27/10/2016 BBC Business Live


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the wire, the EU battles to save its the wire, the EU battles to save its


free-trade deal with Canada, but the clock is ticking. That's our top


story today, Thursday the 27th of October.


Canada's Prime Minister was due in Brussels to sign the deals but says


he will not be leaving after work without an agreement. So with this


deal at a standstill, what can the UK helped to broker when it starts


to negotiate with the European Union. Samsung smartphone sales


plummet after the exploding phone debacle. We will have the latest


from our team in Asia. In Europe, the markets have started


headed down but the winner in Germany is Deutsche Bank, after its


surprise news it made some money. Selling peace of mind, why 24


million customers across Africa, Asia and Latin America rely on one


firm that offers insurance to safeguard their future. And, it is


all done on a mobile phone. As the electric car maker Tesla


reports profit for the time, would you convert to an electric vehicle?


A warm welcome to the programme. It is jam-packed with stories. We will


start in Brussels where we have talked about the fact that Justin


Trudeau, the Prime Minister of Canada, was due to be in Brussels to


sign a major free-trade deal with the European Union today. The


reality is, as of last night, the deal is still blocked by regional


parliament in Belgian. Talks to break the deadlock are underway


right now. It is embarrassing for the EU, which has been struggling to


show unity and restore its credibility after Britain's Brexit


vote. What is at stake? The comprehensive economic and trade


agreement aims to eliminate 98% of trade barriers between Canada and


the EU. That could save EU exporters more than half $1 billion every


year. Supporters say it will cause an increase in trade by 20% and


would especially help small businesses. What is the other side


of the argument? Critics say it would give too much power to big


business and they point out EU regulation on things like product


safety could be dire looted and multinationals will be able to sue


governments if they don't get their own way. It has taken seven years to


get to this point and 27 of 28 EU governments want to go ahead and


sign the agreement, but Belgian cannot back the deal because three


regional parliaments in the French-speaking part of the country


are blocking it. There is wide implications. The row demonstrates


how hard it may be for the UK to do a post Brexit trade deal with the


EU. Late Wednesday, Canada's Trade Minister could hardly hide her


frustration. Today, 27.5 member states of Europe to support this


deal. As we have said on many occasions and I am happy to repeat,


this is an excellent agreement. It is an agreement that, as the Prime


Minister has just said, we made significantly more progressive since


he came into office. I am going to disappoint the journalists, I am not


at this time going to deal in hypotheticals. As of this moment,


the summit remains on your's agender and on Canada's agenda. If there is


a deal to sign tomorrow, Canada will be there. But the ball today is in


Europe's courts. Allie Renison is the Head


of Europe Trade policy Let's go back to basics, what is it


the regional parliaments in Belgian is opposed to? On the face of it,


they have issues with provisions around investments, so the ability


for investors to sue government for forfeiture of property. It has


become a big issue for Europe's public. Also imports of beef. Do you


think we will get to the point where we will see this deal signed in the


near future? One of the reasons people are being catastrophic about


this, there was an artificial deadline set by the EU and Canada.


It will probably take more time to work out some issues. But eventually


it will probably be signed, probably not today. Away from the specific


situation on the ground in Belgian, is it the feel that it is an


anti-global movements? When you look at the amount of trade, the


population of Belgian that does trade with Canada is under 1%. I


think the Premier of the region which is effectively holding up this


deal is being seen as the champion against globalisation. It is


embarrassing, this situation as far as the EU is concerned with Justin


Trudeau waiting in the wings to come to Brussels to sign it. What does it


mean for the trans-Atlantic to an investment partnership and the UK


looking to broker its own trade agreement? Canada deal is being seen


as a dry test run. It is a more contentious issue and one of the


reasons is when the negotiations started, you had the spying scandal


that the NSA and Germany. That means it will be difficult for this to be


completed. Europe will be learning lessons quickly by making sure this


embarrassment doesn't happen again and we don't get to the situation


where you have one country's vote holding up deals. When it comes to


the Brexit deal, there are moving parts the UK and the EU will have to


deal with, but trade globalisation deals are contentious and the Brexit


deal will put up barriers. I think it will be more likely to see the


Brexit signed. Thank you for explaining that. We will follow that


story closely. Deutsche Bank has reported pre-tax


profit of 675m dollars in the third quarter,


despite analysts predicting a LOSS The company has increased how much


it's set aside to deal Deutsche is currently negotiating


with US authorities over a $14bn fine for alleged


wrongdoing in the lead up The Financial Times is reporting the


Bank of England has asked other institutions to declare what


exposure they have two the German Lander and some of Italy's largest


banks, the International Monetary front describe them as the riskiest


bank. Electric car maker Tesla has


reported profits of nearly $22 million for the third quarter -


compared to a loss of 230 million dollars


this time last year. That follows 13 loss-making


quarters in a row. Record car deliveries helped offset


rising expenses for next year's roll-out of the company's


mass-market Model 3 saloon car. Shares jumped around 4%


in after-hours trading. This may not come as a huge


surprise, but it's a huge The tech giant saw its profits


all but wiped out by the Galaxy Note Not a huge surprise but it shows the


scale of this problem for Samsung? Correct, operating profits fell, but


the operating profit plunged by 96%. This is due to the Galaxy note seven


fiasco. Samsung has said it has written $5 billion in recall


expenses because of what happened. But some analysts aren't so sure the


entire cast of the scandal has been accounted for. Samsung hasn't


announced what has caused the phone to catch fire. It is worth noting


Samsung's earnings would have been worse if they didn't have a


diversified business. They have a strong semiconductor and display


panels division which helped with profit numbers. But we are still


looking at the smartphone division, because that is where most of the


money comes in from. They are hoping the recent episode with the Note


seven will not scare buyers away. But analysts have said Samsung users


are loyal and given Samsung controls about a quarter of the market, it


will not be that easy to switch to other high-end smartphone providers.


