06/01/2017 BBC Business Live


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This is Business Live from BBC News with Aaron


Samsung Electronics expects to report a 50% surge in fourth


quarter profits despite the fiasco with its flagship Note 7 phone.


Live from London, that's our top story on Friday 6th January.


Samsung's on track for its best profit in years -


and pledges to put the Galaxy Note 7 debacle behind it.


And the power of a Trump Tweet - the President-elect threatens


Toyota, and the result - $1.2 billion is wiped off


the value of the company in less than five minutes.


The markets appeared to be risk on mode. We'll tell you why.


Can economists be compared to weather-forecasters when it comes


Our Economics editor Kamal Ahmed will be here with that


and a look back at the rest of the business week.


And following the impact of Donald Trump's Toyota tweet,


we want to know what's the biggest Twitter storm you've ever sparked?


We start with Samsung - because in the last few hours


the South Korean tech giant has said it's on track for the best quarterly


It's a major boost for the company after the exploding smartphone


scandal that put a serious dent in its reputation.


In the three months to the end of December, Samsung is forecasting


That's up by half on the same period last year,


much better than expected and the best quarter since mid-2013.


That might come as a surprise, as we know Samsung was forced


to scrap its top of the range phone, the Galaxy Note 7, after a spate


Hugely embarrassing and hugely expensive.


It has warned the scandal sent more than $5 billion


Samsung makes chips and screens for the whole tech industry.


Samsung hasn't revealed the details but it's thought to have been


the best quarter ever for its semiconductor division.


It makes the complex chips that are more and more in demand


as phones get smarter, and the prices of those have jumped.


So despite the exploding phone scandal, Samsung's investors have


had a pretty good year, shares up by almost 50%


Cyrus Mewawalla, managing director of global technology research


Thank you for coming in. Looking at those figures, giving everything


that's happened in the past year, it sounds like a pretty positive result


from shareholders but how will they be feeling? I think Samsung


management have done a very good job this year. Record profits and the


share price has gone up 50%. Looking forward, Samsung's future may not be


that rosy for the rest of 2017. Earnings momentum will carry it for


a few weeks or months, but there are big roadblocks ahead of the Samsung.


It's a very successful hardware company, the eighth largest tech


company in the world, but it's week on software. If you look at the fact


Samsung are strong on chips and smartphones but that is yesterday's


story. Tomorrow's story is a whole new theme of technology, artificial


intelligence, virtual reality, internet TV, cyber security, the


Cloud. All these things have one thing in common which is software.


You need to have a software ecosystem to plug into which is


where Samsung is weak. I was talking to an expert this morning who was


telling us about the price of chips. Normally chip prices have come down


but some of the chips, D-Ram? Those prices are up, why are those prices


up? Prices of D-Ram have risen because there was an unexpectedly


good demand from smartphone makers all around the world. If you ask any


analyst, he'll have a massive supply and demand model. They will move out


of sync and when there is too much demand prices will go up. This can


change very, very quickly. What's more important in 2017 as far as


Samsung's chip division is concerned is new chip technologies. Samsung is


a specialist in memory chips, but what is happening around the world


is chip architectures are changing so logic chips and memory chips are


coming closer together and new type vulnerable types of chips are being


developed. AI chips are going to be big. Intel and Micron are developing


a new chip that could blow the technology out of the water. Thank


you for joining us this morning. The Australian economy has


recorded its first trade surplus The latest official numbers show


the country exported more than $900 million more goods


and services than it The resource rich nation saw big


growth in exports of coal, It means Australia is likely


to avoid the recession that some economists had feared,


after the economy's suprise in contraction in the third


quarter of last year. Mexico's president has


defended a sharp increase in the price of petrol


despite protests and looting. More than 250 people


have been arrested. Fuel prices went up by as much


as 20% at the beginning of the month Enrique Pena Nieto said the changes


were necessary because of the rise The average price of a gallon


of petrol is now almost as much You've got the live page. What did


you find? In the UK we've got some results out today. We mentioned


Next, a huge UK retailer. Share is continuing to fall after a


disappointing Christmas sales. That story is being reflected around the


world. What about this, outsmarted by your toothbrush. This is from the


consumer Electronics show. I think it's smart, it tells me how long


I've been doing it for but it also says if you are pressing too hard.


It's not a fancy things. Tesla? That is yesterday's! Let's move on! Let's


talk about this. The power of a tweet, some can be good, some can be


bad. Shares in the Japanese car-maker Toyota closed nearly 1.7%


down. They were at one point down nearly 3%. It is because Donald


Trump did something. He sent a tweet. He wrote that...


Sarah, sorry, we are just chatting away! Good to see you. At one point


that Trump tweet knocked $1.2 billion off the value of Toyota!


That's right. As you said, Toyota shares fell more than 3% in early


trade on Friday. But they did recover some ground. Closing down


around 1.7%. You have do remember, too, that the drop could be due to


the power of a Trump tweet, but it could also have been influenced by a


slightly stronger yen which is bad news for the country's exporters.


