:00:00. > :00:12.Hello, this is business live from the BBC. Running out of steam, the
:00:13. > :00:13.mini rally in oil prices comes to a halt despite the cold weather in the
:00:14. > :00:19.US. Live from London,
:00:20. > :00:20.that's our top story It was nice while it latest for oil
:00:21. > :00:35.producers but the spike in the price of oil is quickly fizzling out -
:00:36. > :00:42.so where will they stabilise - Adidas ends its sponsorship deal
:00:43. > :00:50.with athletics world governing body four years early -
:00:51. > :00:53.over the doping scandal sweeping And this is how European markets
:00:54. > :00:58.look in the first half We'll discuss the week
:00:59. > :00:59.ahead for investors. And can Europe be turned
:01:00. > :01:02.into a technology hub to rival for Adidas to pull out
:01:03. > :01:13.of its sponsorship deal? Oil on the agenda -
:01:14. > :01:33.and crude has taken a steep fall in the last couple of hours,
:01:34. > :01:36.reversing its gains from earlier It comes after a volatile week that
:01:37. > :01:42.saw oil prices drop to 13-year lows. So - the big question -
:01:43. > :01:45.what happens next? Oil has seen dramatic falls over
:01:46. > :01:47.the past 18-months - and is now just a fraction
:01:48. > :01:51.of its peak in the middle of 2014. Between one and two million barrels
:01:52. > :02:03.a day are being pumped over and above what is needed -
:02:04. > :02:06.it's all a big battle between producers to try
:02:07. > :02:07.to gain market share. The International Energy Agency says
:02:08. > :02:13.unless something changes then the oil market could
:02:14. > :02:15.drown in over-supply. So what going to happen
:02:16. > :02:19.to oil over 2016? Here are a few expert
:02:20. > :02:29.predictions from Davos. I could see a price, 30-40 in the
:02:30. > :02:34.middle of the year is towards the end of the year could be in the 50s.
:02:35. > :02:40.I think the oil price in six months will be at the level of 35- $40 per
:02:41. > :02:46.barrel. I think it will be about $35 in six months. There is oversupply,
:02:47. > :02:49.very little demand, we all want to blame China for our awards and
:02:50. > :02:54.couples, but this is not the only problem. Nobody knows exactly what
:02:55. > :03:00.it will be but my protectionist $30. I want to bet at $20, the reason?
:03:01. > :03:07.You guys know, the oil price in six months will be $15 per barrel
:03:08. > :03:14.because of the extraordinary glut in oil on the planet. It might even go
:03:15. > :03:18.to $5 per barrel, maybe even that low. The price of oil in six months?
:03:19. > :03:23.Sure it will keep on going down and down. That is safe, notice she
:03:24. > :03:24.didn't put a price on that. Richard Mallinson, an analyst
:03:25. > :03:34.from Energy Aspects joins us Put your money where your mouth is,
:03:35. > :03:37.what do you think? There are visited the different opinions. We think the
:03:38. > :03:39.first half of the year oil prices will remain under pressure, not
:03:40. > :03:43.necessarily, slower than the scene, necessarily, slower than the scene,
:03:44. > :03:47.but not come much higher. The second half of the year we will see a
:03:48. > :03:51.recovery, the market is beginning to rebalance. That is not the focus but
:03:52. > :03:55.when that becomes clear we can see a rally later in the year. You say the
:03:56. > :04:00.first six months six months around 28- $30 per barrel and the last six
:04:01. > :04:04.months, when you save recovery come what you mean? Exactly where? We
:04:05. > :04:09.think the fourth quarter this year we will see prices above $60 per
:04:10. > :04:14.barrel for Brent big recovery. It's interesting when you look at oil
:04:15. > :04:16.price and equity market, commodity markets are clearly suffering
:04:17. > :04:23.volatility and has been replicated with the equity markets. How much
:04:24. > :04:26.can be read into the link between the two? How much will depend on
:04:27. > :04:30.what oil does this year for the wider market and economy? I think
:04:31. > :04:35.the last few weeks we saw this interesting spiral were oil price is
:04:36. > :04:39.headed lower and that pushed equity markets lower but because equity
:04:40. > :04:42.markets went down, oil sold off again and that does not really
:04:43. > :04:47.follow. If you look at the theory and think about the world, the
:04:48. > :04:52.biggest economies are net oil importers, benefiting from lower
:04:53. > :04:55.prices and should get a boost. The volatility and uncertainty are bad
:04:56. > :05:00.for economic growth but generally lower oil prices are a boost for the
:05:01. > :05:04.global economy. We saw that in terms of oil demand last year and we will
:05:05. > :05:07.see that continuing to be a benefit. In countries like India, very price
:05:08. > :05:13.sensitive customers appointed by soil. As we were hearing from the
:05:14. > :05:17.people we talked to in Davos and the other people quoted widely in the
:05:18. > :05:23.press, many think much lower, $15 per barrel, one person said $5 per
:05:24. > :05:30.barrel, why don't you believe it will go below $28 per barrel? We
:05:31. > :05:34.look at the fundamentals, the supply, demand, and when you think
:05:35. > :05:38.about the cost of producing oil, yes, there are low-cost regions, but
:05:39. > :05:42.the marginal barrels can the last few barrel is the world needs, even
:05:43. > :05:48.in a Channel 4 supply market, frock -- come from and higher cost region.
