21/12/2016 BBC Business Live


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


The world's oldest bank needs to find over $5 billion


to avoid the prospect of a government bailout.


Live from London, that's our top story on Wednesday, 21st December.


A bailout of Monte Pasci would see investors facing compulsory losses.


It presents a tough choice for the new Italian Prime Minister.


Also in the programme, a new twist in Malaysia's 1MDB scandal.


We will have the latest from Singapore.


And as economies grow, so too does demand for office space.


We'll meet the man behind the firm that matches


firms with work spaces - being dubbed Airbnb for offices.


So we are asking where would you like to work


A coffee shop or somewhere more scenic?


Sally, where could be more exotic than here in the Business Live


studio? The clock is ticking


for the troubled lender Banco Monte The Italian bank is seeking over


$5 billion in new investment Today is the final deadline


for investors to buy new shares. The new Italian Prime Minister has


sought Parliamentary approval for an emergency bailout package


worth $20 billion if that investment money doesn't materialise


from the private sector. That would be contentious


because investors who already lent the bank money will be penalised


under EU laws that came into force Poor quality loans are one


of the biggest issues facing In total, the country's


lenders are sitting on $370 That's about 40% of


all the non-performing With me is Nicola Marinelli


from the London Business School. He was a former trader for Italy's


third largest lender, Is that right? That's right. Zbluf


the inside track on this one. Today is very critical as Ben outlined. It


is the chance for retail investors to get on board. Tomorrow, we are


talking about institutional investors and hedge funds. Do you


think they will come up with the funds they need?


It doesn't look like it. Apparently the latest reports are that the bank


is not actually getting the amount they are hoping for. They were


hoping for 1.5 billion euros. But it looks like probably there won't be


more than 800 million. If they don't get the 1.5 billion euro today from


retail investors, does that give the wrong signal for tomorrow? Well, it


certainly does especially because there are no anchor investors


apparently for the new shares. There were some names floating around like


the Qatari investment funds and probably some other hedge funds, but


the latest news is that none of them is actually available. So probably


everyone is basically thinking that there will be a state intervention.


Now, talk us through how that will work. On the one hand it will break


some EU laws and of course, it will be politically very difficult as


well. So just talk us through that process. It is a difficult situation


for the Government, but the banking recovery and directive that EU level


allows for some other choices. For example, recapitalisation of the


bank that is pre-emptive based on the fact that the bank, Monte dei


Paschi, failed some stress tests. So this could be done with a mix of


private money and public money. Bailing in, not all the creditors


basically. So also the depositors above 100,000 euros threshold, but


only the most junior creditors and the equity holders and so on. That's


something that is more palatable for the Government. Just briefly, you've


worked for this bank. Where has it gone wrong? Well, there have been


several things going wrong. For example, initially the acquisition


of a bank. It was part of ABM Am roe. It was done at the wrong price


and there were scandals with trading, but they were not really


big in terms of size. What is really bad now is that they have a huge


amount of non performing loans because they have a big portfolio of


loans in Italy and the Italian economy hasn't grown very much and


after the crisis a lot of SMEs have been struggling and the portfolio,


the one they want to sell now is around 30 billion euros and that


really is a big... So a bit of a mountain to climb? Exactly. Thank


you for your time and when we get news out of Italy today as to how


that sale goes, we'll fill you in. US President Barack Obama has


permanently banned new oil and gas drilling in US Atlantic and Arctic


waters in one of his last major environmental protection actions


before leaving office next month. Mr Obama invoked a provision


of a 1953 law which will be difficult for president-elect


Donald Trump to reverse. Volkswagen has struck a deal


with the US authorities over some 80,000 VW,


Audi and Porsche cars The agreement is another step


towards allowing the German car-maker to put the emissions


cheating scandal behind it. In June, VW agreed to a $15 billion


settlement for another 475,000 The new agreement will cost


Volkswagen an estimated $1 billion. A strike by airport baggage handlers


and check-in staff in the UK planned for Friday and Christmas Eve has


been called off. More than 1,500 members of the Unite


union employed by Swissport had been due to walk out for 48 hours


in a row over pay and conditions. There's been another


twist in Malaysia's 1MDB Nice to see you. What's happening


now? Well, Sally, as you mentioned 1MDB is Malaysia's state development


fund which was set-up by the Prime Minister to supposedly help the


country's development. But as we have been reporting, it has been


investigated in a dozen countries including in the United States where


it has been allegedly linked to a Hollywood movie, the Wolf of Wall


Street. The authorities found several banks may have broken the


law while doing business with 1MDB including Swiss bank, BSY which has


already been kicked out of the country and former private investor


banker for BSI who has been facing trial and he has been found guilty


of tampering with key witnesses. So basically he was facing money


laundering allegations and he has been found guilty that he urged his


witnesses to destroy evidence, and he faces his sentence is tomorrow,


but he also faces a separate trial in which he faces charges of money


laundering which, of course, is a lot more serious next year.


Thank you very much. I know you will stay across that story for us there


in our Asia business hub. Back with them as soon as there is any


developments there. This is what markets are looking


like across Asia. It is brighter for the Japanese economy.


