08/01/2016 BBC Business Live


Similar Content

Browse content similar to 08/01/2016. Check below for episodes and series from the same categories and more!



This is business life. After a tumultuous week, Chinese shares jump


and close high but concern now growing about a looming currency


war. That is our top story on Friday eighth January.


After the week we have had since August it has been a terrible time


the markets, Chinese shares ending slightly higher but currency


concerns cast a shadow over the week ahead. Copyright laws in China in


question is a firm sees its merchandise confiscated in Las Vegas


after claims of eight and infringement. The latest from the


markets where European shares have edged higher after that rebound in


Chinese stocks. And we will be getting the inside track on the US


jobs market, it is that time of the month, one of the key barometers of


the health of the world biggest economy will be released in a few


hours but will it support the American central back? It raised


rates last month, will the numbers support that? We will discuss that.


And the European Space Agency has announced funds to put humans on the


moon again. Would you be interested in signing up? Would it be money


well spent? Please reply using the hashtag.


Hello and welcome to the programme. So goes January, so goes the year


and that is a worrying thought this week. The Chinese market has


stabilised today, closing slightly higher but no celebrations yet


because concern about growth in the Chinese economy still is alive and


kicking and the strength of the Chinese currency is also causing


concern and that is something that the Chinese authorities are wanting


to change. In fact, the yuan hit a five-year low as the People's Bank


look and to weaken the currency in the hope of sparking export growth


but it sparked Alnwick and the central bank intervention led to an


emerging market currency sell-off. Malaysians and South Korean


currencies have both weak and while the South African rand is down more


than 3.5%. The falls are not just reserved for emerging markets, the


Australian dollar is more than 4% lower this week. But not all


currencies are weaker, safe havens like the Japanese yen are moving in


the opposite direction. Visit the start of a currency war?


All of these central banks looked to be


fighting to the bottom. We got our correspondence back from Singapore.


Let's talk about that. A couple of days ago, we saw the China Central


bank allowing the yuan to devalue. That makes Chinese stuff cheaper but


you look at the other Asian manufacturers in the area,


commodities, they don't want the currency to be more expensive. They


are between a rock and a hard place, especially in the face of what we


anticipate to be higher US interest rate this year. When the yuan


effectively depreciates as a result of the central bank's movements,


forced to make a decision, other forced to make a decision, other


central banks, whether they allow their currency to weaken, as some


have, for example the ringiit. Or do they strengthen in the face of a


weakening yuan? They have to be competitive and remain competitive


to try to export their way out of their own slowdown. Can we just


explain? Let them all have weaker currency, what would that do? It


means it's difficult to buy raw materials and make the stuff you


need to in order... Like in US dollars. It makes it difficult to


import goods into your country because that becomes more expensive


and it puts pressure on ordinary consumers like you and me. Thinking


about sending our kids to university, many Asians in the


region have those ambitions, a lot of Asian corporates and companies


have their debt in US dollars and that gets harder to pay off and


becomes troublesome for the economy is on the whole. We have been


talking about these so-called currency wars but can we accuse the


People's Bank of China of deliberately stoking this? In the


last month we have seen money escaping from the Chinese economy.


They are just trying to stabilise their own currency. That is very


fair. What we have seen in the last week is the Chinese trying to


stabilise the yuan as this massive capital outflow you were describing


is taking place and that is happening because there is this


sense of pessimism and anxiety about the way the economy is going and


that is being reflected, a metaphor we have seen in the volatility of


the Chinese markets this week. What does the central bank, what


mechanism does it have left? This is the only way it can try to stabilise


the yuan but it is having a knock-on adverse effect, partly because these


actions are not being particularly well communicated to the markets. We


are running out of time. Thank you, great to see you.


Let's take a look at some other news. Saudi Arabia is considering to


sell shares in its vast state oil company.


That's according to the kingdom's deputy crown prince Mohammed bin


Salman in an interview with the Economist magazine.


We will be talking about that at the end of the show.


Saudi's public finances have been hit hard by the 70 per cent plunge


in the price of crude oil over the last 18 months.


Analysts estimate Aramco is worth over a trillion dollars,


Saudi's public finances have been hit hard by the 70 per cent plunge


even selling off a minority stake of 20 per cent could fund


Samsung Electronics says its operating profit is likely


The preliminary figures indicate that that sales are likely to be


affected by weak demand in China and currency woes.


Analysts believe the smartphone market is becoming saturated


and the tech giant will face another year of weaker sales as a result.


