tv Worldwide Exchange CNBC August 14, 2015 4:00am-5:01am EDT
a very warm welcome to worldwide exchange on this friday morning. i'm wilfred frost. >> i'm seema mody. here's your headlines from around the world. >> greece moves one step closer to securing a bailout after the country's parliament votes in favor of the package. >> alexis tsipras has fears rebels in his own party could weaken the government. >> german gdp, euro zone numbers due in an hours time. >> beijing falls out of the
spotlight after the central bank holds the market steady. they grab investor's attention after they post the biggest weekly gain since early june. >> the german car maker speeds away from a long running probe into the failed take over of volkswagen in 2008. welcome to the show. french gdp disappointing earlier coming in flat for the quarter. german gdp in line, a little below expectations. italian gdp has just come in as well and that has disappointed too. the expectation year on year was for plus 0.5 and has come in for the year but the expectation quarter on quarter was for plus 0.3% and we have 0.2% gdp. so a little disappointing. not as disappointing as the
french number earlier which was flat for the quarter against expectations of a 0.2% expansion. joining us now is the senior european economist. good morning to you. we await the broader euro zone number in about an hour but so far what we've got from the likes of italy, germany, france, disappointing. >> slightly disappointing. i wouldn't overexaggerate it. remember we also have the spanish number a bit earlier which was 1%. very strong. so overall for your area we're still looking at .3,.4. >> so at the margin, given that we've had such disappointment, such macro head winds on the confidence side with greece is this not too bad result. >> i would mention that. what is a little bit concerning is that investment looks to be very weak and that's of course in this recovery, we had big
head winds coming from oil and the qe program, no physical austerity this year so consumption is is doing okay but investment is the next factor that needs to come in to have a sustainable recovery. >> on that note, moodies has interesting research that shows that despite the recovery and economic policy companies are not investing in growth. instead, they're hoarding cash and buying back their own stocks. that could have major implications on wage growth. >> long-term this is a big issue for europe because it effects potential growth really and if we're going to have higher growth than lackluster we have growth at 1% at the moment. in a few years time we'll be head by demographic head winds as well so investment needs to come back. it needs to happen.
ecb has done what they can in terms of reducing fragmentation and interest rates so that's all good but there seems to be this lack confidence among companies. >> i guess my next question, what needs to happen them for businesses to spend more money on growth. >> it's a little bit interesting to look at individual countries here because spain, for instance, actually had quite a lot of reforms in the midst of the crisis. labor market reforms. they had a fairly good investment going on at the moment. germany has good consumption. that's normally also been connected with good investment and italy of course did some reforms earlier this year. >> thanks for now. stick with us and we'll talk about greece next. greek mps passed the third bailout deal with 222 votes to 64. it came after a tense all night debate during which alexis tsipras told lawmakers the
option of a bridge loan would send greece back into crisis. finance ministers must now prove the deal with reports suggesting the commission is still ready in case the package isn't ready in time. >> this comes as greek media reports suggest tsipras could call a confidence vote as soon as next week in response to an on going divide in his party. >> more than half of germans are opposed to a third bailout for greek the vast majority of governments don't believe the greek government will influence reforms. despite big deadlines in greece and elsewhere this week it hasn't been front of the agenda given what's happened in china. is this important? the fact that it's past the greek parliament? >> yes, of course. it is one further step.
it's gdp numbers for q-2. those are are just temporary. so we're looking at a significant recession coming up and the question is really do they have the political kind of and to get the reforms between implementation risk will be high and political risk if there's a new election. >> that's something interesting to talk about. there was no financial contagion a month or two months ago when the greek crisis was at its peak. we're all saying it might be what happens to other countries like spain. strong gdp numbers we were saying earlier today and it has elections coming up. has that come too late to derail the antiausterity or do you think they'll do well in this election? >> they will probably to well anyway but the question is whether they do well enough to take power and lead the country
into a completely different direction. i think the greek example is deterring many countries and i think that question at the moment is a little bit on the back burner for greece. >> politically has the greek crisis created a divide in the euro zone that could have an impact on broader discussions around the economic recovery of the euro zone. >> i don't think for the recovery but long-term for sure in terms of do we have the right kind of institutions to deal with problems? how do we deal with it? it's very clear once we get to a point where we invest so much money into a country there's an sbugs into national sovereignty which one would think is in the functioning monetary union that should be part of it. the whole aspect of fiscal union is still a discussion to be had. >> do you know who is still
finding his way into the discussions despite not being the finance minister? he said this bailout deal is december state prisoned to fall. this deal is not going to work. is there any truth to his statements here? >> you can make any deal work if you really put your effort into it. greece has a mountain to climb and it's probably the hardest issue to solve. they have to find a solution. >> senior european economist who sticks with us for our next chat. switching focus for a second, turkey is facing a snap election in the coming months after talks on forming a coalition government collapsed late on thursday. the country's prime minister said a fresh election may be the only option and urged parliament to call for a new vote as soon as possible.
