Browse content similar to 21/01/2016. Check below for episodes and series from the same categories and more!
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This is Business Live from BBC News with Ben Thompson and Sally Bundock. | :00:09. | :00:11. | |
The bear necessities - investors head for safe havens | :00:12. | :00:13. | |
as the global market turmoil deepens. | :00:14. | :00:16. | |
Live from London, that's our top story on Thursday 21st of January. | :00:17. | :00:34. | |
Stock markets in Asia suffer further losses a day after global turmoil | :00:35. | :00:37. | |
saw billions of dollars wiped off the value of shares worldwide. | :00:38. | :00:41. | |
It's rate decision day for the European Central Bank. | :00:42. | :00:48. | |
We'll be looking at how the global volatility is making it much harder | :00:49. | :00:53. | |
And we are 30 minutes into the European trading day | :00:54. | :01:00. | |
with traders on high alert again, so shares are mixed not knowing | :01:01. | :01:06. | |
which way to head after Wednesday's heavy losses and the price of oil | :01:07. | :01:09. | |
And how do you reach over a billion people? | :01:10. | :01:14. | |
We'll be talking to the chief executive of India's largest private | :01:15. | :01:16. | |
sector bank about the challenges of reaching customers | :01:17. | :01:19. | |
And Facebook's chief operating officer Sheryl Sandberg says men | :01:20. | :01:25. | |
still run the world and it's not going so well. | :01:26. | :01:27. | |
Basically if we had more women running our global economy, | :01:28. | :01:31. | |
And its becoming an all too familiar tale, the turmoil on financial | :01:32. | :01:54. | |
markets which shows little sign of abating. | :01:55. | :01:58. | |
There have been further falls in Asia today. | :01:59. | :02:00. | |
in Singapore in just a moment, but lets just recap the roller | :02:01. | :02:05. | |
At one point the Dow Jones industrial average was down | :02:06. | :02:11. | |
They did stage a recovery later in the day to wipe out some | :02:12. | :02:17. | |
So far, though, the damage to global share prices has been enormous. | :02:18. | :02:21. | |
Here's the big number - around 15 trillion dollars | :02:22. | :02:24. | |
is the amount that has been wiped off stock markets around the world | :02:25. | :02:27. | |
since the peak according to Bloomberg. | :02:28. | :02:30. | |
The fears of many investors are now being realised. | :02:31. | :02:33. | |
That's when an asset slumps 20% or more from its peak. | :02:34. | :02:41. | |
It signals a serious loss of confidence and usually means more | :02:42. | :02:44. | |
Well, on Wednesday London's FTSE 100 entered bear territory, | :02:45. | :02:51. | |
down 20.5% from its peak in the summer. | :02:52. | :02:54. | |
Japan's Nikkei 225 is there already. | :02:55. | :02:59. | |
And the index of global shares known as the MSCI is just a whisker away, | :03:00. | :03:04. | |
Our Asia business correspondent Karishma Vaswani is in Singapore. | :03:05. | :03:20. | |
Tell us more about how things went today. Well, markets in ASEAN | :03:21. | :03:29. | |
started the day faring better than most expected, but almost every | :03:30. | :03:33. | |
single one turned negative by the time they closed. Chinese shares | :03:34. | :03:38. | |
were down 3%, despite the huge cash injection from the central bank. | :03:39. | :03:43. | |
They are doing that a lot these days to shore up support and confidence. | :03:44. | :03:49. | |
Korea and Hong Kong were down as well. Japan's new K lost 2.4% after | :03:50. | :03:56. | |
entering bear market territory on Wednesday. Initially Tokyo shares | :03:57. | :04:06. | |
were doing better. But as the day progressed the yen strengthened and | :04:07. | :04:11. | |
it got investors nervous and worried about corporate profits. It is not | :04:12. | :04:18. | |
just the Japanese yen. Do not forget the slowdown in China and lower oil | :04:19. | :04:23. | |
prices or affect things, so it is likely shares will continue to be | :04:24. | :04:27. | |
volatile in this part of the world. Good to speak to you. Let's show you | :04:28. | :04:38. | |
the numbers. The price of Brent crude in the UK is trading below $28 | :04:39. | :04:45. | |
