Morning business round-up: Currency fears haunt G20

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The finance ministers of the G20 group of nations are meeting in Moscow amid concerns that major trading powers may be heading towards a currency war.

Japan's monetary stance has seen a big decline in the yen, while the euro has risen against a basket of currencies.

The value of a country's currency has a big impact on its trade and there are fears nations may try to influence markets to help boost their economies.

The G20 has previously asked nations to refrain from market intervention.

Commerzbank, Germany's second-largest bank, is slashing bonuses for 2012 as a result of "unsatisfactory net profit".

The lender says pay will be 17.2% lower than the previous year.

The chief executive, Martin Blessing, is foregoing his bonus claims - a decision which the company's chairman described as "honourable".

It follows a loss of 716m euros ($957m) for the fourth quarter, as well as an increase in the money set aside for bad loans.

Shares in French luxury goods firm PPR have risen more than 5% in Paris to their highest level in 12 years.

That follows a better-than-expected jump in earnings at the company, which owns brands such as Gucci and Yves Saint Laurent.

Net income rose 6.3% to 1.4 bn euros while sales jumped 20% to 9.7bn euros, driven in part by sales of its Bottega Veneta handbags.

PPR boss Francois-Henri Pinault said the results were "excellent".

Mining group Anglo American has fallen to a pre-tax loss in 2012, hit by lower commodity prices and a writedown on a key iron ore project.

It made a pre-tax loss of $239m (£154m) compared with a $10.8bn profit in 2011.

Last month, Anglo said it would write off $4bn (£2.5bn) after a review of its Minas-Rio project in Brazil.

The company has also been affected by strikes in South Africa, particularly at its platinum mines, and took a $600m impairment charge on platinum projects.

On the London markets, the pound has fallen against the dollar after UK retail sales fell unexpectedly in January, confounding economists' expectations for a rise.

Volumes fell 0.6% from December 2012, hurt by heavy snowfall, the UK's Office for National Statistics (ONS) said.

Volumes also fell 0.6% from a year ago, the first annual fall in 17 months.

The ONS highlighted weak sales in the food sector, which dropped 2.6% year-on-year to the lowest level since April 2004. It also said small stores had fared worse than large stores.

In other UK economic news, the cost of renting a home in England and Wales fell in January for the third month in a row, but remained higher than a year earlier, a survey says.

The average rent in January stood at £732 a month, according to LSL Property Services.

This was 0.3% down on the previous month and the lowest level since July last year, but 2.8% higher than in January 2012, the survey found.

And the UK's biggest energy supplier, British Gas, plans to appoint Chris Weston as its new managing director.

Centrica, which owns British Gas, said it was proposing Mr Weston, the current head of Centrica's US retail gas business, to succeed Phil Bentley.

If approved by the board, it will be formally announced alongside Centrica's financial results on 27 February.

The latest Business Daily podcast from the BBC World Service looks at mining giant Rio Tinto's new $6bn project in the Gobi desert, one of the most remote and hostile environments on earth - but also home to the world's greatest untapped reserve of copper, gold and silver.

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BBC Business Live

  1.  
    12:53: POWER TO THE REGIONS?

    A front page report in the Financial Times says the Conservatives and Labour are competing to devolve more powers from London. It says the chancellor, George Osborne, is to announce a package of additional powers for Greater Manchester - including what it calls a "Metro Mayor" for the region. Ed Miliband, meanwhile, is to announce more money for the regions - and more powers for local authorities to organise public transport.

     
  2.  
    12:46: MARKETS UPDATE

    European markets have been trading higher this morning, buoyed by strong corporate results, action from the Bank of Japan, and an absence of terrible news from the eurozone.

     
  3.  
    12:37: WESTERN BANKERS World Service
    Merle Hazard

    BBC World Service economics correspondent Andrew Walker teams up with country and western singer Merle Hazard (also known as Nashville fund manager Jon Shayne) for this week's In The Balance programme, airing at 08:30 and 18:30 GMT tomorrow. Merle's latest song is about the perils of being a central banker.

     
  4.  
    12:24: HUNGARY INTERNET TAX
    Hungary protests

    Hungary has suspended its plans for a tax on internet usage, following mass protests in the country. Viktor Orban, the prime minister, says the decision was taken because "people have questioned the rationality'' of the policy. He added that the government will carry out a national consultation on the issue next year.

     
  5.  
    Via Twitter Andrew Clark, deputy business editor of The Times

    tweets: "Berenberg's analyst Bethany Hocking says 'significant concerns' mounting about M&S trading in light of profit warnings from SuperGroup, Next"

     
  6.  
    12:14: WWI DEBTS

    Some news from the Treasury on who actually holds the WWI bonds it is "retiring". There are:

    • 11,200 registered holders of the bonds
    • 7,000 hold less than £1,000
    • 92% hold less than 10,000 each
    • Most holders are individual people who have passed them down

    There are also a few big investors, which the Treasury declined to name.

