12/04/2017 BBC Business Live


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This is Business Live from BBC News with Ben Bland and Aaron Heslehurst.


International investors go cold on South Africa,


as one of the continent's biggest economies moves from political


Live from London, that's our top story on 12th April.


As South Africa's battered economy tries to recover


from a double downgrade, protesters are heading


We're live in Johannesburg for this developing story.


Also in the programme, the BBC understands that the head


of security at Barclays is now facing an internal disciplinary


probe over his part in a whistle-blowing inquiry.


We will get all the news from the markets.


And we'll be getting the inside track on one start-up


that is taking used batteries and giving them a second life.


As the boss of United Airlines, we want to know when have you wished


you'd apologised sooner? As South Africa's president


Jacob Zuma celebrates his 75th birthday, the festivities may be


rather more low key than usual. In less than a week,


the country's members of parliament are scheduled to hold a vote of no


confidence against the president. It comes after he ousted some


of his key political opponents Today, members of the public


are expected to take to the streets in protest at the move,


but Mr Zuma's decision also has South Africa has been downgraded


to "junk status" by two of the leading debt ratings


agencies, Fitch and S They argue that the reshuffle


will hamper the country's efforts The government's debt pile continues


to grow and the loss of its "investment grade" status


could have a significant impact on South Africa's ability to borrow


money on international markets. It means that major institutions


such as pension funds and hedge funds may be prevented from buying


the country's debt. Viv Govender is in our


Johannesburg studio. She's a senior Analyst


for Rand Swiss. What is president Zuma up to with


all of this? Why the moves? Is he to blame with what's going on at the


moment? Yes. Look, if you had to go and


basically do a prediction of why he's doing this, I think the general


conspiracy theory is he is going to be out of power by December. He


wants to put his ex-wife into his position, both at the ANC and in


Government afterwards and those basically would be in order to


protect him from any kind of criminal prosecution thereafter. In


order to achieve that goal of actually bringing his wife into


power, you may need to indulge in patronage for his supporters and


that could not be done with a Finance Minister in place because he


would prevent some of the irregular expenditure that would be required


to basically convince the supporters for both him and his wife in the


coming election. So he's prepared to do all of that at the threat of


hammering the South Africa's economy. Unemployment is 25%. I mean


that's a whooper at the moment. Could that go higher of the back of


what we're seeing at the moment? And 25% by the way is just the official


number. If had the people who were already employed, it is probably in


excess of 40%. The problem that we have in South Africa is that some


people have been unemployed for a long period of time that the number


of discouraged workers is probably 15% and maybe 20% of the total


workforce, people that are sitting at home for two or three years and


have given up the search for a job. If you included them, it would be in


excess of 40%. This would be a major impact on those workers. Over the


last couple of years the only real source of long-term or formal sector


employment in the country has been the public sector. If you look at


the public sector pay rolls they have been increasing over time.


Things such as social work and other things come out as one of the top


categories when we look at the employment numbers coming out. The


private sector hasn't been as strong especially the mining sector has


been under a great deal of pressure losing hundreds of thousands of


workers over the last couple of decades. If you had the Government


unable to borrow money, firstly they couldn't spend as much as they would


have to reduce the amount of workers in the public sector which would be


quite difficult and the private sector as well is not out there


really looking at employment opportunities. They are looking at


cutting down on the number they have because of the regulations around


labour, etcetera. Viv, we appreciate labour, etcetera. Viv, we appreciate


your time. Thank you for joining us. And no doubt we will talk to you


soon. The BBC understands that Barclays's


head of security is to face an internal investigation


over his part in a Troels Oerting allegedly assisted


the bank's boss, Jes Staley, in his attempts to unmask the author


of an anonymous letter, which questioned the past conduct


of a senior recruit. UK financial regulators


are investigating the scandal and we will be getting more on this


from our markets guest, Toshiba shares are down by nearly 2%


in Tokyo trade this morning. The Japanese conglomerate could face


delisting after it finally But it was done without


the endorsement of its auditor. Toshiba is trying to sell


its its crown jewel, the chip business, to offset huge


losses from its US nuclear The head of United Airlines has


apologised for what he now describes as "the truly horrific removal"


