07/01/2016 BBC Business Live


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This is Business Live from the BBC with Ben Thompson and Aaron


Oil falls to a fresh 11 year low as global markets fall sharply.


Live from London, that's our top story on Thursday seventh January


Brent crude price tumble over 4% to levels not seen since April 2004


- the global economic slowdown triggers Thursday's moves.


The slide in oil is triggered by a weakening yuan and another


emergency trading halt in China's stock markets leaving Asian


And European markets follow their Asian counterparts


The FTSE 100 is done by nearly 2%. The Frankfurt Dax is down nearly 2%,


as well. Ouch! As the latest Star Wars release


breaks box office records around the world, cinemas are


reaping the rewards. But in an age of streaming


and downloads, do movie theatres The boss of the global cinema chain,


Imax will join us Live. And with global markets in turmoil,


is there anywhere safe Under the mattress as Ben does,


or just go out and spend it? That is assuming any of us have


money to put under the mattress. Nevertheless...


We start with oil, Brent crude - the global oil benchmark -


slumped by another six per cent yesterday to hit its lowest level


in more than 11 years - and it's still falling.


And over in China, soon after stock markets there opened,


Triggering an automatic shutdown of the market -


Unsurprisingly, that's having an big impact on commodity prices.


Brent crude for delivery in February has now fallen below $33


for the first time since February 2004.


Just 18 months ago, oil was well over $100 a barrel.


It has now lost more than two thirds of its value in the past year


The big reason - there's too much supply and not enough demand.


Normally tensions in the Middle East would push up prices.


But traders say the current row between Opec members Saudi and Iran


- means they're both cutting prices to try to win market share.


And it's unlikely that Opec members will be able to agree a deal


Tom James, Founder and CEO of Navitas Resources


Let's start with this... Typically, we've been hearing, you have middle


East tensions, you would see the price of oil go up, typically.


Correct me if I'm wrong. Four years ago, when sanctions were imposed on


Iran, they stopped Iran selling to the west, the Saudis came in and


grabbed the market share. The Saudis won't give that up freely, will


they? The early part of last year they increased their market share to


Asia some ten, 15% in a few months as oil prices were sliding down.


They started to lose out a bit. They are eager to keep a hold of it. They


are selling oil way below their anticipated Budget level. The middle


East mainly want to sell at about $80 per barrel to pay the bills.


They are down 32, 33, so they are sweating. They are indeed. Now, this


remarkable picture, that 18 months ago, as Ben showed, oil around $100


per barrel. It is 33 now, as you say. At that time, some people were


saying, there is a shortage, we are going to run out. The picture now


is, we don't have enough storage facilities for the oil, right?


That's right. Talking about currency devaluation in China, that impacts


the price. That devaluation is seen as another signal that the China


slowdown is continuing. And the demand won't be there. China and


India, the two big growth sectors, where people have been watching to


see if the growth will be used up. With Iran coming back to the market


and possibly increasing production, that is another hit to the price.


You've already touched on the idea of the Middle East tensions spiking


the price. Opec, they have the power on the prices normally, but that


power has all but disappeared. There are these internal battles between


Saudi and Iran, they just want to win customers. It is amazing. 18


months ago $100, now about 33. Opec could not do anything before because


we were running out of oil. The Saudis were the only ones who could


have stabilised prices. The Saudis, in the past, for decades, has been


the stabiliser of the market. Last time we were down here, in the low


30s, back in 2008 after the financial crash in the markets,


Saudi cut back by 10%, their production, and triggered a recovery


in oil prices. They are not doing that. There has been a lot of


changes, the crown prince, strategies are changing, or we are


saying -- that they are saying, we are fed up of overproducing and


letting everybody else make money, anybody else want to cut back? They


are not flinching. It seems to be a situation of who is going to blink


first, doesn't it? Very much. Thanks very much. Let's have a look at some


of the other stories making the headlines in the business world this


morning. US department store giant Macy's


said it will cut thousands of jobs An additional 600 jobs will be lost


in back-office operations, while 750 workers will go


through the closing Global food prices have continued


to fall for the fourth year A report out today from


the United Nations' Food and Agriculture Organisation says


prices in 2015 were down around 19% It's blamed the weak economic


environment and an oversupply The company behind a controversial


pipeline project between Canada and the US is suing the US


government for $15 billion. TransCanada says President Obama's


decision to axe the project The pipeline was meant to transport


oil produced from Canadian tar sands in Alberta to the US Gulf coast,


but the Obama administration said it would harm the fight


against climate change. We will talk about Marks Spencer


shortly. But we cannot get away from China. Some experts out there


suggesting that what we are seeing with China, that this could spur a


further worrying picture of deflation. Because of the rate drop,


it could be more deflation, that is a problem. Consumers think the price


will drop. You put off purchases, and it is a


visual downward cycle. We have had an update from Marks


Spencer. Sales over the crucial Christmas period were down. 2.5%


fall. Crucially, you can see, the boss is off. He said he will retire.