:05:49. > :05:53.If we get a series of negative headlines you cannot push prices
:05:54. > :05:58.beyond that. We are already beyond prayer pure fundamentals would
:05:59. > :06:01.justify. As we saw last week, the further you go, the more attentive
:06:02. > :06:05.for people who were putting positions on prices going down to
:06:06. > :06:11.take that profits to come out and it pushes it back you. It is the
:06:12. > :06:14.conversation we will have again, I'm sure.
:06:15. > :06:17.Sportswear giant Adidas has told the athletics' world governing body
:06:18. > :06:21.it's to terminate their sponsorship deal four years early,
:06:22. > :06:24.The company informed the IAAF of its decision -
:06:25. > :06:28.understood to be a direct result of the doping scandal
:06:29. > :06:33.the move will result in tens of millions of dollars
:06:34. > :06:37.Four senior executives are to leave Twitter as the social
:06:38. > :06:41.media giant attempts to halt its tumbling share price.
:06:42. > :06:43.Since co-founder Jack Dorsey returned as CEO last year,
:06:44. > :06:46.the company's value has fallen by over 35%.
:06:47. > :06:49.The shake-up will see the departure of key staff from the company's
:06:50. > :06:54.product, media and engineering divisions.
:06:55. > :06:57.Federal government offices in the Washington area will be
:06:58. > :07:00.closed on Monday after a blizzard over the weekend dumped more than 21
:07:01. > :07:05.The government shut down the offices at noon on Friday ahead
:07:06. > :07:13.of the storm, and they remained closed Saturday and Sunday.
:07:14. > :07:15.Let's take a look round the world at what's
:07:16. > :07:21.business stories are making the news.
:07:22. > :07:29.Russia must work with Opec. Since quitting the vice president of Luke
:07:30. > :07:34.oil saying that Russia needs to work with Opec on cuts in oil supply to
:07:35. > :07:37.world markets in a bid to support prices. Opec is always in the
:07:38. > :07:41.background in terms of pressure on or off it dealt with the price in
:07:42. > :07:47.general. And a quick word on Saudi Arabia. Not one country you might
:07:48. > :07:51.expect to be trying to boost tourism but it can be expanded to encourage
:07:52. > :07:55.more visitors to the country. Questions already about why you
:07:56. > :07:59.would want to go there. Of course, lots of religious tourism but why
:08:00. > :08:04.the tourism? Infrastructure is not particularly well for tourists. I
:08:05. > :08:09.have been there, and it's not someone that makes ranking to get
:08:10. > :08:12.back to given that they threw me out last time. Journalists not
:08:13. > :08:16.necessarily welcome, but that's another story. Let's look around the
:08:17. > :08:20.world about what business stories are making the news.
:08:21. > :08:24.And Japanese shares have risen - despite the latest trade figures
:08:25. > :08:27.showing exports falling for a third straight month ...
:08:28. > :08:29.Chinese shares have begun the week on a stronger footing,
:08:30. > :08:32.extending the gains we saw on Friday after that rally in oil prices.
