07/07/2016 BBC Business Live

This is Business Live from BBC News with Aaron Heslehurst

Is Deutsche Bank the world's most dangerous bank?

According to the International Monetary Fund it is.

With its share price now hitting record lows could the German giant

Live from London, that's our top story on the 7th July.

Last week, the IMF said that, of all the banks big enough to bring

the financial system crashing down, Deutsche Bank was the riskiest.

As if that wasn't worrying enough its shares are now at a record low.

Could one of the rocks of European banking now be in major trouble?

The BBC understands that Tata Steel is going to pause the sale of most

of its business, leaving thousands of workers uncertain about their

future. Take a look at the European markets. They have opened higher!

We're going to tell you why. As sterling takes yet another

pounding post-Brexit, it's now hovering at

a new 31-year low - on the winners and losers from a top

currency expert responsible for exchanging billions of pounds,

dollars and euros. And we want to hear your questions

on the pound. For example, should you be getting your holiday money

now, or waiting? The tide is going out,

and it's time to see who's got As global markets continue to deal

with the fallout of the Brexit vote, fears are now growing

about the state of the European, Those fears have seen bank shares

hit hard, and the bank that's been hit the hardest

of all is Deutsche Bank. Yesterday the bank's shares

hit a new record low, and its value is now down 25%

since the referendum and 50% since the

beginning of the year. Well, while the bank has assets

of 1.64 trillion euros - - however, it also has liabilities

of 1.58 trillion euros, which means the value of what it's

owed doesn't need to move by much The problem Deutsche has -

according to many analysts out there - is that it doesn't

have a large, safe retail banking businesses to balance its bigger

and riskier investment Artur Fischer is chief executive

of the Berlin Stock Exchange. Really good to talk to you. Pretty

scary numbers there. And a pretty damning assessment from the IMF,

citing Deutsche Bank as the riskiest bank in the world- what do you make

of that? Well, we have have to be careful. I do not want to sound self

defending here but we have to be careful not to scaremonger.

Obviously, there is always going to be a bank with the worst figures.

Please remember, Deutsche Bank is in the middle of a restructuring,

moving from being a major investment. The figures are not as

good as they should be. And on top of it, we have the Brexit, which hit

the banking sector very, very hard. Looking at the bank itself, what

sort of capital buffers does it have? Here in the UK, the banks

after 2018 were very good at building up their balance sheets -

is Deutsche Bank in a similar position? I would compare Deutsche

Bank from A to B ratio of 11% maybe with Barclays. I think they are at

the same kind of ratio. But when you restructure a bank, you're losing

some of the tools you need to organise your investment banking

assets. In particular, when you change this kind of infrastructure,

it becomes very difficult to manage your assets in an optimum way. It is

Aaron here. During the financial crisis, we kept on hearing time and

time again about certain is to Jewish and is, and the phrase was,

too big to fail. The IMF can do the warnings, people can worry or not,

but nobody will let Deutsche Bank fail, will they? Well, your guest is

as good as mine. I do not have any privileged information about that.

