tv BBC Business Live BBC News August 16, 2019 8:30am-9:01am BST
this is business live from bbc news with maryam moshiri and victoria fritz. heading for safety. investors vote with their feet as concerns about the global economy mount. but here in london, the ftse 100 and 250 fail to open due to technical difficulties. live from london, that's our top story on friday the 16th of august. gold, bonds and the japanese yen have all become magnets for investors, amid worries about the us—china trade war and uncertainty over brexit. also in the programme... hong kong's richest man urges demonstrators to love china, hong kong and themselves, as chinese military forces gather near the territory's border.
in europe, the markets look like this, the london market has failed to open due to technical difficulties. we will have the latest. and today a biz live favourite, andrew walker is here to talk through the big events of the week, including a horrible time for the argentinian markets and the impact of the hong kong protests on the financial hub. also on the show — one study says there arejust six major things that affect your ability to secure a pay rise. they include your age and your willingness to switch roles. today we want to know, what are your top tips for getting a pay rise? let us know — just use the hashtag bbcbizlive. hello and welcome to business live. in the last minute or so, the ftse 100 has started trading after some
technical difficulties meant it did not open at 8am like the rest of the european markets. more on that in a moment. but we start the programme with this. investors around the world are heading for safe—haven assets amid worries about the global economy. the us—china trade war and uncertainty over brexit are just some of the factors. and that's led to volatile trading in many markets around the world. over the past nine months, the price of gold has shot up dramatically, rising to more than $300 per ounce. but it's notjust gold. over the same period, german government debt — from europe's traditional powerhouse economy — has been a magnet for investors — pushing returns on the bonds to record lows. concerns about global growth have really accelerated over the past 3—4 months. you can see this in demand for the japanese yen, also often seen as a safe—haven in times of trouble. with us now is simon macadam,
global economist, capital economics. good morning. looking for me being in the financial market is a bit like looking at ways in the ocean. —— are looking for meaning. there's a whole range and thousands of different actions and reactions which will affect any set pattern. but when you look at the bigger picture, and overall impression emerges. what picture does it say to you about the state of the minds of investors at the moment? yes, in the minds of investors, you have had this sort of fear that has emerged, this sort of fear that has emerged, this anxiety, and it is worth stepping back for a moment and thinking how we got here in recent weeks. this has built up quite quickly. a couple of weeks ago, we had another escalation in the us china trade war. the us, went to four hours after supposedly productive negotiations, —— just 2a hours after supposedly productive negotiations, president trump announced another batch of tariffs
on goods imported from china which bonded retaliation —— prompted retaliation with these $7 threshold being broken. that has unnerved investors and that was followed by a raft of very weak industrial data, wea k raft of very weak industrial data, weak numbers from china and retail sales were also quite poor. industrial oil production is going from bad to worse in the eurozone. german industry is still in the doldrums. to top all of that off, you have got a looming crisis and a sovereign default perhaps in argentina so all of that is building on the trade war fears and then just to top it off, we have had a yield curve inversion which is one of these financial market indicators that puts fear into the minds of investors because it is traditionally seen as a very good indicator of a recession. yes, the inverted cherry on top. i want to pick up on germany because you mentioned it, the german economy is shrinking, we know that. yet
investors now are willing to pay for the privilege to stash their money and german banks overnight or in german government debt. the situation has got to be pretty dire for that to be the least bad place at the moment. yes, well, i think the yields on government debt are negative across the whole yield curve, whether it is overnight, all the way out to 30 year bonds in german debt. germany is a traditional safe haven so even if the german economy is doing relatively badly, as you say, it contracted in 02 by 0.1%, it is a place where investors expect safety, and it is a similar situation in japan, the economy is doing badly as pa rt japan, the economy is doing badly as part of the global phenomenon but people pile into the yen as a safe haven asset. their ten year yields haven asset. their ten year yields have touched —0.7%. there are investor fears, there, and have touched —0.7%. there are investorfears, there, and this is pa rt investorfears, there, and this is part of the global story to bonds. it is not just part of the global story to bonds. it is notjust in germany, yields have been falling everywhere, yield curves have inverted in the uk,