     
  7.  
    12:07: WARM WEATHER
    BBC

    This is what's causing all the problems for clothing retailers like Next and SuperGroup - it's been unseasonably warm this autumn. September was one of the warmest and driest on record, October has been warm too, and we're in line for the record warmest Halloween.

     
  8.  
    11:59: SUPERGROUP
    Superdry

    SuperGroup, the company behind the Superdry clothing brand, says it won't cut its prices despite becoming the latest High Street retailer to admit that unseasonably warm weather has hit sales. People just aren't buying enough coats. SuperGroup gets about a quarter of its turnover from men's outerwear alone. It has downgraded its profit forecast for the year, and its shares are down 8%.

     
  9.  
    11:34: EUROZONE UNEMPLOYMENT

    Unemployment across the eurozone stayed at 11.5% in September, official figures show. But that doesn't show the huge disparity between the members of the bloc. The jobless rates in Greece and Spain are still up around the 25% mark, while Germany retains the lowest rate - just 5%.

     
  10.  
    HALLOWEEN Via Twitter Aaron Heslehurst Presenter, World Business Report

    tweets: "#Halloween2014 Americans spend $7.2 billion on the trick or treat season. Get this part of that total is $350mln on costumes for PETS! :o)"

     
  11.  
    11:12: MH370 LAWSUIT

    The children of one of the passengers on board flight MH370, the Malaysian Airways plane that vanished in March, have become the first family to file a legal case over the incident. Jee Jing Hang's two young sons are suing the company for breach of contract, as well as the civil aviation authorities, immigration department and air force for negligence.

     
  12.  
    11:01: BNP PARIBAS RETURNS TO PROFIT
    BNP Paribas

    French bank BNP Paribas has reported an 11% rise in net profit for the last quarter. The firm had sustained heavy losses in the previous three months as a result of a $8.9bn fine for violating US sanctions against Sudan, Cuba and Iran.

     
  13.  
    Via Twitter Alice Ross, Frankfurt bureau chief at the Financial Times

    tweets: Scotiabank: "The uptick in the eurozone measure probably does little to appease fears that deflation is just around the corner."

     
  14.  
    10:40: RUSSIA RAISES RATES

    Economic growth in the next six months will be close to zero, Russia's central bank warned.

     
  15.  
    10:39: RUSSIA RAISES RATES

    Russia's central bank has raised its key interest rate to 9.5%. The bank also said that inflation would breach 8% by the beginning of 2015.

     
  16.  
    10:31: RBS

    Shares in the Royal Bank of Scotland are leading the FTSE in London, up 4.4% after the company reported quarterly pre-tax profits of £1.27bn.

     
  17.  
    10:29: MONTE DEI PASCHI
    MONTE DE PASCHI

    Shares in the world's oldest bank, Italy's Monte dei Paschi, have been suspended after dropping 9%. The institution, which has been around since the 15th century, is in dire straits after failing EU "stress tests" that assess banks' ability to withstand financial volatility. Shares in another beleaguered Italian lender, Banca Carige, were also suspended earlier this morning.

     
  18.  
    10:19: EUROZONE INFLATION

    Marginally better news from the eurozone. The annual rate of inflation rose to 0.4% in October, up from 0.3% in September - which was the lowest in five years. Lacklustre economic growth in the area has led to ever-louder calls for Europe's central bank to adopt stimulus measures similar to those favoured by the Bank of England.

     
  19.  
    10:06: SNAPCHAT

    The FT appears concerned its readers are being left behind by modern technology. The paper's Tim Bradshaw has put together an explainer on how to use Snapchat - the app recently eyed by Facebook and Yahoo among others. "If you're older than a teenager, you might be confused about what Snapchat is for," says Tim.

     
  20.  
    09:53: AMAZON
    AMAZON

    Online retail giant Amazon has been compared to an Islamist terrorist organisation by one literary agent. Andrew Wylie, who counts Philip Roth and Martin Amis among his clients, said Amazon was a "sort of Isis-like distribution channel", the Guardian reports. He complained of the "brutality" of its tactics with publishers.

     
  21.  
    09:38: WWI DEBTS
    War loans

    The BBC's Hugh Pym, previously of this parish, provides an in-depth explanation of WWI bonds over at iWonder. "Bond holders also agreed in effect to accept that they might never get their investment back," he writes. "Whereas the original bonds had been due to be repaid in full in 1947, Chamberlain converted them to "perpetuals", giving the government the right not to pay back the loans if they so wished, as long as they continued paying the 3.5% interest."

