16/12/2016 BBC Business Live


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We start in Japan where Prime Minister Shinzo Abe is hosting


Russian President Vladimir Putin at a summit in Tokyo.


He's the first G7 leader to host Mr Putin since


sanctions were imposed over the Ukraine conflict.


That's not the only reason it's a big deal.


The two countries have never signed a peace treaty formally


ending World War Two because they are still


in dispute over four islands in the Western Pacific,


which Soviet forces occupied at the end of the war.


But the reality is they have a serious business relationship


Trade between Russia and Japan has soared in recent years.


It is now worth more than $33 billion a year.


That's three times what it was ten years ago.


Japan is cash-rich and Russia is desperate for investment,


particularly to its far eastern region.


Russian officials say some 68 deals have already been signed.


There are reports that its huge state gas company Gazprom


is exploring partnerships with Japanese conglomerates


Basically, Japan needs all of its energy brought in.


At the moment it relies on the Arabian Gulf -


but Russia has huge amounts and is on its doorstep.


It also wants help with issues like cyber security.


Chris Weafer is the co-founder of analysts Macro Advisory Partners.


Welcome to the programme. Darren Cave is that background, but in the


headlines we have also heard that Barack Obama, still US president,


has said they will tackle the hacking situation that came from


Russia. We have heard also that EU leaders want to extend sanctions


against Russia for another six months. None of this seems to


concern Shinzo Abe? Know, and it is not concerning investors. The


markets are strongly this year, just this week we heard that German


companies have invested more in Russia this year in the first nine


months than in all of 2015. People are beginning to look beyond the


Obama administration so it will end Obama administration so it will end


in January when Donald Trump comes in with a different agenda, it is


also clear that the EU struggles more and more each meeting to get a


consensus to end sanctions. The view that business and investors take is


that we are nearly at the end, provided nothing bad happens in


2017. As Aaron points out, the


relationship between Russia and Japan makes a lot of sense, Japan is


energy poor and cashrich, Russia has a lot of energy. These energy deals


could be worked through? Both countries were talking about energy


cooperation before sanctions, we are getting back to that agenda again.


They say there is a lot of energy in Russia and it is very close to


Japan. Japan is looking at the fact that its neighbour, South Korea, has


been raising investment quite substantially in Russia and Central


Asia and does not want to lose out. From the Japanese perspective there


is either the issue of China and Chinese dominance affecting Russia,


perhaps they can act as a moderating influence, rather than if it was


entirely sided with China, which is a great fear.


You look at the picture of Russia and President Putin and you go, what


is going on? Cooperation with the Saudis, a deal with Qatar, deals


with Japan, Putin has this... More of a global vision today? We have


seen that evolving, particularly since 2014. President Putin bemoaned


the fact that what he saw was Russia had moved too closely to the west,


it was going to put all its eggs in one basket. In 2014 there was almost


a knee jerk reaction to the China pivot, that has not worked out.


China has not invested much. Since the last year we have seen Russia


adopting globalisation, diversification, trying to do as


many deals as possible for the Kremlin. That is good business and


good politics. I think globalisation will be the way forward.


Looking forward briefly, how does that tell you about trade deals and


how they will go in the future, we are looking at more bilateral


country to country and putting aside these big multi-country deals? The


belt this is a discussion about globalisation -- this is a


discussion about globalisation and there is thought that it is coming


to an end. If the Trump administration follows through, it


will mark the end of the old-style globalisation. Bilateral deals, I


think bartering is as good a word as any. Russia has always been good at


that and that is the intention, we have energy or whatever rocks, in


return we want investment political support. Bilateral deals,


old-fashioned bartering is where we are heading.


Thank you very much for your time this morning. Have a good weekend.


Pressure on Yahoo has continued to grow after the internet company


revealed that it was the victim of another huge hacking attack


in 2013 - in which 1 billion user accounts were accessed.