the lira weakened on the news. you can see the dollar gaining around .4% against the turkish lira. but wilf how are markets looking. >> so far, slight disappointments, particularly from france in terms of euro zone gdp hasn't dampened markets in europe today which we're looking at about .5% of gains. the u.s. yesterday was also up for most of the day although sold off late as oil did and finished flat. let's look at the euro stoxx 50 and also gains there and now to see where that's playing out. we're looking at gains up about 0.43 on the ftse 100 and it's a broad based half a percent of gains to finish up the week. overall, european equities still down this week.
the likes of germany and france. really suffering heavily tuesday and wednesday off the back of the chinese devaluations. let's look at individual movers across europe. swiss life up 2.1% in the green after it reported a small profit in the first half. the company credits commission income for overcoming the strong swiss frank. bp is down half a percent after they manipulated the natural gas market in 2008 however the judge did not address the proposed fine or any other penalties of course. so no doubt weighing on bp. porsche is up 2% after prosecutors dropped a market manipulation probe against members of the companies 2008 supervisory board. what's next? >> coming up on worldwide exchange, big news for big bird. sesame street counts it's blessing as hbo kermits it's cash on five seasons of the
show. plus hope and rory. rory mcilroy forgets his injury woes and gets through a tough opening round in wisconsin. more from the pga championship this hour. plus all hail the king. elvis presley's jacket from viva las vegas is one auction sold at his graceland mansion. we run through the other big ticket items coming up.
markets are steady as we close out the week. they set a firmer rate for the currency after letting the yuan fall for three straight days. sri is standing by in singapore for us. >> good to see you. so subdued really across the asian markets. really steep weekly loss in the asian markets. i want to highlight one big thing that is really pressuring the malaysian benchmark, the comp down by 1.6% and that's oil at six year lows. so malaysia is a net exporter and that's really delivering quite a serious shock to the terms of trade and not just to the stock market but also to the currency as well.
i'll show you what the asian currencies have been doing in a minute but let's just get back to the markets. one of the winners today is the indian market. indian shares are outperforming broad region. up by 2%. it's the pharmaceuticals and banking sector and technology and helping the export sector as well. that's what the market is pricing in there. let's get back to those currencies because it was an absolutely lousy day but let's face it, it has been for the past couple of months. it's been under pressure because of the higher rates environment. strong dollar, fed normalization, slump in commodity prices. mitt cal troubles as well. the devaluations story as well from beijing was just yet another dynamic that's been battering this currency and creating this perfect storm. so we were down by as much as 2.5% for the ringgit against the
dollar. claw back as you can see there we're up by 1.8% on the dollar against the ringgit to still under pressure here. a similar story for the indonesia rupee given the trade shock by commodities. these are the currencies that you have to look out for and let's also not forget these have both been the worst performing currencies in asia so far this year. so it really comes down to the pace of this devaluations cycle. in china, see marks it's going to be a little bit feddish and data dependent and let's also not forget that the chinese economy is not firing on all four cylinders so that suggests more devaluations to come. back to you. >> absolutely. but really interesting move in the indian market.
