21/12/2015 World Business Report

Now for the latest financial news with Sally

Shares in Toshiba plunge in Tokyo, on reports it is poised to announce

Our team in the region will have the latest.

A difficult coalition is expected, following a general election that

We assess what this means for Europe's fifth-biggest economy.

In a minute we will take a closer look at negotiations over the trade

The Japanese industrial giant that makes everything

from home appliances to nuclear power equipment is seeing

Local press is reporting the company will reveal

This massive loss would be double the company's total net income

for the previous two decades, and is related to

an accounting scandal, layoffs, and sales of business units.

With more than a 9% move in its share price, Toshiba needed to make

a statement today saying it would hold a board meeting later in the

day and discuss structural reform, adding that any measures it decides

are expected to result in a significant deficit

for the fiscal year, as indicated in the media reports.

Sharanjit Leyl is in our Asia Business hub in Singapore.

Tell us more. That's right, you have pretty much said all we know at this

point because of course there were all these reports over the weekend

saying that of course Toshiba is likely to post a fiscal year loss of

more than $4 billion and of course you mentioned that the firm as well

has issued this announcement saying they have no specific plans for an

announcement today. Investors, of course, are watching very closely

that board meeting which will be taking place in just a few hours. We

expect an announcement perhaps there. There are expectations that

they may then announce wider ranging restructuring plans including job

cuts. Statement the board said they would discuss structural reforms. So

we are watching that very closely. We know that Toshiba has been in

trouble for a long time. That massive accounting scandal earlier

this year revealed that for years the conglomerate had inflated

profits to cover up losses. Of course, is part of the scramble to

reform and restructure reports are saying the company may cut as many

as 7000 jobs and the story was one of the most damaging accounting

scandals to hit a 140 -year-old company. It forced its

then-President and seven other top executives to resign and it was

revealed that they have actually inflated profits by about $1.2

billion since 2008. The global financial crisis, of course. As you

say, Toshiba is a huge company which sells everything from rice cookers

to nuclear reactors. A huge conglomerate. It doesn't help that

all of this is coming two weeks after the securities and exchange

watchdog said that Toshiba should be slapped with a record $60 million

fine over that scandal. Of course, when we have the board meeting from

Toshiba later we will update you with anything they might say about

those losses or job losses and restructuring. Let's talk about

Spain. Spain's governing conservative party

has won the most seats in the general election, but has

lost its majority and must now try to form a coalition, and that could

spell trouble for the country's After five years of negative growth,

Spain's economy emerged The recovery has since been fuelled

by domestic demand, namely a rise And current Prime Minister Mariano

Rajoy was leaning on the economic recovery as one of the pillars

in his campaign for re-election. In the third quarter of this year,

the economy expanded by 0.8%, the ninth consecutive quarter

of growth in Spain. And unemployment has retreated

from its record high of 28%. But it is still pretty lofty, at

21%, making it the second-highest in This is a cause of concern for many

voters and opponents of Rajoy's conservative Popular Party, who feel

that many of the jobs created are But Mr Rajoy says it is

only going to get better. He centred his re-election campaign

on employment, promising two million Joining me now via webcam is Jan

Gerhard, country analyst at IHS. Thank you for being on the

programme. So no party has a majority, and this new, young,

populist party Podemos has got quite a significant chunk of the votes as

well. Sure, well, this party clearly has been a game changer for the

Spanish political landscape. And as you just said, the party has just

formed from the two... The country has reformed from a two party state

to a multi-party framework. None of the parties have enough for a

majority government and the building of the coalition will be very

difficult. The big surprise of this election is that the Centrist

Citizens' party performed worse than poll suggested so the incumbents and

the right cannot go into a coalition with them. It is equally difficult

on the left. As you just said, Podemos did very well. A lot of

support came from party... From people who are very tired of the

austerity measures which were opposed by the current Prime

Minister -- proposed by the current Prime Minister. Tired of the

austerity measures and also the young in Spain have been dealing

with very high unemployment levels for them for many years. Youth

unemployment there is just below 50% currently. Do you think that's why

that particular party did well? Yes, absolutely. The young support

Podemos, and also the other new party, Citizens party. But the high

unemployment rates are a big factor in this election. What does this

mean for the economy? I know it is hard to say at the moment when we

don't know what the coalition looks like but presumably political

instability will have a knock-on effect? Certainly, it is too early

to say, as you just said, how the economy will develop after this

election. If the Centre Right take the government, we would have seen a

continuation of austerity reforms. Now we are not quite sure how this

will develop. But uncertainty will certainly remain high. Political

agreement will hopefully be found within the next few months. Thank

you so much for your time. Good to get your analysis on Spain. We will

talk about that further when we look at today's papers.

Ukraine has not repaid a $3 billion debt owed to Russia, claiming Russia

has refused to accept repayment terms already offered to other

The moratorium means that Ukraine is likely to default on the debt.

The countries have been at loggerheads since Russia annexed

Crimea last year, and today Russian minister of economic development

Alexey Ulyukaev is at the latest round of talks on deep and

comprehensive free trade area of the EU-Ukraine Association

Agreement. It was signed in April 2014, in response to the security,

political and economic challenges faced by Ukraine.

The EU unilaterally granted Ukraine preferential access to the EU market

This season is in full swing in Ukraine. This is a Christmas and New

Year's market in the centre of Kiev on the historic square. Further to

the west, more serious events are taking place. Talks between

Ukrainian, Russian and European Union officials to try and find a

compromise to Russia's objections to the free trade deal between the EU

and Ukraine. Now, the Europeans and the Ukrainians have said that the

free trade zone will go into effect regardless of the outcome of these

talks, will go into effect as planned on one January. Trade

between Russia and Ukraine has decreased a great deal since the war

broke out in Ukraine's East. Nonetheless, business between Russia

and Ukraine still makes up a large part of Ukraine's economy. But

economic relations between the two countries have deteriorated even

further recently. The two countries have cut off all airline traffic

between them and Russia is threatening to take Ukraine to court

over a $3 billion loan which Ukraine says it cannot pay back to Russia.

All this is taking place as Ukraine's economy remains in a very

fragile state. And so any further adverse developments could have a

very negative effect on Ukraine's economy. David Stern, who is in

very negative effect on Ukraine's economy. David Stern, who is in Kiev

for us. A really brief look at markets. The yen at its highest

against the US dollar per week. And as mentioned, Toshiba one of the big

losers. I will see you soon. The Government has been criticised

for its handling of the recent The Parliamentary Business Select

Committee says ministers were not alert enough to the effect

a collapse in global steel prices