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yet of finding dark matter. Now for the latest financial news. | :00:00. | :00:21. | |
Challenging times. Samsung forecast another fall in profits as it loses | :00:22. | :00:27. | |
ground to cheaper smartphones. The chief policymakers had to | :00:28. | :00:31. | |
Washington to discuss what to do to boost global growth. | :00:32. | :00:41. | |
Welcome to World Business Report. Let us start with Samsung, because | :00:42. | :00:47. | |
they are the world's biggest maker of televisions and mobile phones. It | :00:48. | :00:51. | |
is forecast to drop in profit for the second quarter in a row stop it | :00:52. | :00:56. | |
expects to take an operating profit of $7.9 billion. That is down from | :00:57. | :01:03. | |
the same period last year. It follows a 6% decline in operating | :01:04. | :01:08. | |
profit in the previous quarter. The company share price is nearly 12% | :01:09. | :01:13. | |
off from its record high. It is weighed down by worries over slowing | :01:14. | :01:20. | |
smartphone growth. We can speak to Lucy Williamson. What is behind the | :01:21. | :01:33. | |
struggling times? A large part of it is competing at the lower end of the | :01:34. | :01:36. | |
market. Chinese companies are growing in clout. We have seen | :01:37. | :01:40. | |
cheaper models come out from Samsung and its rivals. China promote and `` | :01:41. | :01:50. | |
a more affordable version. Saturation at the high end of the | :01:51. | :01:53. | |
market has been happening for some time. It is only going to get worse. | :01:54. | :02:02. | |
Samsung is starting to feel this. How is Samsung responding to this? | :02:03. | :02:12. | |
As I said, it is bringing out cheaper versions of its products, | :02:13. | :02:17. | |
more affordable versions, and scaling up some of the classics. | :02:18. | :02:28. | |
Also focusing on price. Cheaper prices designed to appeal to shift | :02:29. | :02:34. | |
more items and make up for the saturation of fact. Also reports | :02:35. | :02:39. | |
that Samsung is trying to cut back on its marketing. It spent a lot on | :02:40. | :02:45. | |
marketing. That is one area where Samsung feels it can cut back. | :02:46. | :02:53. | |
The world's top financial policymakers will descend on | :02:54. | :02:57. | |
Washington later for the twice yearly meetings of the International | :02:58. | :03:01. | |
Monetary Fund and World Bank. The debate is likely to be on what needs | :03:02. | :03:05. | |
to be done to boost global growth. With the US in recovery, much of the | :03:06. | :03:09. | |
focus is going to be on Europe and China and their ability to foster | :03:10. | :03:16. | |
sustainable growth. Over the next few days, the streets | :03:17. | :03:20. | |
around Washington headquarters of the International Monetary Fund and | :03:21. | :03:23. | |
the World Bank will be full of visitors. The IMF is one of the most | :03:24. | :03:29. | |
powerful players in the world economy. It is expected to tell | :03:30. | :03:33. | |
policymakers to do more to increase growth. The lender of last resort | :03:34. | :03:39. | |
says that five years after the start of the financial crisis and growth | :03:40. | :03:46. | |
remains too weak and too slow. Some of the obstacles to growth include | :03:47. | :03:50. | |
super low inflation, especially in Europe. Geopolitical tensions and | :03:51. | :03:58. | |
communication by central banks. Those inside this building would | :03:59. | :04:01. | |
like to see greater corporation between countries, especially to | :04:02. | :04:06. | |
developing economic policies. The economy may no longer be frozen, but | :04:07. | :04:14. | |
the economic buds are slow to bloom. The American results season is going | :04:15. | :04:17. | |
to kick off. Stock markets are nervous. Two chance of the Internet | :04:18. | :04:27. | |
world, Google and net Flex, were hammered. Yesterday the sell`off | :04:28. | :04:37. | |
continued. All closing down heavily. What is going on? Always | :04:38. | :04:44. | |
got to talk to you. What is going on? There is a sense that valuations | :04:45. | :04:51. | |
in the technology sector were getting too extended. There may be | :04:52. | :04:57. | |