We do know that we had a clear statement some months ago. But at

the end of the day, we have improved our safety net and we trust that it

will work. What sort of faith do you have in the chief executive, who is

described as a conservative, feet on the ground type, pragmatist - do you

think he is the right man to have at the helm? Absolutely. We have

somebody there who has been with the bank for many years, who has a very

down-to-earth view and I believe is the right man for the job. Chief

executive of the Berlin stock exchange, Artur Fischer, thank you

for your thoughts. Germany's Chambers of Industry

and Commerce has lowered its outlook for German exports to Britain,

following the British decision The DIHK said it now sees a 1

percent drop in exports In 2017, the body predicts

that exports to Britain Great Portland Estates,

a central London property and investment company,

said it expected the Brexit vote to hit economic growth

and confidencein the British capital, taking a toll

on commercial property markets. The group has a property portfolio

worth $4.8 billion. Commercial property has been one

of the early victims of Britain's vote to leave the EU,

with a number of property funds being suspended after investors

linked up to ask Tata Steel is expected to announce

on Friday that it will pause the sale of most of its UK business,

including Port Talbot, However, it will proceed

with the sale of its specialty steel-making business,

which employs 2,000 employees in Hartlepool, Rotherham

and Stocksbridge. And we want to bring you some more

on that Tata Steel story, which is really big here in the UK. Simon

Jack, our business editor, has and a really expensive extensive piece on

this. It says that Tata is less concerned about the speed of the

sale, due to rising steel prices and a raft of government incentives. Of

course, steel generally is a story which we have spoken so much about,

particularly against the Chinese, accusations of causing something of

a glut in the international steel market. Just wondering, if and when

the UK leads the European Union, if it changes the steel industry in

some ways. I know we have still got global 40s to be reckoned with, but

if it changes any rain in the UK. It will be interesting to see. It says

the pressure has been reduced on the Indian owners to sell, hence the

reason we are seeing this pause in the sale. Head online to see what

Simon Jack has, and about that. Although, with the dropping of the

pound, it will be cheaper now. Let's take a look round the world

at what business stories Christine Hah is in Singapore

and has been following The electronics manufacturer expects

to post good profit figures, Yes, Samsung is saying that results

for April to June, the second quarter, will be the best it has

seen in any quarter for two years. It is forecasting operating profits

to be up 17%, more than what analysts were expecting at this

point. Official results will not be out until late July, but Samsung

shares in Asia are up 2% on the back of those comments. Smartphone sales,

still the main driver of growth, to ghillie from the Galaxy series,

launched this year. It comes at a time when global smartphone sales

are weakening and competitors are seeing slowing demand. Weather this

spells a true turnaround for Samsung, after two years of slowing

market share, we don't know. A lot of this is only product line-up and

less marketing costs, not on innovation. -- a lot of this is on

Lena product line-up. Well, let's stay in Asia,

where share markets crept ahead on Thursday after some upbeat data

out of the US showing that the service sector hit

a seven-month high in June - took some of the sting out

of the latest Brexit scare. But over in Japan, the benchmark

Nikkei did slip slightly as investors seeking safety flocked

to the yen, pushing it up against the dollar and making

the country's exports Let's have a look at Europe. Is

expected, it opened higher, breaking that losing streak in Europe. Some

caution from the US Federal reserve over raising its interest-rate.

And Samira Hussain has the details about what's ahead

On Thursday, the precursor to Friday's jobs report comes out,

with a look at how many jobs were added in the private sector.

Expect to see that private employers probably stepped up hiring

in the month of June, with some analysts estimating

soft drink giant Pepsi will be reporting.

is what potential impacts Pepsi may face in the wake of Brexit.

Given the uncertainty in overseas markets,

Pepsi is going to be focusing their efforts

That means investors will also want to hear

Joining us is Richard Hunter, Head of Research, Wilson King

Good to see you, as ever. One of those markets is the FTSE 250,

something we have been talking a lot about, the difference we are seeing

between the benchmark FTSE-100, the blue-chip stocks, which is

internationally focused, and everybody commenting on how robust

it has been in the wake of the Brexit folk, compared with the FTSE

250, which is more representative of how the UK is doing? You're

absolutely right. There was a broad knock down across all of the markets

after the vote. The FTSE-100 recovered quite quickly. You're

quite right, in the subsequent days, we have seen that currency tailwind,

in other words the weakness of the dollar, is playing into the hands of

many FTSE-100 companies, who on a lot of their money overseas, and

therefore the quality of those earnings has improved. FTSE 250 is

more of a barometer for the UK, and that's where the pain is being felt.

I'm going to put you on the spot, but you are a tele- tart, you can

handle this - the fallout from Britain's decision to leave the EU

will cost France, one of its biggest trading partners, between 0.1% and

0.2 percentage points of economic growth, according to their budget

minister. Is that any surprise, the UK leaving is going to have an

impact on Germany and France? For sure. The proponents of the UK will

be saying that in terms of trade with the European Union, they need

us as much as we need them. So, a long way to go. It will be helpful

when we know who is going to be negotiating on our behalf. But the

UK is not necessarily in an extremely weak position. Despite

lots of people saying that? Absolutely. A long way to go, and we

are in a pretty good negotiating position as well. Really good to

talk to you. Still to come: We're going to be

talking about the drop in the pound, what it means for your holiday

and why it's a bit of a mixed You're with Business

Live from BBC News. All eyes are on how Brexit

will affect the British economy. And there's one area that has been

touted as potentially vulnerable The Halifax has just

released its latest Most of this relates to the market

before the vote on 23 June, for how

buyers and sellers were behaving Joining us to discuss

developments in the property market is Susan Emmet,

research director at the real Is Aaron was saying, this survey was

conduct before the 23rd of June, showing that house price inflation

was dropping. Is it actually a period of a slowdown in prices, and

is that a good thing for the market, it is actually a slowdown in

activity which we do not want to see? Clearly at the moment there is

a lot of uncertainty out there. The Brexit result took a lot of people

by surprise. Over the coming weeks and months, we expect to see buyers

posing for thought, taking a breath and seeing how the situation pans

out. So, we are expecting fewer sales in the short term, and yes,

that will have an impact on the market with and we are expecting to

see a period of slower growth in house prices. Can I just ask you,

over the last few days, we have seen the suspension of some of these big

commercial property funds, but when you look at faces like London, I

think we are already seeing a cooling of foreign buyers, but when

you look at a place like London, isn't the dynamics, it is still

supply and demand there is more demand than some fly?