The Chief Executive will retire this year. He will be replaced by


somebody in the company who has been there for a long time.


Trading on the main Chinese stock markets has been suspended -


What impact is it have cost -- we know it is not having a good impact.


This is about investors being worried about what the central bank


is going to do. Suggesting that the Chinese economy is not doing well.


That's right and as a result it has been a turbulent day on the markets


throughout the region. Following the shock news this morning that the


mainland Chinese market would be shocked all day after the


government's new circuit breaker mechanisms kick in. This is for the


second time in a week. Within half an hour early morning trading on the


stocks in China had fallen by a whopping 7%. That was when trading


was suspended for the day, as you said, because Chinese authorities


devalued the yuan. It sparked off worries among investors. They were


very nervous about what they said about the state of the Chinese


economy. As a result, currencies have fallen, as well as stock


markets. In Hong Kong, Japan, Singapore, in Australia stocks lost


$33 billion of its market value today. Thanks throw much. What a


week it has been. The holiday seem a long time ago.


Chinese shares falling. The weakening of the yuan has been


fanning the fires. All of this comes on top of regional tensions after


yesterday North Korea claimed it had a successful hydrogen bomb test.


This is why the numbers are red. This is how Europe is looking. Three


days into the year... The Frankfurt Dax losing about 5%, you can see it


is down another 3% today. The FTSE 100 is down almost 3%. All of that


on breast is enough to wipe $2.5 trillion off the value of global


stocks in the first six days of the year. -- all of that unrest. We now


have the details from New York. The markets have taken a beating this


week off plunging oil prices and more concerned that the world's


second-largest economy, China, is slowing down even more than


anticipated. Will Cirstea bring a rally, or another headshaking day on


Wall Street? -- will this bring a. The number of Americans filing for


unemployment fell last week to 275,000, from 287,000, it is


expected. Wall Street is likely to disappoint investors, a quarter


review is expected to be below expected.


Joining us is Bronwyn Curtis from the Society of Business Economists.


