tv World Business Report BBC News July 28, 2017 5:30am-5:46am BST
this is bbc world news. the headlines. aid workers say seven million people in yemen are one step away from famine. two years of war have led to a dire humanitarian situation, made worse by an outbreak of cholera which has affected hundreds of thousands of people. venezuelan president nicolas maduro has banned protests ahead of sunday's controversial election for a new national assembly. opposition groups have vowed to defy the ban. they claim the country's sliding towards dictatorship. aid workers on the greek island of lesbos have told the bbc they're dealing with many extremely vulnerable refugees who've suffered torture and sexual abuse at the hands of so—called islamic state. reports from nigeria say more than a0 people were killed in an attack by boko haram militants on an oil exploration team near maiduguri. the local university confirmed that some of its staff had been killed. now it's time for world business report. king for a day!
amazon founderjeff bezos briefly becomes the world's richest person. but wall street nerves about the company's massive spending push him back down to number two. plus, making america grow again. will the latest figures on the us economy bring president trump closer to his 3% target? welcome to world business report. i'm rachel horne. also coming up — a billion—dollar round of coffees as starbucks buys out its chinese partner. but first — we start with retail giant amazon. it has seen its shares fall sharply after its latest figures disappointed wall street. the good news — it is raking in huge sums of money as its sales keep expanding.
the bad — it's spending a fortune on developing its business, and that is making investors nervous. let's show you the details. total sales in the three months tojune jumped almost a quarter compared to last year to just under $38 billion. unfortunately, they spent almost all of it! operating expenses surged to well over $37 billion. that means there wasn't much actual profit — a comparatively measly $197 million, and down 77% on last year. amazon is investing massively in everything from tv and movie content to new warehouses for the global expansion of its business. like this — the deal it announced last month to buy the supermarket chain whole foods for over $13 billion. amazon has been putting increasing pressure on bricks and mortars retailers in the us. optimism about the company's future has helped to push up amazon's share price. since january, amazon shares have risen by more than 40%
to a new record, making the company worth about $500 billion. that has proved very lucrative for this person — the firm's founder, jeff bezos. on thursday, he became the richest person in the world, overtaking microsoft's bill gates. but it was a brief reign. as the share price has come down again, he has dropped back into second place. what you have to remember is the market is making him rich based on his ownership of amazon, and amazon is not making a heck of a lot of money. the market is saying that, at some point in time, they will generate so much market share that they can set their own prices. this is extremely profitable, and that's so he's done what he's he's done. so it's really a tribute to someone who latched on to the strength of the so—called new economy, and internet economy, and has ridden it. riaz kanani, co—founding partner of marketing agency,
radiateb2b. this is quite typical of amazon, they make a lot of money and they invest a lot of money and they are not interested in banking profits might have markets reacted so badly? two major regions, —— reasons, the lead up to these results, they were expecting them to not invest heavily. the other major reason is amazon has really aggressively invested and as a result the markets have had. why were investors not inspected them to do what they usually do? the last couple of years they have been comfortable, they have been growing, they continue to invest but i think they under estimated how much, having really taken significant market share, i mean, amazon prime now have nearly
50% of american households which is astonishing when you think about it isa astonishing when you think about it is a subscription to an e—commerce retailer. so they are pushing on, they are going to invest further in faster delivery, different types of delivery, as well as pushing internationally. jeff bezos isn't just building a company, and empire is almost too small a word for what he's trying to create, he going global, into tv and video, we are seeing the purchase of whole foods, where do you think rob one could go next? the rumour is internally they are working on a communications platform, it would compete with lock—up and facebook. instant messaging, video chat, that kind of thing. —— whatsapp. it's a natural next step for them, given there are alexa device they launched which has been extremely successful which allows you to order things by voice.
you know, choose to play music by voice. briefly, amazon is part of this text table of facebook, amazon, netflix, google, alphabet, with the result this week from facebook and alphabet, how do is amazon's compared to their tech partners? very different, facebook and google are very much still advertising companies. whereas amazon throughout it all is really still an e—commerce, and this tradition business, that is what they do, ——a distribution business. that is their core business. but how they view the world. thank you forjoining us. let's stay in the us where in a few hours' time, we get economic growth figures for the three months tojune. it's an important set of numbers for president trump. he has been promising an annual growth rate of 3% or more. but gdp growth in the first quarter — the three months to march — was barely half that at i.4%.
