03/03/2017 BBC Business Live


Similar Content

Browse content similar to 03/03/2017. Check below for episodes and series from the same categories and more!



This is Business Live from BBC News with Ben Bland and Rachel Horne.


The world's largest advertising firm, WPP, says 2017


Live from London, that's our top story on Friday the 3rd of March.


Last year may have been another good year for the advertising giant WPP


but it says the year ahead looks less certain.


What does this tell us about the state of the global economy?


And for the first time ever, the digital currency Bitcoin is now


A softer open for the main European indices. We will be having a look at


what is moving world markets and why.


And we'll be getting the inside track on all the biggest


stories of the week with our economics editor, Kamal Ahmed,


including the stock market debut of Snapchat's parent company.


The shares jumped more than 40% on their first day of trading.


Well, one American school which invested $15,000


in the startup back in 2012, has banked millions,


so today we want to know what's the best investment


It often serves as an important key early indicator of how well


When advertising is doing well, we're buying and selling


The world's biggest advertising agency, WPP, has just


published its full-year results in the last hour and a half.


In a moment we'll hear from the company's founder


and Chief Executive, Sir Martin Sorrell, but first let's


Annual pre-tax profits of $2.3 billion for the group,


The group has reported 2016 like-for-like net sales up 3.1%.


However, that growth may be about to change as WPP has set


"conservative" sales targets of 2% for 2017, based on more


WPP's Chief Executive, Sir Martin Sorrell, joins us now


Thank you for speaking to us. Let's look at these figures, profit up but


you are expecting slower growth next year. Why? Not mix did this year. We


had a strong 2016, another record year -- not next year. The profits


were over ?2 billion, not dollars, although there is not so much


different as that used to be. What we saw was a slowing in quarter four


and a slow start to 2017. Worldwide GDP growth is about 3.5 to four


point -- percent. We are seeing stronger growth market in Latin


America and Middle East and Central and eastern Europe but tougher


conditions generally and if we look at inflation, very little, maybe a


bit more here in the UK post Brexit and the devaluation of the pound and


maybe a bit more coming in America with President Trump's expansionist


policies if they are in fermented. Generally little pricing power -- if


they are in fermented. Three forces are pushing the clients,


technological disruption, digital disruption, the second is zero-based


budgeting, a fashionable deconstruction of cost but its width


is putting pressure on costs and also activist investors. That is all


encouraging people to focus more on the short-term than the long term


and not on innovation and brand building which is key to success in


our view in the long term. I wanted to ask you about Snap. You spent $90


million on it. We account for about 25% of the world's media markets and


that was roughly the proportion we invested in Snap. Do you think they


can live up to the hype and work out how to make enough revenue to turn a


profit? Early days but it is competition for Facebook which is to


be welcomed. Our clients and ourselves, our third largest client,


the CMO, was talking about the importance of measurement for


Facebook and Google. Google is easier to measure in that it is


search and you can see the sales results more clearly but Facebook is


more difficult to measure. Snapchat has the same issue as it competes


with Facebook and Amazon builds its search capability to compete with


Google and what we need is better data. Often the privacy issue is


used as the reason why data is not used as the reason why data is not


as prevalent or at exposed as it should be. Sometimes that is an


excuse, a figleaf, not the real reason, but clearly what our clients


want and what Snapchat will have to prove is that return on investment


from using Snapchat as a medium is as effective or more effective than


Facebook or any other medium and that is the key battle. Measurement


of traditional media is pretty efficient of -- but measurement of


new media is pretty much nonexistent so we have to expand that capability


to get the appropriate returns that we are seeing. Other issues like


fake news, which you know a fair bit about on the BBC in terms of subject


matter, on brand safety, media placement, fraud, those are other


important issues. And last year about a third of your investors


opposed your pay deal, it went ahead. That opposition was up from


about 22% oppose it the previous year. Will that increasing


opposition have an impact on your pay deal this year? The discussions


about pay continue and our company is no different to any other. There


