11/05/2016 BBC Business Live


Similar Content

Browse content similar to 11/05/2016. Check below for episodes and series from the same categories and more!



This is Business Live from BBC News with Ben Thompson


We get unprecedented insight into the world's most valuable firm


as the Saudi government prepares to sell a stake in Aramco


Live from London, that's our top story on Wednesday, 11th May.


The promised share sale would value Saudi Aramco


at over $2 trillion - that's four times


But at what cost to the world's other oil producers and us?


Also in the programme, another twist in the Facebook bias row.


Now the US Government wants to know how the tech giant picks news


And Japan's benchmark, the Nikkei edged up for a third


straight day but nothing to get excited about.


And in Europe, after disappointing figures from Germany,


France and Italy yesterday, we get an update in the UK this


morning on manufacturing and industrial production.


And for 200 years Savile Row, England's home of bespoke tailoring,


has been dominated by men, but not any longer.


Her shop is the first on the prestigious street to be


And as the pollsters admit they might not be able to predict


the outcome of the UK's Referendum on EU Membership,


because it's never been done before, we want to know,


Let us know, use the hashtag BBCBizLive.


We're starting in Saudi Arabia where the head of Aramco,


Saudi Arabia's massive state run oil giant, says production will increase


this year ahead of a government plan to sell a stake in the company.


Last month, the Saudi Royal family announced a plan to radically


Called Vision 2030, the plan is designed to move


the country away from its dependence on oil and gas.


They currently account for 90% of all the government's income.


But the oil prices are down 60% from their peak of $115


That's forced the government to dip into their reserves to keep


One part of the plan to end this reliance on oil


That really is tantamount to flogging the family silver.


The company is thought to be worth over $2.5 trillion.


The Kingdom wants to sell 5% of it to help pay for other projects.


But remember, the Saudi's aren't quitting oil.


In fact they're going to pump even more and that


could spell big trouble for other oil producers like Venezuela,


The President and Chief Executive of Saudi Aramco, Amin Nasser,


has been speaking to our Business Editor Simon Jack.


They started off by talking about the significance of the country's


The vision 2030 is set by the Kingdom is a game changing plan. It


is important especially at this time to reduce dependency on oil. To have


more sustained economic growth. Create more jobs. So it is, I think,


timely and overdue to identify new resources, but rely more on


investment for additional streams of revenue for the Kingdom. You say


timely. Is that because of the arrival of US shale, is it because


we're looking at a future with fewer hydrocarbons, we see electric cars,


are you worried that you have got so much of the stuff in the ground that


one day you won't be able to sell it, you will have stranded assets?


Yes, there are more energy resources coming, electric cars, renewables,


but they are starting from a small base. There is still a lot of


challenges and however, oil will continue to play a major part in it


for the long-term. Privatising industry is important. It is a step


in the right direction. Starting with a company like Saudi Aramco.


All the systems and processes and procedures will help to a company


like Saudi Aramco. It is about time. When you privatise something, you


have to publish a prospectus, you have to talk about cost of


production and give details about the quality of your reserves. All of


those things. Are you ready for that level of transparency?


