17/05/2012 World Business Report


17/05/2012

Similar Content

Browse content similar to 17/05/2012. Check below for episodes and series from the same categories and more!

Transcript


LineFromTo

popular support. Those are the latest headlines. Can

:00:05.:00:13.

live for the money news in World Business Report. -- time now for

:00:13.:00:22.

some to thank you for joining us. Investors withdraw hundreds of

:00:22.:00:26.

millions of euros amid fears Greece may pull out of the eurozone. 100

:00:26.:00:31.

billion of reasons to be cheerful. Facebook sets the price for the

:00:31.:00:39.

largest ever sale Show on the Internet. -- share sale.

:00:39.:00:44.

In times of crisis people like to hold on to large cash an increase

:00:44.:00:49.

speculation Greek money could switch from the euro means an

:00:49.:00:53.

increasing and as people are guarding a euros. Between 700

:00:54.:00:56.

million and 1.2 billion euros has been withdrawn from Greek banks in

:00:56.:01:00.

the ten days since inconclusive parliamentary elections. That is

:01:00.:01:06.

still less than 1% of the total deposits held by banks in Greece.

:01:06.:01:10.

News that the European Central Bank has stopped lending to some Greek

:01:10.:01:18.

banks has fuelled concerns. We now speak to a chief market analyst.

:01:18.:01:23.

This is not a run on with the banks? Is it just National because

:01:24.:01:33.
:01:34.:01:44.

of all of the uncertainty surrounding it Greece -- natural --

:01:44.:01:51.

surrounding Greece. There has been uncertainty over how much money has

:01:51.:01:55.

been withdrawn. Of course there are such large issues there that are

:01:55.:02:01.

not going away. If anything, the largest issue is that they still

:02:01.:02:06.

cannot agree on a coalition. We are now waiting on another election to

:02:06.:02:11.

guess a government in place. This is causing massive uncertainty for

:02:11.:02:19.

everybody. -- to get. Given we are not going to see a government own

:02:19.:02:25.

place until the 19th of Judy you expect the uncertainty to continue?

:02:25.:02:35.
:02:35.:02:39.

-- in a place -- 19th June -- in place. It is likely we will

:02:39.:02:43.

continue to see stories like this while people wait to see what is

:02:43.:02:48.

going to happen. Even when we get a government in place we still could

:02:48.:02:54.

see Greece coming out of the euro. In the meantime we hear the

:02:54.:02:57.

European Central Bank has decided to withdraw funding from some Greek

:02:57.:03:04.

banks. We do not know the details but essentially it is because the

:03:04.:03:09.

bank has deemed them to be insolvent. That is worrying. When

:03:09.:03:12.

you look at the banks there, whether they are technically

:03:12.:03:16.

insolvent or not, we have been saying that the country is in

:03:16.:03:24.

Salford. If the banks are and softened -- insolvent that is

:03:24.:03:31.

neither here nor there -- insolvent. So there are large issues with this.

:03:31.:03:35.

I think the thing is that we need some resolution, something concrete

:03:35.:03:39.

in place in terms of the government for some sense of normality. Thank

:03:39.:03:46.

you. To the other side of the world, a

:03:46.:03:52.

different story. Japan is growing faster than expected. Wealth grew

:03:52.:03:56.

by 1% in the first three months of the year and much of that was due

:03:56.:04:00.

to investment to rebuild areas in the North East devastated by last

:04:00.:04:06.

year's tsunami. Japanese people are also spending and firms continue to

:04:06.:04:13.

sell their goods overseas. Let's cross live to out reporter in Tokyo.

:04:14.:04:21.

So some good news for Japan today? Yes. These growth figures are

:04:21.:04:29.

better than expected. They had growth of 4.1% and analysts had

:04:29.:04:34.

expected 3.5%. That is the third straight quarter of growth for the

:04:34.:04:41.

Japanese economy. That is a very different story from Europe. Public

:04:41.:04:48.

investment rose by 5.4%. Exports were also up by 2.4%. Consumer

:04:48.:04:58.
:04:58.:04:58.

spending was also up. It is the rebuilding in the north-east of the

:04:58.:05:05.

country in the area affected by the tsunami last year. The outlook for

:05:05.:05:11.

the exports is pretty grim. Because of the turmoil in Europe, that is.

:05:11.:05:16.

Are we so getting a sense that companies are being very cautious

:05:16.:05:24.

about capital investment? Certainly companies are being cautious

:05:24.:05:28.

because they are so affected. The large exporters and companies are

:05:28.:05:32.

affected by their export markets. They are also affected by the

:05:32.:05:36.

strength of the Japanese yen, which is still strong although it has

:05:36.:05:46.

come offer of record highs. With forecasts of energy shortages in

:05:46.:05:51.

the summer and price rises on electricity already being felt by

:05:51.:05:55.

corporate customers, soon to be felt probably by domestic consumers

:05:55.:06:01.

as well, that could all be a factor that could mean this road we have

:06:01.:06:06.

seen in this quarter may not last. I was just going to ask some of the

:06:06.:06:13.

analyst I have been talking too, some of them are more optimistic.

:06:13.:06:19.

Are you getting it is a mixed feeling? It is very much a mixed

:06:19.:06:23.

feeling first of the effects of the rebuilding after the tsunami is

:06:23.:06:27.

going to be felt in Japan for a long summer. A large area was badly

:06:27.:06:33.

damaged and it will take a long time to rebuild -- a long time.

:06:34.:06:42.

When you talk to analysts they say Japan is not yet feeling the

:06:42.:06:50.

effects of nuclear reactors being off-line. So far we have not seen

:06:50.:06:54.

much manufacturing leaving the country and job losses because of

:06:54.:06:58.

that and domestic electricity consumers have not felt the pain of

:06:58.:07:05.

price rises. That's all still to come and it will come down the line

:07:05.:07:12.

for some thank you. Facebook is set to announce the

:07:12.:07:19.

price of its share sale later. Admittedly it was forecast to reach

:07:19.:07:22.

up to $11 billion but a large amount of private shareholders had

:07:22.:07:27.

decided to raise the amount of stock by one quarter. Shares are

:07:27.:07:32.

due to start trading on Friday. It could price the company at more

:07:32.:07:39.

than $100 billion. Let's cross live to out reporter in Tokyo. To she

:07:39.:07:45.

joins us now from San Francisco. Hello to you. Is it possible that

:07:45.:07:55.
:07:55.:07:57.

Facebook could live up to all of this hype? I do not know whether

:07:57.:08:04.

they can build a business with this huge overvaluation. -- valuation.

:08:04.:08:10.

The question so many people seem to be asking is where is the revenue

:08:10.:08:17.

going to come from? We saw GM only earlier this week withdrawing its

:08:17.:08:25.

advertising from Facebook. It did not do very much at the sizing,

:08:25.:08:31.

only $10 million. Some people say it did not do it very well --

:08:31.:08:41.
:08:41.:08:45.

advertising for is. Facebook needs to have the Google moment. They

:08:45.:08:49.

have to create a business that is highly sustainable and lucrative.

:08:49.:08:54.

They still have yet to do that. It is still a simple advertising

:08:54.:09:01.

business. It has 900 million users but only makes a few million

:09:01.:09:06.

dollars a year through advertising? Yes. Many of the advertising

:09:06.:09:10.

dollars have not moved over to the internet and Facebook in particular

:09:11.:09:18.

for some many people think that Facebook is interesting. They still

:09:18.:09:25.

do not have that golden advertising price. Some people have done well

:09:25.:09:35.

Download Subtitles

SRT

ASS