The government upgraded its monthly economic assessment,


a day after the Bank of Japan raised its view of the world's


number three economy for the first time in over a year.


In the US, the Dow within touching distance of the 20,000 level


and Germany's DAX posted its highest levels this year.


Now yesterday's move in the FTSE 100 to its highest levels


since mid-October were primarily driven by a weak pound,


a rebound in oil prices and a decent rally in the banking sector.


We'll talk more on that in a moment, but first, Samira has the details


about what's ahead on Wall Street Today.


As we move closer to the holiday break, things are beginning


But there are still a few bits happening that we need to note,


including Micron Technology reporting earnings.


Now investors are expecting the chip maker to report revenue growth


for the first time in more than a year.


The recent improvement in pricing for chips and flash memory chips


is really expected to continue for the first half of 2017.


Also reporting earnings Wednesday, consulting and outsourcing


Now strong demand for its cloud services is expected to boost


They have been investing heavily in digital services


to gain market share, as it faces stiff competition


from rivals like IBM, Infosys and Tata Consultancy


Joining us is Simon Derrick, Chief Markets Strategist,


Nice to see you, Simon. How are you? I'm very well. Full of the festive


spirit? I'm always full of the festive spirit. What about the


markets? I think they are full of the festive spirit given the that


fact that we are approaching 20,000 on the Dow. 12 months ago, the


Federal Reserve had hiked rates. Oil prices, everything going on. We have


just had the Federal Reserve hike rates again and nobody cares! All we


are talking about is politics and what Donald Trump is going to do. A


huge shift this year in what the market focus is on and probably a


good thing as well. We have stopped focussing purely on interest rates,


politics and the spending partners of governments have become a big


story, we are having to re-think everything about the way we look at


markets. The joy, you know, investors are not looking really at


interest rates and policy anymore, they are all looking at Trump, it


makes a change that we don't have to look at them for a while either.


That's been the story of the year, when rates would go up, if, when and


by how much? That moved and it is about spending. He shifted the focus


with regard to interest rates from what the Central Bank is going to


do, but what is happening about the borrowing costs for governments? It


will make for an interesting 2017 because first of all we have seen to


what Mr Trump is going to do. I think that's going to be fascinating


and I'm interested, given the fact that he's so keen to revitalise US


industry, what he is going to do about a strong dollar, that could be


a drag on some of the exporters. I think China, currency policy next


year will be a big story and European politics. Oh, of course.


That's the political risk of 2017, isn't it? That's where the shift


will be for us next year. OK, Simon, you're not off the hook. You have


got to come back in five minutes and share more of your thoughts and


views on things. Yes, including sherry!


Why demand for office space could give us a better


We meet the firm that matches empty offices


You're with Business Live from BBC News.


People who buy drones could have to register it and take a test


to prove they can fly it safely under new rules proposed


Do you think you'd pass the test? Probably not!


There were 59 near misses involving drones and airliners


have been reported in the UK over the past 12 months.


Our technology correspondent Rory Cellan-Jones has this report.


Earlier this month, Amazon made its first delivery by drone.


Just one potential use of an exciting new technology.


But after a number of reports from pilots of near-misses


with drones, there is mounting concern about safety.


If people don't use drones responsibly and follow the rules


and regulations that are in place, obviously, that is a safety issue,


first of all, but could also affect the long-term future


There are already plenty of regulations.


For example, I cannot fly here because we are too close


While professional users of drones have to register


with the Civil Aviation Authority, anyone else can just buy


The Government is consulting on regulations which would mean


new drones would have to be registered, users would have to pass


a theory test like that for drivers, and there would be tougher penalties


Peter, an experienced drone owner, believes it is already too complex.


If you put in too complicated rules, you will scare people off and deny


the future industry this pool of talent that we need.


There will be thousands of new drone owners this Christmas.


Whenever new rules come in, they are being told they will be


Can you fly a drone? Have you tried? No. Actually, I'd love, to try. My


hand, eye co-ordination, it is forward, back, up, down. I have been


in public parks where there has been one circling above us and it worried


me to bits and there is some child miles away manning this thing and


I'm thinking, "Don't get it get stuck on my head."


A warning about borrowing for spending during Christmas, it is a


worry, Citizen's Advice have a report out today.


The clock is ticking for Italian lender Monte dei Paschi.


The world's oldest bank needs to find over $5 billion


in new investment, otherwise it faces the prospect of


This could prove a contentious move by the new Italian Prime Minister,


as EU laws would force investors to take compulsory losses.


A lot at stake today. We will keep you up-to-date.


How can you measure the health of an economy?


Well, there are the official stats, of course, but they tell


So it's said that looking at demand for office space can give


When economies are growing, more people are in work,


and that means demand for office space grows, and so does the rent.


Commercial property space is worth a whopping 11


The tech industry is one reason behind the growing


demand for office space, accounting for 20%


of all office leasing in the first half of the year.


But in the UK, the number of people working from non-conventional office


spaces has risen to its highest level since records began.


Tech start-up Ofixu aims to take advantage of this.