Despite Mr Trump's warnings, Toyota's president said the company


has no immediate plans to curb production in Mexico. Toyota has ten


manufacturing plants in the US and the company 's US arm says


production and employment levels in the US wouldn't decrease because of


the new Mexican plant. Lower labour costs and the Nafta free trade area


makes it attractive firms to make cars in Mexico to sell in the US. Mr


Trump says he will end this practice as it is costing American jobs. Have


a great weekend! The markets appear


to be risk-on mode. Well, traders suggesting it could be


because of the returns on US debt, It could be signs of stability


in Europe, or a recovery in oil. Anything that has been battered


by higher US rates is coming back. On the markets around the world,


is a correction of the "Trump The markets have been trying


to fully price in his policies That's what the traders


are telling us. Talking of telling us,


let's go see what Samira has to tell us about the big biz news


on the other side of the pond. Well, if it's the first


Friday of a new month then This will be the first unemployment


report for the New Year. It will be an opportunity for the US


Labor Department to offer insights on trends for the labour market


for the entire year of 2016. Now for the month of December,


economists are expecting to have added about 178,000 jobs,


similar to what we saw The unemployment rate


is likely to have increased Also being released


Friday is November's It will likely show that the trade


deficit narrowed for the month. The results of this report could


impact growth estimates for the US Joining us is Richard Dunbar,


Investment Director Thank you for coming in. We are


going to start off talking about BitCoin, the digital currency that


had headlines a couple of months ago. It fell 20% overnight. Explain


to us, what is Bitcoin? Digital or crypto currency on the web. Invented


by a programmer who we don't know who he or she is. It is


peer-to-peer, there is no central bank looking after it for us. Which


has made it very popular in an era when central banks seem to be


falling over themselves to debase their currencies. So no tangible


notes or coins? It's all cyber. All cyber but accepted by 100,000


retailers around the world. You can swap it for dollars... You can buy


your groceries with it in some places and swap it for other


currencies. Wasn't it the best performing currency last year? It's


doubled, more than doubled over the past year. It's had some wobbles


over its short history since 2008, but fell 20% overnight. What is the


appeal of Bitcoin? Appeal is that it's not controlled by central banks


or politicians. It competes with traditional currencies and since the


financial crisis we had seen central banks and governments falling over


themselves to reduce the value of their currencies, boost exports and


their economy. Which is great for those economies but if you are


selling these currencies and you either don't trust or trust these


politicians then maybe something else is better. I suspect, and my


traditional training would suggest that a fool and his money are easily


parted but it has been a big performer. Do you have any? No.


We'll leave it there. Identity then have any real money! -- I don't even


have any real money! Coming up - what do


economists and weather You're with Business


Live from BBC News. Consultants BDO say High Street


retail sales last month were down slightly compared


to the previous year. That's the fourth year in a row


of falling sales and follows a dramatic plunge in sales


in December 2015. Our business correspondent


Theo Leggett joins us now Theo, what does this say


about the health of the High Street? There has been a fall in December


sales for the past four years. This year's were only down slightly on


last year, but that was after what was really seen as a very bad year


last year. There hasn't been much recovery, that can't be a good


thing. Another point I took from this report is that the first three


weeks in December were pretty awful. The month as a whole retailers was


kind of saved by the week before Christmas. Christmas fell on a


Sunday so we had Christmas Eve being a Saturday. That really brought


people are out shopping. Overall for the month it was a bad period for


the high street retailers. If they can't do well in December that


doesn't bode well for them going forward, especially as we are


expecting inflation to be on the up over the next few months. Internet


retailers did rather well. They did, but in general consumers are still


spending, right? They're still putting their hand in their pocket?


Absolutely, just because they aren't going to the high-street doesn't


mean they aren't spending. We saw a 20% increase in online shopping and


a 50% increase in the run-up to Christmas. At the moment, consumer


sentiment seems to be holding up relatively well. Some areas aren't


doing as well as others. Home where, soft furnishings are doing well.


Retailers who are in fashion are struggling. We had the results from


Next, they aren't alone. Fashion retailers are feeling the pinch.


Part of that is because of the weather. It hasn't been cold enough,


obviously! You Brits love to blame the weather


and everything. What have you got? Do you check your e-mail for work at


home? I check it all the time. I don't


think of it as a chore. I have FOMO, fear of missing out.


Workers in France have been told they don't have to be compelled to


check e-mails outside office hours. The French have a 35 hour working


week. They have got it right! Know they


haven't, look at the economy. Samsung Electronics expects


to report a 50% surge in fourth quarter profits,


despite the fiasco with its We seem to have a short memory, but


it is more their components side that is pushing those profits out.


A quick look at how markets are faring.


Markets are all in the red. But they have had a cracking time of it.


The FTSE 100, only early in the day, but the FTSE 100 has had something


like three new record, continuous record highs in succession.


You think it is time for a correction?


It's only the end of the first week of 2017 and already some of the big


themes of the coming year are with us.


