tv BBC Business Live BBC News July 4, 2017 8:30am-9:01am BST
this is business live from bbc news with susannah streeter and rachel horne. the americans may be marking independence day today, but does the world's biggest economy have much to celebrate now that the ceo president is in charge? live from london, that's our top story on tuesday 4th july. as global leaders prepare to meet later this week as part of the 620, today we're going to look at whether donald trump's policies are a step forward for the world's biggest economy. also in the programme, the billionaire co—founder of struggling chinese technology giant leeco has had personal assets frozen. we're live in our asia business hub with the details. and we've got the latest from the markets. and get comfortable, because we'll be getting
the inside track today on alcantara. it's the product you've probably never heard of that luxury brands love to use. and as the american owner of shredded wheat completed their acquisition of weetabix, we want to know, what do you love to eat for breakfast? just use the hashtag bbcbizlive. hello and welcome to business live. welcome to the programme. it's the 4th ofjuly and while americans will be taking the day off to mark independence day, the republicans and democrats will have differing views on whether the state of the country's economy gives cause for celebration. the self—styled ceo president wants america to grow by 3% a year — a level not seen for over a decade. with growth currently atjust 1.6%, how exactly does he plan on doing it? central to his plan is the renegotiation of us trade deals. the trump administration now says that it plans
to start talks over the north america free trade agreement "as soon as practicable". similarly, the president has pulled out of a global climate agreement, saying he will not be part of a deal that disadvantages us businesses and workers. mr trump is also trying to push through a new healthcare deal which is estimated to bring federal deficits down by $119bn — but crucially would also leave 23 million people without health insurance. so could these and other aggressive policies give trump his 3% growth rate? well, the imf doesn't think so. they have now downgraded growth forecasts to 2.1%. with me is avinash persaud, emeritus professor of gresham college and chairman of intelligence capital. let's start with that 3% that donald trump is aiming for. can he do it?
it doesn't look likely. business confidence remains resilient, but they are still praying for lower taxes and lower regulation. but the us isa taxes and lower regulation. but the us is a consumer driven economy and consumer confidence remains in the doldrums. politics is part of the problem. president trump was sworn in on the 20th ofjanuary, so it problem. president trump was sworn in on the 20th of january, so it has been five and a half months. his campaign was very forthright and emotional. he has a majority in the house. you would think that by now, he should have achieved a lot. what is your perception of the situation? the striking thing about the trump presidency from a policy perspective is the absence of policy. he rode this populist wave that he could solve america's problems with a few big solutions, simple solutions that only he was able to do because he wasn't going to pander to vested interests or the politically correct. and the absence of anything
that has changed anything is a problem for consumers. he has also been waged by this health care bill. failed to get it through the first time. in the meantime, his plans to tax cuts which would help reinvigorate the economy for corporate america have been pushed into the long grass. there are two problems. one is his inability to get things done. secondly, what he's trying to get done is not clear. it is not clear that the health care plan will be good for the economy. the us has a productivity problem and good health care and good education are important for web activity. —— for productivity. education are important for web activity. -- for productivity. we have seen a boom from president trump's election, but it was deregulation that markets were looking for that has not happened yet. well, in the election campaign
we had this delusion that by cutting taxes, somehow the tax revenues would grow larger because they have incentivised the economy so much. we have lots of evidence to say that is not the case. the debts are still quite big. so he is not going to get through a big public spending campaign through congress. so he wa nts 3%. campaign through congress. so he wants 3%. the imf said it will be 2.1. it will be between 1.5 and 296. thank you, avinash persaud. let's take a look at some of the other stories making the news. energy—rich qatar said on tuesday it plans to increase natural gas production by 30% over the next several years, as it faces pressure from its neighbours in a diplomatic crisis. a system failure at the nasdaq stock exchange has caused the share price of some of the world's biggest companies to be set
to exactly $123.10. this caused amazon's market value to fall by over 87%, while microsoft's share price soared by 79%. nasdaq says the glitch was caused by improper use of testing data. australia's central bank has kept its benchmark cash rate at 1.5% for a tenth straight meeting. the decision by the reserve bank of australia was widely expected after recent concerns about financial stability. chinese technology giant leeco — that had hoped to topple tesla — has had its assets frozen in a row over an unpaid loan. mariko oi is in singapore. what more can you tell us? the company might not be a household name outside china, but it's an exciting company that was known as the netflix of china. then as you mention, they started drawing
comparisons with the likes of apple and tesla when it started branching out into hardware like smart tv, smartphones and even electric cars. but just after it started selling devices in the us last year, the company's devices in the us last year, the compa ny‘s cash crunch devices in the us last year, the company's cash crunch also started to get attention. today, assets of the compa ny‘s chairman to get attention. today, assets of the company's chairman and his wife and three affiliates worth over $180 million have been frozen by a court. the ruling comes after a company failed to pay interest that was due on bank loans taken out to fund its smartphone business. the chairman has admitted previously to shareholders that the financial problems were more severe than expected. he has not commented on today's latest developments, but it goes to show how expensive all those new innovations are. thank you. let's look at the financial markets
