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This is Business Live from BBC News with Ben Thompson and Sally Bundock.
The bear necessities - investors head for safe havens
as the global market turmoil deepens.
Live from London, that's our top story on Thursday 21st of January.
Stock markets in Asia suffer further losses a day after global turmoil
saw billions of dollars wiped off the value of shares worldwide.
It's rate decision day for the European Central Bank.
We'll be looking at how the global volatility is making it much harder
And we are 30 minutes into the European trading day
with traders on high alert again, so shares are mixed not knowing
which way to head after Wednesday's heavy losses and the price of oil
And how do you reach over a billion people?
We'll be talking to the chief executive of India's largest private
sector bank about the challenges of reaching customers
And Facebook's chief operating officer Sheryl Sandberg says men
still run the world and it's not going so well.
Basically if we had more women running our global economy,
And its becoming an all too familiar tale, the turmoil on financial
markets which shows little sign of abating.
There have been further falls in Asia today.
in Singapore in just a moment, but lets just recap the roller
At one point the Dow Jones industrial average was down
They did stage a recovery later in the day to wipe out some
So far, though, the damage to global share prices has been enormous.
Here's the big number - around 15 trillion dollars
is the amount that has been wiped off stock markets around the world
since the peak according to Bloomberg.
The fears of many investors are now being realised.
That's when an asset slumps 20% or more from its peak.
It signals a serious loss of confidence and usually means more
Well, on Wednesday London's FTSE 100 entered bear territory,
down 20.5% from its peak in the summer.
Japan's Nikkei 225 is there already.
And the index of global shares known as the MSCI is just a whisker away,
Our Asia business correspondent Karishma Vaswani is in Singapore.
Tell us more about how things went today. Well, markets in ASEAN
started the day faring better than most expected, but almost every
single one turned negative by the time they closed. Chinese shares
were down 3%, despite the huge cash injection from the central bank.
They are doing that a lot these days to shore up support and confidence.
Korea and Hong Kong were down as well. Japan's new K lost 2.4% after
entering bear market territory on Wednesday. Initially Tokyo shares
were doing better. But as the day progressed the yen strengthened and
it got investors nervous and worried about corporate profits. It is not
just the Japanese yen. Do not forget the slowdown in China and lower oil
prices or affect things, so it is likely shares will continue to be
volatile in this part of the world. Good to speak to you. Let's show you
the numbers. The price of Brent crude in the UK is trading below $28
a barrel. Let's look at Europe as it is trading now. All these markets
are high across Europe and Germany, France up 1% and so is London. But
these markets lost serious amount of ground on Wednesday. London entered
a bear market. Is this a short lived upside for Europe's markets. I am
going to hand over to you. Is it my turn? We get a little chat.
Maike Currie joins us from Fidelity Worldwide Investments.
There they are. Market turmoil, more than $3.5 trillion wiped off
yesterday. The turmoil on the market does not necessarily reflect the
economic picture on the ground. Yes, as we have heard so many times stock
markets do not reflect what is happening in the broader economy and
if we look at the fundamentals, things are looking better,
especially in the US and the UK. The IMS growth forecast of three or 4%
is higher behind these falls? One is
valuations. Since 2009, valuations have doubled, but earnings growth
has not come through and investors are asking if they are paying the
right price. Then the biggest investors are withdrawing
panicking, they should be sticking to their strategy and they say look
at the fundamentals. The fundamentals are there, but do you
think the markets will have to accept or realise that a slow in
China and lower oil prices is the norm? Certainly for 2016?
Absolutely. China is on a path of transformation to a consumption led
economy and that will not be without pain. With China's fixed asset
investment it is off the scale. But it does not mean China is in
meltdown, it is slowdown. You know the routine. You are going to come
You are going to come back and take us through the newspapers.
Meanwhile, it's rate decision day for the European Central Bank.
While in the past, troubles in southern Europe have slowed
growth, now it's the same issue troubling global markets
which are vexing Europe's central bank.
Nobel Prize winning economist and professor at Yale University
No doubt all the market turmoil we have just been speaking about, the
slowing of China, the oil prices, Mario Draghi, the boss of the
European Central Bank, what do you think he should be doing? What do
you think the European Central Bank needs to do? Well, the European
Central Bank's primary mission is not to stabilise the stock market.
On the other hand there is a feedback loop going on between the
stock market and the general economy. The stock market is
well-known a leading indicator of the aggregate economy and so it is
troubling when it declined this much. If I were Mario Draghi, I
would be considering more stimulus. It is funny you should say that,
this is Sally in the studio, I know last week Mario Draghi had a private
meeting with Angela Merkel, which he does regularly, but in that meeting
it was expected she would put pressure on him to start an exit
from the stimulus programme, because for Germany it is not the right
path. I do not think this is the time for an exit. This is a time of
concern. We had big drops in August and now they are coming again
several months later. It is changing the mood. People are saying
different things and it has a darker, more ominous look to it now.