Samsung, Apple, they are all victims of their own success a saturated


market! Let's talk about VW. Everybody knows about their problems


with the diesel engines. It is suggested they made buy-back cars in


the US because they say it will be cheaper to buy back the cars as


opposed to fixing them. Around 50,000 cars could be purchased from


their owners. I wonder how much that will cost. Let's see what else we


have got. Samsung talking about those weaker numbers and the Apple


share price, it has lost something like $20 billion of its value


because it is cutting back production of the iPhone because


everybody has got one! Let's take a look round the world


at what's business stories This is an interesting one, a great


story. A real controversy going on at CES in Las Vegas. There was quite


a stir when a couple of US federal marshals turned up and started


removing merchandise and pulling down signs belonging to a Chinese


company. A silicon valley start-up called Future Motion accused this


Chinese company of copying its design for an electric, board which


it invented a couple of years ago. The Chinese version was on display


at the show. It is also for sale on Ali Barbour for about a third of the


price of the American company. The US start-up is not happy and the


case will be in court next week and so far there has been no comment


from the Chinese company. Fireworks in Las Vegas, thank you. The markets


in China finished eight tumultuous week. -- a tumultuous week. We can


see that the Dow Jones fell almost 400 points on Thursday as the


Chinese turmoil spilled over to the local markets. But Europe,


tentatively positive this morning. Oil prices moved around 1.5% higher.


And now Nada can tell us us what will making the headlines


in the business world in the United States today.


Wall Street will have its eyes on China but the big domestic news is


December's jobs report. Those figures will be released before the


start of trade in New York and it is expected to show that employers kept


hiring with non-farm payrolls increasing 200,004 the month and


unemployment unchanged at 5%. That would point to continued strength in


the labour market despite the pain being felt by US manufacturers who


are suffering off the back of a strong dollar and weak global


growth. It is also key data for the Fed to digest while considering


future rate hikes. Investors will also get to hear from two federal


Conservative committee members. -- Federal reserve.


We were talking about this earlier, we have been covering this story all


week. People might think that Armageddon is here! So much money


off the markets. It is not necessarily that exchange. Give us


something positive. It's not. Stock market tend to move quite sharply in


short periods to factor in new news but when you stand back and get a


broader perspective, the economic background is still pretty


reasonable with reasonable growth in the UK, the US, things are improving


in Europe and even in China growth is quite positive so when you have


settled down and adjusted to this news, the background is pretty


reasonable and we should seek market stabilising. I know you want to ask


about US jobs, but we mentioned how January typically, set the tone of


the market. This can't be the tone for the rest of the year! I hope


not! We have to bear in mind, because of how the Chinese have


handled the sale of state and companies, the currency and stock


market interventions, those are pretty unusual events. I don't think


January should necessarily set the tone. However, what if we see US


jobs data coming out and disappointing? We have been looking


to them to take up some of the slack. It's a fair comment. That


data has been a fixed point, we have been quite confident that


unemployment is reducing and things are improving in the States so we


need that number to be close to what we are expecting otherwise it could


upset everybody. We will leave it there, you will be running through


the papers with us. It's seen as one of the most


important economic releases in the world,


but will today's US jobs number verify that the American's central


bank did the right thing You're with Business


Live from BBC News. And now a look at some


of the stories from around Britain. And UK household debt has


increased to a record high. Tanya Beckett's here to tell us how


worried we should be. What is interesting about this is


the fact that debt levels are now above where they were just before


the financial crisis. The instability we saw as a result of


that did not start because of UK debt but the fact we were heavily


indebted as a nation and personally added to the pain of the aftermath.


What the TUC is saying, this is a trade organisation, it is


complaining that debt levels are high again and they are back to


about a quarter of household income, and that is too high and the reason


for that, they are saying, is that we are not earning any more fulsome


if you adjust for inflation can we are earning less -- we are not


earning any more. Full it says the government needs to act.


