:00:05. > :00:15.country illegally. They have been ordered to leave. Now it is time
:00:15. > :00:20.
:00:20. > :00:26.Welcome to World Business Report. More pain for Spain. Standard and
:00:26. > :00:32.Poor's cuts its credit rating by two notches. And Samsung's profits
:00:32. > :00:42.rise over 80 %. It is all down to the sale of smart phones. The
:00:42. > :00:45.
:00:45. > :00:52.central bank in Japan eases Standard and Poor's has lowered
:00:53. > :00:58.Spain's long-term credit rating from AAA to BBB +. They think the
:00:58. > :01:04.economy will shrink by about 1.5 % and that banks will need more
:01:04. > :01:08.capital. What does this mean for Spain? I guess this is a kick in
:01:08. > :01:12.the teeth for the Prime Minister who is working hard to turn things
:01:12. > :01:18.round. He is not finding it easy, is he?
:01:18. > :01:26.That is right. There is a lack of confidence from the markets.
:01:26. > :01:35.Borrowing rates on Spanish dead are creeping up. -- Spanish debt. A lot
:01:35. > :01:45.of bad debt. The bottom fell out of the market in 2000 and it. A lot of
:01:45. > :01:46.
:01:46. > :01:52.banks in Spain were left with bad property assets. -- 2008. And there
:01:52. > :01:55.are reports that next year will see negative growth. It is not a good
:01:55. > :02:01.picture being painted by Standard and Poor's but not a massive
:02:01. > :02:06.surprise. This is what we have seen from the market. How is that
:02:06. > :02:12.manifesting itself in Spain? The messages, when you compare it to
:02:12. > :02:16.Italy, at least there is progress in Italy. For Spain, we are hearing
:02:16. > :02:23.that it will fall further before going back up. What is the
:02:23. > :02:29.perception on the street? The normal people in Spain think
:02:29. > :02:34.things look bad. There is a lot of austerity in the new budget. Huge
:02:34. > :02:40.cuts to health, education, areas of government that will be
:02:40. > :02:46.controversial. Unemployment is a huge problem. It is expected to
:02:46. > :02:51.rise to at least 25 %. It looks very bad for average people. For
:02:51. > :02:55.the Government, they are trying desperately to send out messages of
:02:55. > :02:59.confidence. They have got this new budget. They have got tough
:02:59. > :03:03.austerity in place. They want to hit their targets for this year.
:03:03. > :03:08.Standard and Poor's have backed up the lack of confidence. Negative
:03:08. > :03:11.growth in the economy means you will not hit the targets. They were
:03:11. > :03:17.not at the projections for this year or next year.
:03:17. > :03:21.Thank you. Samsung made $4.5 billion in
:03:21. > :03:30.profits last year. The electronics giant sold about 90 million mobile
:03:30. > :03:34.phones. It beat both Apple and Nokia. We take a look at the
:03:34. > :03:39.changing image of the company. Some things cannot be expressed with a
:03:39. > :03:45.text message. At the headquarters of Samsung in South Korea, there is
:03:45. > :03:49.always room for a bit of tradition, even when you are battling for the
:03:49. > :03:53.future of the global electronics market. Samsung employees are known
:03:53. > :03:58.as dedicated and numerous. The company has known for decades how
:03:58. > :04:02.to attract them, with extensive benefits, and a strict corporate
:04:03. > :04:07.culture. Samsung is used to competing in fast-paced markets.
:04:07. > :04:11.The company built its name in microchips. With a reputation for
:04:11. > :04:18.being more of a fast follower than an original creator of mobile
:04:18. > :04:28.devices, how has Samsung are written to such superpower status?
:04:28. > :04:31.
:04:31. > :04:35.We are not following any more. That is a strange word. All of the good
:04:35. > :04:40.service and content cannot be realised without great hardware. We
:04:40. > :04:46.are very connected. We are bringing new innovation. When I say
:04:46. > :04:55.enervation, not just hardware but total solutions. -- innovation.
