Browse content similar to 21/12/2016. Check below for episodes and series from the same categories and more!
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Now for the latest financial news with Sally Bundock And World | :00:00. | :00:00. | |
The bell tolls for the world's oldest bank. | :00:00. | :00:19. | |
Italy's Banca Monte dei Paschi di Sienna faces a deadline to raise | :00:20. | :00:23. | |
$5.2 billion from private investors today. | :00:24. | :00:27. | |
If it fails state intervention is unavoidable. | :00:28. | :00:32. | |
Living under a cloud - the millions in north-east China | :00:33. | :00:35. | |
stranded by extreme air pollution - we are live in Beijing | :00:36. | :00:38. | |
The clock is ticking for the troubled lender Banco Monte | :00:39. | :00:55. | |
The Italian bank is seeking just over $5 billion | :00:56. | :00:59. | |
in new investment to help it stay afloat - | :01:00. | :01:01. | |
today is the final deadline for existing investors and other | :01:02. | :01:04. | |
retail investors to purchase new shares. | :01:05. | :01:06. | |
The new Italian Prime Minister has sought Parliamentary approval | :01:07. | :01:08. | |
for an emergency bailout package worth some $20 billion | :01:09. | :01:11. | |
in the event that private sector assistance doesn't materialise. | :01:12. | :01:13. | |
This would prove contentious as investors who have already lent | :01:14. | :01:16. | |
to the bank will be penalised under EU laws which came into force | :01:17. | :01:19. | |
Poor quality loans are one of the biggest issues facing | :01:20. | :01:23. | |
In total, the country's lenders sit on around 370 billion dollars worth | :01:24. | :01:34. | |
This accounts for about 40% of all the non-performing loans | :01:35. | :01:38. | |
Ben Kumar is Investment Manager at Seven Investment Management. | :01:39. | :01:50. | |
Good morning, then. How this particular bank get into so much | :01:51. | :02:00. | |
trouble? As you say, bad loans are the focus. When you are the oldest | :02:01. | :02:05. | |
bank in the world, maybe your regulations, maybe the way you | :02:06. | :02:08. | |
assess loans, is a bit more of different to modern banks. It is | :02:09. | :02:11. | |
based on relationships, how long they have been going and if you have | :02:12. | :02:15. | |
been lending to a family or a business hundreds of years, the | :02:16. | :02:18. | |
credit checks aren't of the same quality as some of the newer banks. | :02:19. | :02:22. | |
The new banks have had trouble as well. Banca Monte dei Paschi di | :02:23. | :02:27. | |
Sienna this year has had a problem lending money to people who couldn't | :02:28. | :02:30. | |
afford to pay it back. It has been going on now for centuries. As we | :02:31. | :02:37. | |
know, for some weeks they have been grappling together to try and save | :02:38. | :02:41. | |
this bank. It has been reported that they managed to get around 500 | :02:42. | :02:47. | |
million euros. That is nowhere near their target. Will they raise the | :02:48. | :02:53. | |
funds? Element they have a few ways to do it. Debt to equity swap, not | :02:54. | :02:58. | |
appealing. They have some big investors. One of the biggest | :02:59. | :03:05. | |
Italian insurers owes about 180 million of shares. -- owns. There | :03:06. | :03:13. | |
aren't many other big investors like that in the bond market who you can | :03:14. | :03:21. | |
guarantee will swap into equity. Explain why are swapping into equity | :03:22. | :03:26. | |
isn't an attractive option. You are kind of swapping a guarantee for | :03:27. | :03:29. | |
something that is not a guarantee. It is difference between a bond | :03:30. | :03:35. | |
where you get what you meant to equity way you go over 100 euros and | :03:36. | :03:40. | |
then you hope the bank doesn't go bust and you get some money back | :03:41. | :03:44. | |
when you can. You can see why that is not attractive to people who | :03:45. | :03:47. | |
thought bonds were stable. Let's assume they don't get that money | :03:48. | :03:56. | |
they need and required today. The ultimate deadline is December 30 | :03:57. | :04:02. | |
one. It is not reached, the debt-to-equity swap is unwound and | :04:03. | :04:06. | |
no one has to go through it and the Italian government has to come | :04:07. | :04:10. | |
through and bailout Banca Monte dei Paschi di Sienna. A lot of investors | :04:11. | :04:14. | |
will find out their safe investment has become unsafe indeed. It will be | :04:15. | :04:17. | |
difficult for the relatively new Prime Minister who has only been | :04:18. | :04:21. | |
there since December 12. Thank you for coming in. As you know, we will | :04:22. | :04:27. | |
be across a story today as it developed. | :04:28. | :04:30. | |
US President Barack Obama has permanently banned new oil and gas | :04:31. | :04:34. | |
drilling in US Atlantic and Arctic waters, in one of his last major | :04:35. | :04:38. | |
environmental protection actions before leaving office next month. | :04:39. | :04:40. | |
Mr Obama invoked a provision of a 1953 law which will be | :04:41. | :04:43. | |
difficult for President-elect Donald Trump to reverse. | :04:44. | :04:45. | |
Volkswagen has struck a deal with the US authorities over some | :04:46. | :04:48. | |
80,000 VW, Audi and Porsche cars with 3-litre diesel engines. | :04:49. | :04:51. | |
The agreement is another step towards allowing the German car | :04:52. | :04:54. | |