It seems like we are going back to square one, we have people... You


can't spend more than you earn or you shouldn't because it will come


back and bite you, right? I think that is right, but what the


TUC is saying, people are having to run up the debt because the income


is not rising as inflation is. Therefore they cannot afford to pay


their rent or mortgage is because the property values have gone up as


well. That is the argument of the TUC. You are right in saying that


maybe also you would have to dissect exactly why people are running up


debts. People might be tempted to take out loans because interest


rates are so low, and not look at the amount they have to pay back,


just look at what they have to pay back every month. Very interesting,


thank you. Have a great weekend! This is Games Workshop, fantasy


model games were not so high up on the Christmas list this year, it has


warned that sales in September were below expectations. It also holds a


licence to sell Lord of the rings and the Hobbit battle games. We also


had a comment from the biggest and most successful investor in the UK


but we have no time to tell you! Chinese markets calm after circuit


breakers are scrapped but currency concerns loom over


the global economic outlook. And it's a Friday and so time


to speak to one of our esteemed With the health of the global


economy making headlines this week, investors in Europe and the US


are nervously waiting for one of the key barometers


of world economic growth, In December, 211,000


new jobs were created. A bumper number that meant America's


unemployment rate held at 5%. This month a reading


of 200,000 is expected. Andrew Walker, our economics


correspondent, joins us now. You know what, this is all over the


place! All I know is that, I do not know what that 205 was, 200,000 is


what is expected. 211,000 was November. And they had written


December, we will take that out later on! Everybody watches these


numbers, and the US Fed does as well, if we have got something less


than 200,000, apart from being a shock for the markets, with that rub


it into the American central bank saying, you should not have done


that weight rise? -- rate rise? I doubt they would say it was a


mistake to raise that rate the small amount we saw in December. It is


more how it would affect their rate rise plans in the course of the


year. Weak numbers could lead to them thinking carefully about


whether or not to pull the trigger a second time. We know from the


minutes of that December meeting, the one where they did make the


decision to make the first rate rise, we know every member of the


committee involved expects there to be a further rise of interest rate


of at least three quarters of a percent by the end of the year. That


is not a commitment, that is the expectation. If the data, including


most notably the jobs figures, where to disappoint, then of course they


would be willing and very keen to restrain themselves a little bit and


wait longer than they have been expecting to before they make these


further rises. Can I jumped in, and asks, we were talking about the


currency depreciation at the beginning of the show. Could this


disrupt the Federal reserve's plans for this year when it comes to


deflationary pressure and what that means for us? Yes, and going back to


those minutes, the committee did agree that there is likely to be


some sort of restraining effect on exports from the US as a result of


the weakness in emerging economies and I guess all tied up within that


very much is what is happening to the dollar, the strength of the


dollar which apart from affecting American exports does ring


deflationary pressures into the US. They do not expect their target of


2% is going to happen very quickly for inflation, they think it will be


a couple of years, but there is certainly a possibility of weakness


overseas leading to them pushing back the expectations of when the


rates will move. Let's talk closer to home. Do you think 2016, are we


going to continue seeing those two very different tales, the US and its


gross, -- the growth, raising interest rates and a lag in the


Eurozone? Is the recovery on track for jobs? There was certainly


encouraging stuff in these jobs figures. If you look at the company


's most exposed to Financial Times, Italy, Spain, Greece even, set in


and Portugal, -- exposed to the financial strain, there have been


quite substantial increases in employment. There is concern about


the low inflation, it has come up from negative levels we have had in


some stages, but the ECB is still concerned about that. They will not


be in a hurry to raise rates. There is a striking contrast in the


employment figures, we had encouraging news in the crisis


countries, but if you look at Finland, they are moving in the


opposite direction and there is a distinctive story there, partly to


do with the import and export market in Russia, so they have got some


real problems in Finland. Also the decline of Nokia, so they have got


real problems. Thank you very much. He is esteemed! Not just ordinary


editors on this show! Let's take you back now


quickly to our top story. Following a torrid week


on the markets in Asia, Chinese stocks have closed the day


slightly higher after regulators removed their new circuit


breaker mechanism. Earlier our UK team spoke


with Neil Woodford, one of Britain's most


successful investors. He thinks the real issues in China


are only just starting to emerge. What is in stark relief is that the


problems in China are beginning to surface. The Chinese


administration's ability to suppress all of that is getting more


difficult. I think it is becoming much more obvious globally and


domestic league, within China, that the economy is weaker than they


admit to, there is probably a banking crisis around the corner. I


have been saying for some time that I think that China's economy will


have a hard landing. Much of what we are panicking about now is what we


have been talking about as an investing institution for some time.


You have been on twitter today, thank you! This one says, fixed the


economic problems in Europe before we worry about the moon. This one


says, I would like to see people, it is lonely on the moon. This one


says, there should be a rescue mission bringing back that lonely


old man. There was a UK advert at Christmas about the moon. James


says, the mood has been done, let's go to another planet. And Ben


Thomson, our own Ben Johnson says, can we send our into the moon! Very


naughty! -- can we send Aaron! Let's start with this story in the


Economist, this was the news that Saudi Arabia is considering selling


to the public Aramco, possibly the world's most valuable company, but


it is the secret that we know nothing about it. We can assume it


is huge, because Saudi Arabia is the world's largest oil producer. The


estimate is that ten times the reserve that Exxon Mobile have, so


that is an enormous company. The Saudis need to improve their


finances and this gives them an opportunity to do that. The price at


which they sell the shares, if they do, will have to be something which


is carefully thought through given the pressure that oil markets are


currently under. Isn't this a sign of what is happening at the moment?


The Saudi is having to sell some of the family silverware at the worst


possible time. Exactly. They have got a lot of US Treasury bonds which


they have already had to redeem, they will want to balance up where


they are realising funds from this is of that process. This story, from


the Financial Times, another Chinese billionaire has gone missing. Where


are they going, Jane? We do not know where they are going and we do not


know why. I think we can assume it is all part of the government's


anti-corruption process. We do not know any more detail than that. I


just want to tell you this, this is the guy who has gone missing, he


went bankrupt twice before the age of 18. He cracked relaunching


businesses until they were successful. He has not forgotten his


roots, he has recreated part of his village inside the headquarters of


his Shanghai business, complete with vegetable fields which are tilled by


his farmer. Extraordinaire, only in China. This Powerball lottery, $75


million in the US. I will get my tickets later! Always a pleasure,


have a great weekend. That is it from us, plenty more


business News throughout the day and on the BBC website.


Good morning. After a week of continuous rain,


Download Subtitles