04/12/2015 BBC Business Live


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This is Business Live from BBC News, with Aaron Heslehurst and


The Organization of the Petroleum Exporting Countries gather


in the hope of answering the big question - will they, or rather,


can they, do anything to reverse the slump in the price of oil?


Live from London, that's our top story on Friday the 4th of December.


With oil prices at record lows, all eyes are on Opec king-pin Saudi


Arabia, under huge pressure to cut production and revive crude prices.


So far, the oil-rich nation has refused to budge.


Is Yahoo on the brink of breaking up?


Bosses have been locked in talks over the future of the


The Asian markets were tracking south, we will explain why.


And it's Friday, so we are joined by our guru of all


He's going to be taking us through hugely important US jobs numbers.


They are the last piece in the puzzle that economists have


been waiting for, ahead of perhaps the biggest central bank


Will December 2015 be the time the Federal Reserve starts raising


We always like to know what you think of the stories we're covering.


We start in Vienna, where ministers from the oil cartel Opec are holding


The big question - will they, or rather can they,


do anything to reverse the slump in the price of crude?


Here's perhaps the key person around that table,


Saudi Arabia's Oil Minister Ali al-Nieemi.


He was mobbed by journalists yesterday as he arrived at the


meeting, after a report that Saudi was proposing a cut in production to


Let's take a look at the background to all this.


Here's what has happened to the price of US crude over


The graph tells the story - it has more than halved in value.


Because there is a massive worldwide glut of oil.


Demand has gone down, but Saudi and others have still been


The theory is they want to hang on to market share, and force those


newcomers to the market, US shale producers, out of business.


The result - the lowest oil prices in more than six years -


Smaller Opec members like Venezuela are now really struggling


They have been putting pressure on Saudi Arabia, the world's


biggest oil exporter, and its Gulf allies to cut production.


Saudi Arabia may at last be willing to cut production, but only if Iran,


Iraq and other non-Opec members like Russia agree to cut as well.


So, is there any possibility of a deal?


International Oil and Energy Consultant Dr. Manouchehr


I know it's Fiona, I realise it's December, but there is a real chill


in the air -- it's FENA. There is a real disquiet. Can they agree today?


I don't think so. I think the argument that the Saudi minister


will so, this strategy is already working and has started to be


effective. US oil production, shale, is coming down and so on. Because of


the low price, demand is picking up. They will say, wait another six


months or another year. But of course others cannot afford that,


because they are under pressure in this one last year. Even Saudi


Arabia, there are some of the high authorities, printers, complaining.


The 700 reserves have gone down to 600 or so -- Princes. They are in


the open market. They want to get their bonds and loans and so on. So


there is pressure. But overall, I don't know what is happening in the


discussions, but I think they will not budge. I think they will


continue this strategy, in spite of so much pressure, Venezuelan,


Nigeria, they are really suffering, they have had enough. The Saudis are


saying, we will cut if Iran, they put pressure on Iran and Iraq, Iran


will just enter the market after being locked out last year. Iran


doesn't want to cut, they want to get the stuff and sell it. Iraq say


that for 20 years they were under sanctions, they deserve to trade.


Let me add something, there are pressures from within Opec, on


previous occasions, in the 1980s, there was also pressure from the US.


George Bush, the vice president, President Clinton, they went and put


pressure on Saudi Arabia to cut. This time, there is no US pressure,


it is only within the internal Opec pressure on Saudi Arabia. And I


don't think they will budge, I think they will wait six months or one


year, that is their demand. There is already an effect of this policy.


But of course it is long-term. It is two or three years before they


actually see this 12 million barrel cut in investment for expulsion


production in the industry -- expulsion. Can I ask you one more


question? Given the disagreements between members of Opec and of


course the Shell gas production, is in your future Opec still a really


relevant player in the oil industry? Of course, it is more than


35% of the market, and the oil is theirs, they have been through this


and they see the fate of other producers, so they want to be in


charge of their own. They don't want to be left at the mercy of the


so-called market, and there are people in the US campaigning for


fair trade, price, to purchase and so on, priced that somebody else


will defend fair price. But they know that. In spite of all of this,


the ministers are responsible, they know that they have something to


do,. Thank you very much for coming in and taking us through that.