:08:33. > :08:38.Xbox in Japan have dropped from 8% in the year earlier. More than
:08:39. > :08:40.expected come in Port set fell by 18%, suggesting the slowdown in
:08:41. > :08:50.China is continuing to affect demand. Why is it up by all 1%? One
:08:51. > :08:54.of the reasons is hoping the Japanese Government will take action
:08:55. > :08:59.after this bad news and late last week the markets surged after media
:09:00. > :09:04.reports suggested Japan's Central bank would continue monetary easing.
:09:05. > :09:08.All eyes will be on the bank of Japan, which is meeting at the end
:09:09. > :09:13.of the week and will be watching to see how it sets out its monetary
:09:14. > :09:17.policy. Thank you. We will all be watching that, more from our
:09:18. > :09:25.Singapore business bureau later in the week. Shares in Asia gained only
:09:26. > :09:26.got a stronger footing, extending begins on Friday after the rally in
:09:27. > :09:27.oil price. Shanghai's market up
:09:28. > :09:29.just shy of 1 percent, In Europe, those gains on Friday
:09:30. > :09:33.came somewhat of a surprise after one of the worst ever
:09:34. > :09:35.starts to a trading year, driven by concerns over falling oil
:09:36. > :09:38.prices, disappointing earnings, And as we've discussed,
:09:39. > :09:46.there'll be a lot of attention paid to where oil prices stabilise,
:09:47. > :09:48.and if it recovers back towards $40 a barrel,
:09:49. > :10:06.especially with the cold We have the details on what will
:10:07. > :10:11.happen on Wall Street today. McDonald's are a suspected child
:10:12. > :10:15.lived their fourth-quarter sales but there second largest oil producer,
:10:16. > :10:19.Halliburton, is expected to because a steep fall in fourth-quarter
:10:20. > :10:22.profits, the surprise given the struggle in the aisle industry the
:10:23. > :10:25.reports from other big corporations including Apple and Boeing and the
:10:26. > :10:29.Federal Reserve will not get quite as much attention this time but
:10:30. > :10:33.investors will be anxious for any region on whether the central bank
:10:34. > :10:39.plans to slow its path of interest-rate hikes. Also a host of
:10:40. > :10:42.economic data out, most importantly fourth-quarter gross domestic
:10:43. > :10:47.product, confirming worries the US economy should -- slow sharply from
:10:48. > :10:51.the third quarter. That is quite a busy week.
:10:52. > :10:55.Joining us is Richard Fletcher, Business Editor at The Times.
:10:56. > :11:02.A very busy week that started unusually the stock market high-end
:11:03. > :11:07.oil price high. Did not start long. The first positive Monday this year
:11:08. > :11:12.in Asia! The first time we had a Monday Asia stock, without it would
:11:13. > :11:16.be a good week but unfortunately it seems to have gone red since then.
:11:17. > :11:22.Obviously a busy week. We have the Fed meeting and the central banks
:11:23. > :11:31.have been behaving like parents of badly behaved toddlers, they threw a
:11:32. > :11:35.suite into the pen but any of us who have had toddlers, the treats that
:11:36. > :11:41.last furlong. The tantrum seems to be coming back. It is a very busy
:11:42. > :11:46.weekend wheels of GDP, but it will be quite a bumpy ride, despite last
:11:47. > :11:56.week's gains. Despite the volatile nature of last week, we did end up
:11:57. > :12:00.in London. It's incredible when you think about how the week when. If
:12:01. > :12:04.you look at that they are, the excitement did not last long at all,
:12:05. > :12:09.is such a equally say where we talk about markets and certainty but what
:12:10. > :12:14.is it they want? It's got to be more? The markets love the idea of
:12:15. > :12:18.more stimulus last week, we had big hints from Mario Draghi and it looks
:12:19. > :12:27.like we'll get hints from Japan at the end of the week and markets have
:12:28. > :12:32.been becoming more about the Fed and expect three hikes from the Fed this
:12:33. > :12:36.year, whereas the Fed made it as clear as they ever make anything,
:12:37. > :12:41.lots of hints, it would be for this year. It seems the markets want more
:12:42. > :12:48.stimulus but is free money has to end at some point. We keep being
:12:49. > :12:51.told that, don't we? Thank you. You will be back shortly to talk us
:12:52. > :12:58.through some of the other stories out there today.