samira hussain reports from new york. the question is... as candidate for president donald trump had ambitious goals for america's economy, believing he could make the country's gdp saw. we are bringing up country's gdp saw. we are bringing up from i% country's gdp saw. we are bringing up from 1% up to 4% and are actually think we can go higher than 4%, i think we can go higher than 4%, i think it could go to five or 6%. but the realities of governing the country have a president singing a somewhat more muted tone. the various players on president trump's economic team have suggested that america's economy could grow in and around 3%. america's economy could grow in and around 396. you would need productivity to go back to levels seen at only the peak of the tech boom in order to get sustainable rates of growth at a 3— 3.5% or better, we have only done that for a few years in the entire post—world war ii environment. i think it's very unlikely that anything on the
fiscal policy front will go to the sustainable 3% or better. fiscal policy front will go to the sustainable 396 or better. it was fiscal policy that had the international monetary fund downgrading america's growth prospects for both pc the next. in the imf‘s opinion, whateverfiscal policy does get made may not be as growth boosting as previously hoped for. the continuing saga of repealing and replacing obamacare has had a cascading impact on president trump's legislative priorities, reforming this country's compensated tax code, and passing on billion—dollar spending bill, with things that would have a direct impact on america's economic growth. but the likelihood of getting either of those two things anywhere close to the president's desk is looking highly unlikely. let's go to asia now, where coffee giant starbucks is splashing out in china. it is buying out its eastern chinese partners, spending $1.3 billion on the 50% of the business it doesn't already own. it's the biggest deal starbucks has ever done. what has been the reaction to this
announcement? quite a bit, reason why they are doing really is because china is starbucks's fastest—growing market outside the us a number of stores, the deal will really help the company reach its target of operating some 500,000 stores in mainland china by 2021. this announcement of course percolating just as the seattle —based site —— starbucks announced its profit, income fell about 8.3% untiljuly which matched market expectations and of course the latest results come, really, the first under the new chief executive kevinjohnson who took over from the co—founder how witchell in december. he describes the china buyout as part of the firm's long game to deal with
calling growth in the us. we know of course starbucks is the world ‘s largest coffee chain, it has really been affected by reduced footfall in america's high street and shopping centres and lots more consumers america's high street and shopping centres and lots more consumers are shopping online and hence the move to target china and asia. thank you. in other news — air france—klm is buying almost a third of virgin atlantic, leaving sir richard branson's parent company, virgin group, with a minority stake in the airline he founded. air france—klm is taking a 31% stake, worth £220 million, in virgin atlantic as part of a four—way joint venture with us partner delta. virgin group's share will fall from 51% to 20%, while delta will retain 49%. sir richard said he would remain "very much involved" after the deal. germany's transport minister has announced a recall of 22,000 porsche cars to remove what he says is illegal emissions—controlling software. he said that luxury marque porsche would bear the cost of the recalls of the affected 3—litre cayenne models. let's have a look at the markets. driving those markets down is the
top story, the amazon results. sales revenue is up the profits are down is amazon reinvest a lot of the money and that is pulled down the markets in asia. the price of oil was down slightly. we will keep an eye on that across the morning. thank you. the bbc understands at least 60 buildings have failed the government's whole system fire test in the wake of the grenfell tower disaster. dan johnson reports. all those touched by weight for a full picture of how this fire spread, other residents in other towers are nervous. wondering if they are safe —— grenfell. these blocks in salford, not of them, or across the sydney in england we understand will be declared a risk after failing the latest test.
understand will be declared a risk after failing the latest testm you think that that isn't safe, do you think that that isn't safe, do you know? it's bad, isn't it? they should take a lot of, i don't care how much money it cost, it's not money its people 's lives.|j how much money it cost, it's not money its people 's lives. i think we are sitting on a tinderbox when you look at all the flats. i mean, as you can see, we've already had a fire here. that didn't spread. but i think it may have been an act of god. some of the cladding had already come down. now the rest will too. in the first round of tests, panels from every building failed. after criticism that wasn't realistic, experts have now combined cladding and the installation fitted behind it to show which materials are dangerous when they are put together like they were on grenfell. yesterday, the police said there we re yesterday, the police said there were reasonable grounds to suspect corporate manslaughter may have been committed by the council or the te na nt committed by the council or the tenant management organisation.
community have been asking the police to, you know, carry on their criminal investigation and all i can say is, you know, i'm pleased they are doing that, i'm pleased they are starting, and i will co—operate in any way i possibly can. more than six weeks since grenfell burned, investigations are finding their focus of reverberations will while reverberations to go across the country. this is bbc news. the latest headlines: aid workers say seven million people in yemen are one step away from famine. two years of war have led to a dire humanitarian situation made worse by an outbreak of cholera which has affected hundreds of thousands of people. venezuelan president nicolas maduro has banned protests ahead of sunday's controversial election for a new national assembly. opposition groups have vowed to defy the ban. they claim the country's sliding towards dictatorship. aid workers on the greek island
of lesbos have told the bbc they're dealing with many extremely vulnerable refugees who've suffered torture and sexual abuse at the hands of so—called islamic state. reports from nigeria say more than a0 people were killed in an attack by boko haram militants on an oil exploration team near maiduguri. the local university confirmed that some of its staff had been killed. time for our daily news review and we start with the independent: the picture on front of the independent shows chaotic
scenes as crowds of palestinians resumed prayers at a sensitive holy site injerusalem. israel had removed the security measures it installed close to the al—asqa mosque earlier this month. but as the crowds arrived clashes broke out with israeli forces and dozens of people were hurt. the ft reports on president trump's new communications director anthony scaramucci who has launched a scathing attack on two senior colleagues. he described the white house chief of staff, reince priebus, as a paranoid schizophrenic, in an expletive laden tirade. frankfurter allgemeine focuses on porsche who will recall 22 thousand of its cayenne model over ‘irregular‘ engine management software. the luxury carmaker is owned by volkswagen, which admitted it had fitted some of its cars with a device to cheat on emissions tests. the guardian financial pages report on falling profits at sky television. the broadcaster has suffered a drop in subscribers as customers switch to popular streaming services such as netflix and amazon. and finally the boss of amazon, jeff bezos, has been crowned if only