15/06/2016 BBC Business Live


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From gold to government bonds and the Japanese yen, demand is high


right now. We will talk you through the other reasons why, as investors


seek refuge. Here is a clue. The US Federal Reserve is due


to announce its latest decision - the big question -


when will the world's biggest And looking at financial markets,


they are bouncing back. In Europe today, that was the scene in Asia as


well, but how long? We will be getting an expert view.


And you've heard of 'Made in China', but what about 'Made in Greece'?


Could manufacturing be the boost the ailing Greek economy needs?


We'll meet one start-up that's out sourcing its production to Greece


to create jobs and growth after the country's


And as Twitter snaps up a stake in music service Soundcloud,


we'll assess Twitter's battle to stay relevant.


What's the one thing you'd like to see on Twitter?


Let us know, use the hashtag BBCBizLive.


As ever, a completely jammed show. A very warm welcome and let's get


cracking. Financial markets around the world


are on edge with investors looking Today, America's Central Bank


concludes its meeting but the focus Markets across Europe took


a battering on Tuesday as investors weighed up the possible


consequences of next Today we have seen a slight bounce


back but many are wondering for how long. As worries over the


referendum, global growth and slumping commodities give us little


reason to be optimistic at the moment.


Despite Japan adopting negative interest rates in January -


you can see here - its currency - the Yen -


has continued to strengthen against the dollar as investors head


to the relative safety of major currencies.


It has almost been a one-way bet really. The Swiss franc also popular


right now. Gold too has shot up -


it has risen by more than 200-dollars an ounce


since the beginning of the year - with some economists predicting


market uncertainty is likely And of course investors have


also been putting money On Tuesday, the yield on German ten


year bonds turned negative territory for the first time ever -


with investors effectively paying for the privilege


of leaving their money You would think this is


extraordinary, but these are are in at the moment.


He's the managing director with London-based investment


Nice to see you, welcome. Let's pick up on German bond story that Sally


was ending on, turning negative for the time ever. It really does give


us an indication of what investors are thinking. We use that phrase a


lot, flight to safety, somewhere safe to put their cash, if they are


willing to pay to store it at the German central bank there is


something seriously wrong with the world economy. The right number of


things worrying investors, the Brexit vote coming up shortly, the


interest rates on the Fed coming through, which if they don't raise


this time it is likely they will later this year. And China perhaps


coming under pressure. The China story is an interesting one because


it has been there for quite a while. We are coming up to the anniversary


of the big stock market crash in China, that had repercussions around


the world. And I suppose you would question the timing of what it is


suddenly now. I suppose it is all of these things together, that perfect


storm, that is once again scaring investors. The key issue was that


the Chinese devalued their exchange rates this time last year and it led


to some wobbles in the market, about three to -- about three to 4%


devaluation. The very short-term stuff is all about the Brexit


voting. Is it as simple as that flight to gold? Sally touched on the


increase in the price to gold, and it is always the one that well when


stock markets and equity markets are quite jittery. Is it that simple?


Very good quality bonds have been driving it as well. What has been


interesting is that we have the Bank of America Merrill Lynch survey out


yesterday, and it showed that the position in the Fort folios is as


conservative as it has been since 2008, so when things bounce they can


bounce substantially. What makes it go away, is it simply the 24th of


June? I think it is a case of getting used to it, the world grew


at a rapid rate the last 30 years, I think we are in a hangover pays --


hangover phase, I think it will be like this for a while.


US authorities have charged a Chinese national - Xu Jiaqiang -


with three counts of economic espionage for allegedly stealing


The Department of Justice has not name the employer,


but it is widely reported to be software developer IBM.


China and the US have both flung accusations at each other over


state-backed hacking and theft of secrets.


28 international organisations have pledged to tackle


gender inequality at work by reviewing their own


The pledge is part of the first United State of Women Summit,


The 28 signatories include Pepsi, Amazon, Deloitte and sales force.


Each of the companies will assess their salary policies,


review hiring and promotion practices, and include new measures


We will talk about that in the paper review later too.


Retail sales in America rose more than expected in May helped


by an increase in online and clothing sales.


They were up 0.5% last month, after rising by 1.3% in April.