110w. asian shares turned lower as earlier gains were quashed by tensions on the korean peninsula after north korea fired a missile that landed injapanese waters. a system failure at the nasdaq stock exchange caused the share price of some of the world's biggest companies to be set to exactly $123.10. this caused amazon's market value to fall by over 87%. nasdaq says the glitch was caused by improper use of testing data and no trades were completed at those prices. let's take a look at what's happening in europe — there were expectations that britain's ftse 100 and germany's dax would start off in the red. now back to rachel. joining me is jane sydenham, investment director, rathbones investment management
let me start with the nasdaq, that great story. it feels like we are hearing more stories of fat fingered trades or glitches in the system. is it something traders now need to ta ke it something traders now need to take into consideration?” it something traders now need to take into consideration? i think it is, because so much trade is automated and high—speed. so the technology is important and traders need to be aware that not everything works perfectly all the time. need to be aware that not everything works perfectly all the timem need to be aware that not everything works perfectly all the time. it is interesting that it is the tech stocks that have been hit. there is growing unease about technology stocks in general. it seems that their financial stocks have gone through torrid times and now the focus is back on tech, do you think it could be the end of a bubble that we have seen? one of the reasons technology stocks have done so well is that they are genuinely growing companies in what has been a relatively low growth environment.
but because it feels as though interest rates are starting to rise and economies are strong enough to withstand a bit of an increase in rates, in that environment where banks have been so undervalued for so banks have been so undervalued for so long and some people would say they look quite cheap and tech stocks look expensive, there is a bit of a transition going on. people are beginning to say, maybe i should dip my toe back into the financial sector. and do you think with all these regulatory decisions made on these regulatory decisions made on the tech stocks, like the google decision made by the european commission, that big find that it was hit by, do you think that will have an impact going forward? was hit by, do you think that will have an impact going forward7m may. if we look at what happened to microsoft, that was quite a point for them. it is too early to say if that will be a transition, but it's possible. it is all about news flow. if we see lots of positive news for sectors, that will support share prices. if the news becomes negative, the opposite is true.
let's talk about oil. it has had a good run. yes, the best run for five yea rs good run. yes, the best run for five years in terms of eight successive days of rises as a result of reduction in the rig count of american shale oil and gas, which 110w american shale oil and gas, which now seems to be the thing that oil traders are watching, rather than the pricing via opec. it is interesting how quickly they can mmp interesting how quickly they can ramp up production and an ease off the pedal when the oil price doesn't look so attractive. absolutely. it is amazing how technology has made a difference in that industry both in terms of bringing the costs of production down, but also the sensitivity to turn off the supply tap, which used to be a hard thing to do. we were talking about the american owner of shredded wheat dying weetabix. what is your favourite breakfast?” dying weetabix. what is your favourite breakfast? i am a measly girl, sorry! —— i am a muesli girl.
still to come, the luxury product you've probably never heard of. we're going to be talking about alcantara and its use in everything from supercars to private jets. you're with business live from bbc news. british chip company imagination technologies has announced a 19% increase in revenues. but the results are overshadowed by its continuing dispute with its biggest customer, apple, who announced in april that they are stopping using the chips? theo leggett is in our business newsroom. it's been a tough year for the company, hasn't it? absolutely, and the answer to your question is yes. look at the share price. this was where it was in march before apple said it wasn't going to be using imagination‘s intellectual property and its designs for chips any more. and here is what happened to the share price
afterwards. it has not recovered. nipped upa afterwards. it has not recovered. nipped up a bit over the past few days because there is talk of the company being sold. but this is a major dispute. imagination provides the design for chips used in things like iphones, ipads, apple tv ‘s and watches. it provides a good stream of revenue through royalty payments. and if apple stubs using those designs, that royalty stream also stops that provides problems for the company. it provides a great deal of uncertainty. who might want to buy imagination technologies? there are plenty of names in the frame. apple is one of them. it owns an 8% stake at the moment. there is talk of a chinese company potentially being interested , chinese company potentially being interested, and intel as well. although it has problems, imagination has been talked about for yea rs imagination has been talked about for years as one of the uk's leaders in technology and it does still have
useful intellectual property. thank you. sainsbury‘s is up 2.3%. their chief executive says the market is competitive. big supermarket chains are finding life to be tough. could there be another round of takeovers? sainsbury‘s is apparently in talks to buy imagination technologies a wholesaler and nisa. the drive for cheaper groceries. the discount is also performing pretty well. interesting sainsbury‘s is not doing too badly either. you're watching business live. a quick look at how
markets are faring.... look at how they have opened in europe. a bit of a sea of red following on from falls in asia. the ftse 100 following on from falls in asia. the ftse100 currently down. asia falls took place after an uplift earlier in the session following the news that north korea have fired a missile into the waters off japan. and now let's get the inside track on a type of material that you may not have heard of, but you may have sat on it, or even worn it! alcantara is a synthetic suede—like material, which is used in many luxury items. one of its main selling points is its durability, alongside its similarity to real suede. if you're lucky enough to own a lamborghini, porsche, yacht, or even a privatejet, you'll probably have come across their product which is used as an interior trim. alcantara is protected by several patents and is produced by its italian parent company, also called alca ntara.