of a passenger from CEO Oscar Munoz at first told


staff he stood by them, but with United's stock market


valuation plummeting, he issued another statement saying


he was disturbed by the incident. We are looking at the Business Live


page. Check it out. We will talk about Tesco later on. There is more


on the Barclays story. There is a full write up by Simon Jack


explaining this line that the bank's head of security now faces


investigation over this trying to unmask a whistle-blower. I want to


do paint. I bought five meters of paint, ?96 of that's about $140 for


five litres! It says tensions are rising between


the owner of Delux and Elliott Advisors.


Changes to a stamp duty loophole in Hong Kong have sent


Well, as you said Hong Kong, the Hong Kong Government slapped a 15%


tax on first time homeowners who are purchasing more than one flat at a


time. So, what was happening was investors were coming in, snapping


up multiple units in one go to qualify for lower tax rates. These


buyers were using one legal contract and they only had to pay 4% tax duty


so now they are being charged the same 15% as someone buying a second


property. There has been a lot of Chinese capital snapping up some of


the Hong Kong's best plots of land and at record-breaking prices and it


has pushed home ownership out of the reach of many people who live there


and the Government hopes that closing this loophole will help the


average buyer, but of course, Hong Kong is one of the most expensive


real estate markets in the world. Sarah, thank you very much indeed.


Investors ducked for cover on Wednesday as a drumbeat


of alarming geo-political news sent the safe-haven yen and gold


to five-month highs and yields on top-rated sovereign bonds


Gold climbed as far as $1,280.30 at one stage, its highest


The unease has tarnished an otherwise brightening outlook


for global economic growth and has kept equities restrained.


Japan's Nikkei feeling the pressure as a rising yen weighed


Shares are down in Tesco and WH Smith.


That's despite Tesco reporting profits better than analyst expected


and WH Smith reporting a rise in profits as well. Barclays shares


recovering after their slight fall on Tuesday. That's all to do with


the news that the investigation involving the Chief Executive and


how he handled a whistle-blowing situation. The BBC now understanding


that the head of security at Barclays faces an internal


disciplinary probe over his part in that inquiry.


Here's what's ahead on Wall Street Today.


United Airlines has been getting a lot of attention recently,


but it will be another carrier that will be in the spotlight


Delta Airlines will be reporting earnings, but don't expect them


The number two US airline by passenger


traffic for the second time in less than a month has


lowered its forecast for passenger revenue.


Now Venezuela is due to make a $3 billion payment on its debt


by Wednesday and this would be yet another test for the country to stay


solvent in the face of political unrest and low oil prices.


And finally, the New York Auto Show kicks off with a media


This comes as car sales in the US have gone flat


after two consecutive years of record-breaking vehicle sales.


Maike Currie is investment director at Fidelity International.


Great timing. You're South African. We want to ask you about this - junk


status by Fich and Standard and Poors. That's what they have issued


to South Africa. Junk status, just to explain, junk will make it


awfully expensive for South Africa to service its debt and to borrow


more money? Absolutely. What investors demand they want a higher


return to actually lend to a country. Now, what has been


interesting from an investment point of view is that despite the junk


status investors have been piling into South African bonds so that's


pushed up the price, the yields and the income return has fallen. Now


the question is whether this is about the political reactions in


South Africa or whether this wb short-lived which I doubt. I think


it is more symbolic of a broader optimism around emerging markets. So


what would be interesting if you look at the performance of emerging


markets since the beginning of the year, they're up over 10%. They've


performed twice as well as the US and Wall Street which has performed


twice as well as London and the general consensus was a Trump


presidency would be bad news for emerging markets and the tightening


by the Fed would be bad. So it is interesting times. Yes, indeed. I


want to turn our attention to Barclays. The BBC understanding that


the head of security is facing an internal probe. The shares have been


on a roller-coaster. They seem to be recovering today? The interesting


thing about the banks more generally is with inflation rising and the


prospect of interest rates going up after years of record low interest


rates, that's good news for a bank's business model. That will bode well.


