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This is Business Live from BBC News with Ben Thompson and Sally Bundock.
Oil giant Shell posts a $6 billion loss compared to a year ago as
falling prices and BIG write-downs drag on the bottom line.
Live from London, that's our top story on Thursday 29th October.
Across the board - Shell's results have nose dived,
with plans for drilling in the Arctic and Alberta shelved.
Can the oil giant turn its fortunes or is this the new normal?
Also in the programme - the novel way to spread
Google is on course to use helium balloons to connect
And a mixed picture for markets. We will have all the details for you
And we will be taking "time" out to talk about the
lucrative business of selling high end watches and jewellery.
Brian Duffy - the boss of Aurum Holdings - the biggest
British distributor of Rolex and Cartier time pieces will join us.
And as one woman admits to spending 6,000 dollars a week outsourcing her
chores we want to know what would you pay someone else to do for you?
Oil giant Shell has announced third quarter results
The company posted a $6.1 billion loss -
a huge slide into the red compared with a profit of $5.3 billion
One of the main factors, unsurprisingly,
Brent prices have been hovering around $50 a barrel
and Shell has said that will cost them billions as the weak price is
And that fall is dragging on Shell's market value.
Shares are down by more than 17% since the beginning of the year.
Another reason for the lacklustre share price - Shell's proposed
After spending over $7 billion searching for oil in the Arctic, the
company announced last month that it would be pulling out of the region
It has written off $2.6 billion in this latest report.
And another project was shelved just this week - Shell said it will take
a $2 billion charge as it ends an oil-sands project in Alberta.
Elet us get analysis. A lot of big numbers there and they are mostly
bad news numbersers how bad is it? It is an enormous loss. It's the
most valuable company in the FTSE 100, so what happens to Shell really
matters. The thing is that projects that make
sense when e most valuable company in the FTSE 100, so what happens to
Shell really matters. The thing is that projects that make
sense when oil is at 100 $s a barrel don't make sense at $48s a barrel.
Also, the, parts of Russia where there are Shell projects there. So
if you think of Shell like a sort of sinking balloon, what they are
trying to do is chuck over the heaviest objects they have got to
regain altitude because the gravitational pull is down because
of the fall in oil prices we were talking about. And that going to
stay in the downward direction and people are saying $50s a barrel is
going to be the new normal for some time. How long will the blood
letting last for? We have seen the same with BP and the boss of Shell
have said, we need to make these businesses competitive, with oil at
$50-60 a barrel. They are adjusting for a new normal. They are looking
at places which are lower cost producing. As all of the additional
supply sources get abandon the secure to low prices is low prices
because people stop investing, the seeds of the future price spike in
oil is being sown now. Don't rule out a return to high prices in the
future. Investors are keeping the sweet ens in there, to keep
investors pension funds onboard, to keep them hanging in. BP and Shell,
between them paid something like 15% of all tiff depends in the FTSE 100,
so they are massively important. So they are trying to keep investors on
side. They know they will have to go back to them, so they need to keep
them in return so they keep them onside. A lot more analysis on the
business page online. Deutsche Bank has just announced
it will axe 15,000 people from its The lender said it would cut 9,000
full-time jobs and 6,000 external contractor
positions as Germany's biggest bank It plans to dispose
of $4.7 billion worth of assets. The bank has just reported a third
quarter loss of $6.6 billion. Samsung posted
its third-quarter earnings today, revealing that - the company is
back to operating profit growth made $6.42 billion in operating
profit during the Q3 period, a hefty The South Korean tech giant
attributed its overall profit increase to
strong shipment growth in its smartphones, including the S6 Edge+,
the Note five, the A8, and the J5. The European Union says emissions
tests for new models of cars will be changed to ensure that that harmful
nitrogen oxides are measured under real-world driving conditions -
not just in a test lab. The new rules will come
into effect from 2017. Emission testing has come under
scrutiny since the Volkwagen scandal when so called cheat software was
used to manipulate results. It is looking at stories as they
break. Let us look at some of the raking stories now. We mentioned
Shell of course, there is lots of other companies with news, Lloyds
bank, Barclays is very much in the news, we will talk about that later
but Lloyds bank as well, share sale confirm. The crucial thing is that
the Government stake below 10%. It has been slowly returning it to
private hands, ahead of that big sell off at the end of the year.