There's the incoming US president Donald Trump,


who yesterday sent a Tweet that caused Toyota shares to plummet.


And then there are the ongoing negotiations over Brexit,


including the resignation of the UK's ambassador


Plus, the Bank of England's Chief Economist has admitted that


economists, like weather forecasters, can sometimes


When I said the big bloke, I said that with absolute respect!


Our Economics Editor Kamal Ahmed is with us.


What was Andy Haldane talking about exactly?


Is he a mate of yours? No, and neither is Donald Trump, but his


policies, have alluded that they could be inflationary? He wants to


have this big fiscal stimulus, wants to spend a lot more money rebuilding


airports, roads and rebuilding America's infrastructure, which is


seen as in pretty poor state. That will have an inflationary pressure


as that flows into the American economy. It is fascinating. We have


spoken about this on a number of occasions on our analysis of


President-elect from. Was he going to be the president like the


campaigning Donald Trump? Would he change his tone after he won. Would


there be a more conservative President-elect. What we have seen


from these tweets and the way he is behaving, how he campaigned and how


at the moment he seems to be saying how he will be the president, are


pretty similar. He is very aggressive about car companies, for


example, that are producing cars in Mexico. Has been critical of Toyota,


General Motors. He praised Ford who said they would move production into


America from Mexico. In Billy Macri has been pretty front foot on how he


campaigned. He can affect things in real-time. People voted, or the


election gave us a different type of president and that is what people


seemed to want. He's doing that. A notion that the president of the


United States tweeting policy in real-time, which as you say, have


these huge effects on very large companies' share price has come is a


new way of operating. Will it continue after his inauguration on


January the 20th? We will see, but at the moment campaigning Donald


Trump and President-elect Trump is pretty similar. The chief economist


of the banker links -- Bank of England says predicting the future


is hard? Yes, Michael Fish said in 1987 he didn't believe a hurricane


was on its way, 24 hours before one of the most devastating hurricane to


hit the South East and caused millions of devastation. The chief


economist of the Bank of England has said, we also sometimes get it


wrong! The bank forecast that if there was a vote for Brexit, which


there was in the UK, that there would be an immediate negative


effect on the UK economy. That hasn't appeared in the short term at


least, to have happened. Consumers are still spending strongly. And the


Bank of England is saying just like weather forecasters, they have to


learn the lesson that that prediction was wrong. Economists,


they have to use the data better. They have to be aware that economics


is a judgment of human behaviour. And that will be difficult. It is


always going to be tricky and imprecise. What they are saying is,


we need to be more honest about that. We mentioned about the UK's


ambassador to the EU, a resignation and an appointment already. What


would that do to Theresa May's negotiating position on Brexit? It


is reported now she will make quite a big speech in the next few weeks,


laying out Britain's position to an extent, or at least by which Britain


will approach the members of the European Union when Britain sparks


Article 50, the process to leave the European Union. The British Prime


Minister, she feels like she has to take care. If you reveal too much of


your hand in a negotiation, you have lost leveraged and power by doing


that. She doesn't want to put herself into the position where she


has made her position clear and Britain is unclear what the rest of


the European nations want. She has to play it carefully and we will not


see a huge amount of detail on what Britain actually wants from that


Article 50 process. Thank you very much. Have a great weekend.


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 page is where you stay ahead of the braking business


news. We will keep you up-to-date with the latest details with insight


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want to hear from you. Get Involved on the BBC Business Live web page.


And on Twitter... You can find us on Facebook. Business Live on TV and


online, whenever you need to know. What other business


stories has the media been Richard Dunbar, Investment


Director at Aberdeen Would you have liked to have gone to


a football boarding school? It seems like a good option in China. $8,000


a year. Some academic stuff probably, but mostly football. 32


football pitches around the schools and it looks like a great way to


spend your education. They have so many fields. 48 football pitches.


But they will start churning out probably world-class football


players? China has decided it wants to win the World Cup, so it has to


throw money at the problem, as it has done in other sports. They are


probably going to continue to fuel the football cost boom that we have


seen in Europe and our players will be attracted to that also. Can I


talk about another big business? Do you like sushi? I love sushi. I love


Japanese food. Tell us about that photo, how much did he pay for that?


That was sold yesterday morning for $600,000. So when you chop that big


fish up, it will be expensive for each little bit that goes into


sushi. The man who bought it said it was a little bit expensive! He is


known as the tuna PR king. I suspect he is putting bat against his


marketing budget. My concern is it is always 24 hours old, when does it


stop being fresh gesture marked that is your fault for eating the raw


stuff. We cook it. Have you returned any Christmas gifts? No, didn't get


any. This is the biggest day for returns in the US. All the stuff


that arrived after Christmas, you can now return. Richard, have a


great weekend. OK, got to go. Have a good weekend, we are getting booted


off. Goodbye. Good morning. Rain on the menu over


the next 24 hours or so. Further east, it is a different story. Snow


more likely to be coming out of the


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