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Hello, this is Business Live from BBC News. The US air strikes on
Syria overshadowed President Trump's meeting on trade and security with
China's President. Live from London that's our top story on Friday 7th
April. With little sign of a breakthrough
on efforts to tackle America's huge trade deficit, will the two men
manage to avoid a trade war? Also coming up, it's a lawsuit that
probably runs for more than 140 characters, Twitter sues the US
Government after it demanded to know the identity of an anti-Trump
account. Also we will look at how the markets are doing. A lower open
at the start of the trading day across Europe and safe haven assets
on the rise after news of that air strike by the US on Syria.
We will get the inside track on how Facebook is stepping up the fight
against fake news and the rest of the week's big tech stories
including a story on Tesla. Talking of fake news it's currently a hot
topic so today we want to know which stories have caught you out and how
did you realise? Let us know, just use the hashtag BBC Biz Live.
A warm welcome to the programme. The US President has been holding his
first face-to-face meeting with his Chinese counterpart. Trade and North
Korea were supposed to be at the top of the agenda but the summit has
been overshadowed by the US carrying out missile strikes on Syrian
Government air bases. Those were in response to a suspected chemical
weapons attack this week. In Florida, Donald Trump said
discussions with XI had been long and he was confident they would
develop a great relationship. They are the leaders of the world's two
biggest economies and they have been expected to discuss the US's huge
trade deficit with China, the fact that America imports far more from
China than the other way around. But in a sign their raegs relationship
seems to have got off to a good start Chinese state media are
reporting Donald Trump has accepted an invitation to China from MrXi.
Gareth Leathers joins us, senior Asia economist at Capital Economics.
Also we are getting some lines from the Chinese news agency here saying
that the first meeting with the two Presidents urged co-operation with
the US on investment, infrastructure and energy: There does seem to be
back peddling from the President. A year ago President Trump - now he is
saying it's the start of a great relationship, better news for us?
This is a familiar pattern, all Presidents on the campaign trail,
they were all the same, when they get into office they realise that
the relationship with China is normally more complicated, that it
can't be boiled down to a single issue such as trade. There are
encouraging signs, I don't want to discount Trump's unpredictability,
there are signs he is taking a more pragmatic line to China which is
encouraging. He is still going to be want to be seen doing something
about the trade, he has been going on about the trade deficit and job
losses. How does America reduce the trade deficit, they can't say to
China you have to buy more goods from America, how do you resolve
that? It's very difficult. One option which obviously Trump seemed
to favour on the campaign trail was large-scale tariffs, labelling China
a currency manipulator, he is rowing back in the short-term from that.
What he is hoping to do I think is build up a decent relationship with
his Chinese counterpart in the hope he will get easy concessions, you
may see a big order of Chinese Boeing from the US in the next
months. He may also seek concessions so the Chinese may look to open up
domestic markets in terms of levelling the playing field which is
one of the big complaints American companies have had recently. Of
course the other big thing on their agenda will be North Korea. China is
so important in terms of the North Korea's trade with anywhere else, a
lot of that trade goes through China. Yeah, Trump's been clear, he
has been putting pressure on the Chinese to try and act more
decisively with North Korea. And it's North Korea, sorry it's China
that holds all the leverage with North Korea, it is its biggest
trading partner and key ally. He has said if China doesn't follow through
with some commitments he is prepared to act unilaterally and the action
in Syria today is maybe a precursor to what he is prepared to do in
North Korea, he is showing America is tough and prepared to take a
stand. We have been talking about it the last couple of days, this
important meeting but for people watching this is important for
everybody that these two gentlemen behind us here and the two nations
actually get along and continue trading without a trade war. A
healthy one and two of the world's biggest economies is good for us.
It's the world's most important relationship, the last thing the
world needs is a trade war and that would hurt everyone. Thank you very
much. Some other news now. Spotify is
reportedly considering to a direct stock market listing, instead of
taking the usual route of holding an initial public offering. It is a
relatively rare way to sell shares in a company. The public would be
able to buy and share sells but the company would not raise any fresh
funds. We will talk about that shortly.
