30/07/2012 World Business Report

in Russia's main cathedral. Now for the latest financial news.

Welcome to World Business Report. Apple and Samsung had fought a

court in America for the latest round of their dispute over patents

in mobile phone devices. HSBC is due to reveal its first

half earnings, but our investor confidence is dropping after money-

laundering allegations. Japan's industrial output falls for

its third straight month amid fears that the recovery might be losing

momentum. It has been billed as the clash of

the titans. The war of words between Apple and Samsung in a

court this Sunday. The latest round of their patent battle is over

mobile devices. Together, they account for almost half of the

smartphone market, but they have seen their share prices hit record

highs cent to profits fuelled by these devices.

-- thanks to. Apple is known for its

distinctiveness. Its latest attempt to protect that will play out in

San Jose, California. They have accused Samsung of copying the

iPhone and iPad. Samsung has counter-sued, claiming that Apple

infringed its patent. Both deny the allegations. What makes this

dispute so interesting is that the two companies have a complex

relationship. While Samsung's smart phones and tablets compete with

Apple products, Samsung also sells components to Apple. This could

make reaching an agreement easier. Over the past couple of years, the

two might have clashed in court rooms around the world. With

impending litigation involving Google, it seems that Apple and its

rival, Samsung, are not the only ones who have a lot riding on the

outcome of this case. The beleaguered banking sector will

be in the spotlight this week. Hate SPC posts its first set of results

since a report by the US Senate says it allowed billions of dollars

in cash to be laundered by Mexican drug gangs -- HSBC. The bank has

announced it will cut 30,000 jobs over the next two years. This will

affect about one tenth of its global workforce. Big numbers. I am

joined by a banking analyst. They are expected to set aside a fair

amount of money for the selling of financial products, but at the same

time they are expected to turn in a profit of around $20 billion. Do

those figures tally with your analysis?

I heard something like 16.8 billion. Within that there is a 3 billion

dollar Game when they sold a credit card business with in America last

laundering allegations that I mentioned earlier. If it doesn't

hit them now in the current crop of numbers, presumably it will for the

second half of the year. No provision has been made for this

fine yet. They have a lot of litigation. We don't know how big

these fines will be. They have a little bit put away but they don't

want to make headlines because they haven't yet been fined.

They obviously want to say that they are in discussion and they

will see what happens. What about the position of Stuart

Glover, he is the CEO. He has apologised for the money-laundering

allegations - is there a sense that if the numbers come out below what

the market is expecting, that could be the queue to get rid of him?

Absolutely not, Stuart Gulliver is very safe. He has been very busy

putting his strategy in and making cost cuts. I think they sold almost

30 businesses since May last year when they announced the changes.

They are really getting the bank moving forward. I think he is in a

pretty safe position in terms of the allegations. He was running an

investment bank at the time. There are a lot of other board members

there, including the chairman, who were also on the board at the time.

Even if he is saved, they could be other people will be booted out.

You could argue that no-one's hands were entirely clean.

At the end of the day, the board knew they bought a Mexican bank in

2002. One of the joys of working in developing markets is faster growth

and earnings. The downside is that you have to be aware that sometimes

business is conducted the way that it wouldn't be done in the

developed markets. You have to be very aware of that. Clearly this is

something they missed. We will get those numbers in a few

hours' time. Two of Europe's leading carriers

put out their latest financial results. They are right and air and

Air France. Those numbers tell dramatically different stories.

Ryanair should see its profits soaring, but Air France is likely

to go in the opposite direction, posting deep losses. They lost

almost $500 million in the first half of this year. They are

planning to lay off 5,000 staff. Will this be enough to put it back

into profit? Ryanair's budgeted through hard

times. Air France has taken the brunt of the storm. Last year they

lost almost $1 billion, and it is on course to do the same again....

Its managers would like to shed one tenth of the workforce. 5,000 staff.

Unions are deciding whether to accept. They are becoming aware

that if something doesn't change, the airlines will be in a very

difficult position. I imagine that other airlines will follow suit.

Cutting costs is the first step as the managers try to turn the

company around in a cut-throat market. There are 320 airlines

across Europe. All of them are cutting prices to the quick as they

scrabble to sell tickets. That is why Air France can't make any money,

even given the recent pick up in passenger numbers. There is an

urgent need to consolidate throughout the sector in Europe.

Air France is one of the big groups of airlines which will be expected

to buy up the smaller.... They need to sort out their internal issues.

They need to restructure, they need to get their costs down. Until that

is done, and it will take some time, they will not be in a position to

go shopping for other airlines. Air France has said it needs 7.5

billion. If job-cutting does not do it, they will go to the state and

ask them to pump in more. Japan's industrial production fell

unexpectedly last month. Good morning in Singapore. These numbers

are not very encouraging. How bad are they? Should we hide under the

covers now? It is a third straight month of

declines as Japan continues to feel the impact of this global economic

slowdown. You have the strong yen against the US dollar. Their

industrial output inched lower by 0.1%. This was due to falling

output from auto makers and the electronic industry. You also have

the yen appreciating. Auto makers are moving production overseas and

demand is low abroad. For July, manufacturers are still expecting a

4.5% increase. One Japanese economist has said the numbers are

disappointing and though they could be a recovery this month it will be

temporary and the economy will continue to languish for the months

ahead. The Week In Numbers, the Economist said, would not be enough

for the Bank of Japan to ease... -- The point you are making their

about the expectations of Central Bank activity helping to lift the