We have been always when we talked about transparency. We have been


transparent with one shareholder, which is the Government. We have


been transparent with our board. When we are listed and there are


many shareholders, we will be sharing data like any company is


doing, quarterly, sharing the results and data. When we share it,


it will be a pleasant surprise for the rest of the industry. Lots of


people have wondered about Saudi's behaviour in the oil market and


there is lots of conspiracy theories, you are trying to put the


US out of business, or you're helping the US put Russia out of


business or you're trying to handicap Iran or it is because the


kingdom are running out of answer? You mean in terms of unceasing our


productions? Yes. No, as I said earlier, we are trying to call on


Saudi Aramco when it comes to production. It is commercial. Aramco


has always dealt on a commercial basis based on the guidance and the


terms of production that we have seen sfr from the minister of energy


and industry and mineral resources. Simon Jack speaking to the new Chief


Executive of Aramco. There you go. We will have more on that if we get


it. A US Senate committee has launched


an inquiry into how social media giant Facebook picks the stories


for it's trending news list. The announcement comes only hours


after Facebook was forced to defended itself over


claims its Trending Topics. The stories that appear on the left


hand side of their website, suppressed stories supporting


conservative political viewpoints. Despite last minute attempts


to derail the process, the Brazilian senate is due to vote


later on Tuesday on the impeachment of President Dilma


Rousseff from office. Ms Rousseff is accused of breaking


the country's budget She could be suspended for up to 180


days if lawmakers vote Budweiser beer brands to re-brand


its cans for the summer. The beer will have its name changed to


America! Between the months of May and September. Budweiser are hoping


to capture the patriotic spirit of Americanses focussed on events like


the US election and the summer Olympics. Want a can of America? I'm


not sure about that one! Already a lot of comment online about whether


you are a fan of that beer. Some suggesting it doesn't really taste


of much and that would also suggest that America is similar!


Let's talk about Disney, the company that makes dreams a reality or not.


Not for investors, it seems. Disney posted a profit, $2.1 billion. It


was certainly, I think, nearly double the same period last year,


but why didn't it please? Because investors are a fickle lot! This is


a company that owns Star Wars. Yes. And yet investors are disappointed


with happened. That's why expectation is a difficult thing.


Markets expect one thing and if you don't meet it, your shares fall. Ask


Apple! More bad news for the car industry


in Asia this morning. Profits are down at Toyota


and losses for Takata mount after that massive recall of faulty


airbags around the world. Sharanjit Leyl is following these


stories in Singapore for us. I bet this is going down like a


tonne of bricks over there? You could say that, Aaron. It is


worse for the ought owe car making. Toyota, its profits were driven down


by the stronger Japanese yen. They are saying net income may drop 35%


to lower than expected $13.8 billion for this fiscal year ending in


March. The Japanese yen has strengthened for than 10% against


the dollar and the car maker suffered production stoppages. You


will recall that followed the deadly earthquakes in south-western Japan


last month. As growth starts to stall, the ought owe maker is racing


to keep ahead of Volkswagen. As for Takarta, it posted its third annual


loss on the mounting costs of recalls of those potentially


dangerous airbag inflators. Their net loss came in at $120 million.


Those inflators have been linked to 11 deaths and more than 100 injuries


and the US Transport Authority last week announced a recall of up to 40


million more of the company's airbags on top of the more than 50


million that have already been recalled globally.


