07/02/2017 BBC Business Live


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07/02/2017

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This is Business Live from BBC News with Rachel Horne and Sally Bundock.

:00:00.:00:07.

The oil giant made $2.6 billion last year, that's less than half

:00:08.:00:14.

Live from London, that's our top story on Tuesday 7th February.

:00:15.:00:35.

With oil prices on their way up and a cut in supply,

:00:36.:00:38.

does the future look better for the companies that

:00:39.:00:40.

Also in the programme, cashing in its chips.

:00:41.:00:45.

Crisis-hit Toshiba takes offers for its memory business as it

:00:46.:00:48.

looks to cover the cost of its nuclear problems.

:00:49.:00:51.

And we'll be getting the inside track on how you track

:00:52.:00:54.

news across the internet and around the world to work out

:00:55.:00:56.

The co-founder of this company will be giving us the inside track. What

:00:57.:01:17.

we are sharing, what we are liking and how valuable that data is.

:01:18.:01:22.

And, the red telephone box is 90 years old, so it is overdue for a

:01:23.:01:26.

makeover. It is all about getting a new age to look. When did you last

:01:27.:01:33.

use a phone box? Use the phone -- use the hashtag.

:01:34.:01:39.

One of the world's biggest energy companies BP has seen another sharp

:01:40.:01:44.

It's of particular interest this time as oil prices have been

:01:45.:01:49.

recovering thanks to the agreement reached at the end of last year

:01:50.:01:53.

between the oil cartel Opec and non-members to cut

:01:54.:01:57.

The company's preferred measure is underlying

:01:58.:02:01.

That came in at $400 million in the last three months of 2016.

:02:02.:02:10.

That means that for the year as a whole BP made $2.6 billion,

:02:11.:02:14.

But chief executive Bob Dudley said that the year had seen "significant

:02:15.:02:22.

strides in creating a stronger platform for growth".

:02:23.:02:26.

Looking back to the beginning of last year, you can see

:02:27.:02:28.

the shift in the price of oil on global markets.

:02:29.:02:31.

It bottomed out at $27.88 a barrel in January 2016.

:02:32.:02:38.

And on Monday it was trading at just over $56.

:02:39.:02:41.

BP's competitors are also struggling after two years of low oil prices.

:02:42.:02:48.

Last week, US giant Exxon Mobil reported a 51% fall in full-year

:02:49.:02:51.

profits and Royal Dutch Shell a 44% dip.

:02:52.:02:57.

There are wider challenges for BP and others in the industry,

:02:58.:02:59.

including funding investment in new oil projects,

:03:00.:03:01.

the rise of renewable-energy sources and for some a concern

:03:02.:03:04.

about their ability pay to shareholder dividends.

:03:05.:03:10.

Our Business Editor Simon Jack is with me.

:03:11.:03:16.

Give us your take. On paper they do not look brilliant. The replacement

:03:17.:03:26.

cost profit, which adjusts for the fluctuating price of oil, is half of

:03:27.:03:29.

what it was last year, looking pretty bad. But BP has legacy

:03:30.:03:39.

issues. In 2010 we were reporting on the Deepwater Horizon explosion,

:03:40.:03:43.

they had to put $63 billion into cleaning that up and compensating

:03:44.:03:48.

people, and 7 billion claim in the last year. So although the headline

:03:49.:03:52.

numbers look worse, this was a year when they started turning the

:03:53.:03:57.

corner. We have to remember that, because that was an enormous event,

:03:58.:04:03.

massive cost, and many analysts say Bob Dudley has steered the ship

:04:04.:04:06.

extremely well, given the challenges. This will be the

:04:07.:04:11.

argument that comes up when we start talking about his pay. There was a

:04:12.:04:16.

massive shareholder vote last year, he got paid ?40 million in a year

:04:17.:04:24.

when BP lost $6.5 billion. If they are making more money this year,

:04:25.:04:27.

goodness knows what they will pay him. Or did he do a better job this

:04:28.:04:33.

year than last? He adjusted to the massive crush in price, the clean up

:04:34.:04:39.

the Gulf of Mexico, some people think, given the hand he was dealt,

:04:40.:04:44.

he did not do a bad job. They say they are keeping the dividend in

:04:45.:04:47.

place, which is important for these companies are. And for pensioners

:04:48.:04:52.

and anybody who has savings. What now for BP? They have streamlined

:04:53.:04:58.

the business, it is a shadow of the business it was before the explosion

:04:59.:05:03.

in the Gulf of Mexico. They have scaled back in the North Sea as

:05:04.:05:07.

well, they have mothballed their drilling off the southern coast of

:05:08.:05:14.

