06/06/2017 BBC Business Live


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This is Business Live from BBC News with Sally Bundock and Ben Thompson.


Could Brazil get a third president in a year?


Amid claims of corruption, bribery and illegal funding


we'll look at what next for the ailing economy.


Live from London, that's our top story on Tuesday the 6th of June


With ongoing protests, the stakes are huge


for Latin America's biggest economy - which is just recovering from two


We will talk you through what is at stake.


Also in the programme, one of the world's biggest


coal mines gets the go ahead in Australia.


India's Adani group says protests won't stop the $12 billion project.


And markets are in wait and see mode, with the UK election looming


large and central bankers getting ready for key meetings.


And forget Wi-Fi, forget Bluetooth - how about sending data with sound?


We'll get the inside track on how the technology could revolutionise


And staying with tech, Apple has launched its new smart speaker,


It's called the HomePod but it's more expensive than rivals


Get in touch with your views on the HomePod or anything else.


It doesn't seem like all that long ago we were talking about Brazil's


meteoric rise to economic stardom as one of the so called BRICs.


But all that has come crashing down thanks to a string of corruption


allegations involving top politicians and companies.


And it could all come to a head again later today as Brazil's top


electoral court resumes the case against the country's former


President - Dilma Roussef- and her successor Michel Temer.


They're accused of illegally funding their 2014 election win.


This is how the economy has fared over the last five years.


Since Rousseff was voted into office, there have been two


years of recession - ending last week when growth


of 1% was reported for the beginning of this year.


She was impeached 10 months ago and succeeded by Michel Temer


who has focused on economic reforms but could now be out


Government policy and stability is important because non-financial


companies owned by the state account for nearly 18% of the economy.


The two biggest are Eletrobras and Petrobras.


The latter is the state owned oil giant at the heart of the corruption


allegations and was once the biggest company in Latin America.


With me is Edwin Gutierrez, head of emerging-market sovereign


debt at Aberdeen Asset Management in London.


Nice to see you. Sally, talking through the issues at stake.


What happens next, where are we in terms of these proceedings? We will


hear more later today, but could we get to the stage where the last


elections are in old and that Michel Temer has to leave office? It is a


possibility. We now have this case up the electoral court, and we could


conceivably get a judgment this week against Michel Temer. We would get


new elections. One of the prospects is that one of the seven justices of


the Supreme Court could request more time, which would delay a judgment.


I wanted to get onto that. Anybody hoping for a swift resolution will


be disappointed, it could be a protracted hearing. As you


mentioned, the judge could ask for more time? There is a lot happening


behind the scenes, most politicians and members of the judiciary. Many


see this as the negotiation process. The request for more time, it could


be discussions about if Michel Temer Falls, who is the successor? And


then it would not happen until the major parties had agreed. What are


the obligations of -- what are the implications of Brazil? It was one


of the big players, but it hasn't played out how many people thought.


The economy has been in recession and it is a difficult place to be?


Absolutely, we finally had a quarter of growth after two years of


recession, but it is quite reasoned and quite challenged. There is a lot


of debt, especially in a household sector. Consumption is going to


remain subdued. This latest episode affects the economy. It only further


undermines recovery in investor sentiment, which is really key.


Investment of GDP is a mere 16% and you cannot grow if you only


investing 16%. Whoever becomes all remains the President, what is their


top priority? The top priority is the ongoing process, we need to see


either the Kelton met or a successor push pension reform across the line.


That is the most critical reform investors are looking for. Also,


businessmen in Brazil, to boost investor sentiment. Thanks for


explaining that. Let's take a look at some of


the other stories making the news. Investors will keep a nervous eye


on Qatar's stock market today after the index slumped 7.3%


yesterday after five Gulf nations cut financial and diplomatic


ties with the country. It has risen in early trading today.


Qatar is calling for talks to resolve the crisis.


Qatar Airways has cancelled flights to Saudi Arabia, the UAE,


Bahrain and Egypt after Etihad, EgyptAir, FlyDubai, Gulf Air


and Emirates cut flights to and from the Qatari capital Doha.