Thank you very much. A look at the numbers for you. Not a


lot to get excited about. The Nikkei ending up slightly. It was its third


straight day after a rough ride for the Nikkei of late. I want to show


you what is happening in Europe. Remember we get industrial


production and manufacturing figures this morning. Hot on the heels of


disappointing figures yesterday for Italy, Germany and France. They


didn't meet expectations. Markets fell as a result. You can see that's


really reflected in how Europe opened this morning and we'll get


the figure ins a little while. Sue is with us to talk us through


the numbers. Samira has the details about what's


ahead on Wall Street Today. When American retailers report


earnings everyone from economists to investors pay attention. And first


up in this earning season is the department store Maisie's and


tourists were not flocking to its flagship location here in New York


and that will hit the results for the quarter and making matters more


difficult is spending on a parallel is down. The big question is what


does this mean for the US economy? Well, we'll get a better idea of


that on Friday when April retail sales number are released as well as


consumer sentiment. So how Americans are feeling about the state of the


US economy. Sue Noffke, UK equity fund manager


at Schroders. Can I start with a two part question


on Aramco, the Saudi company, I mean they only want to sell 5% of it. But


the sums are eye watering. But this announcement that they are going to


continue increasing production in oil will just surely suppress oil


prices? It is a surprise that you're trying to market selling a large


amount of shares internationally on the basis that you are going to


continue to potentially ramp up production. Whereas, the oil price


has apparently bottomed earlier this year on the expectation that people


will stop producing quite so much and that's demand and supply will


come into balance. So this could throw a spanner in the works to that


recovery in the oil price. Having said that, oil companies are valued


on their reserves and their production efficiency. And Saudi is


very well placed on both reserves and the cheapness of prodaoution


those. Who will be interested in these shares? It strikes me there is


two things. One, it is unprecedented that Saudi is opening up a business


in this way. So all of that is untried and untested and also, there


is probably a level of scepticism about quite how much they are


committed to this process. The market is driving a need for it, but


whether they are really behind the big plan to open up the company and


you think maybe if oil prices pick up again, they will reign back on


that a little? You've got 5% initially. That could either be a


large overhang of more shares to come further down the timeline or


you might just end up being a very small investor in a small minority


stake... With very little power? Indeed. And that's going to be a


feature along with governance for a lot of international investors. You


see how time flies. You're going to come back and take us through the


papers? I am. For 200 years Savile Row has


been dominated by men. Her shop is the first


on the prestigious street to be You're with Business


Live from BBC News. We've had an update


from the world's largest travel Our Business Correspondent Tanya


Beckett is in the newsroom for us. Turkey is a big issue for TUI.


Turkey visits are down by 40%. Spain is supposed to have a record year in


number of visitors this year? This is a company that sells 750,000


holidays a year. It is the world's largest. It is an anglo German firm.


It is looking to off load some brands, I will come back to that.


There are complex issues hitting the travel market, but it is talking


about revenues going up strongly this year and its share price has


been doing better on the back of that expectation. But remember, a


lot of moves at the moment in the foreign exchange markets because of


the peculiar set-up we have with interest rates at the moment.


Particularly in Europe for example and you know, the euro-pound rate is


very strong for the euro at the moment. Looking elsewhere, we're


seeing a very difficult dollar-yen situation as well. There are also


security concerns. Turkey being one of them. We've also had concerns in


Egypt and of course, concerns in more recently in Brussels as well


with the bombings there. So that's affecting the picture, but it also


has off loaded hotel beds which is its online hotel bed booking service


and it is looking to off line its specialist division, many, many


brand names under that, that is an effort to boost the balance sheet.


This is a question of narrowing its losses, 251 million wds which is a


narrowing of its loss from this time last year. Nonetheless it is a loss


and it has to do something about that if it is to keep the balance


sheet strong. Thank you very much. Staying with


travel. Just want to take you to the Business Live page, they have been


discussing the obligations of Brexit on European travel. We have talked


about it here before, because maybe Judy free European flights would


come in, cheap cigarettes, cheap booze, but not quite so good for


other things, because it says protection of the EU has been good


for compensation for flights, things like that. The pros and cons, we


have been assessing those. You're watching Business Live -


our top story... The Chief Executive of Aramco says


oil production will increase this year had of the government's


preparation to sell a 5% stake in the company. When it does list it


will be four times the value of Apple. 5% is about 120 billion?


Something like that. It is a good job we are good with maths in this.


Think of fine tailoring, you might imagine Savile Row.


In London's West End, it's been the home to top hats


For the first time in its history, the iconic street has a shop owned


Kathryn Sargent opened her shop at 37, Savile Row


just a few weeks ago, and dresses royalty,


She trained on Savile Row itself, where she spent 15 years


working at Gieves Hawkes, rising through the ranks to become


As well as serving customers from her store in Savile Row shop,


Kathryn also has clients in the United States.


