21/10/2016 BBC Business Live


21/10/2016

Similar Content

Browse content similar to 21/10/2016. Check below for episodes and series from the same categories and more!

Transcript


LineFromTo

compensate for the plummet in the value of the pound. We want to know

:00:00.:00:00.

what we can do as consumers to fight those price

:00:00.:00:14.

rises? A warm welcome to the programme. We start in Brussels,

:00:15.:00:20.

where European leaders are meeting to try and save a free trade

:00:21.:00:23.

agreement with Canada. The comprehensive economic and trade

:00:24.:00:29.

agreement has put -- has caused a public backlash and is being blocked

:00:30.:00:34.

by a Belgian regional Parliament. The row has called into question the

:00:35.:00:38.

credibility of the EU when it comes to agreeing a major trade deals. A

:00:39.:00:43.

far bigger deal, the Transatlantic Trade and Investment Partnership

:00:44.:00:46.

partnership with the United States, has yet to be concluded. And there

:00:47.:00:50.

is the issue of a future trade deal with the UK following Brexit. CITA

:00:51.:00:57.

aims to eliminate 98% of tariffs between Canada and the EU and to

:00:58.:01:02.

boost the economy is by billions of dollars, but critics say a treaty

:01:03.:01:06.

will weaken European consumer rights. This is the problem,

:01:07.:01:10.

Belgium's government supports the deal but it cannot be signed off

:01:11.:01:15.

without the agreement of the country's regional parliaments as

:01:16.:01:19.

well. The mostly French-speaking region of loonie voted against CITA

:01:20.:01:25.

and last night refused to compromise despite new concessions. There are

:01:26.:01:29.

wider implications, the row demonstrates how hard it will be to

:01:30.:01:33.

do a post-Brexit trade deal with the UK, in the words of the EU's trade

:01:34.:01:44.

Commissioner... A big story is the situation with

:01:45.:01:52.

Petrobras, the state oil dried in Brazil were for two years, Petrobras

:01:53.:01:58.

has been at the centre of one of the's biggest corruption scandals.

:01:59.:02:03.

The new Chief Executive is the man now responsible for salvaging the

:02:04.:02:08.

company, no small task, he is selling assets and striking

:02:09.:02:11.

partnerships with foreign firms to bring in vital investments as Brazil

:02:12.:02:16.

has some of the largest offshore oil reserves in the world. He told our

:02:17.:02:20.

correspondent that in five years' time, Petrobras could be back to its

:02:21.:02:25.

former glory. We have just announced a new

:02:26.:02:30.

strategic plan, this is a plan for 2017 opted 2021. However, it was the

:02:31.:02:37.

easiest part because the most important one is to deliver the

:02:38.:02:41.

plan. I think that after this period, we will see the company back

:02:42.:02:49.

to its best days. You'd think foreign companies are willing to

:02:50.:02:53.

partner up with Petrobras? The company still has the image of

:02:54.:02:56.

corruption it is trying to shake off and there is the question of very

:02:57.:03:00.

high levels of debt and there is nothing to guarantee you will be

:03:01.:03:03.

here after two years because a new President will be elected in 2018.

:03:04.:03:09.

It is not a good idea to depend only on one person although I don't think

:03:10.:03:14.

it is work done just by one person, it is worked on by a team, working

:03:15.:03:19.

very hard to really see the company at the levels I mentioned before. So

:03:20.:03:26.

this two years, your work is to improve the institution, the

:03:27.:03:31.

organisation of the company. Can you give an example? Two years from now,

:03:32.:03:35.

a completely new political group comes into power in Petrobras and

:03:36.:03:40.

the company still runs with a state mindset, it appoints political

:03:41.:03:45.

people to key positions, but that's not happen again in 2018? What is

:03:46.:03:52.

important to know is we have changed a lot of internal rules related to

:03:53.:03:57.

the decision-making process. For instance, in the past, during the

:03:58.:04:00.

days in which the problems happened, you could take a very important

:04:01.:04:06.

decision to buy or to hire or to sign a contract by just one person.

:04:07.:04:10.

It is not possible any more. You need at least two Executive

:04:11.:04:17.

directors signing of this contract, you need at least five different

:04:18.:04:22.

committees assessing this operation. We do believe that these measures

:04:23.:04:26.

will make it very difficult for anyone that would come in the future

:04:27.:04:31.

to try to break up and do whatever they want. As it was in the past.

:04:32.:04:39.

That was Pedro Parente speaking to the BBC in South America.

:04:40.:04:44.

Other news now and a big breaking story today, British American

:04:45.:04:48.