the biggest one day gain in 7 months. >> that's where you get uncorrelated returns. >> especially expecting to cut rates again in september. we'll see if that happens. for now, thank you so much. switching focus, fires are still burning in the chinese city of tianjin. the death toll now stands at 50 from the blast that originated at a chemical's warehouse. nbc's ian williams fired this report. >> it's a scene of utter devastation. fire still burning, smoke still rising, more than 24 hours after this. new video shows the first blast light up the sky over tianjin followed by a far more powerful explosion. captured on cell phone from a nearby apartment building until the photographer retreats in terror. among the american eyewitnesses,
english teacher. >> there were shockwaves. thing people thought was a earthquake. >> buildings collapsed and torn apart. hundred of cars incinerated. shipping containers scattered. broken glass and debris everywhere. the death toll is now past 50. dozens are still missing. a thousand firefighters responded to the blaze. at least 12 died. hospitals are overwhelmed with the injured. hundreds of them. they were desperate for medical care but beds were in short supply. the cause of the blast is unknown. it happened at a company that stored hazardous chemicals. including sodium cyanide raising fears of an on going toxic threat. chinese officials marked off the blast area but the damage extends well beyond. this office block was hit with the full force of the blast. but we're about a mile or mile
and a half from the explosion. all 94 buses were destroyed. the ghostly buildings from beyond have been abandoned. too dangerous. a local clock frozen in time. marking a deadly moment this busy port city will never forget. let's switch focus and talk about oil prices and have a quick look at how they're trading today. they did sell off quite sharply in the afternoon of u.s. trade yesterday having sort of stabilize for the first -- the two previous days. we're looking at 49.09 on brent. it's down a quarter of a percent today. wti, below 42. 41.97. it's down 0.6% today. also bring you some flashes coming out from the rosneft ceo. they will increase production at their existing fields. of course another sign that it's taking much, much lower oil
prices to see people cut supply even at 42 for wti. they decided not to cut and they'll be increasing production at their existing fields. >> speaking of oil, famed investor and author of the bloom, doom, and gloom report spoke to cnbc earlier today and shared his outlook for oil and commodity prices. >> it's partly demand and partly supply and obviously the supplies in the u.s. have gone up substantially. the iraqi oil production is up substantially but in other countries oil production is actually down. so the supply didn't really kill the oil price. in my view, it's the slow down in demand that came largely out of china and other emerging economies. you have to understand china is the largest trading company of a very large number of companies
and raw materials from africa, asia, and sells it's goods into these markets. if commodity prices go down, say brazil, and china buys less from brazil then the brazilian economy retracks and can buy less goods from china. it's a vicious circle on the down side. >> another very soft week for oil prices. how much of that this week is down to financial factors that we had a strong u.s. dollar as opposed to the fundamentals of the market. >> it's a combination of things. we're looking at china a different light now coming out of the summer which has been a bit of a surprise. suggests that maybe there is more real weakness in the global demand story than we thought
before. we're still treating very much the story as a supply issue mainly and from the european perspective which i cover, the fact that we are not so -- the recovery we're having in europe is more domestic demand lead than expert lead. in that sense it benefits consumers and that's been the story since the beginning of the year which leads to lower inflation. it's bad for the ecb but it's very useful for real disposable incomes which have risen quite strongly everywhere so we believe in the consumption-led recovery in europe. >> but the ecb meeting minutes suggest there's a growing number of inkags that were seeing a turning point when it comes to the inflation picture. earlier this year the concern was europe was entering this japanese-style inflationary trap but we have come off the lows. now we're expecting 0.2% here in
july. are you expecting a meaningful change going forward in the inflation picture? >> we believe in the same story. we have passed the low point for core inflation so we should see an up tick going forward. >> despite the drop in oil prices. >> it will effect the headline inflation again and ecb is clear they'll be looking through temporary influences on headline inflation going forward because we know that it will come back at the end of the year because year on year comparison on inflation drops out. but the ecb is keen to make sure that that doesn't lead to expectations. that they would cut the program prematurely. so they'd run their course. we think still the inflation picture is to weak they'll have to do more qe so continue beyond september 16th. >> another factor, now investors are trying to understand the
move by the pboc to devalue the currency or let the currency weaken as some would say, what it means for oil prices because a weaker yuan makes commodities more expensive. >> yeah. true. i think the key issue is to understand domestic demand in china. is it weaker than what we think? or what official numbers say. and one has to be a little bit careful with the devaluations because especially against the euro. we had a massive appreciation of the yuan over the last year so the latest move is quite small. the other thing is if you look at trade linkages it's small. europe exports 5% of total exports to china. so that link is not so strong. the issue is whether it has repercussions on the rest of the emerging markets, on the u.s. and having a bigger impact on
global demand. >> that's the big question. how that will impact the broader global landscape. thank you for joining us on worldwide exchange. now moving on, can a passion for food turn into money making business? alice caught up with one of london's top food bloggers to find out. >> blogging may have become mainstream due to teenagers using it to detail their at aly lives but people make a living out of it. we visit one of london's best known food bloggers to find out how he made the jump from finance to fine dining. >> the blog was the catalyst for me to leave investment banking. >> the blog brings me income indirectly in the sense that i host super club and it's because my blog that people find me.