joining us is andrea boragno, chief executive officer and chairman of alcantara. thank you forjoining us in the studio. my pleasure. let us talk about the product, the type of material... very innovative. as a result of proprietary technology. very versatile. it can be resented in countless different ways. we started in the fashion industry, in the 70s, versace and other important fashion designers using alcantara, then we moved into interiors and then we moved into interiors and then the automotive industry. nowadays, because of the versatility of the material and because of the properties of being presented or in cou ntless properties of being presented or in countless different ways, we are expanding more and more in many business sectors. the last one where
we are growing significantly is consumer electronics and especially information technology. headphones... in the earpads, we have glasses here. it is carbon neutral as well? your production process ? neutral as well? your production process? the first italian company to be carbon neutral and we have a strong commitment on sustainability and we believe this trend will grow and we believe this trend will grow and grow. and talking about growing trends, we are positioning the brand at the intersection of high—performance technology and emotions. the emotion of beauty, something related to design something related to design something related to fashion and even to art. which is why you have been at the festival of speed. exactly. we are very pleased about this participation with the london design festival in partnership
with... we wanted to put together the best of the uk design together with italian excellence. for several yea rs, with italian excellence. for several years , we with italian excellence. for several yea rs, we have with italian excellence. for several years, we have had a very intensive and fruitful relationship with the world of design, of creative people, and even artists, it is a relation of give and take. for designers, alca nta ra of give and take. for designers, alcantara becomes the means by which they express their creativity and very often, alcantara becomes the integrating part of the creative process and as they return, we have a lot of ideas. so important it became an integrated part of the business. the business proposition, in italy, do you think that is the right way to go to luxury products
to revitalise the economy? it is a global trend, not only in italy. it is an advantage to some extent compared to other countries. we believe and we have been practising the positioning of the brand at the intersection between technology and emotion. we think there is a growing trend of this. and the market once exclusivity and top quality is not enough —— and the market wants exclusivity. for me, top quality is boring. you need luxury and emotion. the motion and luxury. that is what the market wants. we need breakfast. thank you. let's talk about gender equality because a new report from the wharton business school says venture capitalists who provide funding for start—ups have an inbuilt bias against female entrepreneurs. from new york, samira hussain reports. it is loud, dark and it is popular
with women. that popularity has propelled this brand of stationary cycling from a single studio to a national phenomenon and soon it will debut on the public stock exchange. but does its dependence on women speak to the wider trend of women starting female focused companies?” believe ultimately what investors are looking for businesses with sound fundamentals, have you proven you are able to consistently grow your business and are you making returns on your capital? studies have shown women are more reluctant to get into business. and a good inn is solving a problem you face personally. that was how the camp and alternative was born. —— tampon. i was terrified of becoming an entrepreneur. the chance of success
is slim to none but i was facing a deep personal problem and i knew i had to solve it. but if female entrepreneurs only focus on solving their own problems, or catering to women, they risk reinforcing the same stereotypes that have plagued women in business for years. the stereotypes and preconceptions about what men and women are good at and the traits they possess more exaggerated than reality. i think in most businesses, in reality, men and women are relatively create likely to have the traits needed to be successful but it is the perception. less tha n successful but it is the perception. less than 5% of fortune 500 companies have female ceos and while more women than ever are starting businesses, it is still far less than men. if the economy is ever going to receive the full benefits of gender equality, everyone will need to rethink what businesses women can succeed need to rethink what businesses women can succeed in. time to look
to see what other stories have been making the news today. dominic o'connelljoins us. starting with the story in the financial times come uk ministers calling for post—brexit cooperation with the eu. quite an extraordinary story. when was the last time you can recall two cabinet ministers writing an open letter to the financial times that was not a response to anything, lead letter, it is all about the relationship between britain and europe when it comes to approving drugs? they are saying, giving assurances the drug companies, big industry in britain, worth about £60 billion a year to the uk, assurances the old way of approving medicines, donein the old way of approving medicines, done in collaboration with european regulatory authorities, it will not be damaged by brexit talks. how can they say this? the ecj, the european courts, they are part of the whole regulatory apparatus and one of the points of brexit is we do not want european courts to have any say in
