16/08/2012 World Business Report

with the Queen. Those are the latest headlines from BBC News. Now

for the latest financial news with Sally.

This is World Business Report. The headlines: Subpoenas for seven of

the world's biggest banks as US authorities investigate the alleged

fixing of the so-called LIBOR interest rate.

Foreign direct investments in China for in July as economy continues to

feel the pinch of slowing growth and the European debt crisis.

Early investors in Facebook can sell their shares today as the

post-flotation lock-up period ends. There is no let up in the ongoing

troubles for the banking industry as US authorities confirm they have

issued subpoenas to seven banks over claims they manipulate and the

LIBOR interest rate, the rate at which banks lend to each other. The

banks are Barclays, Citigroup, Deutsche Bank, JP Morgan Chase,

HSBC, Royal Bank of Scotland and UBS. We will be getting analysis of

what this means in a mannered but first week here is an explanation

from our New York Business Correspondent. -- in a moment.

The Attorney generals for New York and Connecticut have issued

subpoenas to seven leading banks. A subpoena is a request for

information backed by the force of law. State authorities in benighted

states are involved because LIBOR is used to set the rate of interest

one state and municipal bonds. And so manipulation of LIBOR could have

caused the state's huge losses. Barclays has already agreed to pay

a $450 million penalty. The latest developments show that the Net is

being spread much wider than Barclays to many other banks, and

that local authorities in the United States as well as national

regulators in Britain and the US are involved.

Let's get some more analysis from a banking analyst. We'd did know when

his first came to light at Barclays that more banks will be named.

Yes, but we did not know that all of them will be named and shamed at

the same time. The general consensus was that we would see a

trickle effect, one every three or four months. We did not expect to

see them at the same time. It has been a bit of a shock. What is the

impact? This is coming from the US again, which was the top story

yesterday. The US has an easier time doing this because in new York

it is not required to show intent. That means they did not show that

they -- did not have to show that they did this to intentionally hurt

people. But it does appear they are going after foreign banks more than

domestic ones. But we have to give them the benefit of the doubt. I

think we are seeing more from an external perspective. And the focus

on London because we're talking about the London interbank lending

rate set in London by a series of banks. It is under review by the UK

government will stop it is going to be changed. It will be changed but

it is not a trivial thing. It will take a long time to change because

there is so many things involve. In the US there are 900,000 mortgages

linked to this one rate, this one very small rate. Making that kind

of change will probably be it a five-year programme.

A lot more on the website about that story.

Let's move on. Wal-Mart is reporting its second-quarter

results today with the recovery in the US still fragile. Investors

will be watching the numbers for any indication of how American

consumers are feeling. Wal-Mart is pushing its back-to-

school offerings to attract American shoppers. Third by

mistakes in the past including removing popular products, the

world's biggest retailer has gone back to its relentless focus on

value for money. That strategy appears to be paying off, with its

crucial US business gaining momentum. Wal-Mart focuses on a

lower income consumer who has less flexibility in terms of overall

spending. They have benefited from reduced gas prices we have seen.

Slightly declining an incitement rates, especially in the lower

income job market. -- unemployment rate. And oversees its business has

remained strong, but Wal-Mart continue to deal with allegations

of bribery in its Mexico operations. Executives at the retail giant were

sued over the handling of the affair by a group of New York City

pension funds. We don't sit idly by when huge exposes of potential

bribery of foreign officials and even worse, cover ups by company

directors and executives, may have taken place. Most investors will be

focused on what Wal-Mart has to say about their consumers.

Low income shoppers to struggle to pay their bills. Americans are

starting to open their wallets. They spent more into line and they

have in the past five months. But given the fluctuating recovery many

are waiting to see what Wal-Mart has to say.

Facebook's early investors and a handful of directors are able to

sell stock. They are able to sell stocks their own in the company

today. The so-called lock up period, which prevents them from unloading

shares, will expire. Facebook shares have already plummeted by

almost half since its initial public offering. Are they set to

fall further? Let's get more detail. We can join via the Web can from

the US Peter Zhang Nan, an investor who has been involved in several

successful internet companies. What do you think will happen today? Do

you think we will see a flurry of shares coming to market? I think we

will see a lot. We are looking at 285 million shares. There is a

large number. But I think that the battering the Facebook shares have

taken in the past three months have actually helped for today.

Investors who have a very large number of shares would not want to

let them go at this price. If Facebook was trading at 30 or $31,

I think we would see a massive move. We will see some movement no

question. Some people will want to get rid of them at any price as

quickly as possible. But in terms of the massive hammering, I don't

think it will be that bad. What is just perspective on how this has

gone for Facebook? There is so much commentary. There are those that

feel it was massively overpriced and was doomed to be a disaster but

there are others who say, this is a long-term story. I heard a great

analogy the other day when they compared it to the last long waited

episode of a TV series that has gone on for eight years and they

say they're going off air, they build up hype, there is no way it

can reach what everybody has imagine. Facebook has the ability

to grow. They have markets. But am a lot of work to do. They still

have not created a mobile strategy. There is a lot of things they must

do. I think the frenzy was so great, everybody saw Facebook as the next

big, big thing. They did not really think, you know, it is still a very

young company and as a lot to do. Irrational exuberance that we saw

back in 2001 has gone away. -- and the rational. It has a lot of room

to grow. We're going to see and hit today but it will not be the end of

days for Facebook. 0 OK. Thanks for your analysis.

More evidence today that the slowdown in China it is continuing.

There has been a steep fall in foreign direct investment into the

world's second-biggest economy. Tesco to Rico Hizon in Singapore. -

- let's go to. What is happening in China? Not a good sign. A steep

decline for foreign direct investment in July as the economy

continues to feel the pinch of the slowing global economy and of the

European debt crisis. The mainland attack that $7.6 billion in s b r i

s, down close to 9% compared to the same period last year. For the

first seven months of 2012 foreign direct investment amounted to $66

billion, 4% lower from the same time one year ago. Analysts are not

optimistic about the second half of the year. They are forecasting a

further slowdown in foreign direct investment.