so i have been commissioned to write articles that i wouldn't have normally done. i have a lot of contact with prs and brands. companies contact me wanting me to write about their product or that restaurant. i have just been to an event where i know that someone paid a blogger 2,000 pounds for an article. just to write a review. the blogger got away with it and she was a very popular blogger. this chap was talking to me and said well we did get a lot of feedback and response. >> of course comes the cookbook. >> i'm having my first book published in october and i was really touched to be asked to write a book. i think a lot of bloggers are -- the bloggers who cook are going down that route because for
publishers it works well. you have someone who can write and who can cook and who already has a following. so it's a win-win situation. >> fancy a career change, here are his top tips to start a blog. >> you need to write about something that you are passionate about. period that you don't mind spending hours and hours learning about it and writing about it. it's a part-time job really. not full time. and also depends how much you blog. i do it on average two to three posts a week but you need to love writing. if you resent having to spend two or three or four hours writing, 500 words a piece, that's not going to work either. >> happy blogging. >> let's bring you some flashes coming out of china that we've had in the last few minutes. the china security regulator said it will not interfere with
the stock market in normal conditions. it also says that margin lenders role in stabilizing the market will not change for the next few years. they say that margin lending has transferred shares to state owned asset manager. the security's regulator says market fluctuates have begun to normalize so it's necessary to let market forces play a greater role. i suppose there's not that much chance of believing that will happen given what they have done over the last few months and of course it's probably easy to say now it's behind them but they'll let the market forces play a normal role until the volatility returns. those flashes coming from the china security's regulator. still to come here on worldwide exchange, how much would you expect to pay to stay in one of these five star locations? the answer may very well surprise you and we'll be talking a lot more about that coming up. >> yeah, that's right. the ceo of a travel website
secret escapes is coming on in just a bit so we want to know how do you book your summer vacation. let us know here on worldwide exchange. get in touch with us e-mail world tps firstname.lastname@example.org. wow, i've never been there. i hear that's very beautiful. we're back in two. before earning enough cash back from bank of america to buy a new gym bag. before earning 1% cash back everywhere, every time and 2% back at the grocery store. even before he got 3% back on gas. kenny used his bankamericard cash rewards credit card to join the wednesday night league. because he loves to play hoops. not jump through them. that's the excitement of rewarding connections. apply online or at a bank of america near you.
alexis tsipras fears rebels in his own party could weaken the government. >> france grinds to a complete halt. the data not boding well for euro zone members. >> stabilization in the chinese market after the central bank holds the currency steady with the shanghai composite hosting the biggest weekly gains since early june. >> porsche shares drive into the green after they speed away into the failed takeover of volkswagen in 2008. euro zone inflation and gdp
data. despite the numbers out of france and germany as well as italy. stocks are higher. ftse 100 up about .2%. down about 9% from the recent highs but in today's trade up by around 40 points. the cac 40, the french markets, right above 5000 up 17 points but let's look at the euro stoxx 50. as we see individual markets picking up steam. the index itself off session highs but still up by around 9 to 10 points. that euro zone inflation number, a very critical number investors will be watching coming up in about half an hour and the expectation is for 0.2% in july. >> let's have a quick look at bond yields as we had a little bit of gains in european equity markets during the latter half of the week.