Hyundai and Kia Motors plan to recall more than 170,000
vehicles in South Korea because of an engine defect.
The recall covers models equipped with a 2-liter or 2.4-liter Theta
two gasoline engine produced before August 2013.
The South Korean transport ministry said metal debris in crankshafts
could cause engine damage, leading to possible engine stalling.
Now to Asia, where Korean tech giant Samsung Electronics has published
a profit estimate for the first quarter that makes it
the best quarter for the company in three years.
It's not a shabby number. That's right impressive numbers today. As
we have been reporting Samsung has had a really rough ride in recent
times and just today the boss appeared in court for the first
time. He of course has been sitting in jail after being charged in a
corruption scandal that brought down South Korea's President. Going back
to those numbers, it really comes from the memory trip division as
well as flat panel display business. Sales have been strong and that has
led to positive profit forecasts which has forecast to jump by about
48% to nearly $9 billion. Of course these numbers are expected to help
Samsung shares even more. They've been trading at record highs in
recent weeks which goes to show this corruption scandal suspect putting
that much of a dent in its bottom line. Good to see you, thank you
very much. Let's look at the markets.
Bonds, the yen and gold jumped in Asia - Investors turning
to safe-haven assets after the United States
launched cruise missiles against an air base in Syria.
It means attention is focused on the Middle East
and the impact on the oil price - which has risen -
rather than the meeting between President Trump and Xi
The US dollar dropped , while gold and oil prices rallied hard,
though the early market panic calmed when a US official called the attack
a "one-off," with no plans for escalation.
A softer start to the trading day across Europe.
One other story we're keeping an eye on is the row between Twitter
Twitter shares ended the trading day on Wall Street lower.
The social media giant is suing the Trump administration
after authorities demanded Twitter to reveal the identity
The anonymous profile criticised the government's immigration policy.
Dave Lee sent us this from San Francisco.
In January, when Donald Trump became President Trump several so-called
alternative accounts for US Government services began appearing
online. Most claim to be authored by current or former employees at those
agencies and offered harsh criticisms of their new boss. Now
it's been revealed that US customs and border protection filed
documents demanding Twitter reveal the identity of at least one of the
tweeters speaking ill of President Trump. The law the Government is
using to meant to be for finding out more information about the source of
imported goods coming into the USA and not from unmasking online
identities. Therefore, Twitter has asked the judge here to refuse the
request calling it an issue of free speech. Twitter's move has been
strongly backed by groups who support strong online privacy.
Twitter is protecting its users here. I think as a platform it
really wants to be a place where people can speak freely. Yeah, I
think this is really important for them to be doing and I think they're
doing it from a place of actually wanting to protect their users and
protect speech. President Trump famously loves using
Twitter because he says it gives him the freedom to say what he wants
without having to go via the mainstream media. With this lawsuit
Twitter is saying that freedom should apply to everybody on the
network, even if they're anonymous and even if they're criticising the
commander in chief. Just saying his beard gets thicker
and thicker! Richard Dunnebar joins us. US jobs,
it's that time of the month, it's Friday, and they're expecting
another big number that continues to indicate that American employment is
full at the moment. Year, we are expecting quarter of a million new
jobs to be added. The economy is at full employment, as importantly
those jobs are paying more than inflation so Americans have more
money in their pocket so consumer is doing well. The by-product is
interest rates are starting to rise now. The chairman of the Federal
Reserve saying the US economy is maybe running a little hotter than
it should and it's time to touch the brake a little. And that's an
increase in rates. Yeah, nevertheless the economy is in rude
health and that's for the rest of us is a rising tide that lifts many
boats and if the US economy is doing well other economies tend to do well
also. Something we were talking about earlier, Spotify and
by-passing the usual route of public offering, just going to list and put
shares on the market. Explain for us why that makes a difference and how
it works. Why would you come to the market, to either raise new money or
to sell shares that you already have, if you are a big private
company. But you don't have to do that. You can list the shares and
say that's providing a value for the company, people can see the value
and if people or others want to buy or sell shares in future they can.