Tobacco which produces things like Rothmans and Dunhill cigarettes, has

:04:49.:04:53.

made a merger of the two American company Reynolds that makes Camel

:04:54.:04:57.

cigarettes, the biggest deal by a British company in recent years,

:04:58.:05:04.

valuing get at over $47 billion. It already owns 42% of Reynolds and

:05:05.:05:08.

this offer is for the remaining 58% it does not. Sorry huge deal.

:05:09.:05:14.

Microsoft shares have gone up more than 6% to hit an all-time high

:05:15.:05:18.

after it reported better earnings than expected. It has been boosted

:05:19.:05:23.

by soaring sales from Cloud computing business as more companies

:05:24.:05:27.

shift away from owning their own hardware and storing data in the

:05:28.:05:30.

Cloud. Mobile telecom equipment maker

:05:31.:05:36.

Ericsson says North American sales have declined in the third quarter,

:05:37.:05:40.

highlighting the depth of the crisis it announced with its profit warning

:05:41.:05:43.

last week. It said it would introduce further cost-cutting in a

:05:44.:05:49.

deal with the weaker broadband market for its business as well.

:05:50.:05:57.

I just want to bring you this story, you might remember the dam that

:05:58.:06:02.

broke in Brazil, prosecutors in Brazil have charged 21 mining

:06:03.:06:08.

executives over that dam bursting which killed 90 people and polluted

:06:09.:06:13.

hundreds of kilometres of rivers. The men were charged with

:06:14.:06:15.

manslaughter and other environmental crimes. This is some Arco Valley

:06:16.:06:26.

Brazil, this was a huge scandal -- son Marko. It costs people, 90

:06:27.:06:31.

people, their lives, and it has caused huge amounts of consternation

:06:32.:06:36.

for those mining companies, so huge story.

:06:37.:06:38.

And you like this story! Yes, I was listening to this on the

:06:39.:06:46.

way in, the suit company must brass, school promise taking off in the UK,

:06:47.:06:51.

they have been shipped in for the United States -- from the United

:06:52.:06:55.

States, and schools here, the rise of the Proms has boosted Moss Bros

:06:56.:07:02.

because of people hiring suits and increasingly buying them.

:07:03.:07:10.

Glee has a lot to answer for that! Let's talk about what is going on in

:07:11.:07:17.

the Philippines, the President is in Beijing for talks on what he calls a

:07:18.:07:24.

new commercial Alliance with China. Yesterday, he announced a separation

:07:25.:07:28.

from the United States, the huge concern in Washington. The trade

:07:29.:07:31.

Minister of the Philippines has been trying to minimise the damage caused

:07:32.:07:36.

by the President, saying the company will maintain its economic ties with

:07:37.:07:41.

the United States -- the country. Our correspondent is in Singapore.

:07:42.:07:44.

Do you think there is support for the President's move to veer away

:07:45.:07:50.

from the US and towards China? I think it has generated more raised

:07:51.:07:55.

eyebrows than support because the Philippines and the US historically

:07:56.:08:02.

have strong partnerships which has stretched more than seven decades.

:08:03.:08:06.

The statements he made a mistake visits to China about time to say

:08:07.:08:09.

goodbye to America, they were separating, has caused a bit of

:08:10.:08:14.

shock in diplomatic circles. Rodrigo Duterte is known to be the Filipino

:08:15.:08:19.

version of Donald Trump who is also known for his controversial remarks.

:08:20.:08:24.

But this is quite a shock and we have has to see his top aides do

:08:25.:08:31.

some damage control, the Finance Secretary, the trade Minister,

:08:32.:08:35.

downplaying and contradicting his remarks, said the -- saying they

:08:36.:08:38.

will not break ties with the US but will maintain their trade and

:08:39.:08:42.

economic relationship. They are looking for stronger integration

:08:43.:08:46.

with neighbours like China. Mr Duterte signed a $13.5 billion worth

:08:47.:08:53.

of deals on state visits so he is forging strong integration with his

:08:54.:08:56.

neighbour. From Singapore, thank you.

:08:57.:09:04.

We have got the markets, the Asian markets were mostly lower on Friday,

:09:05.:09:08.

partly because of the dollar climbing to a seven-month high

:09:09.:09:12.

against a basket of currencies, dragging down the price of crude

:09:13.:09:16.

oil. The Hong Kong market closed because of the approaching typhoon.

:09:17.:09:22.

Let's check in with Europe and European markets, all of them higher

:09:23.:09:28.

in early trading. The FTSE 100 climbing in London. One of the big

:09:29.:09:33.

winners is British American Tobacco, that has gone up more than 2% in

:09:34.:09:38.

share prices after a merger with Reynolds. Talking about all things

:09:39.:09:42.