back to 0.63. the 10 year note in the u.s. seeing yields tick up a little bit. 2.18% there. forex, the u.s. dollar in general has been strong this week but that's focused against the yuan and other emerging market currencies. in fact, against the euro it's weakened quite steadily and now 11134. that's because people think what happens in china delays a rate hike and the euro dollar responding accordingly. we've seen the aussie dollar move in line with currencies and that's softened during the course of the week. although bouncing back today. >> goldman sachs is selling it's gold mining business in columbar by for less than $10 million. they bought the mines and other assets including a port and rail
cars for more than $600 million but struggled to turn a profit due to labor and siermtissues. slightly down in today's trade by 0.2% in frankfurt. >> they'll be buying $16 billion worth of deposits from ge capital. this gives them the foothold to expand it from customers. it is trying to shed billions of dollars that accounted for nearly half of the company's profits. ge is flat in germany. >> a lawyer for plaintiff says investors recovered more than $2 billion in settlements with nine banks over claims of price rigging in the currency markets. he told a manhattan court on
thursday they're settling with banks. the banks have agreed to pay about $800 million. now switching focus to tech. apple is putting plans into place to launch a live streaming tv service on ice. reports say the company wanted to announce the service at its iphone event next month but it's being delayed until last year. negotiations with nbc, abc, and fox have been slow going. apple also lacks a network infrastructure capable of ensuring a smooth streaming experience. there's a 50/50 chance apple would unveil the service in september. it's been a volatile ride for shares of apple over the past couple of days. some of that having to do with the pboc devaluations of its currency and apple's exposure to china that resulted in shares of
apple underperforming here in europe on friday. apple shares at 103 down by around 1%. >> now is apple developing a stealth device? one analyst seems to think so. in a note, apple could be bringing fielbrin bringing fighter jet style to autos. it incorporates sense of technology and acts as a heads up display. now this on one level seems futuristic if you're bringing fighter jet technology into a car but i'm surprised this hasn't happened earlier. there's issues when you're driving, you can't use your phone. it's illegal to do so. why don't they already have all the data you want so you can make a phone call and use your music while you're driving. it's a great idea. >> so a hologram effect on the windshield while you're driving. >> it's there so you can look at
both. that's the whole point. >> as long as it doesn't cloud your vision. >> i got stopped the other day for using my mobile phone in my car. >> really? >> yeah, really annoying. otherwise i had a clean license. i was a bit of a golden boy but got points for that. i got to go to one of those painful courses. >> so you have a ticket and now you have to attend a class. >> and i got points on my license. >> because it takes time to get those points clear. >> why didn't you bring this out earlier if you're planning to? >> innovation a big part of the growth strategy. another story we want to talk about this time in the gaming world, king digital. 2nd quarter profit falling 28% as revenue from its flag ship game candy crush saga continues to decline. however the company is still investing in the game. future orders fell 13% and king
expects a further drop. king fell about 9% in after hours trade. as you can see, wow, one of the big losers today down better than 15%. i was speaking to my nephew. he was saying actually he's not playing games as much anymore because he just loves snapchating. messaging. can messaging take the place or replace gaming. that's an interesting thing to watch. >> i never got into gaming on mobile. they're so token, the games on a mobile. >> they're fun. they're very addictive. especially candy crush. but the question is can it continue given that it's a highly competitive landscape. there's so many amazing games out there. >> that's my fear. addictive. i think it's dangerous. if you start getting hooked on something always in your pocket you'll never do any work again. it's been a busy time for education company pearson as it
sells it's stake in the economist and financial times newspapers. earlier on the channel john fallon set out his vision for the company's future direction. >> we are tying our future to what i think is going to be one of the great global growth stories of the next decade. if you talk to parents in countries around the world, rich and poor, the single thing that matters to them most is equipping their kid with the skills and the knowledge to go to university and learn english and that's going to get them a better start in life. that's what we're aligning pearson too. this is a sector only just emerging. you mentioned 3 trillion pound ace year spent on education. we're the biggest education in the world and we're battling 5 billion pounds in annual sales so the growth opportunity here is immense. >> all right. the next segment is brought to you by the letters hbo and the
number 5. that's right. long running children's program sesame street agreed to a five year deal to air it's first run episodes on hbo. it will provide additional resources to sesame workshop. the nonprofit group behind the tv program. they will be available free on pbs which hosted sesame streak for 45 years. an institution a big part of my childhood as well. >> as it was over here too. >> was it? >> over here too. >> good to know. let's talk about sports because it's round two of the pga championship. the final major of the year tees off in just a few hours. on thursday, defending champ rory mcilroy who is playing in his first event since rupturing a ligament in his left ankle got into a precarious situation. he played his shot from the water on to the green. rory is one under dustin
johnson. he's the first round leader. he has held that mark at three majors this year but yet to come away with the title. >> i can tell you know who all of those guys are. >> they're my homies, man. >> what's his name? >> rory mcilroy. >> you got it right. >> i got it right the first time too. >> beg to differ. still to come, what's the better bargain for the five star locations? the heart of london or another beautiful beach on the mediterranean. the answer may well surprise you and we'll give it to you right after this break.
