tv BBC Business Live BBC News October 17, 2017 8:30am-9:01am BST
this is business live from bbc news with ben bland and sally bundock. more turbulence in the big plane dispute. bombardier sells a majority stake in its c—series to airbus to avoid us import tariffs. live from london, that's our top story on tuesday, 17th october. some of the canadian firm's planes will be made in the us. so will the deal keep the project flying and will it safeguard bombardierjobs around the world? also in the programme: netflix shares hit a new high after the video streaming firm adds yet more customers to its tv revolution. and this is how the market start the
day in london. eyes on inflation data, which we get in the next couple of minutes. we'll be getting the inside track on how youth isn't a barrier for one of singapore's most ambitious property developers. the heir to one of the city state's biggest fortunes tells us how he's planning to change its landscape. how many tv subscriptions have you got and what is your favourite? use the hashtag. bbcbizlive. hello and welcome to business live. the huge trade dispute between boeing and bombardier, which also pitted the united states against canada, has taken another twist that could make it all a lot more complicated. it's all about the canadian firm's c—series planes. bombardier is now selling a 50.01%
majority stake in the project to the european aerospace giant airbus. why's it doing that? because of the 300% tariffs that the united states recently announced on imports of the planes. those were imposed after boeing complained that bombardier has received illegal subsidies from the canadian and uk governments to help develop the plane. but because airbus has some big factories in the united states, bombardier says some c—series planes will now be assembled there. this would allow them to avoid the import tariffs. we're joined by our business editor, simonjack. some fancy footwork announced in the middle of the night? this is an elegant solution to a thorny problem. it started when bombardier
got into financial trouble. it is a small company, tiny compared to boeing and airbus. it was developing this c—series plane which everybody agrees is a good product and it took longer and was more expensive and it got hand—outs from the canadian government, quebec government and some from the uk. they sold 125 aircraft to delta airlines at a knock—down rate which is when boeing said you would not be able to do that if it were not for subsidies, it is against the rules, and the us government agreed and slapped the ta riffs government agreed and slapped the tariffs on there and put pressure on the company. with this they get to move some of the production inside the us, fast removing the border tax and getting around the tariffs. the us, fast removing the border tax and getting around the tariffsm is key, airbus has a factory in alabama where they can put the c—series planes together. does that
mean boeing's attack on this being anti—competitive goes away? mean boeing's attack on this being anti-competitive goes away? some would say this was never... boeing said it was about us jobs being undercut by foreign governments subsidising rivals. there are a couple of questions still out there. if they are going to move production to alabama does it mean we will lose jobs from canada? sources at airbus think it is such a good product and there will be big demand, they will be able to increase production worldwide and that means you will not lose production in canada and you would have extra production in the us and the unions in northern ireland, where there are two a500 jobs. there is another reeling in february about the tariffs, but it seems this is an elegant solution to a difficult problem. was it unexpected? a difficult problem. was it unexpected ? have airbus a difficult problem. was it unexpected? have airbus been after a sta ke unexpected? have airbus been after a stake in bombardier? two things
happen. bombardier got into financial trouble in 2015 when the government ‘s had to help out and at that time airbus had a look, taking an interest in the c—series because everybody realises it is a good product and it could have use in the domestic chinese market. this happened quickly, but it is because they had a dress rehearsal for the transaction a couple of years ago and that is why they got it done quickly this time. very interesting. we will watch this space. any changes or updates, we will fill you in on every twist and turn. let's take a look at some of the other stories making the news: an app that is just nine weeks old has been bought by facebook. it's called tbh, which stands for to be honest, and encourages teens to be nice to each other, and has already been downloaded five million times. facebook didn't reveal how much it paid for the company, which only has four employees. the british online fashion retailer
asos has reported a 1a5% increase in profits. international sales were up by nearly half as the firm cut its prices in response to heightened competition. despite reducing its full—price items, asos says it managed to sell fewer products as part of a special offer. greenpeace has named and shamed three chinese firms for their poor environmental standards. xiaomi, vivo and 0ppo are the worst performers in greenpeace's latest ranking of the environmental standings of the world's biggest consumer electronics manufacturers. samsung, the world's largest smartphone maker, and us tech giant amazon... what we watch and how has changed radically in recent years, so too is how we pay for it and the big disruptor
in the market has been netflix. house of cards, the crown, 13 reasons why are among the original content it offers and the latest numbers from the company show it is still hitting the mark. netflix says it made a profit of $130 million. its revenues ringing in atjust under $3 billion — that's in the three months to the end of september. but the crucial number to watch is the number of users — that's grown by 5.3 million in the third quarter and netflix says there will be an even larger pick—up in the ath quarter. and whilst the united states remains its biggest market the rest of the world is increasingly subscribing too. canada is now number two, followed by the uk, brazil and germany.
