:00:04. > :00:14.headlines. Now for the latest financial news in World Business
:00:14. > :00:16.
:00:16. > :00:20.Hello. Welcome to the program. A chance to catch up on all the
:00:20. > :00:24.latest in the world of business and money. Let's take a look at the
:00:24. > :00:32.headlines. Facebook loses more friends on Wall Street as its first
:00:32. > :00:39.financial results disappoint, sending shares plunging further.
:00:39. > :00:42.Record quarterly profit for the world's largest mobile-phone maker.
:00:42. > :00:52.Plus, is America's economic recovery stalling? Growth may have
:00:52. > :00:59.
:00:59. > :01:06.weakened to its slowest pace in a We will catch up with Sharanjit
:01:06. > :01:15.Leyl shortly and talk about those Facebook numbers. First, let's talk
:01:15. > :01:20.US. Is America's economic recovery stalling? It is expected to show
:01:20. > :01:28.that the world's biggest economy, growing at about 1.5%. If that is
:01:28. > :01:38.the case, it will be the slowest pace in one year. We will hopefully
:01:38. > :01:39.
:01:39. > :01:45.have a report on that in a while. First, we look at Samsung. It is
:01:45. > :01:54.the world's largest maker of mobile phones, televisions, etc. It posted
:01:54. > :01:58.record profits. Sharanjit Leyl, what do you say about this company?
:01:58. > :02:04.It is a big one and it appears people cannot get enough of
:02:04. > :02:12.everything Samsung! It appears they cannot get enough
:02:12. > :02:18.in terms of its mobile phones. It was mainly due to the surge in
:02:18. > :02:28.smartphone sales and better profits as well in its TV business. And it
:02:28. > :02:35.has put a big smile on the face of today as they celebrate. Profits
:02:35. > :02:42.came in at about $5.9 billion. That is about a 79% jump from one year
:02:42. > :02:47.earlier. Samsung makes the Galaxy smartphones and that is making it
:02:47. > :02:52.the world's biggest maker of mobile phones. It is really the strength
:02:52. > :02:57.of the phone business that will offset the sales of TV and other
:02:57. > :03:03.electronic devices. The biggest risk to Samsung are the painter and
:03:03. > :03:13.issues and the various legal tussles with Apple. It is expected
:03:13. > :03:15.
:03:15. > :03:20.to be Samsung's biggest competitor. Apple will not announce yet when
:03:20. > :03:24.the latest iPhone will be launched. That could bring up sales of the
:03:24. > :03:29.galaxy smartphones as well. I am sure the battle will continue.
:03:29. > :03:35.Thank you. That was Sharanjit Leyl from Singapore.
:03:35. > :03:39.The -- They were some of the most hotly anticipated financial results
:03:39. > :03:43.on Wall Street for many years and it seems that Facebook has failed
:03:43. > :03:46.to come up with the goods. In its first earnings report since its
:03:46. > :03:49.$100 billion flotation, Facebook posted a loss of $157 million,
:03:49. > :03:59.mainly due to one off-expenses associated with its IPO. But it was
:03:59. > :04:01.
:04:01. > :04:05.the news about slowing growth that sent its shares tumbling.
:04:05. > :04:10.It was the party scene at the headquarters when Mark Zuckerberg
:04:10. > :04:15.took the company public. But with its shares down about 35%, pressure
:04:15. > :04:20.is mounting on the young chief executive. The social network's
:04:20. > :04:25.first set of earnings as a public company did little to calm a
:04:25. > :04:30.sceptical Wall Street. Facebook has 955 million users worldwide and its
:04:30. > :04:34.revenue for the last three months rose 32% from one year ago. But its
:04:34. > :04:39.growth, particularly in the US, appears to be slowing. And this is
:04:39. > :04:42.worrying because it makes most of its money from uses in the US and
:04:42. > :04:46.Canada. The social network has also been played with questions about
:04:46. > :04:53.whether it can be drought had to make money off the growing number
:04:53. > :05:02.of people using the site on mobile devices. Facebook's IKEA was the
:05:02. > :05:08.most anticipated since Google. But shares in technology companies have
:05:08. > :05:12.all performed poorly. And there are concerns about growth persisting
:05:12. > :05:15.which will be unlikely to change any time soon.
:05:15. > :05:18.Shervin Pishevar is Managing Director of Menlo Ventures, a
:05:18. > :05:28.venture capital firm based, like Facebook, in Menlo Park California.
:05:28. > :05:28.
:05:28. > :05:32.He is also a Facebook shareholder. Those results, they didn't exactly
:05:32. > :05:37.break the bank. As shareholders, you must be looking at it and think,
:05:38. > :05:47.I bought it at $38 per share and now it is worth $24 per share?
:05:48. > :05:48.
:05:48. > :05:53.markets are interesting. Facebook hit their numbers and those that
:05:53. > :05:59.did and also went down. Facebook is an historic company, like Google
:05:59. > :06:03.was. If you look at the growth of it, all of it will marvel. One of
:06:03. > :06:07.the most outstanding thing I saw was that over 7% of the human
:06:07. > :06:11.population is using Facebook on their mobile phones. The future of
:06:11. > :06:16.the Facebook is on mobile. That is what I think the hope is and where
:06:16. > :06:21.the transition, in terms of their business model, will go. They are
:06:21. > :06:26.just experimenting with the mobile phone ads. Because they have to do
:06:26. > :06:30.that, some critics will say. You mentioned close to 1 billion users
:06:30. > :06:35.on Facebook but there is always the question about how the company will
:06:35. > :06:39.generate money. How it will make $1 from all of its users. If you look
:06:39. > :06:43.at the mobile, which has been causing a bit of a problem, because
:06:43. > :06:48.people have been turning to Facebook on their mobile devices.