offering on these five star locations? well, you can see all sorts of places you can go to. a pleasure to have you on the show. before we get into your business help people understand what exactly secret escapes does and how it's different from the other lon line travel sites like expedia. >> it's a members club for discounts on luxury travel. in any given week we'd be offering up to 400 discounts on four and five star and boutique hotels which our members can save up to 70% on standard prices. each hotel is hand picked. so it's guarenteed to be a great quality experience and the key thing is that the discounts are totally exclusive to us. so anything you find on secret escapes will be cheaper than anything online. >> what does it take to become a member? >> virtually nothing. >> it's a member's club, it's luxury, it's elite. anyone can do it.
>> what we're doing is making luxury travel accessible to everybody. we don't claim to be, you know, a niche club. we're trying to make luxury travel available to everybody. >> and the discounts you secure for your members, is that based because of the volume you can deliver to five-star hotels? >> it's a lot to do with the fact that we deliver incremental bookings. you go to expedia or booking.com because you have a goal in mind. that trip was going to happen. what we're doing is communicating via e-mail and something will click at so point in time and you'll think that's an amazing weekend break we can do and it will be an incremental trip you weren't plaining and that's a valuable piece of business and they have 30% of their rooms not filled at any given time in the year and if you can fill those with new business they're delighted. >> some would say this seems too good to be true. offering a 70% discount to traditional prices?
what's the catch? are these lousy hotels? >> no, absolutely not. every single hotel is very very heavily checked before it goes live. the price checks done are incredibly rigorous. everything is absolutely genuine and it's one of the things we pride ourselves on is the genuine nature of the discounts. travel business has gotten quite a bad name for some fairly unscrupulous discounting claims and we're confident we steer well clear of that. >> this is this also a play on the millennial audience? the millennial generation is more interested in traveling abroad as much as by a 23% point margin. >> we have two key audiences. the millennial audience is pre-kids so they're very flexible. you can send them an e-mail with a fantastic offer and they can make a decision in an instant.
not that availability has to be last minute. you can book anymore, next week, next month, or even next year but it's an impulse decision and that means that people in the situation that millennials are in are in a great position to be able to take a break at short length. >> tell us where a company perspective, you just raised money from google ventures and when's the next funding going. >> so this round of funding is really about putting up all the things that we started over the last year. so we're now in 13 countries. many of those launched in last 12 months. a big drive in growth in the u.s. we launched in april of this year. we'll be pushing hard in all of those but we have loads of growth to achieve in the core markets in the u.k. and germany plus exciting plans for asia as well. so lots to do. but it's all with the core model. we haven't taken the funding to try to innovate around the model.
it's about extending it into new markets. >> what's it been like working with google ventures which doesn't just provide funding but also entrepreneurship and advice and mentorship as well. >> that's the brilliant thing about working with google. our partner that looks after us there is a very successful entrepreneur. great guy to work with. the network is fantastic. they own one of the biggest if not the biggest digital advertising platforms in the world. they know about e-mail. the resources are amazing and we look to leverage that as much as we can. >> interesting to hear about your company. thank you. founder and ceo of secret escapes. but we want to hear from you. how do you book your summer vacation? online? do you use a travel agency? are you asking your mom. let us owe what your thoughts are. e-mail us add email@example.com and tweet us @cnbcwex.