along with the us, canada has been inverted for quite a while. this is pa rt inverted for quite a while. this is part of the global flight to safety. it certainly is. thank you for joining us. and explaining all of that. let's take a look at some of the other stories making the news. thailand plans stimulus spending that the government hopes will give a $7.3 billion boost to the economy. the measure is aimed at countering recent slowdown we've just been talking about. the package includes help for farmers and people on low incomes. apple says it was either directly or indirectly responsible for 2.4 million usjobs in 2018. that's up by 20% from the 2 million the tech giant estimated back in 2017. it says most of the jobs came from companies which make parts in america for apple products. the world trade organisation has ruled against us duties imposed on a range of chinese imports, effectively giving beijing a green light to seek compensation. washington imposed the duties after it accused beijing of paying
illegal subsidies to chinese firms. the wto said the us was in the wrong but washington says it does not accept the decision. hong kong's richest man, lee ka—shing has broken his silence on protests that have disrupted the territory for over two months, over the controversial extradition bill. the billionaire has warned that the best cause can lead to the worst result. sarah toms has the latest from singapore. what has he said? what advice has he been giving to people in hong kong? he is of course hong kong's most influential businessmen. he is the latest of many businessmen to weigh in on these pro—democracy protests that have been rocking hong kong for the past ten weeks. he has called for a halt to the unrest in the name of
love, love freedom, love tolerance, love, love freedom, love tolerance, love the rule of law, he has said in various advertisements. love china, love hong kong and love yourself. he placed the advertisements on the front pages of several local hong kong newspapers on friday, signed them off as they hong kong citizen. the retired multi—billionaire, you may remember, was the head of ck hutchinson, a conglomerate with ride ranging businesses from real estate —— are wide ranging businesses from real estate, technology and ports, but li ka—shing has stopped short of voicing his support for the hong kong government. hong kong is of course part of china, but it has a special status that gives people who live there more autonomy than they have on the mainland. in a separate statement, his spokesman said li ka—shing believes hong kong's long—term prosperity depends on that special status and that he wants residents to treasure that and stop
the violence. thank you forjoining us. let's look at what has been going on in terms of asian shares, it has been pretty flat, they initially moved a little bit upwards but then a cayenne dead flat and the hang seng ended just about in positive territory. there is a stumps —— may go some stability in the markets today despite the ongoing unrest in hong kong but any bigger gains were held back. why? of course, investors are particularly worried right now about the potential for a are particularly worried right now about the potentialfor a global economic slowdown. if you look at the us, the dowjones up after losing 800 points a couple of days ago but then regaining what it lost the next day, not all of it, quite. the london market is shut. the last time we saw this happen was about 1k months ago in june, time we saw this happen was about 1k months ago injune, and that was the first time in seven years and that all ended up that the market was shut for about an hour due to technical problems. we are not sure
what is happening today, the stock exchange has put out a statement saying there has been some technical difficulties which have meant a delay to the start of trading for the london market. we have because we'll bring you up—to—date on what is happening with that as soon as we get it. the rest of europe, as we can see, is looking like it has turned into positive territory. turning to the us — a private financial investigator who flagged warnings about bernard madoff‘s $65 billion ponzi scheme is now targeting one of america's blue chip companies. harry markopolos has claimed that general electric is hiding an accounting scandal, sending its shares tumbling. ge strenuously denies the claims. samira hussain has more from new york. harry markopolos is a forensic accountant. he says that general electric is hiding $40 billion of losses in its insurance business. general electric has countered those claims, calling them "meritless, misguided and self—serving speculation." nevertheless, ge shares fell by 15%
at one point on thursday and it is a clear sign that investors are worried. they are worried, quite possibly because of the source of the information. he has a track record of highlighting financial misdeeds, and most recently was the whistle—blower who uncovered bernie madoff‘s $65 billion ponzi scheme, the largest case of financial fraud in american history. the report also comes at a time where ge's profitability has taken a massive hit. last year, it was dropped from the dow 100 and has had to lay off thousands of employees. just to clarify, the london market is still shut. technical difficulties, apparently, according to the lsa. some slightly mixed m essa 9 es to the lsa. some slightly mixed messages coming out over trading and what is going on. joining us is mouhammed choukeir, chief investment officer at kleinwort hambrosa danish bank.
