16/11/2015 World Business Report


16/11/2015

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Those are the latest headlines from BBC News.

:00:08.:00:09.

Now for the latest financial news with Sally

:00:10.:00:11.

The stock market is set to open as usual and businesses prove

:00:12.:00:21.

resilient but safe havens like gold and the Japanese yen gain ground.

:00:22.:00:30.

Japan falls back into recession for the second time since

:00:31.:00:32.

France is trying to return to some sort of normality after the attacks

:00:33.:00:49.

The stock market will open as usual this morning

:00:50.:00:53.

and there is expected to be a big drop at the open but most analysts

:00:54.:01:06.

agree that knee jerk reaction will be short lived and a prolonged

:01:07.:01:09.

Public transport should be running as normal today in France,

:01:10.:01:13.

Museums and some other attractions will also open as usual,

:01:14.:01:17.

but more vulnerable sites, such as the Eiffel tower will remain closed,

:01:18.:01:19.

as will Disneyland Paris, which will remain closed until Wednesday.

:01:20.:01:35.

To talk us through the long-term effects on the French

:01:36.:01:37.

economy I'm joined by Yannick Naud, a London based French financial

:01:38.:01:40.

As we have just outlined, as much as possible, France is trying to have a

:01:41.:01:56.

normal week in terms of stock markets and business. It will be

:01:57.:02:01.

business as usual. The stock market will open as it always does. What we

:02:02.:02:06.

have seen from the markets in Asia is that the market is likely to be

:02:07.:02:09.

slightly down but nothing near what could have been estimated early in

:02:10.:02:17.

the weekend. All in all, we think that tourism and transportation

:02:18.:02:20.

should be the most affected in terms of the stock market, maybe luxury

:02:21.:02:27.

and insurance as well but the impact will be small. In terms of the

:02:28.:02:34.

nature of this terrorist attack, it happened well after the markets

:02:35.:02:38.

closed across Europe on Friday, so the whole weekend has taken place

:02:39.:02:44.

and people are digesting what has happened. Why and what the outcome

:02:45.:02:50.

could be on the French economy. That helps, doesn't it? For it to be a

:02:51.:02:56.

more rational response? Exactly. If we consider what happened with the

:02:57.:03:02.

July seven bombings in London and the attacks in March of 2004, those

:03:03.:03:06.

attacks happened in market hours and we saw a sharp market fall in some

:03:07.:03:13.

kind of panic. This is a horrific event but it was after the markets

:03:14.:03:17.

closed and therefore, investors had plenty of time to see what would be

:03:18.:03:22.

rational in terms of investing in the French economy. All in all, the

:03:23.:03:32.

impact is quite small. It cannot be underestimated, also, the response

:03:33.:03:35.

on the part of those around the world, globally but also in France

:03:36.:03:41.

in terms of solidarity. Is anything, businesses are supported in these

:03:42.:03:56.

situations, aren't they -- if? Yes, we often see stronger consumer

:03:57.:03:58.

spending in some resilience when these things happen, because people

:03:59.:04:05.

don't want to be changing their way of life. They think that by spending

:04:06.:04:12.

a bit more, they will do their part for the economy. All in all, it is

:04:13.:04:19.

likely to be not a huge event for the long-term. And it could have

:04:20.:04:22.

been any capital city in Europe or anywhere in the world for that

:04:23.:04:27.

matter. This is a global risk, it is something that cannot be priced in

:04:28.:04:34.

or predicted, therefore it is just something that financial markets,

:04:35.:04:38.

globally, have to get used to. Yes, unfortunately terrorism can happen

:04:39.:04:44.

anywhere. As we have seen this weekend, some of the people were

:04:45.:04:47.

coming from Belgium or Germany, they could come from anywhere in Europe.

:04:48.:04:53.

There could be an industrial accident, these are things you

:04:54.:04:58.

cannot price out in advance. All in all, the impact is quite small.

:04:59.:05:06.

Thank you for coming in. In terms of reactions, markets in Asia opened

:05:07.:05:11.

lower because of what happened. The euro is at a six-month low at the

:05:12.:05:14.

moment against the US dollar and some shares in Asia like airline

:05:15.:05:20.

stocks, for example, are being affected. We will keep across the

:05:21.:05:24.

reaction as it happens in Europe as the day begins here later.

