Browse content similar to 27/07/2012. Check below for episodes and series from the same categories and more!
Line | From | To | |
---|---|---|---|
headlines. Now for the latest financial news in World Business | :00:04. | :00:14. | |
:00:14. | :00:16. | ||
Hello. Welcome to the program. A chance to catch up on all the | :00:16. | :00:20. | |
latest in the world of business and money. Let's take a look at the | :00:20. | :00:24. | |
headlines. Facebook loses more friends on Wall Street as its first | :00:24. | :00:32. | |
financial results disappoint, sending shares plunging further. | :00:32. | :00:39. | |
Record quarterly profit for the world's largest mobile-phone maker. | :00:39. | :00:42. | |
Plus, is America's economic recovery stalling? Growth may have | :00:42. | :00:52. | |
:00:52. | :00:59. | ||
weakened to its slowest pace in a We will catch up with Sharanjit | :00:59. | :01:06. | |
Leyl shortly and talk about those Facebook numbers. First, let's talk | :01:06. | :01:15. | |
US. Is America's economic recovery stalling? It is expected to show | :01:15. | :01:20. | |
that the world's biggest economy, growing at about 1.5%. If that is | :01:20. | :01:28. | |
the case, it will be the slowest pace in one year. We will hopefully | :01:28. | :01:38. | |
:01:38. | :01:39. | ||
have a report on that in a while. First, we look at Samsung. It is | :01:39. | :01:45. | |
the world's largest maker of mobile phones, televisions, etc. It posted | :01:45. | :01:54. | |
record profits. Sharanjit Leyl, what do you say about this company? | :01:54. | :01:58. | |
It is a big one and it appears people cannot get enough of | :01:58. | :02:04. | |
everything Samsung! It appears they cannot get enough | :02:04. | :02:12. | |
in terms of its mobile phones. It was mainly due to the surge in | :02:12. | :02:18. | |
smartphone sales and better profits as well in its TV business. And it | :02:18. | :02:28. | |
has put a big smile on the face of today as they celebrate. Profits | :02:28. | :02:35. | |
came in at about $5.9 billion. That is about a 79% jump from one year | :02:35. | :02:42. | |
earlier. Samsung makes the Galaxy smartphones and that is making it | :02:42. | :02:47. | |
the world's biggest maker of mobile phones. It is really the strength | :02:47. | :02:52. | |
of the phone business that will offset the sales of TV and other | :02:52. | :02:57. | |
electronic devices. The biggest risk to Samsung are the painter and | :02:57. | :03:03. | |
issues and the various legal tussles with Apple. It is expected | :03:03. | :03:13. | |
:03:13. | :03:15. | ||
to be Samsung's biggest competitor. Apple will not announce yet when | :03:15. | :03:20. | |
the latest iPhone will be launched. That could bring up sales of the | :03:20. | :03:24. | |
galaxy smartphones as well. I am sure the battle will continue. | :03:24. | :03:29. | |
Thank you. That was Sharanjit Leyl from Singapore. | :03:29. | :03:35. | |
The -- They were some of the most hotly anticipated financial results | :03:35. | :03:39. | |
on Wall Street for many years and it seems that Facebook has failed | :03:39. | :03:43. | |
to come up with the goods. In its first earnings report since its | :03:43. | :03:46. | |
$100 billion flotation, Facebook posted a loss of $157 million, | :03:46. | :03:49. | |
mainly due to one off-expenses associated with its IPO. But it was | :03:49. | :03:59. | |
:03:59. | :04:01. | ||
the news about slowing growth that sent its shares tumbling. | :04:01. | :04:05. | |
It was the party scene at the headquarters when Mark Zuckerberg | :04:05. | :04:10. | |
took the company public. But with its shares down about 35%, pressure | :04:10. | :04:15. | |
is mounting on the young chief executive. The social network's | :04:15. | :04:20. | |
first set of earnings as a public company did little to calm a | :04:20. | :04:25. | |
sceptical Wall Street. Facebook has 955 million users worldwide and its | :04:25. | :04:30. | |
revenue for the last three months rose 32% from one year ago. But its | :04:30. | :04:34. | |
growth, particularly in the US, appears to be slowing. And this is | :04:34. | :04:39. | |
worrying because it makes most of its money from uses in the US and | :04:39. | :04:42. | |
