08/12/2016 BBC Business Live


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


France says "bonjour" to the big banks.


As Brexit creeps closer, it's been revealed that British


banks are actively preparing to shift across the Channel.


Live from London, that's our top story on Thursday 8th December.


Could Brexit mean a new financial dawn for Paris?


A top official there tells the BBC that big banks are already


Also in the programme, From Russia With Love -


the Kremlin has sold an $11.3bn stake in Russia's largest


oil company Rosneft to Glencore and Qatar.


And we'll be getting the inside track on a firm


named one of the top 50 disrupters in the world.


In Europe, we are going up and up. How long will the rally last? We


will get an expert view. And we'll be getting


the inside track on a firm named one of the top 50 disrupters


in the world. It lets customers buy online


with just one click. We ask the boss how it works


and whether it's safe. And as a new study lists the top ten


places to work, we want to know - what's the one thing you'd change


about your workplace? We start with Brexit -


and the growing concerns within Britain's financial industry


about the coming departure In Paris, a top official has told


the BBC that major banks are in advanced stages of planning


to shift some operations from London Financial firms contribute some 12%


percent of the UK economy. Currently, they can


operate across the EU a right they may lose when Britain


leaves the EU. In the City of London, some of the


world's biggest financial giants are pondering how to react to an


uncertain future. In Paris, they are in full swing. I am told


international banks are being wooed with special deals on income tax,


corporation tax, schooling. They corporation tax, schooling. They


have even been told contracts will be written in English. You have had


lots of interest from international institutions. What state are you at


now with negotiations? In some cases, we are still at the level of


informal consultants be with lawyers and so on. But in other cases,


especially regarding international banks, it is no more informal. There


are already undertaking reels due diligence and we receive a lot of


practical questions. So we now know that companies have


taken big steps towards moving. And if they do come to Paris, there will


probably come here, where 70 new office buildings are being planned


and where an influx from Britain is seen as key to attracting the rest


of the world. We are also aiming at world companies that are today


established in London, or thinking about establishing themselves


somewhere in Europe. For instance, we have a lot of contact with


Chinese companies who are looking for a base in Europe and are very


interested by France in Paris for many reasons, and they are very


interested by the Paris business Institute. Do you think these are


companies that would otherwise have gone to London? Probably. But now


that is off the table? Yes. I have spoken to bankers and lobbyists and


politicians across Europe, and it is clear that there isn't one city, not


even Paris, that thinks it can take on everything that the City of


London does. But there are lots, like Luxembourg, Amsterdam,


Frankfurt, Dublin and yes, the French capital, that think they can


take a big chunk of that business, and if you put all those chunks


together, you end up with a very big problem for one of Britain's biggest


and most lucrative industries. We will stay across that story about


the banks that are actively preparing to move overseas.


The world of big oil deals doesn't come much bigger than this.


The giant commodities trader, Glencore, and the sovereign wealth


fund of Qatar are buying almost a fifth of Russia's state-owned oil


The big bucks for the deal are coming from Qatar,


with Glencore putting up around $320m.


Our reporter from the BBC Russian Service joins us from Moscow


This is a big-money deal? Yes. The Kremlin say this is another victory.


They say they have managed to sell Rosneft despite the sanctions and


that investors are still interested in Russia. However, if you analyse


it carefully, you can see the opposite. You can see that Russia's


economy is struggling and the Kremlin urgently needs to take steps


to heal holes in its budget. This was another example of that. It


shows how the Russian economy is struggling and how some of the


Russian firms are struggling to repay their debts and how volatile


the Russian economy is and how dependent it is on oil, which is


still unstable and is not growing. So put this in perspective for us.


Russia has of course been grappling with western sanctions for some


time. How key is this deal for Rosneft and the Russian economy? It


was very important for Rosneft and Moscow on the one hand to get some


profit and somehow get money to heal the holes in the country's budget.


