:00:00. > :00:07.This is Business Live from BBC News with Ben Bland and Rachel Horne.
:00:08. > :00:10.The world's largest advertising firm, WPP, says 2017
:00:11. > :00:34.Live from London, that's our top story on Friday the 3rd of March.
:00:35. > :00:37.Last year may have been another good year for the advertising giant WPP
:00:38. > :00:39.but it says the year ahead looks less certain.
:00:40. > :00:44.What does this tell us about the state of the global economy?
:00:45. > :00:47.And for the first time ever, the digital currency Bitcoin is now
:00:48. > :01:01.A softer open for the main European indices. We will be having a look at
:01:02. > :01:02.what is moving world markets and why.
:01:03. > :01:04.And we'll be getting the inside track on all the biggest
:01:05. > :01:07.stories of the week with our economics editor, Kamal Ahmed,
:01:08. > :01:10.including the stock market debut of Snapchat's parent company.
:01:11. > :01:14.The shares jumped more than 40% on their first day of trading.
:01:15. > :01:19.Well, one American school which invested $15,000
:01:20. > :01:21.in the startup back in 2012, has banked millions,
:01:22. > :01:23.so today we want to know what's the best investment
:01:24. > :01:44.It often serves as an important key early indicator of how well
:01:45. > :01:50.When advertising is doing well, we're buying and selling
:01:51. > :01:59.The world's biggest advertising agency, WPP, has just
:02:00. > :02:01.published its full-year results in the last hour and a half.
:02:02. > :02:03.In a moment we'll hear from the company's founder
:02:04. > :02:06.and Chief Executive, Sir Martin Sorrell, but first let's
:02:07. > :02:13.Annual pre-tax profits of $2.3 billion for the group,
:02:14. > :02:24.The group has reported 2016 like-for-like net sales up 3.1%.
:02:25. > :02:28.However, that growth may be about to change as WPP has set
:02:29. > :02:31."conservative" sales targets of 2% for 2017, based on more
:02:32. > :02:42.WPP's Chief Executive, Sir Martin Sorrell, joins us now
:02:43. > :02:54.Thank you for speaking to us. Let's look at these figures, profit up but
:02:55. > :03:04.you are expecting slower growth next year. Why? Not mix did this year. We
:03:05. > :03:10.had a strong 2016, another record year -- not next year. The profits
:03:11. > :03:13.were over ?2 billion, not dollars, although there is not so much
:03:14. > :03:24.different as that used to be. What we saw was a slowing in quarter four
:03:25. > :03:31.and a slow start to 2017. Worldwide GDP growth is about 3.5 to four
:03:32. > :03:36.point -- percent. We are seeing stronger growth market in Latin
:03:37. > :03:39.America and Middle East and Central and eastern Europe but tougher
:03:40. > :03:44.conditions generally and if we look at inflation, very little, maybe a
:03:45. > :03:49.bit more here in the UK post Brexit and the devaluation of the pound and
:03:50. > :03:54.maybe a bit more coming in America with President Trump's expansionist
:03:55. > :03:59.policies if they are in fermented. Generally little pricing power -- if
:04:00. > :04:04.they are in fermented. Three forces are pushing the clients,
:04:05. > :04:08.technological disruption, digital disruption, the second is zero-based
:04:09. > :04:12.budgeting, a fashionable deconstruction of cost but its width
:04:13. > :04:17.is putting pressure on costs and also activist investors. That is all
:04:18. > :04:21.encouraging people to focus more on the short-term than the long term
:04:22. > :04:24.and not on innovation and brand building which is key to success in
:04:25. > :04:38.our view in the long term. I wanted to ask you about Snap. You spent $90
:04:39. > :04:42.million on it. We account for about 25% of the world's media markets and
:04:43. > :04:47.that was roughly the proportion we invested in Snap. Do you think they
:04:48. > :04:52.can live up to the hype and work out how to make enough revenue to turn a
:04:53. > :04:55.profit? Early days but it is competition for Facebook which is to
:04:56. > :05:01.be welcomed. Our clients and ourselves, our third largest client,