Apple and Amazon could join forces with Foxconn to bid for Toshiba's


Toshiba needs to sell it to cover billions of dollars of cost overruns


in its bankrupt nuclear US unit. US President Trump has said he plans


to privatize America's air traffic control system,


in what he called an air Mr Trump says the reform


would deliver cheaper, faster, and safer travel


as well as an economic boost that could be worth


$25 billion to the economy. It's currently part


of the government's Federal Aviation Administration


employing 30,000 staff. Let's talk about a huge deal in


Australia. A huge and controversial mine


in North East Australia finally The $12 billion Adani project


in Queensland will cover an area a quarter of the size of London


but critics fear it will cause The Indian company behind it says


those protests won't stop them. It is understandable why this is so


controversial? Well, that is right. It is a controversial deal,


investment, rather. It has been in the making for a while. Even Adani,


after a lot of hurdles, has decided they will go ahead with the deal.


They have given clearance to the investment plan and they plan to


start the construction of the coal mine by the end of the year. Why is


it controversial? Because there are two sides. It has deeply polarised


Australians. On one hand, you have the Queensland communities, where it


will be built, who feel it is a good investment because it will create


jobs. Queensland has been lagging behind when it comes to development


and jobs creation. Then you have climate scientists,


environmentalists and activists that have been opposing it because they


think it will really harm the already ailing Great Barrier Reef,


and exasperate global warming, which is a big issue over there. They


claim the amount of carbon dioxide it will emit will be much more than


what countries like Kuwait and Chile do in a whole year. Clearly, it has


divided the country. But Adani have said they are going ahead with it.


An interesting story to highlight. Let's look at the markets and how


the day is shaping up. This is how things went overnight in Asia. That


is the United States... Shall I keep talking? That way! You can see them


there. America had a rough ride, Japan followed suit. Japan, down by


1%, with the yen strengthening. Let's look at Europe, while I sit


down, because that is seemingly where the cameras are. Europe and


France are down. Quite interesting, with the polls looking like the


races tightening in the run-up to the election on Thursday, markets


are a little bit more nervous than they were some weeks ago, with the


outcome not as obvious. Let's chat about this with James Quinn. He is


the business editor at the Telegraph. This is where the party


is at. I should never have gone over there in the first place.


Let's talk about Qatar. I know we'd talked about it in the news


round-up, I think it is a fascinating story. Diplomatic,


political, economic ties severed. What does it mean for Qatar? I think


it means isolation, certainly in the Middle East. There has been no


suggestion there is any isolation from the West, as it were. The UK is


a big partner. Qatar is investing in a lot of things in the UK, it owns


90% of the Shard, it owns Harrods, it owns the Olympic Village, it


could be good for the UK in an odd way. Not cutting diplomatic ties


with the West, but it is quite hard to get to if you think about things


like air space and shipping routes. This is where energy intensive


industries, things like aluminium, is struggling to get stuck in and


out on a logistical basis? Yes, Qatar Airways are having to divert


planes around the region. It has made most of its wealth on natural


gas, and those pipelines are being stopped. The only intervention is


from President Trump, saying he will calm the rift. He was recently


there. I wanted to get your take on the run-up to the election in terms


of how markets are digesting it. The pound is super-sensitive at the


moment. Super volatile. As the polls narrow, the Tories have anything


between a 12 point lead or a 1-point lead. Traders are not knowing what


is priced in. At the moment, a close Tory win, Conservative Party win for


Theresa May, that looks likely. Anything other than that will lead


to volatility. It is so funny, we shouldn't read too much into the


polls, of course, the last election told us that, and the EU referendum,


and yet we have really wildly differing polls. There really is all


to play for? The referendum last year, in the run-up, it seemed a


likely Remain vote. The pound when surging. It was almost $1.50. And


then as the result became clear, it fell away. We will keep a very close


eye on that. We will talk more about some stories later in the papers.


Still to come, sent at the speed of sound.


We meet the firm that's come up with an alternative to sending


digital data via Bluetooth and Wi-Fi by using sound.


You're with Business Live from BBC News.