Canada. The social network has also been played with questions about | :04:42. | :04:46. | |
whether it can be drought had to make money off the growing number | :04:46. | :04:53. | |
of people using the site on mobile devices. Facebook's IKEA was the | :04:53. | :05:02. | |
most anticipated since Google. But shares in technology companies have | :05:02. | :05:08. | |
all performed poorly. And there are concerns about growth persisting | :05:08. | :05:12. | |
which will be unlikely to change any time soon. | :05:12. | :05:15. | |
Shervin Pishevar is Managing Director of Menlo Ventures, a | :05:15. | :05:18. | |
venture capital firm based, like Facebook, in Menlo Park California. | :05:18. | :05:28. | |
:05:28. | :05:28. | ||
He is also a Facebook shareholder. Those results, they didn't exactly | :05:28. | :05:32. | |
break the bank. As shareholders, you must be looking at it and think, | :05:32. | :05:37. | |
I bought it at $38 per share and now it is worth $24 per share? | :05:38. | :05:47. | |
:05:48. | :05:48. | ||
markets are interesting. Facebook hit their numbers and those that | :05:48. | :05:53. | |
did and also went down. Facebook is an historic company, like Google | :05:53. | :05:59. | |
was. If you look at the growth of it, all of it will marvel. One of | :05:59. | :06:03. | |
the most outstanding thing I saw was that over 7% of the human | :06:03. | :06:07. | |
population is using Facebook on their mobile phones. The future of | :06:07. | :06:11. | |
the Facebook is on mobile. That is what I think the hope is and where | :06:11. | :06:16. | |
the transition, in terms of their business model, will go. They are | :06:16. | :06:21. | |
just experimenting with the mobile phone ads. Because they have to do | :06:21. | :06:26. | |
that, some critics will say. You mentioned close to 1 billion users | :06:26. | :06:30. | |
on Facebook but there is always the question about how the company will | :06:30. | :06:35. | |
generate money. How it will make $1 from all of its users. If you look | :06:35. | :06:39. | |
at the mobile, which has been causing a bit of a problem, because | :06:39. | :06:43. | |
people have been turning to Facebook on their mobile devices. | :06:43. | :06:48. | |
That activity has surged 67%. They have got to get in quickly! If you | :06:48. | :06:53. | |
think about it this way, from a logic perspective, everybody is | :06:53. | :06:57. | |
excited about Apple and iPhone and everything else. If you look at the | :06:57. | :07:01. | |
numbers of iPhones out there, it is amazing. But nobody is forcing | :07:01. | :07:06. | |
anyone to go to Facebook. People are engaged across hundreds of | :07:06. | :07:10. | |
millions of mobile phones around the world. This is just the | :07:11. | :07:14. | |
beginning. There innovation, that they can apply to mobile | :07:14. | :07:19. | |
advertising, and also to payments, is really exciting. OK. We will | :07:19. | :07:28. | |
keep our eyes on that. Thank you. We have to move on. I mentioned | :07:28. | :07:32. | |
whether America's economic recovery is stalling. We should get the | :07:32. | :07:38. | |
first reading of second-quarter growth numbers out soon. | :07:38. | :07:43. | |
Welcome to an upstate area in New York. The town could do with a lick | :07:43. | :07:49. | |
of paint and more new jobs. It is unlikely to get them from this | :07:49. | :07:57. | |
local electronics firm. It employs 35 people, making printed circuit | :07:57. | :08:03. | |
boards. There is a recessionary element in manufacturer in in our | :08:03. | :08:07. | |
products. Many of our customers buy products from the whole world. So | :08:07. | :08:11. | |
if there is an area that is paralysed, as far as economic | :08:11. | :08:16. | |
decisions and investments go, it will come back and trickle-down | :08:16. | :08:22. | |
through my customers. And too well floor. This bit of kit is only nine | :08:22. | :08:27. | |
months old and costs nearly $1 million. The boss says he probably | :08:27. | :08:31. | |
still would buy it now, if he had to make the choice, despite the | :08:31. | :08:35. | |
uncertainty of the business climate. But there are many other companies | :08:35. | :08:39. | |
