06/06/2016 BBC Business Live


06/06/2016

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This is Business Live from BBC News with Ben Thompson and Sally Bundock.

:00:00.:00:08.

Strapped for cash - one of the world's biggest oil

:00:09.:00:11.

producers, Saudi Arabia, woos banks ahead of its plan

:00:12.:00:14.

to issue its first ever international bond.

:00:15.:00:16.

Live from London, that's our focus today, Monday June the 6th.

:00:17.:00:32.

With the price of oil hovering at around half

:00:33.:00:37.

the levels seen last year, Saudi Arabia gets the ball

:00:38.:00:40.

rolling on its plans to sell government bonds.

:00:41.:00:43.

Is there an appetite and what does it mean for the region?

:00:44.:00:49.

Also in the programme: Will trade talks between the world's economic

:00:50.:00:53.

superpowers China and the US be overshadowed by mounting tensions

:00:54.:00:56.

And a brand new trading week is under way.

:00:57.:01:03.

Europe has managed to shrug off the negative tone set in Asia.

:01:04.:01:07.

We will talk you through what's moving markets and why.

:01:08.:01:12.

We meet the women who set up their own theatre production

:01:13.:01:19.

company despite limited funding and tough competition.

:01:20.:01:23.

And as one Canadian boss says he takes every Friday off as a day

:01:24.:01:27.

to think we want to know would you ditch the 9-5 to work

:01:28.:01:30.

Or would that mean you actually never switch off and

:01:31.:01:35.

Let us know, use the hashtag BBC Biz Live.

:01:36.:01:48.

Working 9-5 is the stuff of dreams in 24 hour news. Send us your

:01:49.:02:03.

Saudi officials are meeting with global banks in Riyadh later

:02:04.:02:14.

today as the oil producer moves forward with plans to issue

:02:15.:02:17.

The country has been badly hit by low oil prices which generate

:02:18.:02:22.

more than two-thirds of its revenues.

:02:23.:02:24.

So to plug the gap the country could sell up to $15-billion worth

:02:25.:02:27.

of US-denominated debt in the next few months.

:02:28.:02:30.

It follows a $10-billion government loan agreed

:02:31.:02:33.

Taking a look at this graph from the beginning of the year

:02:34.:02:39.

the price of Brent Crude has dramatically improved.

:02:40.:02:41.

It's now trading at close to $50 a barrel, an increase of almost 70%

:02:42.:02:45.

Even though oil prices are now at seven-month highs, they're

:02:46.:03:04.

still a fraction of the prices seen in the middle of 2014.

:03:05.:03:07.

It's thought Saudi Arabia needs to have the price at about $100

:03:08.:03:13.

Jane Kinninmont is a senior research fellow and deputy head

:03:14.:03:16.

of the Middle East and North Africa programme at Chatham House.

:03:17.:03:21.

Sally said it was a drop in the ocean. This is the starting point

:03:22.:03:30.

for Saudi Arabia when it comes to doing this. Why does it need to do

:03:31.:03:36.

this and wide do it now? Saudi Arabia's main source of revenue has

:03:37.:03:38.

plummeted over the past couple of years and it is not easy for the

:03:39.:03:44.

country to radically cut spending because most of

:03:45.:03:46.

it is such spending and public sector salaries for a population

:03:47.:03:52.

that is accustomed to a high level of spending from the state. They are

:03:53.:03:57.

cutting back on projects, but it is difficult to cut back on salaries

:03:58.:04:02.

and public service projects. There is $100 billion deficit this year

:04:03.:04:09.

and this will plug 15% of that. They are trying

:04:10.:04:10.

to lay out their stall before Ramadan which begins today, so not

:04:11.:04:15.

much will get done this month, so off the back of that there will

:04:16.:04:17.

be an Again it is still a drop in the

:04:18.:04:31.

ocean, but it also suggests there will be a lot of competition between

:04:32.:04:35.

these countries, the likes of man and Bahrain are

:04:36.:04:36.

it be more popular? Cutout and Abu Dhabi are probably the best places

:04:37.:04:50.

to borrow and a few months ago you had to pay a lot less than in Saudi

:04:51.:04:55.