a barrel. Let's look at Europe as it is trading now. All these markets | :04:46. | :04:54. | |
are high across Europe and Germany, France up 1% and so is London. But | :04:55. | :05:01. | |
these markets lost serious amount of ground on Wednesday. London entered | :05:02. | :05:11. | |
a bear market. Is this a short lived upside for Europe's markets. I am | :05:12. | :05:15. | |
going to hand over to you. Is it my turn? We get a little chat. | :05:16. | :05:17. | |
Maike Currie joins us from Fidelity Worldwide Investments. | :05:18. | :05:24. | |
There they are. Market turmoil, more than $3.5 trillion wiped off | :05:25. | :05:37. | |
yesterday. The turmoil on the market does not necessarily reflect the | :05:38. | :05:42. | |
economic picture on the ground. Yes, as we have heard so many times stock | :05:43. | :05:47. | |
markets do not reflect what is happening in the broader economy and | :05:48. | :05:48. | |
if we look at the fundamentals, things are looking better, | :05:49. | :05:57. | |
especially in the US and the UK. The IMS growth forecast of three or 4% | :05:58. | :05:59. | |
is higher behind these falls? One is | :06:00. | :06:09. | |
valuations. Since 2009, valuations have doubled, but earnings growth | :06:10. | :06:13. | |
has not come through and investors are asking if they are paying the | :06:14. | :06:17. | |
right price. Then the biggest investors are withdrawing | :06:18. | :06:34. | |
panicking, they should be sticking to their strategy and they say look | :06:35. | :06:37. | |
at the fundamentals. The fundamentals are there, but do you | :06:38. | :06:42. | |
think the markets will have to accept or realise that a slow in | :06:43. | :06:46. | |
China and lower oil prices is the norm? Certainly for 2016? | :06:47. | :06:56. | |
Absolutely. China is on a path of transformation to a consumption led | :06:57. | :06:59. | |
economy and that will not be without pain. With China's fixed asset | :07:00. | :07:06. | |
investment it is off the scale. But it does not mean China is in | :07:07. | :07:11. | |
meltdown, it is slowdown. You know the routine. You are going to come | :07:12. | :07:14. | |
You are going to come back and take us through the newspapers. | :07:15. | :07:18. | |
Meanwhile, it's rate decision day for the European Central Bank. | :07:19. | :07:20. | |
While in the past, troubles in southern Europe have slowed | :07:21. | :07:24. | |
growth, now it's the same issue troubling global markets | :07:25. | :07:26. | |
which are vexing Europe's central bank. | :07:27. | :07:33. | |
Nobel Prize winning economist and professor at Yale University | :07:34. | :07:39. | |
No doubt all the market turmoil we have just been speaking about, the | :07:40. | :07:52. | |
slowing of China, the oil prices, Mario Draghi, the boss of the | :07:53. | :07:57. | |
European Central Bank, what do you think he should be doing? What do | :07:58. | :08:01. | |
you think the European Central Bank needs to do? Well, the European | :08:02. | :08:08. | |
Central Bank's primary mission is not to stabilise the stock market. | :08:09. | :08:11. | |
On the other hand there is a feedback loop going on between the | :08:12. | :08:16. | |
stock market and the general economy. The stock market is | :08:17. | :08:20. | |
well-known a leading indicator of the aggregate economy and so it is | :08:21. | :08:26. | |
troubling when it declined this much. If I were Mario Draghi, I | :08:27. | :08:31. | |
would be considering more stimulus. It is funny you should say that, | :08:32. | :08:38. | |
this is Sally in the studio, I know last week Mario Draghi had a private | :08:39. | :08:42. | |
meeting with Angela Merkel, which he does regularly, but in that meeting | :08:43. | :08:47. | |
it was expected she would put pressure on him to start an exit | :08:48. | :08:52. | |
from the stimulus programme, because for Germany it is not the right | :08:53. | :09:00. | |
path. I do not think this is the time for an exit. This is a time of | :09:01. | :09:07. | |
concern. We had big drops in August and now they are coming again | :09:08. | :09:11. | |
several months later. It is changing the mood. People are saying | :09:12. | :09:20. | |
different things and it has a darker, more ominous look to it now. | :09:21. | :09:25. | |