some caution about the US economy. There is a consensus that the US | :04:58. | :05:02. | |
economy is in good shape and the recovery is continuing. The data is | :05:03. | :05:10. | |
not supported that. There's going to be some disappointment in the US | :05:11. | :05:16. | |
economy. Factor that in along with valuations. So it is the fact that | :05:17. | :05:22. | |
technology stocks and investors think that they have been | :05:23. | :05:30. | |
overvalued? Absolutely. There have been extended, not just in the US, | :05:31. | :05:34. | |
but other markets. Some argue that firms in the US, though they are | :05:35. | :05:41. | |
focusing on results, at earnings are not as much. That is the case. It is | :05:42. | :05:50. | |
all about the focus on the bottom line, cost`cutting, reorganisation. | :05:51. | :05:58. | |
There has not been investment to ensure that the economy remains | :05:59. | :06:02. | |
productive. You cannot just keep cutting costs. We are going to see | :06:03. | :06:09. | |
some disappointing results, particularly with the Federal | :06:10. | :06:14. | |
reserve unwinding stimulus. There may not be much to support stocks in | :06:15. | :06:21. | |
the US. It almost seems like a perfect storm. What are we expecting | :06:22. | :06:29. | |
from this stunning season? I think we will be surprised. But it will be | :06:30. | :06:35. | |
on the basis of the bottom line results rather than revenue numbers. | :06:36. | :06:41. | |
They may disappoint, but the bottom line results will look pretty good. | :06:42. | :06:44. | |
That is consistent with what I am saying. Cost`cutting to get the | :06:45. | :06:52. | |
bottomline to satisfy the numbers. But they are not doing anything in | :06:53. | :06:58. | |
terms of sales and investment. What about what is happening in European | :06:59. | :07:02. | |
and Asian markets? The flavour of the US trading day transmits through | :07:03. | :07:09. | |
Asia into Europe. We will have a weaker opening. There are issues | :07:10. | :07:17. | |
peculiar to Europe. Is there are going to be quantitative easing? If | :07:18. | :07:25. | |
they do not, quantitative easing is it prospect for Europe. That could | :07:26. | :07:33. | |
be positive. If markets are kept waiting, that will be a source of | :07:34. | :07:40. | |
disappointment. And emerging markets are still in focus. That is right, | :07:41. | :07:47. | |
they are suffering. A lot of extra cash was leaking into those markets. | :07:48. | :07:51. | |
Those countries with account deficits are really suffering. The | :07:52. | :07:56. | |
US will not be lifting interest rates any time soon. That will have | :07:57. | :08:04. | |
some support. Thank you. Time for a look at some of the | :08:05. | :08:09. | |
day's other business News. Support for the Windows XP operating system | :08:10. | :08:15. | |
and is today. No more official security updates and bug fixes for | :08:16. | :08:19. | |
the system. Some governments have negotiated extended support | :08:20. | :08:23. | |
contracts for the OS in a bid to keep users protected. Anyone else | :08:24. | :08:28. | |
using the software will be at increased risk of infection and | :08:29. | :08:31. | |
compromise. The boss of a private bank has been | :08:32. | :08:38. | |
shot dead in an underground car park in Lichtenstein. Detectives named a | :08:39. | :08:43. | |
former fund manager as a suspect. He may have taken his own life. He | :08:44. | :08:49. | |
calls himself the Robin Hood of Lichtenstein on his website. | :08:50. | :08:58. | |
Japan and Australia have agreed a trade deal which will see it though | :08:59. | :09:04. | |
tariffs on imports of key products. Japan has agreed to lower duties on | :09:05. | :09:08. | |
Australian beef and agreed to raise the duty free College of on cheese. | :09:09. | :09:19. | |
`` quota. Australia will cut tariffs on Japanese electronics, cars and | :09:20. | :09:25. | |
white goods. The deal is agreed after seven years of negotiations. | :09:26. | :09:30. | |
Let us take a look at the markets before I go. Plenty of talk about | :09:31. | :09:36. | |
what the markets are doing. This is what the Asian markets are doing. | :09:37. | :09:39. |