02/03/2017 BBC Business Live


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This is Business Live from BBC News with Susannah Streeter


Investors scramble for Snapchat - in the biggest tech


But is the app a cash cow - or just a craze?


Live from London, that's our top story on Thursday 2nd of March.


So today is the day for the most anticipated tech market


floatation since Twitter - SNAP shares will begin trading


on Wall Street later at $17 a share valuing the company at $24 billion.


Also in the programme - the fallout from Yahoo's


massive security breaches - Marissa Mayer is to take


a significant pay cut and the company's top lawyer


And the global market rally continued in Asia earlier today -


this is the scene right now in Europe right after another


record breaking night for the Dow in the US.


We'll talk you through all you need to know.


We will be getting the inside track on how our cities might look in the


world's largest property fair. Today world's largest property fair. Today


we want to know, do you love snatch at, or do you have no idea what it


is? -- SnapChat. The programme is jam-packed day, so


we will make it as snappy as we can. We start on Wall Street


where investors are gearing up for what could be the biggest -


and certainly the most hyped - technology flotation


since Twitter in back 2013 - In a few hours' time shares in SNAP


- the owner of photo messaging app Snapchat -


will begin trading Will it end up a stock market


giant like Facebook - or - like Twitter -


a bit of a flop? The flotation has been


hugely oversubscribed, Late on Wednesday it


priced its shares at $17 - above the $14-to-$16 range it


had previously indicated. That will give the company


an opening valuation More than twice as much as Twitter


at its current share price. That's despite a couple


of major worries - Firstly, Snapchat has


yet to turn a profit. In fact it lost over half a billion


dollars last year alone. Plus shareholders


who buy in will not The founders of the company


will retain complete They are incredibly young -


and as of later today - Evan Spiegel and Bobby Murphy -


both in their 20s - will be worth around


$4 billion each. the younger audience only brands


want to reach. For me personally it makes me feel like a dinosaur. I


find this out incredibly difficult to use. If we rewind and look at


Facebook. When it went on the public market it had huge scale. Millions


of people use it. Not just young people. For me that's one of the


biggest concerns. It has a lot of young users. There is optimism


around because it has quite a few, given its young age, but can they


entice more to keep that user base growing? Well, as we have seen in


has been slowing. I think that is has been slowing. I think that is


because of threats in the market. Look at Instagram, they went away


and copied some of the biggest features of Snapchat. But they have


the backing of Facebook to move users across. I think there are some


worries there. Kevin the owners, still in their 20s, they


will retain complete control of the company. Given they have minimal


corporate experience that is a risk, isn't it? Absolutely. Mark


Zuckerberg created the same thing, he is still owner of the company. We


are looking at very young founders. The have to be questions about how


they can scale the company. An deal will all of the corporate questions


in the long term. -- and deal. Will it be a rocky ride? Or do think you


the optimism will continue? There is one major opportunity for it. If we


look at social media, a lot of people we speak to say they are


moving away from the larger social networks. People are looking for a


more intimate connection. If you look at your own Facebook feed, the


fact that all of your family, your parents come your grandparents, and


people you don't want to be in touch with our on there. There is a


certain value in having a smaller network. If Snapchat can tap into


that I think there is some value there. Does all of this talk about


Snapchat make you feel old? Do get in touch.


One of London's tallest buildings, The Leadenhall Building -


nicknamed the Cheesegrater - has been sold to Chinese


It's one of the largest UK property deals so far by a Chinese investor.


British Land and Oxford Properties, which both own 50% of


the wedge-shaped skyscraper, say contracts have been


exchanged with CC Land, a company run by Chinese property


Yahoo, which disclosed two massive data breaches last year,


now says about 32 million user accounts were accessed by intruders


in the last two years using forged cookies.


The Internet giant say some of the latest intrusions can be


connected to the people believed to be responsible for the 2014


breach - which at least 500 million accounts were affected.


Forged cookies allow an intruder to access a user's


Lots of other stories on the website. Merlin is a UK-based


organisation that runs many, many theme parks, many of the corporate


stories there, as well. Have a look when you have the time.


Australia has announced a crackdown on visas for foreign workers


in the Fast Food Industry in a bid to protect jobs.


This is part of a trend, isn't it, saying that citizens already in the


country need to have access to those jobs first before immigrants?


Exactly. That is what the country's Immigration Minister said. It's to


protect Australian jobs and give them to Australians first and


foremost. He is talking about the 457 visas. They are given out to


skilled professionals. Last year most of them were given to jobs in


the restaurant sector, cooks for example, medical professionals also


come under that Visa, along with other people in the software


industry, programmers and software developers. It covers a broad range


of industries. Targeting the fast food sector. McDonald's and KFC are


some of the employees have employed around 500 people since 2012 on this


particular Visa. And he has said, you know what, they don't need to be


country, they could be employing country, they could be employing


Australians, instead. About 100,000 people were on the 457 Visa. He is


targeting the fast food sector. He admitted most of these jobs would


affect managerial staff at these companies, not the guys on the


ground, but it does show that Australia, along with many countries


around the world, are taking visual and political steps to show they are


looking after their people first. Interesting to see what is going on


happening in the US with regards to happening in the US with regards to


that kind of story. Let's look at Asia. Hong Kong down slightly by the


end of the day. But most of the day in Asia most of the markets were


high and rallying following that rally from Dow Jones. Quite a bit


above 20 1000. Japan had a good session. The yen is weak. Lots of


talk about that the Fed in the United States is poised to raise


rates this month in March. -- above 21,000.