This is the time for the central bank not to try to stabilise the | :09:26. | :09:33. | |
market. The US market particularly, we do not want to worry about the | :09:34. | :09:36. | |
stock market, but we do not want to see a meltdown. You mentioned the | :09:37. | :09:42. | |
phrase it was not a good time to exit stimulus in Europe. Let's go | :09:43. | :09:49. | |
from that to a British exit, David Cameron speaking at Davos today. In | :09:50. | :09:56. | |
terms of economics will Britain be better off or worse off in or out of | :09:57. | :10:04. | |
Europe? You say in terms of economic 's, unfortunately there is no clear | :10:05. | :10:07. | |
dividing line between economic 's and politics. Britain's except does | :10:08. | :10:18. | |
not feel right. I am not involved directly, but it seems like European | :10:19. | :10:23. | |
unity was a dream that came out of World War II and I would like to see | :10:24. | :10:28. | |
it continue personally. It might be better for the UK in terms of narrow | :10:29. | :10:33. | |
economic thinking to pull out, but I would not let that dominate. Thank | :10:34. | :10:39. | |
you, we appreciate your time. Enjoy Davos, it looks like a beautiful | :10:40. | :10:45. | |
day. Nicer than it is here. I am just talking about the environment. | :10:46. | :10:47. | |
I am just talking about the environment. | :10:48. | :10:49. | |
The boss of Italian bank Monte dei Paschi di Siena | :10:50. | :10:51. | |
has admitted some customers have been pulling out their savings | :10:52. | :10:53. | |
but called the fall in deposits limited | :10:54. | :10:55. | |
Italy's third biggest bank was founded in 1472 | :10:56. | :11:01. | |
and is thought to be the world's oldest. | :11:02. | :11:04. | |
It has lost 60% of its stock-market value this year | :11:05. | :11:06. | |
amid fears about its mountain of bad loans. | :11:07. | :11:14. | |
more than 1,000 investment banking jobs, | :11:15. | :11:20. | |
with Asian operations hit particularly hard - | :11:21. | :11:24. | |
Bloomberg News says the banking giant may abandon | :11:25. | :11:26. | |
several Asian markets altogether as it battles to cut costs. | :11:27. | :11:28. | |
Barclays has refused to comment on the reports. | :11:29. | :11:36. | |
There is the story breaking on the website about Pearson, the British | :11:37. | :11:47. | |
education publisher, shares up 8%. The shares may be up, but look at | :11:48. | :11:54. | |
that, 4000. Investors like to hear about a company restructuring. It | :11:55. | :12:00. | |
said it had to cut its earnings forecast for last year and this | :12:01. | :12:05. | |
year, so it is clearly struggling and 10% of the workforce is going. | :12:06. | :12:12. | |
We are going to talk about car is very shortly, but I like this. This | :12:13. | :12:20. | |
is Jaguar Land Rover. We will not rot up and win it. We will add | :12:21. | :12:24. | |
value. I like that, I thought it was very cool. We will be talking to the | :12:25. | :12:34. | |
chief executive of India's largest private bank who is trying to reach | :12:35. | :12:36. | |
people in rural areas. UK car production is at a 10-year | :12:37. | :12:52. | |
high and more of them are exported than ever before and more than 80% | :12:53. | :12:57. | |
of them get shipped abroad. Then is in Solihull this morning, looking | :12:58. | :13:03. | |
very casual with those robots all around him. We export a lot, but is | :13:04. | :13:11. | |
China a big concern? Record car sales in the UK last year, 1.5 | :13:12. | :13:16. | |
million cars were made right here and 1.8 million of them were sold | :13:17. | :13:23. | |
around the world. We even sold cars, and our second biggest export market | :13:24. | :13:27. | |
is America taking on the likes of General Motors and Ford in their | :13:28. | :13:33. | |
home market. It is an industry we had all but written off a decade | :13:34. | :13:38. | |
ago. Professor David Bailey is with us. We wrote off carmaking and yet | :13:39. | :13:42. | |
there has been a big resurgence. What changed? The UK is good at | :13:43. | :13:50. | |
making cars and what we have seen is a huge resurgence in assembly, great | :13:51. | :13:54. | |
