08/06/2017 BBC Business Live


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


Turning up the heat - Qatar's credit rating is cut


Live from London, that's our top story on Thursday the 8th of June.


Who will blink first in this dispute, and how damaging could it


be for Fatah-- Qatar's economy and the region?


Also in the programme: Countdown to Comey.


The former FBI Director will offer testimony


about Trump and Russia, but could it damage


And investors worldwide are watching the UK election, the European


Central Bank meeting and that James Comey testimony in Washington.


We meet the woman with a remarkable career that began on a farm


in rural Illinois and has taken her all the way to the shining


And with polls now open in the UK general election, we promise


So let us know what you make of the stories we're covering today.


When we say politics free, we do refer to the UK election and not the


politicking going on at the moment in the Middle East.


We start in the Gulf state of Qatar, where concerns are growing


about the economic fallout after neighbouring Arab states cut


off diplomatic and trade ties over its alleged support


of terrorist groups, something Doha denies.


Late Wednesday, top credit rating agency Standard and Poors cut


Qatar's credit rating, with a warning it could


Its stock market is down almost 10% in the last three


days, and its currency is at an 11-year low.


Qatar is a tiny nation, but it's a very important


It has one of the world's largest reserves of natural gas.


It has seen exports of its liquefied natural gas or LNG


That's made the state phenomenally wealthy.


It has built up one of the world's biggest sovereign wealth funds,


It's used that money to buy assets across the globe.


They range from Paris Saint-Germain football club to big


stakes in Volkswagen, Russian oil giant Rosneft


and commodities trader Glencore to Britian's Barclays Bank.


Not to mention millions of square metres of London,


including Canary Wharf, the Shard and Harrods.


The success of Qatar Airways has made it a major aviation hub.


But more than 50 flights a day have been grounded


And it's a huge employer of migrant workers, many of whom are working


Families from India to the Philippines depend


There are half a million workers from India alone in Qatar.


Zeynep Kosereisoglu is practice leader, Middle East,


North Africa and Turkey at Frontier Strategy Group.


nice to see you. Let's start with some background to this. How are we


in this position, and why is Qatar looking increasingly isolated? This


is because of long years of tension between Qatar and its neighbouring


countries, like Egypt. We started seeing these problems that in 1985


when we had an attempted coup. We have been watching a lot of these


tensions over the last few weeks increase over the foreign policy,


through mostly soft power but of course the fact that these measures


are taking place today, and to such an extent that it shows us that


maybe a change from a US Per Spett with to the region could also have


been the main trigger for such a large move from these countries. I


remember in 2014 there were some similarities with hot what happened


then, but it strikes me that this time it is more severe. We have had


a lot of talks between these countries about Qatar's foreign


policy, that was more of a short-term spat, but this time we


are seeing unprecedented levels of measures, so different in terms of


the extent and the pressure they will put on the economy. So what


does it mean day-to-day for the economy and people living in Qatar?


A few factors are important. The first one, you have seen already


some shortages within the economy, it is very much import dependent so


we will see domestic prices increasing, but also economic


activity in the country depends on imports as well so we will be seeing


a halt in the construction activity. Qatar Airways as you have mentioned


as well. But most importantly we will see precious on the peg to the


dollar. -- we will see pressure on the peg to the dollar. They do have


reserves to maintain the peg, but as this conflict last longer, we will


set pressure on liquidity within the banks. And as Sally outlined, so


many investments from Qatar around the world, it has been active in


spreading the wealth around the world so it has a diverse economy.


How long does this crisis last? No one really knows. But what are those


ripple effects around the world? It is going to be very hard for the


Qatari authorities to prove to these countries that there will be a


change in policy. They are asking for a very big change, so you have


to make a big move to showcase and prove that the foreign policy is


going to change and that will be quite difficult from Qatar's


perspective. So this might last a little longer than we saw in 2014.