are discussions taking place between compensation committees and chairman


with the Institute of investors about what pay should be. Our plans


are to be based on performance and I think in the last five year run of


our last plan, which has just crystallised, we have outperformed


97.5% of the FTSE 100 if I remember correctly and the value of the total


shareholder return it up by over 200% over that five-year period. It


is about a question of pay for performance. Thank you for your time


this morning. Music streaming service Spotify says


it's reached the landmark It's grown by 25% in less


than six months and has now widened its lead over its nearest


rival Apple Music. The Swedish company


is reportedly considering a US It's already one of Europe's most


highly valued startups, A South Korean court has said


the first hearing in the trial of Samsung's de facto boss Jay Y Lee


will be held on 9th March. Earlier this week, the man who runs


one of the world's biggest companies was indicted on charges including


bribery and embezzlements. He's admitted making donations


linked to the president, but denied the accusations


that he sought political A quick look on the tablet because


there is an interesting story about the London stock exchange who have


resulted out, revenue up 14%, operating profit up 1% but in those


results, the LSE said it continued to work hard on the proposed merger


with Butcher Bourse, which many thought was dead in the water --


with the German market. Europe income position regulators objected


to the deal but they are waiting for the outcome of the decision which is


due on the 3rd of April 2017 and that merger something will still


happen and we will keep an eye on it. You can read more about it on


our website. It's a big day for computer


games giant Nintendo. It starts selling its latest


device, the Switch. It's kind of hybrid machine,


combining a home console And it's safe to say it is a massive


gamble for Nintendo, which is trying to recapture its glory days


as a games company in Some are even calling


it "make or break'. Tell us more. Nintendo is under


intense pressure to reboot its hardware sales business with the


Nintendo tending to have poor sales. The WiiU also lagged behind


competing consoles. They say that launching Switch button in a


different ball game. Mobile is a fast-growing gaming segment and a


hybrid device, Switch has deep integration with smartphones and


also allows Nintendo to stay true to its roots in the self top console


business. That also worries from gamers in the complaint as it does


not offer many games and if it fails, Nintendo might have to


rethink its hardware business. But for now it shares have jumped today


about 4%, defying the rest of the Tokyo stock market. Thank you.


Shares across Asia pulled back on Friday, shadowing


Japan's Nikkei ended the session lower despite a weakening


yen which usually helps to prop-up exporters.


Shares in Hong Kong and Shanghai slipped ahead of the opening of the


national peoples Congress, something where China's leaders may announce


new measures to rein in debt and tighten up the side of financial


markets. A softer open for


the European markets - the FTSE, the DAX and the CAC


all opening lower. Traders are becoming increasingly


confident the Federal Reserve That puts some downward


pressure on global markets because it draws investors


towards US currency Let's find out what is in store on


Wall Street. How soon will US


interest rates rise? Janet Yellen is scheduled to speak


in Chicago this Friday, one day before the US Central Bank


enters a quiet period ahead Her words could shed light


on whether the Federal Reserve will Rate expectations have gone up


for a couple of reasons. The economy continues to improve


and the stock market has a new record this week,


the Dow Jones industrial average closed above 21,000,


just four weeks after hitting 20,000 In other economic news,


the Institute for Supply Management releases its non-manufacturing


index for February. Also, keep an eye on


Caterpillar's share price. The heavy goods maker's stock


plunged after federal agents raided raided its offices in Illinois,


believed to be related Joining us is Richard Dunbar,


Investment Director Thank you for coming in. I want talk


you about digital crypto currency. Otherwise known as BitCoin. This is


performed very well relative to other currencies. But nobody is


quite sure who controls it, and the supply, but they are certain that


central banks don't control it. It is very shadowing, it came from


nowhere. It tends to fund the darker corners of the Internet but it has


many advantages in that the general policy of central banks as to be to


devalue their currencies but BitCoin does not have those Fassett and that


has been a real attraction in the past ten years. -- with those


assets. And it is now exceeded the price of an ounce of gold so it is a


real milestone for a currency that is still relatively in its infancy.