American, the details of what is ahead on Wall Street today.

:09:43.:09:47.

The world's largest fast-food chain will report earnings on Friday.

:09:48.:09:52.

McDonald's has been struggling as consumer tastes move away from fast

:09:53.:09:56.

food in favour of healthier options. And lower food at home inflation is

:09:57.:10:01.

hurting the golden arches as more diners stay away. Investors want to

:10:02.:10:05.

hear an update from McDonald's on the company's turnaround campaign,

:10:06.:10:10.

pricing and the impact of wages. Also reporting earnings on Friday,

:10:11.:10:16.

General Electric. Adomah is feeling optimistic about its earnings this

:10:17.:10:20.

quarter, saying it expects possibility in its flagship luxury

:10:21.:10:23.

car division, and many will look to the results of industrial giant

:10:24.:10:29.

General Electric. It is seen as a barometer for the overall economy.

:10:30.:10:38.

Joining us now is the editor in chief of Investment Week and a

:10:39.:10:42.

regular on the programme. Shares in both the UK's tobacco companies up,

:10:43.:10:55.

claiming after this offer to buy out the rest of Reynolds, what does this

:10:56.:10:58.

say about the state of the tobacco industry? It is ripe for

:10:59.:11:04.

consolidation. When you see a mode of the site, you have two companies

:11:05.:11:09.

with strong brands and they will get rid of weaker brands, and there is

:11:10.:11:14.

difference in their geographic penetration. You talk about creating

:11:15.:11:19.

a truly global tobacco business. Reynolds the second biggest tobacco

:11:20.:11:27.

business in the US. But volumes of falling and we have a situation like

:11:28.:11:31.

that, and we are getting tobacco companies squeezed by new regulation

:11:32.:11:35.

including things like packaging and product placing where you have the

:11:36.:11:39.

health warnings, this is not a great time to be in the tobacco industry,

:11:40.:11:43.

some might say. Deals are cheap to do because interest rates remain

:11:44.:11:48.

low. And again if you look at their sales geographically, there is still

:11:49.:11:53.

growth in emerging markets, Latin America and parts of Asia, China,

:11:54.:11:58.

those parts of the world. As you say in the US and Europe, we have been

:11:59.:12:04.

on a 20 year decline in the appetite for smoking. It is more about the

:12:05.:12:08.

long-term growth prospects in some of those other countries and shoring

:12:09.:12:11.

up their revenues in developed markets.

:12:12.:12:17.

This is something that was talked about, and appetite for mergers and

:12:18.:12:21.

acquisitions, partly helped by a weak sterling.

:12:22.:12:24.

And as I said, low interest rates. A lot of big deals going on because

:12:25.:12:29.

companies think they have to do it now before they see this uptick in

:12:30.:12:34.

interest rates in the early part of this year. There is $2.5 trillion

:12:35.:12:42.

less worth of deals than in 2015 so it feels like that on more deals in

:12:43.:12:49.

terms of deal-making, but lower in terms of value. One thing from BAT,

:12:50.:12:53.

they ping is on the increase, which has taken off in Europe and they are

:12:54.:13:00.

trying to expand this. It would make sense because it is taking the

:13:01.:13:03.

appetite for cigarettes out of the market. These are big companies,

:13:04.:13:08.

they are not stupid and they see the trend for vaping. They are moving

:13:09.:13:12.

into that as well. We will leave it there, you are back to talk about

:13:13.:13:17.

the papers and all things including the Kit Kat, we will try not to eat

:13:18.:13:21.

this. It has survived so far into the

:13:22.:13:23.

programme! See you later! Still to come, how

:13:24.:13:29.

economic is editor is waiting in the wings, he is loitering! He will talk

:13:30.:13:35.

about the foot -- fluctuating pound as China's consistent economic

:13:36.:13:36.

growth. More than 5.5 million people

:13:37.:13:46.

regularly log onto gambling websites. It is a ?4 billion market

:13:47.:13:53.

would you believe. But now the Competition and Markets Authority is

:13:54.:13:55.

investigating the sector, highlighting examples are

:13:56.:13:58.

potentially unfair treatment of customers including firms misleading

:13:59.:14:06.

promotions. The senior director for consumer enforcement joins us now.

:14:07.:14:13.