Arabia for a bank loan. But Saudi Arabia

:04:56.:04:55.

has a much larger population and diversify economy. The population is

:04:56.:05:04.

a double edged sword economically because it costs a lot of money, but

:05:05.:05:09.

it has more potential to be an ongoing post-oil market

:05:10.:05:12.

compared to countries that have over a billion citizens.

:05:13.:05:17.

How attractive is this debt from Saudi Arabia? If you compare it to

:05:18.:05:23.

elsewhere around the world, is it somewhere people would

:05:24.:05:25.

want to put their money? All the major ratings agencies have cut

:05:26.:05:32.

Saudi's ratings, so it is seen as being on a par with Japan which is

:05:33.:05:37.

one of the world's most heavily indebted countries and Saudi Arabia

:05:38.:05:38.

the least. But the great uncertainty of risk is the

:05:39.:05:44.

dependency on oil and investors will be thinking about the dramatic

:05:45.:05:49.

vision that Saudi has announced to diversify, but they are in early

:05:50.:05:54.

stages and the implementation is not yet certain.

:05:55.:05:54.

A lot will depend on the oil market and on the premium Saudi Arabia is

:05:55.:06:02.

willing to pay. We will be watching that really closely and we will be

:06:03.:06:04.

speaking again about that. He might run the world's biggest

:06:05.:06:08.

social networking site, but not even Mark Zuckerberg

:06:09.:06:11.

is immune to being hacked. The Facebook founder's accounts

:06:12.:06:13.

on sites including Instagram, Twitter, LinkedIn and Pinterest

:06:14.:06:15.

appear to have been briefly A hacker group called Ourmine,

:06:16.:06:18.

which has more than 40,000 Twitter Swiss voters have rejected

:06:19.:06:33.

a proposal to introduce a guaranteed Final results showed that nearly

:06:34.:06:37.

77% oppose the plan, The proposal had called

:06:38.:06:42.

for adults to be paid a monthly income, regardless

:06:43.:06:45.

of whether they are working or not. The suggested monthly income

:06:46.:06:48.

would have be at around 2,500 US More than 40% of the UK's oil

:06:49.:06:50.

and gas firms say they're plan to cut costs in the wake

:06:51.:06:59.

of the industry downturn. Of the 141 companies surveyed,

:07:00.:07:01.

51% made redundancies In Scotland - where the North Sea

:07:02.:07:03.

is a big employer, 57% of companies said they had been severely or badly

:07:04.:07:08.

affected by the slump in oil prices. Across the UK as a whole,

:07:09.:07:12.

firms said that for every one job created last year,

:07:13.:07:15.

six had been lost. We would love to show you the tablet

:07:16.:07:31.

right now, but it is having a Monday morning feeling.

:07:32.:07:34.

It is not charged. It is not playing. But lots of stories on the

:07:35.:07:40.

business life paid, all the stories we do not have time to get across

:07:41.:07:48.

like German industrial orders and the demand for them is falling.

:07:49.:07:53.

Trust us, it is there even though we cannot show it to you.

:07:54.:07:59.

The US Treasury Secretary Jack Lew has called on China to cut excess

:08:00.:08:02.

capacity in steel and aluminium - warning that overcapacity was having

:08:03.:08:05.

a "distorting and damaging effect on global markets".

:08:06.:08:07.

He's also called on the country to be more transparent

:08:08.:08:10.

in its communications about monetary policy.

:08:11.:08:14.

It comes as a US-China summit opens in Beijing today to discuss

:08:15.:08:17.