Kathryn, welcome. Thanks for coming in. Thanks bringing these in. It has


been a heck of a journey, one can imagine. You started, graduated and


went straight to Saborit. I just left home, it has been a


roller-coaster but a great career so far. What do you love about


tailoring, as a layman? It is handcrafted saddle Road tailoring,


you are making something from the most finest cloth by hand to fit


people, and they are just exquisite garments -- Savile Row. There is so


much value in what we do. You have got to train a long time to be able


to create these garments, but they are of quality. It is something I am


very proud to represent Savile Row in, the history of tailoring. Savile


Row itself, it is just full of amazing history. Let's just talk a


little bit about that history, 1846, the first Taylor established then on


Savile Row, and it really did create the iconic street, it is where


everyone goes, or where everyone would like to go. LAUGHTER


Tell us what it is like opening that shop then in what is a very male


dominated industry. It just feels like a culmination of the hard work


over the last 20 years. I trained as a graduate, and worked my way up in


one of the larger houses, Gieves Hawkes in Savile Row. It is about


being a great Taylor and part of the history of the industry. It is


fantastic. It was probably hard enough slog being a master cutter


and a master tailor, but on Savile Row, again being male naked over the


200 year history, worthy blokes and obstacle, did they give you a tough


time? It is quite inclusive actually. You have got to earn the


respect by doing the training process. I was worried when I left


to start my own business that it might not go down so well but it has


been really welcomed. I am part of the industry and the community. We


all know each other and it is very supportive. Do you find people are


surprised that they book a tailoring appointment and you turn up? It used


to happen when I was a junior. You want to deliver great things for


them. But it is just about winning confidence. There is an element of


surprise when US Customs, I put on the form, what is your career?


Taylor, are you sure? What goes into something like this? You cut the


cloth, you have thousands of cloth, you can do any design. I then have a


house style, I work with the individual to flatter them, their


lifestyle. We construct a fitting and we do a process of two or three


before we finish the garment, that is a classic man's 's miss it. The


pockets aren't in place yet. Howard will it cost? It is an investment


piece, a bespoke suit should last you ten, 15 years, something like


that would start from around ?4200. $6,000. OK. That is a ladies's


finished suit. Ben, you can have that one. We appreciate your time,


Katherine, thank you very much, we appreciate your time.


Heathrow Airport has announced plans to ban night flights in an attempt


to boost its bid to build a third runway.


It's part of a package designed to reduce the impact of expansion


on the local community and the environment.


Heathrow boss John Holland Kaye has been speaking to the


Well, we want to make sure that the Prime Minister is able, when he's


ready, to get on the right choice to expand Heathrow. This is what will


secure the future for the British economy. Heathrow has been a


cornerstone for the British economy for 70 years and we need to make


sure we secure our trading links through Heathrow for the next 70


years. We don't want to be the generation that pulls the ladder are


behind us, and that is why it is so important to the UK that we get on


and expand Heathrow. Today I wanted to clear the decks, make it clear


for the Prime Minister to get on, when he's ready, to expand Heathrow.


Sue is back with us to talk this through some of the paper stories


that caught UI. Let's start with that story we headlined about


Facebook, under fire for allegedly filtering results, and trying to


pretend certain things are trending that aren't. I think this is part of


a wider scrutiny of some of these new businesses, a lot of internet, a


lot of customer data, and just how much transparency is there, how much


manipulation of our data that is purporting to be something that


maybe it is not. They could be a big point here, because they are saying


some of this Facebook staff are the gatekeepers to what goes out to 1.6


billion users, and if they are again, allegedly, saying we don't


like that political... Yes, if they are putting a spin on, that is quite


significant, and if it is not what it actually is, in terms of the


trends. But the way that you touched on comment new media is shaping the


way people consume news, traditionally you might have gone to


a newspaper and looked at the headlines and now it's about what


people are reading. It gets pushed up the rankings. That is the issue


here. It is, and whether their biases and how do you correct those


biases, and who should be correcting them? Amazon, you like this? Purely


because Amazon is getting into bed, so to speak, with Morrisons, the UK


supermarket, to sell groceries. It will shake up the way the market


works. This is their test, and they got it a bit wrong because they have


listed things were rather interesting prices. And different


pictures compared to the products they are talking about. I think


there is vast interest in what Amazon is doing, particularly here


in the UK. It is a competitive grocery space. We have had


disruption from discounters, now we have anticipated disruption from


Amazon. And Amazon are well set up to do grocery staples, but things


you have found that have long life shelf life rather than fresh. For


fresh, they have linked up with a Morrisons. This was a test. They


have got the test prices that were leaked, everyone has jumped on them,


but there wasn't much market information to be gleaned. More than


a hundred bucks for four pints of milk, I think they got it wrong!


Thank you for joining us. We will see you soon.


Parts of Scotland once again may have started with the sunshine


today, further south a case of heavy rain, some fog, even minor flooding.


South-west England and South Wales, the more persistent rain easing


Download Subtitles