This is the time for the central bank not to try to stabilise the
market. The US market particularly, we do not want to worry about the
stock market, but we do not want to see a meltdown. You mentioned the
phrase it was not a good time to exit stimulus in Europe. Let's go
from that to a British exit, David Cameron speaking at Davos today. In
terms of economics will Britain be better off or worse off in or out of
Europe? You say in terms of economic 's, unfortunately there is no clear
dividing line between economic 's and politics. Britain's except does
not feel right. I am not involved directly, but it seems like European
unity was a dream that came out of World War II and I would like to see
it continue personally. It might be better for the UK in terms of narrow
economic thinking to pull out, but I would not let that dominate. Thank
you, we appreciate your time. Enjoy Davos, it looks like a beautiful
day. Nicer than it is here. I am just talking about the environment.
I am just talking about the environment.
The boss of Italian bank Monte dei Paschi di Siena
has admitted some customers have been pulling out their savings
but called the fall in deposits limited
Italy's third biggest bank was founded in 1472
and is thought to be the world's oldest.
It has lost 60% of its stock-market value this year
amid fears about its mountain of bad loans.
more than 1,000 investment banking jobs,
with Asian operations hit particularly hard -
Bloomberg News says the banking giant may abandon
several Asian markets altogether as it battles to cut costs.
Barclays has refused to comment on the reports.
There is the story breaking on the website about Pearson, the British
education publisher, shares up 8%. The shares may be up, but look at
that, 4000. Investors like to hear about a company restructuring. It
said it had to cut its earnings forecast for last year and this
year, so it is clearly struggling and 10% of the workforce is going.
We are going to talk about car is very shortly, but I like this. This
is Jaguar Land Rover. We will not rot up and win it. We will add
value. I like that, I thought it was very cool. We will be talking to the
chief executive of India's largest private bank who is trying to reach
people in rural areas. UK car production is at a 10-year
high and more of them are exported than ever before and more than 80%
of them get shipped abroad. Then is in Solihull this morning, looking
very casual with those robots all around him. We export a lot, but is
China a big concern? Record car sales in the UK last year, 1.5
million cars were made right here and 1.8 million of them were sold
around the world. We even sold cars, and our second biggest export market
is America taking on the likes of General Motors and Ford in their
home market. It is an industry we had all but written off a decade
ago. Professor David Bailey is with us. We wrote off carmaking and yet
there has been a big resurgence. What changed? The UK is good at
making cars and what we have seen is a huge resurgence in assembly, great
skills base, good relationship between unions and management, big
investment and a supportive industrial policy. It has been so
successful the supply change has struggled to keep up. We want to see
the benefits of that assembly in the wider economy. That is the issue. It
is a big success story, but all of this massive machinery requires a
lot of investment. One of these machines probably costs about
?100,000. I want to show you something. If we think about the
size, the scope and the expense of those machines, what they are doing
is putting this tiny little thing, a rivet, that will hold the car
together. That is a small component of many thousands that go into this
process, but it shows the power of this technology. What are your
goggles for? What? Why are you wearing glasses?
You are not near dangerous stuff. It is health and safety, I hope he does
not drop that little thing, it looks expensive.
And more parcels have been sent this year, that is on the Business Live
page. You're watching Business Live,
our top story: Stock markets in Asia
suffer further losses, a day after global turmoil
saw billions of dollars In Europe right now, markets across
the board are trading up around about 1%, but let's not forget that
yesterday they lost more than 3%, the main markets in Europe, and for
London a significant, symbolic day, it entered into bear territory.
$3.5 trillion since the beginning of the year, since the peak.
Let's look at the world of banking in one of the most difficult
but exciting countries in the world, India.
with the chief executive of ICICI Bank, Chanda Kochhar,
but first let's look at some of the basics.
ICICI is the largest private Indian bank
and the second biggest overall in the country.
While the majority of its activities are in India,
it now operates in 17 other countries around the world.
The bank's home territory offers a great deal of challenges.
With a population of over 1.2 billion people,
and access to services is not an easy task.
Under Mrs Kochhar, the bank has put a particular focus on mobile banking
to broaden access, particularly into rural areas.
Well, let's speak to Chanda Kochhar now, who joins us from Davos.
Welcome to the programme, thank your -- thank you for being with us,
let's talk about the success of the Indian economy, how do you think
India is managing to see the growth it is seen when everyone around it
is slipping? If you look at the Brics, you are the last woman
standing! Yes, first of all, I think the entire macroeconomic factors for
India have been managed very well, we have built strong reserves, we
made sure we build another import covers. Of course, the fall in oil
prices has helped substantially. Inflation has been part of the
control, so with this our currency has been relatively more stable
compared to the rest of the world. Second, I think there is a whole lot
of effort being put in by the government to attract more foreign
direct investment in some of the various, very important sectors, and
that has brought in a lot of foreign investment. Third, I think on the
ground a lot of focus on increasing production of coal, increasing
production of iron ore, so all that has got the economy ticking, and
that is why we are where we are. We in India believe our potential is
even more, and we ought to be doing even more and even better than this.
