03/10/2016 BBC Business Live


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This is Business Live from BBC News with Sally Bundock


A make or break week for Deutsche Bank -


it's boss John Cryan is expected to negotiate deals on job losses


in Germany as well as try to negotiate a much smaller legal


Live from London, that's our top story on Monday 3 October.


Leading German firms have rushed to defend Deutsche Bank


amid concerns over the troubled lender's financial health.


Executives from Siemens, Daimler, Munich Re and BASF all say


The UK's Chancellor, Philip Hammond, is expected to say


at the Conservative party conference today that he will manage


the economy in a different way to his predecessor,


Markets today, a public holiday in Germany. Elsewhere at a slight


uptake but sterling has been falling. We will tell you why.


We will be getting the inside track on how a Japanese fashion brand is


hoping not to get lost in translation, as it makes a move into


Europe. And it used to be a British tradition to put the kettle on for a


cup of tea during the break of your favourite TV shows, but not any more


according to the main energy supplies. People say more people use


on demand and catch up services to watch television. So we want to know


from you, how much live television do you watch? Maybe you are watching


now. Use the hashtag BBC live. A warm welcome to the programme. I


hope you have your cup of tea or coffee latte or whatever you are


drinking right now. We have a packed programme with plenty to discuss. We


are starting with the fact it is another pivotal seven days for


Deutsche Bank following a week in which shares


in the German lender fell Deutsche is in the process


of negotiating a 14 billion dollar fine in the US for mis-selling


mortgage-backed bonds in the lead up Over the weekend, German business


leaders have come out These include the engineering


conglomerate Siemens and the parent company of Mercedes-Benz,


Daimler. Last week, Deutsche's chief


executive John Cryan moved to reassure staff


about the bank's financial position, stating that the fall in share price


was due to what he called Following reports that Deutsche


could reach a far smaller settlement with US authorities,


the company's New-York listed shares It's also reported he's poised


to reach a deal with labour unions in Germany this week paving the way


for job cuts in its home market. He is Senior Analyst,


Lafferty Ratings. welcome to the programme, good to


have you with us. Just before we get into the nuts and bolts, can you


remind people around the world watching, Deutsche Bank, a


relatively small bank in a global scale, but everyone seems to think


it is the most dangerous bank in the world. Can you explain why? I think


it is probably to do with its derivatives book. It does have a


large amount of derivatives on it. That means their linkage is between


lots of different banks, so lots of banks would be counterparties. If


something happened to Deutsche there would be a knock-on effect? Yes, it


could injure the system. It probably has a bigger systemic risk. On


Friday they wrote an e-mail to the staff saying it's speculation. That


it was rumours, but that is not the case, this is a bank in trouble?


Well, the investors have only been willing to pay 30 cents for every


euro worth of up value on Deutsche Bank's books. They are certainly


worried about something. Whether they are worried about short-term or


long-term... I'm not saying, my worries are more in the long term,


that I worry about Deutsche Bank's strategy and culture and whether it


has a business model that can earn decent returns over the long-term.


Many share your worries about the outlook of Deutscher. But the recent


appointment of the boss at the bank... Do you think he will pull


off the renegotiated deal with the Department of Justice? We're looking


at a five point for your rope bill instead of a 14 year and -- your row


bill. I don't know. A very political times this, isn't it? Yes. It does


look good he will get that figure down significantly from the original


14 billion or something. That is much more manageable for Deutsche


Bank's books, going forward. Deutsche is still a bank... You are


telling us something very interesting before we came an hour.


You said your research shows that smaller banks in Europe, around the


world, operate much better than the big banks because Deutsche Bank is


still, I would say, one of those banks that is too big to fail. They


can't let this bank fail? No, it's not going to fail, but in the long


term I would... We are seeing some excellence from smaller banks and


banks that are decentralised, like the bank in Sweden. It operates on a


decentralised basis, so it's like a series of smaller banks. There is


some real excellence there. In the long term that is a threat to


Deutsche because they are outperforming Deutsche. They do


outperform the bigger banks. We appreciate your time, thank you for


joining us. We will keep an eye on that and any


news coming out of Deutsche about job losses or any deal with the


United States and we will fill you in.