You mentioned some of the investments within the world, but


also a lot of investment in the region, from Turkey to Egypt, so


some of them are in projects that can't be moved out, but the liquid


ones that are mostly in stocks can be pulled, and we could see that if


this lasts much longer. Zeynep, it is good to here your thoughts on


that. For now, thank you very much, Zeynep Kosereisoglu, thank you for


coming in. Let's take a look at some of


the other stories making the news. China's imports and exports were up


strongly last month. Exports in May rose 8.7%


compared to the year before. The latest official trade figures


gave the country a trade surplus Sony says it has sold more


than 1 million virtual reality The PlayStation VR headset


was released in October, and its relatively low price has


seen sales grow faster than rival The headset is designed to work


with the PlayStation 4 rather Three events are keeping traders


transfixed today. One is the UK election, and of course we won't


know the outcome of that until maybe this time tomorrow or earlier. The


other one is the European Central Bank meeting happening at lunchtime


today. No policy change expected, but what will be said at the press


conference afterwards is critical. And then there is that James Comey


testimony taking place today. What does that mean for the Trump


administration? That is playing a part in markets worldwide, we are


seeing a lot of caution in terms of trade. Data out of Japan as well,


about its growth figures. The final figures showing growth at 1%. But


missed estimates by quite a distance, so that the pressure on


stocks in Tokyo. Let's have a look at Europe right now, so a sense of


how things are going. The FTSE 100 pretty flat, sterling still bubbling


along. A slight gain for Germany, and that is the state of play here.


Samira Hussain has the details about what's ahead on Wall Street Today.


All eyes will be on Capitol Hill, James Comey will testify to US


lawmakers. This will be his first public appearance since he was fired


by President Donald Trump. Any damaging revelation in his testimony


could dampen already flagging momentum for Trump's pro-business


fiscal agenda. In earning the series, James maco will be


reporting, and they have warned that four-year sales will be lower than


previously thought. It faces treasure from rising competition and


commodity costs. And a little bit of economics news. The jobless claims


dipped slightly to 240,000 from 248,000 in the week previous. Thank


you. Joining us is James Hughes,


Chief Market Analyst, at GKFX, Let's talk about ECB, because we


haven't talked through at least two days since we talked about the


time this is happening, Greece is time this is happening, Greece is


rearing its ugly head again in terms of the debt crisis, but let's talk


debt first of all. There is no change expected, and this has been


the case for a long time. It is not necessarily the rates we are looking


at now, it is the quantitative easing which is extending to


December this year, but there is so December this year, but there is so


much discussion at the moment about the fact that the German economy is


overheating, the German economy is performing well and this is having


stimulus pumped into it. So much pressure coming from Germany to the


EEC beta start to take that back, but it is getting a balancing act,


Germany much stronger than the other countries. And you have Germany in


that position, you have Greece in a really dire position still.


Yesterday we had banks bailed out by Santander, the whole banking support


system kicking in, and then you have this weekend, Parliamentary


elections in France. It is just a mess, isn't it? It isn't a mess, but


it is complicated! But it is a mess, as it has been for the last ten


years, and we have known this story for such a long time. You call a


spade a spade! We talked about Greece tenures are going exactly the


same situation, and they said, but the IMF said, we will deal with your


debt later. That doesn't work, because later eventually comes


around. Yes, at the time we talked about them kicking the can down the


got to the can, and what will they got to the can, and what will they


do? There will be a few more measures, a few more statements from


Germany about what they will do, and it is a mess, unfortunately, and it


doesn't show any signs of changing. We will talk more about that a


little later, you will talk as though the papers, but for now,


thank you. Let's go to Australia now,


where Special K is a special name. You may think of it as a serial. But


in Australia, it is all about tennis star who is becoming well known. The


top 100 tennis player Thanasi Kokkinakis is trying to use the name


commercially. We have seen this sort of row before, but not often between


a serial provider and a tennis player!


It really is a different type of court case the Thanasi Kokkinakis!