     
  22.  
    09:31: RBS RESULTS Joe Lynam BBC Business Reporter

    It looks like RBS are well placed to meet new Prudential Regulatory Authority leverage ratios (expected to rise from 3% to 4% at least). RBS's current leverage ratio is 3.9%.

     
  23.  
    Via Twitter Victoria Fritz Business reporter, BBC News

    tweets: "How many pumpkins can you spot on @BBCNews? ;)"

    Sorrell
     
  24.  
    09:24: IAG TAKES OFF

    Investors are happy with the upgraded profit forecast from IAG, owner of British Airways and Iberia. Shares are up 4.3% in London, and leading the FTSE.

     
  25.  
    09:19: EUROZONE WOES

    Bad news in the eurozone. Germany retail sales fell by 3.2% in September, the worst decline since May 2008. Meanwhile, Italian unemployment rose to 12.6% in the same month, a level not seen since the 1970s.

     
  26.  
    08:55: RBS RESULTS

    The chief executive of RBS, Ross McEwan, has told reporters that further branch closures are "inevitable", but he has not set a target number for closures.

     
  27.  
    08:44: RAIL RIP-OFF
    Rail Prices

    The Telegraph has been investigating the price of rail travel, and says it's uncovered a scandal. Passengers using station ticket machines, it claims, are offered widely varying fares by different train companies, and routinely denied the cheapest option. In some cases, a single journey can cost them more than £100 extra.

     
  28.  
    08:26: MARKETS UPDATE

    Predictably, the major European markets have opened with a spring in their step, thriving off the Bank of Japan's announcement earlier.

    • In London, the FTSE 100 is up 0.9% at 6523.07
    • In Frankfurt, the Dax is up 1.6% at 9261.44
    • In Paris, the Cac 40 is up 1.4% at 4198.96
     
  29.  
    08:24: RBS RESULTS

    Ross McEwan says RBS is in talks with regulatory authorities to settle investigations into the foreign exchange rate scandal. Traders at several banks are suspected of colluding to manipulate foreign exchange rates.

     
  30.  
    RBS RESULTS Via Twitter Adam Parsons Business Correspondent

    tweets: "RBS: "Realisticaly we still have some work to do" before paying a dividend"

     
  31.  
    08:15: AIRLINE UPGRADE
    British Airways

    International Airlines Group, the conglomerate made up of British Airways and Spain's Iberia, has reported a 30% rise in profits, and has upgraded its forecasts for the year. The company said it had been successful in controlling costs, helped by new fuel-efficient planes.

     
  32.  
    08:09: RBS

    Trading has just started on the markets in London. RBS shares are up about 2.7% so far.

     
  33.  
    08:02: RBS RESULTS BBC Breakfast
    Breakfast

    Kevin Doran, fund manager at Brown Shipley, says we could see the government sell some of its 80% stake in RBS within the next 12 months. The bank's current value is "very close to fair value", he says, so maybe a sale before the general election?

     
  34.  
    Via Twitter Jamie McGeever, markets correspondent at Reuters

    tweets: "One of the BOJ side-effects - gold falls to a 4-year low of $1,168"

     
  35.  
    07:48: JAPAN STIMULUS

    Bank of Japan Governor Haruhiko Kuroda says Japan is at a "critical moment" in its bid to conquer years of falling prices. "We can say the Japanese economy is now at a critical moment in its process of getting out of deflation," he told reporters in Tokyo. "The (easing) measures this time show the Bank of Japan's unwavering determination to exit deflation."

     
  36.  
    07:43: WWI DEBTS

    We've put a call in to the Treasury, asking them to whom the WWI repayments are being made. Do you know anyone who holds National War Bonds (or 4% Consols, as they were called after a refinancing)? Get in touch by emailing bizlive@bbc.co.uk or tweeting @BBCBusiness.

     
  37.  
    07:40: SONY SLUMPS

    Another important fact from Sony's results. The company is packing up its smartphone business in China.

     
  38.  
    07:35: WWI DEBTS
    South Sea Bubble

    Some of the debt being refinanced by the Treasury dates back to the 18th century, including the "capital stock of the South Sea Company originating in 1711", the collapse of which led to the South Sea Bubble financial crisis of 1720 - depicted by William Hogarth in above print. It's also paying for bonds issued in 1752 and used to finance the Napoleonic and Crimean Wars, the Slavery Abolition Act (1835) and the Irish Distress Loan (1847).

