28/04/2016 BBC Business Live


28/04/2016

Similar Content

Browse content similar to 28/04/2016. Check below for episodes and series from the same categories and more!

Transcript


LineFromTo

This is Business Live from the BBC, with Ben Thompson

:00:00.:00:10.

Facebook shares hit record highs after profits at the tech giant

:00:11.:00:18.

Live from London, that's our top story today,

:00:19.:00:22.

Facebook profits surge as the number of users soars.

:00:23.:00:41.

We'll assess the results, that have sent shares soaring 10%

:00:42.:00:46.

The world's biggest advertising company WPP

:00:47.:00:53.

But does the chief executive, Sir Martin Sorrell, deserve

:00:54.:00:59.

to be the best paid boss in Britain?

:01:00.:01:03.

And as American banks opt not to change policy, we ask what is next

:01:04.:01:08.

to kick-start sluggish American growth.

:01:09.:01:11.

And imagine if the lift in your office not only

:01:12.:01:14.

took you up and down, but sideways as well.

:01:15.:01:16.

We'll be talking to the elevator company which says it is a viable

:01:17.:01:19.

And as we question WPP boss Sir Martin Sorrell

:01:20.:01:27.

about his huge pay packet, today we want to know: is any

:01:28.:01:30.

company boss worth $100 million dollars a year?

:01:31.:01:32.

the elevator is, it is straight out the elevator is, it is straight out

:01:33.:01:58.

of Charlie And The Chocolate Factory.

:01:59.:02:01.

We start in Silicon Valley - where it's been a challenging week

:02:02.:02:04.

for tech giants including Apple and Twitter.

:02:05.:02:05.

The world's biggest social network continues to attract

:02:06.:02:08.

new friends by the millions - and more importantly -

:02:09.:02:11.

is managing to convert them into profits.

:02:12.:02:12.

Facebook saw revenue jump more than 50% in the first three months

:02:13.:02:15.

of the year to over $5.3bn - that's better than Wall Street

:02:16.:02:20.

That's largely down to booming sales of advertising

:02:21.:02:24.

But with smaller screens, smartphones have been difficult

:02:25.:02:30.

But for Facebook, it's seen 82% of its ad revenue now come

:02:31.:02:34.

The social network has continued to grow and grow.

:02:35.:02:49.

As of the end of March, 1.65 billion people were logging

:02:50.:02:52.

That's 200 million people more than this time last yearShares

:02:53.:02:55.

jumped in after hours trade and if you look at the past three

:02:56.:02:59.

years you can see the value has steadily climbed from just over

:03:00.:03:06.

Sarah Wood, Co-Founder and Co-CEO of video ad tech

:03:07.:03:10.

There were a lot of naysayers about Facebook, how can they get up these

:03:11.:03:23.

people, how can they monetise them. It looks like they have cracked it?

:03:24.:03:28.

They have done a great job jumping on two key trends, one of those is

:03:29.:03:32.

mobile, a massive jump to Mobot consumption, and one is video.

:03:33.:03:36.

Mobile advertising in video advertising are two of the largest

:03:37.:03:40.

sectors, and Facebook have converted those into profit. Others are

:03:41.:03:46.

struggling to do that, I am talking specifically mobile advertising,

:03:47.:03:48.

that was the key for Facebook. How are they doing it when Twitter

:03:49.:03:56.

struggles? What Facebook has is massive scale, 1.6 billion users,

:03:57.:04:00.

many coming back day after day, but it also has data, it is the ability

:04:01.:04:07.

to target users very precisely by geography, relationship status, and

:04:08.:04:11.

that really helps. Lets just have a look at how they managed to do it. I

:04:12.:04:14.

touched on the fact that, on a small touched on the fact that, on a small

:04:15.:04:18.

screen, we are more easily annoyed by adverts when you are browsing the

:04:19.:04:22.

things on small screens, and that has been the real shift, how you can

:04:23.:04:26.

advertise on something that is getting smaller and smaller, and it

:04:27.:04:29.

seems again, Facebook is doing that right. Consumers are fed up with

:04:30.:04:34.

interruptive advertising, it is true on large screens and small screens.