Home appliance retailer AO has warned of tough trading conditions


despite posting a 40% increase in UK profits The online retailer


faced rising losses in their European business -


partly down to the cost of expanding the business into Europe.


Theo Leggett has been going through the numbers.


Talk us through what they show. It's a really interesting business. It is


the sort of thing you used to buy an High Street, now we do it online and


it is done very well. But the cost of Europe is quite significant?


Absolutely. AO, it initially stood for Appliances Online. It has been


around for 15 years but has had large expansion over the last few.


Floated on the stock market on 2014, shares shooting up on a wave of


enthusiasm. Recently they had been at a much lower level. They have


been trying to expand a lot, particularly in Germany and the


Netherlands. That accounts for a large proportion of the operating


loss which they posted. They posted an operating loss of ?12 million


compared to ?10 million last year. In the UK, things have been rather


better. Both revenues and sales are up, revenues up 17%. This is a


business that is not yet profitable. It is trying to grow its business.


Revenues and sales are very important. The problem is, things


like washing machines, dishwashers and the like, most of them are


imported. With the pound sterling falling to levels it is that now


since the EU referendum, importing those things has been more


expensive. The company says it has created a mixed trading environment


and it expects things to get tougher as we go forward over the next few


months. What the chief executive has been saying is that circumstances


have become more challenging due to the impact of dampening consumer


confidence following the vote to leave the EU, subsequent price


inflation and a slowdown in the housing market. So, a mixed picture.


The business is still growing. It expects that growth to slow over the


next few months. It is not making money yet, but it is building for


the future. It will come out in the wash! Thanks for your analysis.


You've been waiting all morning for that. Don't get in a spin about the


results! Splenic... EasyJet telling us a 9.5% rise on


last year and it's load factor. How full the planes are.


It's steady 91.5%. You're watching Business Live.


Our top story: Latin America's biggest


economy could get a third One of the Brazil's top courts


could annul the 2014 election over claims of corruption


and illegal funding. We have been across that story.


Further details throughout the day on the BBC.


A quick look at how markets are faring.


They are headed lower. Markets treading water with bigger events


later in the week like a general election in the UK.


With the internet of things, more and more everyday objects


But what about devices which don't have wi-fi or a way


Well, Chirp is an app which encodes data into sound waves and can be


used by almost anything with a speaker and microphone.


In fact you could already be using the technology.


It's running on hundreds of millions of devices around the world.


But it does have big constraints, most "chirps" last for


a couple of seconds and can only transmit a very


limited amount of data, enough to send a web address.


With us now is Moran Lerner, chief executive of Chirp.


Nice to see you. Welcome to the programme. We tried there to explain


it, but you better do it because I think it's fascinating as a


technology. We're reliant on Bluetooth and wi-fi to transmit all


sorts of things. How does Chirp work? It is limited in what it can


send? It is limited in the data packets we send. We used to be an


app. And it is fair to say we are now a business to business company


where we've developed a suite of software development kits and our


clients around the world are able to embed our technology quite simply in


many cases in under three minutes. So they can take that technology and


put it in their own platforms? Correct. Because we work across all


platforms, we have gone beyond the smartphone, you can embed it into


smart devices and some advanced robotics companies are using our


technology. Apps, every day apps that are used, gaming, it is used in


the latest Skylanders game and we are about to announce a


revolutionary new interactive toy with a company called High Jinx. So


the idea this toy will be in the lounge with a toddler and when a


certain programme is on the TV the toy will interact with the TV


because the sound is activating the toy? Absolutely. The beauty of sound


is that it's portable and it's everywhere. So you can have a device


and I can show you how it works simply, both the device is off line


so you don't need any connectivity of any kind to use Chirp. So this


one will speak to this one? That's right.


It has appeared there. I can move to a different area on the screen and I


will know the location of the other device. Unlike Bluetooth and wi-fi


is I can have one million devices around me with our software.


I suppose that relies on the sound wave being unique because it has to


identify a specific thing. We're surrounded by sound every day, it


has to pick up that one precise sound that will only play for a


split second. Our standard chirps are that one split second or 1.7


seconds, but we are able to customise it, if we want to send


longer data packets it can be longer. It depends on the device and


what our customers want to use it for. Give us some applications.