Australia, but they are hanging on. They have discovered more oil than

:05:15.:05:18.

they sold last, so that gives you an idea they are expecting to be able

:05:19.:05:23.

to balance their books at 16 dollars a barrel. -- $60. The dividend yield

:05:24.:05:33.

is 6%. When it gets that high, a lot of investors think it cannot last,

:05:34.:05:37.

but they are convinced it is OK for the time being. Because of the

:05:38.:05:42.

disaster in the Mexico golf, it is not where it was. It used to be

:05:43.:05:51.

slightly ahead of Shell. It is very much an American company as well,

:05:52.:05:56.

when the American operations got hit, it knocked the stuffing out of

:05:57.:06:00.

BP. You could argue that slimming down the company at a moment when

:06:01.:06:06.

oil prices collapsed was not a bad thing. It imposed a bit of

:06:07.:06:09.

discipline. They are not the same company they were. They are in

:06:10.:06:13.

better shape than a couple of years ago.

:06:14.:06:18.

As we have already mentioned, their shares are down today by 2% on the

:06:19.:06:21.

FTSE 100. 30 more US technology firms have

:06:22.:06:23.

signed a brief opposing President Trump's immigration ban,

:06:24.:06:26.

bringing the total The new signatories include Tesla,

:06:27.:06:28.

Adobe, HP and Evernote. A US federal appeals court will hear

:06:29.:06:32.

arguments this Tuesday over whether to restore President Trump's

:06:33.:06:35.

travel ban on people from seven The President of the European

:06:36.:06:39.

Central Bank Mario Draghi has rejected claims that Germany

:06:40.:06:45.

is manipulating It follows comments made

:06:46.:06:47.

in a document published by the US Treasury, which accuses Germany

:06:48.:06:52.

of undervaluing Europe's currency A South Korean company wants

:06:53.:06:54.

to buy part of Toshiba's This is all about sheep are needed

:06:55.:07:15.

to raise some funds pretty quickly? It is. It is not just any old chip

:07:16.:07:21.

maker that is looking to buy the stake, it is the world like second

:07:22.:07:27.

largest chip-maker after some song. It is all according to sources in

:07:28.:07:33.

local media and elsewhere, that they have submitted an initial bid,

:07:34.:07:35.

although the size of the stake has although the size of the stake has

:07:36.:07:41.

not been decided. Toshiba needs to raise funds to offset a

:07:42.:07:45.

multi-million dollar write-down it has had on its American nuclear

:07:46.:07:49.

power business. Both spokespeople from both companies have not

:07:50.:07:53.

commented on the specifics of the process, but analysts say that Hynix

:07:54.:07:59.

would benefit from Toshiba's technological know-how. Their

:08:00.:08:04.

products are used in long-term data storage. Demand for these chips has

:08:05.:08:13.

risen sharply, mainly due to the growing need for quicker processing

:08:14.:08:16.

of smartphones and other mobile devices. At the same time, Toshiba

:08:17.:08:22.

is planning to stop building nuclear power plants, after incurring liens

:08:23.:08:23.

of dollars of losses. Overnight, the US and Asian

:08:24.:08:31.

markets were down. The Dow was pulled down

:08:32.:08:34.

by a fall in oil price, while markets also continue to wait

:08:35.:08:37.

for detail on Donald Trump's And that uncertainty over Trump

:08:38.:08:40.

was also one of the factors causing the Asian markets to fall,

:08:41.:08:45.

yen and gold rising as investors There are also concerns

:08:46.:08:50.

about the upcoming European elections, so let's see how

:08:51.:08:55.

the European markets are doing. They have been open for four minutes

:08:56.:09:05.