Some progress there. Progress for Lloyds, Barclays results have come
through, we will talk about that in a second. There is more news about
Deutsche Bank. All the banks have been to readjust their business
models in a similar way to the oil giants, talking about Shell and BP.
We have had Total earnings, the French oil company doing better than
the likes of Shell, increasing its production, which is bucking the
trend among the oil majors, Total Let's go to China,
where a top-level Communist party meeting where the nation's economic
and social policies for We're waiting for the official
announcement - but expecting John Sudowrth is in the town
of Rudong in Jiangsu province province once held up as a model
for that policy, but now weighed There are too few young people to
support the population. That is right. It's a County of one million
or so people, and there has been nowhere in China that has been quite
ass enthusiastic as this place, in terms of enforcing the one child
policy, and the results are now everywhere to see. One of them,
right here behind me. Closed schools, almost half of the schools
in this County have closed their doors over the past decade or so.
And although this has been the most enthusiastic enforcer of the one
child policies, the rest of the country is not so far behind. So
what they are looking at here, is staring into the abyss of that
demographic time bomb. Falling birth rates, falling worker numbers and
this real economic drag on growth, and that is why some people suggest
that it is now high time that the issue, they have been encouraging to
do so for a long time by analysts and advisers and a lot of
speculation it will be at this party, in this plan we will see the
back of the one child policy. As you say we could hear that announcement
imminently. If they went from, to a two child policy is it would take
decades get a communique this evening which
may give us some hints about the sort of direction of travel. But
analysts we have spoken to say that they are certain in the end it will
be confirmed that this issue will be in there, although as you say, the
big concern is that even allowing everybody to have two children will
still not do enough to boost the population, and will still leave
China with this giant change. Thank you John.
So that is what the markets in the region are done, you see the Nikkei
up 0.2%. Really all eyes on the fed last night, America's central bank
signalling that interest rates could rise as soon as December, that was
enough to push the Dow up. A tougher tone than its last meeting, but what
is interesting is that tougher tone came despite weaker economic data.
If you look at the data. The possibility of more moves by the
European Central Bank, but, borrowing costing soared. We will
get more on that in a moment but I want to take you to Europe. It has
results from the likes of Barclay, results from the likes of Barclay,
Shell, BT. Deutsche Bank, a mixed bag, that has left the markets mixed
over the course of early trade. Bar kiss profited down sharply. Not a
shuerge price. BT seeing a 15% rise in profit, and Santander up posting
a near 5% rise in profit, but as we said Deutsche faring worse.
Announcing plans to cut more jobs. But of coarse those details
filletsering there. We will assess them later. What about the US? We
have more on what we can expect out of the US today, particularly those
long' waited GDP numbers. On Thursday we will get a look at
American economic performance in the third quarter which is likely to
show the US recovery is not as robust as thought. GDP expanded at a
1.5% rate. If true, that would mark a slow down from the second quarter.
The GDP report will serve as a barometer for how well the US is
handling weakness oversea, growth was likely head back by trade and
fallen exports. Analysts will see if lower oil prices encouraged more
consumer spending and if the housing sector made gains, which could help
off set the weak economy. Watch out for earnings results from MasterCard
and Starbucks. Growth numbers coming out, other
figure, earnings, give us your take on the US, in the light of the fed
and last night. That is right. So the focus is now back to will the
data be strong enough for the fed to move in December? Previously, last
month in September, markets had assumed that rate rises for 2015
were really off the table. It was a 2016 story. But last night, the
commentary took away that... That bit about overseas economies and
market, turbulence we saw in August, that really unnerved the fed and
took away that impetus for rate rice. The door is wide-open. It S we
have seen markets move to discount that, so from a one third chance to
half a chance now. By December. So it all moves round. It did. It does.
