Browse content similar to 26/10/2017. Check below for episodes and series from the same categories and more!
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Now it's time for
World Business Report. | 0:00:00 | 0:00:01 | |
An end to stimulus or just
a slowdown in bond buying? | 0:00:15 | 0:00:18 | |
Economists will pour over
the European Central Banks statement | 0:00:18 | 0:00:21 | |
later for clues about
the bank's plans. | 0:00:21 | 0:00:22 | |
And is the little
birdie flying high yet? | 0:00:23 | 0:00:25 | |
Twitter will report
its latest results. | 0:00:25 | 0:00:26 | |
Lots of new features over the last
year, but will it be enough | 0:00:26 | 0:00:30 | |
to ignite user growth. | 0:00:30 | 0:00:36 | |
Welcome to World Business Report. | 0:00:43 | 0:00:46 | |
I'm Ben Bland. | 0:00:46 | 0:00:50 | |
Economists are on tenterhooks,
awaiting the European Central Bank's | 0:00:50 | 0:00:53 | |
policy meeting later. | 0:00:53 | 0:00:54 | |
No, they are not expecting a rate
hike, but hoping for clues as to how | 0:00:54 | 0:00:58 | |
and when the bank will bring
large-scale bond purchases | 0:00:58 | 0:01:00 | |
to an end. | 0:01:00 | 0:01:02 | |
That makes it one of the most keenly
anticipated meetings since early | 0:01:02 | 0:01:05 | |
2015 when the program was unveiled.
Expectations are the bank will cut | 0:01:05 | 0:01:09 | |
monthly asset purchases
from the present 60 billion euros - | 0:01:09 | 0:01:11 | |
that's $71 billion -
and stretch them out for as long | 0:01:11 | 0:01:14 | |
as capacity allows while it waits
for consumer-price growth | 0:01:14 | 0:01:17 | |
to pick up. | 0:01:17 | 0:01:19 | |
But are we really at
such a turning point? | 0:01:19 | 0:01:21 | |
Or will it take a long time
for markets to "normalise?" | 0:01:21 | 0:01:31 | |
With me is Vicky Pryce,
Chief Economist at CEBR. | 0:01:32 | 0:01:41 | |
Do you think we are likely to see
the ECB take down its bond buying | 0:01:41 | 0:01:46 | |
programme? Not immediately. It will
say that it intends to. The | 0:01:46 | 0:01:51 | |
expectation is that from maybe
January we will see a reduction from | 0:01:51 | 0:01:55 | |
the 60 billion euros of bond buying
per month. This is of course the | 0:01:55 | 0:01:59 | |
government bond buying in the
secondary markets. There is still | 0:01:59 | 0:02:02 | |
money they are paying buying
corporate bonds, of course. We will | 0:02:02 | 0:02:05 | |
see what happens to that. That will
be reduced, the government bond | 0:02:05 | 0:02:10 | |
buying in secondary markets, to
possibly 30 or 40 billion per month | 0:02:10 | 0:02:14 | |
from, perhaps, January. The
intention would be, I think, to wait | 0:02:14 | 0:02:20 | |
and see what happens to the economy
as a whole. In other words, they | 0:02:20 | 0:02:24 | |
would want to carry on through as
long as they possibly could buying | 0:02:24 | 0:02:28 | |
those bonds over a period of time,
maybe an extra year, because of | 0:02:28 | 0:02:33 | |
course Mario Draghi believes
strongly that the only reason, or | 0:02:33 | 0:02:38 | |
the main reason, that the European
economy is doing as well as it is | 0:02:38 | 0:02:42 | |
now, is because of his
unconventional monetary odyssey we | 0:02:42 | 0:02:45 | |
have seen with quantitative easing,
the reduction in rates to negative, | 0:02:45 | 0:02:49 | |
and of course the changes in the
banking system for companies. Until | 0:02:49 | 0:02:53 | |
he started those measures, in fact,
lending was falling and the economy | 0:02:53 | 0:02:58 | |
of the eurozone was in recession for
some time. Is that why, if eurozone | 0:02:58 | 0:03:04 | |
growth has been better than
expected, you might assume the bank | 0:03:04 | 0:03:07 | |
would the more ready to move? But he
attributes that growth to the | 0:03:07 | 0:03:11 | |
success of the bank's approach,
hence carrying on with it for | 0:03:11 | 0:03:15 | |
longer, albeit perhaps at a slightly
less speedy pace? Absolutely. If you | 0:03:15 | 0:03:21 | |
look at his previous statements,