iam sure i am sure you knew those flags. it's bringing them in with original content for different countries. but to fund that it recently announced price increases in several countries, for example, a 10% rise to $10.99 a month in the us for its most popular plan and a 7% rise in the uk to £7.99. but there's fierce competition for those tv dollars, amazon, hulu, youtube and even facebook are also making their own content, but how much are we willing to pay for it? richard broughton is research director at ampere analysis who specialise in research about the media industry. good to see you, richard. they were stellar results from netflix. how have they done it? excellent results and big growth internationally. the first quarter where netflix international subscriber base
outside the us became larger. the numbers subscribing in the us seems to go up. we thought they had peaked but not so. this year has been strong. higher quarter on quarter than the equivalent point last year and their strategy is a part of that. they are eking out a profit. revenues at almost 3 billion. in terms of the future, they said that at some .50% of content will be original which is expensive and the same timea original which is expensive and the same time a lot of competition like facebook saying they are doing original content. this content is expensive and if you look at the average high—end drama series from netflix it can cost up to $5 million per episode and if you look at its cash flow, although marginally in profit, the cash flow is negative as a consequence of the upfront investment it needs to make in budget series. we have seen some
organisations part company. disney recently went its own way. how worried will they be about that given that they seem to be weathering the storm pretty well?- some extent they will look at it as a vindication of their original strategy, moving away from licensing potentially expensive content and moving into their own exclusives they can make use. that original disney deal was us only. price, how important is that? it has put up prices, but it is still cheap. it is still cheap and the advantage for netflix means small price rises can have a dramatic affect on the bottom line. there is room for price growth. will we see it in the $20 market? i think that will take time. very interesting. we are asking you
what you think about this. how many subscriptions have you got? i have i have none. none? not even the fee —— licence fee? yes i have the licence fee. in the last hour, the embattled japanese steel maker has told the bbc that the us department of justice has requested documents relating to, what the company calls, the non—conformity of specification of the products that kobe steel makes. karishma vaswani is in singapore with more. i was just i wasjust on i was just on the phone to a spokesperson with kobe steel about 30 minutes ago. they confirmed the company has received a request from the us department ofjustice
requesting documents related to this ever widening falsifications gamble. what he was able to tell me was the request came from the department to kobe steel's united states subsidiary but he did not clarify how many companies in the us might be affected and all that kobe steel is doing at this point is complying with this request, but no timeline yet for when the results of the investigation might be revealed and perhaps more bad news to come. let's ta ke perhaps more bad news to come. let's take a look at how the markets are doing. asian equities edged up tuesday. more record highs on wall street. us stocks ending on a fresh eye as they prepared for a busy week of
corporate news. apple helping to lift the nasdaq. energy shares higher as oil prices rose on the back of concerns about supplies in iraq. airbus shares rose. that was after it agreed to buy a majority sta ke after it agreed to buy a majority stake in bombardier‘s c—series jetliner. and uk inflation figures for september are out today, an important factor in the central bank's next interest rate setting decision. we will watch to see what effect it has on sterling. joining us is nandini ramakrishnan, who is a global market strategist from jp morgan asset management. welcome. it is quite a busy day and important for the uk, especially for mark carney at the bank of england. the inflation numbers for the uk will measure how much prices are
changing and we expect 3% growth rate of inflation, higher than the past, the highest level it should be since 2012, which affects the economy when you take into account how much people earn. it does not matter until you can pay for it in the real company. a 1% higher than the real company. a 1% higher than the central bank's target rate and mark carney will get a grilling in front of the treasury select committee and many are saying we are seeing rates go up in the november in the uk. what are you saying? we expected interest rate hike this year because inflation is high and the uk economy is strong enough to handle it with growth at 2% and consumer spending. when growth slows down in say up to two years, you need somewhere from which you can cut interest rates so we expect the bank of england to do one interest rate hike this year. i suppose the hints we have had from the bank of england, although there was a spit
in the last vote, they expect inflation to peak and when the yearly effect of the weak pound wears off, they expect it to slow down so they might be worried about choking off what is sluggish growth. that's a big concern for the bank of england. that inflation shouldn't go much higher than it is right now. as it comes down, we will have to see if they change their monetary policy. we have got a couple of well—known people warning, be ware of the bear. so we have got bill mcnab, the chairman of the us investment bank, saying we are looking for a sizeable correction and mark faber who is known as dr doom! what do you make of the comments coming out? if you look at netflix up 60% this year alone? equity markets are doing well. it is across the world you are seeing
macroequities and companies are earning money so the prices go up. it is fairto earning money so the prices go up. it is fair to be concerned about one that's going to turn. we don't expect it to be in the next 12 to 18 months. a big correction? no, it won't be one thing that sets the match to the whole global markets, it will be various points of economic weakness that start slowing it down. there could be a bear market, but that's going to be in the next two to four years, and not in the near future. thank you very much. useful insight always here. good to see you, thank you. still to come: we'll be getting the inside track on how youth isn't a barrierfor one of singapore's most ambitious property developers and his plans to change the city state's landscape. you're with business live from bbc news. asos has reported a 1a5% increase in full—year profits and raised profits for the coming year.