The hack was done in 2013, that was revealed yesterday, that it was 1


billion people. The company's shares closed down


more than 6% on Wall Street on fears that a planned $4.8 billion sale


to telecoms firm Verizon According to reports in the US,


Verizon is now trying to persuade Yahoo to amend the terms


of the acquisition agreement The Greek parliament has defied


international creditors providing its bailout funds


and voted through a one-off Plans for the 617 million euro


pre-Christmas handout were opposed by European bodies negotiating


Greece's financial lifeline. A deal agreed earlier this month


to provide the next tranche of debt Prime Minister Alexis Tsipras said


Greece would not be blackmailed. US authorities have accused six


pharmaceutical firms from the US, It is alleged the companies


conspired to raise the price of the antibiotic doxycycline


and diabetes drug glyburide. The civil lawsuit has been


filed in 20 US states. It follows criminal charges being


brought against former executives Figures from the US Treasury show


that Japan has overtaken China China has been selling its foreign


currency reserves in a bid to prop John Sudworth is in our Beijing


bureau and can tell us more. Good to see you, happy Friday. Japan


holds more debt, US debt, than any other country in the world?


That's right, it has taken the crown back, if you like, as the biggest


holder of US debt. It is not because of what it has been doing but what


China has been doing, selling off US Treasuries. What China wants at the


moment, basically, is dollar assets to use them to prop up the value of


its currency, which isn't a huge amount of pressure. All of the


debate we heard in the US election cycle about China devaluing its


currency, the truth is that all the action is focused on trying to prop


up the value, because China fears a rapid and uncontrolled devaluation,


and the more likely it looks that US interest rates will rise further,


the more pressure it puts on the Chinese UN and the more that has to


be done to stem the tide of capital rushing for the exit. What does it


mean for the rest of us? Good question. China is burning through


its foreign currency reserves for the same purpose, added some point


China may need to consider either a devaluation or putting in place


stringent capital controls. But, of course, would send a shocking signal


to the rest of the economy and indeed be likely to have an impact


on us all elsewhere in the world. John, I am glad you raise the


question and answer that, because I was opposed to! Bet I was supposed


to. Asian stocks struggled for traction


on Friday as global markets continued adjusting to the idea


of higher US interest rates. Remembering a lot of those emerging


economies are holding US dollar debt and higher interest rates in America


- makes that debt more Europe - pretty much the same story


- still digesting the FED decision and looking to Wall Street -


which I must say had its worst day in two months or put it this way -


four stocks fell for every one that Talking of the US - let's pop over


and see what should be making the biz headlines


today, here's Samira. Investors will be looking for more


fallout from the revelation that Yahoo faced a massive data breach


affecting 1 billion customers. How is the US housing market herring


these days? The commerce Department is expected to say that housing


starts fell in the month of November.


Building permits are expected to slip for the month. With the recent


rise to US interest rates, many will be paying attention to the housing


market and how higher borrowing costs may impact that sector.


Finally, error parts maker Honeywell International is scheduled to


announce its financial expectations for the year 2017 before US markets


opened for trading. Joining us is Jane Foley, Senior


Currency Strategist at Rabobank. Thank you for coming in. We wanted


to start with sterling, it has rallied recently? Looking back to


October, we had a sharp fall in sterling on top of what we had after


the referendum in June, that is because the market was very fearful


of hard Brexit. That just means Brexit without access to the


European single market. Since then, the market has taken a different


tone and has begun to think that there might be access after all,


sterling has a very binary relationship with talk about hard


Brexit, soft Brexit. Since October, sterling has performed better. This


year has been very political, Trump, Brexit, the Italian referendum. What


will the market to be keeping their eye on next year? Politics? Very


much so, Brexiters very much there, in 2017 we will find out how


complicated Brexit will be, then it is elections in Europe. We have seen


in the US and Brexit lots of protest votes, movement towards the far


right and the far left in some countries, the elections next year


we have the Dutch elections in March, the French presidential


election in the spring and the German election. We are likely to


see more votes cast for the far right, but opinion polls right now


suggest they will not be able to form a Government in the Netherlands


and France, certainly not in Germany, so the euro will be there


Eve Pollard tile, it will have a dominating effect on the markets.


