06/04/2017 BBC Business Live


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This is Business Live from BBC News, with Jamie Robertson


The President of protocol meets the maverick billionaire businessman


turned president. Can President Xi and Trump gets down to serious


business, will be meeting proved too difficult?


Live from London on Thursday, the 6th of April.


We are going to talk you through what is at stake as the Presidents


of the two biggest economies in the world meet in person for the first


time. Australia's consumer watchdog sues


Apple over claims it misled All of the markets down. It is all


to do with the central bank. And we get the inside track


from the boss of Dulux paint owner, AkzoNobel, on why he's fighting off


a $23 billion hostile takeover. Tonne Buchner also tells us


what the rise of populism in Europe Also in the news, Amazon's Jeff


Bezos says he's selling $1 billion each year,


to get into the space race. Today we're asking,


for your next space holiday, which entrepreneur would you trust


to get you there and back - Richard Branson, Elon


Musk or Jeff Bezos? The world's two biggest economies


come face to face later today, when US President Donald Trump


hosts his Chinese counterpart, It will be the first time they meet


in person. As well as North Korea, trade


will be at the top of the agenda It's already an issue that's created


tensions between the two. At just over $659 billion of goods


and services in 2015, it's one of the biggest trading


relationships in the world. But the big problem Donald Trump


has, is that it's heavily tilted in China's favour,


because the US had a trade Last week, Mr Trump tweeted that


today's meeting "will be a very difficult one,


in that we can no longer have Trump has been outspoken in his


desire to put America first. In terms of what he might do


about it, during his election campaign, Mr Trump floated the idea


of a 45% tariff There have been indications China


would retailate to any such move, and in January, President Xi said


that waging a trade war "will only cause injury and loss to both


sides." Marianne Petsinger,


a geo-economics fellow in the US and the Americas Programme


at Chatham House, is with me. That is a think tank based in


London. Good morning. So much anticipation about this meeting


between the two Presidents. How do you think this will go? I think


expectations have been lowered. This will be a meeting about setting the


trade for future trade discussions. I don't expect any concrete trade


issues to be solved. The missile launched from North Korea


overshadows events. In terms of trade, during the election campaign


itself, Donald Trump saying on day one he will name China a currency


manipulator, he will slap tariffs on goods coming from China into the


United States. As yet we have seen nothing? That is correct. What we


have seen is last week trade orders were signed looking into the trade


deficit. We could say that is potentially targeted at China and


the other one is focused on increasing enforcement of rules.


China is seen as the culprit. In terms of the bigger promises, we


haven't seen them. China has not been named a currency manipulator.


In a couple of days, around April the 15th, the Treasury releases its


biannual report looking into currency manipulation more broadly,


so we could see some developments. Chinese investment in the United


States is interesting. What do you think Trump's view will be? Do they


really want the Chinese taking over their companies? Key administration


positions are saying we don't want that night we want an American


investor, not a Chinese one. There is a fine balance to be struck.