every time he has not actually moved | 0:03:21 | 0:03:25 | |
rates up, or has continued with the
corporate bonds and the government | 0:03:25 | 0:03:29 | |
bonds that he is buying, remember,
he started with 60 billion per | 0:03:29 | 0:03:34 | |
month, then went up to 80, because
things were not responding as fast | 0:03:34 | 0:03:37 | |
as he would like, then went down to
60. We have seen this change. The | 0:03:37 | 0:03:42 | |
markets are ready for that. Every
conference speech he has given after | 0:03:42 | 0:03:45 | |
the meeting with the ECB, and every
press release he has put out, does | 0:03:45 | 0:03:50 | |
make that strong point. That
actually, just because of his | 0:03:50 | 0:03:53 | |
actions, he has seen the fiscal side
being either negative or neutral. | 0:03:53 | 0:03:57 | |
While that happens, the ECB is
really the only game in town. And he | 0:03:57 | 0:04:03 | |
knows that. And so he will be wary
about changing that stance very | 0:04:03 | 0:04:09 | |
radically, because we still have
problems in a number of countries. | 0:04:09 | 0:04:14 | |
Unemployment is still high in places
like Spain and Greece. There are | 0:04:14 | 0:04:17 | |
problems with what is going on in
Catalonia. So there are concerns | 0:04:17 | 0:04:20 | |
about growth for the future. There
are still huge debt problems in a | 0:04:20 | 0:04:25 | |
number of countries, where the debt
overhang is enormous and must be | 0:04:25 | 0:04:28 | |
dealt with, not just increase also
Italy and Spain. And of course we | 0:04:28 | 0:04:32 | |
still have problems with Ireland and
Portugal. That is still there. In | 0:04:32 | 0:04:36 | |
addition, we have a banking sector
which is in some ways still in | 0:04:36 | 0:04:40 | |
crisis. They have very large non-
performing the -- non-performing | 0:04:40 | 0:04:44 | |
loans in a number of countries which
they need to deal with. All that | 0:04:44 | 0:04:48 | |
suggests to me that he will be
cautious in terms of starting to | 0:04:48 | 0:04:52 | |
tighten up. Vicky Pryce, thank you. | 0:04:52 | 0:04:54 | |
Any wannabe hobbits
out there, beware. | 0:04:54 | 0:04:56 | |
If you have a dream of settling
in Middle Earth, or New Zealand | 0:04:56 | 0:04:59 | |
as it's known to you and me,
there's just been a snag. | 0:04:59 | 0:05:03 | |
Rico Hizon is in our
Asia Business Hub in Singapore. | 0:05:03 | 0:05:05 | |
So Rico, what's going on? | 0:05:05 | 0:05:14 | |
You are very own Gandalf, Rico. A
guide, a counsellor, with a | 0:05:14 | 0:05:18 | |
mischievous sense of humour. Do I
look old like Gandalf? It was the | 0:05:18 | 0:05:25 | |
mischievous sense of humour I was
thinking of. I am sorry that your | 0:05:25 | 0:05:29 | |
plans will have to change, but newly
elected Prime Minister Jacinto | 0:05:29 | 0:05:32 | |
Dearne wants to clamp down on
foreign property ownership, which | 0:05:32 | 0:05:36 | |
has led to soaring property prices
and a housing crisis. -- Jacinda | 0:05:36 | 0:05:43 | |
Adern. It only applies to
nonresidents. So it you are thinking | 0:05:43 | 0:05:48 | |
of buying one you have to kiss the
dream goodbye. Chinese investors | 0:05:48 | 0:05:51 | |
have been among the biggest offshore
buyers, and reports say that hedge | 0:05:51 | 0:05:56 | |
fund managers are buying farms and
rural properties, anything they can | 0:05:56 | 0:06:02 | |
get a hold of, and this is also due
to the surge in the New Zealand | 0:06:02 | 0:06:07 | |
immigration website from Americans
logging on after Donald Trump won | 0:06:07 | 0:06:09 | |
the presidency last year. Apparently
the number of Americans who applied | 0:06:09 | 0:06:13 | |
programmes of citizenship has risen
by 70%. Well, Ben, the ban follows | 0:06:13 | 0:06:19 | |
fears that overseas buyers are
putting too much pressure on prices. | 0:06:19 | 0:06:22 | |
There is also low interest rates,
limited housing stock, and | 0:06:22 | 0:06:27 | |
immigration driving up prices in
recent years. Here is another | 0:06:27 | 0:06:33 | |
important fact for New Zealanders.