maker to put the emissions cheating scandal behind it. | :04:55. | :04:56. | |
In June VW agreed to a $15 billion settlement for another 475,000 | :04:57. | :04:59. | |
The new agreement will cost Volkswagen an estimated $1 billion. | :05:00. | :05:03. | |
Nike, the world's leading sportswear manufacturer, | :05:04. | :05:05. | |
has posted better-than-expected profits following a rebound | :05:06. | :05:07. | |
Profits rose 7.3% to $842 million in the three months to November, | :05:08. | :05:20. | |
while revenue jumped 6.4% to $8.18 billion. | :05:21. | :05:24. | |
Nike's basketball category and the Jordan brand accounted | :05:25. | :05:36. | |
for about 15% of Nike's wholesale revenue in 2016. | :05:37. | :05:42. | |
Adam Messinger who is Chief Technology Officer is leaving | :05:43. | :05:46. | |
just weeks after its chief operating officer resigned. | :05:47. | :05:48. | |
Twitter's shares have lost 23% this year, leaving the company | :05:49. | :05:54. | |
with a market value of $12.8 billion. | :05:55. | :05:58. | |
A strike by airport baggage handlers and check-in staff in the UK planned | :05:59. | :06:01. | |
for Friday and Christmas Eve has been called off. | :06:02. | :06:07. | |
More than 1,500 members of the Unite union employed by Swissport had been | :06:08. | :06:10. | |
due to walk out for 48 hours in a row over pay and conditions. | :06:11. | :06:14. | |
The strike was called off following talks | :06:15. | :06:16. | |
Swissport confirmed it had made a revised offer, | :06:17. | :06:19. | |
which the union would recommend to its members. | :06:20. | :06:27. | |
The Chinese capital Beijing has been blanketed in thick smog | :06:28. | :06:30. | |
since the weekend leading the authorities there to take | :06:31. | :06:32. | |
drastic action to minimise the pollution crisis. | :06:33. | :06:34. | |
Factories have been forced to slow down or pause production, | :06:35. | :06:37. | |
flights have been cancelled and highways closed | :06:38. | :06:39. | |
Yet, despite these red alert provisions the air pollution | :06:40. | :06:42. | |
Stephen McDonnell is in our Beijing bureau. | :06:43. | :06:56. | |
We can see behind you the live shot of the smog. This is pretty | :06:57. | :07:02. | |
debilitating and I know that business leaders I have spoken to | :07:03. | :07:07. | |
who are considering China are thinking they won't have offices in | :07:08. | :07:12. | |
Beijing for this reason. As you mentioned, the view here from the | :07:13. | :07:16. | |
bureau tells the story. Normally there is a park and the CBD which | :07:17. | :07:23. | |
you can see. We can't see it at the moment and that is because this huge | :07:24. | :07:28. | |
city is covered in this toxic veil of pollution. As you mentioned, the | :07:29. | :07:34. | |
provisions to try and reduce this. Good knows how bad it could have | :07:35. | :07:41. | |
been. -- goodness knows. You mentioned factory closures. We had a | :07:42. | :07:45. | |
look at that and apparently some 1200 factories were told to stop | :07:46. | :07:53. | |
producing. Cars have gone on to an odds and evens and numberplate | :07:54. | :07:58. | |
system which has cut the traffic in half and yet, pollution levels, if | :07:59. | :08:03. | |
we talked about PM 2.5 are still well over 400 in Beijing and much | :08:04. | :08:10. | |
worse in a nearby province when we are talking 600, 700. I think one | :08:11. | :08:18. | |
date even registered as 1000. What will the authorities do next? At the | :08:19. | :08:25. | |
moment, they are trying to worry about them getting through the next | :08:26. | :08:33. | |
few days. Many flights have been cancelled because of poor | :08:34. | :08:37. | |
visibility. Freeways shut down because of the same reason. | :08:38. | :08:40. | |
Schoolchildren have been told to stay at home. I think they are | :08:41. | :08:44. | |
hoping that all of this can reduce the problem but really, they just | :08:45. | :08:50. | |
need the wind to come along and clear this. In terms of long-term | :08:51. | :08:56. | |
solutions, well, it's closing down the most clapped-out factories, it | :08:57. | :09:00. | |
shutting down the worst of the coal-fired power stations here which | :09:01. | :09:03. | |
are still pretty terrible. Beijing has moved a lot of industry out of | :09:04. | :09:09. | |
the city area into other provinces and possibly that's why the problem | :09:10. | :09:15. | |
gets worse the further you get from the city but it poses a big problem | :09:16. | :09:19. | |
for people wanting to do business here. This is the centre of | :09:20. | :09:22. | |
government in Beijing. If you want to do business in China, you need to | :09:23. | :09:26. | |
come to Beijing and many large companies are based here for that | :09:27. | :09:30. | |
very reason. All right. They have huge problem to deal with. Banks | :09:31. | :09:36. | |
were your time and telling us what is going on. We will talk of that in | :09:37. | :09:41. | |
more detail. A quick look at the markets. The US and Europe had a | :09:42. | :09:44. | |
good session yesterday so Asia are riding on the coattails of that. | :09:45. | :09:48. | |
Japan is down slightly by one third of a percent. You up-to-date with | :09:49. | :09:52. | |
business stories. I will see very soon. | :09:53. | :10:02. | |
After the attack in Berlin, authorities throughout Europe, | :10:03. | :10:05. |