We have touched on some of the headlines, but there is a lot to

:08:18.:08:32.

talk about. Indeed, a very busy day for them. They are not allowed to

:08:33.:08:36.

have the Monday blues that your tablet is having. This is one of the

:08:37.:08:42.

most significant and high profile bilateral talks between the two

:08:43.:08:48.

countries, but remember this is the last one under President Obama and

:08:49.:08:52.

many experts were saying that no one wants to be too aggressive. It will

:08:53.:08:57.

be rather understated, but the Americans get in with a very topical

:08:58.:09:02.

subject of the steel industry and China being accused of flooding the

:09:03.:09:08.

market with cheap products. China is accused of manipulating its currency

:09:09.:09:13.

to gain competitiveness in exports, which is a topical issue in the US

:09:14.:09:19.

presidential election. Thank you so much, good to see you. We will keep

:09:20.:09:25.

across how that discussion goes on between the US Treasury Secretary

:09:26.:09:28.

and authorities in China. We will keep you right up to date. Japan is

:09:29.:09:37.

down by 0.4%. In Hong Kong it is the opposite story. The Asian reaction

:09:38.:09:45.

today to the US non-farm payroll numbers, which were much worse than

:09:46.:09:49.

expected and spooked investors in terms of their thinking about what

:09:50.:09:55.

the federal bag will do next. All eyes will be on Janet Yellen and

:09:56.:10:01.

later today. The pound is really wobbly today, down significantly

:10:02.:10:08.

versus the dollar and other major currencies. That is on the fear that

:10:09.:10:13.

perhaps we may vote to leave the European Union. For now investors

:10:14.:10:20.

are very nervous about that. The mining stocks, the FTSE 100, we are

:10:21.:10:24.

right across the board hire in Europe. First, let's have a look at

:10:25.:10:28.

Samira Hussain has the details about what's ahead on Wall Street Today.

:10:29.:10:34.

Janet Yellen may give investors lose to thinking about the economy. This

:10:35.:10:41.

will be the last time she speaks publicly head of the next meeting of

:10:42.:10:46.

the US Federal reserve in June. According to the minutes from the

:10:47.:10:50.

last meeting, as long as the economy continues to show signs of strength,

:10:51.:10:56.

June rate hike was on the table, but that was before the latest report in

:10:57.:10:59.

which the US economy created only which the US economy created only

:11:00.:11:03.

38,000 jobs for the entire month of May. It was the worst jobs growth in

:11:04.:11:09.

six years and has led many to believe that the Federal reserve

:11:10.:11:12.

will not raise interest rates in June.

:11:13.:11:17.

Joining us is Trevor Greetham, head of multi-asset

:11:18.:11:20.

at Royal London Asset Management joins us again.

:11:21.:11:26.

As we touched on, it is all about the Federal reserve today and Janet

:11:27.:11:34.

Yellen speaks a bit later. It is interesting because everybody is

:11:35.:11:38.

looking to what she says to give us an indication about rates in the

:11:39.:11:43.

world's largest economy and it is important. Yes, the jobs rate rise

:11:44.:11:50.

on Friday was a shocker. It is a notoriously volatile report month to

:11:51.:11:54.

month and she may decide to take it is one piece of data, but generally

:11:55.:11:59.

the economy has been recovering and it is time we started raising

:12:00.:12:02.

interest rates a bit more. They have only raised interest rates once in

:12:03.:12:09.

most people's investment careers. We are talking about a quarter of a

:12:10.:12:14.

percent. It is a real mindset shift and that is the issue. Many people

:12:15.:12:19.

have not seen a rate rise at all and that concept of going up is

:12:20.:12:24.

important. It is important. People say when they start to raise rates

:12:25.:12:29.

it will burst bubble, but when they did it in December, the markets

:12:30.:12:32.

wobbled a bit and they are back where they are now. From Janet

:12:33.:12:37.

Yellen's point of view, the interest rates are stuck close to zero and

:12:38.:12:43.

the unemployment rates are very low level and 5% and if they do not

:12:44.:12:46.

start now, they will have to do it later. June is looking likely in

:12:47.:12:53.

this report. The meeting in June is on the 15th and the referendum here

:12:54.:13:00.

is on the 23rd. The pound is very weak today, which is good news if

:13:01.:13:04.

you are an exporter in the UK, but bad news for other reasons. If you

:13:05.:13:11.

are an exporter in the UK and we leave the EU, you are in deep

:13:12.:13:15.

trouble and there is massive uncertainty about what the rules are

:13:16.:13:21.

and your trading partners will draw support from that, but there is a

:13:22.:13:26.

lot at stake here. We think the remain vote will win, that is where

:13:27.:13:31.

the bookies are. A few polls said the opposite. It it is really close

:13:32.:13:38.

and we are focusing on the positive and we think it will be better for

:13:39.:13:42.

the overall size of the economy, a bigger market to trade in and we

:13:43.:13:47.

think that will result in a stronger pound and ultimately higher interest

:13:48.:13:52.

rates in the UK, but nothing to fear, a better economy. We will

:13:53.:13:56.

speak again about this. Trevor will be returning. We will be talking

:13:57.:14:03.

about whether you work 9-5. One Canadian boss takes Friday off as a

:14:04.:14:07.

day to think. A great idea. Thursday is the new

:14:08.:14:09.