So some sunk the big story out of Korea today. Apple, and other


companies have poor earnings. Let's look at Europe to see how the day is


faring. Deutsche Bank shares opening up 3%, Barclays Bank up 2% and bolts


wagon shares up by 4%. But overall, the markets are down. We will talk


through what is happening in Europe in a moment.


And Samira Hussain has the details about what's ahead


Twitter will be reporting earnings on Thursday. The company wasn't


meant to report until after markets close, but it has bowed to pressure


from analysts who want to hear from the company before market is for


trading. Twitter is struggling, not much use of growth and the company


was trying to sell itself. But the room is bidders have backed out.


Ford will also be reporting on earnings. The company is trying to


maintain their profit margins as many are expecting a slowdown in new


vehicle sales in the US. And finally, we will be hearing from the


online retail giant Amazon. With the holiday season just around the


corner, investors will want to know what the company is projecting for


the next three months. Joining us is Kathleen Brooks,


Research Director at City Index. Let's start with GDP, we have UK


figures today. Expected to be about .3, .4% which is down from the


second quarter of .7%. Slowdown of sorts, what does it mean to the Bank


of England? It is the first three months of growth post Brexit. We


have the inflation report from the Bank of England. This quarter of


growth doesn't mean much. It will be next year we will see the key


slowdown. The Bank of England has expected a massive slowdown in


growth. No .8% for next year is their latest forecast. If there is a


weaker number today that forecast could be cut. And next week is when


we could see the real impact on the markets. Deutsche Bank surprisingly


OK, Barclays Bank, these different results talking about how they are


doing in this economic environment? We have had bad political news and


economic worries. The market can get itself in tears. But with Deutsche


Bank, they have eked out a profit. But we don't know how much of a fine


there will have to pay. We don't know if they have whittled it down


further and that will be when their share price will take off. Or


otherwise, as the case may be. Earnings season has been OK. We have


had big losers, with apple being the key one. It is their first loss in


so many years, it cannot keep going up. Thank you so much, you will talk


this through some of the paper stories.


Still to come: Selling peace of mind.


Why one firm is offering insurance for people in developing countries


to safeguard their future if a family member dies.


You're with Business Live from BBC News.


And now a look at some of the stories from around the UK.


Two of britain's blue chip companies have reported their latest


Our Business Correspondent Andrew Walker joins us


Pre-tax profit up Barclays Bank was down. The chief executive is still


confident the restructuring he is leading is going ahead pretty much


as planned. It is an effort to focus the bank more on the UK and US


markets, pulling away from other parts of the world. The brief


history of Barclays Bank over the course of the financial crisis, the


share price gained strongly up until the end of 2006 and then plummeted,


as did so many. Recovered a bit, but is still bumping along at a


relatively low levels. The other striking thing in these figures was


the provision bank is made for compensation who have been mis-sold


payment protection insurance. The figure was ?600 million. Lloyds said


they were confident there would be any more large provisions required.


And the chief executive of Barclays Bank was saying something similar.


They think they have the reserves right for this issue. What about BT?


Their profits, depending on what figure, they are up by ?873 million.


Revenue up by 35% and that has a lot to do with the acquisition of the


mobile operator EE. Even if you take that out of the figures, revenue was


still going up. Also Openreach, the network that provides the wires and


the controversy. There is this argument about whether BT should


have to dispose of that operation, but the profits continue to roll in


nonetheless under executive described these as positive results.


Thank you, Andrew Walker. It is a busy morning, certainly.


