26/06/2012 World Business Report


26/06/2012

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motivated. You are or up to date. Now it is

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time for the financial news. It is time for World Business Report.

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The headlines: More pain for Spain. Moody's downgrades 28 banks.

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To pan's Prime Minister faces a rebellion over his plan to double

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sales tax. -- of Japan's. The problems continued to pile up

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for the eurozone. The creditworthiness of 28 Spanish

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banks was downgraded by Moody's. It says Spanish banks are vulnerable

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to losses on their property loans and said that the government will

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struggle to help them out as its finances are in a bad state.

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Santander was among those downgraded but its rating still

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remains above the Spanish government's. A fifth European

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nation has approached Brussels for finding. This time it is Cyprus,

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which analysts think will need between 5 and 10 billion euros.

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And Greece is in search for a new finance minister after Vassilis

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Rapanos resigned due to health reasons. That could hold up

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negotiations over the terms of the Greek bail-out. Jeremy Stretch is a

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market strategist at CIBC Markets. Good morning. It is just 24 hours

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of information there. Let's start with Spain. The downgrading of the

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banks and the concern by Moody's. What about the bail-out? Spain have

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only just formally requested the banking bail-out. But we don't know

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any details as to how that will work. We do not know how much Spain

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will request. We had those audits of the banking system last week.

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But as the property loans continued to go bad that number will continue

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to go up. That is probably one of the reasons Moody's are

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particularly concerned about the banking sector in Spain. As far as

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the other news that I mentioned there, in terms of Greece and their

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situation, it is not looking particularly good, when you have

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not got the Prime Minister available, or the finance -- or the

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finance minister. Yes. It would almost be funny and ironic if it

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was not so serious. Both of them are not able to attend the EU

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summit this week. The whole process in terms of the bail-out, or

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renegotiations, are being delayed. One thing the eurozone does not

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have a lot of time -- a lot of his time. Angela Merkel was speaking in

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Berlin yesterday. She has clearly set no to the idea of debt sharing.

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That is right. On the one side we have a number of nations same, what

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we require is some kind of debt neutralisation across Europe to

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share the pain. And on the other side you have Germany, who will be

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the paymaster for the majority of that. They are saying, as it stands,

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we're not in a position to do that. Markets are thinking ahead of this

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EU summit at the end of the week. Very low expectations, I imagine.

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Indeed. The level of expectation is so low that you can almost step

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over the bar. That is about as positive as we can get. Thank you.

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We'll keep you up-to-date. Let's move on to Japan. Lawmakers there

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are voting on a bill that would double the nation's sales tax to

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10%. It is a controversial move that dozens of members of the

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ruling party are likely to vote against. Our correspondent is in

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Tokyo. Tell us about this boat today. What is the latest? -- vote.

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They will start voting in about one hour in the lower house of

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parliament. The bill is expected to pass. The ruling Party of Japan has

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managed to reach a deal with its two main opposition parties. So it

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is likely to pass. But as you say, 50-60 possibly lawmakers from the

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ruling party have already said that they might vote against it. It is

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not clear what they will do, whether they will be even show up,

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or whether they will vote against it. But the leader has indicated he

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might form a new party. If that happens it will be a huge blow.

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This is critical. If this vote goes against the government, what will

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it mean for the Prime Minister? would mean that the ruling party

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will have significantly less power. But the Prime Minister seems very

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committed to make this bill passed after the lower house -- past. He

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keeps saying it is needed to tackle the huge debt. Thank you very much..

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News Corp is considering splitting into two companies according to the

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Wall Street Journal, which is one of News Corp's newspapers. One

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company would control the movie studios and television channels and

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the other would look after newspapers, book publishing and the

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education business. According to this report News Corp chairman

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Rupert Murdoch has recently come around to the idea after initially

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opposing it. of Nissan, was paid almost 1

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billion yen, nearly $13 million, for his work over the past

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financial year. He disclosed his pay at the company's annual general

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meeting. That makes him Japan's best-paid executive.

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Microsoft is buying Yammer for $1.2 billion. Yammer provides private

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social networks for companies. Microsoft says that it wants Yammer

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to be seen as part of its Office business software. Yammer will

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continue to be run from its headquarters in San Francisco.

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tumbled tumbled almost 8% on Monday to hit

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a 9-year low. It follows a negative report from Morgan Stanley. It said

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that the BlackBerry phones are ageing and that the new BlackBerry

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10 software is unlikely to be a hit. It is becoming a race against time

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for Italy's third-largest bank, Monte dei Paschi di Siena. Today, a

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delayed meeting of the bank's board is due to approve a new business

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plan. MPS, as it's known in Italy, urgently needs to find a billion

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euros to fill a capital shortfall. world's oldest bank. But to ensure

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it stays around it needs more than a new management plan. Supreme

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efforts have climbed two-thirds of a 3 billion euros black hole

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identified it -- identified by help.tside

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help. -- have failed. Wended markets can probably not help

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because they are up to expensive. This could become the first Italian

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bank to resort to some form of The markets here reckon the Bank

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and other Italian banks are far less exposed to those of Spain

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which have beak investments in the commercial property market. But M

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Italian government bernment b say the Italian state being asked

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to support a bank it already relies on itself. But investors in a

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solution will be found. I think that they will keep going. They are

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the third largest bank in Italy. They will undoubtedly sell assets.

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They will go to the government who will then buy a get off them

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through a secondary agency which means that they can continue but

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they will have to pay a high coupon for that. I also think they will be

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bailed out was certain degree by the fact they have Italian

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government bonds to be redeemed in the next couple of years, which

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will give them some respite from the pressure they are under current

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be. The hope is that talks with the Treasury and the Bank of Italy will

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bear fruit. But the state will want to minimise any addition to its

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already public debt. We're seeing losses across the

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board on markets, not significant, but falls across the board. HSBC

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finally came out with its lower growth forecast for China, to 8.4%

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this year. The Bank of Korea's sentiment index has that to a

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