Fairly flat in Europe. In Europe yesterday all of these markets


closed up around 2% higher, or slightly under that, so a strong day


for Europe. We will talk about these issues in a second. First, let's get


more on what we can expect on Wall Street later today.


It could be the biggest tech company for a while. SNAP, owners of


Snapchat, will start trading on Thursday. We'll see the success of


Facebook? Or will it look more like twitter? -- will it see. The


bellwether for the supermarket retailer Kroger. They are battling a


renewed price war from Walmart. Intense competition and deflating


food costs. Also reporting on Thursday, Abercrombie and Fitch.


and those who are shopping is not and those who are shopping is not


spending much of clothing and accessories, the company will likely


be taking a hit. -- hitting malls. Record levels reached in the


markets. Joining us is Alix Stewart, fixed


income fund manager at Schroders. What is driving the market onwards


and upwards? Partly global growth is picking up around the world and


optimism that Trump is going to roll back regulation and the spirits are


high. Even though he didn't actually say much in his address, there


wasn't much detail about this massive boost infrastructure, was it


more his demeanour that reassured investors? I think so. I think he is


being seen as the mouthpiece but he has a team behind him which are


quite, quite keen on delivering, making America great again. Also, we


were talking about this yesterday, the fact that quite a few people are


saying Mart is the month when they raise rates again. That has shifted.


Most were expecting it to be in June. In a couple of weeks' time we


are looking at a rate increase. Indeed. We were looking at two rises


for the rest of the year and only 50% chance of a march rise, and now


it is 80%. With our more cautious members saying they think it is time


to reduce accommodation. The Fed has been vocal. They are putting out the


signals. Yes. If they don't deliver in two weeks it'll be interesting.


They don't like to surprise the market. Even the more cautious are


saying we are going to go in March, it would be a big surprise if they


don't. We will have to see that key crunch meeting in a couple of weeks'


time. Still to come: Is property still the best


investment? We will find out when we speak to


the head of one of the biggest property shows. Let's talk some more


about Merlin. We mentioned earlier about Merlin. We mentioned earlier


that their results were out. They own many theme parks around the


country. It is their first set of figures since the accident of their


roller-coaster Smiler. The company, which also owns


the London Eye and Legoland, Theo Leggett has been


looking at the numbers. On the face of it, they look


positive. The Alton Towers crash eventually cost the company ?5


million in a fine imposed for safety failings last year. There was a drop


in visitor numbers at Alton Towers in the wake of the crash but the


company says it is recovering, cost company says it is recovering, cost


savings have been made. A lot of job losses at the park are reaping


rewards and the park is recovering. But it is a big company owning 100


visitor attractions around the world, a lot of them outside of the


UK. Results were better than expected but this is the share price


today. A lot of anticipation before results came out, now it has fallen


quite dramatically down 2.5% this morning. If you look at the figures


come as you can see why. Revenues are looking well on the surface,


profits -- profits up 3% but a lot of that is due to the fall in the


pound sterling after the referendum last year. Taking out those are


facts, operating profits would be done more than 6%. The company talks


about headwinds like the effects of international terror on business,


and that is why we see this response from investors this morning.


Although the park chain seems to be operating in a fairly robust


fashion, there are issues it must address. Thank you. We have some


company results from Jimmy Choo, men's shoes are boosting their


figures, after strong demand for the menswear line. We cannot give you an


insight on that! And another story, something breaking just after 7am


today. The capita Chief Executive is to step down, Andy Parker, in


September, they issued a profits one in. The bass is to step aside at


Catheter. More details on the website.


Today is the most anticipated tech market floatation since Twitter -


SNAP shares will begin trading on Wall Street later at 17 dollars


a share, valuing the company at 24 billion dollars.


That is a lot of money. A look at the markets now. Markets in Europe


have been mixed today, all of these markets, most of them, these three


that you can see, London, Paris and Frankfurt, they all had good days.


Today, taking a breather, looking for direction. As we've been saying,


certain shares on the move. And now let's get the inside


track on real estate... MIPIM is the biggest


property show in the world. It takes place every March in Cannes


in the south of France. What are some of the challenges -


or even opportunities - In the coming years,


more than 60% of the population Next comes efficiency of resources:


How will future real estate projects be able to take into account


the need to monitor and save resources, when energy


demands will grow 40% and half the world's population


will be living in areas Very soon, over one trillion objects


will be connected to the internet and all the data collected


from the users and the buildings will clearly modify the way real


estate professionals are working. Perhaps they are already changing in


reaction to that trend? Let's find out.


Filippo Rean, Head of Reed MIDEM's Real Estate Division -


he's also the director of the property show.


