:00:14. > :00:21.in Russia's main cathedral. Now for the latest financial news.
:00:21. > :00:25.Welcome to World Business Report. Apple and Samsung had fought a
:00:25. > :00:30.court in America for the latest round of their dispute over patents
:00:30. > :00:38.in mobile phone devices. HSBC is due to reveal its first
:00:38. > :00:42.half earnings, but our investor confidence is dropping after money-
:00:43. > :00:50.laundering allegations. Japan's industrial output falls for
:00:50. > :00:59.its third straight month amid fears that the recovery might be losing
:00:59. > :01:04.momentum. It has been billed as the clash of
:01:04. > :01:10.the titans. The war of words between Apple and Samsung in a
:01:10. > :01:17.court this Sunday. The latest round of their patent battle is over
:01:17. > :01:20.mobile devices. Together, they account for almost half of the
:01:20. > :01:24.smartphone market, but they have seen their share prices hit record
:01:24. > :01:30.highs cent to profits fuelled by these devices.
:01:30. > :01:34.-- thanks to. Apple is known for its
:01:34. > :01:39.distinctiveness. Its latest attempt to protect that will play out in
:01:39. > :01:49.San Jose, California. They have accused Samsung of copying the
:01:49. > :01:53.iPhone and iPad. Samsung has counter-sued, claiming that Apple
:01:53. > :01:56.infringed its patent. Both deny the allegations. What makes this
:01:56. > :02:02.dispute so interesting is that the two companies have a complex
:02:02. > :02:06.relationship. While Samsung's smart phones and tablets compete with
:02:06. > :02:13.Apple products, Samsung also sells components to Apple. This could
:02:13. > :02:16.make reaching an agreement easier. Over the past couple of years, the
:02:16. > :02:20.two might have clashed in court rooms around the world. With
:02:20. > :02:24.impending litigation involving Google, it seems that Apple and its
:02:24. > :02:29.rival, Samsung, are not the only ones who have a lot riding on the
:02:29. > :02:33.outcome of this case. The beleaguered banking sector will
:02:33. > :02:38.be in the spotlight this week. Hate SPC posts its first set of results
:02:38. > :02:46.since a report by the US Senate says it allowed billions of dollars
:02:46. > :02:51.in cash to be laundered by Mexican drug gangs -- HSBC. The bank has
:02:51. > :02:56.announced it will cut 30,000 jobs over the next two years. This will
:02:56. > :03:00.affect about one tenth of its global workforce. Big numbers. I am
:03:00. > :03:04.joined by a banking analyst. They are expected to set aside a fair
:03:04. > :03:09.amount of money for the selling of financial products, but at the same
:03:09. > :03:13.time they are expected to turn in a profit of around $20 billion. Do
:03:13. > :03:19.those figures tally with your analysis?
:03:19. > :03:22.I heard something like 16.8 billion. Within that there is a 3 billion
:03:22. > :03:32.dollar Game when they sold a credit card business with in America last
:03:32. > :03:38.
:03:38. > :03:41.laundering allegations that I mentioned earlier. If it doesn't
:03:41. > :03:46.hit them now in the current crop of numbers, presumably it will for the
:03:46. > :03:54.second half of the year. No provision has been made for this
:03:54. > :03:57.fine yet. They have a lot of litigation. We don't know how big
:03:57. > :04:00.these fines will be. They have a little bit put away but they don't
:04:00. > :04:04.want to make headlines because they haven't yet been fined.
:04:04. > :04:09.They obviously want to say that they are in discussion and they
:04:09. > :04:14.will see what happens. What about the position of Stuart
:04:14. > :04:19.Glover, he is the CEO. He has apologised for the money-laundering
:04:19. > :04:23.allegations - is there a sense that if the numbers come out below what
:04:23. > :04:28.the market is expecting, that could be the queue to get rid of him?
:04:28. > :04:33.Absolutely not, Stuart Gulliver is very safe. He has been very busy
:04:33. > :04:37.putting his strategy in and making cost cuts. I think they sold almost
:04:37. > :04:42.30 businesses since May last year when they announced the changes.
:04:42. > :04:47.They are really getting the bank moving forward. I think he is in a
:04:47. > :04:50.pretty safe position in terms of the allegations. He was running an
:04:50. > :04:57.investment bank at the time. There are a lot of other board members
:04:57. > :05:04.there, including the chairman, who were also on the board at the time.