They obviously don't need to raise new money or they don't feel the
need to sell existing shares they've got. Doesn't the IPO give you the
value of the stock? Exactly. So it will list on the market. The market
players will say this is... What do you list it for? Just to provide
that value. And to give you options in future. At some point you might
want to raise money. At the moment all I get is the value and that's
useful. If I am Spotify and I go there is the shares, what do they
start at? How do you price it? People will buy and sell them and
they'll find a price. Obviously the management at Spotify don't wish to
sell many shares and raise new capital. Interesting. Subscribers
continue to grow, I think. It's a fabulous product, it's been a
fabulous success for the user of that product. It doesn't make any
money yet. It's normally helpful at some point in a corporate history.
Like a lot of those tech companies, not all of them, but some not making
a profit. You are going to take us through some of the paper stories.
Speak to you later. properties compared to the same
period last year. That's according to latest
figures from online property portal Rightmove.
For the first time since 2014, asking rents outside London fell
in the first quarter of the year, down by 0.4% on the
previous quarter. Theo Leggett is in our
business newsroom. Any breakdown or sign of where the
biggest changes are or is this across the board? To a certain
extent it's across the board, yes it's an average figure but the trend
is that last year there were changes in stamp duty which meant a lot of
people planning to invest in rental properties did so in a rush. There's
been this surge of rental properties coming on to the market. Great news
if you are a representer because that's been weighing on rents and
across the country the rise over the past year was only 1. 8% and in the
first quarter of the year average rents actually fell. But there is a
big difference across the country. In London, for example, across the
year rents have fallen by more than 4%. Obviously the London market has
been overheated for a while. In other areas such as Manchester
they've been rising sharply, up 8% and West Brom up 9%. There are
regional variations but the trend is more properties on the market,
that's keep ago lid on rents. VO, you have a great weekend. Stay
watching. You're definitely a redhead. We have a little snippet
about Lada coming up next. If you invested in one of those a few years
ago, you might be making some money, I think. Don't give the story we!
Cheeky man! Out there he! He's still there, he's still smiling. Have a
great weekend,. -- CEO. There is a lot of reaction to the military
strike on Syria. We have got EU regulators due to announce later
they are going to give the green light to the 21st-century Fox $1
billion takeover of the UK broadcaster Sky. We will keep across
that story. China's President Xi Jinping has
urged cooperation with the United States on investment, infrastructure
and energy when his first meeting with President Trump. It has been
overshadowed by the US air strikes on Syria. We will keep across that.
A quick look at how markets are faring....
Investors are very cautious. We have seen the safe havens like gold and
bombs have gone up. -- gold and bonds. A muted, soft opening across
Europe. And now let's get the inside track
on this week's tech stories with our We have had a busy week with tech
stories. Fake news and Tesla. Let's start off with Facebook's
announcement that it's going to step up its attempts to combat fake
news. Ever since the election last year in
America, Facebook has been under huge pressure about its role in
spreading fake news. First of all it said, I don't think this is really a
big deal, they underplayed it, then it has rapidly changed tack and
said, we are going to have a whole series of actions against it. Today
it has launched what it calls an educational tool across 14
countries. If you have got Facebook in 14 countries you will see this
advert for a guide to how to spot what they call false news. It has
got ten points in it, ten tips. Really they are kind of quite
sensible things. It's almost a guide to basic journalism, check out the
sources, look at the evidence, I rather like this one, look at. Lynn,
shocking headlines. Well, we are all going to have to be careful with our
headlines. I also like the fact that they say, make sure what you are
looking that isn't just a joke. Sometimes people see satirical
websites and take them seriously. The point is, they are under
pressure to stop the flow of this fake information from which people
are actually making a lot of money. Some of it is driven by politics,
obviously. A lot of it is to buy operation set up thinking, we can
make money, because people clicked on this stuff, we advertise against
it and make money from the advertising. A lot of people talk
about the imagination... That story, the value. In less than 24 hours,
you can imagine a British company was valued at 1700 million dollars,
banged down to $250 million, a small country almost entirely dependent on
the biggest company in the world, Apple. It provides graphic chips for
Apple. Apple announces a big move worried is going to make its own
chips and it is not going to need little old imagination technology
any more. And the shares absolutely plummeted. They fell 60%, 70%. Next
day, they recovered a bit because it is now sort of speculation that
obviously there will be a buyout target, and maybe they will be able
to do some deal with Apple which still needs a lot of technology, and
is hiring people, it has hired a lot of the imagination technology staff.