It is over intellectual property. The 21-year-old is known as Special


K, and what he would like to do because he is trying to bank on his


fame and his good health at the time being is to create a special tennis


line of clothing, and all the stuff that can come with it, Kellogg's is


saying that Special K is one of its best selling cereals, and they are


taking him to court in Adelaide. Lawyers on both sides of decided not


to say nothing, but they just showed the crying emoji with the sad words


on his account. Don't cry over spilt milk, that is


what I say. Thank you for your input. Still to


come, we will meet the woman who started out counting cows and now


runs her very own tech firm. It is an accounting software company, it


has gone from strength to strength. We will hear that story very


shortly. You are with Business Live from BBC News. First, let's focus on


some more corporate stories. Flybe, Europe's largest regional


airline has announced a pre-tax loss of ?20 million,


compared to a ?2.7 million The airline recently created


an alliance with Eastern Airways to operate its scheduled route


network under the Flybe brand. Theo Leggett has been


looking at the figures - We have talked about fly be before,


a UK regional airline, it does all of those routes you don't


necessarily want to get a train for but it has not managed to make it a


success this year, big turnaround. We knew this year would be bad


because in March the company put out a profits warning, saying that there


were issues. Some of the problems are beyond its control. For example,


bad weather which has forced flight cancellations, strikes among air


traffic controllers in France, that has had an impact. You say they do


routes that people won't necessarily take trains for but some of the


routes they do, there are rail alternatives and the rail companies


have been discounting so that has had an effect as well. But to a


certain extent, Flybe has also been a victim of its own actions. When


things looked better if you years ago it ordered a lot of planes. It


has renegotiated some of those contracts, but other planes had to


be brought into the fleet and it had to find something to do with it.


That has left it with a problem of overcapacity. It has not been able


to fill up the planes quite as well, not been making so much money and


there is a lot of competition in this market. That is where some


other problems have been. It has been insulated from other issues


because it mainly flies of the UK, it hasn't had many problems as other


airlines with a fall in the value of sterling. They does have the pay


aircraft leasing products in dollars but it has hedged against those in


done rather well from those hedges. It is struggling at the moment in a


broad brush. It thinks it will be able to reduce the size of its fleet


when leases come up for renewal later in the year so that should


help sort itself out. So it is saying things should get better in


the future, on the other hand there are big cost involved as well


because it is revamping its IT systems and expect over the next


year to have ?6 million worth of costs associated with cancelling


existing contracts. So a mixed picture but the past year has not


been particularly good. Thank you very much. A reminder of course, in


case you had missed it, it is the general election today. A reminder,


BBC coverage begins on BBC One at five to ten this evening, the first


results around midnight. Qatar has had its rating cut.


Reuters reporting that Qatar's central bank has asked commercial


banks to provide it with details and frequent updates on their foreign


exchange trading. Lots of people scrabbling to get hold of US


dollars. We are also hearing anecdotal evidence of just quite how


this rift is affecting people. We have heard women the last half-hour


that the Emirates Postal service is stopping all Post a Qatar, and says


if the posters midway there it will come back. -- all post-to Qatar.


Let's remind you how market are doing in Europe, trading has been


underway for nearly 15 minutes. Pretty flat really. Rent crude up


nearly 8%, but at $48.43 a barrel. The FTSE 100 fairly flat. Keep an


eye on the pound, tomorrow, in the wake of the vote of the UK general


election. And now let's get the inside track


on coding - an industry that's often Therese Tucker runs a financial


software firm - black line - and is one of only a handful


of female tech entrepeneurs Originally from a farming town


in Illinois, she took one of the first ever programming


courses offered by Apple In 2001, she founded BlackLine,


funding the business herself. She's had to battle sexism


in the tech industry - some funding for the business


was only offered on the condition that she was replaced


as Chief Executive by a man - but she's seen off these


challenges and joins us now. Still the boss. Quite an achievement


just to be here given all of that, welcome to the programme, good to


have you here. Let's start with the business. We said during the


programme, your background was very rule, talk us through this course.


You went to university and you took the Apple course. That is when you


fell in love with coding and that is pretty where you are. Focus through


that. The beautiful thing about programming is that you can direct a


computer to do something for you, and you can then run that on a


million computers. The power is amazing for what you can do for


business with that, and I fell in love with it. And I have spent my


entire career doing that. Take me back to the 1980s, and that Apple


course. We all see at full a certain way now and we see what it has done


an transform the business, what was apple-like back then? It was


radically new. At that time, most of the computers were still mainframes


with cards, and is terrible to work with. Apple was this amazing new


innovation that actually made it fun. Not that different from today,


in many ways. Tell us about the journey, it sounds like it has been


pretty tough. Any journey is tough. But if Nutley in the tech industry.


