03/02/2017 BBC Business Live

This is Business Live from BBC News with Rachel Horne

Snapchat files for a stock market flotation -

that could be the biggest tech IPO since Facebook.

Live from London, that's our top story on Friday 3rd February.

It's set to be a massive deal - Snapchat could be worth up

to $25 billion, but the photo messaging company

is yet to record a profit in its five year history.

Apple switches its focus to India following a slowdown in China -

The European markets have opened for for the latest.

The European markets have opened for trade and are holding pretty steady.

We will bring them to you when we get them.

Also in the programme: Brexit - round one.

As EU leaders gather in Malta - its Prime Minister calls

for a "fair deal" for Britain - but warns it will pay

And following the announcement that Snapchat will be listing

on the US stock market, today we want to know -

would you buy shares in a company with a limited track record

The value of Facebook has tripled since it went public in 2012,

but will Snapchat be a similar success?

In the last few hours the social networking company has filed

documents to float its shares on the New York Stock Exchange.

It's likely to be the biggest IPO in the technology world

For those of you who don't use it - it's kind of the opposite

of Facebook - instead of making a permanent record of your life it

lets you send picture messages that then disappear.

According to the company - 158 million people use Snapchat

every day to send picture messages or Snaps.

That's nothing compared to the almost 2 billion

But it's very popular among young people,

An estimated 41% of Americans aged 18-34 are on Snapchat.

Its users are young - and so are its founders.

It was set up by Evan Spiegel, on the left - now still only 26 -

Three years ago they turned down $3 billion

in cash for the company from Facebook boss Mark Zuckerberg.

We'll find out - Snapchat could have a stock market value

Making the founders multi-billionaires.

How does that sound? I want to cry.

With me is our Technology Correspondent Rory-Cellan Jones.

I could have got deja vu here because around five years ago we

would have been sitting in the BBC studio somewhere talking about

Facebook before it went public and gone how is it going to monetise its

ads and make money, and it's the same here, I will Snapchat make

money? It already is that you are right, there is a huge parallel with

Facebook but is there a parallel with Twitter? We have a company, it

is not aimed at you, and Rachel I am not even sure it is aimed at you.

Sadly not, just out the bracket! It is aimed at 15 to 24-year-olds, I

have just done a little Snap which features us fooling around with

fresh. It's about reinventing the camera which is what the company

say, injecting fun into the way kids interact. People who understand this

understand it brilliantly and use it all day, but the rest of us struggle

with it. If it is going to be worth what the market thinks it's worth it

has two continue growing its audience. There are some quite

worrying charts in the IPO document released overnight, one of them

shows the growth tailing off a little just as they are coming to

market. You don't want to see that. That reflects they are up against

the gorilla in the room, Facebook, which has been taking their ideas

and putting them into Instagram which it owns and winning over some

of that audience. Rachel wants to come in but can I bring that end,

you said it, Mark Zuckerberg says here is $3 billion, they did not

take it so he went and bought Instagram, thinking if I cannot have

you nobody will. Mark Zuckerberg was offered billions at quite an early

stage in his early 20s, for Facebook, he was brave, rejected all

offers and said I will do it my way. The Snapchat guys are doing exactly

what Mark Zuckerberg did. The question is if they can follow the

same path but I think a lot of people will be spooked by slowing

user growth. In the listings they talk about themselves as a camera

company, what is that about, are they trying to monetise through

hardware? They released spectacles. Yes, they have released these things

were you record instant video. They are trying to stress the difference

between them and Facebook and Twitter. They are not about text,

they are about images and they think they have tapped into something real

and powerful amongst that group, the millennial is that love to

communicate and have fun. They think it's powerful to advertisers. Always

a pleasure, we have two wrap it up but let's put you on the spot to

revisit in five years, will it be Twitter or Facebook? I think it will

be Twitter. Sad. The Chief Executive and co-founder

of Uber, Travis Kalanick, has quit President Donald Trump's

business advisory group. The boss of the ride hailing service

has been coming under mounting pressure over the Trump

administration's Critics included Uber drivers, many

of whom are themselves immigrants - and a social media campaign urging

users to delete the Uber app. The e-commerce giant Amazon has

reported record sales of $43.7bn However that was short of market

expectations so it's shares have The US based firm said growing costs

would hit future profits. Apple is to start making iPhones

in India this year as the firm looks to tap into a booming middle class,

as sales in China slow. The chief executive Tim Cook said

this week the company intends to "invest significantly" in India -

where they only have a 2% share Isn't the issue with these Apple

iPhone's, are they not just too expensive for the market?