But on the other hand, it was important to remain in control of


this strategic asset, and they managed to achieve both of these


goals. However, the Russian rouble is still heavily dependent on oil


and the Russian economy is still struggling to overcome the outcomes


of Western sanctions to deal with the volatility in the oil market. As


you said, a welcome boost as far as the coffers are concerned in Moscow,


and President Putin has talked about this, highlighting that it is the


biggest sale in the energy sector so far this year? Yes, Russia's state


news has shown this in their headlines. They are showing that


this is a great success of the Russian economy and of the Russian


president. On the other hand, we are waiting for markets to react and we


are seeing that Russian oil companies had a meeting with Mr


Putin earlier and they had to agree on cuts which may hit the Russian


economy later this year. Big Russian companies will have to repay their


debts, and this is also adding to uncertainty in the market. All that


is part of our Russian service. Thank you for your time. -- Olga.


Let's take you to do Business Live page. But the UK retailer is


dominating the stories, Sports Direct. It has reported a this


morning, so staff morale has been hit, they say. -- it has reported a


loss. It was hit by accusations of Victorian conditions in its


warehouses. It has come in for a lot of criticism, not least by MPs, who


have been calling for an improvement in working standards. There is


plenty of detail, because they have issued their figures this morning.


We have had a fierce fightback from the boss, lashing out at critics. He


says his business is all ethnically motivated.


Financial markets in Europe will be looking to Frankfurt today


where the European Central Bank holds its meeting.


Analysts are expecting the massive monetary stimulus


The bank is currently buying up 80 billion euros of bonds a month


to push down borrowing costs for governments and firms as well as


Japan's economy grew at 1.3% in the three months


That's down sharply on the original estimate of 2.2%.


It's a blow to Prime Minister Shinzo Abe,


the world's third biggest economy through an asset purchase


scheme which he hopes will push inflation up.


Tata Steel has announced plans to secure jobs and production


at its UK steelworks including Port Talbot in Wales.


The one billion pound - that's about $1.25 billion -


commitment looks set to end eight months of uncertainty for employees


However, changes to workers' pensions are still to be agreed,


Let's see how things are going with the markets in Europe. Where are


heading into the European Central Bank meeting. There is an


expectation that the ECB will step in with further stimulus because of


the uncertainty about the outlook for Italy. For now, markets in


Europe are following the lead from Asia and Wall Street the night


before. And Samira Hussain has the details


about what's to watch out All eyes will be on US markets


Thursday. It has been a record-breaking streak as of late,


repeatedly closing at record highs since the presidential election. The


financial sector has been a big winner on markets, up some 15% since


November. President-elect Donald Trump's plans to reduce corporate


tax and regulations, along with the likelihood of the Federal Reserve


raising interest rates next week, have all been big boosts for the


banking sector. Also happening Thursday, a department store will be


reporting earnings. Investors will want to know how the struggling


retailer is getting ready for the holiday shopping season. They will


also be looking for any updates on its financial position, business


restructuring or sale plans. Back here, Justin Urquhart-Stewart,


co-founder and director of Seven Investment Management, is with us.


Let's start with the US markets, doing particularly well as a result


of Trump. As Sally said, the Trump pump. Let's enjoy the party. No one


has said anything yet! We haven't got a clue what the policies are


like, but we have an idea, so we enjoy it. It is like Brexit, we have


a phoney war there too. Everything carries on until someone explains


the policies. At that stage, does the guild suddenly come off the


lovely polish? If we add the result of the US election to the


traditional December rally, it will that have an impact as well? There


is that warm feeling to it, but behind it, people are looking at


what he's actually saying. People are saying he will pump a lot of


money into the economy, so things will benefit from that. But the


other side is what will actually happen about trade, if he is


actually going to be more isolationist and break up trade


deals, that is very bad for global trade. So at the moment, they are


looking on the good side. What would burst the bubble? It would burst the


bubble if he said, our policies are going to be directly anti-trade when


it comes to Nafta. If it is cancelled, which is unlikely, and if


he suddenly turns on Europe. It is more likely that the global carry on


for a while, and then you will start seeing the policies coming through


and at that stage, people will say maybe it is not quite as good,


because things like infrastructure don't happen immediately. It is a


nice policy, but it takes a while to come through and at that stage


reality will come back. But enjoyed it for the moment. Did European


Central Bank were due to wrap up their stimulus programme in March.