:12:59. > :13:04.Can you be made into technology hub to equal silicon valley? That's
:13:05. > :13:05.coming up. Not great news for investors this
:13:06. > :13:12.year - with UK companies set to cut dividends for the first
:13:13. > :13:15.time since 2010. That could mean bad
:13:16. > :13:28.news for pension funds. That is the issue, not just
:13:29. > :13:31.investors who stand to lose outcome is associated people who are
:13:32. > :13:35.related? Yes, it's a big part of the return when you buy shares, not just
:13:36. > :13:41.the price, but the income you generate and Centrica, Sainsbury's,
:13:42. > :13:44.Tesco, they already cut their dividends and many more will cut
:13:45. > :13:49.this year. Dividends were doubly bit last year but the commodity price
:13:50. > :13:53.bust and oil price crash, all that is cashed up the companies. Then me
:13:54. > :13:59.show you something. This is an information page about them. This is
:14:00. > :14:06.for every pound how much income you get and it had a yield of 14%. You
:14:07. > :14:10.think, crikey, that sounds good, I will get 14p for every pound, but
:14:11. > :14:14.that is a dead ringer for something that the Devlin -- dividend will be
:14:15. > :14:19.cut. It will be amazing if they manage to pay that much. Some of the
:14:20. > :14:23.big miners are expected to cut. A very important component for pension
:14:24. > :14:25.funds, they get the incoming from there and that gets cut it a
:14:26. > :14:37.headache for them. Some countries are doing better than
:14:38. > :14:41.a few years ago, namely the banks. Lloyds, the LLoyds Banking Group is
:14:42. > :14:44.back on its feet and has begun to pay dividends and that like it could
:14:45. > :14:49.become a big dividend paying giant. Some of them black -- backing the
:14:50. > :14:57.trend, but overall space dividends payments to go down. Thank you. HSBC
:14:58. > :15:02.in the news, the Telegraph looking at the fact that after a nine-month
:15:03. > :15:07.review of where its headquarters should be located we could find out
:15:08. > :15:13.this week if it will decide to keep its HQ in the City of London or
:15:14. > :15:18.Canary Wharf or if it will be on the move to Hong Kong, perhaps. There
:15:19. > :15:21.has been a lot of debate about this, but whether they are simply using
:15:22. > :15:26.this to try and argue against things like the bank levy that it says
:15:27. > :15:30.unfairly penalises aid and whether the Government should reassess the
:15:31. > :15:34.potential losses that would be a result if they were to move their
:15:35. > :15:35.headquarters. Some say it's an empty threat, they would not actually do
:15:36. > :15:54.it. Worth watching. The rally in oil prices has come to
:15:55. > :15:57.a halt since he called spot in the US.
:15:58. > :16:03.Websites for this, apps for that and many of them with
:16:04. > :16:06.Many of them are created in America's Silicon Valley.
:16:07. > :16:08.So what hope is there for contenders from elsewhere?
:16:09. > :16:10.Well, one London investment fund hopes Europe can rival
:16:11. > :16:14.Called Seedcamp, it was setup in 2007 to invest new tech
:16:15. > :16:16.More than eight years later they've invested hundreds
:16:17. > :16:19.of millions of dollars into more than 200 new companies -
:16:20. > :16:22.which operate across the world.One of the biggest areas for investment
:16:23. > :16:26.is so-called Fin-Tech, financial technology -
:16:27. > :16:30.which makes up 15-per cent of their portfolio
:16:31. > :16:36.With me is Reshma Sohoni, founder of the investment firm
:16:37. > :16:46.So much when it comes to tech start-ups, and the thing that stands
:16:47. > :16:50.up -- stand out from me that we try and find finance for them and what
:16:51. > :16:55.you do is how you spot them. How do you work out what is viable? There
:16:56. > :16:58.are so many every year that come online, how do you judge what is a
:16:59. > :17:02.good start up and therefore worthy of money? I think the ecosystem you
:17:03. > :17:07.have around an experience, we've been at it about a decade, that
:17:08. > :17:11.helped a lot. What we look for is how is the technology instructor for
:17:12. > :17:17.the industry of choice and also perseverance. You look for pound --
:17:18. > :17:21.founders who are going to go to debt and spend the building something
:17:22. > :17:24.powerful and for us and a lot of the asset class, for it to drive it
:17:25. > :17:30.needs to be a globally relevant business, world-class. How risky is
:17:31. > :17:34.it for you? Obviously you are mentioning the key things you look
:17:35. > :17:38.out for but I issue many companies you invest in gold make it? We have
:17:39. > :17:45.a 20% death rate and it should really be 40%. Close to half should
:17:46. > :17:50.really die because it's very risky and trying to get into the hearts
:17:51. > :17:53.and minds of consumer -- consumers is difficult. When you look at the
:17:54. > :17:56.new start-ups there are so many that come online together and it's not
:17:57. > :18:00.necessarily that there is a unique proposition, I would imagine it's
:18:01. > :18:05.quite a view to quite a few to -- doing a similar thing. Is there a
:18:06. > :18:09.reason why one takes off and the others fail? ASBOs the skill as a
:18:10. > :18:14.spot in the one that will take off? You are spot on and it's a multitude
:18:15. > :18:19.of factors and I think it's that entire network of factors coming
:18:20. > :18:22.together to make something drive and money. Capital matters a lot,
:18:23. > :18:28.whether it is going into hiring the top talent or into marketing or
:18:29. > :18:35.rising above the noise. Your business can you started in 2007.