:04:35.:04:38.

What Facebook houses a suite of products that are non-interruptive,

:04:39.:04:42.

nonintrusive, when the ads play in the news feed, they are not blaring

:04:43.:04:47.

out, the auto is off, so that is less intrusive, but it can also be

:04:48.:04:51.

monetised. But if it is less intrusive, does it work for

:04:52.:04:56.

advertisers? There is always a balance. The challenge for

:04:57.:04:58.

advertisers is to create great ads that people want to watch and share,

:04:59.:05:04.

to create a great content and distributed in noninvasive formats

:05:05.:05:08.

that don't annoy users. Sarah, thank you as always.

:05:09.:05:10.

WPP, the world's biggest advertising company has announced healthy

:05:11.:05:14.

trading for the first three months of this year.

:05:15.:05:23.

Revenues were up some 10% in the three months to March -

:05:24.:05:26.

slightly flattered by the weak pound but largely thanks to strong

:05:27.:05:28.

But the numbers have been overshadowed by ongoing controversy

:05:29.:05:31.

Ir Martin Sorrell is due for a five-year performance

:05:32.:05:41.

related share award of more than $90 million.

:05:42.:05:43.

That would make his pay packet this year $101 million dollars.

:05:44.:05:47.

Electronics giant Samsung says first-quarter profits rose 12%

:05:48.:05:49.

That's thanks to strong early sales of its new flagship smartphone.

:05:50.:05:57.

The South Korean firm made $5.8 billion

:05:58.:05:59.

The new S7 phones were launched in March, and analysts say its price

:06:00.:06:05.

and a lack of new products from rivals has helped boost sales.

:06:06.:06:14.

Lloyds Banking Group has announced what it calls a robust fall in

:06:15.:06:24.

profits. The bank was rescued by the Government at the height of the

:06:25.:06:29.

financial crisis. The Government has been reducing its stake and now

:06:30.:06:36.

holds less than 10%. The mission to Mars, we will talk

:06:37.:06:41.

about that a little later. Elon Mosque has vowed to get more of us

:06:42.:06:52.

to Mars -- Elon Musk. We are not pointing any fingers!

:06:53.:07:01.

Deutsche Bank has announced a fall in profits for the first part of the

:07:02.:07:10.

year, and it is a typical problem, the investment bank has problems.

:07:11.:07:14.

The investment analyst says 2016 will be a peak year for our

:07:15.:07:24.

investments. They try to rein add-in to make the bank a little more

:07:25.:07:27.

profitable. They are telling us to move on. You can check that out on a

:07:28.:07:35.

life page. Let's talk about the bank of Japan.

:07:36.:07:37.

The Bank of Japan surprised markets as it held fire on a fresh

:07:38.:07:40.

round of widely expected stimulus measures, sparking questions

:07:41.:07:42.

about whether it had anything left in its arsenal to kick start

:07:43.:07:45.

This was widely expected, but nothing, absolutely nothing from

:07:46.:08:05.

them today. That is right, and their options are decreasing all the time.

:08:06.:08:08.

Over the past three years, the bank of Japan has tried pumping millions

:08:09.:08:13.

of dollars into the economy. In January it went even further by

:08:14.:08:16.

introducing negative interest rates, and nothing has had its desired

:08:17.:08:19.

effect yet of used in the country's sagging economy. The central bank

:08:20.:08:24.

was widely expected this morning to introduce more monetary easing, and

:08:25.:08:29.

this was seen as even more likely after data came out saying that the

:08:30.:08:32.

country had fallen back into it deviation. Aneke actually rose on

:08:33.:08:37.

this news, with investors confident that the bank would act to curb the

:08:38.:08:42.

falling prices, but on learning that they wouldn't, Nikkei fell, and the

:08:43.:08:56.

yen also strengthened, so it is not clear what bankers will do.

:08:57.:09:02.

