11/10/2016 World Business Report


11/10/2016

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Now for the latest financial news with Sally Bundock

:00:00.:00:00.

Turn it off - that's the warning from Samsung to owners

:00:00.:00:24.

Shares plunge in South Korea after the company orders a worldwide

:00:25.:00:28.

Europe's fastest growing economy presents its budget under the cloud

:00:29.:00:34.

of alleged sweetheart corporate tax deals.

:00:35.:00:41.

Also in the programme, what next for the price

:00:42.:00:51.

We'll have the latest on the rising price of crude oil.

:00:52.:00:55.

It's a disaster for Samsung at a critical time for

:00:56.:00:58.

It has told all users of its flagship Galaxy Note 7

:00:59.:01:04.

smartphone to switch them off while the company investigates new

:01:05.:01:07.

Samsung has also announced it is to stop all sales of the phone

:01:08.:01:13.

The company recalled 2.5 million phones in September

:01:14.:01:20.

after complaints of exploding batteries and later assured

:01:21.:01:23.

customers that all replaced devices were safe.

:01:24.:01:27.

But there are now reports that even those phones that had been replaced

:01:28.:01:31.

Now organisations such as the US Federal Aviation Administration

:01:32.:01:36.

are telling airline passengers with these phones they must be

:01:37.:01:40.

switched off and not stowed in checked in baggage

:01:41.:01:44.

The Galaxy Note 7 was meant to be Samsung's flagship phone,

:01:45.:01:54.

released just weeks after Apple's iPhone 7.

:01:55.:01:56.

It was well received but since the scandal,

:01:57.:01:58.

Samsung shares have taken a major hit.

:01:59.:02:00.

There's also expected to be significant damage to brand

:02:01.:02:02.

The reputational damage is the biggest thing. Samsung have spent

:02:03.:02:15.

billions and billions of pounds over many years marketing and building up

:02:16.:02:20.

a trusted brand and then you get exploding phones. It questions the

:02:21.:02:24.

reliability of all of their projects but especially their mobile phone

:02:25.:02:26.

handsets. Rico Hizon is in our

:02:27.:02:27.

Asia Business Hub in We were talking about this

:02:28.:02:40.

yesterday. They were rumoured problems and now it is a worldwide

:02:41.:02:46.

halt. The crisis deepens for Samsung Electronics. South Korea's largest

:02:47.:02:51.

conglomerate. If you have a look at the stock price right now in South

:02:52.:02:55.

Korea the losses have indeed accelerated in midday trading.

:02:56.:03:01.

Samsung stock price lower plunging now to around 7% after it told shops

:03:02.:03:08.

across the globe to stop selling its new Galaxy Note 7. They have safety

:03:09.:03:13.

regulators saying they found a product defect in the unit and urged

:03:14.:03:18.

consumers to stop using them. Samsung has asked all users to turn

:03:19.:03:23.

their phone off and seek a refund or exchange for a different phone. With

:03:24.:03:26.

these problems mounting, sale, on the note seven there is no pressure

:03:27.:03:32.

on the company to drop the high-end smart phone and some analysts or

:03:33.:03:36.

even saying it is now meaningless to continue producing the Aleksei note

:03:37.:03:40.

seven. The reputational damage is too much. And apart from the recall

:03:41.:03:45.

of 2.5 million units there will also be doubts about whether or not the

:03:46.:03:50.

replacement units are safe to have. The Galaxy Note 7 has gone from

:03:51.:03:54.

praised condonation within weeks as images of charred handsets have

:03:55.:03:59.

spread throughout social and traditional media. Analysts are

:04:00.:04:02.

forecasting that the recall is damaging and could cost Samsung

:04:03.:04:04.

Electronics billions of dollars. Samsung could have more financial

:04:05.:04:15.

problems on the way with the US Supreme Court set to finalize how

:04:16.:04:18.

much it should pay rival Apple In the original court ruling

:04:19.:04:21.

the world's largest smartphone maker was ordered to pay close to $400

:04:22.:04:25.

million in their tit Now Apple is hoping for more

:04:26.:04:28.

and Samsung for less. Do take a look at our website. Our

:04:29.:04:37.

correspondence are all over this story. They are updating the website

:04:38.:04:45.

all the time so take a look. Let's speak about Ireland. It looks like

:04:46.:04:50.

being Europe's fastest-growing economy in the indie 16. The country

:04:51.:04:54.

is about to announce its budget at a time when it is seeking to

:04:55.:04:57.

consolidate its reputation as the comeback kid of the EU. Nearly three

:04:58.:05:03.

years ago Ireland needed an international of over 65 billion

:05:04.:05:06.

euros to combat the impact of a crippling recession. The country is

:05:07.:05:10.

expected to see growth of almost 5% this year. Rather good. Attracting

:05:11.:05:15.

international corporations especially through its tax regime is

:05:16.:05:20.

a key part of its strategy. Last year Ireland saw corporation tax

:05:21.:05:25.

receipts leapt by 50% to 6.9 billion euros but the future of that

:05:26.:05:29.

strategy is coming into question after the EU ordered apple to repay

:05:30.:05:34.

more than 13 billion euros in that taxes after finding the Irish

:05:35.:05:38.

government arranging a sweetheart deal with the tech giant, and

:05:39.:05:43.

allegations that Dublin and Apple have denied. Ireland doesn't want

:05:44.:05:49.

the money. It is appealing against the ruling saying it intends to

:05:50.:05:53.

protect the integrity of its tax system. First of all, the budget.