The news will provide some cheer in the US after employers added just


38,000 jobs last month, the fewest since September 2010.


Let's head to Asia, where the world's biggest


stock index provider, MSCI, has again failed to include


mainland China's domestic shares in its emerging markets index.


If it had, it would have been a major step forward


for Beijing as it attempts to open up its financial markets


Fill us in. That's right. As you said, investors were looking to dip


their toes a little bit further into the Chinese market. Might just have


to wait a little bit longer. The MSCI stock index has made


significant steps to Word inclusion, but they have said investors need


significant action -- axe and to aid shares in China, that are purchased


and traded on the Shanghai and Shenzhen stock exchange is. -- a


that need to be removed, more that need to be removed, more


accessibility of the global investors. These were some of the


reasons behind MSCI's decisions. The reason why would have been important


to these Chinese shares to be included is because MSCI is the


world biggest stock index provider. China has recently increased its


efforts to reform its very volatile stock market, but the MSCI said that


global investors were looking for more and analysts essentially saying


they were not surprised by this move. They say it is a long-term


possibility and Chinese authorities will take a little while putting in


place the regulations allowing A shares to be brought by foreigners.


It had very little impact on sentiment, Shanghai shares closing


up at a two week high, shrugging off that negative news. Hong Kong you


can see up higher and also Japan. But let's not forget, heavy losses


at the start of the week in Asia, so maybe a little bit of people seeing


stocks looking cheap at the moment and buying them today. That is last


night in the States. Let's look at Europe to show you today's bounce


back. The FTSE 100 still below 6000. It has not been below that since


February of this year. And the scene across the board in Europe slightly


higher. We will talk you through the sentiment in a bit more detail for a


moment, but first Samira Hussain is in New York. Just a few weeks ago,


Wednesday was going to be pretty much a sure thing is the day when


the Federal reserve would raise rates again. That was before the


last jobs report, with its indication of an alarming slowdown


in job creation in the US. So now it would probably stunned investors if


the Federal reserve finished its meeting on Wednesday afternoon with


anything other than a decision to keep rates on hold until later,


possibly much later in the year. And aside from more of the same from the


Fed, investors will look to industrial production and wholesale


prices data for clues as to whether the US economy can pick up steam


again. In particular, they will be hoping industrial production shows a


rise after falling 0.2% in May. Joining us is Simon Derrick,


Chief Markets Strategist, Good morning. Let's look at the


numbers, they are all green today, things are looking OK but how much


longer? It has been a pretty tough couple of days. It has. As we heard


earlier, it is a multitude of things, not just the referendum,


about what the Fed is going to do, Japan, in part the China story. We


still have a degree of uncertainty out there, even without the US and


story. I think today will be important, we have the Fed meeting.


It is very unlikely that we will get a rate move, in fact extremely


unlikely, so what will be really interesting is the signalling we get


from Janet. If she is cautious, which is the most likely outcome, it


might cause things in the markets. It could be supportive. While


talking about Japan, quite interesting, the policy chief of the


Japanese ruling party, a lady who is seen as Shinzo Abe's right-hand


woman, she said that she is closely monitoring the referendum next week


and the impeccable have on currency markets, ie the Japanese yen,


because a lot of the economics has been about weakening the yen, but it


is getting stronger and stronger. This has been a major story because


a number of other than nations around the world have been upset


about the fact that they see Japan as a manipulator in this currency.


There has been a lot of pressure to them not to do anything, but the


reality is the stock market in Japan follows closely the strength and


they will do something. Maybe not they will do something. Maybe not


tomorrow, but I think they will do something over the course of the


next few months to help weaken the yen, bubbly with monetary policy


rather than intervention. Something I'm sure we'll talk about again --


probably with monetary policy. Made in Greece, a term you are familiar


with? We will meet the start-up moving its production to Athens in a


bid to boost the economy. You are watching BBC live from BBC News.


First, here in the UK, one man will be taking centre stage.


The Former owner of BHS - Sir Philip Green -


is to appear before MPs later to give evidence about


Sir Philip sold the department store chain for just ?1 last year


The collapse of the firm has left an uncertain future for its 11,000


staff and many more pensioners who saved into the BHS scheme.