We meet the composer and the ballet dancer who teamed up

:14:10.:14:16.

to create their own theatre production company, amid limited

:14:17.:14:18.

You're with Business Live from BBC News.

:14:19.:14:30.

Last year a BBC investigation found that working practices

:14:31.:14:33.

at Sports Direct were so tough, that ambulances were called

:14:34.:14:35.

to its warehouse and premises 76 times in just two years.

:14:36.:14:38.

Sports Direct boss Mike Ashley originally said he wouldn t attend

:14:39.:14:42.

Over the weekend, he agreed to appear before MPs.

:14:43.:14:50.

Lucy Burton has been following the story.

:14:51.:14:58.

So Lucy, why the change of heart? Well, Mike Ashley has been

:14:59.:15:03.

prevaricating for months, hasn't he? On Friday at the end of last week,

:15:04.:15:09.

it looked like he wasn't going to appear in front of the MPs, he said

:15:10.:15:12.

his lawyer wasn't available and neither would he be. Over the

:15:13.:15:15.

weekend there was a change of heart, he wrote to the head of the

:15:16.:15:19.

committee and said, "I will be available. I've got nothing to hide.

:15:20.:15:23.

Qrts he feels like he is able to defend some of the allegations that

:15:24.:15:27.

you mentioned at the beginning of the section, but also, there was a

:15:28.:15:30.

suggestion that he could have been physically dragged in front of the

:15:31.:15:34.

committee by the Serjeant at Arms at Parliament. Now, that would have

:15:35.:15:38.

been on live TV. It would have been pretty embarrassing, it is unlikely

:15:39.:15:42.

that would have happened, but a legal lengthy battle could have

:15:43.:15:46.

ensued, he probably decided it is just easier to go in there and

:15:47.:15:49.

defend my actions. Lucy, the challenge, of course, is determining

:15:50.:15:55.

what he is accused of doing and whether MPs can get anymore evidence

:15:56.:15:58.

to back that up. Talk us through the allegations? There is a number of

:15:59.:16:02.

allegations that were uncovered by the BBC and the Guardian newspaper.

:16:03.:16:07.

They looked at things like zero-hours contracts. A suggestion

:16:08.:16:11.

that employees were harassed over the tannoy at workment they are

:16:12.:16:16.

saying there was a rather Draconian six strikes and you're out system if

:16:17.:16:21.

you were an agency worker. Those ambulance claims as well. What the

:16:22.:16:25.

MPs will be trying to find out is whether the investigation that Mike

:16:26.:16:29.

Ashley has launched into this has worked and how far it has got. Thank

:16:30.:16:33.

you very much, Lucy for filling us in on that story. As ever, there is

:16:34.:16:38.

a lot more online about that. It is a story, that we have been following

:16:39.:16:42.

closely at the BBC with an investigation. You can see Mike

:16:43.:16:50.

Ashley there. Read more detail. Analysis too from our business

:16:51.:16:54.

correspondent, Joe Lynam, talking about the U-turn from Mr Ashley over

:16:55.:16:58.

the weekend. Check it out on the website.

:16:59.:17:02.

Our top story: Saudi Arabia is moving forward with plans to borrow

:17:03.:17:07.

money from the international money markets for the first time ever.

:17:08.:17:12.

The government hopes to raise about $15 billion through the sale

:17:13.:17:16.

of government debt which it will then invest to help move

:17:17.:17:19.

the economy away from its over reliance on oil.

:17:20.:17:25.