Let us touch briefly on Deutsche, we have heard about the job loss, not
wholly unexpected, we knew they had to cut costs but the latest figure
15,000. Significant number. Very big numbers, they are under pressure to
do a number of thing, to lower the cost, so clearly staff cuts are part
of that lower cost part, and the other aspect is to raise capital,
now they have done two things, they have suspended their dividend for
the next two years, so that will retain resources within the company
and help that capital number and they will be selling is off parts of
the business. Some staff will clearly go with the new business
owners but that will also reduce the capital requirements for the
remaining Deutsche group. OK, thank you Sue. Sue will be back in five
minutes to look at some other stories. Still to come it is an
age-old industry but there is a new player in town, can the smartwatch
ever take on the luxury watch makers? And faced with a slow down
in key markets for luxury goods we will meet the boss of watches of
Switzerland as well as other outlets as it plans a major expansion.
Let us discuss Barclay, because it is among those out with earnings
today, reporting pre-tax profits of 861 million, that is for the three
months to end the of September. That is half the profit the bank posted
for the second quarter, our business editor has the details. A
significant fall but once again, a company that we weren't expecting
anything amazing and this confirming what we thought might happen?
Barclays, yes, slightly treading water at the moment. They are the
second of the Big Four UK banks to report. Yesterday we had Lloyds,
tomorrow RBS and Monday HSBC. As you say, their profits slightly softer.
Statutory profit, year or year are up slightly. ?560 million for
foreign exchange mis-selling provisions and issues around
mortgage-backed securities in America. Let's look at the share
price this morning. Slightly soft profits, share price slightly down.
Over the last six months, interesting things. This is when
Anthony Jenkins, the previous chief executive, was fired. Investors
quite liked that, they thought they might be a new focus on the
investment bank. And recently the new Chief Executive was announced. A
little uptick in the share price. What we are really waiting for is
their full-year results, March one next spring. That's likely to be the
chief executive's first outing in public in the UK and people here
will be seeing what kind of Chief Executive he wants to be for
Barclays. We'll watch closely to see what he manages to do with the bank.
Thank you. A report will be released today to
talk about how a government initiative will allow more women to
get into the boardroom. They set themselves a target of 25% of women
on the boards of fifth -- FTSE 100 companies. They are expected to say
they have reached new milestones as far as that is concerned. That
picture is Martha Lane Fox. She's on the board of Marks and Spencer. Now
they want to extend it to the boardrooms of FTSE 250 companies and
they want to increase that target to 33%.
Clearly implications about whether quotas are the way to do that, but
nonetheless some progress there. You're watching Business Live -
our top story: Profits at the oil giant Shell have
slumped, posting a $6 billion loss as falling oil prices take
a bite out of its bottom line. Has the humble wristwatch had
its day? Or does new technology mean that
the craftsmanship and design that goes into watchmaking is more
important than ever? Well, our next guest probably agrees
that watchmaking is alive and well. Brian Duffy is the chief
executive of Aurum Holdings. Aurum runs luxury and jewellery
stores like Watches of Switzerland, It operates 139 shops across Britain
and employs more than 1,500 people, with plans to expand into the US
and Europe. They are currently the Crown
jeweller and have a Royal warrant from both
the Queen and Prince Charles The average timepiece costs
around ?10,000 - about $15,000. The group is Britain's biggest
distributor of Rolex, Patek Philippe, Jaeger-leCoultre
and Cartier watches. Just to give you an idea,
the global jewellery and watches market had a total revenue
of $290 billion in the last year. And that represented a growth rate
of nearly 7% between 2010 and 2014. I'm not wearing a watch today, I was
too ashamed! Thank you for coming in. Before we talk about watches,
let's find out how you got into this business. You've been working in the
realm of luxury goods for some time. When the luxury goods player Ralph
Lorenzo knocked on your door, you watch on a career break studying
rock and roll. I was at the Academy of contemporary music in Guildford
doing rock 'n' roll and blues and jazz, something I'd always wanted to
do, study and learn guitar and music. Rav Lauren came knocking and
your reaction was? It was irresistible. I've always loved
Ralph Lauren. I effectively became the first president for Europe, a
big new beginning for the brand. Right place, right time and an
irresistible knock on the door. But I did regret not finishing my
degree. Let's talk watches. It's an age-old industry, but we are talking
about high end luxury watches, $10,000, $15,000. These are not just
timepieces, they are things you inherit and pass on. It's about an
investment not necessarily a product. It's the wonders of
mechanical craftsmanship. They are precious materials. They are family
heirlooms. They work every minute of every hour of every day of every
year for your life and hopefully the life of generations to come. They
are beautiful things to have. How do you convince people to part with
that sort of cash in a market or an environment where the recession has
taken its toll on some of the luxury goods maker 's? Markets are slowing
down, like China. How do you convince people to part with cash
for something that will live well beyond them? On some of the luxury
goods maker 's? Markets are slowing down, like China. How do you
convince people to part with cash for something that will live well
beyond them? Honestly I call it rational indulgence. You don't need
it to tell the time, your phone can tell you the time, or something much
less expensive. But you're taking the money out of you your bank and
putting it on your wrist. They generally don't do appreciate,
values go up, they are made of precious materials which have gone
up a great deal recently. It's a wonderful thing to have and enjoy
and to pass on to the next generation. When it comes to
persuasion, how important are the marketing sites? The likes of George
Clooney and other big international stars becoming the face of a brand?
