22/07/2014 World Business Report

which aims to eradicate female genital mutilation as well as child

marriage within a decade. Now it is time for World Business

Report with Sally Bundock. Russia prepares for tougher

sanctions from the EU. We assess which countries could be the winners

and losers if it is pushed into economic isolation.

With two weeks to go until Argentina defaults, one New York billionaire

thinks he is closing in on a multi`million dollar payday.

Hello and welcome. You are with World Business Report. Also in the

programme: With hours to go until the results

announced we take a look at which presidential candidate investors

want to win in Indonesia. In a few hours time European foreign

ministers are meeting in Brussels to discuss further sanctions on Russia.

Following pressure from Barack Obama, three leading EU powers,

Britain, France and Germany, have said they are willing to push for

measures which would place whole sections of the Russian economy

under sanction. Let's have a look at what this means. Despite strong

political rhetoric there are concerns about what this could do

for home economies. Russia is a key trading partner with many European

nations. Despite the escalating situation, the French still planned

to make and sell two assault ships worth $1.6 billion to Russia. This

is why France says specific companies should be targeted, not

entire sectors of the economy. For Germany, Russia import industrial

machinery as well as trains, cars, medicines. More than 6000 German

companies are registered in Russia. In the UK it is the city of London

that is at risk if blanket financial sanctions were implemented. The city

provides extensive services to Russian corporations and it would be

hit hard. Wealthy Russians have invested an estimated $46 billion in

the UK economy. Targeting individuals could end this flow of

capital. It is a TWO`WAY street. Russia needs its European trading

partners. EU countries import 84% of oil. This could send Russia into a

deep and protracted recession if it collapses. The talk through what is

at stake, we are going to look at several countries but firstly we

will start with the UK. I am joined by the head of economic research at

Open Europe. We have outlined some of the issues. The UK finance

minister Chancellor George Osborne has said we must be braced for

economic impact. How big a hit could this be? There has been a lot of

talk about the links between the city of London and Russia but they

are probably not as huge as made out. In 2012 Russia accounted for

1%... 0.5% of total investment in Europe into the UK. There are

sizeable amounts because London is a global financial centre, any hits

would be manageable. There would be losses but it could be withstood.

What about sanctions on individuals? We have supposedly a lot of Russian

billionaires who are spending money and buying assets in London. There

are certainly a disproportionate number of billionaires in London.

How much money is held here is a good question. A lot of people talk

about this without having looked at the data. We have to remember that

when you look at the flows of money out of Russia, a lot of it goes

through certain countries, Cyprus, the Netherlands, the British Virgin

Islands. These countries will have arrangements which make money hard

to track. It is a fair question to ask how effectively the sanctions

can be enforced and how the money can be tracked to the billionaires.

What about companies like BP? The question there is retaliation. There

is an amount of capital from the UK into Russia. There will be concern

about business there. It is a question of retaliation, what will

Russia do, how will it respond to these harsh measures if they come

about? There have been rumours of asset freezes, capital controls.

Thank you for coming in from Open Europe. We will be discussing in

detail the economic factors that could influence the edge and German

officials later on. Argentina is less than two weeks

away from default. The latest hearing in New York today is aimed

at resolving the stand`off between it and hold out investors. One New

York hedge fund has refused to accept Argentina's rescheduling of

debts. This report from Wall Street on the Titan pushing Argentina to

the brink. When it comes to distressed

investing, few can match him. The 30th floor is home to a hedge fund

co`founded by Paul Singer. He made his name as a vulture investor,

buying up the debt of bankrupt companies and countries and

negotiating his way to profit. In 1996 he bought up some of the rue's

debt for $11 million. He said the route would pay them back in full or

be sued. He got his $58 million. This time it is Argentina in his

sights. Paul Singer, a key fundraiser for the Republicans, seen

here with Mitt Romney, may be weeks away from collecting hundreds of

millions of dollars. Not a bad return on an investment of $48

million. The heavily discounted Argentinian debt. How did this the

11 year battle start? In 2001 Argentina defaulted on debt. 93% of

its lenders agreed to be repaid less. A few holdout creditors

including Paul Singer refused to go along. They sued and won. He is a

very tenacious investor. He will stop at nothing. Argentina is

learning that. He is learning that Argentina is about as tenacious as

he is. They are not taking it lying down? Argentina is cutting deals

with China, Russia, telling everyone that this is a political issue, this

isn't just a financial issue. After waiting more than a decade, Paul

Singer wants his money. If Argentina refuses to pay by the end of the

month, the country will default. It is a lose lose situation for all

involved. Indonesia is hours away from

unveiling its election results. The presidential vote that took place on

July the 9th is reportedly the closest race in over a decade.

Concerns are mounting now that the transition of power will not run

smoothly. It is increasingly worrying investors. We get more from

Rico Hizon on in our Asia business hub. Tell us what the likely outcome

is going to be. This is indeed the moment of truth.

We will find out today who will be the next President of Indonesia.

Looking at most private tallies of official results, they give it to

the Jakarta Governor Joko Widodo. Over the weekend his opponent

accused the election commission of failing to investigate widespread

cheating in the polls and warned he will not accept the election results

and suggested officials recount the results in Jakarta. The uncertainty

is making markets quite jittery. In early Jakarta trading the benchmark

index is slightly down by one fifth of a percent. It was up on Monday

admits to news of a victory. If the results are challenged this could

hurt rallying stocks which are up. It could lead to more uncertainty.

A few more business stories. Yahoo has bought Ferrari. It is thought to

be the biggest acquisition since they bought a blogging platform in

2012. Yahoo said it will target advertising at smart phone users.

Netflix reported $71 million for the second quarter. Later today we will

have earning news from Apple, McDonald's, Coca`Cola. These are the

markets in Asia: China's president has done a deal

with Venezuela including a credit line to the country in return for

crude oil and other minerals. An interesting story emerging in South

America. In the UK, the senior lawyer who

reviewed the government's anti` terror legislation is expected to

call