11/04/2016 World Business Report


11/04/2016

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As the deadline for bids on the Online giant looms, the owner of

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We'll analyse today's inflation figures with an expert.

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Also in the programmme: Australia tries to sell more than just

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commodities and beach holidays to the Chinese.

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The owner of Britain's Daily Mail newspaper is considering a bid

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for the struggling US internet company Yahoo.

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The Wall Street Journal says the Daily Mail and General Trust is

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in talks with private equity firms about an offer.

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Yahoo is under pressure from shareholders to turn itself

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around and just weeks ago invited interested parties to make an offer

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and first-round bids for the firm's main web assets are due today.

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So far Google and the US telecoms firm Verizon are said to be

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circling and now of course the Daily Mail is added to that list.

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For Yahoo's boss Marissa Mayer, it's an admission she is losing her

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battle to turn around the struggling tech giant.

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There were high hopes when she was hired as Chief Executive in 2012

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that she would revive Yahoo - that had just churned through several

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Mayer was viewed as one of the biggest power players in Silicon

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Valley having had a rapid rise to the top management at Google.

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But three years after her appointment and Yahoo was

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still marred by slowing growth and internal dissent.

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It's left it vulnerable to activist investors,

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like shareholder Starboard Value, demanding the board be completely

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With me is Simon Griffiths, partner at Irwin Mitchell.

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That morning. It is very interesting. Tell us your thoughts

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on the Daily Mail getting involved. It is great to have a British

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company interested in getting involved because Britain have no

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large global Internet businesses. However, I think with the Daily

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Mail's involvement, private equity houses will take Yahoo's core

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business and the Daily Mail will take the content and media. When we

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look at the market cap of the Daily Mail compared with Yahoo, we can see

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it would need a financial helping hand. Correct. The Daily Mail around

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?2.5 million, Yahoo's ?34 billion. However, core assets are worth

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around $6,000,000,000-$8,000,000,000. It is

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hard to tell because most of the value is the stake in Ali Baa-Baas,

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the Chinese Internet company and the stake in Yahoo Japan, only part of

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the value of Yahoo comes from its core assets -- $6 billion - $8

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billion. Talk us through Horizon and Google. It is all speculation. No

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formal offers at all. Your thoughts on those companies? Horizon is a

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large US telecoms business, whose CEO has a vision of becoming a

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global tech business. Acquiring Yahoo will help in his vision to get

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there. Google doesn't need Yahoo. It doesn't make much difference. Of

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course if companies are looking at Yahoo, Google has had a look, but it

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would be a headache for Google. It would be a lot of hassle with

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competition authorities might well refusing it. Marissa Mayer joined

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the company when she was young and six months pregnant. There was

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controversy when she started. However, she seemed extremely

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determined. A woman on a mission. She has not fulfilled that mission.

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Maybe. Let's hope she is still a determined business leader after

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this Yahoo period of life is over. It was once a glorious company with

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market capital over $150 billion, now $35 billion. It is not her

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fault. Thank you so much for coming in. We shall keep you up to date

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with every twist and turn as far as that story is concerned.

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It's the biggest trade delegation ever from Australia to China.

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For all of this week, 1,000 business representatives

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and the country's trade minister are touring China to boost ties

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Bilateral trade stood at just under 100 billion USD last year.

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And it's especially crucial for Australia because China is

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its biggest trading partner in both exports and imports.

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How to sell Australia to the Chinese? It looks like this at the

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moment, and hunky man holding shrimp. It works. Plenty of Chinese

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holiday in Australia, and plenty send children to be educated. This

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trade mission, it is a massive effort, is aimed at broadening that

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relationship. What they are trying to do is get Chinese to buy services

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from Australia. We have leaders from 1000 businesses coming in this

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delegation, senior politicians, going to eight Chinese cities in

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five days, selling tourism, education and agribusiness. What

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does it say about the relationship? It has changed a lot. The Chinese

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buying everything in the ground in Australia is over. This is about

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selling far more services to the people of China from Australia. It

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is very important. It is no underestimation to say the future of

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the Australian economy depends in part on its relationship in trade

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with China. How much will they raise? Last time in 2014 the

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Australian government said it led to the injection of $3.5 billion US.

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They want the same or more this time around. That was Robin Brant in

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Shanghai for us. Let's stay with China. Everyone wants to know how

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the Chinese economy is doing. This week we have loads of economic news.

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Today, it is inflation. Chinese inflation for appears to be

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holding steady, with the consumer price index again coming in

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at 2.3% compared with a year ago. Producer prices fell 4.3% in March

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also compared to a year earlier. That's slightly higher than

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for the previous month. What does all of it mean? We speak

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with an independent analyst who can make sense of it. Thank you for

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being on the programme. Talk us through these numbers today. Does it

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tell us that prices are rising or does it tell us that the fears

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around deflation have gone away? No, I think it tells us very little.

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What you have to remember is even at 2.3% below the central bank target

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of 3% CPI, this is the 49th month of falling producer prices. After all

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of the stimulus earlier in the year the Chinese economy is at best

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treading water. It is still effectively weakening. Is the

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deflation threat still there? I think it certainly is. This is not

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going away any time soon. The government is unable to bring about

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meaningful reform that will change the Chinese economy long-term.

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Measures instituted are relatively short-term. Papering over short-term

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problems. Do you think the central bank will move interest rates soon

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in your view? It has been cutting rates recently. This is the real

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problem. The central bank is in a horrible position, juggling many

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things, one being the inflation picture, the other being liquidity

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requirements in the system and managing the currency as well. The

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feeling is they are doing better than potentially forecast in terms

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of inflation numbers, so maybe they won't rush to cut rates as

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aggressively as people thought a couple of weeks ago. But the numbers

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are changing monthly and the outlook is still weak. If it is not direct

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rate cuts, it will be listening to cover over many debt problems. We

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have to leave it there but we appreciate your time. Thank you for

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your perspective on the Chinese economy. Let's squeeze in some other

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stories, starting with Japan. It has sought to

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reassure investors that it's willing to intervene

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in the currency markets. The move follows a recent pledge

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by the G20 nations to consult on foreign exchange markets and avoid

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competitive currency devaluations. The yen has gained more than 10%

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against dollar this year, which worries the government because

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it decreases export earnings and Tatar Steel is beginning the formal

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process of selling its loss-making UK plants, inviting interested

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bidders to submit their offers. So far,

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the only company to have publicly expressed an interest is Liberty

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Steel, owned by Sanjeev Gupta. Thousands of workers in England

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and Wales risk losing their jobs So, let's look at markets. Inflation

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data in China did not wobble markets much. As you can see, Japan is down

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a lot with the yen strengthening daily versus the US dollar, hitting

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sentiment. Hong Kong is up half a percent, as I mentioned. Chinese

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news did not really affect sentiment. I will see you soon.

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