:05:54.:05:59.

What will be the big announcements, do you think?

:06:00.:06:02.

The emphasis will be on what we call be squeezed middle in Ireland.

:06:03.:06:09.

Universal child-care payments. Everybody will be entitled to them

:06:10.:06:13.

and the poorest families will get more. There are also attempts to

:06:14.:06:17.

reduce the number of universal social charge which came in as a

:06:18.:06:21.

means of trying to alleviate the problems of the budget deficit post

:06:22.:06:25.

the global financial crisis. You think they will tingle with

:06:26.:06:29.

corporation tax? No. Absolutely not. In terms of that holder Bakul no

:06:30.:06:37.

change from Ireland. It is going to the court room. There was an opinion

:06:38.:06:42.

poll yesterday in the Irish Times which suggested a majority of people

:06:43.:06:46.

in Ireland supported the appeal. Again, it is one of those big

:06:47.:06:50.

problems because it is a far wider issue in terms of how do you tax

:06:51.:06:54.

corporate is in a very global mobile world? Again you will need to look

:06:55.:07:01.

at a in the terms of attitudes of corporate is towards paying taxes. A

:07:02.:07:06.

report released last week in the US suggests that 73% of Fortune 500

:07:07.:07:13.

companies have offshore sun city areas and tax havens and that is

:07:14.:07:16.

probably an illustration of the problem. The last Irish budget now

:07:17.:07:25.

faces Brexit. It has implications for Ireland. Is there anything to do

:07:26.:07:30.

with that in the budget at all? Despite the good growth rate

:07:31.:07:36.

predicted for 2016 they were revised downward. One of the most immediate

:07:37.:07:39.

effects are certainly in the run-up to Christmas will be cross-border

:07:40.:07:43.

shopping. Because of the devaluation of the UK pound. I think the other

:07:44.:07:47.

issues that will be tourism because the UK sent a lot of tourists every

:07:48.:07:51.

year to Ireland and I think there will be fewer of those. Again, I

:07:52.:07:55.

think the food and agribusiness sector is the ones that will be most

:07:56.:07:59.

immediately affected because 41% of exports go to the UK. There are

:08:00.:08:04.

positives, however. Positives in the terms of the ability we can pick up

:08:05.:08:09.

some more mobile investment, particularly in areas where Ireland

:08:10.:08:12.

is strong such as data, pharmaceuticals, parts of the

:08:13.:08:18.

financial sector. I was hearing after the referendum, people I speak

:08:19.:08:22.

to an finance saying that many people are now looking towards

:08:23.:08:26.

Ireland. I think we are seeing that. One of the interesting areas is

:08:27.:08:32.

legal services in terms of UK legal practices be registering in Ireland

:08:33.:08:38.

-- reregistering in Ireland to avail themselves of the ability to trade

:08:39.:08:42.

with the European Union. The other interesting area is the Irish

:08:43.:08:46.

government last week announced 2 billion euros to attract overseas

:08:47.:08:49.

students. There may be positives there as well. Thank you very much

:08:50.:08:55.

for coming in. It is going to be very, very interesting and we need

:08:56.:08:58.

to announce their budget we will keep you up to date. Also in

:08:59.:09:02.

business news the monetary authority of Singapore announced it is closing

:09:03.:09:08.

down a merchant bank and finding it to others for anti- money-laundering

:09:09.:09:12.

controls. The action follows an investigation into the Malaysians

:09:13.:09:17.

state investment fund. One bank will lose its merchant bank status and

:09:18.:09:23.

the branch manager was arrested last week. The biggest bank has been

:09:24.:09:32.

fined 1 million Singaporean dollars. The price of Brent crude has surged

:09:33.:09:36.

to its highest after the Russians said they will support proposals to

:09:37.:09:43.

freeze oil production. The group are gathered in Istanbul on the

:09:44.:09:46.

sidelines of the world energy Congress. But look at the markets

:09:47.:09:50.

right now so you can be right across the price of oil. We have not got it

:09:51.:09:54.

there, actually, for some reason. Brent crude was down slightly today

:09:55.:09:59.

from that high point that it hit yesterday off the back of the News

:10:00.:10:03.

of Russia's support. I will be back shortly to look at the papers. Jonas

:10:04.:10:08.

for that. In the meantime, I will hedge about. -- join us for that. In

:10:09.:10:21.

the meantime I will hand you back. A newsreader Wauchope has begun on

:10:22.:10:23.

Southern Railway with dispute over the role of conductors on trains

:10:24.:10:27.

after months of destruction

:10:28.:10:31.

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