we understand that the ftse100 has failed to open and we are what, a1, 42 minutes failed to open and we are what, a1, a2 minutes into the trading day in europe. regardless of that and the technical difficulties there may be and what might be behind those, the index more generally is down almost 7% over the last 30 days, it has not been great for uk equities. yes, it's had a rough ride but it is consistent with what we've seen globally. we have seen the correction in global equity markets ta ke correction in global equity markets take place not just correction in global equity markets take place notjust in the developed world and the us and uk but also in the emerging world. to put it into context, the ftse is down 6% in the last couple of weeks but still up on the year to date about seven or 8%. global equities, because of the us, are up about 1a%. in the context of the full year, it is a small blip. it has been a turbulent week, particularly in terms of the bond markets, hasn't it? yes, this is all about the fear of recession, we talked about this earlier in the programme, in terms of the inverted
yield curve, this isjust a market indicator that could point to a recession but we have seen an economic slowdown in the last few months. this is not new. we have seen a months. this is not new. we have seen a lot of economic data, whether it is the manufacturing sector or the services sector, all showing signs of weakness. this is just a continuation of the theme. and continuing the theme, a danish bank has launched the world's continuing the theme, a danish bank has launched the worlds that is negative interest rate mortgage, so you are handing out loans to homeowners where they charge zero —— -0.5%, homeowners where they charge zero —— —0.5%, so the bank pays the borrower to ta ke —0.5%, so the bank pays the borrower to take the money of their hands, why is that an attractive business model? actually, it isjust a function of what is happening in these tri—state markets. that in the interest rate markets. in the global markets, there are $15 trillion which is negatively yielding, so you don't receive a return for lending money to the government. this is just a continuation of that. the first time we have seen a bank pass that threw onto the consumer. as you say, it is —0.5% and you can borrow
for 20 years and not pay any interest in denmark right now and we could see that knock on to other markets. gosh, 0k. come back in 80 minutes to talk through some paper stories. we will be looking at the week that was ina we will be looking at the week that was in a three—minute's time including argentina's market collapse. —— in 80 minutes' time. andrew walker will be with us for that. you're with business live from bbc news. if you are a regular rail commuter, how easy is it for you to get to and from work and home? well, today, the independent newspaper has revealed the best and worst connected cities outside london. birmingham came out as the best city for rail links. so we sent ben thompson to liverpool, which is towards the bottom of the list. good morning and welcome to liverpool, one of the worst
connected cities, as far as train travel is concerned, according to a new report. it has been looking at how different cities are connected to the rail network and there are some surprises in there. the ones that do well, edinburgh, manchester and birmingham top of the list but down the bottom, places like cardiff, leicester and here will stop the list was put together by a familiarface, simon stop the list was put together by a familiar face, simon calder, stop the list was put together by a familiarface, simon calder, the travel editor of the independent newspaper whojoins me travel editor of the independent newspaper who joins me now. travel editor of the independent newspaper whojoins me now. how did you work this out, look at how cities rank? it was simply a matter of the 12 biggest cities in the uk outside london, how well are they connected to each other? simply because as travellers, you want to get on a train, have a cup of tea, check your phone and get off at the other end. i was staggered with the way that some cities, as you say, birmingham and manchester, really well connected, but even a great city like liverpool, glasgow, cardiff and leicester, very poor connections in terms of direct trains, which of course, this waits
people from travelling by train at a time when we are all supposed to be being more thoughtful about our travel. you might expect somewhere like birmingham to be very well connected, right in the centre of the country but why the difference between someone like glasgow and edinburgh that are not geographically very similar? edinburgh has very good links in terms of its tram out to the airport. glasgow has a subway but it does not really connect with the rail network. and poor old leicester is just there rail network. and poor old leicester isjust there on rail network. and poor old leicester is just there on the east midlands mainline. it used to have superb connections with places right across the country. those have been scaled down and if you want to go from leicester to pretty much anywhere, you will probably have to change. and no one wants to do that. thank you forjoining us. that was a bit sharp of us to remove ben from the programme. and simon calder, paul simon! a quick update on what is going on, remember the national grid power cut? the big report on that is being delivered to the energy