Charlotte, thank you. You saw it on the screen, but confirmation that of

:09:03.:09:03.

what that did to the Nikkei stocks. Japanese stocks gave up early gains

:09:04.:09:07.

and managed to wipe out much of the previous four day rally

:09:08.:09:13.

after - as we've just heard - the Bank of Japan disappointed

:09:14.:09:16.

investors by holding off And remember, the Nikkei closed

:09:17.:09:18.

tomorrow for a national holiday. In Europe, this is how the numbers

:09:19.:09:21.

are looking at the open. Inheriting the lead from Asia -

:09:22.:09:26.

as well as the news that the Federal Reserve left

:09:27.:09:29.

interest rates on hold. We'll pore over the wording

:09:30.:09:31.

of what we heard from In a moment, but Mariko Oi has

:09:32.:09:35.

the details about what else is ahead We will find out how the world's

:09:36.:09:46.

biggest economy performed in the first three months of the year on

:09:47.:09:50.

Thursday. Originally the expectation was bad, with many economists

:09:51.:09:53.

forecasting the slowest growth in a year, but some of Wall Street's top

:09:54.:09:58.

firms have now raised their forecast on Wednesday, and that is because of

:09:59.:10:01.

the data showing a trade deficit narrowed sharply in March, rather

:10:02.:10:06.

unexpectedly. What that means is it poses a smaller drag on overall

:10:07.:10:12.

business activity, and that economy growth may not have been as weak as

:10:13.:10:15.

anticipated. Which coincides with the Federal reserves and more

:10:16.:10:22.

optimistic views on the economy. On Thursday we will hear from the likes

:10:23.:10:28.

of Ford, LinkedIn, Amazon and MasterCard about their forecast.

:10:29.:10:31.

Joining us is James Hughes, chief market analyst

:10:32.:10:33.

for at GKFX, a leading online forex trading broker.

:10:34.:10:35.

James, good to see you. A familiar face to us all. I guess the

:10:36.:10:42.

headline, if we look at yesterday and the focus from the markets, it

:10:43.:10:47.

was America's Central bank, it was bank of Japan, the Fed, and also New

:10:48.:10:52.

Zealand's central-bank, and the headline, central banks do nothing.

:10:53.:10:57.

We all focus on the Fed is being the most important thing, but arguably

:10:58.:11:00.

it was Japan that was the most important yesterday. We expected Y20

:11:01.:11:07.

trillion increase that this already 80 trillion quantitative easing. And

:11:08.:11:14.

we got absolutely nothing. So it is no surprise we have seen such a big

:11:15.:11:17.

move in the yen, it strengthened quite a lot. We always moan about

:11:18.:11:25.

the Fed and the ECB and the tiny amounts that they change the

:11:26.:11:28.

wording, and that is what they did yesterday. But the reason they do

:11:29.:11:33.

that is because there are such huge swings in these markets. And the

:11:34.:11:38.

worry about the global economy, the wider economic Richard, that is

:11:39.:11:41.

interesting because that has always been the excuse for not doing

:11:42.:11:45.

anything, and that has now disappeared? And that means we are

:11:46.:11:50.

going to see some rate hikes in the coming months, because they have in

:11:51.:11:55.

saying that this global economic downside which has been affecting

:11:56.:11:59.

the markets, and January, February, sought huge falls in the markets,

:12:00.:12:03.

but what is interesting is they are saying they have moved away from

:12:04.:12:06.

affecting the US economy, because they haven't gone anywhere, China is

:12:07.:12:11.

still struggling economically. Commodities are up, oil is up, but

:12:12.:12:16.

not as much as we want, so they are struggling, these economies, still,

:12:17.:12:21.

but they are not affecting the US as much. But it is interesting, because

:12:22.:12:25.

if the US is sounding more optimistic, it is strange we are

:12:26.:12:31.

seeing gold, the safe haven... It is because nobody knows what anybody is

:12:32.:12:34.

doing, that is why gold is rallying! When all else fails, buy gold! We

:12:35.:12:38.

will talk to you very shortly. We'll hear from a man whose pay

:12:39.:12:41.

package is almost as big as Aaron's. It's the boss of advertising giant

:12:42.:12:46.