It needs to ramp up its chip production. Apple, the other half of
the story, becoming a big player in making its own chips, making
everything from the chips to obviously the phones, to the
software that runs on them. Powerful integrated technology company. We
have got ten seconds. Often tech companies are accused of being
overvalued. In this case, Tesla,... Wow, Tesla. Fantastically
interesting company, electric car company owned by Elon musk, made
80,000 cars last year, now worth more than Ford, which made quite a
few more, many millions more. In terms of car production. It is being
valued as a silicon valley company, not as a car company. Interesting.
Rory, have a great weekend. Always a pleasure. We went from Tesla cars,
what about this one... Picture a classic car,
chances are it's something very fast and very expensive -
a bright red Ferrari perhaps, or a sleek shiny Porsche.
But whilst the glamorous end of the vintage market
grabs the headlines, some rather more modest models can
make a handsome return for savvy collectors.
One such specimen is a bog-standard And if you had picked
one up ten years ago, you could be sitting on a 4000%
profit. My name's Ed Hughes,
I'm a technology teacher turned I have a collection of Ladas
and other Eastern European So, this is my 1994 Lada
105, or a Riva 1500 And I've had it probably
about 13-14 years. It was given to me by a chap
who basically said his wife had told him that either it went
or the husband went! So he sold it to me for about ?50,
or $65, thereabouts. It's probably worth
about ?2000, $2500. It's provided reliable transport
for me for many years. In the meanwhile, I've got more
and more of these things, which perhaps wasn't quite
so sensible in retrospect. Now, if somebody offered me let's
say a Ferrari in exchange for my whole collection of cars,
I probably wouldn't accept, because I think it's very easy,
anybody with a big enough cheque-book can own a car like
a Ferrari or something like that. But it requires a bit more skill,
a bit more care and so on, to own a collection of motoring's
less loved specimens. Wow! I want one of those now! What
do you call a Lada with a sunroof? A skip! This is really interesting.
Norwegian sovereign Wealth fund has come at and said that the system of
executive pay is pretty much flawed. A lot of thinking is going into
executive pay, not only by the Norwegians but by institutions like
ourselves trying to find schemes that are long-term, transparent,
simple, but also reflect the efforts of senior directors on boards and to
get the right figure and the right structure. It's not straightforward.
This is obviously an interesting angle from the Norwegian state oil
company. But many other institutions, not least ourselves,
also thinking this way about the best structures to put in place. It
comes just after BP quite dramatically cut the pay packet for
its boss. There was a huge vote against that BP package last year.
But when you see the extent to which institutions like ourselves are
voting against these executive pay deals and are working extremely hard
to produce the right pay deals that suits us as shareholders, but also
suits the many others that or interested in these areas as well, I
think you'd be surprised. Were going to move onto stinky milk. I didn't
realise this, the Norwegian sovereign wealth fund is $900
billion, but on average it owns 1.3% of every listed company in the
world. It has been a fabulous save of their assets over the years, and
that is the result that they have got. I think the milk is likely off!
That's how you do it, you smell it. Scientists at Trinity College Dublin
are using nanotechnology in order to try and build a chip that can send
us a message to our telephones that will tell us when the milk is off,
so when we are sitting on the train on the way home, the phone will go,
the milk is off, pop into the shop on the way home, job done, there you
go. A useful direction for their efforts! Have a great weekend,
Richard Dunbar, thank you very much. Wrap it up!
There will be more business news throughout the day on the BBC Live
web page and on World Business Report.