Of course, the whole whistle-blowing scandal is another cloud hanging


over Barclays. Are you going to come back and take


us through the papers? The United boss gets around to saying the S


word. Charging into the future,


we speak to the CEO of a company that's pioneering a way to make


money by squeezing new life out You're with Business


Live from BBC News. Food sales has helped push


supermarket giant Tesco to record Like for like sales are up 0.9% -


it's the first full year of growth since 2010 but profits


are down after settling an accounting scandal


with the Serious Fraud Office Maureen Hinton is from


retail analysts, Verdict. Hey, Maureen, do you think, it is a


good number, but Ben and I were looking at the share price of Tesco,


did you say 1.8% down? Down nearly 2% of the what's investors thinking


here? I don't know to be quite honest. I


think it is perhaps because the operating profit wasn't as high.


They were hoping perhaps that it would go up to 1.3%, but the


business is doing really well. It is improving. The customer experience


has improved. It is winning customers back. Better availability.


Availability. The operating margin is improving. It doesn't make sense.


It might be because of the Booker acquisition, but I think there is a


lot of growth opportunity with that because they're wholesalers and they


can supply where all the growth is going at the moment which is through


food service, through take-aways, we're changing our eating habits so


they have got a good growth story there as well. It is the same


actually. It tends to go down and go back up again the share price.


It's facing some challenges, its reputation, it was dealing with that


fine over the accounting scandal. It has potentially got a battle with


suppliers over the increased costs being passed on because of the


weaker pound. Yes, it had a couple of battles with Unilever and


Heineken more recently. Because it has such big buying power, and


perhaps because CEO Dave Lewis comes from a supplier background, it has


good negotiating skills. Thank you very much indeed, Maureen from


retail analyst Verdict. HSBC plans to become dementia


friendly. I think this is a cracking story. They are outlining their


plans today to becoming more dementia friendly bank. HSBC says it


gets 3000 calls per month regarding power of attorney, which is a big


issue for people suffering from dementia and their families.


Our top story - South Africa's president Jacob Zuma is facing


increasing political and financial turmoil as the country's economy


It may be his 75th birthday today but that won t stop huge protests


against his leadership that are expected to take place today.


A quick look at how markets are faring.


A firmer start to the trading day across Europe. The main indices all


in positive territory. That follows on from a more cautious day of


trading in Asia where investors responded to geopolitical moves with


stuff going on around North Korea and tensions between America and


Russia. The Korean peninsular. That's sent goals to higher levels


and safe haven bonds as well. Currencies, the Japanese yen, going


into the Swiss franc as well. Japanese exporters don't like that.


And now let's get the inside track on the business of batteries.


Nearly every one of us uses lithium ion batteries every day -


they power our smartphones, gadgets, and now even some electric cars!


In fact, one report says the market for lithium ion batteries


is expected to exceed $33 billion by 2019.


But what happens when you get rid of your old phone or gadget?


One start-up firm, called Aceleron, takes these


end-of-life batteries, and turns them into


second-life battery packs for other applications.


Aceleron says its technology helps to reduce waste


by re-using these batteries, and produces low cost energy


Let's find out more, Carlton Cummings is co-founder of Aceleron.