regulator 0fgem today so we might van dyck —— find out some more. regulator 0fgem today so we might van dyck -- find out some more. your fault? you're watching business live. our top story. investors around the world are heading for safe haven assets about concerns of the global economy. the us china trade war and brexit are some of the factors weighing in on the markets. a quick look at how the markets are doing at the moment. these are the european markets and the ftse100 is yet to open, and it is the same for the ftse 250, yet to —— due to some technical glitches due to the —— according to the london stock exchange, we are a7 and a half minutes into the trading session in europe and we are yet to find out what is going on all those smaller stocks are apparently trading. the last time this happened was due last year. that was the first time in seven years. —— i was
injune first time in seven years. —— i was in june last year. but as far as the lse are concerned, it is a technical issue and they try never to deal with it. from one stock market to another. from a huge stock market crash in argentina to continued unrest in hong kong — it's been another busy week in business news. 0ur economics correspondent andrew walker is with us now to look at some of big stories that have been causing waves. let's talk about argentina first, we have been covering it quite a bit on bbc news. it is a huge story for the argentine economy. actor lately, looking at what has happened in the markets, there's been a bit of a recovery towards the end of the week but it is really trite —— tiny compared to the falls we saw earlier. compared with a month ago, both the stock market and the currency are down about 25%. if you imagine you are a foreign investor who has bought argentine shares, you have been hit in terms of the value
of your investment and both those things, it is a terrible week. what is going on is there was this primary election in which the incumbent, the president basically lost, and the markets were assuming he was going to be re—elected in an election later this year. but the signs of this primary election suggest that he won't be and he could well lose in the first round. the market and many investors fear a return to what they would regard as being the bad old days of poorly managed government finances, a government that intervenes very heavily in the economy and they basically voted with their feet. they have taken an awful lot of money out and in response to that, the president has been doing some things that i think might be interpreted as a little sweeteners for vote rs, interpreted as a little sweeteners for voters, so some initial public spending commitments and tax measures that i suppose he hopes will pull things back for him from the brink. but as things stand, his
prospects of the election look pretty bleak. you were talking about the good old times, and it is hard to render the good old times in argentina, we have had hyperinflation, government collapse, sovereign debt default. 100 years or so sovereign debt default. 100 years or so ago, argentina was richer than france, it is so striking, it has been seen as one of the great puzzles of 20th—century economic history, white declined in relative terms so much. you do central banks next and i will do hong kong, you love a good central bank. i love a little bit of monetary policy, nothing gets me going better on a friday. some quantitative easing! let's talk about what the central banks have as weapons these days, what are we going to do about global growth slowdown? everyone is concerned about it. some, notably the fed, still have some of the conventional munition available, they can cut interest rates quite a bit and have done once already this year and they could go further. the bank of england has also got a bit of room to cut interest rates. at
the european central bank, the bank ofjapan, the european central bank, the bank of japan, they are already at the european central bank, the bank ofjapan, they are already at or below zero, and the chances are they will go a bit further, certainly in the case of the ecb, and it will probably also restart its quantitative easing. but the fact is, once you get to zero and below, it does appear that it becomes less effective. and that is giving rise toa effective. and that is giving rise to a certain amount of speculation that particularly in the eurozone, we mightjust that particularly in the eurozone, we might just see that particularly in the eurozone, we mightjust see governments start to use spending and tax measures, fiscal policy, to try to inject a bit of stimulus, something that frankly the eurozone regarded as heresy in the days of the financial crisis. but things have moved on a lot since then. i would think perhaps even some fiscal stimulus from germany is not to be completely discounted. although the government is not frankly talking it up, it is still a possibility, ithink. is not frankly talking it up, it is still a possibility, i think. and hong kong, we have some good pictures as well to show to people because there's been an awful lot of unrest, hasn't there? yes. what
impact do you think this has had on the business community and hong kong? the government thinks it is certainly contributing to what is a quite weak economic picture. they have already been hit by trade tensions and exports falling. we had an announcement from the government that they are taking some steps, some additional public spending, a bit of help with welfare payments for people, some rent reductions for businesses operating in government owned property. so some measures to try to provide some stimulus but they also said that what they called they also said that what they called the social unrest has contributed to the social unrest has contributed to the problems. it has affected the tourism sector, hotels and so forth. so clearly, there are some real concerns about the wider economic impact. one to keep an eye on, suddenly stop absolutely. thank you for joining suddenly stop absolutely. thank you forjoining us. how to get in touch with us?