The electric carmaker Tesla, says deliveries more than doubled


in the three months to October compared to a year ago.


Tesla is yet to make a profit and is facing criticism


after its autopilot system was linked to several accidents.


The autopilot feature makes the vehicles automatically change


lanes and react to traffic, but it is not a fully-fledged


India has ratified the Paris Climate Change Agreement by committing


to produce at least 40% of its electricity from non-fossil


Last December, countries agreed to cut emissions in a bid to keep


the global rise in temperatures below two degrees Celcius.


India is one of the biggest emitters of greenhouse gasses in the world.


I got stuck with the tablet today. Keep taking the pills, Aaron!


What pills? Tablets!


That went straight over my head. IMG, job cuts. We were talking about


Deutsche Bank... There may be 1000 jobs going at


Deutsche in its IT section. Up to 9000 in total at Deutsche That is


what the speculation is. IMG are talking about 1800. This is all part


of the plan to save about 900 million euros by 2021.


So lots of jobs going across Europe, I would say. Let's talk about what's


been going on on financial markets around the world.


First, Karishma Vaswani is in Singapore and Sterling


is down in Asian trading after Prime Minister Theresa May set


a date for starting the formal Brexit negotiation process.


This is in reaction to what has been happening in Birmingham, at the Tory


conference. Investors not liking it, the strength of the pound? That is


absolutely right. The British pound has been falling in Asian trade down


about half a percent after those comments from the British Prime


Minister that the timeline for the process of the separation from the


European Union. You would think given that there is more


transparency, a bit more detail about when this is supposed to


happen, that what Asian investors have been clamouring for, more


details, more of a timeline as to when the timeline would happen that


they would be a bit more optimism in Asian markets today but that hasn't


happened. Even though the falls in the pound were not as dramatic as


what we saw back in June, many in Asia are telling me that's because


there is still a lack of confidence in how the UK is going to handle


this transition, in particular access to the single market. That is


key for many Asian businesses who are looking to continue doing


business in the West. OK, thank you so much. Good to see you.


We can see the markets have. In Hong Kong the Hang Seng was pushed higher


by gambling figures, lifting casino operators. In Japan talking about


that confidence survey and not moving, stagnant among the big


manufacturers in Japan. China manufacturing data out, slightly


better than expected in September. Let's have a look at markets in


Europe trending right now. All of them apart from Germany, who are


shut for a public holiday today. We no movement on Deutsche shares, we


will see how that affects estates later. France up a tiny better.


We'll talk more about Europe in a moment or two.


And Samira Hussain has the details about what's ahead


It is a new week and a busy one. Auto-makers will be reporting sales


numbers for the month of September. Stay tuned for details on how well


car-makers have fared in the world's largest economy. In the US election


news, vice presidential nominee Mr p and Tim Kane well hold their only


debate in the state of Virginia. The International monetary fund will be


holding their annual meetings in Washington this week. And at the end


of the week, we get a look at the health of the labour market when the


latest jobs report is released. US jobs, always important!


Jeremy Stretch, head of currency strategy for CIBC World Markets.


