08/12/2016 BBC Business Live


08/12/2016

Similar Content

Browse content similar to 08/12/2016. Check below for episodes and series from the same categories and more!

Transcript


LineFromTo

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

:00:00.:00:07.

France says "bonjour" to the big banks.

:00:08.:00:10.

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

:00:11.:00:13.

banks are actively preparing to shift across the Channel.

:00:14.:00:16.

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

:00:17.:00:36.

Could Brexit mean a new financial dawn for Paris?

:00:37.:00:38.

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

:00:39.:00:41.

Also in the programme, From Russia With Love -

:00:42.:00:48.

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

:00:49.:00:52.

oil company Rosneft to Glencore and Qatar.

:00:53.:00:54.

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

:00:55.:01:00.

named one of the top 50 disrupters in the world.

:01:01.:01:08.

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

:01:09.:01:12.

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

:01:13.:01:14.

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

:01:15.:01:16.

in the world. It lets customers buy online

:01:17.:01:21.

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

:01:22.:01:23.

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

:01:24.:01:26.

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

:01:27.:01:30.

about your workplace? We start with Brexit -

:01:31.:01:33.

and the growing concerns within Britain's financial industry

:01:34.:01:57.

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

:01:58.:01:59.

the BBC that major banks are in advanced stages of planning

:02:00.:02:03.

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

:02:04.:02:07.

percent of the UK economy. Currently, they can

:02:08.:02:15.

operate across the EU a right they may lose when Britain

:02:16.:02:16.

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

:02:17.:02:33.

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

:02:34.:02:38.

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

:02:39.:02:41.

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

:02:42.:02:44.

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

:02:45.:02:49.

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

:02:50.:02:57.

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

:02:58.:03:03.

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

:03:04.:03:09.

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

:03:10.:03:15.

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

:03:16.:03:21.

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

:03:22.:03:23.

practical questions. So we now know that companies have

:03:24.:03:39.

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

:03:40.:03:44.

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

:03:45.:03:48.

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

:03:49.:03:54.

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

:03:55.:03:58.

established in London, or thinking about establishing themselves

:03:59.:04:02.

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

:04:03.:04:07.

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

:04:08.:04:11.

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

:04:12.:04:17.

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

:04:18.:04:20.

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

:04:21.:04:29.

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

:04:30.:04:32.

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

:04:33.:04:36.

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

:04:37.:04:42.

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

:04:43.:04:45.

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

:04:46.:04:49.

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

:04:50.:04:53.

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

:04:54.:04:55.

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

:04:56.:05:12.

the banks that are actively preparing to move overseas.

:05:13.:05:14.

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

:05:15.:05:17.

The giant commodities trader, Glencore, and the sovereign wealth

:05:18.:05:19.

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

:05:20.:05:22.

The big bucks for the deal are coming from Qatar,

:05:23.:05:28.

with Glencore putting up around $320m.

:05:29.:05:46.

Our reporter from the BBC Russian Service joins us from Moscow

:05:47.:05:51.

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

:05:52.:06:03.

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

:06:04.:06:08.

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

:06:09.:06:11.

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

:06:12.:06:15.

economy is struggling and the Kremlin urgently needs to take steps

:06:16.:06:19.

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

:06:20.:06:24.

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

:06:25.:06:27.

Russian firms are struggling to repay their debts and how volatile

:06:28.:06:32.

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

:06:33.:06:39.

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

:06:40.:06:43.

Russia has of course been grappling with western sanctions for some

:06:44.:06:49.

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

:06:50.:06:57.

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

:06:58.:07:02.

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

:07:03.:07:10.

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

:07:11.:07:15.

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

:07:16.:07:21.

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

:07:22.:07:27.

and the Russian economy is still struggling to overcome the outcomes

:07:28.:07:32.

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

:07:33.:07:37.

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

:07:38.:07:41.

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

:07:42.:07:44.

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

:07:45.:07:51.

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

:07:52.:07:55.

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

:07:56.:08:00.

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

:08:01.:08:06.

are seeing that Russian oil companies had a meeting with Mr

:08:07.:08:10.

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

:08:11.:08:19.

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

:08:20.:08:23.

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

:08:24.:08:30.

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

:08:31.:08:41.

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

:08:42.:08:47.

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

:08:48.:08:52.

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

:08:53.:09:02.

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

:09:03.:09:09.

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

:09:10.:09:13.

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

:09:14.:09:16.

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

:09:17.:09:19.

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

:09:20.:09:25.

says his business is all ethnically motivated.

:09:26.:09:27.