:18:36. > :18:41.What a time to start a venture capital company investing in tech
:18:42. > :18:45.stock! As we enter a volatile period, I would say it's a reminder
:18:46. > :18:49.to us to look back to those times and say, actually, some of the worst
:18:50. > :18:54.times in the economy as the best times for start-ups. Why? It is a
:18:55. > :18:58.tough period and if you can put money down and investing great
:18:59. > :19:06.founders you have the rise of the market to go after and it helps
:19:07. > :19:10.everyone float higher, so the worst period is when to invest. What
:19:11. > :19:15.industries do you look at? Is your door open to anyone or anything that
:19:16. > :19:19.comes through with a new idea that is a Jean-Julien Rojer or DuPont did
:19:20. > :19:22.on specific industries? I think we seen a lot of the disruption in
:19:23. > :19:28.things like coat-tails and transport and travel. Haughey saturated
:19:29. > :19:32.market, I imagine? Absolutely, you go towards things that are part of
:19:33. > :19:38.your geography. Being in London and at the centre of gravity of European
:19:39. > :19:42.industry and capital, we are certainly prevailed towards the
:19:43. > :19:46.intake and property tech, which are huge, so if you talk about rivalry
:19:47. > :19:50.versus the US, are trying to say we would not call out at the same angle
:19:51. > :19:54.and same industries but we try and look at other industries which are
:19:55. > :20:00.huge. Talking of the rivalry, you say Europe will become a serious
:20:01. > :20:04.rival to silicon valley, you are from the States, you can tell from
:20:05. > :20:08.your accent, how close are we to that? I think in the nature of the
:20:09. > :20:13.competition will not be the same, but in terms of value of quantum it
:20:14. > :20:17.can seriously rivalled the valley, to industries, financial services,
:20:18. > :20:20.property tech and others can help detect and so forth, no reason why
:20:21. > :20:24.the UK and Europe cannot be at the forefront. We're being told we got
:20:25. > :20:33.to finish it here, which is. Thank you for coming in. In a moment what
:20:34. > :20:34.the business places -- pages are discussing, but here's a reminder of
:20:35. > :20:52.how you can get in touch. We want to hear from you. Get
:20:53. > :21:05.involved on the BBC business live web page. You can also find us on
:21:06. > :21:12.Twitter and Facebook. Business live, on TV and online, whenever you need
:21:13. > :21:13.to know. We're looking at the stories we've not mentioned yet.