skills base, good relationship between unions and management, big | :13:55. | :13:59. | |
investment and a supportive industrial policy. It has been so | :14:00. | :14:04. | |
successful the supply change has struggled to keep up. We want to see | :14:05. | :14:10. | |
the benefits of that assembly in the wider economy. That is the issue. It | :14:11. | :14:18. | |
is a big success story, but all of this massive machinery requires a | :14:19. | :14:23. | |
lot of investment. One of these machines probably costs about | :14:24. | :14:29. | |
?100,000. I want to show you something. If we think about the | :14:30. | :14:34. | |
size, the scope and the expense of those machines, what they are doing | :14:35. | :14:40. | |
is putting this tiny little thing, a rivet, that will hold the car | :14:41. | :14:47. | |
together. That is a small component of many thousands that go into this | :14:48. | :14:52. | |
process, but it shows the power of this technology. What are your | :14:53. | :15:00. | |
goggles for? What? Why are you wearing glasses? | :15:01. | :15:04. | |
You are not near dangerous stuff. It is health and safety, I hope he does | :15:05. | :15:08. | |
not drop that little thing, it looks expensive. | :15:09. | :15:13. | |
And more parcels have been sent this year, that is on the Business Live | :15:14. | :15:17. | |
page. You're watching Business Live, | :15:18. | :15:19. | |
our top story: Stock markets in Asia | :15:20. | :15:21. | |
suffer further losses, a day after global turmoil | :15:22. | :15:22. | |
saw billions of dollars In Europe right now, markets across | :15:23. | :15:33. | |
the board are trading up around about 1%, but let's not forget that | :15:34. | :15:38. | |
yesterday they lost more than 3%, the main markets in Europe, and for | :15:39. | :15:44. | |
London a significant, symbolic day, it entered into bear territory. | :15:45. | :15:49. | |
$3.5 trillion since the beginning of the year, since the peak. | :15:50. | :15:52. | |
Let's look at the world of banking in one of the most difficult | :15:53. | :15:55. | |
but exciting countries in the world, India. | :15:56. | :15:56. | |
with the chief executive of ICICI Bank, Chanda Kochhar, | :15:57. | :16:02. | |
but first let's look at some of the basics. | :16:03. | :16:04. | |
ICICI is the largest private Indian bank | :16:05. | :16:06. | |
and the second biggest overall in the country. | :16:07. | :16:08. | |
While the majority of its activities are in India, | :16:09. | :16:12. | |
it now operates in 17 other countries around the world. | :16:13. | :16:15. | |
The bank's home territory offers a great deal of challenges. | :16:16. | :16:18. | |
With a population of over 1.2 billion people, | :16:19. | :16:22. | |
and access to services is not an easy task. | :16:23. | :16:29. | |
Under Mrs Kochhar, the bank has put a particular focus on mobile banking | :16:30. | :16:33. | |
to broaden access, particularly into rural areas. | :16:34. | :16:37. | |
Well, let's speak to Chanda Kochhar now, who joins us from Davos. | :16:38. | :16:46. | |
Welcome to the programme, thank your -- thank you for being with us, | :16:47. | :16:56. | |
let's talk about the success of the Indian economy, how do you think | :16:57. | :16:59. | |
India is managing to see the growth it is seen when everyone around it | :17:00. | :17:08. | |
is slipping? If you look at the Brics, you are the last woman | :17:09. | :17:12. | |
standing! Yes, first of all, I think the entire macroeconomic factors for | :17:13. | :17:17. | |
India have been managed very well, we have built strong reserves, we | :17:18. | :17:21. | |
made sure we build another import covers. Of course, the fall in oil | :17:22. | :17:26. | |
prices has helped substantially. Inflation has been part of the | :17:27. | :17:31. | |
control, so with this our currency has been relatively more stable | :17:32. | :17:34. | |
compared to the rest of the world. Second, I think there is a whole lot | :17:35. | :17:38. | |
of effort being put in by the government to attract more foreign | :17:39. | :17:43. | |
direct investment in some of the various, very important sectors, and | :17:44. | :17:47. | |
that has brought in a lot of foreign investment. Third, I think on the | :17:48. | :17:52. | |