:05:02. > :05:05.the CMO, was talking about the importance of measurement for
:05:06. > :05:08.Facebook and Google. Google is easier to measure in that it is
:05:09. > :05:13.search and you can see the sales results more clearly but Facebook is
:05:14. > :05:17.more difficult to measure. Snapchat has the same issue as it competes
:05:18. > :05:23.with Facebook and Amazon builds its search capability to compete with
:05:24. > :05:25.Google and what we need is better data. Often the privacy issue is
:05:26. > :05:34.used as the reason why data is not used as the reason why data is not
:05:35. > :05:39.as prevalent or at exposed as it should be. Sometimes that is an
:05:40. > :05:44.excuse, a figleaf, not the real reason, but clearly what our clients
:05:45. > :05:48.want and what Snapchat will have to prove is that return on investment
:05:49. > :05:52.from using Snapchat as a medium is as effective or more effective than
:05:53. > :05:57.Facebook or any other medium and that is the key battle. Measurement
:05:58. > :06:04.of traditional media is pretty efficient of -- but measurement of
:06:05. > :06:08.new media is pretty much nonexistent so we have to expand that capability
:06:09. > :06:14.to get the appropriate returns that we are seeing. Other issues like
:06:15. > :06:19.fake news, which you know a fair bit about on the BBC in terms of subject
:06:20. > :06:24.matter, on brand safety, media placement, fraud, those are other
:06:25. > :06:28.important issues. And last year about a third of your investors
:06:29. > :06:32.opposed your pay deal, it went ahead. That opposition was up from
:06:33. > :06:35.about 22% oppose it the previous year. Will that increasing
:06:36. > :06:42.opposition have an impact on your pay deal this year? The discussions
:06:43. > :06:46.about pay continue and our company is no different to any other. There
:06:47. > :06:51.are discussions taking place between compensation committees and chairman
:06:52. > :06:57.with the Institute of investors about what pay should be. Our plans
:06:58. > :07:03.are to be based on performance and I think in the last five year run of
:07:04. > :07:11.our last plan, which has just crystallised, we have outperformed
:07:12. > :07:16.97.5% of the FTSE 100 if I remember correctly and the value of the total
:07:17. > :07:21.shareholder return it up by over 200% over that five-year period. It
:07:22. > :07:23.is about a question of pay for performance. Thank you for your time
:07:24. > :07:25.this morning. Music streaming service Spotify says
:07:26. > :07:29.it's reached the landmark It's grown by 25% in less
:07:30. > :07:35.than six months and has now widened its lead over its nearest
:07:36. > :07:39.rival Apple Music. The Swedish company
:07:40. > :07:40.is reportedly considering a US It's already one of Europe's most
:07:41. > :07:46.highly valued startups, A South Korean court has said
:07:47. > :07:57.the first hearing in the trial of Samsung's de facto boss Jay Y Lee
:07:58. > :08:00.will be held on 9th March. Earlier this week, the man who runs
:08:01. > :08:03.one of the world's biggest companies was indicted on charges including
:08:04. > :08:05.bribery and embezzlements. He's admitted making donations
:08:06. > :08:09.linked to the president, but denied the accusations
:08:10. > :08:24.that he sought political A quick look on the tablet because
:08:25. > :08:28.there is an interesting story about the London stock exchange who have
:08:29. > :08:33.resulted out, revenue up 14%, operating profit up 1% but in those
:08:34. > :08:39.results, the LSE said it continued to work hard on the proposed merger
:08:40. > :08:44.with Butcher Bourse, which many thought was dead in the water --
:08:45. > :08:47.with the German market. Europe income position regulators objected
:08:48. > :08:51.to the deal but they are waiting for the outcome of the decision which is
:08:52. > :08:55.due on the 3rd of April 2017 and that merger something will still
:08:56. > :08:57.happen and we will keep an eye on it. You can read more about it on
:08:58. > :08:58.our website. It's a big day for computer