Starting a business will always be tough,

:17:26.:17:30.

but it can be particularly hard in creative industries

:17:31.:17:33.

where funding is limited and competition is fierce.

:17:34.:17:41.

Composer Ella Spira and producer Pietra Mello-Pittman set-up

:17:42.:17:43.

the theatre company, Sisters Grimm, seven years ago

:17:44.:17:46.

after a background in classical music and at the Royal Ballet

:17:47.:17:49.

Their biggest production has been the Zulu ballet Inala

:17:50.:17:56.

which performed to sold out crowds and the music was nominated for

:17:57.:17:59.

It brought in almost $3 million, but despite the show's success

:18:00.:18:04.

the pair find getting support for new productions

:18:05.:18:06.

They are both with us now in the studio. Thank you for coming in to

:18:07.:18:21.

be with us on Business Live. Ella, you're the composer and you're, you

:18:22.:18:24.

were, well you still, are you still a ballet dancer? No, I left the

:18:25.:18:28.

royal ballet last year and I am a full-time producer. So teaming up to

:18:29.:18:33.

start Sisters Grimm, how did you two meet? How did it begin? We met

:18:34.:18:41.

because she was looking for someone to write some music. I was cord owe

:18:42.:18:46.

graphing a piece and didn't like the music I had. I gave to Ella as a

:18:47.:18:50.

reference score and she composed something ten times better. We

:18:51.:18:55.

fund-raised and recorded the score at Abbey Road and that was the first

:18:56.:19:00.

time we collaborated together. You make it sound so easy. One gave

:19:01.:19:04.

something to someone else and it came out beautifully. There must be

:19:05.:19:09.

an element you have a specialism in specific areas, how do you make that

:19:10.:19:13.

gel? We got on particularly well because we actually have matching

:19:14.:19:18.

skill sets in being very organised, wanting to do things to the highest

:19:19.:19:22.

standard, not cutting any corners and I think being leaders and

:19:23.:19:27.

wanting to inspire people to want to work with us and believing in the

:19:28.:19:31.

projects we want to do together. You both love spread sheets, is that

:19:32.:19:34.

right? LAUGHTER

:19:35.:19:37.

It is the key to success. Just to explain though when it comes to the

:19:38.:19:43.

business skill, I mean, you know, we think in our heads composer, ballet

:19:44.:19:49.

dancer, fantastic, incredible, aristic skills and when it comes to

:19:50.:19:54.

running a business what about those skills? We never studied business.

:19:55.:20:00.

It is something that was in us. We're entrepreneurial in our

:20:01.:20:03.

creative concepts and the way we approached fund-raising. Yeah, it is

:20:04.:20:07.

something we have always had. What was your biggest learning curve?

:20:08.:20:11.

What's the biggest surprise of doing business? It is one thing to have

:20:12.:20:16.

the creative flair and go out and meet people, raise money and get

:20:17.:20:19.

shows on stage and deal with that? I think managing the fun raising side

:20:20.:20:24.

of it is probably, in a sense, the biggest challenge because we know,

:20:25.:20:28.

it is instinctive in us to know what to do with that money and how to

:20:29.:20:33.

make it go as far as we can make it go. We managed to do a lot with very

:20:34.:20:37.

small budgets, but it is, knowing how to deal with, you know, in the

:20:38.:20:42.

time of austerity really, how to put things together in a creative way

:20:43.:20:45.

because we came out of really that thing of a lot of cuts to the arts

:20:46.:20:50.

funding. So we had to be creative about how we put our models

:20:51.:20:54.

together. And also how you deal with each of those things because there

:20:55.:20:59.

is not a one-size-fits-all. With this over here, this is the process,

:21:00.:21:04.

with this over here, this is, not everything is totally plaque and

:21:05.:21:09.

white, a lot of it is feeling things out. You're both very young. You are

:21:10.:21:15.

both female. Has that held you back do you think or caused hindrances

:21:16.:21:21.

and also in terms of future funding, it has got to be exhausting having

:21:22.:21:25.

to sort of constantly push for that funding you need for those

:21:26.:21:28.

production you desperately want to put on? I think we have felt some

:21:29.:21:33.

challenges in being two ambitious female leaders. But we're driven and

:21:34.:21:38.