Going to be live page, Debenhams is the story I wanted to show,


reporting a 10% drop in profit. Details on the website. The BBC


business live page. You're watching Business Live -


our top story: The Canadian Prime Minister has scrapped a planned trip


to Brussels today after the EU failed to agree a controversial free


trade deal with the country - over opposition from a Belgian


regional parliament. Belgium is trying to negotiate with


its regional parliaments over a few points they are not happy with. To


put it mildly. A quick look at how


markets are faring. The FTSE 100 is down at the moment,


but we get the third quarter GDP figures very shortly and that could


have an effect on the numbers. This And now let's get the inside track


on micro This insurance. It's a growing business around


the world that provides protection Micro insurance can be used


to safeguard against a wide range of events including the loss


of belongings, livestock One estimate by Swiss RE says


that the 4 billion people around the world could benefit from micro


insurance that means, for example, paying a small


premium of 60 cents a month on a rolling basis for accident


or life insurance. The potential payout from that


could be $1,000 dollars if the insured person


lost their life. It's often provided


through mobile phones rather BIMA is one company


that's leading the charge Mathilda Str m is the company's


Deputy CEO Head of it is? BIMA. It means in assurance


in Swahili and other languages -- insurance. That is pretty


interesting. We think it comes from Sanskrit. Going back to basics, we


have spoken about this being sold via mobile phones and we know many


banks and finance in Africa, places like that, it is done on mobile


phones. If we take it back to the average customer, they live under


$10 a day and they don't have a banking account, but they do carry a


phone. That phone doesn't have to be a smartphone, but they can still


register for an insurance policy and pay for it. They can register by


answering five simple questions, no paperwork, no health checks, and


they have an insurance policy. They can pay for it using their


pay-as-you-go credit, by deducting 2 cents a day we can allow them to get


access to insurance. How does this work on a practical level? For me to


take out insurance in the UK I have got to sign the paperwork and make


declarations and I might have to go for a medical. You have cut that


out. At the starting point only 2% of people in Alaba tips has


insurance and that means 98% of people are not insured -- 2% of


people in our markets have insurance. Here we have a great


variety. But we choose one risk rate for 90% of the people and we hedge


our risk across the mass-market. How'd you make it financially


viable? They are not paying much for the insurance, and they must be


fairly high-risk customers, when you haven't done a health check and they


are living in Africa or emerging markets where they might have


accidents and they might get on well or have something go wrong. It must


be quite high risk? You could say it is high risk, but the key thing for


making it successful is scale, and technology, mobile technology, that


helps it and it helps to eliminate costs and allows more people to


register, regarding risks, when it comes to insurance, we are paying


out about $1000 in claims, and that can have a salary of around 2-3


years, but for us that is just $1000. Everyone can see the value of


insurance for goods and property, and then we get into life property


and livelihood and farming, that kind of stuff. That is the


livelihoods are many people in parts of Africa. How does that work? Why


is that so important? If we take an example of a woman who was paid a


claim in Pakistan last year, her husband passed away in a tragic


drive-by shooting in Islam a bad and she had four children and he was the


only breadwinner. She was paid out $3000 which effectively allowed her


to send her eldest son to graduate school and allowed at least two


years of salary placement which her husband would have had. If she


hasn't got a bank account, how'd you get the money to her? Effectively a


mobile bank account, we can send it straight to her. All sitting on her


phone? Yes. Very interesting. Best of luck with that project and thanks


for talking to us. Mathilda Str m is the company's


Deputy CEO Head of In a moment we'll take a look


through the Business Pages but first here's a quick reminder of how


to get in touch with us. The business live pages where you


can stay ahead with the breaking news, we keep you up-to-date with


the latest details, with insight and analysis from the BBC's team of


editors from around the world. We want to hear from you, as well. Get


involved. You can do this through twitter and Facebook. Business live


on TV and online whenever you need to know. Thank you for getting in


touch, we asked if you are ready to plug in, because Tesla it is


actually making profits for the first time. Fabrice Santoro he will


switch to an eco-friendly car -- says he will switch. He is


convinced. Jerome says he will buy an electric car and he says there is


no way to charge without a long extension. I don't agree with that,


I see charging points everywhere in London. You must live somewhere


quite fancy. I don't actually live in London. Another one says,


hopefully safety will be a priority. What other business


stories has the media been Kathleen Brooks is joining


us again to discuss. Going to the trade deal between


Europe and Canada, questions about what kind of relationship the UK


will have with Europe. Glaxo is in the spotlight, they say they will


get a bonus because Brexit is worth extra money to Glaxo, this is


because of the weak pound? Yes, this is a one-off bonus, otherwise the


pound would be worth nurturing a thing, and they have done quite well


and they don't seem to be worried about Brexit -- the pound would be


worth virtually nothing. There are challenges for them going forward,


the uncertainty around Brexit and our relationship with the EU is


going to affect the drug producers because they don't know things like


patents and being able to sell their drugs across the EU. That is a


massive market for them. There will be clarity about the law in terms of


regulation. In terms of drugs in Europe and the UK and how that


works. They need very particular skills, and it seems the outgoing


chief executive sounds quite positive that the deal will be


struck and that is quite interesting. In the markets we don't


know anything about Brexit, but when you get big bosses like this saying


we could fill the Labour shortage, that is positive. We have spoken


about the results for Apple, not great, considering the record


figures we normally see, but the wireless in bugs have been launched.


These might not be ready in time -- ear. They have this -- coming out,


and I think they have dismissed the idea of wires coming out, but they


will have an uphill battle to sell these things. Very bad timing, they


should be stealing the march with Samsung having a problem at the


moment. That is right. Strikes me as a rare miss for Apple. What about


this regarding craft beer? We are swimming in craft beer, it seems


like we have reached peak craft peer, but some of that might not be


as microbrewery as you think, because there has been a wave of


consolidation and buyouts, and you only have a few, brew dog says he


will not sell out, but many are. Catherine, thanks for joining us.


Good morning. Similar day ahead for most parts of the UK. We are based


in a


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