates at historic low.

Investors yawned at the unsurprising fed statement, but stocks held on to modest gains. The Dow rose eight points and spent much of the day above the 12,000 mark, but closed about 16 points shy of that mark.

The Nasdaq gained three quarters of a percent and the S&P 500 added about a half percent. Disappointing earnings from Boeing held a gain in check. Boeing reported an eight percent drop in profit badly missing Wall Street expectations.

The company said delays in its new 787 Dreamliner and higher pension expenses will hurt its 2011 profit. The Dreamliner has been a nightmare so far for Boeing with one delay after another on the project. Boeing shares lost three percent.

Telecom giant AT&T and consumer products maker Procter and Gamble highlight Thursday's earnings calendar and Microsoft reports late in the day. On the economic front, we get the weekly jobs report on jobless claims and December orders for durable goods.

That's the wrap of the day on Wall Street. I'm Alison Kosik in New York.

DEFTERIOS: Well, China may have been hugging the headlines recently, but let's not forget about the other emerging giant so we say it, India. India's government expects the country's economy to grow around nine percent in 2011.

Standard Charter Bank says it will be the world's third biggest economy in less than 20 years' worth a staggering $30 trillion that's double the size of the U.S. economy in 2010.

Driving that growth are people like my next guest, the Mahindra Group's chief executive, Anand Mahindra who runs a conglomerate that's in businesses from automaking to financial services.

Let's walk in with him now to WORLD BUSINESS TODAY. Nice to see you again, Anand.


DEFTERIOS: Yes, thanks for joining us. First off, let's go to the headline numbers of India, nine and a half percent growth for 2010 probably about eight and a half, nine percent for 2011. It sounds like a silly question, but is it almost too fast for this economy to absorb all that growth and capital coming in?

MAHINDRA: No, I think if you look at the normal competitor, which is China. China grew above 10 percent for a very long time. In India, I don't think we can have - we have a problem with nine. I think if you go to 10 percent, that's when you're going to problem with the supply side.

Because if you - our infrastructure has not moved as fast as China's. You're a democracy, you cannot struggle of then create bridges and highways thinking that's the way I like it. But I think, yes, you're right that that kind democratic frame behind us, above nine might require some special care and handling. So I'm very comfortable with nine and I think we'll achieve it.

DEFTERIOS: As you know, the Central Bank raised interest rates to kind of stay ahead of (INAUDIBLE) on the inflationary pressures. Good inflation range in anywhere month to month, 15 to 20 percent. That's going to put a squeeze on those who were trying to enter the middle class no doubt.

MAHINDRA: Well, you know, I think we have one of the finest administrators in macroeconomics anywhere in the world. Our finance minister and the reserve bank are excellent managers. What I think they did the day before was to give a signal that they're going to attack core inflation. All they did was raise it above 25 basis points.

DEFTERIOS: The market was expecting 50, and I think what they did was signal that look, our dragon that (INAUDIBLE) here is long term inflation.

We're not going to react to (INAUDIBLE) crisis and (INAUDIBLE) crisis is a problem of short term dislocations of infrastructure. So I think they're doing a pretty good job. Of course, any hike in interest rates will slow down growth to some extent and I think the rest of the world takes comfort from this very proactive management of the economy.

DEFTERIOS: Let's take a pause here and bring up a graphic. I don't know if I can. Looking at the scoop and the scale of the emerging markets of the global economy today, of course, including India.

If you go back to 2000, it was about a quarter of the global economy looking now at about a third, 34 percent. By 2020, emerging markets making up 55 percent and look at the scale at 20-30 if we're in the super cycle that people have been talking about.

Sixty nine percent of the global economy will be from emerging markets. It's a phenomenal cycle of growth we're in right now as a conglomerate that's in a number of different businesses. How you harness that growth most efficiently in your home market?

MAHINDRA: You know, how do you harness it would be a compliment. It would mean almost like there's (INAUDIBLE) holding the range. We're like surfers. You're just surfing this wave because it's carrying us along with them.

I'm very fortunate that the conglomerate as you used it. I used another word. I used a word federation because we're a group of separate companies, but each of our companies are in various touch points of the economy.

Most notably we are very, very hook to the rural part of India, which is where all the growth is going to take place. So 65 percent of India's population still lives in good levels. They're hungry for growth. They're hungry for growth. They want a better life and we are frankly surfing on the back of their consumption growth.

DEFTERIOS: A pretty good ride.

MAHINDRA: Absolutely.

DEFTERIOS: Nice to see you. Mahindra had to fight the traffic to get here to the interview spot on time. I appreciate your participation in the program. Anand Mahindra of the Mahindra Group. We're going to take a short break. That does it for our coverage right now here at Davos.

We're going to follow the session throughout the day. Nicolas Sarcozi is going to take the podium in about 15 minutes from now and we'll see you in the afternoon on WORLD BUSINESS TODAY. We'll be right back.


HODSON: Welcome to WORLD BUSINESS TODAY. Rescuers in Northeastern Columbia are expected to continue their search for survivors today at the scene of a deadly mine explosion.

Officials say at least 20 people were killed and six injured in Wednesday's blast. They say an unknown number of miners may still be trapped as deep as 1,200 meters underground. Local authorities suspect an accumulation of methane gas may have caused that explosion, Pauline.