london, singapore, shanghai, new, our correspondence of your business well covered, on—air, online and on the bbcnews app. check out the bbc news business pages for insight and analysis. the bbc‘s business live bait has the latest business news and we want your views, too, get in touch via the business life page, twitter and facebook. join the bbc‘s business conversation. you have been tweeting us about one of the stories we're covering today, an article the bbc website about six ways to improve your chances, well, six factors that could improve your chances of getting a pay rise. we ask you to give us your tips. we've had lots of tweets. liz jarvis says, "know your worth, leave personal circumstances out of it and remind your employer clearly and concisely what you have achieved in the past yea r". what you have achieved in the past year". another says, "work hard, go the extra mile but make sure those who need to be are aware of what you
are doing. don't let them think your extra effort is normal part of the role otherwise when you ask for a pay rise, they may not understand your value". it is about value. mouhammed choukeir from kleinwort hambros joins us again. you are very valuable to us! what are the key factors to getting a pay rise at work? what about where you are? some of the things you mentioned but the key thing we have to think about is invest in yourself, continue to grow and challenge yourself and continue to learn and then you will achieve the pay rise over time. if the money isn't there? corporations are growing, over time, you see their profitability is growing over time so profitability is growing over time so they are looking to spend that on employees and reward those pushing themselves and going the extra mile and the way they do that is again by investing in themselves. this is interesting, some of the ones that the resolution foundation has brought up, being young, pay rises tend to rise fastest during your 20s because you are most likely to start off on because you are most likely to start offona because you are most likely to start off on a low salary and then the jumps appear higher. another one says changing jobs, this is
interesting, lots of people are resista nt to interesting, lots of people are resistant to changing their roles and asa resistant to changing their roles and as a result, they do themselves out of a potential pay rise. changing jobs comes with the benefits of a new challenge, a pay rise, new colleagues and so forth but then there's the instability, if you like of moving into a new organisation, away from the familiarity of your workforce and that the work with. another tweet says, "use a psychology trick, thank your boss for being so nice to you, which primed them to believe they are generous and makes them more willing to give". bbc bosses, we love you so much, you are wonderful! makes no difference! it's an interesting one, "being a man, almost 50 years on from the equality of outcome of significant progress has been made to close the gender pay gap but nevertheless, on average, men are still paid 18% more per hour than women, both on full and part—timejobs per hour than women, both on full and part—time jobs combined". per hour than women, both on full and part—timejobs combined". well, anyway... nothing we can do about that. thank you forjoining us. and thank you for watching business
life. your penultimate edition of the dynamic duo. self—styled. happy friday! good morning. it will feel more like an autumn day rather than an august day today. we have got this area of low pressure moving its way in from the atlantic. associated weather fronts. and a whole mass of cloud right across the uk, stretching in the southern parts of the atlantic. it is going to bring some heavy rain, particularly across parts of wales, south—west england and into north—west england. there could well be some localised flooding issues. you can see as the rain moves further eastwards, by this afternoon, pushing into east anglia and the south—east, but it will eventually clear from northern ireland and scotland to give us some sunny spells and a few showers. really quite gusty conditions for many, potentially up to about a0—50 mph around the irish sea coasts. the
highest temperatures today will be in northern ireland, where you have the best of the sunshine. elsewhere, it will feel rather disappointing, temperature is more likely to the high teens. through tonight, the rain continues to clear towards the south—east and then we are looking at clear spells and further showers feeding their way to scotland, which could be heavy during saturday morning. 0vernight temperatures will be staying up at about 12—15d. not too cold, quite a mild start to the weekend really. for many of us, it will bring a fairly promising day with some sunshine. a bit of cloud across southern with some sunshine. a bit of cloud across southern areas with some sunshine. a bit of cloud across southern areas and there will be some showers towards western scotla nd be some showers towards western scotland and into northern ireland. for most, staying dry on saturday with quite breezy conditions during saturday and temperatures 18—21. the area of low pressure i showed you at the start is still with us, even into sunday. some cloud, perhaps a bit of rain in the south—east early in the morning, and another weather system moving its way into scotland and northern ireland which will mean that the showers become a bit more
organised and more persistent spells of rain come here. a few more showers on sunday in northern england and across wales but otherwise, again, for most of us on sunday, largely dry and bright. again, quite gusty wind, up to about 30-a0 again, quite gusty wind, up to about 30—a0 mph for many throughout the day. maximum temperatures on sunday, 16-21. day. maximum temperatures on sunday, 16—21. some more promising news, though, in the forecast, as we go to next week, it will start off a little bit unsettled but from mid week onwards, while there will still be one or two showers around, it is looking largely dry with some sunshine as well. temperatures up in the high teens or low 20s but signs it could warm up a bit more as we go into the end of the week. goodbye.
you're watching bbc news at nine with me, rachel schofield. the headlines: a 52—year—old father is stabbed to death with a screwdriver in a shopping centre in newcastle — seven teenagers are arrested. kim jong—un rejects further peace talks with south korea, as he test fires two more missiles. the power cut that brought large parts of the uk to a standstill — the national grid has until the end of the day to submit a formal report into what went wrong. of the day to submit a formal report my of the day to submit a formal report understanding power my understanding was that of the power came on relatively quickly but it was not quick enough. and something went wrong and we need to get to the bottom of it. a cyber attack on the uk's biggest provider of forensic services leads to a backlog of more than 20,000 samples.