Let's get more with Tom McPhail, head of pensions research,


I would imagine you and many others would be glued to what Mr green has


to say later? A fascinating session in store. Sir Philip Green account


of the story, what happened to the business, the pension scheme, MPs


will be looking to drill into what went wrong, whether Sir Philip Green


critically should now be putting more money into the pension scheme.


The pension's regulator is very keen to see more money put into the


scheme, I'm sure. Ultimately the members of the pension scheme


members, who were the ploy ease, will want to be reassured that


tensions were safe. Sitting behind it all is the pension protection


fund, which acts as a lifeboat in a situation, but the critical test is


to see her how much money Sir Philip Green might be prepared to put into


the pension scheme to top it up before it probably goes into the


pension protection fund. What responsibilities he has, that is


what people will want to know. He is famously quoted as saying if I


soldier an airliner and you crashed it into a mountain, that is not my


fault, but surely he has some responsible at either the pension


fund? He can and may well argue he sold the business, it is not his


problem any more. The question is did he leave it in a fit state,


should he have put more money in the pension scheme before he passed it


on? Will he willingly put his hand in his pocket haps to salvage his


public reputation again always end up in the courts? Today's session in


front of the MPs will be a very strong indicator of how this might


play out. Thank you so much for your time. Of course, we will be across


that questioning session for you, join us on the BBC for that. A quick


look at the BBC website, another big company coming out in favour of


remaining in the EU, joining the long list. BT gave an up date last


week. Rolls-Royce says Brexit will heighten the investment risk.


Details on the website. You're watching Business Live -


our top story - Growing unease over the global


economy leads to a big sell off on financial markets around


the world. European markets opening up in the


first few minutes of trade, the FTSE 100 up 0.9% so far this morning.


Now - it's a question that's been debated


How to get Greece's economy working again.


Amid a deep recession, mounting debts and soaring


unemployment, Greece is struggling to shake off its economic crisis.


In the first three months of this year its economy shrank


But help could be at hand, in the unlikeliest of places.


A UK-based start up called Nima Composites - has


moved its manufacturing process to Greece -


in an effort to help create jobs, and boost the local economy.


It makes high-tech covers for laptops and tablets


And it won support from a group called Re-load Greece,


which works to provide mentoring, legal advice and expertise


Evangelos Zympeloudis is the Chief Executive of Greek


So, you have got some examples of the product that you, as a company,


have come up with and are going to manufacture in Athens? That's


correct. Our RMT is based in Bristol and we will outsource our


manufacturing facilities in Greece. We have secured a partnership with a


company there and they are going to allocate space in their facilities


to set up our production. Essentially carbon five casing? 100%


carbon fibre casing. We will start with the Apple MacBook, but in the


future we want to expand the range to consumer electronics. It's


interesting. I'm looking at this. This is a very unlikely saviour of


the Greek economy. Talk us through that process. You've been encouraged


to move production back there to create jobs, create a bit of growth.


Just talk us through what it's like being able to do that and also the


help that you've got along the way to be in a position to do that? Yes,


so in missionary it was something important to us, we wanted to give


back to our country. Hearing all the things about Greece and I realised,


what's the point in complaining? I will try to do the best with the


means that are available to me, to give back. And that's something, we


serve this philosophy across Nima Composites and we have been


fortunate to find like-minded people through Re-load Greece. Is it


somewhere you would have considered manufacturing without this about?


Most people would assume you would go to China, for example? Yes,


especially for carbon fibre, the market in Greece is not well


developed and I think that's most important to us. We will not only


create new jobs but by transferring skills know how there is the


potential to spark off a new industry in the country. From a


personal point of view, you lived and grew up in Greece, but came to


the UK to study. Yes. The other founders of the company, mostly


Greek. Apart from one Brit from Bristol. Most of the founding


members are doing research with carbon fibre composite at Bristol


University. And that's something that was important to us.