Only one quarter of adults own their | 0:06:33 | 0:06:37 | |
own property now, compare to 50% in
1991. Soaring prices have put home | 0:06:37 | 0:06:43 | |
ownership out of reach for many
residents. Rico, many thanks. We | 0:06:43 | 0:06:47 | |
will see you later. | 0:06:47 | 0:06:49 | |
Is Twitter facing
a crisis of confidence? | 0:06:49 | 0:06:51 | |
The micro-blogging site is releasing
corporate results later, | 0:06:51 | 0:06:53 | |
and many will be looking to see
if its popularity is waning. | 0:06:53 | 0:06:56 | |
This is the number they need
to beat: 328 million | 0:06:56 | 0:06:59 | |
monthly active users. | 0:06:59 | 0:07:00 | |
That was the figure for both
the first and second | 0:07:00 | 0:07:03 | |
quarters this year. | 0:07:03 | 0:07:05 | |
In May, the Chinese micro-blogging
site Weibo overtook Twitter | 0:07:06 | 0:07:09 | |
in active users, 340
million, up 30% from 2016. | 0:07:09 | 0:07:12 | |
The once champion of free speech,
Twitter announced earlier | 0:07:12 | 0:07:14 | |
in the month that it will implement
new rules to make the platform free | 0:07:14 | 0:07:18 | |
from hate and abuse,
targeting unwanted sexual advances, | 0:07:18 | 0:07:20 | |
hate symbols and tweets
glorifying violence. | 0:07:20 | 0:07:22 | |
And of course Twitter,
like other social media, | 0:07:22 | 0:07:24 | |
has pledged to be more transparent
about advertising: who is paying, | 0:07:24 | 0:07:27 | |
and to what end. | 0:07:27 | 0:07:28 | |
But is that all enough
to restore trust in Twitter? | 0:07:28 | 0:07:48 | |
It will be an early morning for
Twitter, unlike other tech titans, | 0:07:48 | 0:07:55 | |
Twitter reports their earnings
before markets open on Thursday. | 0:07:55 | 0:07:57 | |
That means Jack Dorsey and his
colleagues will be up well before | 0:07:57 | 0:08:02 | |
their 5am call with investors.
Hopefully they will have some good | 0:08:02 | 0:08:07 | |
news, but that may not be the case.
Some of the same problems continue | 0:08:07 | 0:08:12 | |
to plague Twitter. Their user
growth. At the beginning of the year | 0:08:12 | 0:08:16 | |
they added 9 million new users. In
the following quarter that dropped | 0:08:16 | 0:08:19 | |
to 1 million. Many analysts are
expecting the same for this quarter. | 0:08:19 | 0:08:24 | |
It isn't just how many people have
joined the platform. The question | 0:08:24 | 0:08:31 | |
is, how active are they on the site?
Working in Twitter's favour is that | 0:08:31 | 0:08:35 | |
they are trying new things. They are
experimenting with lengthening | 0:08:35 | 0:08:39 | |
tweets from 140 characters to 280,
and they have added a new feature | 0:08:39 | 0:08:44 | |
called Happening Now, which lets
users see events happening nearby. | 0:08:44 | 0:08:48 | |
Finally, there is the issue of how
Twitter handles the various | 0:08:48 | 0:08:51 | |
accounts. It will be a precursor to
Twitter's appearance before | 0:08:51 | 0:08:55 | |
lawmakers in Washington next week,
where they will likely face a | 0:08:55 | 0:08:58 | |
grilling. | 0:08:58 | 0:09:00 | |
Deutsche Bank has agreed to pay
$220m to resolve a US investigation | 0:09:00 | 0:09:03 | |
into its manipulation
of interest rates. | 0:09:03 | 0:09:04 | |
It is the latest settlement stemming
from banks' involvement | 0:09:04 | 0:09:07 | |
in the rigging of the
benchmark Libor rate. | 0:09:07 | 0:09:09 | |
The sum is more than twice the $100m
British bank Barclays agreed to pay | 0:09:09 | 0:09:13 | |
last year to end a similar probe. | 0:09:13 | 0:09:17 | |
And drinks giant Coca Cola
is the latest to beat market | 0:09:18 | 0:09:21 | |
expectations. | 0:09:21 | 0:09:25 | |
It reported earnings of 50 cents
a share in the third quarter, | 0:09:25 | 0:09:28 | |
while operating revenue came
in at just over $9 billion. | 0:09:28 | 0:09:31 | |
Coca-Cola's results were helped
by the recent relaunch of Coke Zero | 0:09:31 | 0:09:34 | |
in the US, as it looks to offer
healthier, lower-calorie drinks. | 0:09:34 | 0:09:41 | |
Let's take a quick look at the
markets before we go. | 0:09:41 | 0:09:45 | |
Asian markets were largely muted
Thursday, tracking a retreat | 0:09:45 | 0:09:48 | |
on Wall Street as fears
over the progress of US | 0:09:48 | 0:09:50 | |
President Donald Trump's tax cut
plans dampened investor sentiment. | 0:09:51 | 0:09:53 | |
But Tokyo edged up slightly,
bolstered by positive corporate | 0:09:53 | 0:09:57 | |
earnings and a weak yen that boosts
Japanese exporters' bottomline. | 0:09:57 | 0:10:00 | |
US stocks closed lower after hitting
several records in the last month, | 0:10:00 | 0:10:03 | |
with disappointing reports
from companies including AT&T | 0:10:03 | 0:10:05 | |
and Boeing prompting
a sell-off across the market. | 0:10:05 | 0:10:07 | |
That is it | 0:10:07 | 0:10:08 |