I know Oma go -- pomade is the watch 007 is wearing inspector and you
were at the premiere because your company is involved in the process.
How important is that the sales? Marketing is very important. The
image and association you want to have can be through celebrity
endorsement, sports endorsement. Rolex, visibility at Formula one for
example. Marketing is important for those brands who have global reach.
Some brands are very... They trade on discretion because you have to go
and find them. You've been with 2-1 for two years. What difference have
you seen in terms of how to sell? Is it easier to sell a luxury watch in
this environment rather than Ralph Lauren clothing? With the cooling of
the global economy and the emerging market economy, people are thinking
more about value. We can offer value. They are financial
investments. That's a tougher argument if you're talking about
fashion or high heels. Interesting when this March watch does a million
thing and this is a watch that simply tells the time and date. -- a
smartwatch. Interesting to meet you, thank you for coming in, but we've
run out of time. That was a joke! Everybody is
catching on. Here's a reminder of how to get
in touch with us. The web pages where you can stay
ahead of the news. We'll keep you up-to-date with the latest details,
insight and analysis from the BBC's team of editors around the world.
And we want to hear from you. Get involved on the web page. Or on
Twitter. And you can find us on Facebook. On TV and online.
Keep your messages coming in, particularly about things you would
like to outsource. We'll run through some of those in a second. Sue is
back with us to look at some of the stories in the papers. We want to
talk about this Google story. It is amazing. This massive project to
launch balloons into space. To create more bandwidth for areas that
can't have, because of their geography, fibre networks or antenna
networks. The balloons go up into the air and beam down bandwidth that
will broadly make a 4G network available to a number of Indonesian
islands. Indonesia is a very large, populous country and that the moment
they are struggling to get connected. About 50% of people are
not connected. This is one way, a cost-effective way, for Google to do
it. It only takes 300 balloons to make a continuous string around the
world, I'd imagine it would be much more. They will start off with a
regional area, but that's claim. They go 20 kilometres up in the air.
You can get quite a decent range on the ground. It sounds like a crazy
project, Micah Richards Branson kind of project. We'll see how it works
out. -- Richard like -- like a Richard Branson project. Let's talk
about outsourcing in your private life. This is a mother in Sydney who
is said she's spent $6,500 outsourcing things like cleaning,
shopping, cooking. And a nanny. She has five children.
$6,500 a week! About ?3000 a week. $4500. That's a lot of money. She
says it's worth her while because she gets to spend quality time with
her family, a bit of time for herself, enough sleep. She can
afford it. Many working women and dads who can't afford to outsource
the chores, unfortunately. We've been asking people to get in
touch. The common theme is coffee, someone to buy copy for you in the
morning. We share that feeling! Thank you for sending those in. What
would you outsource? I do outsource some things. The things that take a
lot of time, that allow me to have time to spend with my family. Spend
money on the things you don't want to do, that's why you earn money.
Thanks so much for coming in. Thank you for your company today.
Thank you for your comments about my glasses, they've made their debut.
We like those! You can wear those again. See you soon.
Good morning. The general story today is of rain crossing from west
to east across the country with sunny skies following on. A wet