Talking of foreign investment, some big names in the world of
technology, Google and Facebook are talking extensively about doing all
they can to connect the mass population of India to the world
wide web etc, and for you, in banking, that must be the key to
getting those rural areas the kind of access to banking that they
require. It has to be an online service by a smart device.
Absolutely, I think the way technology and use of mobility and
mobile is penetrating in India, I think the business models for
banking are changing in India. So we have, of course, 1 billion mobile
users in the country, 400 million people using internet, and most of
them use internet on mobile. And that gives us the opportunity to
actually spread the access of banking to those people who, in the
past, could not access banking. And as a country, as a whole, in less
than 18 months, we have opened more than 200 million accounts for people
who have not had bank accounts so far, and just in our bank, mobile
banking has crossed even banking in branches. The number of transactions
that take place on the mobile phone are much more than what take place
in branches. Branches total less than 10% of transactions, and all
the rest are done on this technology based platform. We have a very
strong mobile offering, more than 100 kind of banking products and
services through the mobile phone. Can I ask you this while we have got
you, no disrespect here, you are a rare breed where you are in Davos,
because only 17% of the big power hitters are women. Sheryl Sandberg
of Facebook said that men still run the world, but I am not sure it is
going that well. I want to ask you, do you think if more women were in
power in economic institutions, banks and you name it, would we have
a richer world, do you think? Well, I think in any case women are almost
50% of the talent, so if we had more women participating in the economic
development and economic growth, we would just ensure that we are using
more and more of the right talent available and creating diversity in
decision-making. You know, my belief is, in every decision making, we
need diversity of thought, and that is where gender diversity really
helps. So to have more women making better economic participation, just
more diversity in decision-making, making decisions even more
comprehensive. Chanda Kochhar... And I must add that India is actually
doing very well on this count. I mean, you have a large part of the
banking sector in India being run by women. Really good to hear, as we
were just about to say, it has been a pleasure to have you on the
programme, Chanda Kochhar, chief executive of ICICI Bank. Thank you.
She hadn't finished! Let's talk about what the viewers are saying,
their views on that subject. Fabry is -- Fabrice says men are not to be
blamed, it is just a bad part of the cycle, run the world, girls. Another
says, without being rude, would there be much difference if there
were more women in power? Lemmon says, as long as we can remember,
men have been in power, maybe a change of shift would not be a bad
thing. We have a special Davos page,
because many of the world's key business leaders, politicians etc
are in Davos at the moment, and one of our leading ladies, Tanya
Beckett, you can see her there discussing the key issues. She is
interviewing many of the key people, as is Kamal Ahmed, our economics
editor, who is there as well. And Leonardo DiCaprio attacks corporate
greed, that is amazing, isn't it? There are always Hollywood stars
there. By Mikey makes about $30 million a film!
I went a few times, and Richard Gere was there. Maike is back with us, by
the way. Security is very tight, and they would not let Richard Gere
through the security, because he did not have his badge on. He was
desperately trying to find it under his coat, I was saying, don't you
know who he is?! Sharon stone was there as well. It was a bit of a
double act, I have to say. Are you from the nineteen eighties?!
She is still around, you know! Maike, what are we going to start
with? Since we're on the theme, shall we start with Sheryl Sandberg?
You interviewed a power hitter this morning, a female, I interviewed the
president of MasterCard yesterday, another woman, at Davos, and she
said that there have been studies done, if more women ran the world,
we might be $12 trillion richer. There is the benefits of balance and
diversity of thought, and I think it is quite staggering in this day and
age that if we look at the FTSE 100, of the 100 companies, we only have
six female CEOs, it is really staggering. Look at executive
positions, a number of nonexecutive positions have gone up, but
executive directorships, only one in ten in the FTSE 100, and lower down
the company scale, it is one in five. Do you feel, if we could ask
you a personal question, do you feel held back at all? Is it an obstacle
for you? No, I don't, there are lots of opportunities, you have to go out
and grab them, but it would be an advantage if we had more leaders in
place you could look up to, who set an example. I think Sheryl Sandberg
is a good example of that. Even Sheryl Sandberg, who makes a lot of
good points, and I would encourage every to read her book, even she
works for a man. She does, Mark Zuckerberg, we know him well.
Luck, Abba is back together for the promotion of a new restaurant in
Stockholm, a temp one restaurant. Are you a fan? I am a very big Abba
van. I will definitely be going. What a fantastic marketing event,
they will probably never need to advertise again, do you imagine? I
don't think so. I know they have been trying to get them together,
they were once offered $1 billion and they said no. They don't need
the money. Their royalties must be incredible. It has been great to
have you on the programme. That is another addition of Businesslike, we
will see you tomorrow. OK, bye.
Good morning, although it is not as cold as this time yesterday
temperatures are widely below freezing across the eastern side of