:06:48. > :06:53.That activity has surged 67%. They have got to get in quickly! If you
:06:53. > :06:57.think about it this way, from a logic perspective, everybody is
:06:57. > :07:01.excited about Apple and iPhone and everything else. If you look at the
:07:01. > :07:06.numbers of iPhones out there, it is amazing. But nobody is forcing
:07:06. > :07:10.anyone to go to Facebook. People are engaged across hundreds of
:07:11. > :07:14.millions of mobile phones around the world. This is just the
:07:14. > :07:19.beginning. There innovation, that they can apply to mobile
:07:19. > :07:28.advertising, and also to payments, is really exciting. OK. We will
:07:28. > :07:32.keep our eyes on that. Thank you. We have to move on. I mentioned
:07:32. > :07:38.whether America's economic recovery is stalling. We should get the
:07:38. > :07:43.first reading of second-quarter growth numbers out soon.
:07:43. > :07:49.Welcome to an upstate area in New York. The town could do with a lick
:07:49. > :07:57.of paint and more new jobs. It is unlikely to get them from this
:07:57. > :08:03.local electronics firm. It employs 35 people, making printed circuit
:08:03. > :08:07.boards. There is a recessionary element in manufacturer in in our
:08:07. > :08:11.products. Many of our customers buy products from the whole world. So
:08:11. > :08:16.if there is an area that is paralysed, as far as economic
:08:16. > :08:22.decisions and investments go, it will come back and trickle-down
:08:22. > :08:27.through my customers. And too well floor. This bit of kit is only nine
:08:27. > :08:31.months old and costs nearly $1 million. The boss says he probably
:08:31. > :08:35.still would buy it now, if he had to make the choice, despite the
:08:35. > :08:39.uncertainty of the business climate. But there are many other companies
:08:39. > :08:44.that wouldn't take that risk. The latest figures are likely to show
:08:44. > :08:51.that growth in the US economy has slowed from an annual rate of just
:08:51. > :08:57.below 2% in the first quarter to 1.5% or less, between April and
:08:57. > :09:01.June. This is the recovery of fits and starts. There are periods we
:09:01. > :09:05.see some acceleration and growth -- in growth and activity and that
:09:05. > :09:09.quickly gets pushed down and we see a slowdown as well. Having survived
:09:09. > :09:14.the recession that followed the global financial crisis, this
:09:14. > :09:20.business at least believes it can cope. This is the way life is going
:09:20. > :09:22.to be. There will be financial debacles, different elements of
:09:22. > :09:28.legislative gridlock and that sort of thing. Uncertainty has become
:09:28. > :09:31.the certainty. With the eurozone in crisis and US policy-making
:09:31. > :09:37.gridlocked for the presidential election, businesses are hankering
:09:37. > :09:41.down, crossing their fingers and hoping for the best.
:09:41. > :09:44.Barclays reports second quarter earnings in just over an hour. It
:09:44. > :09:49.is still reeling from the resignations of its top executives
:09:49. > :09:52.over the LIBOR interest rate fixing scandal. The LIBOR rate is the
:09:52. > :09:57.interest rate that banks set and charge each other to lend and
:09:57. > :10:01.borrow money. Apart from the $450 million in fines it has received
:10:01. > :10:11.from US and UK regulators, what is the broader financial impact on
:10:11. > :10:12.
:10:12. > :10:19.Barclays likely to be? Ralph Silva is a banking analyst at SRN. Before
:10:19. > :10:23.we talk about the actual numbers, where does Barclays sit today?
:10:23. > :10:28.is actually the biggest investment bank on a global level, where there
:10:28. > :10:31.are bigger investment banks in the US but it is a very international
:10:31. > :10:34.organisation. It is important for us to look at Barclays because it
:10:35. > :10:39.gives us an idea of the international banking area. We will
:10:39. > :10:45.talk about what we are expecting out of their numbers. But upfront
:10:45. > :10:49.financially, we know it has cost Barclays $450 million in a fine.
:10:49. > :10:54.But could the affair cost... Be more costly to Barclays as it moves
:10:54. > :10:59.forward? Absolutely. It will be a ten-year period before it recovers
:10:59. > :11:03.over the problems they have had. That period will see them lose a
:11:03. > :11:07.massive amount of business. But they already know that. They are
:11:07. > :11:13.making over $2.5 billion every quarter. The $400 million they are
:11:13. > :11:18.losing is actually find. It all eyes are on the market, what will
:11:18. > :11:22.we hear from them? I believe they will do better. That is what we
:11:22. > :11:26.hear. Which means the investment banking business may be taking a
:11:26. > :11:30.turn around. It will not be a massive improvement, but a slight
:11:30. > :11:35.improvement. And even that is great at the moment. Can I quickly ask
:11:35. > :11:39.you, while we are talking about the rate fixing scandal, 13 other banks
:11:39. > :11:44.are currently under investigation. They range from that -- Japanese to
:11:44. > :11:48.American. What to expect the outcome to be? They are the world's
:11:48. > :11:52.biggest banks which is a very scary prospect. But the regulators have
:11:52. > :11:57.slowed it down and are not doing it all at once, which is a positive
:11:57. > :12:00.thing. We will probably hear one or two banks every quarter and it will
:12:01. > :12:08.come up slowly. That is probably the most responsible way to do it.
:12:08. > :12:11.Thank you. Let's take a quick look in Asia.
:12:11. > :12:13.Asian stocks charged higher Friday after the European Central Bank's
:12:13. > :12:15.chief vowed to save the euro chief vowed to save the euro