Let's take a look at some other news for you.


A US judge has rejected a bid by the airbag maker Takata


and the car maker Honda to end a class action lawsuit.


The case had been brought on behalf of millions of owners of cars with


Over 19 million US cars have been recalled


Takata and Honda have already agreed to settlements for six of the eight


deaths linked to ruptured Takata airbag inflators in Honda vehicles.


And South Korea's financial regulator says it is investigating


possible insider trading by Samsung executives.


It is being reported that nine Samsung executives purchased


as much as $43 million of stock in a takeover target before Samsung


announced a deal to combine with the company in May.


You've got the tablet! I do. Let's have a quick look.


Let's take a look at the Business Live page.


This story took our fancy, handbags at dawn at Avon. They are a huge


provider of cosmetics, particularly in the US. They are looking to sell


their North American division, but there are investors are claiming it


is significantly undervalued, and they have spoken to the chairman and


told them that they do not have to be selling, but they have in fact


lost confidence in the leadership. You a handbag lady? No, I'm not, you


never see me come in with a handbag. I have deep pockets! This is called


filling time by the way, ladies and gentlemen!


Let's take a look round the world at what's business stories are


We'll start in Asia, where Leisha Chi is in Singapore for us


with news that Toshiba is planning to spin off its PC business.


Does Toshiba want to get rid of its PC business? That's right, there are


rumours that Toshiba is looking to split off its arm unprofitable PC


business, because it is losing money but also because the Japanese


company has been embroiled in one of the country's biggest accounting


scandals in years. The firm needs to raise cash and reassure investors


about its finances. It has been reporting inflated profits after


nearly seven years of improper accounting. Toshiba has been selling


off businesses and losing money. It has merged with former rivals.


Toshiba used to be a pretty big brand name back on the day. But fast


forward now, it only holds about 2% of the global PC market. Apple holds


20%. It is going to be hard for them to catch up on the road. Talking of


catch up, have a great weekend and we will talk to you soon. Thanks for


that. Let's stay with the markets. Asian markets joined the global


market slump this Friday, and all to Yes, it acted,


and this is the result. The long-awaited announcement


from Mario Draghi, the ECB boss, was seen as a huge let-down, as the


bank crucially failed to increase the size of the stimulus while the


rate cut was less than hoped for. Although I will tell you


the euro jumped by more than 3% late yesterday


because of the ECB announcement. In fact, the euro posted


its biggest single day gain against Talking of dollars,


let's find out what will be making All eyes will be


on November's job report. It's the last one before the Fed's


highly anticipated interest-rate It is expected to show that


non-farm payrolls increased Now, that would be less than gains


seen in October, but still healthy and in line with


an unemployment rate of The report is also predicted


to show that wages grew. Another piece


of economic data out is US trade-deficit figures


for October. The Commerce Department will likely


report that the trade gap shrank And after markets reacted negatively


Thursday to the European Central Bank's stimulus plans,


we'll hear from the man himself, He'll be in New York to participate


in a meeting of the Economic Club. We'll hear him react to criticisms


that the European Central Bank That is of course the big issue that


faced the markets yesterday. We have a guest with us.


is co-founder and director of Seven Investment Management.


Can the ECB fix the Eurozone's problems? The Eurozone is actually


doing quite well, I know what the headlines say, but we have seen


confidence indicators rising and better corporate results. Generally


we have seen an improvement. Yesterday the euro jumped


dramatically. Overall it has been considerably weaker. What we saw


yesterday was a market showing a certain level of addiction to


quantitative easing. Somebody is not giving them their drugs any more,


what happens? The market goes down like that. This will come back the


other way. What you will see I suspect is about is back from that.