:21:14. > :21:15.Richard Fletcher, Business Editor at The Times is joining us
:21:16. > :21:24.Rahane is out there in the Saudi orders a load of aeroplanes, it
:21:25. > :21:28.would seem? He's coming to Europe this week, you will be in Paris and
:21:29. > :21:32.this is one of the deals that will be announced, probably the biggest,
:21:33. > :21:36.not just planes and oil, we had a story on Saturday about the fact
:21:37. > :21:41.that pistachio nuts, a range that 60% of the market for sanctions were
:21:42. > :21:48.imposed. That collapsed and California pistachios, they're
:21:49. > :21:51.trying to get the Government 's two inches a 200% tariff because they've
:21:52. > :21:56.been used to having the market for themselves. Saffron in Spain is
:21:57. > :22:01.another market that will be hit. There is some big deals and small
:22:02. > :22:05.deals, but not small if you work in those markets. Apparently their
:22:06. > :22:09.current features 44 planes, so this is more than doubling it. Looking at
:22:10. > :22:16.the numbers, is an upgrade for a fleet that has an average age of 25
:22:17. > :22:19.years. Some aircraft predates the 1979 Islamic revolution. The head of
:22:20. > :22:24.Iran air trying to do these negotiations says don't talk about
:22:25. > :22:28.it too much because we need to steal this deal. You understand that even
:22:29. > :22:32.catering is a big issue? We take it for granted that there is these
:22:33. > :22:37.services but in Iran that is not necessarily the case. He did not
:22:38. > :22:41.want to fly on Iran air, 1200 deaths since 1980, a large number caused by
:22:42. > :22:45.criminal failure. Good news for the people of Iran goes their flying on
:22:46. > :22:50.slightly zephyr planes. It's about proving to the Arabian people that
:22:51. > :22:53.is letting can be good for them economically because it's about
:22:54. > :22:57.boosting these, there is a tendency to think all of these foreign firms
:22:58. > :23:02.will come in as tap into our market but it's a two-way process.
:23:03. > :23:04.Absolutely, the possession of nuts are example. Busy summer in ring in
:23:05. > :23:08.money coming into the London property market as well. How
:23:09. > :23:15.driverless cars could kill the speeding ticket and rob your city.
:23:16. > :23:21.That is one line. I would imagine most people think, great. This is
:23:22. > :23:24.the law of unintended consequences. Everyone has worked out driverless
:23:25. > :23:31.cars are more law-abiding than me and maybe you as well. So
:23:32. > :23:37.Washington, for example, the issue over 700 fines for cutting red
:23:38. > :23:43.lights every day. $37 million per year. It is big business. For local
:23:44. > :23:49.authorities it could be bad news around the world as these
:23:50. > :23:51.law-abiding cars. Staggering statistics, $307 million in revenue
:23:52. > :23:57.over ten years just from speed cameras. He said it is an entire
:23:58. > :24:01.industry, one which could disappear overnight. Yes, leisure can
:24:02. > :24:05.programme your driver 's car to slightly bruised his bid limits come
:24:06. > :24:09.yes, I'm sure someone will somewhere. As Mike driverless car to
:24:10. > :24:16.slightly push the limit. That's quickly mention this story about
:24:17. > :24:20.Adidas and earlier than expected end of its sponsorship deal with the
:24:21. > :24:25.IAAF. This is amazing, just a few months before the Olympics, it could
:24:26. > :24:30.be challenged in court. Adidas are relying on the fact they believe
:24:31. > :24:36.these revelations about drug abuse allowed them to use disk was in the
:24:37. > :24:41.contract that allows them to end it now. The IAAF could change that, but
:24:42. > :24:45.we'll have to wait and see. We dug by the French implication. This lays
:24:46. > :24:48.bare how much money is involved in sport when you talk with ending
:24:49. > :24:55.sponsorship from one company which tens of millions at stake? Yes, it
:24:56. > :24:59.goes to show how close these manufacturers are to athletics and
:25:00. > :25:04.how much money has been involved. Thank you. We appreciate all your
:25:05. > :25:08.comments. Let's squeeze in some of yours. You sent us some of your
:25:09. > :25:11.thoughts on social media. We been asking if you think is right for
:25:12. > :25:15.editors just drop its sponsorship of the IAAF. Ryan says yes, I believe
:25:16. > :25:20.there within their rights to leave the deal to do that tarnish
:25:21. > :25:26.replication -- reputation for the about big business will not wanting
:25:27. > :25:30.to that is with a business in difficulty. Until it cleans up its
:25:31. > :25:34.act, good move by Adidas, it should leave more money for track and field
:25:35. > :25:40.athletes. James says quite right for them to polite, all athletes across
:25:41. > :25:41.all sports should be up to do that, they need to clean them up or their
:25:42. > :25:53.brands will suffer. Where Wilshire and oil prices be
:25:54. > :26:09.tomorrow? See you tomorrow. By life. -- goodbye.
:26:10. > :26:16.Sunday saw some record-breaking January temperatures. 16.5 degrees
:26:17. > :26:17.in the Western Highlands. Not quite as mild as that today,