-- 40 minutes. And Samira Hussain has

:09:06.:09:10.

the details about what's ahead Company earnings continue today. The

:09:11.:09:22.

largest American auto-maker General Motors will report. America's auto

:09:23.:09:27.

industry has received a lot of attention from the president. He

:09:28.:09:31.

wants to see more jobs created here in the US. We can't be sure that

:09:32.:09:36.

their earnings, which are expected to cap a record year, could get some

:09:37.:09:41.

attention from the commander-in-chief. Walt Disney will

:09:42.:09:46.

also report earnings, it seems the success of its latest animation

:09:47.:09:49.

movie will help revenues for the quarter. But the last few months

:09:50.:09:53.

have not been too kind to them, it has not had that many put dusters.

:09:54.:09:59.

Investors will be paying attention to the sports network ESPN, which is

:10:00.:10:02.

the real cash cow for them. And Rachel was sinking Let It Go!

:10:03.:10:20.

Can you do a rendition? Nobody needs to hear that!

:10:21.:10:23.

Joining us is Jeremy Cook, who is chief economist

:10:24.:10:25.

I have not seen the letter macro frozen! I have three boys, but I

:10:26.:10:37.

managed to get one of them to watch it!

:10:38.:10:44.

Something we must not avoid, how China is propping up its currency.

:10:45.:10:47.

It is burning through its currency reserves. It has three Delian

:10:48.:10:59.

dollars of reserves. -- $3 billion. -- $3 trillion. The Chinese currency

:11:00.:11:02.

has weakened a fairly dramatically. A lot of fears are bound the Donald

:11:03.:11:09.

Trump presidency, whether he calls China a currency minute later, as he

:11:10.:11:14.

threatened during the campaign. With increased outflows, people moving

:11:15.:11:18.

money out, we have seen the people. I could China stepping in and

:11:19.:11:21.

burning through money that they may have in reserves to make sure the

:11:22.:11:26.

currency stays stable. It is subject to keep an eye on as far as

:11:27.:11:36.

international trade businesses go. They need to make sure they are

:11:37.:11:41.

protected against that. We mentioned on the market is the French market

:11:42.:11:45.

is down slightly. The markets have been burned by politics repeatedly

:11:46.:11:49.

in the last year. French elections coming up, the markets feeling

:11:50.:11:56.

pretty wobbly. We had a big speech from Emmanuel macron last night.

:11:57.:12:01.

From toffee the has issues around nepotism and his wife taking a job

:12:02.:12:07.

from him. Marine Le Pen is still in the lead as far as the first-round

:12:08.:12:11.

poling goes. We have seen in Asia in the recent weeks concerns around

:12:12.:12:17.

what happens with this election, whether we start to see further

:12:18.:12:22.

pressures on the euro. There is political risk, because we have

:12:23.:12:26.

France, the Netherlands and Germany, and Germany, their industry or

:12:27.:12:30.

production numbers are quite bad for January. They were down about 3%,

:12:31.:12:36.

the worst number for a fair while, and also a recent poll suggests

:12:37.:12:42.

Angela Merkel's party are now second in the polls. It will be an

:12:43.:12:46.

interesting year for Germany. A lot for markets to keep their heads

:12:47.:12:52.

around. Jeremy, you will tell us when you were last in a telephone

:12:53.:12:54.

box later! Still to come, we'll speak

:12:55.:12:56.

to the man turning social media into popular media as we get

:12:57.:12:59.

the inside track on how news stories You're with Business

:13:00.:13:02.

Live from BBC News. The Government will be setting out

:13:03.:13:05.

plans later today to tackle what they're calling England

:13:06.:13:08.

and Wales' broken housing market. The Government says 250,000

:13:09.:13:10.

new homes are needed each year and have admitted

:13:11.:13:16.

they are lagging behind schedule. Ben Thompson is at a house

:13:17.:13:21.

factory in Alfreton. Sorry, this is then earlier, who

:13:22.:13:40.

shared some news on that story. Our prefab homes the answer to our

:13:41.:13:45.

housing crisis? They say so. They build these things in less than

:13:46.:13:49.

eight weeks, from start to finish. What do they look like? On the left,

:13:50.:13:56.

the toilet, the stairs, this is one of the bedrooms, and here you get

:13:57.:14:01.

the kitchen. What is different is that everything is done right here

:14:02.:14:06.

in the factory. The fridge is already installed, there is a

:14:07.:14:09.

dishwasher with all of the plumbing, the oven and the hob are in. This

:14:10.:14:14.

house is good to go as soon as it leaves the factory, it just needs to

:14:15.:14:19.

be plugged in. Is it enough to solve the housing crisis? The Government

:14:20.:14:24.

set a target of a million new homes by 2020, building a 300,000 every

:14:25.:14:28.

year. At the moment we are building less than half of that. Today the

:14:29.:14:31.