Let's start with this. Let's start with the pound react reacting in


Asia to what's happening in Birmingham today. Philip Hammond,


the UK's new wish Chancellor will speak. There were comments over the


weekend about how he is going to present a very different style to


George Osborne. What do you think that will do... Will that keep the


pound as it is all adds strength? There is some uncertainty regarding


the fiscal strategy the government. The main plank of the Osborne


Chancery has been removed. Hammond has been saying on BBC radio this


morning about the changing environment that the UK finds itself


in. That is the reason, justification, to change fiscal


strategy. Markets will be watching for the nuances today and also into


that Autumn Statement on November 23, to see if there will be any


fiscal spending plans that will be brought forward to try and provide a


benefit to the UK economy into 2017, because we are continuing to see


these headwinds about business investment, which will potentially


mitigate growth targets for next year. The government has to


potentially step in, to try and limit the damage. It's interesting,


with sterling. We heard about the day in Asia today. Sterling is going


to be so sensitive until the summer of 2019, surely? Yes, sterling will


be inherently sensitive. The talk over the weekend about the Prime


Minister talking a about this reform in 2017, it sets up a difficulty in


parliament in terms of pushing through that. That is the sort of


environment that doesn't play well with International investors. They


don't like uncertainty, which will be amplified by political skirmishes


in the House of Commons and House of Lords. And in Brussels. Yes, indeed.


There will be plenty of opportunity as we move forward to the triggering


of Article 50 for investors to be scared away and that sterling


rallies will be short lived. That will be bad news for most people


accept exporters. Yes. There is always a small silver lining.


Exporters will get a benefit, but if they are importing in order to make


the export there will be quid pro quo. You will take this through some


of shortly. Until then, thank you. Still to come, how


to move your business We get the inside track


on a Japanese fashion brand This is business live on BBC News.


First, let's talk about the Conservative Party conference


underway in Birmingham. The Chancellor Philip Hammond is the man


taking all the attention today, promising a new plan for the new


circumstances Britain is facing after the Brexit vote.


Figures from the Office for National Statistics last week


showed the services sector grew faster than expected.


So was Phillip Hammond, a key figure of the remain campaign,


wrong to warn of financial cases if we voted to leave?


He was speaking to the BBC this morning.


First of all I am delighted the economy has proved as resilient as


it has. But look, we are going through a process, we haven't served


the article 15 notice yet. We must expect some turbulence as they go


through this negotiating process and there will be a period of a couple


of years, or perhaps even longer, when businesses are uncertain about


the final state of our relationship with the European Union. During that


period we need to support the economy, to make sure consumer


confidence remains, to make sure business confidence is stable, so


that we get the investment that keeps the jobs, that keeps Britain


growing. That's my challenge as we go through this period.


Hammond is also expected to announce a boost for ?5 billion


house-building stimulus package today funded through borrowing.


Former Chancellor, George Osbourne, had promised a budget


It was the right approach for that time. But on 23rd June, the decision


the British people made changed our economic circumstances. We're going


to go through a period as I have said when there will be some


turbulence and uncertainty in the economy and it is right that the


Government has the flexibility to be able to support the economy, to


support jobs, to support economic growth during that period. And that


means that we have to reset our expectation about when we can reach


that point of sustainable public finances. George Osborne had set the


date at the end of this Parliament, 2019/2020, what we have said is that


we will not aim for a surplus in 2019/2020, but that doesn't mean


that we are abandoning fiscal discipline.


Philip Hammond there. More on our website.


Leading German firms have rushed to defend Deutsche Bank


amid concerns over the troubled lender's financial health.


Executives from Siemens, Daimler, Munich Re and BASF have


The Goldman Sachs is closed. It is a public holiday.