i find that people here in europe really prioritize travel. just given that london is such a launch pad for the rest of europe. one hour barcelona, two hours it's in rome. >> one hour in barcelona. >> it's like a 3 hour flight. >> two hours from new york. it doesn't even get you to the hamptons. it takes about 2.5 hours to get there. >> lots of places nearby in europe. we're lucky in that regard. let's talk about samsung. it's the latest tech titan to push the mobile space. it's expected to grow to $57 billion next year but some analysts questioned how many consumers are interested in using their phones rather than their credit cards. john breaks down the features and looks at the new note 5. >> samsung ceo is is in new york city just hours ago announcing new phones.
the alabama lax sy note 5 and also the edge. the same version of that phone people didn't expect. this is doubling down on a differ s differenciater for them. it has proven to be more popular than samsung expected. they haven't been able to make the curved screens small enough to meet demand. now they're reaching another phone. samsung also announced samsung pay which we also had expected. this is a competitor to apple pay but unlike apple pay that works through communication this works through magnetic field technology so everywhere you can swipe a credit card you will also be able to use samsung pay
you will be able to try this with newest phone. older phones will also be able to use samsung pay with a software update and it's a battle of the ecosystems now between apple and sam suck. android pay is also available but a lot of attention is going to those too. finally we also have live streaming available on these phones but not through periscope which has taken the lead through youtube. youtube live. samsung partnering with google on that technology. we'll have to see if this combination of things for their echo system makes these phones popular and allows them to take some market share back from apple. let's talk more about samsung, joining us from hong kong is mark newman. a very good morning from here. good afternoon to you. good to have you with us. let's talk about samsung in particular. five successive quarters of profits falling. they brought forward the launch of these latest couple of
phones. is that a sign of desperation on their part? >> the smartphone side is not going so well for the company. they have been attacked on the high end by apple and in the lower end by chinese rivals. this is really their answer to that and the big question is is it really going to be able to stabilize their share or gain it back. it's still a question. to me, two notable stand out things in this new phone is the pay. pay is rolling out through the end of the year starting later this month and united states in september. that's a big differ she yea to for them because as the previous program just noted, it works with magnetic trip and nfc. so any payment point in the
world it will work and that's a big example over any other phone because at the moment it's exclusive to samsung and is second thing that's unique and interesting about what samsung is doing is keeping pushing forward on the hardware which is what they're best at and you see this with the round display. that's something that they own. it's a plastic based flexible display. much, much more advanced and complicated technology that eventually could and should, they hope, lead to affordable screens which lead to a tablet that can fold into a product which they're looking at in a year to two years later coming out so i think those are kind of two very interesting things from this announcement yesterday. >> regardless of that, a few things can carve this phone out
as being a market leader put for both apple and samsung are developed markets now saturated? is the smartphone part of samsung, is it still going to be the main needle mover for the stock? or are there other parts of the businesses you're looking at as well? >> in terms of the stock, it drives a lot of sentiment and variability. there's a huge wide variety of expectations in their profit over the next three, four, five years. a lot of people think that goes to zero and a lot of people thinks that continues to grow. it's a massive range of outcomes. however the main driver of profits for the company is not smartphones. smartphones is only now generating a third of the companies profits. the rest are coming from
components and semi-conductors themselves. outside the company. that's a huge advantage for them and those parts of the company are continuing to do well. >> very quickly, sum it up for us, what's your call on the stock. >> we outperform on the stock because i think there's worries about demand in technology. we'd be buying it right here at this very cheap price point. >> thank you for joining us. mark newman, senior analyst for bernstein. >> the big story this week has been the chinese yuan. we'll discuss how central bank policy out of china has been impacting global markets. that's coming up.
you're watching worldwide exchange, everyone. welcome to the show. i'm seema mody. >> i'm wilfred frost. here's your headlines from around the world. >> greece moves one step further of securing a bailout after the country moves further. he has fears rebels in his own party could weaken the government. >> stabilization in the chinese market after the central bank holds the currency steady with shanghai composite with the biggest weekly gain since early june. >> german and italian gdp di