Government is unveiling a housing White Paper, with rules and

:14:32.:14:37.

regulations that will encourage the house-builders to get more homes

:14:38.:14:40.

built. Will it be enough to help drink down prices that have meant

:14:41.:14:46.

many people cannot get on the ladder at all? We will find out if and when

:14:47.:14:50.

the house-builders start building more homes.

:14:51.:14:55.

I thought we were going to talk to Ben live, I am a bit disappointed!

:14:56.:15:01.

We are missing Ben. Good news from Hornby. They have had

:15:02.:15:05.

a rough time for some time. Their turnaround plan is on track.

:15:06.:15:12.

Again! Picking up steam! For your revenues will still go down

:15:13.:15:16.

slightly, but they have sold their site in Margate for ?2.25 million,

:15:17.:15:21.

and they think things will get better for them. They have been

:15:22.:15:26.

struggling, because the demand is going down, but also the weakness of

:15:27.:15:31.

the sterling has hit the company hard, they have been battling with

:15:32.:15:35.

the weakness of sterling since the decision in June last year to exit

:15:36.:15:37.

the EU. You're watching Business Live.

:15:38.:15:45.

Our top story: The oil giant BP

:15:46.:15:47.

has seen another sharp It made $2.6 billion in 2016

:15:48.:15:49.

which is less than half of what it made the year before as it continues

:15:50.:15:55.

to struggle with low oil prices. A quick look at how

:15:56.:15:59.

markets are faring. BP is a big factor for the FTSE 100.

:16:00.:16:11.

At the open of trade BP fell down around 2%. The FTSE is the one

:16:12.:16:15.

market with its head above water. Germany and France down slightly.

:16:16.:16:20.

How can you tell if a story is going to go viral?

:16:21.:16:24.

It's not all about the entertainment value - increasingly companies

:16:25.:16:27.

want to track what consumers are saying so they can identify

:16:28.:16:29.

the content that's most effective for their business.

:16:30.:16:31.

For those in the know it's called "social velocity",

:16:32.:16:33.

a formula of the tweets, shares, likes, comments and other

:16:34.:16:36.

One firm harnessing that technology is Dublin-based NewsWhip.

:16:37.:16:42.

It's analytics software processes millions of news stories every day,

:16:43.:16:44.

from videos to social media posts in more than 60 countries,

:16:45.:16:47.

predicting which will grab those eyeballs -

:16:48.:16:49.

NewsWhip now has more than 320 clients globally.

:16:50.:16:58.

Customers include media firms,

:16:59.:17:03.

such as Associated Press - us here at the BBC -

:17:04.:17:06.

Buzzfeed and the Guardian to big corporate brands including Reebok,

:17:07.:17:08.

Well, we are joined by the companies co-founder

:17:09.:17:12.

and Chief Technical Officer, Andrew Mullaney.

:17:13.:17:18.

Good to have you on the programme. Thank you for having me. I know here

:17:19.:17:27.

at the BBC we're obsessed with what NewsWatchers are looking online and

:17:28.:17:30.

what digital video they're downloading and why and how many

:17:31.:17:35.

shares, how many likes, that information is what you provide?

:17:36.:17:40.

Absolutely, yeah. For the first time we can really measure what people

:17:41.:17:44.

care about in real-time. So, that's what all our customers use it for is

:17:45.:17:49.

to understand what type of content engages people on social media. This

:17:50.:17:54.

is something you were providing this information to consumers, but you

:17:55.:17:57.

flipped to provaid a service to businesses. Was that purely based on

:17:58.:18:02.

financials? Not really. We noticed that the journalists and the media

:18:03.:18:07.

creators were using the free service way more and that they wanted much

:18:08.:18:14.

deeper features. So we decided to concentrate on providing for these

:18:15.:18:17.

people and of course, there was a financial benefit as they can pay

:18:18.:18:22.

whereas most newsreaders are free. So what caused you and your

:18:23.:18:26.

co-founder to start this? Why did you think of this business in the

:18:27.:18:30.

first place and it is dependant on your technology, isn't it?