You are right, two factors have not changed. That is low supply and a

low interest rate environment. So we are not expecting to see a one bunch

of people rushing to sell or being forced to sell. That will underpin

house prices. We are in for a slower market, but it is impossible to say

more at this stage. We appreciate your time, short and sweet.

You're watching Business Live - our top story:

Deutsche Bank shares hit a new record low this week, and its value

has halved since the beginning of the year. The International Monetary

Fund, the IMF, also says that of the banks big enough to bring the

financial system crashing down, Deutsche Bank is the riskiest. We

will keep across all of that. A quick look at how

markets are faring: The majority of the FTSE 100

companies take the majority of their profit outside. The value of the

pound is still under $1.30. And now let's get the inside track

on the volatile world of currencies and in recent weeks, there's been no

more volatile currency The UK's decision to leave

the EU has continued to punish sterling, which yesterday

fell to a new 31 year low As you can see here,

the pound has now fallen by around 14% against the dollar

since hitting $1.50 ahead It's been good news for many FTSE

100 companies, who in total make around three quarters

of their profits outside the UK. And it's also good news

for exporters, because it means that their products become cheaper

for foreign customers. But a falling pound also means that

imports have become more expensive - leading to price rises

on everything from food to TVs. Arguably, the biggest issue of all,

though, is the impact that the drop has on confidence

in the economy as a whole, with the UK already losing

its triple A credit rating. Joining us now to discuss this -

Jonathan Quin is the CEO and Co-Founder of the International

money transfer company, World First. I would like to be a fly on the wall

at your office at the moment. We will talk about the pros and cons in

a minute, but at the end of the day, some will lose some will win. The

traders will make money. Volatility is a good thing for people in the

markets. We had our busiest period ever. As you mentioned before, the

value of the pound is a two sided coin. This is great for exporters

and also good that those who are considering exporting. It is great

for exporters so long as the products they sell are priced in

pounds. We have to be careful about saying this. If they sell these

products in Euros or dollars and change the money back to sterling,

they will still benefit. We were talking about the big FTSE 100

companies. Again, we are flogging a dead horse, but that is why they are

doing relatively well. They are going to make all those dollars

outside, bring them back in and get more quid for them. Our client basis

is importers and exporters, and we have a group of clients called the

mini multinationals, who do lots of business internationally. Lots of

them are doing well and there are some great stories. But we are a net

importer as a country. So how are the import clients feeling? Some of

them are feeling some pain. And some of the products will have gone up

ten to 15%. So that will be difficult for them. However, some of

those import something and sell it on and I might be an option for them

to consider exporting something that they also sell. We have viewers

around the world and in the UK who may be thinking of going to Europe

or further afield to the US. Let's say they are using pounds. What is

your suggestion? It is difficult to predict the future. If I were them,

I would buy half now and if the rate goes up, you will do better. If it

goes down, at least you have half. It is a classic hedge. There are so

much risk at the moment. It is a tough one. Good luck! Many thanks.

How many times have you ordered a take-away meal or and sat waiting

for the roar of the moped bringing your delivery?

In the near future, you could be hearing the clatter of the tiny

It delivers food and it is a portable potty!

What other business stories has the media been

Joining us again is Richard Hunter, the Head of Research

at Wilson King Investment Management.

This one caught my eye. Apparently, Paris, under the guidance of promise

a Manuel Valls and their finance minister, want to steal a march on

London as the financial capital of Europe. Is that going to happen?

Maybe not so much Paris. A more interesting story is the current

situation in terms of the London stock exchange and merger. It seemed

initially that the base would be in London in terms of the stock

exchange. Now London isn't part of the EU, there will be pressure

either to share the head office, or maybe pressure from Frankfurt to

merge with Deutsche Borse. It is inevitable, and we have already seen

it in terms of the clearing market, that parts of Paris, Milan and

Frankfurt will be vying for some of the London business. How important

is it that some of the European countries are pushing for Britain

not to retain its passport rights? We keep hearing about the passport

and financial services. This is the ability of banks to be able to

continue to do business in Europe unfettered. Part of that is also the

free movement of people, however, and that will be a sticking point.

It is one of the reasons we have seen a lot of weakness in the UK

banking share prices. That move on quickly. There was a lot of UK

bashing going on in Le Figaro. But why hasn't anybody focused on

Europe? I have served some experts say, keep your eye on Europe,

because in a year, it will be in an absolute mess. It ain't a shining

Brexit to one side, the euro zone Brexit to one side, the euro zone

has been of concern for some years now, since the financial crisis. We

are now at least talking about are now at least talking about

potential growth. However, you have massively higher unemployment,

particularly amongst the youth in some of the professional Europe into

trees. We have the Greek situation and some question marks over

Germany. The UK, by comparison, looks in a stable place. Richard

Hunter, always a pleasure. There is more on our website if you want more

business. See you later. Bye-bye.