european courts to have any say in european chilly uk affairs. if we did go down that road, the uk might become yet another international market and not part of the centre of the drugs world and it is a careful line. this will appeal to those after a ha rd line. this will appeal to those after a hard brexit, blue —— com plete after a hard brexit, blue —— complete absence of control of the ecj? it talks about prioritising patients and the best possible way of approving medicines without saying, yes, we will still be in europe when it comes to approving drugs. if you make that concession, the european regulators will still hold sway over the pharmaceutical industry, in the car industry, the aerospace industry, the city of london, they will say, why can't we have that too? it is a very tricky can of worms, if i can mix in metaphor. a can of worms, that is not what you want for breakfast. what did you have? porridge. i had porridge at 2am. you are virtuous. i
had a piece of victoria sandwich sponge cake. a sneaky slice. a story in the times about an american company which has just bought weetibix. amanda says on twitter, a full english, would be herfavourite brea kfast, full english, would be herfavourite breakfast, but the reality is porridge. nothing beats a sausage sandwich! it is either victoria sponge sandwich! it is either victoria sponge oi’ sandwich! it is either victoria sponge or a bacon sandwich! it is either victoria sponge or a bacon sahni! the reason the americans are buying it because the americans are buying it because the chinese bought weetibix thinking the chinese bought weetibix thinking the chinese bought weetibix thinking the chinese diet would change to more western—style processed carbohydrates like weetibix but it did not work. the chinese company has sold it to the americans who of course have tastes which are much more in line with british tastes, eating breakfast there are real. the chinese have proved quite stubborn, they have not adopted weetibix, as they have not adopted weetibix, as they thought they would do. they have not adopted weetibix, as they thought they would dom they have not adopted weetibix, as they thought they would do. is this any more concern in terms of ta keovers for any more concern in terms of
takeovers for the uk? it already was in chinese hands, it had fallen to foreign companies already and given we have sold our ports, airports, power companies, we not that bothered about a breakfast is a real maker! this is a picture of a viewer's breakfast cereal. oh, dear! they have obviously got a hard day coming up. orthey they have obviously got a hard day coming up. or they have been on a night shift. anyway... i think it has to go to porridge. it seems as though in the us it will be weetibix. interestingly, some weetibix was impounded in new zealand. slip of the time, i grew up in new zealand and i said weetbix. weetibix was impounded, brought in by british rugby supporter. we will have to leave it there. bye—bye. good morning. a north— south split
in the weather over the next couple of days. northern areas, it will be quite cool at times. but it is going to turn much warmer across england and wales as we go into wednesday. we have got this weather front here this morning bringing outbreaks of rain across northern ireland and southern scotland and northern england. to the south of the weather front, warmer air. to the north, the air cooler. further south, in front, warmer air. to the north, the air cooler. furthersouth, in the afternoon, sunny spells across good parts of south—west england. in the south—east, lovely sunshine this morning, the cloud will increase gradually in the afternoon. temperatures up to 26 in london. sunny spells for much of wales, the midlands and most of northern england. the rain continues in the final. easing off slightly in northern ireland. the rain again continuing in southern scotland. northern scotland, not too bad. some sunny spells. just the odd shower.
wimbledon today, it should be dry. sunshine this morning, the cloud will increase this afternoon. through this evening and tonight, the raining northern areas will gradually peter out and it will stay quite damp and resilient over the hills and the mountains, lots of cloud. temperatures in the north, nine, ten, 12. in the south, 17, quite a warm night and that is because we are starting to seat warm aircoming infrom because we are starting to seat warm air coming in from the south through wednesday and that will extend further north into much england and wales but staying a bit fresher in scotla nd wales but staying a bit fresher in scotland and northern ireland. there will be cloud here at times on wednesday, a few showers across southern scotland into northern ireland as well. some sunny spells in the final. england and wales, increasing sunshine on wednesday, those temperatures in the south—east
getting up to 28 degrees. thursday, the heat is in place, and then the area of low pressure coming from the south, injecting a bit of moisture, heat and moisture, sparking off some thunderstorms on thursday. hit and miss. detail as to where they will hit is uncertain. potentially another very warm day on thursday with thunderstorms. further north, not quite as wet and not quite as warm. more details online. that is it from me. hello, it's tuesday, it's 9 o'clock, i'm victoria derbyshire, welcome to the programme. this morning — in an exclusive interview, the father of the youngest victim of the manchester arena terror attack says his family has lost everything. saffie roussos would have turned nine today. i was holding onto hope that she was in one of the hotels or hospitals that they haven't checked. when he came and told me, ijust couldn't believe it. i can't say i did anything,