:05:25.:05:29.

Japan's economy slipped back into a technical recession.

:05:30.:05:33.

That's two consecutive quarters of negative economic growth

:05:34.:05:35.

after the economy shrank by almost 1% in the three months

:05:36.:05:38.

Mariko Oi is in our Asia Business Hub in Singapore.

:05:39.:05:47.

It would seem, Abenomics is not doing the trick, talk us through

:05:48.:05:59.

this news? That is definitely what critics of Shinzo Abe's very

:06:00.:06:03.

aggressive economic policies will be arguing after today's figures. The

:06:04.:06:09.

economy shrunk by 0.8% in the most recent quarter. In the previous

:06:10.:06:16.

quarter, it shrank by 0.7% which means two consecutive quarters of

:06:17.:06:19.

negative growth, meaning the economy is back in recession. This is the

:06:20.:06:24.

fourth recession since the global financial crisis and the first since

:06:25.:06:29.

the introduction of Abenomics, so a lot of debate over whether there

:06:30.:06:32.

will be any more stimulus to boost the economy or whether, as Shinzo

:06:33.:06:40.

Abe's supporters would say, the effects would take longer to kick

:06:41.:06:45.

in. There are two main reasons for the contraction of the economy,

:06:46.:06:50.

first Lady, as we always keep talking about, China's slowing

:06:51.:06:54.

growth affects Japan's exporters but also spending by businesses shrunk

:06:55.:06:59.

despite those companies reporting record profits. They failed to pass

:07:00.:07:04.

that on to their employees by raising their wages and they are not

:07:05.:07:09.

really investing just yet. Consumer spending continues to pick up at

:07:10.:07:13.

least, even though the sales tax was raised at the end of the year, which

:07:14.:07:19.

initially affected spending power. Super. Thank you for that news

:07:20.:07:21.

coming out of Japan. If you want to launch a product,

:07:22.:07:24.

start a business, The bank, perhaps,

:07:25.:07:27.

the three F's family friends and fools, if you're lucky or you could

:07:28.:07:31.

ask the whole world to fund it. One of the places to do that is

:07:32.:07:34.

Crowdfunding service Kickstarter. Since its launch in 2009 it's taken

:07:35.:07:37.

payment from 7.8 million backers for projects and it recently passed

:07:38.:07:40.

$2 billion worth of pledges. One of the co-founders is

:07:41.:07:43.

Yancey Strickler and he spoke to the BBC as part of our CEO secrets

:07:44.:07:45.

season about what he'd learnt. Creativity and integrity are

:07:46.:08:06.

everything. It is important to approach each problem and each

:08:07.:08:10.

question and thinking very broadly about all the possibilities and to

:08:11.:08:13.

pursue a solution that you feel proud of, that you feel is right and

:08:14.:08:21.

morally correct. If you take shortcuts, if you tried to do things

:08:22.:08:25.

the wrong way, there is a serious price to pay. You always need to act

:08:26.:08:29.

in a way of which you will be proud. If you do that, I think only the

:08:30.:08:31.

best things can happen. In other news: Africa's biggest

:08:32.:08:34.

mobile company, MTN has until today to pay

:08:35.:08:35.

a $5.2 billion fine from Nigeria. The fine amounts to double MTN's

:08:36.:08:38.

profit last year and was for failing to cut

:08:39.:08:41.

off unregistered mobile users. The boss

:08:42.:08:43.

of the company resigned last week saying it was "in the interest of

:08:44.:08:45.

the company and its shareholders". The company is

:08:46.:08:48.

in talks to reduce the fine. Let's show you how trading is going

:08:49.:09:04.

at the moment. As we mentioned, Asia has some reaction to those events in

:09:05.:09:10.

Paris on Friday. Losses across the board. This is the euro trading

:09:11.:09:17.

versus the dollar and the pound, other currencies, some airline

:09:18.:09:26.

stocks are having a tough time at the moment in anticipation that this

:09:27.:09:28.

will deter people from travelling to Europe from Asia. That is all from

:09:29.:09:31.

us, I will see you soon. The government is to announce new

:09:32.:09:40.

funding for the security agencies MI5, MI6

:09:41.:09:42.

and GCHQ in next week's Strategic

:09:43.:09:46.

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