05/08/2014 World Business Report


05/08/2014

Similar Content

Browse content similar to 05/08/2014. Check below for episodes and series from the same categories and more!

Transcript


LineFromTo

forces fighting Sunni militants in the north. Nouri Al`Maliki made the

:00:00.:00:00.

promise after the Islamic State group made strategic gains in

:00:00.:00:00.

northern Iraq. Those are the latest headlines from BBC World News.

:00:00.:00:08.

Now for the latest financial news and World Business Report.

:00:09.:00:22.

American companies hope to get a foothold into some of Africa's

:00:23.:00:26.

booming economies on day two of the US`Africa summit.

:00:27.:00:29.

Daily deals that fail to excite ` investors say Groupon is an

:00:30.:00:31.

over`hyped internet offering. Can the company change its image?

:00:32.:00:46.

Welcome to World Business Report. President Obama's first ever

:00:47.:00:48.

US`Africa summit is under way and today, American companies are hoping

:00:49.:00:51.

to clinch deals with the 45 African heads of state and government, who

:00:52.:00:59.

are gathered in Washington. With his eye fixed on his legacy, the first

:01:00.:01:02.

African`American president is keen to show his commitment to the

:01:03.:01:05.

continent but less than 1% of America's investment overseas

:01:06.:01:13.

currently goes to Africa. From Johannesburg, Adrienne Murray

:01:14.:01:20.

reports. Home to fast`growing economies and a

:01:21.:01:25.

rising consumer class, Africa's markets are an opportunity the

:01:26.:01:30.

company is hungry to invest, not least from the US. Over 14 years,

:01:31.:01:43.

African growth and opportunity has given `` over 14 years, US`Africa

:01:44.:01:52.

legislation has seen sub`Saharan African companies granted duty`free

:01:53.:02:01.

access to American markets. The agreement expires soon. Most of the

:02:02.:02:09.

trade has been in energy. In that regard, it is not really a success

:02:10.:02:13.

story because trade would have taken place anyway. Exporting clothing,

:02:14.:02:22.

however, has done better. Is China rather than America that has done

:02:23.:02:25.

the most to transform Africa over the past decade, building

:02:26.:02:29.

infrastructure projects like roads, rail and this new airport terminal

:02:30.:02:34.

in Nairobi. The White House says this week's summit is not a blatant

:02:35.:02:39.

response to growing Chinese influence on the African continent.

:02:40.:02:45.

Looking at the figures, while China leads when it comes to trade, the US

:02:46.:02:49.

is a hit in terms of foreign investment. In 2012, American

:02:50.:02:55.

companies invested $31 billion in sub`Saharan Africa. French companies

:02:56.:03:03.

also invested $31 billion. The UK invested $25 billion. China invested

:03:04.:03:10.

only $18 billion. The US has been in Africa for a long time. We are

:03:11.:03:15.

talking about Nigeria, Angola and South Africa. And in very few

:03:16.:03:22.

sectors, like oil. China is the new kid on the block, if I may say. Most

:03:23.:03:27.

of the growth in Africa comes from China. China is the largest

:03:28.:03:34.

bilateral trade partner. President Obama is expected to use the summit

:03:35.:03:38.

to voice American concerns on security, governance and human

:03:39.:03:44.

rights. But increasing trade ties will be at the heart of the talks.

:03:45.:03:55.

We are keeping an eye on that summit, updating you when those

:03:56.:04:05.

announcements are made. The daily deals service Groupon is releasing

:04:06.:04:07.

its second`quarter results. The stock has greatly underperformed

:04:08.:04:10.

over the past six months and some investors are sceptical of its

:04:11.:04:13.

turnaround story and are writing off Groupon as another over`hyped

:04:14.:04:24.

internet name. The market is competitive but Groupon is

:04:25.:04:28.

diversifying in an attempt to get ahead again. With me is Claudio

:04:29.:04:37.

Alvarez, director at GP Bullhound. What will they tell us today?

:04:38.:04:42.

Investors are probably looking for revenue to grow around 25%, 26%,

:04:43.:04:51.

which is around $760 million. In particular, they are looking for

:04:52.:04:55.

three things. First, an update on how North America is doing,

:04:56.:05:02.

Groupon's most competitive market. There will be results from Amazon,

:05:03.:05:05.

Google and local players. Second, what is happening to gross margins.

:05:06.:05:12.