:08:59. > :09:00.games giant Nintendo. It starts selling its latest
:09:01. > :09:02.device, the Switch. It's kind of hybrid machine,
:09:03. > :09:04.combining a home console And it's safe to say it is a massive
:09:05. > :09:11.gamble for Nintendo, which is trying to recapture its glory days
:09:12. > :09:14.as a games company in Some are even calling
:09:15. > :09:31.it "make or break'. Tell us more. Nintendo is under
:09:32. > :09:45.intense pressure to reboot its hardware sales business with the
:09:46. > :09:49.Nintendo tending to have poor sales. The WiiU also lagged behind
:09:50. > :09:53.competing consoles. They say that launching Switch button in a
:09:54. > :09:57.different ball game. Mobile is a fast-growing gaming segment and a
:09:58. > :10:00.hybrid device, Switch has deep integration with smartphones and
:10:01. > :10:06.also allows Nintendo to stay true to its roots in the self top console
:10:07. > :10:10.business. That also worries from gamers in the complaint as it does
:10:11. > :10:14.not offer many games and if it fails, Nintendo might have to
:10:15. > :10:19.rethink its hardware business. But for now it shares have jumped today
:10:20. > :10:24.about 4%, defying the rest of the Tokyo stock market. Thank you.
:10:25. > :10:26.Shares across Asia pulled back on Friday, shadowing
:10:27. > :10:32.Japan's Nikkei ended the session lower despite a weakening
:10:33. > :10:41.yen which usually helps to prop-up exporters.
:10:42. > :10:48.Shares in Hong Kong and Shanghai slipped ahead of the opening of the
:10:49. > :10:52.national peoples Congress, something where China's leaders may announce
:10:53. > :10:52.new measures to rein in debt and tighten up the side of financial
:10:53. > :10:53.markets. A softer open for
:10:54. > :10:55.the European markets - the FTSE, the DAX and the CAC
:10:56. > :10:57.all opening lower. Traders are becoming increasingly
:10:58. > :10:59.confident the Federal Reserve That puts some downward
:11:00. > :11:04.pressure on global markets because it draws investors
:11:05. > :11:05.towards US currency Let's find out what is in store on
:11:06. > :11:20.Wall Street. How soon will US
:11:21. > :11:22.interest rates rise? Janet Yellen is scheduled to speak
:11:23. > :11:25.in Chicago this Friday, one day before the US Central Bank
:11:26. > :11:28.enters a quiet period ahead Her words could shed light
:11:29. > :11:35.on whether the Federal Reserve will Rate expectations have gone up
:11:36. > :11:40.for a couple of reasons. The economy continues to improve
:11:41. > :11:48.and the stock market has a new record this week,
:11:49. > :11:50.the Dow Jones industrial average closed above 21,000,
:11:51. > :11:52.just four weeks after hitting 20,000 In other economic news,
:11:53. > :11:59.the Institute for Supply Management releases its non-manufacturing
:12:00. > :12:01.index for February. Also, keep an eye on
:12:02. > :12:07.Caterpillar's share price. The heavy goods maker's stock
:12:08. > :12:11.plunged after federal agents raided raided its offices in Illinois,
:12:12. > :12:13.believed to be related Joining us is Richard Dunbar,
:12:14. > :12:27.Investment Director Thank you for coming in. I want talk
:12:28. > :12:33.you about digital crypto currency. Otherwise known as BitCoin. This is
:12:34. > :12:40.performed very well relative to other currencies. But nobody is
:12:41. > :12:43.quite sure who controls it, and the supply, but they are certain that
:12:44. > :12:49.central banks don't control it. It is very shadowing, it came from
:12:50. > :12:53.nowhere. It tends to fund the darker corners of the Internet but it has
:12:54. > :12:58.many advantages in that the general policy of central banks as to be to
:12:59. > :13:02.devalue their currencies but BitCoin does not have those Fassett and that
:13:03. > :13:07.has been a real attraction in the past ten years. -- with those
:13:08. > :13:11.assets. And it is now exceeded the price of an ounce of gold so it is a
:13:12. > :13:17.real milestone for a currency that is still relatively in its infancy.