yes, the online retail store targets fashion—conscious twentysomethings in britain and abroad. it recently cut prices to see off competition from rivals like boohoo. kate hardcastle joins us now from leeds. she's a retail analyst at insight with passion. what do you make of this, asos? it slashed its prices, didn't it? what is behind the massivejump? slashed its prices, didn't it? what is behind the massive jump7m slashed its prices, didn't it? what is behind the massive jump? it did, but it managed to retain good profit, profit up 1a5% and i see a business here that's telling a big story about how we buy particularly fashion. you may remember in august we we re fashion. you may remember in august we were hearing it was the end of the road and sales were really struggling for most fashion retailers particularly in the uk, but here is a business that's grown outside of the uk with great progress in international territories, fashionable products, on time, and just at the right
moment for the fashion conscious buyers. so is it about the fact they are buyers. so is it about the fact they a re really buyers. so is it about the fact they are really diversified and they are online as well and they are not a bricks and mortar company? may made stars out of their customers rather than aligning themselves to celebrity. the products range in quality and affordability so they have different types of bases covered. it is a fast pace of business and although they have internal challenges with something like returns, and international development, having to build warehouses in many territories because their international deliveries can take time, this is a business that can see into 2018. againa business that can see into 2018. again a massive increase in sales because they know there is so much growth and one for that model. kate, for now, thank you very much indeed, insight into the retail industry which as you are well aware depending on who you are and what you're selling had a rough ride. the supermarkets, for example, but asos, stellar numbers today. there is plenty of news on the
business live website. merlin‘s magic. merlin reporting revenues up 12.a%. you can read more details on that on the website. you're watching business live. our top story, the canadian plane—maker bombardier is selling a majority stake in its c—series project to airbus. it hopes that will allow it to avoid us import duties of 300%. how do you revamp a historic city without upsetting the locals? it's a problem encountered in cities around the world. but in singapore, one property tycoon has taken a different approach. billionaire kishin rk is not a houshold name, but he comes from one singapore's most influential families.
he's invested in a project to develop an historic part of singapore, robertson quay, and recreate the buzz of river trade from the 1800s, with shops and restaurants. the central plank of this project was collaboration with locals, to try to ensure their communities were not disrupted. sharanjit leyl went to meet kishin rk to find out why this project was different. it's extremely unusual. it's not what we do. it is not about building a building, an office or retail mall. what was interesting and made it a little bit more challenging is that it could not take on a commercial project approach because we needed to fit ourselves into the neighbourhood and not the neighbourhood into our project. so taking that approach, i think, it was a little bit more challenge, but it had to be collaborative for it to be successful. talk us through this neighbourhood because it is full of history. yes, so in the 1800s, what was interesting is where we are standing today, there used to be boats selling and trading in tea,
alcohol, in all kinds of different spices and pepper, so what was interesting is a lot of this infrastructure around us had a warehouse history so they were all former warehouses and that was part of the design philosophy was to create the approach of blending in the old historic warehouse feel, but reinventing the offering. now kishin, you're only 3a years old. but you're from one of singapore's wealthiest families. so, has money always helped open doors for you or has your age been the challenge? i think it's not about the money or the age. in this day and age i think what people are really looking for is how can you add meaning to people's lives? and how can you do something that people can sense the passion? and really understand and get the philosophy around your thinking.
so i think age is becoming less and less relevant in day and age. money, of course, it was important because i would never be able to take on this project, but i think that was not the forefront. but you have got a deal with people who are selling, you know, large plots of property and real estate and when they see you coming, don't they ever feel doubtful? not really because i had to be very clear with what i was going to do with it. so every plot of land that we acquired here, we had a collaborative approach even with the sellers where we had to explain to them the vision of the project and explain to them what we wanted to achieve for the neighbourhood and i think they bought into the story and i hope that i have delivered. so, in this property development, you've got a hotel, you have got a whole series of restaurants and bars, so how do you get the combination right so that people will come?