It is an online marketplace allowing hosts to list all types


of workspaces for any type of work for as long as they need.


And the founder and chief executive of Ofixu Dan Hinden


Did I say it right? It is Ofixu. We have been struggling with Monte dei


Paschi this morning! You love saying that!


It rolls off the tongue! This is the latest in several tech


start-ups that you have been involved in. You were involved with


another company. We are doing really well, aren't we! That rivalled a B


sometime ago. This latest offering is like that for office space, is


that one way of describing it? Yes, I went to work for that company, a


rival in Europe, and my learnings were that it is easy, and it should


be, to attain and maintain listings or property hosts onto a platform


where they can start earning income on otherwise under utilised space.


Why would you not be able to do that? It brings you up to date with


Ofixu today. We have looked at these start-ups, we call them disrupters,


they are changing the way it has always been done. Office space is


one of those but is ripe for change, because why take on a big overhead


with a fixed contract for five or ten years when you don't know if you


will need it, you might need more or less? There is a computer-based $16


billion valuation, the co-working market is booming, but there is


still a lot of underutilised space, 4.2 billion's 4.2 million visitors


is that employed just the owner, so there is an document for freelance


or contractor types, who would prefer not to work in a coffee shop,


because it is not as conducive as a nearby spare desk. We engage with


all of those types of spaces in all environments globally. How do you


manage the bits that you don't know about, when you I tried to rent a


bit of space for a period of time, what the neighbours like, how noisy


it is next door? How slow the Wi-Fi is, how difficult various other


matters are? Does that make sense? Of course. There is a plethora of


listings on our platform, 85 cities, with different hosts. There are


regulations for each office space, regulations for each office space,


you may not be able to run -- bring your pet in, you may not be able to


rent for under a month, but the host. You let that on their rules or


regulations of. The host says what they want, but you get those who


review it afterwards? Absolutely, the ratings and reviews side will


drive the decision on the consumer side. Those who have rented space


will rate and review those listings. I can see why this is great news for


businesses. As far as landlords are concerned, I imagine they are less


happy, because it brings the rent down, and they are only paid for


when it is occupied? It comes up a lot. The landlord might say, we will


sublease our space, if we do it to a company and they have seven desks


but only three are being used, what good is that to me? Are you not


paying a fixed overhead? You are, but if the landlord is flexible


enough with the leasing contract, there is no reason why he can't go


in with the tenant and say, we are happy for you to co-worker with


another company, and we can split the income. There are plenty of land


laws that are winning to do that. But there are so many areas we can


push you with this. Dan, from Monte dei Paschi. -- from Ofixu.


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.


You can stay ahead on our page, with the breaking business news. We will


keep you up-to-date with the insight and analysis from our team of


editors around the world. We want to hear from you. Get in touch on the


BBC web page. We are on Twitter and Facebook. On TV and online, whenever


you need to know. What other business


stories has the media been Simon Derrick, chief markets


strategist, Bank of New York Mellon, What is your office like? What would


you like to see? A coffee machine in my office, those espressos when I


need them. That is not happening any time soon! Dougal would like his bed


in his office. I could have done without! Scott says, somewhere that


is calm and inspirational, where you can see the sea. That is quite


specific! We would like a window. It would be


nice to have a real window. Let's look at this story, in the daily


Mirror. This is one of our tabloid newspapers. ?1 per second, the


numbers behind Carlos Tevez' proposed wages in China. That is


quite phenomenal. It is. The statistics, he will earn more per


week than Cristiano Ronaldo and Lionel Messi combined, or the same


amount. They worked out that he could buy a brand-new Porsche 911


everyday. I work in the City of London, even I think that this


remarkable. Even you! Do they get this money back?


Presumably they must they? In terms of sponsorship, sailor shirts, that


kind of stuff, TV rights? Clearly, you have to sit there and think


about how this works through. Until I read the story, I had not even


heard of this team, so I am not sure how the sponsorship and everything


else works. Football in Asia, Premier League football, is huge.


The sponsorship for the British clubs, the support, absolutely


amazing. ?1 a second, it is not bad going! I and whizzing through this


and I am coming up with all thought. Let's look at Apple in the Indian


press. Looking for manufacturing in India.


Their slice of the smartphone pie. In many developed economies we talk


about the two horse race between Apple and some song, you look at


this graphic and you realise how many makers there are, and why Apple


is such a small player in India. It makes the point that we tend to


think of the high-end mobile phones, you are going to talk about far more


user-friendly phones if you are going out to India, for example,


when you are talking about that networks that cannot support a lot


of the functions. They are talking about India overtaking the US in


being the second largest market in the world for smartphones, so it


makes sense for Apple, if it has stalling sales, to start trying to


get into India. The save Santa's Sherry campaign has been launched by


the Wine and spirit trade association, sales of sherry has


more than halved in the last decade. I am glad we have got onto the


serious issue! This has been the big story, and my specialist area. It is


a key question. We leave whiskey. There are those revisionists that


want to go down this route, but sherry is the traditional drink,


along with a mince pie and a coward or the reindeer. Every year, and


every year he drinks it. Amazing. The carrot goes as well.


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