Chinese investment could lead to the creation of jobs in America, which


Trump would be in favour of. On the other hand, security issues may be


dominating the agenda. Do you think overall after this meeting today and


on words, that this is so critical the two leaders believe they do get


on and see eye to eye on the key issues, not least North Korea? Yes,


and both are under great domestic pressure to deliver. Trump still


recovering from the defeat with health care reform. For Xi Jinping,


he is facing the commonest meeting later this year. He has to be


strong. He has to show he is able to build a strong relationship with


him. Marianne, thank you. Needless to say, we will keep your cross at


that meeting goes when it kicks off later today in Florida. I would


imagine all eyes will be on it. Tencent becomes one of the top ten


largest companies in the world, best known for its WeChat


messaging service and gaming, has overtaken Wells Fargo by market


size, and joined the ranks It gained 1.6 % on the news


taking its value to $279 billion. The rest of the top ten is dominated


by US tech firms. A Chinese court orders


Samsung Electronics' mainland subsidiaries to pay almost


$12 million to Huawei Technologies for infringements of smartphone


patents, in the China firm's first legal victory against Samsung


on intellectual property. A spokesman for Huawei said it


welcomed the ruling. Samsung said it will decide


on the response to the court Pepsi pulls an advert featuring


Kendall Jenner, following public outcry and accusations that it


trivialised recent street The advert featured the reality TV


star defusing tension at a protest, by walking to the police line


and handing an officer Now to Australia, where


the country's consumer watchdog is suing Apple over its software


which disabled iPhones and iPads that had been serviced


outside Apple stores The Australian Competition


and Consumer commission says the tech giant violated


the country's consumer law. Very specifically, they alleged it


has made false, misleading or deceptive representations about


consumer rights. What does this actually mean? Lap -- Let me give


you the back story. It all goes back to having one of these, a pretty


ubiquitous iPhone. There will be a software update every now and again


by Apple. Back in 2014, and for several months following, anyone who


had an update, had it repair done to their phone previously. They may


have changed the touch screen. They may have had something called error


53. If they took their phone to an Apple Store in Australia, they would


have been told that unless it had been serviced only by Apple, they


wouldn't update and fixed the phone for free. The consumer watchdogs say


that consumer rights are being breached because Apple was refusing


to carry out a standard duty of care and repair to the phone, on the


basis that someone else had maybe fixed a cracked screen or something


like that. Thank you very much indeed.


Let's look of the markets. They are looking a bit sickly. The Nikkei


down 1.4. The Dow Jones down. And the Hang Seng. A lot of things to


worry about. There is the meeting between Donald Trump and President


Xi. That has got everybody jittery. They simply don't know what is going


to come out of it. The other thing is we had the minutes from the US


central bank yesterday. We will talk about that in more detail in a


second. The worry there is that basically the Federal reserve is


pushing more money out into the economy. More detailed in a second.


Also, we have the European Central Bank head speaking, as we speak. The


markets don't seem to like much of what he is saying. We will talk


about that in more detail just now. Michelle Fleury is in the United


States. Cautious was the mood on Wall Street ahead of the meeting


between leaders of the first and second largest economies in the


world. President Trump will host Xi Jinping at his retreat in Florida.


US officials say the meeting is not scripted. Investors will be keeping


a close eye to see what the to men have to say about North Korea and


trade. Specifically how America's trade deficit with China can be


reduced. Constellation brands reports fourth-quarter results. It


seems we haven't lost our taste for bare -- beer. It is expected to see


continued sales growth in that sector, even as its profit margins


sing. And ahead of Friday's monthly jobs report, an improvement in the


weekly figures of the number of Americans filing for unemployment


benefits. That is Michelle looking ahead to


the day on Wall Street. Joining us is James Quinn, business


editor of the Telegraph Media Group. Lots of issues with central bankers.


Quite a reaction to the Fed yesterday? SNP ended up off. The


FTSE was off about 100 area. People were expecting a little bit more


from the Fed. They talked about getting rid about 4 trillion of


investment in depth. It is selling bonds again? Yes, during the


financial crisis they bought bonds nobody else wanted to buy. The


credit markets were frozen. Now they are going to sell it back into the


markets. No timescale and no value. You had that, you had the Fed


minutes, which had some red Flags that caused markets to wobble. Also


Commons from Paul Ryan about how tough it has been for the Trump


administration to make change. We have not had the economy boosting


reform he promised? That's right. One is tax reform and two is


infrastructure spending. Paul Ryan, the House speaker, said they went


with health care reform first because they thought it was easier


than tax reform. They didn't get health care reform. What about the


European Central Bank due the markets don't seem to be terribly


happy with Marco druggie. -- the word in Frankfurt seems to be he has


given the same speech he has given a couple of times this year. They


sickly, everything is largely fine, I am not going to change my stance.


He said 80% of the sectors across the euro zone area are performing


well. Some caution on the growth side. He is not saying he will do


anything. We were looking for any hints as to whether he would


withdraw from the quantitative easing programme. The euro has


fallen quite a bit this morning. As soon as he started to speak.