This was completely overdone, it may not be done today, but really that


form did not represent any logic at all because we were using


extending, the deposit rate going negative further, he was providing


more things to buy, extending the period by which it would operate,


all of the things, he just didn't give them any more methadone, that


is what the market was looking for, then it went into his. I want to


talk about miners and commodities, but the bullies in our ears are


saying there is no more time. You will come back and take as through


some of the papers. Thanks, Justin. from the world's biggest economy,


US jobs data - the last bit of the economic jigsaw


for the Fed before it decides


on where interest rates will go. You're with Business Live


from BBC News. It's time for us to look at some


of the stories from around the UK. Rail fares for 2016 have been


announced, and our very own Ben Thompson is at King's Cross


station in Central London. And the lowest rise in fares


for six years. Yes, good morning, guys, welcome to


King's Cross, one of the busiest stations here in London. 30 million


passengers will travel through here during the course of the year. This


morning they have been keeping a close eye on the news that rail


fares will go up in January. They will go up by 1.1%, that is the


lowest increase in six years. Now, it's based on what are called


regulated and unregulated fares. The regulated ones, ones that are


limited by the government, they are pegged to the inflation rate in


July, they go up by 1%. Unregulated fares are set by the companies


themselves, they can vary, but on average they will go up by 1.1%


across the country. We have been speaking to passengers here this


morning who said, we see the need for prices to rise, but in they


wanted improvement in the service, they want to see fewer delays are


better trained and less overcrowding. I've also been


speaking to the rail delivery group, responsible for the rail


companies themselves, and also Network Rail. They pointed out that


more and more money is now being invested in the railways, more of


every pound spent on the services themselves.


I think the increase of 1.1%, in return they want to see the service


improved. Ben, great stuff, thank you! Every Friday year somewhere


else! He has got a very busy weekend


ahead, he is moving house. We will give you the address a bit


later! Weatherspoon say an old website belonging to them has been


hacked, personal details including e-mail addresses may have been


stolen. They say a tiny minority of customers with extremely limited


details were accessed, plenty more on the website.


our top story - a crucial meeting in Vienna.


meets in the hope of answering the big question -


can they do anything to reverse the slump in the price of oil?


That is kicking off at nine o'clock, so plenty more throughout the day.


Later today, the US will release its latest unemployment numbers


Today's numbers are significant because since October,


Fed policymakers have signalled they're likely


to raise interest rates at their meeting that starts on the 15th.


of significant economic data they'll review.


So what kind of number could raise doubts about a Fed move?


Our economics correspondent Andrew Walker is with us.


Good to see you, Andrew. We are expecting a good number, but if it


is anything over 200,000 for the month of November, jobs created,


Janet Yellen, a couple of days ago, very positive with their comments,


they are going to raise rates, surely? It certainly looks like they


are going to do it at that meeting later this month. The US jobs market


is pretty robust, we have unemployment at 5%, we are expecting


no change later, and we are expecting something of the order of


200,000 as an increase in the number of people who do have employment.


