25/10/2011 World Business Report


25/10/2011

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Ennahda, has won the most votes. Those are the latest headlines. We

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now have the latest financial news. This is World Business Report. The

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headlines: Paying the price, UBS looks set to unveil a major loss in

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earnings. BP will show a sharp drop in earnings as the Gulf of Mexico

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disaster still has an impact. In Singapore, the probe into a Olympus

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deepens as the FBI investigates its takeover of a British company.

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Swiss banking giant, UBS, is due to release its latest banning Saturday.

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The figures should have seen the bank firmly back in the black.

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Recent events, including a 2 billion last by a rogue trader,

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mean the balance sheet will not look as healthy as expected. UBS is

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Switzerland's largest bank and a giant in global banking as well.

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Its once famous reputation for rock solid reliability already suffering

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after a multi-billion last in the sub-prime mortgage crisis, took

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another pounding last month when a London trader cost the bank $2.3

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billion. The scandal could not have come at a worse possible time. UBS

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is just beginning to regain customer confidence. They had to

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pour a huge amount of money into their technology to make sure it

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does that happen again. Maybe it is the safest, but clients will need

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convincing. Most of UBS's third- quarter profits will have

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disappeared overnight because of the rogue trade. The chief

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executive has disappeared, resigning after trust in his

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leadership evaporated. There is a new man at the harm. He faces a

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huge challenges. Rebuilding come for the -- customer confidence once

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again. Restructuring is expected at UBS, including a slimming down of

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its troubled investment bank and more job cuts. UBS is not the only

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European Bank recording profits today. Deutsche Bank will unveil

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third-quarter profits. It has been exposed to the Greek debt crisis.

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Good morning. Let's leave aside the rogue trader, the bank was having

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difficulties beforehand, wasn't it? 7-8 years ago, the share price was

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around 70 Swiss francs, it was at 14 in April this year, 11 yesterday.

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It has been an uphill struggle because of the loss in such prime

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lending and other types of toxic debt. It is the most conservative

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nation and most conservative banking industry, that my surprise

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people, they have changed chief executives and chairmen more often

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than they would have chosen. They have not had the stability, but

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they did get it, UBS had lost a lot of wealth management business to a

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lot of other people. It was beginning to grow again, then this

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gentleman got under the wire. It has been devastating news for UBS.

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Not only that, there have been problems in the US with people

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trying to evade tax. There is still the basis of a very good bank. I

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think perhaps, we will see pressure from the Swiss politicians took

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split the bank. The new CEO will probably say over my dead body.

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Let's have a look at Deutsche Bank, slightly different, exposure to the

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Greek debt. The share price was 44 euros earlier this year, it is down

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to 21 euros. There has been a huge emphasis on investment banking, but

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the exposure is still there. That is why it has fallen. Profits will

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certainly be down. We will see you later at the newspaper review.

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Let's have a quick look at the markets. Investors have some

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optimism. Optimism is slightly waning when we look at the Asia

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markets this morning. The Nikkei is down 40 points. Some of the

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investors are focusing on the corporate results that are coming

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out. The UBS results will be out in 20 minutes' time. Shares in Japan's

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Olympus have risen today wrecking a seven-day losing streak. It saw

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half its value why out because of a scandal. -- wiped out. The British

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chief executive of Colin this raised questions? -- Olympus.

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the probe into this company is getting deeper and more

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comprehensive. The FBI is now involved. You mention the former

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chief executive, he says he was fired for questioning the $700

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million payment to advisers in the takeover of a medical equipment

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maker in 2008. He has called on authorities in Britain and Japan to

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investigate the payments. Despite the ongoing probe, shares are

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trading higher today by 8%. The stock price has been hammered since

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the scandal. Traders say the stock is oversold and investors see value

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in Poland this stock. -- Olympus. You will keep us updated as the

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saga goes on. Let's have a look at some other stories. There will be a

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major summit on the sovereign debt crisis tomorrow. The eurozone could

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boost the bail-out fund to one trillion euros. Leaders are

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thinking about boosting the current 440 million euros fund by

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attracting capital from private investors and sovereign wealth

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groups. James Murdoch has received a sharp rebuke from NewsCorp

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shareholders in a vote to re-elect him to the board. 35% of the votes

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went against him. He will remain in the board. The Murdoch family

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control 40% of the voting rights. It reflects the displeasure over

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the handling of the phone hacking scandal. The impacts of the Gulf of

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Mexico will weigh heavily on BP's third-quarter figures. There has

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been a sharp reduction. Before the Gulf of Mexico is village in April

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2010, BP was producing 4 million barrels of crude oil a day. Now it

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is a little over 3 million barrels a day. BP used $30 million worth of

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assets to pay for the clean-up. A joint owner of the well with BP has

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recently agreed to pay it $4 billion. Earlier this month the

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chief executive announced he had won UK government approval for some

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major new business. A $6 billion project to drove north of Scotland.

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-- drill. Despite falling profits, it is thought BP will pay out a

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