He joins us now. Thank you for joining us. What will the city of


the future look like? What are the current trends in property? Our


exhibitors at the show thinking much more about energy efficiency, and


how we will live in future? The answer is a big yes. It means these


themes and trends that it years ago appeared quite different from the


main real estate business, today they are included and considered,


when cities and planners and developers think about new projects


and new developments. Some people would say, why aren't we seeing


energy-efficient products put on new homes? Some would say, solar power


tiles on the roofs, things like that, why haven't they been in


force? There are economic considerations, what is important is


to give a new dimension to changes, the collaboration between the public


and private sectors. This is what we've tried to do at MIPIM, a place


where real estate themes and issues and opportunities, the private and


public sector have come together because, you are right, you might


have different views, more short-term views or long-term views,


you have two combined the two and come up with developers of the


future. In terms of the show itself, it is very international. You have


most countries represented, architects, investors, developers,


discussing and chatting. Depending on where you are in the world,


challenges and demands are very different in terms of use cities and


how they will change in future. But, what are the key themes discussed in


the industry in terms of development of the future cities? You have at


least two big themes which are quite common. One is the sustainability,


that is common and everybody is aware of that. Secondly, how to


include key societal changes. What is sometimes called be sharing a


economy. Into our cities come into our buildings. -- Schering


and I assume the time frame where they change, it is getting shorter?


There's an acceleration... Because of technology. It is something that


accelerates the trend and is something that will allow the


industry to adapt. That is why there is a new buzzword, the combination


of property and technology. It is beginning to be a real thing. At


places like MIPIM, even last year, there was still the margins and


today will be one of the key topics and will have a large space within


the exhibition area. Thank you very much for talking to us about it.


Good to meet you today. Very soon, we will be looking at other stories


being talked about today... The boss of Netflix has been talking


to Rory Kevin Jones. Net neutrality has taken hold around the world as


an assumption and belief about how the Internet should work. There are


many countries that do not have a law about net neutrality. But, we


still operate along those principles. If you could send a


message to Donald Trump about the principle and weight is still


important, what would it be? I think net neutrality very important, so


that no voices are censored and there is equality around. Facebook,


it suddenly seems very interested in doing a lot more video. That would


be quite a danger to you, wouldn't it? And there is YouTube Red, which


is a subscription service, and Amazon, and potentially Apple doing


some original shows. There is a lot of competition and challenge for


Netflix, but room to grow. His business is very challenging. It


is, given the competition. Earlier, we asked what she thought of


Snapchat, whether you love it or have no idea what it is. Snapchat


are hoping to disrupt social media in the way that Netflix wants to


disrupt television. These are the views of some people in New York


about Snapchat. I know what it is but I do not use it. When I see


something, I snap it. I have it but don't use it. I use it everyday. My


kids use it. I'm not the right demographic! I use it all the time,


it's great. I don't know what it is, don't use it! This is what you been


telling us, David, you are 60, and you say that you've just joined, and


your wife has, so you can have fun with your grandkids.


It's not just for youngsters. Good for you. Someone else says that they


tried it for a few weeks but it was pointless. Sarah says that it was


fun in the beginning but she does not know if it is cool any more!


Someone else as that they are too addicted for their own good and it


is taking over their lives! -- someone else says that. Let's


reintroduce Alec Stewart, here to talk about more stories. Marissa


Mayer, and Kodak. Yahoo has been sold to the rise, is that right?


That has gone through. One of the problems is all live the stories


about security breaches, numbers of accounts exposed to seems to be


getting bigger every day and she will pay the price? Quite rightly


so, data security is a massive issue. Would you have your details


with somebody you feel you cannot trust? Data is very valuable to


these companies. So you do not get a bonus. It is not just these data


breaches but the reactions from the executives to it. They were so slow.


It took so long for them to admit it. And we are still finding out.


She will get a cut in future bonuses, and the lawyer is stepping


down. Are we seeing accountability? Finally they are taking action. The


buck stops at the top. To say that they did not know the depth of it is


not good enough. Corporate governance. People have been calling


for it for a long time. With events like this and bridges, there is some


sort of call-back? Yes, it is not just the banking sector that needs


to be accountable. We talked about technology and new developer and is


on the programme today. Virtual reality is supposed to be the future


but interestingly, we have numbers from Google today, it is cardboard


virtual reality sets that have been a big hit. Probably because they are


cheap! A bit of a 70s throwback! LAUGHTER


I would imagine it is the money more than the 70s throwback! What do you


think about virtual reality, have you had a go? Not yet, no. It is a


big trend. These cardboard ones, they want people talking about these


things and so people talk about and by the new expensive ones. Clip onto


a mobile phone, you can see a 360 degrees view of your photos. They


are hoping it would be a gateway to the more expensive motion sensor


virtual reality headset? Yes, I think it is so people have a taste


for it and have that full on experience. They have been really


successful. It would be interesting to see if we have virtual reality in


the cities of the future, as we spoke earlier about with the


property show in Cannes, thank you for coming in.


And thank you for your company. We are back tomorrow, so we will see


you then. More business news throughout the


day on the BBC Live web page. Goodbye.


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