-- DAX. And now let's get the inside track


on the Japanese fashion brand Kemi. It is a well-known brand in Japan


which is now hoping to become The brand was founded by Junko Kemi,


a businesswoman who struggled to find clothes that worked


with her busy professional life In a moment we'll talk


to her about her journey from the rather restrained


Japanese corporate world Kemi now has five shops in Japan


and a thriving online business too. The business employs


around 30 people. Kemi selected London as their first


international territory due The company's international


expansion plans include other financial hubs like Singapore,


Frankfurt and New York. Junko Kemi, founder and lead


designer of Kemi joins me now. Welcome. Good morning. Welcome to


the programme. Can I start? I'm interested. You came from a very,


the Japanese corporate world, right and let's be frank, that's a very


serious, rigid, corporate world. And it is male dominated. Yes, male


dominated and you have gone from that into this free flowing fashion


industry. How did you make that transfer? I was born in Japan and my


grandmother owned a shop. I grew up seeing her business and she was my


role model. She enjoyed her role and the responsibility and she made her


customers so happy. Ever since I was 16 years old, I dreamt that I would


own my own company. After that I joined a big management consultancy,


a corporate strategy company as a management consultant and after


that, I started my own marketing companies and for three years I


worked so hard as a consultant and after that when Japan suffered a big


earthquake in 2011, I thought that life is short and I want to support


the business women like my grandmother. So I started Kemi. How


easy was it to start? You're very established if Japan. You have got


high-profile clients wearing your clothes, some are on television,


some are celebrities. How did you get to that point? So basically, we


are a very small company. So we are using social media and the customers


friends and friends of friends saw a TV anchor. And tell us about your


dresses. They are not cheap in the UK. Can I hold one up. The point is


they're hand-made in Japan. This is silk, isn't it? This is silk. They


are washable. So I can put this in a washing machine? Yes, everything,


the jacket and the suit and these dresses, we can wash. They would


look good on you Aaron. I'm thinking Saturday night! I washed over ten


times. Wow. That's amazing. London, I mean, was that an easy decision to


decide London is going to be the first? Yeah. Yeah. Yeah. I love


London and the multi-cultural and the professional services are big


here. But how do you plan to stand out? It is such a competitive market


in London? There are so many places to go and buy things like this. As


we did already in Japan, so we focus on professional busy women and they


are using an online shop first and we are planning to have a physical


shop in the City area of London and in Canary Wharf in one year. Canary


Wharf watch out! Thank you very much for joining us. Good luck with your


launch here in London. Shthis is how to stay in touch. The


Business Live page is where you can stay ahead with the day's breaking


business news. We will keep you up-to-date with the latest details


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And you can find us on Facebook at. . Business Live on TV and online


whenever you need to know. So you have got no excuses.


As you can see, Jeremy is back. On demand TV switches off, National


Grid power strike for a cuppa. This is National Grid where it would see


a massive surge when the kettle goes on in the old days, the commercial


break. It is the old days. The idea that we all watch a programme


collectively and we get to the end of the programme or an ad break and


everybody would make a cup of tea ready for the next part. Clearly,


there are more and more people who watch on demand. I watch virtually


no TV live. I watch all of it on demand or recorded. These issues and


it is interesting for advertisers as well, of course, because I don't


watch any advertising breaks. We just whiz through it. One of the


structural changes. It is the main screen or the second screen if you


will second screen being the tablet. One viewer says, "I watch live TV as


long as time is available." Does he make the tea? This viewer says I


only watch Business Live. The list goes on. Due it busy schedule. News


bulletins, if you want to watch those live, but again, you can watch


up with news on the internet or with other media sources. There is the


pause button. You don't have to wait for the commercials. Right. Other


stories... The Chinese. UK shops looking to Chinese tourists for a


golden week. There is a flip side about the Brexit story because we


find as consumers if we're going abroad the pound goes not as far as


it did pre-Brexit. But for those visitors coming to the UK, whose


currencies have appreciated they can get what they perceive to be bar


gains. In the context of Chinese shoppers who are keen spenders it


maybe the case that as we see another influx of Chinese visitors


during the golden week period that could be good news for retailers.


Have we got any evidence that this is happening or is this the hope


from the point of view from retailers? There is a lot of


anecdotal and the foot fall data is variable on occasion. So I think


what we're seeing is domestic consumers are being more reticent in


terms of spending and we are hoping that we're going to get the foreign


visitors who are going to fill the gap, but you have to debate where


the foreign visitors come to. In London, we will see evidence that


through their foot fall in the high street. In regional centres, perhaps


less so. We keep saying it is the flip side, but even property is 10%,


15% cheaper. There is a competitive advantage if you're prepared to take


the risks which maybe associated with the next two or three years.


Jeremy, thank you very much. It is a long haul flight. That's for


sure. That's Business Live for today. We will see you again


tomorrow. Bye-bye. Hello there. Good morning. We saw


some big improvements in the weather over the weekend and it is a very


quiet week ahead as well. This was the Weather


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