:13:18. > :13:23.It is, but nobody knows who controlled it, it is peer to peer so
:13:24. > :13:27.there is no control of supply and it has been very volatile relative to
:13:28. > :13:36.other currencies around the world and buyers should beware. Do you
:13:37. > :13:40.have any of it? No! I was reading about how you do get it, you have an
:13:41. > :13:43.address that acts as your account and it adds to that and it is the
:13:44. > :13:48.anonymity that draws people in because the transaction can be done
:13:49. > :13:55.part of it is down to people trying to evade currency controls in China
:13:56. > :13:58.and get money out of the country. And I suspect everything we have
:13:59. > :14:06.spoken about should suggest the wear. Richard, you will be back to
:14:07. > :14:10.talk to us about our paper story and think about what is the best
:14:11. > :14:13.investment you have ever made after a school invested ?50,000 in Snap of
:14:14. > :14:28.a start-up. -- ?15,000. We will be talking about Snapchat's
:14:29. > :14:30.stock market debut. You are with business life.
:14:31. > :14:32.Even with its merger under threat, it seems the LSE
:14:33. > :14:39.In the 12 months to December, revenue was up 14% at ?1.5 billion,
:14:40. > :14:41.although operating profit was just 1% higher.
:14:42. > :14:44.The London Stock Exchange Group says it "continues to work hard
:14:45. > :14:45.on its proposed merger with Deutsche Borse".
:14:46. > :14:54.Our correspondent Theo Leggett joins us now.
:14:55. > :15:02.It looked last week or earlier this week that the whole merger would be
:15:03. > :15:07.off and this seems like a turnaround? It does although nothing
:15:08. > :15:10.is certain until the 3rd of April when the European Commission comes
:15:11. > :15:15.out and says what it thinks about this merger. But you are right, the
:15:16. > :15:18.London stock exchange through the markets on the bombshell last
:15:19. > :15:23.weekend when it said that it wasn't prepared to go ahead with this
:15:24. > :15:27.merger with Deutsche Borse under the conditions which they expect that
:15:28. > :15:31.the European Commission to impose and that would mean getting rid of
:15:32. > :15:35.its Italian bond trading platform, saying it was not willing to do
:15:36. > :15:39.that. Underlying that there are various reports from people close to
:15:40. > :15:43.the negotiations suggesting the real reason is a certain amount of
:15:44. > :15:48.conflict between the boardroom of the London stock exchange and that
:15:49. > :15:51.of Deutsche Borse over where the centre of gravity of this new group
:15:52. > :15:54.would become if it would be in London or in Frankfurt and some
:15:55. > :15:58.German politicians are unhappy it looks like gravitating towards
:15:59. > :16:02.London. But in this statement, the London stock exchange says the group
:16:03. > :16:06.has worked hard on the proposed merger with dreich which received
:16:07. > :16:10.formal approval from both sets of shareholders and this would be an
:16:11. > :16:15.industry defining combination of expanding their present in global
:16:16. > :16:18.markets and -- anchored in Europe and delivering significant customer
:16:19. > :16:21.and shareholder benefits. Considering the obituaries for this
:16:22. > :16:24.deal written in the past week, it sounds like strong stuff so we will
:16:25. > :16:32.have to wait and see what the LSE wants to do.