:18:31.:18:36.

Absolutely, yes. Paul started out creating normal news and noticed the

:18:37.:18:41.

difficulty in trying to make money online so we were both involved in

:18:42.:18:44.

start-ups at the time and we were discussing ideas and I said well,

:18:45.:18:48.

maybe consider trying to figure out the good stuff. There was so much

:18:49.:18:51.

stuff out there and he noticed the journalists were obsessed with the

:18:52.:18:55.

social numbers of their content and that's where the idea came. He said

:18:56.:18:59.

why not try and get the social numbers for all content out there

:19:00.:19:02.

and see what happens and that's where it started. Now, you cover 60

:19:03.:19:07.

countries. I'm interested to know how do you work out what people are

:19:08.:19:10.

going to be more interested in because you also try to predict it.

:19:11.:19:17.

So is there a story that has global appeal or do you find certain

:19:18.:19:22.

countries are more into sports stories or human stories? We're

:19:23.:19:27.

measuring these huge amount of data signals, but it is all about human

:19:28.:19:31.

engagement and there is a human being behind all of these

:19:32.:19:34.

engagements. So the types of content that can do well for example are one

:19:35.:19:40.

we saw the other day which was this kid that got lost in Canada in the

:19:41.:19:43.

freezing cold and fell approach sleep in the snow and his dog came

:19:44.:19:47.

out and lay on top of him to keep him warm and kept him alive. This

:19:48.:19:52.

did very well in this local area and got grabbed by the bigger media

:19:53.:19:54.

agencies because it is a beautiful story.

:19:55.:19:58.

The bigger media agencies, people like the BBC who pay for your

:19:59.:20:01.

services, what is it that they're getting out of it? You're telling

:20:02.:20:05.

them well this story was really important, are you expecting those

:20:06.:20:09.

companies to make decisions about where to put stories on their

:20:10.:20:12.

website in order to get more online users? Absolutely, yeah. To

:20:13.:20:16.

understand everything from, you know, what type of headlines you

:20:17.:20:19.

use, what length of video, what type of words do you use, you know, which

:20:20.:20:24.

stories are of interest and also maybe where to concentrate their

:20:25.:20:28.

journalists because now they can tell in real-time where the

:20:29.:20:32.

engagement is. So what's going to be next on your radar as it were? I

:20:33.:20:36.

would imagine when you started out, when did you start this company? We

:20:37.:20:40.

started five years ago. I imagine there were not many other companies

:20:41.:20:44.

like yours with this technology, but they are all catching up fast. So

:20:45.:20:48.

how are you going to diversify? For us, it is to continue growth. We

:20:49.:20:53.

have 50 staff. 15 of which are in New York and we launched our new

:20:54.:20:58.

analytics product. We're excited about that and we're just going to

:20:59.:21:01.

continue serving up the best content to the story tellers of the world.

:21:02.:21:06.

Andrew, we appreciate your time. Fascinating, especially from our

:21:07.:21:09.

point of view. Thank you very much. Cheers.

:21:10.:21:14.

Today marks the 25th anniversary of the signing

:21:15.:21:16.

of the Maastricht Treaty, officially known as the Treaty

:21:17.:21:18.

Back then there was a feeling of optimism and hope

:21:19.:21:21.

about what the EU could achieve for the prosperity

:21:22.:21:24.

Few would have predicted the financial and political

:21:25.:21:26.

challenges the Union would come up against a quarter

:21:27.:21:29.

Andrew Walker's been taking a look back in time.

:21:30.:21:38.