Happy New Year. Let's start with the Chinese story. $2.5 trillion wiped


off the global markets because of the worries over in China. Help us


out, it is not so much the rest of the markets are looking at the


Chinese markets, it is the story behind that, it is the economy,


right? The Chinese economy. It isn't just the Chinese economy. Clearly


this is the biggest worry that the financial markets have at the


moment. Global growth, actually, in 2015 was the weakest since the


crisis. In other words, you know, we are not seeing that pick up in


global growth we are expecting. You look at the US, we have a rate hike,


remember, back in December? Yeah. The minutes came out last night. The


decision was actually closer than we anticipated. I think the markets are


nervous. The hedge fund is, well-established hedge funds, and


there was one overnight giving back money to the investors, these are


hedge funds that have made a lot of money for investors. Everyone is


very nervous. We will hear from George Osborne later today. He is


going to talk about whether we are feeling more complacent about the


economy, and whether we think we are over the worst, things are fine,


things can go back to the way they were before. But there is also a


warning that there are still a lot of work to do that we shouldn't be


complacent. But that is the general feeling, isn't it? It isn't as bad


as 2009, 2010, things are picking up, we can take the foot of the


pedal, but we can't do can we? -- foot off. I don't think we can. We


have seen a series of weak data coming out of the UK. George


Osborne's number of 2.4% growth for 2015 maybe closer to 2% by the time


we get the revisions. That is what we are worrying about. He is saying,


look, austerity, we cannot just stop it. Tax revenues may not come in, we


may not have the money. We have to be very careful. I think he is


right. You just have to have a look at the first week of the markets,


you know, tomorrow we have the big jobs numbers coming out. Nobody is


talking about it at the moment because everybody is focused on


China, which is clearly more important. But if we got a bad


number there, that would just hit things again. Happy New Year,


everybody! You know the routine, you will take us through the newspapers


in a bit. How The Force is awakening


box office receipts... The latest Star Wars movie smashes


a new record being the highest But with the rise of


streaming and downloads - do we still need the big


screen experience? Boss of cinema chain


IMAX will join us live. You're with Business


Live from BBC News. Boss Marc Bolland is to retire


from the retailer - as the firm reported


third-quarter sales, including that crucial


Christmas period, down 5.8%. So, two stories here, one is the


figures for Christmas, we have been looking at those closely for all of


the big retailers, but news this morning that Marc Bolland is


leaving? That was a surprise, back in October, he said he was going to


stay for another two years, now we have found out that he will step


down in April. He's been there six years, coming from supermarket


Morrisons. As he's been here, the food business at M has thrived, it


did well in figures today, but it is the core clothing element, general


merchandise is down, nearly 6%. Worse than expected, despite


hundreds of millions being spent on revamps. He has not moved the


needle, announcing he will go. I always feel bad for executives when


share prices go up on the day that they announced they will leave, but


I think investors lost faith, David Cumming, he was on notice from last


year, today the axe has fallen. He maintains it was his decision, he


gave it to the board at the end of last year, he's off in April and


will be succeeded by Steve wrote, a 25 year veteran at M, he knows


what a difficult job he has. How do the M numbers compare to other


retailers we have seen so far this year? It's interesting you say that,


we have the Next numbers, they were a little soft, not as bad as these,


they blame the weather. M said the poor performance was partly due to


weather, partly to do with stock availability. They cannot do


anything about the weather but can do stuff about stock availability,


that looks like a management issue and they have seen changes today.


Thank you for joining us. If you want more on any of those


stories, look at the website. The team not only on the Live page, but


they have special coverage of news from Marks Spencer, all of the


figures and results you need to know, and details on the man who


will take over. The picture of Marc Bolland. Whether he has done enough


to turn it around, it is down to the new guide to turn around fortunes


for the retailer. Full coverage on the BBC website.


You're watching Business Live - our top story: Asian markets


in turmoil as Chinese share trading is suspended for a second


The move sends key commodities lower - Brent crude hits a fresh 11 year


It's very close to a 12 year low. Looking at the numbers, the FTSE 100


is down 2.3%. Certainly, not a great start to the


year. The entertainment headlines have


been dominated by the huge success of the new Star Wars


movie at the box office. But we live in an age of streaming


and downloading movies So how can cinemas keep on making


big money from hit movies? Our next guest knows


a thing or two about that. He's one of the big bosses


at the IMAX chain of movie theatres. Since it started in 1970,


the company has expanded to operate It now has more than 1,000


cinemas around the world. It reckons that since it launched,


more than a billion people have China features prominently


in its future - it's Chinese subsidiary last year started trading


on the Hong Kong Stock Exchange. Andrew Cripps is the boss


of Europe Middle East and Africa Welcome to the programme. Can we


begin with that challenge, I guess? I don't if you would call it this,


it is an interesting time for the business? We have so much content


out there, we have Netflix telling us that recent announcement that it


is launching a new 130 -- it is launching in 130 countries, we watch


at home and on the go, it is a challenge for you to get bottoms on


seats? Consumers are watching more movies than in any time in history,


unable righty of devices, but at IMAX, we show blockbusters in a


special environment, at the cinema, people look for an experience. They


are willing to pay more for a premium experience, that is why we


have seen tremendous growth at IMAX. Does that mean you have to rely on


the big films, James Bond and Star Wars? We do show big blockbusters,


but movies change, there are more blockbusters, as the size of the


global movie going economy grows, there are a lot of blockbusters out


there. Are we seeing a shift away from just showing films in a theatre


where you sit on seats, it is about the experience and going to the


cinema? At everything that goes with it? I suppose you well placed to do


that, with big screens and the best sound system. You charge a premium


price for it. But also, it's about giving people a reason to go to the


cinema,? Yes, they have big plasma screens at home and surround sound,


at the cinema, paying a baby-sitter and driving to the multiplex, you


want a special experience, I think that is why IMAX has thrived, it is


a special experience. Speaking of plasmas at home and the home


experience, you guys have a IMAX home product, for about ?2 million,


you can get it installed on your house and have IMAX at home! It is


quite a niche market... But there is a market? You don't have one! It is


designed for high net worth individuals but we have announced a


new product launched in China and the Middle East, it is called the


NACRO one Palais, priced at $451,000. -- the IMAX Pele will stop


how do you advance your product? Is it the quality of the screen or the


sound? You look at a screen now and go, how much better can they get?


Technology is an important component in making sure that consumers


continue to go to the cinema, we have introduced laser, at Empire


Leicester Square London, you can see IMAX inlays, we have a new surround


sound system, it is immersion in the cinema experience and making it more


special. What about you? How did you get into the entertainment industry?