:16:33. > :16:39.We have a story here about zero hours contract, a type of contract
:16:40. > :16:43.that became popular following the financial crisis with the idea it
:16:44. > :16:47.gave businesses more leeway to reduce staff hours, also some would
:16:48. > :16:52.argue it gives those holding the contract more choice. We have
:16:53. > :16:58.figuring showing there is a record high number of people with zero hour
:16:59. > :17:00.contract. 910,000. The rate of increase is slowing. You can get
:17:01. > :17:07.more on our website. You're watching Business
:17:08. > :17:09.Live - our top story. The world's largest
:17:10. > :17:11.advertising firm - WPP - has reported its latest results
:17:12. > :17:13.and it warns that 2017 A quick look at how
:17:14. > :17:25.markets are faring. You can see European markets, they
:17:26. > :17:31.are all down ever so slightly, in a week where we saw a real boom in the
:17:32. > :17:34.States, continuing record highs but falling off yesterday, Asian markets
:17:35. > :17:36.down overnight and the European markets following that trend.
:17:37. > :17:40.And now let's get the inside track this week - we've had record levels
:17:41. > :17:43.on the FTSE and Dow, with the Dow reaching over
:17:44. > :17:44.21,000 on Wednesday, the day after President Trump's
:17:45. > :17:54.And yesterday was the day for the most anticipated tech market
:17:55. > :17:57.Snap - the owner of photo messaging app Snapchat -
:17:58. > :18:00.made its debut on the stock market in the US.
:18:01. > :18:02.Snap closed its first day of trading at $24.48,
:18:03. > :18:08.Our economics editor Kamal Ahmed joins us now.
:18:09. > :18:16.Welcome to the programme. We have to start with Snap. It is fascinating,
:18:17. > :18:20.the shares come with no voting right, the company has yet to make a
:18:21. > :18:25.profit. Do you think it will live up to the hype? It is impossible to
:18:26. > :18:33.say. What we are seeing here, is as you said about the markets, a world
:18:34. > :18:39.awarn with cash. Cash. There haven't been many tech flotation, you
:18:40. > :18:44.mention Twitter,ally. Be aba but there has been little avenue for
:18:45. > :18:49.people to take investment in new tech start ups and so what Snap is
:18:50. > :18:53.doing is offering the market a different type of awed yearnings it
:18:54. > :18:58.is not only young, it is an audience that is about friendship, if you
:18:59. > :19:02.think of Twitter being about stranger, Facebook being about again
:19:03. > :19:06.tantss Snapchat about friendship groups and this idea that young
:19:07. > :19:09.people put much more value on that, than they do on being on Twitter or
:19:10. > :19:15.Facebook which is a more distant type of relationship. So yes it is
:19:16. > :19:22.risky, of course it hasn't made a profit, Facebook tried to buy Snap
:19:23. > :19:27.in 2013 for $3 billion. This puts it at just under 30 billion. But yes,
:19:28. > :19:32.it is a risk but if it pays off for the investors it can pay off in a
:19:33. > :19:35.grand way. I was going to ask about the change in tone we heard from
:19:36. > :19:40.President Trump this week. Much softer than he has been in that
:19:41. > :19:44.speech. That is right. What is interesting, it is almost linked in
:19:45. > :19:49.way. There is confidence in markets, Snap has revealed that in a way. I
:19:50. > :19:53.remember being here on the night after President Trump was elected
:19:54. > :19:58.and we talked about this idea was he going to be campaigning Trump or
:19:59. > :20:04.more Presidential? In the intervening period he has been more
:20:05. > :20:08.like campaigning Trump, aggressive, controversial, attacking the media,
:20:09. > :20:13.certainly the address to the joint houses of Congress was much more
:20:14. > :20:17.benign, much more presidential as some would describe it, softer on
:20:18. > :20:21.things like immigration, talking about tax deeregulation, the need
:20:22. > :20:25.for investment. Bringing America together and the markets have
:20:26. > :20:30.responded positively to that. We look though at the markets not just
:20:31. > :20:34.in isolation about Trump but also about the possibility of interest
:20:35. > :20:40.rate rises, but the Federal Reserve, and also that global growth is