The opinion polls say that the far right will not be able to farm --


for those governments. Will be US dollar continue going up? May before


now, but we are a bit sceptical about the revelations so maybe


things will be looking different by the end of next year. We will see


you shortly for a look at the paper. -- papers.


The US central bank raised interest rates this week -


and said more hikes are probably in the works for next year.


We'll chew over that - and the rest of the week's news


with our economics editor Kamal Ahmed.


You're with Business Live from BBC News.


A few months ago, the future of low-cost airline


Then it secured ?165 million of funds from its shareholder,


Greybull Capital and has just updated the City on its profits.


Joining us from the BBC Newsroom is Andrew Swaffield,


Great to have you want the programme. Let's be frank, a hell of


a year for you guys? Slightly relieved with the numbers today? I'm


pleased with a profitable results, ?48 million EBITDA profit in a


difficult year with a combination of terrorism and the collapse in the


value of the pound, as I'm sure your viewers are aware the British


airlines take most of their revenue in pounds and most of our costs go


out in euros and dollars, sue the exchange rate has a big effect. It


has been a challenging year, but pleased to be profitable and looking


forward we see strong bookings, especially for next summer, which we


are encouraged about. On the point of looking forward, you are going to


have new destinations, but I want to talk about a new fleet, a new fuel


efficient fleet you will bring on board, around 2018? Finnair


introduced the Airbus 350 and now saves a million bucks a year on fuel


on that aircraft, you're looking at 18 of those, a savings of 80


million, these new fuel-efficient planes are important? The Boeing 737


Max eight comes in from March 2018 for us, we expect 24% fuel savings


on an annual fuel budget of ?130 million. That is a phenomenal boost


to the bottom line. It is great for the environment as well and these


are much quieter aircraft. They also have a much more customer friendly


interior as well. Very excited. I'm sure the customers will be


excited. Thank you for joining us. Let's see what is going on live


page. Which? Is bringing a super complaint against the banks, to help


people tricked into transferring money into a fraudster's account but


unfortunately it looks like they will not get them to pay the money


back but they want to give them more assistance. OK.


You're watching Business Live - the leaders of Russia and Japan have


agreed more than 60 trade deals as Shinzo Abe becomes the first G7


leader to host Vladimir Putin since sanctions were imposed


on Moscow because of the Ukraine conflict.


A quick look at how markets are faring.


They are still digestive and what we saw on Wednesday, same old story.


American Central bank, the US Fed, been a long time coming, they


pressed the button, the cost of borrowing rose in the world's


biggest economy but the markets are still digestive that. It's one of


the big stories of the week. It is what we are going to talk to Kamal


Ahmed about. He joins us to talk about that story. The US Federal


Reserve have raised interest rates, the UK Central bank held it steady,


why the different approaches? It is about economic performances.