Isn't there a feeling around the world we are coming to the end of


that loose, and the money is being withdrawn, the party is over? I


think that is right. There will be some tightening. I think also when


people say -- here Mario Draghi talking, Greece talks on funding


tomorrow. The Italian economy, Spain, Portugal, none of them


performing well. And to major elections, the French election, the


German election. The German election important. Germany doing well, the


rest of Europe not so good. James is coming back. I want you to tell us


who you are going to go to space with. You have also sent us a lot of


thoughts as well. We will read some out later. But so far, most of the


money is on Elon musk. How is Mr Branson doing? He hasn't got anyone


yet! Nobody is voting for him yet. If you are for Richard, get in touch


quick. You're watching Business


Live from BBC News. Still to come, the boss of July is


tells us what he is fighting off a takeover.


First, let's focus on some of the results out in the UK. The Co-op is


back in the red. The Co-Op group is back in the red


today after it's written off it's remaining stake in the struggling


Co-op Bank. It has posted losses of ?132


million. The first loss since 2013. The group had a profitable year.


Theo Leggett joins us. We now know that the Co-op bank is


worth precisely how much? Precisely nil. All of this goes back to 2013


of course, when the Co-op bank came close to collapse, when a ?1.5


billion black hole was found in its accounts. There was also mired in


scandal. That was all very embarrassing for the company. After


that majority stake in the bank was taken up by US investors. The Co-op


group retained 20%, but it hasn't managed to get back on its feet at


its value has been written down over time. A year ago that stake was


worth around ?180 million, now the Co-op says it is worth effectively


nothing, which means that despite the fact the Co-op group has had a


pretty robust year, a rise in like-for-like sales at 2.5% in its


grocery division, its funeral care business is doing reasonably well.


Legal services and so on. Its overall group revenues have risen to


?9.5 billion, but because of that write-off of its stake in the Co-op


bank it has pulled in a loss this year. Nevertheless the group says


that is OK, the recovery plan is working and the rest of the business


is fundamentally sound. Can I ask you a question before you disappear?


Who is your money on, Bezos, Mask or Branson? I am a great fan of Elon


Musk. Anyone who can make electric cars seem sexy. The magic of Mask.


-- Elon Musk. Today was going to be an important day for the lifetime


ISA but it has been snubbed by banks and building societies, many argue


because it way too complicated. Lots of details on the website. Analysis


as well from our personal finance experts.


The leader's of the world's two biggest economies are preparing


Trade is set to top the agenda when America's Donald Trump


Have you seen the residents in Florida, the private residence? You


should see the photos of the inside. Is it more flattering to him to go


there or the White House? It is the summer White House in Donald's view.


The markets are flagging because of the US central bank and the Federal


Reserve as we have mentioned. And now let's get the inside track


on one of the world's biggest The Dutch company, AkzoNobel,


is perhaps best known And it could face a shareholder


revolt if it keeps avoiding That's what the boss of its American


rival, PPG, told Reuters. He also claimed none of AkzoNobel's


biggest shareholders In early March, PPG offered


83 euros per share, valuing the Dutch maker of Dulux


at more than $22 billion. Later in the month,


PPG upped their offer to more than 88 euros a share -


a total deal of $24 billion. But this second offer


was also rebuffed. Dominic O'Connell has been speaking


to AkzoNobel's Chief He began by asking why


he was rejecting PPG's advances. We have occurred both proposals very


carefully, we have taken the boards together, financial advisors, legal


advisors, we looked at it carefully from the perspective of a wide


variety of stakeholders, including shareholders, and we have seen it is


a wholly unacceptable set of proposals. Some of your


shareholders, Causeway capital and Elliott, are very keen to you to


engage. Why would you talk to the American bidder? There are a number


of people who say we understand you are not engaging, we don't see the


downside of it but we respect your decision and then there are a fuel


or so who have been public in saying they would like us to engage and


there are people who are really looking forward to our April 19


investors presentation because they want to see our plan. They have seen


what we have done in the last couple of years may want to know what we


plan on going forward. Are you fearful if you were to fall to a bid


from an American rival like PPG that jobs would be lost in Europe as a


result? There is a general opinion that the proposals essentially


undervalues the company. We also look at issues such as the location


of research and development, the DNA of sustainability that we have and


the issues around our stakeholders that we in the Netherlands have a


due to to take into consideration. We talk about the -- have a duty.