It is, but nobody knows who controlled it, it is peer to peer so


there is no control of supply and it has been very volatile relative to


other currencies around the world and buyers should beware. Do you


have any of it? No! I was reading about how you do get it, you have an


address that acts as your account and it adds to that and it is the


anonymity that draws people in because the transaction can be done


part of it is down to people trying to evade currency controls in China


and get money out of the country. And I suspect everything we have


spoken about should suggest the wear. Richard, you will be back to


talk to us about our paper story and think about what is the best


investment you have ever made after a school invested ?50,000 in Snap of


a start-up. -- ?15,000. We will be talking about Snapchat's


stock market debut. You are with business life.


Even with its merger under threat, it seems the LSE


In the 12 months to December, revenue was up 14% at ?1.5 billion,


although operating profit was just 1% higher.


The London Stock Exchange Group says it "continues to work hard


on its proposed merger with Deutsche Borse".


Our correspondent Theo Leggett joins us now.


It looked last week or earlier this week that the whole merger would be


off and this seems like a turnaround? It does although nothing


is certain until the 3rd of April when the European Commission comes


out and says what it thinks about this merger. But you are right, the


London stock exchange through the markets on the bombshell last


weekend when it said that it wasn't prepared to go ahead with this


merger with Deutsche Borse under the conditions which they expect that


the European Commission to impose and that would mean getting rid of


its Italian bond trading platform, saying it was not willing to do


that. Underlying that there are various reports from people close to


the negotiations suggesting the real reason is a certain amount of


conflict between the boardroom of the London stock exchange and that


of Deutsche Borse over where the centre of gravity of this new group


would become if it would be in London or in Frankfurt and some


German politicians are unhappy it looks like gravitating towards


London. But in this statement, the London stock exchange says the group


has worked hard on the proposed merger with dreich which received


formal approval from both sets of shareholders and this would be an


industry defining combination of expanding their present in global


markets and -- anchored in Europe and delivering significant customer


and shareholder benefits. Considering the obituaries for this


deal written in the past week, it sounds like strong stuff so we will


have to wait and see what the LSE wants to do.


We have a story here about zero hours contract, a type of contract


that became popular following the financial crisis with the idea it


gave businesses more leeway to reduce staff hours, also some would


argue it gives those holding the contract more choice. We have


figuring showing there is a record high number of people with zero hour


contract. 910,000. The rate of increase is slowing. You can get


more on our website. You're watching Business


Live - our top story. The world's largest


advertising firm - WPP - has reported its latest results


and it warns that 2017 A quick look at how


markets are faring. You can see European markets, they


are all down ever so slightly, in a week where we saw a real boom in the


States, continuing record highs but falling off yesterday, Asian markets


down overnight and the European markets following that trend.


And now let's get the inside track this week - we've had record levels


on the FTSE and Dow, with the Dow reaching over


21,000 on Wednesday, the day after President Trump's


And yesterday was the day for the most anticipated tech market


Snap - the owner of photo messaging app Snapchat -


made its debut on the stock market in the US.


Snap closed its first day of trading at $24.48,


Our economics editor Kamal Ahmed joins us now.