ground a lot of focus on increasing production of coal, increasing | :17:53. | :17:55. | |
production of iron ore, so all that has got the economy ticking, and | :17:56. | :18:01. | |
that is why we are where we are. We in India believe our potential is | :18:02. | :18:05. | |
even more, and we ought to be doing even more and even better than this. | :18:06. | :18:09. | |
Talking of foreign investment, some big names in the world of | :18:10. | :18:14. | |
technology, Google and Facebook are talking extensively about doing all | :18:15. | :18:17. | |
they can to connect the mass population of India to the world | :18:18. | :18:23. | |
wide web etc, and for you, in banking, that must be the key to | :18:24. | :18:27. | |
getting those rural areas the kind of access to banking that they | :18:28. | :18:31. | |
require. It has to be an online service by a smart device. | :18:32. | :18:37. | |
Absolutely, I think the way technology and use of mobility and | :18:38. | :18:41. | |
mobile is penetrating in India, I think the business models for | :18:42. | :18:46. | |
banking are changing in India. So we have, of course, 1 billion mobile | :18:47. | :18:51. | |
users in the country, 400 million people using internet, and most of | :18:52. | :18:55. | |
them use internet on mobile. And that gives us the opportunity to | :18:56. | :18:59. | |
actually spread the access of banking to those people who, in the | :19:00. | :19:04. | |
past, could not access banking. And as a country, as a whole, in less | :19:05. | :19:08. | |
than 18 months, we have opened more than 200 million accounts for people | :19:09. | :19:13. | |
who have not had bank accounts so far, and just in our bank, mobile | :19:14. | :19:19. | |
banking has crossed even banking in branches. The number of transactions | :19:20. | :19:23. | |
that take place on the mobile phone are much more than what take place | :19:24. | :19:29. | |
in branches. Branches total less than 10% of transactions, and all | :19:30. | :19:33. | |
the rest are done on this technology based platform. We have a very | :19:34. | :19:38. | |
strong mobile offering, more than 100 kind of banking products and | :19:39. | :19:42. | |
services through the mobile phone. Can I ask you this while we have got | :19:43. | :19:48. | |
you, no disrespect here, you are a rare breed where you are in Davos, | :19:49. | :19:55. | |
because only 17% of the big power hitters are women. Sheryl Sandberg | :19:56. | :20:01. | |
of Facebook said that men still run the world, but I am not sure it is | :20:02. | :20:06. | |
going that well. I want to ask you, do you think if more women were in | :20:07. | :20:09. | |
power in economic institutions, banks and you name it, would we have | :20:10. | :20:17. | |
a richer world, do you think? Well, I think in any case women are almost | :20:18. | :20:25. | |
50% of the talent, so if we had more women participating in the economic | :20:26. | :20:30. | |
development and economic growth, we would just ensure that we are using | :20:31. | :20:35. | |
more and more of the right talent available and creating diversity in | :20:36. | :20:39. | |
decision-making. You know, my belief is, in every decision making, we | :20:40. | :20:45. | |
need diversity of thought, and that is where gender diversity really | :20:46. | :20:54. | |
helps. So to have more women making better economic participation, just | :20:55. | :20:58. | |
more diversity in decision-making, making decisions even more | :20:59. | :21:01. | |
comprehensive. Chanda Kochhar... And I must add that India is actually | :21:02. | :21:09. | |
doing very well on this count. I mean, you have a large part of the | :21:10. | :21:14. | |
banking sector in India being run by women. Really good to hear, as we | :21:15. | :21:18. | |
were just about to say, it has been a pleasure to have you on the | :21:19. | :21:23. | |
programme, Chanda Kochhar, chief executive of ICICI Bank. Thank you. | :21:24. | :21:28. | |
She hadn't finished! Let's talk about what the viewers are saying, | :21:29. | :21:33. | |
their views on that subject. Fabry is -- Fabrice says men are not to be | :21:34. | :21:47. | |
blamed, it is just a bad part of the cycle, run the world, girls. Another | :21:48. | :21:52. | |
