30/07/2012

Download Subtitles

Transcript

: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