Welcome to the programme. We have to start with Snap. It is fascinating,


the shares come with no voting right, the company has yet to make a


profit. Do you think it will live up to the hype? It is impossible to


say. What we are seeing here, is as you said about the markets, a world


awarn with cash. Cash. There haven't been many tech flotation, you


mention Twitter,ally. Be aba but there has been little avenue for


people to take investment in new tech start ups and so what Snap is


doing is offering the market a different type of awed yearnings it


is not only young, it is an audience that is about friendship, if you


think of Twitter being about stranger, Facebook being about again


tantss Snapchat about friendship groups and this idea that young


people put much more value on that, than they do on being on Twitter or


Facebook which is a more distant type of relationship. So yes it is


risky, of course it hasn't made a profit, Facebook tried to buy Snap


in 2013 for $3 billion. This puts it at just under 30 billion. But yes,


it is a risk but if it pays off for the investors it can pay off in a


grand way. I was going to ask about the change in tone we heard from


President Trump this week. Much softer than he has been in that


speech. That is right. What is interesting, it is almost linked in


way. There is confidence in markets, Snap has revealed that in a way. I


remember being here on the night after President Trump was elected


and we talked about this idea was he going to be campaigning Trump or


more Presidential? In the intervening period he has been more


like campaigning Trump, aggressive, controversial, attacking the media,


certainly the address to the joint houses of Congress was much more


benign, much more presidential as some would describe it, softer on


things like immigration, talking about tax deeregulation, the need


for investment. Bringing America together and the markets have


responded positively to that. We look though at the markets not just


in isolation about Trump but also about the possibility of interest


rate rises, but the Federal Reserve, and also that global growth is


coming back, and the eurozone has soon stronger growth. America is


seeing stronger growth and all these things are coming together in a low


interest environment. Lots of cash oner cop rat balance sheets and it


is making this rather frothy environment that we are seeing at


the moment. I want to go back to Snap. We had Sir Martin sorrel at


the top of the programme. He was warping it is going to be a tougher


year for advertiser, I am fascinated by the fact the shares have rocketed


on the first day of trading when they haven't worked out how to


Monday tie them. We are told they need to work out how to get theed


advertising. It doesn't bode well. Sir Martin made a very interesting


They don't want to be trapped in They don't want to be trapped in


having to advertise with Facebook or with Google, who are commanding the


new markets in advertising at the moment, and that is why Snap could


be successful, because if they can find a way of encouraging their


millions of user, young users to also use Snap as a way of what, of


understanding what they want to buy, then that becomes an incredibly


valuable proposition. This is 16-25-year-olds. These are the sweet


spot sector for advertisers and if WPP can find them and find access


Snap could be profitable. Thank you for joining us.


Southern Africa has suffered extensively from a wide-spread


But now there's a new threat to the region's agriculture -


a plague of army worms - caterpillar-like pests that


In Zambia, the maize crop has been attacked by the worms and that's


raised fears that the cost of the country's staple food Nshima


Let's see what other stories are being talked


We will start with Snapchat. Because there is a story in business


insider, about a school that invested $15,000 in Snapchat when it


was a start up. They have banked millions this week, what has been


the best investment you have made? Two best, my personal one I would


suggest my house, best investment in the business, a company called


Burford Capital. We made five times our money. And the characterisation


of that is one that people weren't interested in, a market people


didn't know, where there wasn't much competition so a road not well


travelled but more so today. Have you got a good investment? I am


seeing some of the ones tweeteded in. Steve Clarke said best


investment is property, it can be rented out whereas shares are just


parked. Interesting take on that. Mine was a trip, I managed to see


the Northern Lights. Well done. Let us see what other stories are we


covering today. The discounters because we have got Liddle or is it


Aldi? It was Aldi. Aldi starts online sales in China


this month, and using Australian supplier, an interesting tie up. It


is. And Aldi have been underestimated in virtually every


market they have come into. They have been underestimated in the UK


market when they have been competing against our big supermarket, they


are going quietly into China, they are partners with Ali Baba. They are


doing it with a Chinese partner. Carefully. So I suspect that is one


worth watching and they will do well. So soft launch initially.


Perhaps a bigger one in April and some stores as well. Interesting, we


will keep eye eye on that. Have a great weekend. Have a great weekend.


See you soon. Bye. Good morning. A different day today,


it is starting soggy in the south, we still have a mattering of hill


snow in


Download Subtitles