But they may carry on because of concerns about the banking system


not just in Italy, but also the concerns over Deutsche Bank in


Germany, and making sure the confidence is still there. Europe is


an economy overall, the general picture is not that bad. But they


need to make sure there was enough assurance behind the banking system.


Everything is woefully negative at the moment. But if it has more


support, that could turn around. Justin will be back to talk to us,


amongst other things, about what you would change about your office. Lots


of you are getting in touch. Some things, we can't say out loud. Chris


says, a better owner, a company that doesn't insist on you working eight


hours without a break. David says, I would move my office to another


country. Keep your comments coming in.


All very negative. We want Trump pump style reaction.


We meet the firm named one of the top 50 disrupter


It allows customers to buy online with just one click.


We ask the boss how it works and whether it's safe.


You're with Business Live from BBC News


Sports Direct has reported a big drop in half-year


profits after being hit by the fall in the pound.


It caps off a tough year for retailer, which has included


paliamentary and newspaper investigations into how it treats


its staff and a vote of no confidence from investors.


Justin Bones is in our Salford Newsroom.


Just tell us a bit more about what the figures show about Sports


Direct. Yes, it really does seem like hardly a week goes by without


us talking about Sports Direct. It has been warning for some time that


profits could be hit this year. If you look at the underlying pre-tax


profit, that is down 57%. If you prefer reported pre-tax profit, that


is 25%, down by about ?140 million. That is despite sales actually going


up in shops to about 1.6 billion. The company is blaming a number of


things, including the decrease in the value of the pound. Some of the


fall in the value of the assets as well. Also, it is investing more in


people. The reason for that is a lot of the controversy that we have been


hearing about. You may remember it got in trouble for underpaid people,


not paying the minimum wage, because it was taking them so long to get


through stringent security checks at the end of the day. They have also


done away with the six strikes and you're out rule, for one people were


not following rules in the warehouse, and produced a more


standard grievance system. Because of all that trouble, the majority


shareholder, Mike Ashley, reappointed himself as the company


's chief executive just a couple of months ago. One of his first


acquisitions? Well, a new private jet for the company, that will sit


alongside Sports Direct's private helicopter. What is the company


saying in response to this? Keith Halliwell, the company chairman, has


gone on a bit of a rant in the report. A bit of a diatribe. I will


really what he said. I have no doubt that extreme political, union and


media campaign against the company has impacted negatively on the


morale of people. It says it has been disproportionate, inaccurate


and misleading. Thank you very much indeed. Much more on the website.


France's financial regulator has told BBC News that major banks


are in the advanced stages of planning to move some operations


from London to Paris as they weigh up the implications of Brexit.


Benoit de Juvegny said the French capital was seeking to attract


businesses concerned about being able to operate


A quick look at how markets are faring.


Still higher, how long will that last? For now, enjoy the rally.


With Christmas fast approaching, many of you may be avoiding


the last-minute dash for presents by shopping online.


Yes, the convenience of e-commerce has revolutionised the way


we shop and next year, the annual total of all online


purchases is set to top 2 trillion dollars for the very first time.


But some people say the process can be made even simpler.


Klarna is a Swedish payments provider that allows you to complete


This means that you no longer need to go through the long-winded


process of entering your personal information and bank details.


Sebastian Siemiatkowski is the company's boss.


He sat down with our colleague Joe Lynam and began telling him how


We wanted to make payments really simplistic and realised


the things people don't like is exposing a credit card,


We said, why wouldn't we just use the data that you already


provided to the merchants, just allow you to buy


Does the consumer take the risk before the payment is confirmed,


We take the full risk, both from a credit risk perspective


So, if something happens, it is up to us.