I love this idea, great to have you here. For us dummies, like me! How


does this work? Do you take a laptop and electric batteries? That's


right. We take batteries from consumer electronics, laptops and


stuff like that. We can also manage batteries all the way up to the


electric vehicle. Most of the time the batteries, even though the size


or scale might be large, that chemistry is the same, so that's why


we can work on small scale with laptop batteries and batteries all


the way up to the electric vehicle. We identify the good ones, repackage


them into batteries for other things, devices you would put your


phone or tablet into, all the way up to a battery that plugs into your


home. Using examples, I found this fascinating when we spoke before


coming on air, these batteries still have charge in them. Explain that. A


great example is the battery in your remote control. When it doesn't work


for the remote control, you can put it in a clock and it works just


fine. Batteries don't die, they degrade. We need to know where they


are in their cycle and what they can be used for. The tragedy where we


are right now, we take batteries when they are not good for their


first application and we throw them away. The worst part is we don't


have the recycling capacity to do that, so we have to export it, and


it's very expensive. Why would you export something that still has


value, and that's where Aceleron comes in the. If you have batteries


that still have charge in them, why haven't manufacturers done something


about this to make sure you can use the battery right up until when it


is completely empty? Typically that's when you get into the science


of battery. You don't want to use the lithium battery all the way down


to empty for its application. You could liberated from a laptop when


it's done there and put it into a power bank and its fine. But we are


stepping down the ladder. That's why a battery from a car would be at


home power in your house. Mobility is one of the hardest things to do


with a battery, so you could free up the battery. We have developed the


technology to test it quickly and find what it can be used for. That's


one of the reasons the industry hasn't done it, identifying the way


to do it quickly. We developed the technology to do that. So that's


what you've done? I like the phrase, "Powered down to knackered" that


must be a Barbadian quote! I have been inspired by a lot of things


going on. I come from a background in engineering. I worked as an


engineer for a motorcycle racing team. I also worked in renewable


energy, coordinating solar installations. I had the insight


from both worlds so I saw the opportunity with the electric car.


When some of the cars are no longer useful, or when some of the


batteries are no longer useful for the car, there is still energy in


there to power a home. Why wouldn't we use that? You have been listed on


the Forbes Magazine 30 under 30 list. It's a very high-profile


thing. You also the Shell entrepreneur of the year. Have you


had interest from investors? We had quite good interest. We always are


happy to engage a couple of other persons and are happy to bring


others into the team. The major thing is that a lot of these events


and stuff have been able to get us the owners we need to do the job we


want to do. -- the onus we need. This interview has now powered down


to knackered! You are only a very early start-up, it's a pleasure to


meet you. You registered in August last year, so great stuff and best


of luck, Carlton Cummings. In a moment we'll take a look


through the usiness pages, but first, here's a quick reminder


of how to get in touch with us. The business live page is where you


can stay ahead with all the day's breaking business news. We will keep


you up-to-date with all the latest details with insight and analysis


from the BBC pars team of editors right around the world. We want to


hear from you. Get in touch on the BBC live web page. We also on


Twitter and Facebook. On TV and online, wherever you need to know.


Sorry seems to be the hardest word. The United airlines boss has finally


said it. We can start with that one. It was a PR disaster. It was. It's a


lesson in poor public relations and the power of social media. We had


every man and his dog watching this video of the horrific incident. Then


we saw the letter the chief executive sent to employees backing


up the behaviour of the crew being circulated. In China there was a


report distributed by millions of Chinese readers saying the man was


targeted for being Chinese. All of this, the chief executive has only


just come out now with a statement. It's a sorry piece of paper, when he


should have been out there immediately with a genuine apology.


This type of thing can destroy a big company's brand within seconds.


Because of the power of social media. The chief executive needs to


be out there with a bold and genuine apology across channels. I was


hearing, apparently last year this Chief Executive was named


communicator of the year. The irony couldn't get worse. It is quite


ironic. We have a couple of tweets. We asked if he would regretted not


apologising later. Barry says he will immediately apologise and he's


afraid it doesn't come across as sincere as it is.


I want to talk about another executive change at Uber. Yet


another one. What's going on? It ties nicely into the issue of how


damaging negative publicity can be to a company. Uber has struggled


with a string of bad publicity disasters. Its top PR person, who


they recruited from Google, has now left. What has happened at Uber is


that it has struggled to attract employees because of its reputation.


Only joined in 2015 as well. Thank you for coming in as always. Time to


wrap it up. We are out of time. More business news throughout the day and


on the website.


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