The Labour Party in the Dutch elections, they proposed a foreign


takeover fine. These proposals are very much the response to the


changed atmosphere. There are now things happening in many countries


that save this playing field is not level. We need to do something about


it, we need to make sure that either there is a time being given or there


are different considerations being included. The new Dutch corporate


governance code has very strongly put emphasis on the long-term


strategy, on culture, on creating long-term value, and certainly we as


a company strongly support that. What the next government will do is


not something I will speculate on today. But the underlying message is


that price should not be the only consideration. It is already the


case in the Netherlands that we have the fishery duty to look at


stakeholders so it is clearly not only about pricing. Isn't it


difficult for a company like AkzoNobel to be against this kind of


deal, when you have been doing it for years, you have bought ICI and


lots of companies around the world. So isn't it hypocritical? I think


that is an improper word to use. We have looked very carefully at the


proposals we have received. We have looked at it from a value


perspective, a shareholder in Specter, a stakeholder perspective


and an anti-trust proposal, and we think that these proposals are


wholly inappropriate. That is why we have said clearly now to the


proposals on our table. Going back to the takeover finally, perhaps,


since Theresa May became leader here there has been a lot of debate about


whether it is too easy for companies, foreign companies, to buy


British companies, because of the way the takeover rules work because


of a weaker sterling. Do you accept some of that argument? Is it too


easy in Europe as a whole for foreign bidders to buy your --


British companies? We see in many countries this particular psychology


starting to change that people do feel a bit threatened by the


globalisation. This is the driver of certain populist movements that are


there, it results in certain votes that we have seen in certain


countries. Therefore there is indeed that concern, and a concern that we


all will have to live with. It is a very big concern in the Netherlands


as well. Overall what you see is that the environment we operate in


as companies has significantly changed, because the popular


acceptance of what used to be normal is not there any more. You also say,


it is not a level playing field. You see the Euro is weak, the pound is


weak, the dollar is quite strong and therefore you get some tilting of


the balance and people say that does not really create a level playing


field and I have some understanding of the arguments people use. That


new populist mood could be quite useful to defend yourself against a


hostile bid because you can rely on the support of the people which you


might not have been able to counter in the past. The mood is there, it


is not created by companies. The politics of course are driven by


this mood. It is a fact of life that we will have to deal with, as one of


our very important stakeholders of the world.


That was the CEO of AkzoNobel speaking to Dominic. As promised,


James has returned. Before we talk space, let's just talk about this


other story that caught our attention, it is in the Telegraph


and stop your paper. Theresa may in Saudi talks for London to host


world's biggest share flotation. This is a Ramco. Everyone is wooing


them. Japan were going for it, everyone is keen, New York. $2


trillion, whoever gets it will be, that city will have the prestige and


everything that goes with it. I think it is down to New York and


London now. Is that the reason she is there do you think, the real


reason? I think it was one of the reasons, she was in Saudi and Jordan


had three days, the only Chief Executive was the boss of the London


stock exchange to have a beating with her. That has to be one of the


reasons. It would be wonderful for London to get it. Let's talk space.


Who would you go into space with, if you will have to choose one of the


entrepreneurs? As many people have suggested, I would rather go Nasa


with their track record, as opposed to someone who has only been at it.


Richard Branson has been going at this since 2004, the launch date has


moved on many times. I saw him in Seattle last week, and he said


hoping to get away next year with himself and real paying passengers.


Let's go with what the viewers think. They are with Elon Musk. And


Nasa. And they like the fact that Elon Musk is working with Nasa.


Nobody is going for Bezos. And no one going for Branson. Of the small


poll we have conducted! Maybe you get free Amazon Prime as well! That


is it from Business Live, goodbye.


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