This is really where a lot of the technology has been built


around how do we recognise fraud, how do we protect both the consumer


We have been doing this for 11 years and I think we are processing


So, it has worked really, really well, but it has taken


How do you assess risk of the consumer given the fact that


all you have as their name and e-mail address usually?


Basically what we do is we use what we call a risk-based approach.


Now it has become more and more used by other financial


It was very revolutionary when we started it.


It basically means when we look at a specific transaction,


a lot of data might be what time of the day is it, what type


We are one of the few companies in the world that actually


have a security level for the items that you are buying.


So we look at this data and make an assessment.


If it is a transaction with low risk, it might be just enough,


If there is someone buying four iPhones in the middle of the night,


you might want to ask a couple of more questions


Does the consumer lose out, does the bank lose out,


You don't have to sign up before, you can just go


If consumers appreciate our experience, it might be


that they start using it more and more often, instead


of using their card, and eventually it replaces their need for the card.


So, obviously, if you are a credit card issuer, if your bank


is supplying this kind of payment products, this is the person that


could potentially lose out if it is successful.


When you started this company, you are just out of university,


in your early 20s, with no financial experience or education,


and yet your company is now worth $2.2 billion.


Why should we trust a guy with no financial experience ten years ago?


I have actually been doing this now for 12 years.


If you bring somebody in and say, yes, that person has been working 12


years in the financial industry, you'd say that is quite all right


To me, being one of the largest shareholders


Basically, I am the one that is going to suffer


I think that is actually the difference, with a lot


of the banks, what we saw in the financial crisis,


because there was no skin in the game for the executives,


when things hit the fan, basically, they didn't mind that much.


I have invested sweat, blood and tears, the last 11 years on it,


and make sure that compliance is number one.


Because that is the license to operate we have been given.


Speaking about that idea of simple fine payment processes. It is too


simple already, you spend too much when it is simple. You need the


barriers! I can see you clicking away. You need the barriers so you


put it off and don't spend. Justin is waiting to chat some more about


some of the other stories. This one in the Washington Post is


interesting. Company bosses turn to Jamie Diamond, the boss of JPMorgan,


lead to outreach to the Trump administration. He was the one that


was vaguely friendly with Mr Trump. All of the others are busily erasing


their previous speeches and comments about him. Trying to get into the


golden elevator in Trump Tower? The question is, isn't Jamie Diamond


part of the establishment, part of the haves? Is he in the swamp that


he is trying to drain? Is Mr Trump part of the swamp? In terms of


trading and business arrangements, Mr Diamond is part of it as well. He


is a firm supporter of things like immigration controls and some of


firms. -- some of the tax reforms. Is he a supporter when it comes to


trade agreements? He has been quite combative on the trade issue. The


problem would be, if you move to a period of more trade barriers, it is


bad for global trade. There is this view that globalisation is bad, the


world will move against it, but we need to be careful. The world has


got wealthier as a result. There is a balance between liberalising,


making sure you have money coming in, and putting up more barriers. At


the moment, the good side is winning, everybody is ignoring the


other side. The best places to work in the UK, I am sure that seven


investment management, you would say it is the best? Does everybody have


to wear braces? Of course, it is the uniform. No, not really. The only


time they did was my 60th birthday. We have seen the pictures on


Twitter. We asked what he would like to see. Let's talk about air


conditioning. I want the air conditioner switched off in the


winter and better job security. I don't know which order that should


come in. Madelyn says bringing dogs to work. If my cat could stand it, I


would bring him in. Let's talk about Expedia, number one? They have cars


and computer games in the office, I can tell why they like it. It is all


about issues, you know, how is my career, is there good training? Are


they flexible over time off work and things like that? It is basically


careers and training, that is what people want to see. I was surprised


there was not a spark of originality. We went through a phase


of people having games rooms and things like that. That seems to have


changed. It seems quite serious. Important stuff like training, as


opposed to table tennis and computer games? But if the BBC wants to put


them on, that is fine! He won't make it on the air, he'll be playing a


game! Once again, incredibly mild out


there. The sort of temperatures we have been getting overnight are


closer to what we have in the summer. 14


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