Absolutely, it's beyond the reach of many ordinary citizens. They did

ship about 2.5 million iPhone's, a record for Apple, but in the Indian

market which consumes about 300 million smartphones in a year it is

only in tenth place. One of the problems is that it is so expensive

because they are not manufacturing or assembling in India. They have

just had a meeting with IT officials in a southern state to express the

intention to maybe assemble and in the long-term manufacturer there. I

spoke to the local IT minister who confirmed they had this meeting and

they are hopeful they might start as soon as April this year. Apple has

tied up with a company from Thailand and they might start making these

iPhones very soon. If they want to scale up they also have

manufacturing facilities in India so it will be an easy job. There are

challenges ahead because Apple want a lot of concessions which India has

not agreed to and already other manufacturers are protesting. Great

explanation, thank you. So lets take a look at the markets

and in Asia there was a bit of a shock when China's central bank

announced plans to raise the cost of short term borrowing -

no official word on why they've done this but analysts think

the government is worried about the huge amount of lending

that has been going on - concerned about a property bubble

so tightening policy. The Chinese markets had been closed

for a week because of lunar new year and when they opened they fell

posting their biggest losses for two weeks -

and that followed on from what investors called

a cautious day on Wall Street. The Dow closing ever so slightly

down. In Europe markets

were expected to continue that cautious trend -

but lots of figures due out today - services PMI for germany

and france and a key US Jobs report - so lets go

to Wall Street and see It's the first Friday of a new month

which means we are expecting the latest American job numbers. The

unemployment rate is currently at 4.7%, the lowest in almost a decade.

This particular report will be closely watched by the Federal

reserve and of course the new Trump administration. Something delicious

will be happening on Friday, the maker of her shoes and Reese 's

peanut butter cups will be reporting earnings, they have raised their

full-year profit forecast in October because demand strengthened in the

United States and they spent less on advertising. It also expects new

products to help boost sales during the holiday season. Funny that I now

fancy some chocolate. I always fancied some chocolate.

Joining us is Michael Hewson, Chief Market Analyst, CMC Markets.

Good to have you with us, the Chinese, the lunar New Year holiday,

the centre back coming back saying let's surprise them, are they

worried about a real estate bubble in China? I think they have been for

quite some time and I don't think this slight tightening of policy

will make that much difference. There are wider issues at play,

financial conditions are tightening across the world. We see it

reflected in bond yields, rising inflation, maybe they are concerned

about that, Chinese factory gate prices have rebounded massively.

Maybe they are sounding a note of caution with reserve to that, the

Bank of England yesterday was resident about upgrading inflation

forecasts, I think inflation will run a lot hotter than a lot of

people think it will do and I think this is maybe a reflection of that

and also there is a concern with Donald Trump in the White House they

do not want to weaken the currency at the moment. American job figures

out later today, people say it might be about a hundreds 2000, you think

it may be 200,000? I think it could be above 200,000, the private

payroll report, generally there is a close correlation over the last 12

months between the two, never more than a 30,000 discrepancy, 246,000,

I think as President Obama's legacy... These are his last

numbers. I think we should get an number in excess of 200,000. We

shall find out. Also in the programme:

Brexit - round one. As EU leaders gather in Malta -

its Prime Minister calls for a "fair deal" for Britain -

but warns it will pay You're with Business

Live from BBC News. Some supermarket's are rationing

some vegetables to customers - blaming poor growing conditions

in Europe for a shortage Both Tesco and Morrisons

are limiting shoppers, following a UK courgette shortage

last month, after wet and cold weather in southern

Europe devastated crops. Our business correspondent

Theo Leggett joins us now Did I hear this right, some

supermarkets are limiting iceberg lettuce to three? When is the last

time somebody bought three? There is a point to this that I will get to

but yes Tesco are limiting customers to three iceberg lettuce's per

person, Morrisons with the same limit and they are limiting people

to three florets of broccoli per person as well, I think that is the

right term, broccoli is not my specialist subject. A lot of this

vegetables over the winter come some southern Spain where you can get a

winter crop, grown in regions near Valencia, but there has been

appalling weather in that region over Christmas. Whites bled

flooding, crops ruined, fields out of action. When the young crops were

coming through there was also frost and snow, the coldest weather in

decades. So the crop from Spain has been drastically reduced which has

greeted the shortage. This shortage has been made worse by supermarkets

because you have catering companies and restaurants and corner shops

running out of supplies and heading down to the supermarkets to stop up.

It is them those rules are aimed at, because if I go into a supermarket I

am not going to buy three iceberg lettuces what a catering company

that is thinking all my goodness the normal supplier cannot get us what

we need, they will go down to the supermarket and clear the shelves.

Letters and broccoli, also courgettes. Go and get your quarter.

Have you ever bought three... You have got it?

Yes, but they don't eat a whole iceberg each!

It is a lot for your hamburgers! Too much.

Our top story - the social networking company Snapchat has

filed documents to float its shares on the New York Stock Exchange.

It's likely to be the biggest IPO in the technology world

The company is yet to return a profit in its five-year history,

but Snapchat could still be worth up to $25 billion when it goes public.

Staggering. That is a lot of money.

Let's cross over to the Maltese capital Valletta now -

EU leaders are gathering for their first summit of the year

two days after the British parliament voted overwhelmingly

Prime Minister Theresa May will be holding one-on-one talks

with various EU leaders - so what is she up against?

Malta holds the rotating presidency of the EU.

Its Prime Minister, Joseph Muscat, has been clear Britain can't

He has told the European Parliament, "We want a fair deal

But "that deal necessarily needs to be inferior to membership".