Good morning. What are you doing this? Because we have had a number

:14:14.:14:18.

of concerns, people tempted into promotions that look good on the

:14:19.:14:22.

surface but they come attached with hidden and context terms which means

:14:23.:14:25.

that people don't understand the deal they are getting into and we

:14:26.:14:30.

think it makes it really hard for them to achieve any winnings and get

:14:31.:14:34.

a pay-out. We are concerned that companies are exercising too much

:14:35.:14:38.

tax at it over when they might give pay-outs and when they don't and we

:14:39.:14:41.

are concerned that they are making it very difficult for people to

:14:42.:14:47.

complain. A lot of problems in this sector. This is an industry that is

:14:48.:14:52.

trying hard to change with the times and to come under new regulations.

:14:53.:14:57.

Is it fair to be giving it such a hard time when they have so much

:14:58.:15:01.

going on at the moment? We think it is critical that we look at this

:15:02.:15:04.

sector and investigate it. The gambling commission came to us with

:15:05.:15:08.

these concerns a couple of months ago, asking us to look at it because

:15:09.:15:13.

5.5 million people are playing online. This is a growing market and

:15:14.:15:18.

those people need to be treated fairly. They need the right

:15:19.:15:20.

information to make the right choices and they need to know that

:15:21.:15:25.

the odds are not stacked unfairly against them. It is really important

:15:26.:15:31.

that we investigate this now. That is a really good pun if nothing

:15:32.:15:35.

else! Thank you very much. You could also see on our web page, you can

:15:36.:15:40.

see the response from the gambling industry. They say there is no

:15:41.:15:43.

reason to believe there is widespread failings but they will

:15:44.:15:48.

cooperate with the CMA. They say it would be wrong to prejudge the

:15:49.:15:51.

outcome of an enquiry that has only just begun. There is also a story

:15:52.:15:57.

about Homebase, the retailer Laura Ashley is to close its concessions

:15:58.:16:02.

within the outlet after the takeover of it by an Australian company. The

:16:03.:16:05.

company says most of the business in the concessions will shift to nearby

:16:06.:16:10.

stores and websites. That is all on our website on the BBC website.

:16:11.:16:19.

You are watching Business Live. A tiny region of Belgium plucks a

:16:20.:16:30.

massive trade deal for reasons that Canada and the EU are finding to

:16:31.:16:34.

understand -- hard to understand. You can go online and have a look at

:16:35.:16:43.

the package about that. Will only is the place that has blocked this

:16:44.:16:48.

massive trade deal. Plenty more on that story including a lot of

:16:49.:16:52.

pictures of cows. And we don't know if the cows are involved in the

:16:53.:16:56.

blocking, to be fair to them! Let's have a look at the market this

:16:57.:16:57.

morning. Wigan have a quick look at the

:16:58.:17:16.

economic week with a tale of 2-mac with very different economies. We

:17:17.:17:24.

had the curious Case of China's income growth and the fluctuating

:17:25.:17:29.

pound. Also the health of the coming after the vote to leave the EU. We

:17:30.:17:33.

have also had the last of the presidential debate in the US

:17:34.:17:36.

elections. Joining us is Kamal Ahmed. Let's start with the US. For

:17:37.:17:44.

the first time it seems that we have had perhaps some comments about

:17:45.:17:47.

policy. We also had an extraordinary comments from Trump about the job

:17:48.:17:53.

report in America, saying it was anaemic and terrible and the country

:17:54.:17:57.

was losing its businesses. Is that a fair assessment? The American

:17:58.:18:03.

economy in comparison to other Western economies has actually been

:18:04.:18:06.

performing relatively well. The mood in America, businesses and markets

:18:07.:18:13.

are all looking at whether the head of the Federal Reserve will raise

:18:14.:18:16.

rates by the end of the year will stop they have signalled a rate rise

:18:17.:18:22.

many times but then not followed through. Inflation is still very

:18:23.:18:29.

weak. There is no sign of any real inflationary pressure. The dollar is

:18:30.:18:39.

Tambe strong for exports, not up people think -- too strong. It is

:18:40.:18:44.

maybe not anaemic but not as positive as some may have expected

:18:45.:18:48.

but in comparison to what is going on in Europe, America is in a better

:18:49.:18:56.

position toward normalisation of monetary policy. European leaders

:18:57.:19:03.

are trying to rescue this deal with Canada. There is a lot riding on it.

:19:04.:19:07.

We have been talking about Canada plus as the model for the trade

:19:08.:19:13.

deals but it is something they cannot do overnight. This is the

:19:14.:19:17.

most important issue for the EU. We have had Mario Draghi, the head of

:19:18.:19:22.

the European Central Bank, talking about asset purchases and how long

:19:23.:19:26.

they will continue for but the real worry is this Canadian deal. Justin

:19:27.:19:34.