As they transition from a push to all model, Groupon is having to

:05:13.:05:18.

resort to advertising to bring traffic. And third, how is growth in

:05:19.:05:27.

the international market happening. Investors will be looking to get an

:05:28.:05:31.

update on that, to see where growth is coming from. They have a lot of

:05:32.:05:36.

ground to make up. They floated at $20? Yes. As of yesterday, their

:05:37.:05:47.

market cap was around $4 billion. The shares were recently $5 each?

:05:48.:05:55.

That is a huge fall. Correct. And many people have said that if they

:05:56.:06:00.

had sold the business when they were offered $6 billion... You know,

:06:01.:06:11.

history is always... Will Groupon be around in five years? They have been

:06:12.:06:16.

buying up other companies to try to diversify. Will that be good enough?

:06:17.:06:22.

This is a difficult task for the management that they have ahead of

:06:23.:06:26.

them and it is still early days. They have only been there for 18

:06:27.:06:30.

months or so, reorganising the business away from local daily deals

:06:31.:06:35.

and more into commerce and business to business propositions. It is

:06:36.:06:40.

still early days but in the end, you have to believe that if they can

:06:41.:06:45.

show some profits, the over 50 million subscribers and at users

:06:46.:06:49.

will be of value for someone. Perhaps it will not be a stand`alone

:06:50.:06:55.

business but that user base will still be around. Thank you.

:06:56.:07:07.

Indonesia has been one of Asia's best` performing markets this year.

:07:08.:07:10.

Its stock market has risen 25% while its currency, the rupiah, has also

:07:11.:07:15.

strengthened by more than 5%. And now, it is set to deliver its

:07:16.:07:18.

second`quarter growth figures for the year. Rico Hizon is in

:07:19.:07:28.

Singapore. Rico, what are we expecting? The numbers just came out

:07:29.:07:39.

minutes ago. And a big disappointment indeed. Growth in the

:07:40.:07:44.

last three months to June has come in at 5.12% and it was the

:07:45.:07:50.

country's worst performance in more than five years. The forecast was

:07:51.:07:57.

for a 5.3% expansion. This increase in consumer spending linked to the

:07:58.:08:00.

country's presidential election has not helped at all. The economy

:08:01.:08:05.

continues to slow because of this ban on shipments of mineral ores and

:08:06.:08:10.

high interest rates. In the first three months of the year, growth was

:08:11.:08:16.

already at its slowest pace since 2009. If you look at Indonesia,

:08:17.:08:22.

South East Asia's largest economy, it has a population of 250 million

:08:23.:08:30.

people. With growth at 5% or more, we have the President`elect Joko

:08:31.:08:33.

Widodo, wanting to get the annual growth rate up to 7% in two years.

:08:34.:08:39.

He faces some major challenges. First, abolishing subsidies for

:08:40.:08:48.

fuel, as well as other issues like poor infrastructure, declining

:08:49.:08:51.

foreign investment and rampant corruption. A lot of

:08:52.:08:56.

responsibilities to deal with during his five`year term. Thank you.

:08:57.:09:04.

Shares in the world's biggest pork supplier, China's WH Group, made its

:09:05.:09:07.

trading debut in Hong Kong today. Shares are sitting at about $6.70 in

:09:08.:09:10.

early trade, up from the offer price of $6.20. The firm reportedly raised

:09:11.:09:14.

more than US$2 billion in one of the biggest public offerings in Asia so

:09:15.:09:26.

far this year. The World Bank has announced that it is allocating $200

:09:27.:09:29.

million in emergency assistance to help West African countries contain

:09:30.:09:31.

the Ebola outbreak. The money will be distributed to the governments of

:09:32.:09:34.

Liberia, Sierra Leone and Guinea as well as to the World Health

:09:35.:09:37.

Organisation. The number of people killed in the outbreak has reached

:09:38.:09:49.

887, according to the WHO. It has not been a week of that much

:09:50.:09:54.

excitement so far in the markets. Japan are down by 0.3%. This is how

:09:55.:10:02.

things finished off in the US. That's all from me for now. I will

:10:03.:10:09.

be back later to look at the papers.

:10:10.:10:25.

An investigation is under way after the parents of a murder victim heard

:10:26.:10:28.

a judge questioning the significance of personal statements given by

:10:29.:10:31.

bereaved families. Judge Graham White made the remarks after

:10:32.:10:33.

Geraldine and Peter McGinty had read their statement by video link at a

:10:34.:10:37.

hearing to decide whether one of their son's killers should be moved

:10:38.:10:39.

to an open

:10:40.:10:40.

Download Subtitles

SRT

ASS