Financial markets in Europe will be looking to Frankfurt today

:09:28.:09:30.

where the European Central Bank holds its meeting.

:09:31.:09:35.

Analysts are expecting the massive monetary stimulus

:09:36.:09:36.

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

:09:37.:09:41.

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

:09:42.:09:44.

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

:09:45.:09:51.

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

:09:52.:10:00.

It's a blow to Prime Minister Shinzo Abe,

:10:01.:10:02.

the world's third biggest economy through an asset purchase

:10:03.:10:06.

scheme which he hopes will push inflation up.

:10:07.:10:11.

Tata Steel has announced plans to secure jobs and production

:10:12.:10:13.

at its UK steelworks including Port Talbot in Wales.

:10:14.:10:30.

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

:10:31.:10:36.

commitment looks set to end eight months of uncertainty for employees

:10:37.:10:38.

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

:10:39.:10:50.

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

:10:51.:10:56.

heading into the European Central Bank meeting. There is an

:10:57.:10:59.

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

:11:00.:11:03.

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

:11:04.:11:07.

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

:11:08.:11:10.

before. And Samira Hussain has the details

:11:11.:11:10.

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

:11:11.:11:18.

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

:11:19.:11:22.

repeatedly closing at record highs since the presidential election. The

:11:23.:11:26.

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

:11:27.:11:32.

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

:11:33.:11:37.

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

:11:38.:11:40.

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

:11:41.:11:45.

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

:11:46.:11:48.

reporting earnings. Investors will want to know how the struggling

:11:49.:11:52.

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

:11:53.:11:55.

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

:11:56.:12:07.

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

:12:08.:12:09.

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

:12:10.:12:14.

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

:12:15.:12:20.

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

:12:21.:12:26.

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

:12:27.:12:30.

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

:12:31.:12:35.

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

:12:36.:12:40.

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

:12:41.:12:46.

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

:12:47.:12:49.

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

:12:50.:12:55.

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

:12:56.:12:58.

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

:12:59.:13:01.

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

:13:02.:13:04.

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

:13:05.:13:08.

actually going to be more isolationist and break up trade

:13:09.:13:11.

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

:13:12.:13:18.

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

:13:19.:13:22.

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

:13:23.:13:25.

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

:13:26.:13:31.

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

:13:32.:13:37.

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

:13:38.:13:40.

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

:13:41.:13:43.

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

:13:44.:13:46.

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

:13:47.:13:52.

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

:13:53.:14:00.

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

:14:01.:14:05.

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

:14:06.:14:08.

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

:14:09.:14:13.

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

:14:14.:14:17.

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

:14:18.:14:22.

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

:14:23.:14:25.

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

:14:26.:14:31.

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

:14:32.:14:35.

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

:14:36.:14:39.

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

:14:40.:14:45.

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

:14:46.:14:48.

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

:14:49.:14:53.

country. Keep your comments coming in.

:14:54.:14:58.

All very negative. We want Trump pump style reaction.

:14:59.:15:03.

We meet the firm named one of the top 50 disrupter

:15:04.:15:08.

It allows customers to buy online with just one click.

:15:09.:15:11.

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

:15:12.:15:14.

You're with Business Live from BBC News

:15:15.:15:20.

Sports Direct has reported a big drop in half-year

:15:21.:15:27.

profits after being hit by the fall in the pound.

:15:28.:15:31.

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

:15:32.:15:34.

paliamentary and newspaper investigations into how it treats

:15:35.:15:40.

its staff and a vote of no confidence from investors.

:15:41.:15:42.

Justin Bones is in our Salford Newsroom.

:15:43.:15:48.

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

:15:49.:15:55.

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

:15:56.:15:59.

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

:16:00.:16:03.

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

:16:04.:16:09.

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

:16:10.:16:15.

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

:16:16.:16:20.

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

:16:21.:16:24.

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

:16:25.:16:28.

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

:16:29.:16:32.

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

:16:33.:16:36.

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

:16:37.:16:41.

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

:16:42.:16:45.

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

:16:46.:16:50.

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

:16:51.:16:53.

not following rules in the warehouse, and produced a more

:16:54.:16:57.

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

:16:58.:17:01.

shareholder, Mike Ashley, reappointed himself as the company

:17:02.:17:04.

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

:17:05.:17:09.

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

:17:10.:17:13.

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

:17:14.:17:20.

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

:17:21.:17:24.

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

:17:25.:17:29.

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

:17:30.:17:40.

media campaign against the company has impacted negatively on the

:17:41.:17:44.

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

:17:45.:17:47.

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

:17:48.:17:58.