Did you always have a desire? I wanted to be a surgeon! Did you


really?! 30 years in the movie business, I grew up in Japan, I


speak Japanese, I worked for Paramount for 25 years, and now IMAX


in the last four years. From a surgeon to that? It's incredible.


When we talk about the number of people coming to the cinema, you


talk about the demand. How related is that to the state of the wider


economy? As a premium product, people feel a little worse off than


their pocket and say they will not do IMAX today... Is there a


correlation? Cinemas have been resilient against economic times, at


IMAX, we are an affordable luxury. People may postpone a vacation or


not buy a new car, they still need entertainment. They still want good


quality entertainment. I still don't know why you don't have one of those


home systems?! Mates rates? It was a pleasure, good luck with everything.


Have you seen the Star Wars film? Yes, I loved it. Have you? I've seen


it a few times. Great movie. I have not seen it! Yet the hint? We will


get you some IMAX ticket! We are not allowed! -- do you get the hint?


Thanks for joining us. Hopefully we can take you to


Germany, David Cameron is speaking about events, he is laying out the


case for the UK's continuing membership of the EU. He has been


speaking to his German counterpart about that relationship that the EU


has -- the UK has with Europe. We are waiting for those pictures, but


here is a quick reminder of how you can get in touch with us.


The business live pages where you can stay ahead with all of the day


is breaking business news. We keep you up-to-date with the latest


details, with insight and analysis from the BBC's team of editors


around the world. We want to hear from you as well, get involved on


the BBC business life web -- life web page. You can find us on Twitter


and Facebook. On TV and online whenever you need


to know. The relationship between Britain and


Germany is strong and important, we look at the world in many of the


same ways, you know you have two earned money before you spend it,


and we know the importance of backing enterprise and business in


creating good jobs. We know the importance of the Atlantic Alliance


for Security and how important it is, as we enter 2016, that we


confront Islamist extremism and terrorism, and do so together. Our


relationship is deep and strong, as members of the EU as members of


Nato, and the relationship between our parties, parties at the centre


right, that has been strong and will continue to be in future. I have


really enjoyed the discussion is here today, at the present take --


and the presentation I was able to make. I would like to secure the


future of Britain in a reformed European Union. But, this reform is


vital. Britain does have real issues with the way the EU works today. My


negotiation is about dealing with each of those issues. Making sure


that we are in full cooperation and working together, but we are not


part of an ever deepening political union, making sure Europe is adding


to the competitiveness of countries like Britain and Germany, rather


than holding back our competitors. Making sure there are fair rules for


both countries that are inside of the Eurozone and countries like


Britain who will not join the euro zone, but want the euro zone to be a


success and make sure that outside of the Eurozone, there are no


disadvantages, we are not called upon to support the Eurozone


financially. These are important issues, as are the issues of


migration and movement across Europe. Britain supports free


movement, many British citizens live and work elsewhere in Europe, but we


want to make sure that welfare systems, particularly our welfare


system, is not an unnatural drawer to Britain, because we feel the


pressure of excessive migration that we have had in recent years. We


believe these issues can be dealt with, the discussions are going


well. They are hard and tough, they are difficult issues but I am


confident, with goodwill, and there is good will on all sides, we can


bring the negotiations to a conclusion and hold the referendum


that we promised in our election manifesto, and we have legislated


for in Parliament. In the end, the choices for the British people, but


I want to make sure that they have of staying in a reformed European


Union. Giving Britain the best of both worlds. Part of Europe for


trade and cooperation, working together over security challenges


that we face, helping to keep our people safe, particularly in the


difficult and dangerous world we face, but not joining the euro, the


currency many have in the European Union. Not being part of the


Schengen no borders agreement, we keep our borders in Britain and will


strengthen them, and make sure we address each and every one of the


four issues I've raised. I'm even more confident after the excellent


discussions I've had here in Bavaria with colleagues in the CSU that


these things are possible, not just good for Britain, but good for


Europe. Not simply because other countries will benefit from Britain


continued to be a member of Europe, but it is important that this


organisation shows it has the flexibility of a network, and


address concerns of individual members rather than a block. I'm


confident we can reach conclusions but it will take a lot of hard work,


but I've been heartened by the goodwill I felt from sister party


members in the CSU here in Bavaria today. Once again, let me thank you


for the warmth of your welcome. I remember coming seven years ago,


it's been more pleasurable to come back again and have these


discussions with you. Thank


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