:20:41. > :20:44.coming back, and the eurozone has soon stronger growth. America is
:20:45. > :20:49.seeing stronger growth and all these things are coming together in a low
:20:50. > :20:52.interest environment. Lots of cash oner cop rat balance sheets and it
:20:53. > :20:56.is making this rather frothy environment that we are seeing at
:20:57. > :21:01.the moment. I want to go back to Snap. We had Sir Martin sorrel at
:21:02. > :21:06.the top of the programme. He was warping it is going to be a tougher
:21:07. > :21:10.year for advertiser, I am fascinated by the fact the shares have rocketed
:21:11. > :21:13.on the first day of trading when they haven't worked out how to
:21:14. > :21:21.Monday tie them. We are told they need to work out how to get theed
:21:22. > :21:25.advertising. It doesn't bode well. Sir Martin made a very interesting
:21:26. > :21:30.They don't want to be trapped in They don't want to be trapped in
:21:31. > :21:34.having to advertise with Facebook or with Google, who are commanding the
:21:35. > :21:41.new markets in advertising at the moment, and that is why Snap could
:21:42. > :21:46.be successful, because if they can find a way of encouraging their
:21:47. > :21:51.millions of user, young users to also use Snap as a way of what, of
:21:52. > :21:55.understanding what they want to buy, then that becomes an incredibly
:21:56. > :22:02.valuable proposition. This is 16-25-year-olds. These are the sweet
:22:03. > :22:08.spot sector for advertisers and if WPP can find them and find access
:22:09. > :22:09.Snap could be profitable. Thank you for joining us.
:22:10. > :22:12.Southern Africa has suffered extensively from a wide-spread
:22:13. > :22:15.But now there's a new threat to the region's agriculture -
:22:16. > :22:18.a plague of army worms - caterpillar-like pests that
:22:19. > :22:22.In Zambia, the maize crop has been attacked by the worms and that's
:22:23. > :22:24.raised fears that the cost of the country's staple food Nshima
:22:25. > :23:44.Let's see what other stories are being talked
:23:45. > :24:01.We will start with Snapchat. Because there is a story in business
:24:02. > :24:05.insider, about a school that invested $15,000 in Snapchat when it
:24:06. > :24:10.was a start up. They have banked millions this week, what has been
:24:11. > :24:18.the best investment you have made? Two best, my personal one I would
:24:19. > :24:25.suggest my house, best investment in the business, a company called
:24:26. > :24:30.Burford Capital. We made five times our money. And the characterisation
:24:31. > :24:34.of that is one that people weren't interested in, a market people
:24:35. > :24:38.didn't know, where there wasn't much competition so a road not well
:24:39. > :24:43.travelled but more so today. Have you got a good investment? I am
:24:44. > :24:49.seeing some of the ones tweeteded in. Steve Clarke said best
:24:50. > :24:53.investment is property, it can be rented out whereas shares are just
:24:54. > :24:58.parked. Interesting take on that. Mine was a trip, I managed to see
:24:59. > :25:04.the Northern Lights. Well done. Let us see what other stories are we
:25:05. > :25:12.covering today. The discounters because we have got Liddle or is it
:25:13. > :25:16.Aldi? It was Aldi. Aldi starts online sales in China
:25:17. > :25:21.this month, and using Australian supplier, an interesting tie up. It
:25:22. > :25:24.is. And Aldi have been underestimated in virtually every
:25:25. > :25:26.market they have come into. They have been underestimated in the UK
:25:27. > :25:34.market when they have been competing against our big supermarket, they
:25:35. > :25:39.are going quietly into China, they are partners with Ali Baba. They are
:25:40. > :25:44.doing it with a Chinese partner. Carefully. So I suspect that is one
:25:45. > :25:48.worth watching and they will do well. So soft launch initially.
:25:49. > :25:55.Perhaps a bigger one in April and some stores as well. Interesting, we
:25:56. > :25:56.will keep eye eye on that. Have a great weekend. Have a great weekend.
:25:57. > :26:16.See you soon. Bye. Good morning. A different day today,
:26:17. > :26:20.it is starting soggy in the south, we still have a mattering of hill
:26:21. > :26:21.snow in