:05:04. > :05:09.Even if he is saved, they could be other people will be booted out.
:05:09. > :05:13.You could argue that no-one's hands were entirely clean.
:05:13. > :05:18.At the end of the day, the board knew they bought a Mexican bank in
:05:18. > :05:22.2002. One of the joys of working in developing markets is faster growth
:05:22. > :05:27.and earnings. The downside is that you have to be aware that sometimes
:05:27. > :05:30.business is conducted the way that it wouldn't be done in the
:05:30. > :05:34.developed markets. You have to be very aware of that. Clearly this is
:05:34. > :05:40.something they missed. We will get those numbers in a few
:05:40. > :05:44.hours' time. Two of Europe's leading carriers
:05:44. > :05:50.put out their latest financial results. They are right and air and
:05:50. > :05:53.Air France. Those numbers tell dramatically different stories.
:05:53. > :05:58.Ryanair should see its profits soaring, but Air France is likely
:05:58. > :06:00.to go in the opposite direction, posting deep losses. They lost
:06:00. > :06:04.almost $500 million in the first half of this year. They are
:06:05. > :06:14.planning to lay off 5,000 staff. Will this be enough to put it back
:06:15. > :06:16.
:06:16. > :06:19.into profit? Ryanair's budgeted through hard
:06:19. > :06:26.times. Air France has taken the brunt of the storm. Last year they
:06:26. > :06:36.lost almost $1 billion, and it is on course to do the same again....
:06:36. > :06:37.
:06:37. > :06:43.Its managers would like to shed one tenth of the workforce. 5,000 staff.
:06:43. > :06:46.Unions are deciding whether to accept. They are becoming aware
:06:46. > :06:56.that if something doesn't change, the airlines will be in a very
:06:56. > :06:59.difficult position. I imagine that other airlines will follow suit.
:06:59. > :07:03.Cutting costs is the first step as the managers try to turn the
:07:03. > :07:07.company around in a cut-throat market. There are 320 airlines
:07:07. > :07:11.across Europe. All of them are cutting prices to the quick as they
:07:11. > :07:15.scrabble to sell tickets. That is why Air France can't make any money,
:07:15. > :07:18.even given the recent pick up in passenger numbers. There is an
:07:18. > :07:24.urgent need to consolidate throughout the sector in Europe.
:07:24. > :07:34.Air France is one of the big groups of airlines which will be expected
:07:34. > :07:34.
:07:35. > :07:38.to buy up the smaller.... They need to sort out their internal issues.
:07:38. > :07:42.They need to restructure, they need to get their costs down. Until that
:07:42. > :07:52.is done, and it will take some time, they will not be in a position to
:07:52. > :07:52.
:07:52. > :07:57.go shopping for other airlines. Air France has said it needs 7.5
:07:57. > :08:01.billion. If job-cutting does not do it, they will go to the state and
:08:01. > :08:07.ask them to pump in more. Japan's industrial production fell
:08:07. > :08:11.unexpectedly last month. Good morning in Singapore. These numbers
:08:11. > :08:18.are not very encouraging. How bad are they? Should we hide under the
:08:18. > :08:22.covers now? It is a third straight month of
:08:22. > :08:27.declines as Japan continues to feel the impact of this global economic
:08:27. > :08:32.slowdown. You have the strong yen against the US dollar. Their
:08:32. > :08:37.industrial output inched lower by 0.1%. This was due to falling
:08:37. > :08:43.output from auto makers and the electronic industry. You also have
:08:43. > :08:52.the yen appreciating. Auto makers are moving production overseas and
:08:52. > :08:56.demand is low abroad. For July, manufacturers are still expecting a
:08:56. > :08:59.4.5% increase. One Japanese economist has said the numbers are
:08:59. > :09:02.disappointing and though they could be a recovery this month it will be
:09:02. > :09:08.temporary and the economy will continue to languish for the months
:09:08. > :09:18.ahead. The Week In Numbers, the Economist said, would not be enough
:09:18. > :09:31.
:09:31. > :09:34.for the Bank of Japan to ease... -- The point you are making their
:09:34. > :09:43.about the expectations of Central Bank activity helping to lift the