WPP, Sir Martin Sorrell. We'll ask him whether he's worth

:12:47.:12:48.

$100 million. The lift - or elevator -

:12:49.:12:52.

that goes sideways We'll hear from the company

:12:53.:12:56.

making it a reality. You're with Business Live from BBC

:12:57.:13:01.

News. The future of the UK's financial

:13:02.:13:10.

services industry has become a heated battleground for those

:13:11.:13:13.

arguing whether we should leave But what will the referendum mean

:13:14.:13:15.

for financial services? Steph McGovern has been to Chepstow

:13:16.:13:23.

to find out why the race In total, financial services is

:13:24.:13:41.

worth around ?190 billion to the UK economy, but it is about 12% of

:13:42.:13:46.

everything we do. So what will taking a punt on EU membership mean

:13:47.:13:51.

for the financial sector? Let's say I setup my own financial services

:13:52.:13:55.

company in the UK. Because we are part of the EU, we can do business

:13:56.:13:58.

easily with the other countries in it. It is called the passport

:13:59.:14:00.

system. It is why a lot of international

:14:01.:14:08.

companies will have But the In campaigners

:14:09.:14:11.

are worried it is at risk. If we were to leave the single

:14:12.:14:15.

market, negotiate a trade deal along the lines

:14:16.:14:17.

of countries like Canada, it would exclude financial services,

:14:18.:14:20.

at great detriment to the UK. And that would mean that a lot

:14:21.:14:22.

of jobs would be lost, and indeed it would be harder

:14:23.:14:25.

for us to retain that significant On the other hand, because my

:14:26.:14:28.

company is in the EU, I have to comply with their rules and

:14:29.:14:33.

regulations, which have been getting The Out campaigners

:14:34.:14:35.

say this is a handicap There is an avalanche

:14:36.:14:39.

of legislation coming out of Brussels weighing down

:14:40.:14:43.

on our financial services sector Ranging from capital

:14:44.:14:46.

requirements for insurance companies to restrictions

:14:47.:14:51.

on accessing talent It makes the UK financial

:14:52.:14:53.

centre uncompetitive Both sides argue that

:14:54.:14:57.

the other is gambling with the future of the financial

:14:58.:15:08.

services industry, but it's anyone's Let's take a look at the tablet.

:15:09.:15:24.

Greece is back in the spotlight again, just when we thought it was

:15:25.:15:29.

safe to look away. This is Donald Tusk, the boss of the European

:15:30.:15:33.

Council. He is tweeting about the importance of renewed talks. Clearly

:15:34.:15:40.

a lot of worries ahead of the UK's referendum on Europe, any worries

:15:41.:15:43.

over Greece will be very closely watched.

:15:44.:15:53.

top story. Facebook told us last night that the revenue has tripled,

:15:54.:16:05.

because of mobile advertising, we have talked about it a lot on this

:16:06.:16:11.

programme, why it is difficult to make money from mobile adverts

:16:12.:16:14.

although from these figures it would seem that Facebook has cracked it.

:16:15.:16:17.

Imagine if the lift in your office or apartment building not only

:16:18.:16:20.

took you up and down - but sideways as well -

:16:21.:16:23.

whisking you to the far corners of the building.

:16:24.:16:28.

It's an idea one company is testing and says it is possible.

:16:29.:16:31.

ThyssenKrupp Elevator has been making lifts

:16:32.:16:33.

since the 1970s, its HQ is in Germany and has 50-thousand

:16:34.:16:35.

a year, its projects have included the One World Trade Centre in

:16:36.:16:44.

Its chief executive is Andreas Schierenbeck -

:16:45.:16:48.

who also holds a degree in electrical engineering.

:16:49.:16:50.

