03/03/2017 BBC Business Live

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