We are seeing macroeconomic trends that will dominate next year, so if


we look at America and why the Fed raised rates after threatening to


four 12 months, the American economy is strengthening, clearly. -- for 12


months. Unemployment is at record lows, some inflation is coming back


into the system and the world is waiting to see what President-elect


Trump will do on the fiscal side with boosting infrastructure


investment. That compares with Europe, Britain and the Eurozone and


the other members of the European Union where growth is still


relatively weak, there are still fears over the trajectory of travel


for the economies in Europe and the European Central Bank still doing


negative interest rates to stimulate the economy monetarily. And then you


have Asia and the problem of capital flows coming out of Asia into the


American markets because there are higher levels of yield so the Asian


currencies are under pressure. America is going in One Direction,


Europe in the middle and Asia on the other side, this big diversion will


be the big macro trend for next year. What does that mean in real


terms, the US powering ahead and we are back here. It is about


investment money. If you imagined a big investment funds which look


where to put the money in the investment in businesses which


create jobs, they are thinking to themselves, where will I get the


best yield and return for my money? America looks more attractive


because of high interest rates meaning you get better returns and


the banks are operating with better profit margins meaning they invest


more into the economy, lend more to businesses and at the same time as


there are still fears about Europe, talking about political risk on the


programme already. In Asia we have the big issue of what is the


relationship between Japan, China and Russia? If America becomes more


in Schiller how will that play out? The Asian economies have these


issues are very connected to America. If capital flows to America


how will the Asian economies perform? We can now talk about EU


sanctions, as we hear they have been extended against Russia for another


six months. Not all EU countries were in favour, they wanted it


easing slightly because of the impact on their economies. Germany


is the country that has the strongest links in trade terms with


Russia, but again this is all about the issue around the pivot and where


does Russia now look to for allies. Of course, in the Middle East and


what is going on in Syria will have some effect about the economic


relationships with the rest of the world. America may now have a more


friendly President in President-elect Trump than it has


had under President Obama. And also, what will the relationship be


between China, Russia and Japan in Asia? And at that stage, the


European Union is worrying, to an extent, given the rise in commodity


prices. Russia still produces a third of commodities exported around


the world. What will Europe's relationship be with Russia if we


have this aggressive sanctions regime at the time Russia is looking


to increase its economic activity with other countries around the


world. I thought we would have 20 seconds, I was going to ask about


the Fox and Sky deal, they tried five years ago and failed. They are


looking for a bigger content platform to take them from Europe,


India and America and bring all of those bits of the business together.


It's part of the picture, we are seeing content providers hooking up


with distributors. Kamal Ahmed, thank you for your time


this morning. Venezuela's most popular


banknote is no longer The 100 Bolivar note is worth


less than two US cents. And the country's economic crisis


has meant extradordinary They will introduce new coins and


banknotes. The International Monetary Fund


estimates that next year's prices And this latest move


is already causing even more Joining us is Jane Foley, Senior


Currency Strategist at Rabobank. We are going to talk through the


papers. Starting with the story we mentioned at the top, these flatpack


apartments, flats being used as one way to tackle the UK's housing


crisis, they are being used around the world and also in the UK. These


are in south London in the picture. I think it looks amazing.


Is about the size of a shipping container, containing a two-bedroom


flat. It says in the article, it had something that cost. So much for the


highlighting! What do you think of these? The cost is 20% cheaper than


a traditional house and this particular product in Luton the


article says will be sold off, so these flats are temporary but the


beauty is they can be taken down and rebuilt somewhere else up to five


times. Just take them off and pop them like Lego. They are timber


framed and I am trying to build a timber framed house myself so I can


confidently say I would live in one of these. They are timber framed and


in the factory big kitchens and washing machines are put into them


and they are dropped in place from the back of a lorry already done.


The lift and stairs must be put in afterwards that they have a fairly


fast completion time. I must say, the reports from the residents here,


people who have been moved into them, are very positive. I think


they are a great solution. If it works.


Given the prices of London property. This report size 120,000 children


homeless at the moment and they also cite that although we are building


more houses we are nowhere near building as many as we need to at


the moment. Let's talk about the big hacking


story. Yahoo, they came out and said they had 1 billion accounts hacked


in 2013, apparently didn't know about it. This is the thing, we


didn't know about it, we knew about a scandal in 2014, 500 million


accounts, and this is something we hadn't heard about and it happened


before and it was 1 billion accounts hacked. Did they really know or not?


They have been negotiating this near $5 billion deal with Verizon, the


former boss walked away with a nice big paycheque. They are talking


about having to walk away from the steel or maybe discount it and the


discount is reported in here today are up to 3 billion, so 3 billion


potential discount on a deal worth 4.8 billion is huge. Verizon's


concern is that Yahoo will lose users and they will lose the


valuable customer base. Yes, this is why they want to buy Yahoo to rival


the likes of Facebook and Google. They want consumers' information to


help them with advertising. That is what they want and if consumers walk


away there is nothing there for them. Grace Dove, Jane. Merry


Christmas, have a wonderful time off. That's it. You are off for


Christmas as well. I am, so lucky. That is it for


today. More business news on Monday. Hi, it has been a cloudy week and


today will be a cloudy day again. Weather front across western areas,


you can see on the satellite picture coming across the Atlantic and


stalling and becoming slow-moving. This streak of cloud is a front


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