Andreas, welcome. The producer will show the images, it is hard for us

:16:51.:17:07.

to get our heads around it, the technology exists? Yes, you can see

:17:08.:17:15.

it in our test centre in Spain, we are just building a tower in Germany

:17:16.:17:19.

to install this project by the end of this year or next spring. Why

:17:20.:17:26.

hasn't it happened before, we have seen it in films, left that could go

:17:27.:17:30.

in any direction, something people have wanted for a long time, what is

:17:31.:17:36.

not made it possible before? Maybe it was possible, just not needed. We

:17:37.:17:40.

can lift higher and higher although the left cannot follow. We needed

:17:41.:17:46.

new technology to really rich lifts into a level of 3000 metres and of

:17:47.:17:51.

course to put more cabins in a shaft. So this was driving the

:17:52.:17:55.

research. There has to be another way to make it more efficient and

:17:56.:18:02.

better. Amazing images. In 2016 it is rather archaic to hear about

:18:03.:18:08.

lifts, still on cables to this day. And that has always been a hindrance

:18:09.:18:14.

on how high you can go. We keep talking about it, skyscrapers, going

:18:15.:18:22.

up and up. The cable is a thing that has been working for a long time,

:18:23.:18:27.

although it has definitely two setbacks, first if you have a cable,

:18:28.:18:32.

it's only one thing moving, and the other hand the cable cannot be as

:18:33.:18:37.

long as you wish. It can go up to 600 metres and then becoming too

:18:38.:18:41.

buried to bear the load. So getting rid of the cable is a key part to

:18:42.:18:47.

drive the technology, it's an enormous thing to do. So what is the

:18:48.:18:51.

technology that means that you could do this either higher or go in

:18:52.:18:55.

different directions? The change was that we would get rid of the cable,

:18:56.:19:01.

if you put magnets, and linear motor on the wall and of course the linear

:19:02.:19:04.

motor is propelling the cabin to where ever you want to go. And since

:19:05.:19:08.

you have multiple cabins they have to go somewhere if they hit the end

:19:09.:19:12.

of the shaft so we move them sideways and bring them down a

:19:13.:19:19.

second shaft. This makes me feel a little sick! What users would you

:19:20.:19:22.

have? We talked about office buildings and sprawling sites, where

:19:23.:19:28.

would it be used? A lot of interest from buildings which are high and

:19:29.:19:33.

want to have less elevator shafts because real estate prices are high,

:19:34.:19:36.

I'm talking to you in London, come on! If you have vertical and

:19:37.:19:41.

horizontal transportation together, going from a parking place in an

:19:42.:19:45.

airport, directly to the check-in terminal results, changing lifts,

:19:46.:19:52.

people flow is the top priority of a lot of industries. As the big boss

:19:53.:19:57.

of the group... Has building always been in your

:19:58.:20:17.

blood? I worked in the builders differ ten years and then I changed

:20:18.:20:20.

to buildings because they are fascinating. You take so much for

:20:21.:20:24.

granted, you switch on your tap water, how does the tap water come

:20:25.:20:29.

there? How do you get cooling and fire protection, how do you get

:20:30.:20:33.

upstairs that an elevator, there is such interesting stuff, normally

:20:34.:20:38.

engineers like Beck and complexes so I like to do that. Andreas, I said

:20:39.:20:43.

it would be short and sweet, we really appreciated and we hope this

:20:44.:20:53.

technology gives your company left! Andreas, danke schon.

:20:54.:20:57.

WPP is the world's biggest advertising company.

:20:58.:20:59.

In the last hour or so it has announced healthy trading

:21:00.:21:01.

for the first three months of this year.

:21:02.:21:07.

Revenues were up some 10% in the three months to March -

:21:08.:21:10.

slightly flattered by the weak pound but largely thanks to strong

:21:11.:21:12.

But the numbers are really overshadowed by ongoing

:21:13.:21:15.

Sir Martin Sorrell is due for a five year performance related share award

:21:16.:21:22.

That would make his pay packet this year to 101 million dollars

:21:23.:21:26.

Earlier I spoke to Sir Martin Sorrell

:21:27.:21:28.

from New York and I asked him if he was worth that amount?

:21:29.:21:32.

What I have been doing for over 31 years is investing in the company,

:21:33.:21:38.

never selling shares, always reinvesting. So what you referred

:21:39.:21:44.

to, the annual report will be out tomorrow and it will confirm the

:21:45.:21:47.

numbers you talk about, I have kept investing after tax, all of the

:21:48.:21:55.

amount. So all of my wealth such as it is, is invested in this company.