Assuming Britain formally gives its two-year leaving

notice next month - known as triggering Article 50

of the Lisbon Treaty - Mr Muscat says they must agree

That's so it has time to be ratified by member states

and the European Parliament before the UK is formally out.

Then there's the small matter of this - the UK's bill

As much as 60 billion euros is what Britain will owe -

according to some in Europe - taking into account its share

of budget commitments, pensions, spending on UK-based projects, etc.

That bill, that's likely to be the subject of a lot of wrangling.

Thomas, you are an independent analyst, great happy with us. They

are going to be discussing all sorts of things, including... President

Trump. In what way could he be a threat to the EU? We have seen

comments prior to and since inauguration saying he thinks other

countries might want to leave the EU said there is a fear among the

member states that after the EU -- that after Britain leaving, there is

a certain fear about that, so they are concerned and we saw this

manifest in President Donald Tusk, the president of the European

Council, in his statement to the European ladies, saying, United we

stand, divided we fall. The future of the EU will be discussed at the

afternoon session of the meeting today.

Theresa May will be there this morning and then leave that

lunchtime, then this afternoon the other states will discuss the future

of the EU. What do you think will be on the agenda? This morning Pospert

procession and the afternoon session are inextricably linked, this

morning is about migration, specifically the mortar and Libya

Brut, yesterday there were talks with Donald Tusk and the Italian

Prime Minister to see how they can improve operations with Libyans on

the ground and stop the migration flows. We know that in regular

migration has been an issue in many European election campaigns, also in

the Brexit referendum last year, so that brings us on to the future of

the EU and how to take things forward. Donald Tusk essentially

saying to all EU leaders, the EU 27, because Theresa May will not be

there, we need a firm start, we have the migration crisis, we have

Russia, we have the US administration which we are not sure

where they are going with that, radical terrorism, populism, all

these issues we need to take a stance. They can all very well sit

there all these leaders and do the talking but the people in their

respective countries may do the talking for them and they may not be

the leaders any more? Very good point. That is the issue they will

be facing, Netherlands, France, Germany elections. Exactly, go back

to 2007, the 50th anniversary of the European Community which became the

EU. Back in 2007 no-one would have said that ten years onward beat this

crisis, the Ihenacho crisis, the social crisis and now the political

crisis. This is something they will be whereof, they may welcome up with

suggestions how to tackle migration, take the EU forward, but at the end

of the date a lot of them will be concerned about domestic electoral

issues closer to home. And whether they have a job or not! Thomas, we

appreciate your time, we will talk to soon.

In a moment we'll take a look through the Business Pages but first

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Michael is back. Snapchat. I don't.

Neither do I, we are far too old! Remember the press conference

earlier this year where someone was caught doing bunnies, misbehaving?

We asked our audience to send us a text, a Tweet! That his owl -- that

is how old I am! To ask whether it will take off.

I'm 26 and just signed up. Tut, it is confusing, don't see why it has

spread outside millennials. Ryan things Snapchat will be a fad,

a waste of money and people will look stupid in 12 months' time.

A lot of people are saying, wait and see. There are so many of these

social media instant gratification apps, Instagram, Twitter has just

dropped Vine, which was six second videos, I'm not sure how different

Snapchat is, $25 billion, hasn't made a profit, you have no voting

rights with the shares. Investors need to decide whether or not to buy

it, they cannot wait and see. What do you think will happen when it

floats? I think initially there will be a bit of a pop but automatically

when you look at the company you look at the commercials, and

ultimately even though revenue growth is going the right way, user

growth is starting to slow and that, for me, is the problem Twitter is

having, they cannot monetise their user base. If Snapchat cannot

monetise its user base, it will ultimately be a flash in the pan. Or

a snap... Your household must be a barrel of

laughs! This story is amazing, could you

imagine UK, Brits, even Aussies, chipping into their own pockets to

help out the Government? I am buying a house next week so I guess I am

helping out the Government! Mongolian citizens offering cash,

jewellery and horses to pay Government debt. Mongolia is a

victim of the crash in property prices, it is a resource rich

nation. What commodities do they have? Copper, gold, easily extract a

ball, so it should be a rich country but the government went on a

spending boom just as monetary conditions in China started to

tighten and ultimately they spent more than they had coming in, so now

IMF and their citizens have decided IMF and their citizens have decided

to offer cash, jewellery, horses to help. That is lovely! Help your

Government even though it has been completely incompetent. That is

true! I don't think it would happen over here, somehow. Nordstrom, very

nice department store in the United States, they have dropped Ivanka

Trump's brand. Yes, this is a hashtag campaign that was started in

October asking brands not to stock trump brands because of his

rhetoric... But Nordstrom has said this is based only on performance?

They have to say that, they don't want to be seen to be giving in to

the politics. Michael, always a pleasure, have a great weekend and

thank you for joining us. There will be more business news

throughout the day on the BBC live webpage and on World Business

Report. And unsettled spell of weather

continues with some strong wind and heavy rain in the forecast today.

Yesterday was a blustery, windy day, this was the scene around the Irish

Sea coast, taken by one of our Weather Watchers,