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

:17:59.:18:00.

are in the advanced stages of planning to move some operations

:18:01.:18:03.

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

:18:04.:18:06.

Benoit de Juvegny said the French capital was seeking to attract

:18:07.:18:10.

businesses concerned about being able to operate

:18:11.:18:12.

A quick look at how markets are faring.

:18:13.:18:25.

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

:18:26.:18:30.

With Christmas fast approaching, many of you may be avoiding

:18:31.:18:33.

the last-minute dash for presents by shopping online.

:18:34.:18:42.

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

:18:43.:18:46.

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

:18:47.:18:49.

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

:18:50.:18:52.

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

:18:53.:18:56.

Klarna is a Swedish payments provider that allows you to complete

:18:57.:18:58.

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

:18:59.:19:03.

process of entering your personal information and bank details.

:19:04.:19:07.

Sebastian Siemiatkowski is the company's boss.

:19:08.:19:11.

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

:19:12.:19:14.

We wanted to make payments really simplistic and realised

:19:15.:19:23.

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

:19:24.:19:25.

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

:19:26.:19:30.

provided to the merchants, just allow you to buy

:19:31.:19:32.

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

:19:33.:19:38.

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

:19:39.:19:44.

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

:19:45.:19:47.

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

:19:48.:19:50.

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

:19:51.:19:53.

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

:19:54.:19:58.

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

:19:59.:20:02.

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

:20:03.:20:07.

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

:20:08.:20:09.

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

:20:10.:20:15.

Now it has become more and more used by other financial

:20:16.:20:18.

It was very revolutionary when we started it.

:20:19.:20:22.

It basically means when we look at a specific transaction,

:20:23.:20:25.

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

:20:26.:20:28.

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

:20:29.:20:32.

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

:20:33.:20:35.

So we look at this data and make an assessment.

:20:36.:20:37.

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

:20:38.:20:40.

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

:20:41.:20:45.

you might want to ask a couple of more questions

:20:46.:20:47.

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

:20:48.:20:53.

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

:20:54.:21:09.

If consumers appreciate our experience, it might be

:21:10.:21:13.

that they start using it more and more often, instead

:21:14.:21:15.

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

:21:16.:21:18.

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

:21:19.:21:21.

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

:21:22.:21:24.

could potentially lose out if it is successful.

:21:25.:21:27.

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

:21:28.:21:29.

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

:21:30.:21:32.

and yet your company is now worth $2.2 billion.

:21:33.:21:34.

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

:21:35.:21:44.

I have actually been doing this now for 12 years.

:21:45.:21:49.

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

:21:50.:21:54.

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

:21:55.:21:57.

To me, being one of the largest shareholders

:21:58.:22:04.

Basically, I am the one that is going to suffer

:22:05.:22:09.

I think that is actually the difference, with a lot

:22:10.:22:13.

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

:22:14.:22:15.

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

:22:16.:22:18.

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

:22:19.:22:21.

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

:22:22.:22:27.

and make sure that compliance is number one.

:22:28.:22:29.

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

:22:30.:22:40.

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

:22:41.:22:46.

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

:22:47.:22:50.

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

:22:51.:22:57.

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

:22:58.:23:00.

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

:23:01.:23:04.

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

:23:05.:23:11.

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

:23:12.:23:15.

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

:23:16.:23:19.

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

:23:20.:23:26.

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

:23:27.:23:33.

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

:23:34.:23:38.

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

:23:39.:23:42.

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

:23:43.:23:46.

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

:23:47.:23:52.

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

:23:53.:24:00.

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

:24:01.:24:05.

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

:24:06.:24:10.

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

:24:11.:24:13.

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

:24:14.:24:17.

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

:24:18.:24:21.

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

:24:22.:24:26.

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

:24:27.:24:32.

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

:24:33.:24:35.

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

:24:36.:24:40.

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

:24:41.:24:46.

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

:24:47.:24:50.

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

:24:51.:24:54.

conditioning. I want the air conditioner switched off in the

:24:55.:24:57.

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

:24:58.:25:02.

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

:25:03.:25:13.

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

:25:14.:25:19.

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

:25:20.:25:26.

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

:25:27.:25:32.

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

:25:33.:25:36.

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

:25:37.:25:40.

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

:25:41.:25:44.

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

:25:45.:25:48.

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

:25:49.:25:52.

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

:25:53.:25:59.

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

:26:00.:26:01.

game! Once again, incredibly mild out

:26:02.:26:12.

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

:26:13.:26:17.

closer to what we have in the summer. 14

:26:18.:26:18.

Download Subtitles

SRT

ASS