we did a lot of research and not with research analysts or anything like that, but really research with the neighbourhood and the community. understanding exactly what every member of the community really needed and what they did not want to see. creating that the approach of bringing restaurants, a co—working space, a private members' club and two hotels together, was not a normal project for us to take on. we've talked about your successes, but what about some failures in the past? what have you learned from them? i took on a project when i first started about 12 years in another neighbourhood where i wanted to do everything that i thought was going to be good, and everything that i thought was going to be relevant in a less collaborative approach. that project, for example, was brought forward and we opened it with 12 to 18 months of a struggle and then it took off from there because after a while of not really
focussing on what we wanted to do, what i wanted to do, but what i really wanted to see in the development, but it's about what the people wanted and i think that was a big lesson for me. it's not about building something that we want, but it's about building something that the people want. kishin rk there. we have got comments. basic bt package so i can watch sci—fi and other channels. hayley says, "netflix, sky hd, amazon." now tv. greg says yth why would you need a tv subscription? i don't even have a
tv?" how are you watching us. general electric‘s new leader face ago big call on the dividend. we forget about these companies like general electric, it is such old tech. it does get lost when you are talking about other new tech companies that are grabbing on to the consumer and the social space this. is the us' largest manufacturer. it is important what they do and what they signal in terms of dividends, but it is enforcing a theme where investors are looking for companies in the stock market to pay them dividends because yields in the fixed income market have been low. it is a tough year and causing them to think about lessening the dividend they paid to investors. thank you for watching. thank you for your tweets as well. it is good to get those. we will see you again tomorrow. stay with us at the bbc for more business. see you soon. the bbc for more business. see you soon. bye.
good morning. storm 0phelia yesterday gave us some damage and disruption across many parts of the uk. you can see the track of the storm through the night. it moved its way up through into scotland, currently just night. it moved its way up through into scotland, currentlyjust off the coast of the far north—east of scotland. so things should gradually improve, but you notice from the isobars across northern parts of the uk, still close together, so still strong winds this morning particularly in the south east of scotla nd particularly in the south east of scotland and the north—east of england where there is a yellow warning from the met office, gusts up warning from the met office, gusts up to 70mph for a time. but those winds will gradually ease off as we go into the afternoon. outbreaks of rainfor go into the afternoon. outbreaks of rain for scotland. the far north—west of scotland, a bit of rain in northern ireland, but that should clear and rain moves its way into the far south—west of england later. away from that, sunny spells, but noticeably fresher, compared to yesterday. temperatures taking a good tumble from the 23 celsius, 2a
celsius we saw yesterday. now, through tonight, this rain in the south—west will continue to move its way northward and east ward. with clear skies and much lighter winds across scotland tonight, it will be chilly. temperatures down to five or six celsius. elsewhere, temperatures probably staying up in double figures. but for wednesday, well we have got this area of rain, this weather system affecting mainly england and wales. outbreaks of rain at times. the rain becoming patchy and light. so there will be good dry spells. some rain moving its way into northern ireland, but the best of the dry and bright weather in the far north and north—west of scotland. as we go into thursday, well, we still stay unsettled. we have got rain across the eastern areas of the uk. a slice of drier weather with a bit of sunshine and then more rain spreads in from the west and again temperatures 1a to 18 celsius. but that unsettled theme continues throughout into friday as well because this area of low
pressure brings outbreaks of rain into the south—west and with it fairly strong winds particularly in the south—west and along the english channel coasts during friday. a lot of cloud. outbreaks of rain for many us of cloud. outbreaks of rain for many us of us during friday and temperatures 13 to 16 celsius. notice this area of rain, that's going to move in. it stays unsettled into the week. potentially stormy friday and into saturday. disruption is possible. it's worth staying tuned to the forecast for more details on that. that's it from me. bye— bye. hello, it's tuesday, it's 9 o'clock. i'm victoria derbyshire. welcome to the programme. this programme can reveal that a number of councils in england are buying one—way train tickets for homeless people out of their area. it made me feel sick, because i have lived here all my life. i think what
they want to do is get all the homeless people out of bournemouth because all the new people coming into the area are seeing all these homeless people sitting there. in bournemouth, the number of homeless people has trebled since 2010 — we'll try and find out why. also this morning — people in the music industry have been speaking out after this programme heard claims that abuse and harassment there were as bad if not worse than in hollywood. i have been in situations with men more senior to me who tried to use that position of power in