that wouldn't take that risk. The latest figures are likely to show | :08:39. | :08:44. | |
that growth in the US economy has slowed from an annual rate of just | :08:44. | :08:51. | |
below 2% in the first quarter to 1.5% or less, between April and | :08:51. | :08:57. | |
June. This is the recovery of fits and starts. There are periods we | :08:57. | :09:01. | |
see some acceleration and growth -- in growth and activity and that | :09:01. | :09:05. | |
quickly gets pushed down and we see a slowdown as well. Having survived | :09:05. | :09:09. | |
the recession that followed the global financial crisis, this | :09:09. | :09:14. | |
business at least believes it can cope. This is the way life is going | :09:14. | :09:20. | |
to be. There will be financial debacles, different elements of | :09:20. | :09:22. | |
legislative gridlock and that sort of thing. Uncertainty has become | :09:22. | :09:28. | |
the certainty. With the eurozone in crisis and US policy-making | :09:28. | :09:31. | |
gridlocked for the presidential election, businesses are hankering | :09:31. | :09:37. | |
down, crossing their fingers and hoping for the best. | :09:37. | :09:41. | |
Barclays reports second quarter earnings in just over an hour. It | :09:41. | :09:44. | |
is still reeling from the resignations of its top executives | :09:44. | :09:49. | |
over the LIBOR interest rate fixing scandal. The LIBOR rate is the | :09:49. | :09:52. | |
interest rate that banks set and charge each other to lend and | :09:52. | :09:57. | |
borrow money. Apart from the $450 million in fines it has received | :09:57. | :10:01. | |
from US and UK regulators, what is the broader financial impact on | :10:01. | :10:11. | |
:10:11. | :10:12. | ||
Barclays likely to be? Ralph Silva is a banking analyst at SRN. Before | :10:12. | :10:19. | |
we talk about the actual numbers, where does Barclays sit today? | :10:19. | :10:23. | |
is actually the biggest investment bank on a global level, where there | :10:23. | :10:28. | |
are bigger investment banks in the US but it is a very international | :10:28. | :10:31. | |
organisation. It is important for us to look at Barclays because it | :10:31. | :10:34. | |
gives us an idea of the international banking area. We will | :10:35. | :10:39. | |
talk about what we are expecting out of their numbers. But upfront | :10:39. | :10:45. | |
financially, we know it has cost Barclays $450 million in a fine. | :10:45. | :10:49. | |
But could the affair cost... Be more costly to Barclays as it moves | :10:49. | :10:54. | |
forward? Absolutely. It will be a ten-year period before it recovers | :10:54. | :10:59. | |
over the problems they have had. That period will see them lose a | :10:59. | :11:03. | |
massive amount of business. But they already know that. They are | :11:03. | :11:07. | |
making over $2.5 billion every quarter. The $400 million they are | :11:07. | :11:13. | |
losing is actually find. It all eyes are on the market, what will | :11:13. | :11:18. | |
we hear from them? I believe they will do better. That is what we | :11:18. | :11:22. | |
hear. Which means the investment banking business may be taking a | :11:22. | :11:26. | |
turn around. It will not be a massive improvement, but a slight | :11:26. | :11:30. | |
improvement. And even that is great at the moment. Can I quickly ask | :11:30. | :11:35. | |
you, while we are talking about the rate fixing scandal, 13 other banks | :11:35. | :11:39. | |
are currently under investigation. They range from that -- Japanese to | :11:39. | :11:44. | |
American. What to expect the outcome to be? They are the world's | :11:44. | :11:48. | |
biggest banks which is a very scary prospect. But the regulators have | :11:48. | :11:52. | |
slowed it down and are not doing it all at once, which is a positive | :11:52. | :11:57. | |
thing. We will probably hear one or two banks every quarter and it will | :11:57. | :12:00. | |
come up slowly. That is probably the most responsible way to do it. | :12:01. | :12:08. | |
Thank you. Let's take a quick look in Asia. | :12:08. | :12:11. | |
Asian stocks charged higher Friday after the European Central Bank's | :12:11. | :12:13. | |
chief vowed to save the euro chief vowed to save the euro | :12:13. | :12:15. |