Trudeau is due in Europe next week. This is to show that the EU is open

:19:35.:19:37.

for business and that it can do deals but suddenly a small regional

:19:38.:19:42.

parliament in Belgium that represents 3.5 million people says

:19:43.:19:48.

it does not want to do it. That shows the difficulty. This is

:19:49.:19:55.

overlaid with the American transatlantic trade and investment

:19:56.:19:59.

partnership also not going ahead. Europe had a real challenge. If

:20:00.:20:02.

these deals are seen as good for the EU economy but don't happen, the

:20:03.:20:06.

argument is that the European economy is going to suffer. At the

:20:07.:20:11.

time of low growth in Europe more than in America, it is a real issue.

:20:12.:20:18.

Let's talk about China. Their GDP economic growth came in on target

:20:19.:20:25.

yet again! But Beijing is seeking to cool its property sector and the

:20:26.:20:28.

worries about corporate debt level are not going away and in fact have

:20:29.:20:32.

been exacerbated by these figures. The big issue in China, as they make

:20:33.:20:40.

this transition to a consumption led economy, can the Chinese authorities

:20:41.:20:44.

keep the faith of the public in economic growth which has been very

:20:45.:20:51.

strong in China for many years? And at times of stress, and at the

:20:52.:20:54.

beginning of the year there were big worries about growth, the

:20:55.:21:00.

authorities' response is to flood the market with credit, whether it

:21:01.:21:07.

is business or consumer credit. And these have led to these incredible

:21:08.:21:14.

numbers. $18 trillion of corporate debt in China, that is over 100% of

:21:15.:21:19.

GDP. These are big worries because if there is a real slowdown in

:21:20.:21:23.

China, that debt becomes unmanageable and it becomes a big

:21:24.:21:28.

problem and their credit growth is far faster than their economic

:21:29.:21:30.

growth and that always lead to tension. We can't let you go that

:21:31.:21:35.

talking about inflation rising here in the UK and that seems to be

:21:36.:21:42.

pushing through. There is not a lot of evidence yet that the weaker

:21:43.:21:45.

sterling has sped through the prices because businesses are trying to

:21:46.:21:50.

soak up the increased costs but consumers are negative about price

:21:51.:21:53.

rises. We have seen this week the first increase in inflation posed

:21:54.:22:02.

the referendum, and distilling drops, import prices for the UK, we

:22:03.:22:07.

import a lot of energy and fuel and food that will become a problem --

:22:08.:22:13.

as sterling drops. As soon as inflation goes above wage inflation

:22:14.:22:17.

there is a problem because people begin to feel worse off and that

:22:18.:22:20.

becomes a political problem. Thank you very much. We'll take a look

:22:21.:22:26.

through the business pages in a moment but first a reminder of how

:22:27.:22:31.

to get in touch with us. The business life page is where you can

:22:32.:22:33.

stay ahead of all the breaking news will stop we will keep you

:22:34.:22:37.

up-to-date with all of the latest details with insight and analysis --

:22:38.:22:42.

business live. And we want to hear from you as well, get involved on

:22:43.:22:45.

our web page. We are on Twitter macro and Facebook

:22:46.:22:58.

as well. Business live on TV and online, whenever you need to know.

:22:59.:23:03.

So what other stories have the media been taking an interest in? Lawrence

:23:04.:23:11.

Gosling is back to talk to us about those. We have at a chocolate bar

:23:12.:23:17.

sitting on the desk the whole programme! We were talking about

:23:18.:23:21.

inflation and this is the practical effect. This goes back to the

:23:22.:23:29.

Marmite story of last week. The boss of Nestl was saying they were

:23:30.:23:33.

mulling over price rises of one of the iconic products in the market.

:23:34.:23:39.

We are back to the weakness of sterling but also some of the core

:23:40.:23:46.

commodities that go into eight chocolate bar like this, chocolate

:23:47.:23:52.

cocoa, they have been going up. We were talking of air about how much

:23:53.:23:56.

one costs, none of us quite remember! It cost me 65p in the

:23:57.:24:03.

canteen upstairs! BDD go to a petrol station, you would pay more than

:24:04.:24:09.

that. Some of these retailers are pushing through price rises almost

:24:10.:24:17.

without us knowing it. Depending on the outlet that you buy from. The

:24:18.:24:24.

one person says we can eat well for less. Lovely to hear from you, that

:24:25.:24:28.

is it from us, thank you for watching. Goodbye.

:24:29.:24:40.

Good morning, it is a slow start for many of us, quite a lot of low cloud

:24:41.:24:47.

and patches of fog which at its most dent in the west of the UK can make

:24:48.:24:52.

visibility up and

:24:53.:24:53.

Download Subtitles

SRT

ASS