30/06/2016 World Business Report

Conservative MPs will declare their bids to replace David Cameron

as party leader and Prime Minister, while Labour's Jeremy Corbyn is set

to be challenged by a former member of his shadow cabinet,

Those are the latest headlines from BBC World News.

Now for the latest financial news with the World Business Report.

Global stocks continue to rally, the FTSE 100 is now higher

than before the referendum, as investors bet

Plus, goodbye EU, hello EEA, or AA, or WTO?

We talk you through the acronyms and look at Britain's options

Welcome to World Business Report, I'm Sally Bundock.

Also in the programme, we talk to the small business owner

who is making the most of the Brexit opportunities.

So it seems the initial panic on financial markets has not only

calmed down, but turned into optimism.

Global stock markets surging again on Wednesday,

with investors for now betting that some kind of compromise deal can be

done to keep Britain in the single European market.

The FTSE 100 index of leading shares closed at this, 6360.06.

That is its highest close since April, a bounce back

in multinational and commodity companies listed on this index have

But it is worth noting the more domestic-reliant FTSE 250 is also

powering ahead at a similar pace but is not yet back to where

And the relief rally has continued across the globe.

This is the scene is Asia at the moment, with the share

markets climbing for a third day.

The pound is also recovering strongly up against the US dollar

This is last night's close on Wall Street,

and oil hovering around $50 a barrel again.

C U. Still the optimism in Asia today? Absolutely. A good day for

Asian equity markets. The rally continues in Japan, Korea, Hong

Kong. All well entrenched in positive territory. Japan's stock

market is currently higher on hopes that Tokyo will release more

stimulus, which is a plus for the stock market. Local media is

reporting that Shinzo Abe is being urged to spend almost $200 billion.

There is also talk that the bank of Japan will push for another round of

easing. This talk has been around the market for quite sometime due to

the strength of the Japanese yen. Everyone is hoping that it will

materialise sooner rather than later. Of course, there is also some

bad news. One Singapore bank is basically suspending its loans

programme for London properties in the wake of the Brexit vote. This is

Singapore's third largest lender. They said they are being cautious

about lending, however, you have Singapore's largest bank continuing

to provide financing for property purchases in London. But they have

advised customers that they have to be cautious. Thank you so much. Very

interesting. There is still optimism, caution, but many

businesses are feeling better at the moment.

Whether that optimism continues on the markets,

and in the wider business world, depends on this question.

What kind of trading relationship will Britain have

with the European Union following the vote to Leave?

The UK has set up a government task force to prepare for negotiations.

The first is what is often described as the 'Norway model'.

Out of the EU, but belonging to the European

It would give Britain almost total tariff-free access

It's the option which is most similar to the status quo.

As well as paying into the EU budget, and accepting

the majority of EU law, European leaders have said it

would need to accept free movement of people.

This could be a real sticking point, as immigration was a central issue

Option two, the UK could try for an association agreement, or AA,

But there are big questions over whether this would protect access

for London's financial services market.

Without either of those, Britain could try to rely

But exports to the EU would likely be taxed, for instance US cars sold

in the EU have a tariff of 10-per cent.

Well, at the end of the EU summit yesterday,

European Council President Donald Tusk insisted that Britain will have

to accept Europe's terms if it wants access to the single market.

Leaders are absolutely determined to remain

united and we are closely together as 27.

We reconfirmed that Britain's withdrawal from the European Union

must be orderly, and there will be no negotiations of any kind

until the UK formally notifies its intentions to withdraw.

Leaders made it crystal clear today, access to the single

market requires acceptance of all four freedoms,

There will be no single market a la carte.

Marc Ostwald is a strategist at ADM Investor Services International.

Nice to see you. We've tried to simplify things as much as possible,

but this is incredibly complicated. At the moment, we don't know who the

key negotiator in the UK is. I think there are any number of aspects.

Negotiations are likely to be drawn out, likely to be politicised. It is

very important who is going to be taking over, particularly with the

new head of the Conservative government here. There are four key

areas. Financial services, which makes all the other models

noncomparable. Very important, Britain needs that. The financial

services sector needs that access. The question is, what price will

they pay for it and will add compromised anything that the Leave

campaign campaigned on? The other areas to look at the auto which has

lot of makers who export cars from the UK to Europe. That is important.

Defence, we... It shouldn't be too contentious, because Britain is

still a part of Nato. At that and the pharmaceuticals industry. Those

are the most important areas. The overall services sector will also be

important in terms of burgeoning technology, which has been given a

boost but is extraordinarily mobile. I think we'll need to remember that

if the wrong sort of agreement is made, it can basically relocate in a

matter of days because of the nature of the thing. How optimistic argue

that we will get a good outcome? Negotiations cannot officially get

under way in till we hit the Article 50 Button, as it were, which won't

happen until we have a new Prime Minister. Then we have a two year

period to figure it out. Are you optimistic we will come out with a

better option in the UK than we had before? I doubt it. I think we will

come out with something similar, and then the problem will be, what are

the social ramifications, sociopolitical ramifications here in

the UK? If the public here feels like it has been cute as to what

would happen after the Leave, they renege on their promises, then it

will go beyond just the relationship in trade terms. As he said, it will

take a long time and be complicated, we will do our best to inform you on

the journey. In other news: Confidence among

British consumers fell sharply in the days after the country

decided to Leave the European Union, The index measures people's economic

sentiment on a daily basis. It has slumped to its lowest level

since May 2013, when Britain's economy was just starting to emerge

from its post-financial The US operations of Deutsche Bank

and Santander have again failed annual stress tests by the US

Federal Reserve. The tests are designed to see how

banks would survive a severe financial crisis and economic

downturn, and were launched in the wake of the 2008 financial

crisis. The Fed said "broad and substantial

weaknesses" persisted Both banks had also

failed last year. While all 31 large US

banks passed the test, Morgan Stanley only got conditional

approval and has to submit a new capital plan by

the end of the year. The US Senate has approved a relief

plan to help Puerto Rico tackle its $70 billion debt,

ahead of a potential default on Friday when $1.9 billion worth

of payments are due. The US territory has been suffering

a decade-long recession that has seen thousands flee

for the US mainland. Businesses have closed,

schools have struggled with electricity shortages and

hospitals are short of medication. In recent months, a Zika virus

outbreak has hit Puerto Rico's That's World Business Report, stay

with us for the papers in just a moment.

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at a specialist children's heart unit, according to an independent

review into services at Bristol Royal Hospital