It is very male dominated, and that is true, starting in university. I


would be in classes weather might be -- where there might be one other


woman in the class of 500. It has not held you back, have you heard


had to overcome certain things or have you just ploughed ahead


regardless? How have you tackled it? I believe it has both a good and bad


side. If you were the only woman in the room, you absolutely get


noticed. You do have to have a bit of a thick skin however, so that


certain things just don't bother you, you just move on from them. You


have also got to be pretty persistent. I'm just looking at some


of your journey. You drained your bank account, emptied your pension,


second mortgage to your home, and you maxed out your credit cards and


baked your friends. That is quite a gamble! It is a little scary at


times, I had many sleepless nights. The funny thing about being an entry


to nor is when you are doing people think you are crazy, and when you


are successful they think you're brilliant. And they love you. But


you are exactly the same person throughout the entire journey.


Putting all of that money on the line, your livelihood on the line


from your friends, family, it could have gone the other way. I could


have been completely poor, starting over in my 40s, it was terrifying.


And put this into perspective as well, you were facing a woman with


two children at that time as well. Yes, it was terrifying. So you must


have just absolutely believed in this company you created, which is


still black line. Yes, it is still black line. Being an entrepreneur,


you have this overwhelming desire and drive to build something. I knew


that if I gave up that six months later I would be thinking about the


next company. When you were looking for venture capital funding and the


U approach said yes, we are interested but we want this man to


run the company, not you, what was your reaction? I wanted to evaluate


it, I was the new CEO, I wanted to do what was best for the company, so


I did have a meeting with him, and was not terribly impressed. So you


didn't go ahead? We didn't go ahead, and we did not go ahead with that


venture capital. I have since found many people that are quite


supportive, regardless of my gender, and that was the right move at that


point in time. Time is really tight but I'm interested in your view, I


have a bit of a perspective on this. Are things changing, are more women


able to succeed in the tech industry? No. Enrolments in


university in technology courses is at an incredible low, it is hard to


find women programmers and subsequently there are less people


promoted, less women technology entrepreneurs. Why is that? I don't


think they teach it correctly, they need to teach it with much more of a


will real-world perspective so that it reaches out to women who like to


solve problems. Sounds like another venture for you. It could be.


Therese, thank you very much. President Trump's plans to ease


regulation on US banks will have dire consequences -


that's according to the former Congressman who orchestrated major


reforms after the financial crisis. Barney Frank helped


introduce the Dodd-Frank Act But the US House of


Representatives will vote later Mr Frank has been speaking


to the BBC's Mariko Oi. What they are talking about undoing


are the rules that keep large inch oceans from getting so indebted that


the government is faced with a choice between paying taxpayer's


money to bailout their debts or letting them go under and causing a


crisis. But do you agree with some of the proposals made by the choice


act? You yourself said there were some mistakes in the Dodd-Frank law


you would like to change. I do believe that the $50 billion level


we set to be in the super jurisdiction was too low. That was a


mistake we made of the time. There is a bipartisan coalition ready to


raise that. I think the smaller banks and the 10 billion should get


some explicit relief. There were rules we didn't think would apply to


them. In fact they are concerned about them, they spent about of


money showing they are affected by them, so I think there would be a


consensus to do those two things. Beyond that, everything that the


Republicans pill verse, the rules we put in place to prevent


irresponsible behaviour. I would argue for any of those. Barney Frank


of the Dodd-Frank act. Ken Dodd, a of the Dodd-Frank act. Ken Dodd, a


comedian in the UK, let's not go there.


Joining us again is James Hughes, Chief Market Analyst, at GKFX.


This is an interesting story from our transport correspondent on the


BBC website today, does BA's explanation stack up? This is to do


with their delays. Their explanation has some people worried a little


bit. The explanation being it was human error? Yes, someone


messed up the reboot and fried the messed up the reboot and fried the


circuits, and that is the language that was used, it was like me saying


to my dad what happened, that is the kind of excuse I would have for


smashing the TV or something like that, not bringing down a


multibillion-dollar company. James, thank you, thank you for your


company, sorry it was so brief. Goodbye.


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