:21:56.:21:58.

It's something that my father encouraged me to do many years ago.

:21:59.:22:04.

He said that portfolio investment was a mugs game and you should

:22:05.:22:07.

invest in the company you know best, the one that you are in. Will the

:22:08.:22:16.

shareholders approve? Approve of your pay packet? That is up to the

:22:17.:22:22.

shareholders. The incentive plan you referred to, they did approve, many

:22:23.:22:29.

years ago. It was something like 70% or 80% of them proving that plan.

:22:30.:22:34.

The answer to the question is, when it was put to shareholders for

:22:35.:22:38.

approval, and every one of our plans has been put up to shareholders for

:22:39.:22:42.

approval, they were approved. Shareholders can change their mind

:22:43.:22:46.

but the answer to your question is, they had the chance to vote on it

:22:47.:22:50.

and they voted in favour. The performance of the company over the

:22:51.:22:53.

last five years has gone from a market cap of eight and a half

:22:54.:22:58.

billion pounds to ?20 billion and we have outperformed all the indices

:22:59.:23:03.

and all our peers because the plan itself was based on that

:23:04.:23:06.

outperformance. So I am not embarrassed by the performance of

:23:07.:23:11.

the company, or apologising for the fact that this company is a world

:23:12.:23:15.

leader and is based in the UK and we are very proud of the fact that we

:23:16.:23:19.

started at 31 years ago from nothing and it is where it is now. He is a

:23:20.:23:26.

good talker. There's a lot of controversy about why he is paid so

:23:27.:23:31.

much but as he says, she built the company from scratch, 31 years ago,

:23:32.:23:36.

he's been a long time, seen it through the good and about and who

:23:37.:23:41.

else would the money? Meijer we always argue about shareholder

:23:42.:23:44.

activism and how much the chief executive should be paid but it is

:23:45.:23:47.

his company and he built it from scratch. He's almost changed a

:23:48.:23:53.

generation of advertising and what the company does. Some people do not

:23:54.:23:59.

deserve massive pay packets when the company doesn't do well. Clearly the

:24:00.:24:07.

company is making a big loss, in that case, hugely successful and he

:24:08.:24:13.

gets paid for it. There is a programme in place. And he is

:24:14.:24:18.

brilliant on TV! He's a really good talker, we always have fun with him.

:24:19.:24:25.

You mentioned Greece. This is interesting, it's the same old story

:24:26.:24:31.

and it just rolls on. You've got the IMF and the EU and the European

:24:32.:24:35.

Central Bank, who lent money to Greece, they are at loggerheads,

:24:36.:24:38.

Greece cannot pay back all the money. We said this in 2015 and in

:24:39.:24:45.

2014 and in 2011 and we continue lending! Will probably say this in

:24:46.:24:52.

July. Donald Tusk has called a meeting to try to organise this.

:24:53.:24:59.

Greece bow to .2 euros billion to the European Central Bank in July.

:25:00.:25:04.

-- they owe this money. We know that the talks will go on and on and we

:25:05.:25:08.

reach a deadline which will be pushed back. It's just the same

:25:09.:25:12.

thing again. And a word on the timing just before the UK referendum

:25:13.:25:17.

on the afford your Mac, that'll be interesting because the suggestion

:25:18.:25:20.

was that nobody would rock the boat until the referendum was done. This

:25:21.:25:24.

could throw a spanner in the works, it could raise important questions

:25:25.:25:29.

about the future of the U before the referendum. It could, and what will

:25:30.:25:35.

also come from the Leave campaign is, we know that the UK isn't part

:25:36.:25:39.

of the Eurozone, although it is still money from the UK that goes to

:25:40.:25:44.

Greece. That will be the big thing, when these figures are highlighted.

:25:45.:25:49.

Not a lot but sum. We are out of time. Thank you for coming in. Have

:25:50.:26:00.

a great day, wherever you are, we will see a very soon.

:26:01.:26:02.

Download Subtitles

SRT

ASS