Sally mentioned toys, you mentioned being able to send web addresses.


What would you like it to be used for? We would like it to be the next


protocol, but we're not trying to compete with Bluetooth and wi-fi.


We're trying to complement what they do. You were explaining to me


earlier that it's used in the nuclear industry? Yes. If you take


the nuclear industry and a lot of other industries in manufacturing


and industrial settings where you have radio frequency restrictions.


Whether it be from the manufacturing site itself, whether it be from


electromagnetic fields that are created during manufacture, sound


though isn't interfered with and therefore, it's not dangerous and


won't cause explosions. How you make money is simple - the licence? Our


clients have unlimited use of our technology to do with it what they


want. It's so interesting to hear about this. This is why I love this


slot on the programme. A toy in my lounge would drive me mad. Too much


noise already! Thank you very much for coming in


and explaining that. The Chief Executive of the Chirp. Come back


and see us soon. I will do. Apple is joining the market


for voice activated speakers, Yes, the device was launched


at Apple's annual developers It's called the HomePod and can


respond to questions and control devices such as lights


and central heating. It's their new smart speaker


which they're billing primarily as a music device rather


than a smart assistant like They're saying it has spatial


awareness so it should fill the room with sound in the way


that those competitors don't. And I'm not allowed to touch it


and nor can I hear it so I can't actually tell you how good this


thing is just yet, but what I can tell you it will be coming


out later this year. First released in the US,


in the UK and also Australia. Other countries coming


in the New Year, but one of the potential down sides is that


you need an Apple music subscription in order to get


the full integration. So if you prefer to use Spotify


or Pandora, maybe not quite the device for you,


but Apple are pretty confident that this is going to give them


a good part of the market in this The name has to grow on me.


It just does not. It makes a lot of sense,


right and it really speaks to where I think Apple wants


to position this device Is the fact that Apple seem to be


focussing on the fact it's a music device,


is it a kind of a cover-up for Sire not being a very good assistant


compared to Google Home, I take your point and yes,


the criticism you know as far as how Sire is not as smart


as Google Assistant, I think that's a fair criticism to make,


but I do think it is a different approach and not driven


by necessity, but driven Dave Lee there finding out what the


Homepod smart speaker is about. James Quinn is joining


us again to discuss. We know it is a tough market


already? It is crowded. Amazon has got Alexa. It is a crowded market.


Apple invented Sire and came late to the market with a device that allows


you to talk to Sire. Others are cheaper. Sorry, the viewers picked


up on that. Hugh says says it is an overpriced Bluetooth speaker, stick


the logo on it and inflate the price. Patrick says, "Why would I


want to change my Bowes system?" It ties you in because maybe you have


an iPhone and think to talk to it, I'll use an iPad and you maybe have


a McBook and this is the latest in that suite of things. It is a great


way of galvanising the fan guys and fan girls into spending more money


withalle. None of you have got one of these devices. I've got one and I


unplugged it. You have got one? It was a gift! The children were


ordering it to do all sorts, order pizzas and all sorts of things.


Enough is enough to quote someone else! Let's talk about gin and


tonic. The gin craze is seeing the Government make more money on taxes


on gin than they have done on beer for the first time? The average


percentage is 76% of bottle a ging goes on VAT and on duty which is


high compared to 60% for a pint of beer. But it has resulted in a large


intake... A large intake of gin, you're right! You can't move for gin


this country. In your world, maybe, Ben, in my world, I'm trying to


fend-off pizzas! LAUGHTER


It's a huge boom. It is a craze. Tonics and people making gin, gin,


some people loved it and some people didn't like the taste. They are


making it more palatable. What is a gin toll gist? Someone who makes


cocktails. We're off for a gin! , hot, dark tea!


Very strong coffee, I meant to say. I need. I have been here too long.


I'm going to bed. We're here tomorrow. Thanks for watching.


Hello. Heavy rain and strong winds are not things we


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