:04:56. > :05:02.It's mobile devices have become ever more aspirational. This is a
:05:02. > :05:07.cross between a phone and the Tablet. As the matter will -- the
:05:07. > :05:15.battle increases, the focus is on launching and guarding the next new
:05:15. > :05:20.weapon. Security is very tight. There is an electronic ID system.
:05:20. > :05:25.There are security gates and every building. Few things are more
:05:25. > :05:31.protected than this. This is the new smart phone. It will come out
:05:31. > :05:34.in less than one week. It is so well protected, it is being
:05:34. > :05:39.accompanied by 10 security guards on its way to the launch in London.
:05:39. > :05:46.For those curious about the future, the answer could lie inside the
:05:46. > :05:52.sport. I am not allowed to look inside.
:05:52. > :06:01.In another attempt to boost the economy, the bank in Japan has said
:06:01. > :06:06.it will increase its asset purchase program. Let's get more analysis.
:06:06. > :06:10.What is the bank up to? They are taking steps to ease monetary
:06:10. > :06:16.policy. They are easing the purchase of government bonds by
:06:16. > :06:21.about 10 trillion Yen, that is around $124 billion. The central
:06:21. > :06:25.bank has reduced by five trillion Yen a pool of funds it has been set
:06:25. > :06:33.aside for fixed-rate market manoeuvres. This shows how
:06:33. > :06:39.determined the central bank is to try and hit its 1% inflation target.
:06:39. > :06:43.This is why the bank maintained its key policy rate at a range of 0.2 %.
:06:43. > :06:47.That was by a unanimous vote. There was other data that showed the
:06:47. > :06:53.economy was stalling to some extent today. Industrial production rose
:06:53. > :06:58.by about 1% in March. That is the biggest rise in about three months.
:06:59. > :07:06.It is lower than expected. The rise was fuelled by a reconstruction of
:07:06. > :07:16.the country's tsunami-hit areas. The growth over the next few months
:07:16. > :07:16.
:07:16. > :07:22.looks fairly grim. Manufacturers' - - manufacturers expect growth to
:07:22. > :07:29.fall in May. That is as the benefits of the reconstruction wear
:07:29. > :07:34.off. Barclays Bank is facing a serious shareholder vote at its
:07:34. > :07:39.annual meeting today. It is thought that nearly 33 % of investors will
:07:39. > :07:44.vote against the executive pay plan. Barclays Bank have been under fire
:07:44. > :07:50.by shareholders. They gave details of the pay that top executives were
:07:50. > :07:57.receiving. Barclays is a major global player. It's pay for the top
:07:57. > :08:07.bosses has proved highly controversial among the British
:08:07. > :08:11.
:08:11. > :08:18.Because a bank contains mainly financial assets, it is very easy
:08:18. > :08:23.to see what the financial performances. -- performance is. It
:08:23. > :08:28.cannot be much clearer than in the case of a bank like this that
:08:28. > :08:33.senior management are taking large bonuses without a performance.
:08:33. > :08:38.Diamond has admitted that returns to investors were unacceptable. He
:08:38. > :08:43.has tried to take the sting out of this rebellion by agreeing to
:08:43. > :08:49.tougher conditions on his �4 million bonus. Barclays have said
:08:49. > :08:53.that they recognise the power of opinion. Investors in the US have
:08:53. > :09:00.rejected the multi-million pound pay award for another boss. Large
:09:00. > :09:03.shareholders are starting to flex their muscles. Barclays posted
:09:03. > :09:11.better-than-expected first-quarter results yesterday. It is hoping the
:09:11. > :09:20.figures will help to quell the opposition. Its earnings from its
:09:20. > :09:26.equities business argued in the first quarter. Because of the
:09:26. > :09:30.Environment -- are good. Because of the Environment, it is difficult.
:09:30. > :09:37.It will continue to trade at a discount. That discount should
:09:37. > :09:41.narrow. There is no danger that the pay plan will be dejected today.
:09:41. > :09:48.Maybe in the teeth of some significant opposition. A warning
:09:48. > :09:54.shot, perhaps, for other big banks. Let's take a look at the markets.