CHIOU: Well, Charles, half a world away in New Zealand, the families of 29 miners killed in a coal mine explosion got an idea today of how their loved ones died.

A corners inquest into last November's Pike River Mine accident was held in Greymouth. TVNZ Lisa Davis had the details now.


LISA DAVIS, TVNZ (voice-over): The families of the dead at court to hear the first official answers about when and how their men died.

Wearing a yellow ribbon that once represented hope for the miners, the man in charge of the police operation read the long list of names of the men and when their loved ones last saw them.

SUPT. GARY KNOWLES, TASMAN DISTRICT POLICE COMMANDER: (Inaudible) John Walker, an employee of Park River coal mine saw Joshua after hitting towards a vehicle that would have transported into the mine.

DAVIS: Superintendent Gary Knowles told the (INAUDIBLE) police have interviewed 120 people so far including the only two survivors.

KNOWLES (voice-over): (Inaudible). He reported being different explosion.

DAVIS: He read testimony from four medical experts, all believed the men could not have survived the first blast due to asphyxiation, poisoning and burns.

KNOWLES: (Inaudible) coming unconscious as a result of acute hypoxic hypoxia almost immediately. They would have remained unconscious until death (INAUDIBLE) five minutes later.

DAVIS: The families' lawyers summed up reaction to that finding.

NICHOLAS DAVIDSON QC, FAMILIES LAWYER: The key elements, which are important to the family not because this is a finding which in the sense most important (INAUDIBLE) about one that is truly (INAUDIBLE).

DAVIS: The chief (coroner) who also saw video and graphics during the hearing sound accordingly.

JUDGE NEIL MACLEAN, CHIEF CORONER: The death of all 29 men occurred on the 19th of November either (INAUDIBLE) immediate time of the large explosion, which occurred in the mine for a very short time thereafter.

DAVIS: And so another hard day ended.

BERNIE MONK, FAMILIES' SPOKESPERSON: A lot of us cried and we're still crying inside. (Inaudible) we're going to start of the healing and we're going to move on.

UNIDENTIFIED MALE: It does help - a lot.

DAVIS: And families made another difficult step towards finding some closure.




CHIOU (voice-over): And you are looking at a beautiful sunset on this Thursday evening as the sun sets over the western part of Hong Kong island.


CHIOU: Live from CNN Hong Kong and London, you're watching WORLD BUSINESS TODAY.

HODSON: Well, flights are being cancelled and airports shutdown as the northeast in the United States get hit by another big snow storm. Let me throw this to Ivan Cabrera is at the CNN Weather Center.

I was going to say, it never rains, but it pours. But translate that to snow and I think you've got something more like the picture in the northeast in the U.S., Ivan.

IVAN CABRERA, CNN INTERNATIONAL METEOROLOGIST: Indeed, we're going to be digging out for weeks, months, and at this point here, we're waiting for March and April. No question about it. Good to see you there, Charles.

Indeed, another snow storm and we've got problems here. This one is also shutting down airports. If you're trying to fly in to JFK, it's not going to happen today or at least this morning.

Hopefully, we have better news as we head into the Atlanta part of the day here, but Newark is also closed. Newark expected to open at 1 and JFK is expected to open at 8 a.m. that is a local time here, but for now, this snow storm has in effect shutdown major airports crossing the northeast.

Here is the latest as far as some of the totals here and (INAUDIBLE) here, Central Park picking up of 38 cm that's 15 inches, just an unbelievable number in just 24 hours and that came with snowfall rates at about 2.5 cm or 1 to 2 inches at times an hour.

That it's just blinding stuff. Newark there at 36 cm or 14 inches. Here's the live radar of the storm. It's out of the way as far as D.C., Philadelphia is concerned and New York is now seeing the last of it here as the low begins to pull out.

Boston is still getting hit. Reporting heavy snow right now, reduced visibilities. We're down to a quarter mile that's going to cost problems here at Logan Airport as well. They're not shutdown, but just check in with your carrier if you're trying to fly in anywhere across the northeast corridor today.

Because not only that we're dealing with snow here, but also with some significant wind as well and that is likely going to cause some additional delays for you across the mid-Atlantic and the northeast.

The swath of purple here you see still looking at several inches of accumulation before all is said and done and then of course, going to stay rather cold and we are running out of space at this point across the region here as far as where we're going to put all of this snow.

But winter storm warnings are still posted here from New York heading into Boston. But conditions here - this is a fast mover, Charles, will begin to improve by later on today and once we get the airports reopened, we shall let you know.

HODSON: All right, well, Ivan. Thank you very much indeed and let's wish everyone luck with trying to get things back to normal level. It does seem like quite a task.

A quick look at the stock markets here in Europe and in particular, I could talk to you about Egypt where trading has now resumed, but the markets are continuing to fall. Let's see if we got some stock market numbers there.

In terms of European markets, the last time - we were looking at losses for the SMI and for - here we are. OK, losses for the SMI about a third of a percent. Paris coming back a bit still down slightly. London that is now in the positive territory, up about an eight of a percent and the Xetra DAX is extending its gains to a more respectable one third of a percent.

Just to reach rate that the Cairo market is open again, the EDX 30 though falling - again falling.

CHIOU: And that just about wraps it up for us. You're watching WORLD BUSINESS TODAY. Thanks for joining us. I'm Pauline Chiou in Hong Kong.

HODSON: I'm Charles Hodson in London. "WORLD ONE" starts now.