Manufacturing carbon fibre is very difficult. But because we studied


for so many years in Bristol which is the leading institution at the


moment, we had all the skills and the know-how and confidence that we


could deliver. So the important thing is the difference between


this, which is carbon fibre, and this which is plastic. This is a lot


easier to do and does not need much skill, but it is this one that


people can see there, it is not about pure manufacturing and low


cost, it is about high skill and innovation, which is the crucial


thing? Exactly, that's the key point. Briefly have Re-load Greece


spoken to you about the economic risks increase? Yes. The main


purpose of Re-load Greece is to set up UK-based companies which would


have a social or economic impact on Greece. Because they have come


across similar situations in the past, they had all the experience to


help us set up our business. Ice to see you, thanks so much for coming


in and good luck with it all. Thanks very much, really nice to see you.


Rolls-Royce has written to its employees this morning saying


it wants Britain to stay in the European Union,


and that a 'Brexit' would "limit any company's ability to plan


Speaking to the BBC, the company's Chief Executive Warren East said


Brexit would give the aero-engine maker's big American rivals


It's all about uncertainty and our position in Europe. We have a very


interconnected operation around Europe. Half our employees are in


the UK, a quarter of our employees are in mainland Europe. We have some


big customers in mainland Europe, airline customers. A big airline


aircraft partner, Airbus, in Europe. We have a lot of our external


suppliers. What you are seeing here is people assembling that engine


made of many components, some of which we make ourselves and some of


which we buy in. Collectively there are thousands of companies around


Europe that contribute to that engine. We are making investment


decisions all the time about where to place different parts of our


operation, where to place business like that. And uncertainty created


by Brexit puts a lot of those decisions on hold. That's something


our US competitors do not have to cope with.


Responding to other letters Vote Leave said Some of Britain's


leading firms have been clear that if we Vote Leave trade across Europe


Of course pro-EU voices want to talk down the economy but the same hollow


threats were proved nonsense over the referendum and the euro.


Big firms take the limelight when it comes to this debate but what about


small and medium-sized companies? We have been talking to them as well.


I am John Hancock, I have been involved in the fishing industry for


45 Years, I was a skip over 30 years, managing director of a


company called charisma UK Limited imported frozen and fresh fish from


Norway. When I first started here there were 400 boats. There is now


five, six. This is all down to government policy and of course the


EU and the ever increasing bureaucracy that's involved in the


fishing industry. Because the stocks have recovered, I think we will be


able to rebuild the fishing industry piece by piece once we are outside.


We will never get back to the halcyon days of what we had, but you


are going to regain the core traits that are needed to run the fishing


fleet. Engineers, welders, Fish Packers, ice machines. Everything


involved which means that the community thrives. Not just about


Grimsby but the whole of the UK and the coastal communities.


What other business stories has the media been


Simon Derrick, Chief Markets Strategist, Bank


of New York Mellon - is joining us again to discuss.


This is a great story in the Huffington Post, a picture story. It


says this photo tells you everything you need to know about corporate


boardrooms. White, middle-aged men, not very diverse, despite their best


efforts. The chap in the top left is a bit older, but it is quite


shocking. And they actually pride themselves on their diversity policy


as well. It clearly shows that there is so much more that needs to be


done. I think it is interesting to the course of my career how things


have changed. Certainly progress has been made, not just the board level,


but more underground floor level as well, but still clearly a lot to be


done. Interesting because in the United States it is seen as behind


when it comes to boosting the number of women on the boards of companies.


One fact I learned earlier this year which cracked me up, fewer large


companies are run by women than by men named John. That is S and P 500


companies. John is my middle name! That explains a lot, Simon. There is


an event in the White House with 28 companies becoming signatories to


say they are going to improve their gender equality policy. So there is


change going on. Let's look at this story, Twitter, sound out, we


mentioned it, Twitter buying a stake. It is their attempt to get


more people to the site, live streaming, that sort of thing. Love


Twitter. Middle-aged bloke who likes music, so no big surprises there. I


don't quite see how they tie up. I don't see what Twitter wants to get


out of this. Looking at Soundcloud, it was great for unlicensed music,


new artist. It seems they are trying to go down the same streaming route


as Apple, Spotify. I don't see what differentiates them from everybody


else and why Twitter wants to get into bed with them. We asked you


what one thing you would change. Caleb says fewer adverts. This one


says change the management team. We had the boss of Soundcloud here a


few weeks ago. That is it from us. See you soon, goodbye.


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