says, without being rude, would there be much difference if there | :21:53. | :21:56. | |
were more women in power? Lemmon says, as long as we can remember, | :21:57. | :22:00. | |
men have been in power, maybe a change of shift would not be a bad | :22:01. | :22:03. | |
thing. We have a special Davos page, | :22:04. | :22:11. | |
because many of the world's key business leaders, politicians etc | :22:12. | :22:15. | |
are in Davos at the moment, and one of our leading ladies, Tanya | :22:16. | :22:19. | |
Beckett, you can see her there discussing the key issues. She is | :22:20. | :22:24. | |
interviewing many of the key people, as is Kamal Ahmed, our economics | :22:25. | :22:30. | |
editor, who is there as well. And Leonardo DiCaprio attacks corporate | :22:31. | :22:36. | |
greed, that is amazing, isn't it? There are always Hollywood stars | :22:37. | :22:41. | |
there. By Mikey makes about $30 million a film! | :22:42. | :22:43. | |
I went a few times, and Richard Gere was there. Maike is back with us, by | :22:44. | :22:51. | |
the way. Security is very tight, and they would not let Richard Gere | :22:52. | :22:55. | |
through the security, because he did not have his badge on. He was | :22:56. | :22:58. | |
desperately trying to find it under his coat, I was saying, don't you | :22:59. | :23:06. | |
know who he is?! Sharon stone was there as well. It was a bit of a | :23:07. | :23:11. | |
double act, I have to say. Are you from the nineteen eighties?! | :23:12. | :23:20. | |
She is still around, you know! Maike, what are we going to start | :23:21. | :23:25. | |
with? Since we're on the theme, shall we start with Sheryl Sandberg? | :23:26. | :23:33. | |
You interviewed a power hitter this morning, a female, I interviewed the | :23:34. | :23:36. | |
president of MasterCard yesterday, another woman, at Davos, and she | :23:37. | :23:42. | |
said that there have been studies done, if more women ran the world, | :23:43. | :23:50. | |
we might be $12 trillion richer. There is the benefits of balance and | :23:51. | :23:54. | |
diversity of thought, and I think it is quite staggering in this day and | :23:55. | :24:01. | |
age that if we look at the FTSE 100, of the 100 companies, we only have | :24:02. | :24:08. | |
six female CEOs, it is really staggering. Look at executive | :24:09. | :24:11. | |
positions, a number of nonexecutive positions have gone up, but | :24:12. | :24:18. | |
executive directorships, only one in ten in the FTSE 100, and lower down | :24:19. | :24:23. | |
the company scale, it is one in five. Do you feel, if we could ask | :24:24. | :24:27. | |
you a personal question, do you feel held back at all? Is it an obstacle | :24:28. | :24:33. | |
for you? No, I don't, there are lots of opportunities, you have to go out | :24:34. | :24:37. | |
and grab them, but it would be an advantage if we had more leaders in | :24:38. | :24:42. | |
place you could look up to, who set an example. I think Sheryl Sandberg | :24:43. | :24:48. | |
is a good example of that. Even Sheryl Sandberg, who makes a lot of | :24:49. | :24:52. | |
good points, and I would encourage every to read her book, even she | :24:53. | :24:57. | |
works for a man. She does, Mark Zuckerberg, we know him well. | :24:58. | :25:07. | |
Luck, Abba is back together for the promotion of a new restaurant in | :25:08. | :25:16. | |
Stockholm, a temp one restaurant. Are you a fan? I am a very big Abba | :25:17. | :25:25. | |
van. I will definitely be going. What a fantastic marketing event, | :25:26. | :25:28. | |
they will probably never need to advertise again, do you imagine? I | :25:29. | :25:33. | |
don't think so. I know they have been trying to get them together, | :25:34. | :25:37. | |
they were once offered $1 billion and they said no. They don't need | :25:38. | :25:42. | |
the money. Their royalties must be incredible. It has been great to | :25:43. | :25:47. | |
have you on the programme. That is another addition of Businesslike, we | :25:48. | :25:51. | |
will see you tomorrow. OK, bye. | :25:52. | :26:08. | |
Good morning, although it is not as cold as this time yesterday | :26:09. | :26:14. | |
temperatures are widely below freezing across the eastern side of | :26:15. | :26:16. | |
the country, | :26:17. | :26:18. |