we keep on pushing through and we don't give up and we have achieved

:21:39.:21:44.

great things. There is definitely a challenge in looking at how you make

:21:45.:21:50.

something more sustainable. And it is always looking at OK, how can we

:21:51.:21:55.

maximise this skill that we have? What can we do with this? What can

:21:56.:22:02.

we do to build the things we want to do whilst bringing in some other

:22:03.:22:08.

income streams and how can we put the funding together for different

:22:09.:22:10.

things. There has been challenges because of being women, but you make

:22:11.:22:16.

the most of it. On that note, I could talk, we could talk all day.

:22:17.:22:21.

The time is against us. Thank you. Thank you for coming in.

:22:22.:22:30.

Flying is one of the safest forms of transport -

:22:31.:22:36.

But recent accidents have focused our attention on how we can

:22:37.:22:39.

Among those is the risk of cyber attack.

:22:40.:22:43.

The computer systems of airliners being hacked and controlled

:22:44.:22:45.

Our correspondent Theo Leggett caught up with cyber-security

:22:46.:22:50.

expert, Matthew Finn whether it's a growing threat.

:22:51.:22:55.

The worst that could happen is that someone could get control

:22:56.:22:58.

of the aircraft or potentially of the landing lights,

:22:59.:23:00.

Where we have been focusing attention for the last 40

:23:01.:23:13.

or 50 years has been about worrying about weapons getting

:23:14.:23:16.

on board the aircraft, now the thinking is moving

:23:17.:23:18.

into a space where we think about what could happen

:23:19.:23:21.

None of this has actually happened yet, so how seriously our defence

:23:22.:23:25.

Well, there have been some eventuated and possibilities

:23:26.:23:40.

happening, such as that in Kiev Airport.

:23:41.:23:42.

Even if it doesn't happen as yet, it is important to take a look

:23:43.:23:46.

at how cyber security could present a risk to the aviation industry.

:23:47.:24:02.

That was Matthew Finn speaking to Theo Leggett earlier.

:24:03.:24:14.

Trevor Greetham, head of multi-asset at Royal London Asset

:24:15.:24:16.

The Chief Executive that's taken a Friday off. If you have a flexible

:24:17.:24:22.

schedule, great news because you can do more things, is there a danger

:24:23.:24:27.

you end up working more? I'm not going to do 9am to 5pm, but 10am to

:24:28.:24:34.

6pm and you end up working more? There is a danger of that and I can

:24:35.:24:38.

speak from experience. I don't work Fridays. I have the same arrangement

:24:39.:24:44.

as the CEO here. On Fridays I'm looking after my three boys aged

:24:45.:24:49.

three, nine and 11. That's a different full-on day. I'm

:24:50.:24:52.

responsible for my team and I'm having to check messages and the

:24:53.:24:55.

four days I am in the office, are flat-out and there is no hanging

:24:56.:24:58.

around at the water cooler talking about television! You're really

:24:59.:25:03.

focussed on getting things done and it is a good way of getting things

:25:04.:25:08.

done and I recommend it. Most Chief Executives we meet. We talk to a lot

:25:09.:25:12.

of them on this show and a lot of programmes on the BBC are constantly

:25:13.:25:16.

working. They are across everything. It is quite unusual for one of them

:25:17.:25:21.

to say right, I'm going to take time out on a Friday. It is interesting

:25:22.:25:25.

to think how those work for him feel about that? It is interesting, isn't

:25:26.:25:29.

it? There is a picture of this guy mountain biking. We should mention

:25:30.:25:37.

who is he is? He is Chief Executive of O 2 EU brands. I get one hour at

:25:38.:25:43.

gym which is the me time for me on a Friday. It is more about balancing

:25:44.:25:47.

family life and work life and things happen on Friday in the business

:25:48.:25:50.

world which you have to be aware of, I think from my point of view, I

:25:51.:25:54.

could work four days a week more efficiently than five. One we should

:25:55.:26:01.

take on board. Trevor. We don't work on this programme on a Friday. There

:26:02.:26:03.

is a reason. Bye-bye.

:26:04.:26:09.

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