03/05/2016 World Business Report


03/05/2016

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The company says it has complied with orders.

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Those are the latest headlines from BBC World News.

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Now for the latest financial news with Sally

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Profits slide at Europe's biggest bank HSBC as it faces serious

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challenges in Europe and China - so what is the outlook for this banking

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With an election expected in a few months' time, will it be

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Economic reforms from tax to pensions are key election issues.

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The Brexit debate - what do those who run small

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We will hear from one business leader in a moment.

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But first, global banking powerhouse HSBC has just released

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It made $6.1 billion, the pre-tax profits figure. That is an over 20%

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fall compared to the before. It made just under $7.1 billion. 2016 has

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been a tough year from banks from the big players in the US to date

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European rivals. -- to their European rivals. It is also banking

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on growth in China, so is it exposing itself to more pain in the

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future? With me is Christopher Wheeler,

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bank analyst at Atlantic Equities. Nice to see you again. Last time we

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spoke it was all of the big US names reporting, and it was bad news after

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bad news. What you make of the HSBC numbers? Similar problems in many

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ways. Their strong this business is commercial banking, and investment

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banking. Investment banking has been hit ID trading issues we have seen

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from the US banks. A big focus on Asia in commercial banking where has

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been so down. -- slowdown. And it's personal banking businesses in the

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UK and Hong Kong have been hit by the environment. Interesting for

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HSBC, because it may be an announcement it is keeping its

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headquarters in the UK, it is still focused on Asia. History is a part

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of that. And China especially. Yet especially we have seen extreme

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volatility in markets globally hitting investment bank profits. But

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for HSBC, it is exposed to China in a different way to its rivals. Is

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that a good or bad thing? For the last six years, the CEO has been

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slimming back businesses to improve performance. But the whole premises

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of this bank is it is such a big player in Asia, especially China. It

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will continue to focus on China. This has been a difficult time for

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them. As someone said on one of your TV shows, if Asia is going 5% a

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year, that is the size of the Belgian economy. He still sees the

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benefits of being incumbent in that market. HSBC has cut back on jobs

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and investment in parts of the business. Many rivals doing the

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same. What is the outlook for ages busy and banks in general for the

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rest of the year -- ages busy? -- ages busy. Energy companies are

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still struggling. But in Latin America where the bank has a big

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footprint, it is trying to reduce it. The low interest rate is still

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hurting in the UK and Hong Kong retail banking businesses. This is

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part of the problem, the fact that central banks are keeping rates

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extremely low or even negative? That's right. It is exacerbated by

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the fact that HSBC has proffered it can't deploy. It is a nice luxury to

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have and makes it a strong bag, but another head wind to its

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profitability. Thank you for your time. The HSBC results literally

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just. We will look at how the Hang Seng is trading later in the show.

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When it comes to the EU referendum, the business vote in the UK won't

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come from the City's boardrooms, but from small enterprises.

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The majority of UK companies are considered small

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The BBC's business unit has been scouring the county to hear

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My name is Bethany. The company and what it's like to run

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My name is Bethany. The company breeds and distributes medicinal

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leeches to hospitals run the world. Primarily, they are used in post

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reconstructive surgery. If you are reiterating a limb or digit SIGGRAPH

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is or tissue transfer. -- skin graft. Because wages have been used

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for so long in medicine, we are able to supply them without hassle --

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leeches. There is a definite move towards more and more you

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regulation. There are several medicinal directives coming out in

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the pipeline. The longer we stay in the EU, the more, located it could

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get for us. It would mean we potentially face massive amount of

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paperwork to comply with EU medical device regulations, and that is a

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considerable cost. It is a considerable addition to your

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overheads. You can find more from

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our series EU: Business Talks at We'll find out the state of

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Australia's finances later today. It's widely expected that

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the country will go to the polls in less than two months, so economic

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reforms ranging from tax to pensions Last year's budget deficit swelled

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to $29 billion That may put

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its triple-A credit rating at risk. Moody's has warned it could lose

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that coveted status So how will

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the government balance the books? Let's go to Rico Hizon. We have

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missed you. I know where you've been. Tell us more about Australia.

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According to many economists we have spoken to, definitely the Australian

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government cannot balance the books with this current budget. When the

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government makes its announcements, they are saying this budget is all

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about jobs, growth and living within our means. Scott Morrison, the

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treasurer, announcing the details later today, which will also double

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as the unofficial start of an election campaign. What will likely

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be part of the package are small tax cuts and spending on health,

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infrastructure and education, and the cost of these will likely be

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offset by pension changes and closing tax loopholes for modern

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national companies. The budget is expected to form the backbone of the

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Liberal coalition manifesto for an election. If Prime Minister Malcolm

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Turnbull, saying that he will dissolve both Houses of Parliament,

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calls the election. As both houses are waiting for the budget

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announcement from the treasurer, minutes ago, the central bank of

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Australia made an announcement and they have cut interest rates to an

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all-time low of 1.75%, hoping to head off falling prices after a very

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low inflation rates during the January -March quarter. This is some

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development that investors in Australia will be thinking about

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before the market closes today. So the central bank cutting interest

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rates to 1.75%. It is all happening today. Thank you.

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Puerto Rico has defaulted on a $422 million debt payment that

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was due on Monday, but it won breathing space from some

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The US territory's governor warned on Sunday

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the island's financial crisis meant it could not meet the deadline.

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Puerto Rico has $70 billion of debts.

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Creditors have agreed to 30 days of talks and hold off

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Ferrari said it was on course for a record 2016

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after posting a rise in profits and sales for the first three months.

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The Italian maker of sports cars, spun off from

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Fiat Chrysler Automobiles last year, sold 1,882 cars in the first

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Let's look at the markets. Those HSBC numbers came in during the

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lunchtime break in trading. The Hang Seng opened today and is doubt

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1.13%. HSBC's numbers were below expectations, so we will see how

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that affects things. This is not the main market but one of those in

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Australia. As Rico Hizon engine, the central bank cutting interest rates

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in a surprise move down to 1.75% -- mentioned. The price of oil is

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heading up. I will see you soon. Thousands of parents across England

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are expected to keep their children home from school

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today in a protest about national

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