Over the course of the last 12 months, we have seen the number of


people in work raising by about 2.8 million, so no question that the US


jobs situation is moving in the right direction. Not quite as robust


as the headline figures suggest, however, an awful lot of people are


not looking for work because they feel it will be a struggle to find


it, and a lot of people working pastime would like to work longer


hours. If you look at the overall participation rate, it is quite a


bit down from where it was before the recession. That is partly about


the ageing population, but not the whole story. The kind of figures


that the United States has would be the envy of folks on continental


Europe, the eurozone we were talking about before. There is this issue of


wage growth, not particularly strong in the US, I wonder how much that


plays into their thoughts. It is an important factor, because the key


thing that will lead the Fed to raise rates is concerned that maybe


there might eventually be an inflation problem. There certainly


is not one at the moment, even when you take out the effect of very low


oil prices and the effect that has had on what it costs motorists to


fill their cars. Core inflation is still pretty low in the United


States, about 1.3% is one of the key figures that the Fed likes to look


at, and they have a target of 2%. But nonetheless wage growth, yes, I


mean, it is not very robust, but there is enough going on to suggest


that, with these very low-level is of unemployment, that there could


conceivably be a problem in due course. So I think the Fed does


think now is the time to start very gradually raising interest rates. If


we do see a rate rise, it is going to be a small one. A little mini


one, a quarter of a percent? It is a tale of two very different


economies, so to the eurozone, we saw the action by Mario Draghi, the


ECB yesterday, but is there still too much expectation that it is the


job of the European Central Bank to fix the eurozone problems? It is


not, is it? They have got a role in ensuring that there is sufficient


demand in the economy, but it is not entirely down to them by any means.


There is still, if you ask Mario Draghi himself, he will tell you


there is still an enormous agenda of structural reform in labour markets,


in promoting more competition in services and industries. He will


tell you there is still an enormous job to be done there on the part of


eurozone governments. He also, I think, probably takes the view that


some of them could do a little bit more by way of fiscal policy,


spending and taxes to stimulator economic growth. But that has become


a rather heretical idea, the eurozone is still very much consumed


by this idea that you do need to maintain very fierce discipline over


government finances. Some have serious problems with that, most


obviously Greece, but there are probably some that could go a little


easier without doing any great damage, and I think Mario Draghi


thinks Germany could do that without any great danger. Very briefly, we


have seen persistent strength when it comes to the euro, a real problem


for lots of the countries across the eurozone, particularly Germany,


difficult for exporting nations, and what we saw yesterday with Mario


Draghi disappearing gait disappointing the markets, it was


strengthening again. Yes, but the medium term trend has been a


weakening euro. One of the things they want to see is the euro


remaining relatively weak, so as long as Justin was right to say that


that strengthening is a temporary affair, an overreaction, I think


they can probably live with it, but we will be watching it carefully.


Thank you very much for coming in. We got a tweet from Alexander, he


says all oil economies are hurting, often not mentioned, Norway. You can


get in touch with us as well, this is how you can get in touch with us.


The Business Live page is where you stay ahead with all


We'll keep you up to date with all the latest details with insight


and analysis from the BBC's team of editors right around the world.


get involved on the BBC Business Live web page at bbc.com/business,


and you can find us on Facebook at BBC Business News.


Business Live on TV and online, whenever you need to know.


Justin is back, he will be taking us through some of the papers, in the


Economist they are talking about Yahoo and what now for the boss?


This was a great brand 15 years ago, completely overtaken by Google, so


as a search engine it is almost irrelevant, and its biggest asset is


its investment in Ali baba. There is a private equity firm involved in


that, and we know what they are like, nice reasonable people! No,


they want to get their money out of this. Unfortunately, we have got the


dear lady running it, Marissa Mayer, and she has joined to try to revive


the business, has not been able to, so I would not be surprised if they


sell off some of the assets and probably you will end up with this


rump of the Alibaba business which would give them an awful lot of


value. In the New York Times, is there a


shortage of Secret Service men?! So it would appear, I know all about


the US Secret Service, I have seen those Harrison Ford films, they


worked really well, they are highly efficient, and this is someone


called Mr Chavez, I thought he used to run Venezuela... I assume it is


not the same man! Misconduct continues, security breaches


persist, this is not what you expect from the US Secret Service, guarding


the president, but we had a breach of White House fences last week with


strangers getting into it. This would seem like amateur week at a


time when everyone else is spending a lot of money on extra security,


this sort of story. Very strange indeed. Yeah, I wonder what sort of


misconduct they get into. Who knows?! Probably a state secret.


I think that is it, I'm afraid, sorry, Justin, that is it from


business life. There will be more business news


throughout the day on the BBC Live web page


and on World Business Report. See you later, have a great weekend,




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