Maastricht 1992 and a blueprint is agreed for a new and deeper

:21:39.:21:43.

programme of European integration. It was here that the euro was

:21:44.:21:47.

conceived. This was a moment of hope and optimism at least for European

:21:48.:21:50.

political leaders. A quarter of a century on, the EU is

:21:51.:21:55.

blue and yellow's flag looks tattered. We've had arguably still

:21:56.:22:01.

have, the eurozone financial crisis, one important member state, Britain,

:22:02.:22:05.

deciding to leave and the rise of anti-EU political groups in several

:22:06.:22:08.

countries and perhaps a chance that they will take power this year in

:22:09.:22:13.

countries that were founder members of the European project, France and

:22:14.:22:16.

the Netherlands. And now the election of Donald Trump to the US

:22:17.:22:20.

presidency creates new and unpredictable challenges for

:22:21.:22:23.

uranium. He doesn't seem to think much of the EU. He said the British

:22:24.:22:29.

decision to leave was so smart. He has certainly rattled Brussels. The

:22:30.:22:35.

President of the European Council Donald Tusk wrote to members saying

:22:36.:22:40.

the changes put the EU in a difficult position. Maastricht was

:22:41.:22:46.

intended to create a congealial environment for business with less

:22:47.:22:48.

uncertainty. It feels like a long time ago.

:22:49.:22:56.

The iconic red telephone box gets a redesign. It is 90 years old, the

:22:57.:23:15.

old phone box? So, instead of people using it just for calling someone,

:23:16.:23:18.

you can use it for maps. You can use it browse the internet. It is now a

:23:19.:23:24.

wi-fi hotspot. Well Will that cause a resurge in the use of the phone

:23:25.:23:29.

boxes? I would imagine they are hardly ever used. Most are

:23:30.:23:34.

vandalised? I would use them to get out of the rain or hide from someone

:23:35.:23:38.

on the street! We have had quite a few tweets. Some

:23:39.:23:43.

people saying, "I can't find one." Ian said, "It is 20 years since I

:23:44.:23:49.

used a phone box." Ian said he used one in 2007 when his Nokia died. The

:23:50.:23:54.

question is will there be a resurgence in the use of the phone

:23:55.:23:57.

boxes? I don't know if there would? If your mobile phone doing

:23:58.:24:01.

everything from your banking to travel, to your whole schedule, I

:24:02.:24:06.

doubt people will want to tie themselves down to a phone box. The

:24:07.:24:12.

only thing I see is people having selfies, they want that photo of the

:24:13.:24:18.

red phone box. Let's move on. Other stories in the press today. We've

:24:19.:24:23.

got a flying car. I love this one. What do you reckon. Would you get in

:24:24.:24:28.

one? I would get in one, I don't think I will see one in my lifetime.

:24:29.:24:36.

I think it is Jettison stuff. If they could work on the cars at the

:24:37.:24:42.

moment. They have got a Nasa engineer? It seems like another way

:24:43.:24:49.

of Uber to burn through investors cash. I love the idea, but I'm

:24:50.:24:52.

scared of heights! An interesting story in the Guardian

:24:53.:24:58.

about Bermuda which has been sort of slated as a tax haven in president

:24:59.:25:03.

press. Bermuda saying that the UK is a tax haven because people aren't

:25:04.:25:07.

here for the weather? No, we're not. I'm certainly not. Are you here for

:25:08.:25:11.

the tax haven? I'm here for the quality of life let's put it that

:25:12.:25:16.

way. The UK has the most billionaires living in it especially

:25:17.:25:20.

London as a city and the ability for non-doms and we haven't really

:25:21.:25:24.

talked about non-doms in the UK for many, many years, non-doms to not

:25:25.:25:28.

pay tax in the UK has made sure it is a beneficial regime for them to

:25:29.:25:32.

live under. The non-dom rules are changing in April? They are set to

:25:33.:25:38.

change, but I think this is Bermuda firing back to say obviously don't

:25:39.:25:41.

slate us when you have your own beneficial rules and I think there

:25:42.:25:48.

is a bit of post Brexit anger there given the impact on the

:25:49.:25:51.

Commonwealth. Thank you, Jeremy. Thank you too for your company. We

:25:52.:25:54.

will see you tomorrow. That's it from Business Live. There will be

:25:55.:25:58.

more business news on the web page and on World Business Report.

:25:59.:25:59.

Bye-bye. Hello there. Cloud and rain that

:26:00.:26:11.

affected most areas overnight has now cleared away for the vast

:26:12.:26:16.

majority leaving a mixture of sunshine and showers through the

:26:17.:26:17.

rest of today.

:26:18.:26:19.