     
  39.  
    RBS RESULTS Via Twitter Douglas Fraser Business and economy editor, Scotland

    tweets: "RBS CEO Ross McEwan: "Still have a long list of conduct + litigation issues + much, much more to do to restore customers' trust"

     
  40.  
    07:27: WWI DEBTS BBC Radio 4

    Simon Jack on Today says paying off the WWI bonds will allow the chancellor to say he's paying off some of the UK's debt, but its pretty insignificant in terms of the overall debt pile. "It's looks good and sounds good," he says.

     
  41.  
    07:23: WWI DEBTS

    The Treasury has announced it is paying off some long-standing debts - dating from WWI, no less. It will redeem £218m of National War Bonds, issued in 1917, with a 5% interest rate. Around £2bn worth of the WWI debt will remain, but the government says it is "looking into the practicalities" of repaying it all.

     
  42.  
    07:17: RBS RESULTS
    RBS

    RBS warns that much more money could be paid out to cover things like the foreign exchange scandal: "Ongoing conduct and regulatory investigations and litigation continue to present challenges" it says, "and are expected to be a material drag on both earnings and capital generation over the coming quarters". It adds that the timing of further settlements or redress "remain uncertain and could be significant".

     
  43.  
    07:09: RBS RESULTS

    RBS has set aside £400m to cover potential fines for manipulating foreign exchange markets, and a further £100m to cover more PPI compensation claims.

     
  44.  
    Via Twitter Joel Hills, business editor at ITV News

    tweets: "Treasury to repay £218m of war debt + look at 'redeeming the entirety of...£2bn of outstanding First World War debts, in due course'."

     
  45.  
    07:05: RBS RESULTS

    RBS also confirms it plans to keep its Irish subsidiary, Ulster Bank. There had been speculation that the company was seeking a buyer for the division.

     
  46.  
    RBS RESULTS 07:02: Breaking News

    RBS reports pre-tax profits of £1.27bn for the three months to the end of September. It has also set aside £780m for litigation costs, including costs related to the foreign exchange rate scandal still being investigated by regulators.

     
  47.  
    06:57: DONUTS BBC Radio 4
    donuts

    Dunkin' Donuts is back in the UK after a 20-year break, Today reports, with five outlets opened this year. The chief executive Nigel Travis tells Simon Jack that its donuts are an "affordable indulgence". He says they offer things like low-fat ice cream and coffees for those who don't want the high-calorie stuff, but most people don't go for it.

     
  48.  
    06:52: SONY SLUMPS
    PS4

    Despite a whopping net loss, there's one bright spot for Sony: Sales of gaming devices are up 83% compared to last year, driven by the popularity of the PS4 console.

     
  49.  
    06:46: SONY SLUMPS
    Sony

    Amid all the jubilancy on the Asian markets, one Japanese company continues to have a rough ride. Sony reported a net loss of 136bn yen (£800m) for for the past quarter, up from a loss of 19.6bn yen (£110m) in the same period last year. The struggling electronic giant says this was largely down to an "impairment of goodwill" in its mobile communications division - that is a decline in the value of intangible assets, such as brand recognition, reputation and intellectual property.

     
  50.  
    06:41: JAPAN BOOSTS STIMULUS BBC World News

    Martin Shulz, a Japan analyst from Fujitsu Research, tells World Business Report that "Abenomics" - the economic policies of prime minister Shinzo Abe - isn't working. "Abenomics is in trouble, the economy isn't improving enough," he says.

     
  51.  
    06:40: RBS BBC Radio 4
    RBS

    Simon Jack's back presenting the news on the Today programme this morning, looking ahead to the RBS results later. Filippo Alloatti from Hermes Investment Management says the bank will probably announce more money set aside to cover PPI claims plus something like £300m-350m to cover fines or expenses relating to the foreign exchange trading scandal.

     
  52.  
    06:24: HALLOWEEN BBC World News
    Rico Hizon

    The Live Page's favourite business reporter Rico Hizon is sporting a black-on-black jacket and shirt combo with an orange tie this morning to celebrate Halloween. "Nothing is spooking the markets", he quipped on Radio 5 Live earlier.

     
  53.  
    06:22: ASIAN MARKETS

    The markets in Japan have now closed, and investors are grinning from ear-to-ear.

    • The Nikkei 225 index surged 4.9% to 16427.06 (highest since November 2007)
    • In Hong Kong, the Hang Seng rose 1.2%, ending at 23990.24

    Stocks in mainland China, India and South East Asia are also up.

     
  54.  
    06:15: JAPAN BOOSTS STIMULUS
    yen

    Here is how the yen reacted to the news from the Bank of Japan - down against the dollar to a six-year low.

     
  55.  
    06:07: JAPAN BOOSTS STIMULUS Radio 5 live

    The Bank of Japan's decision is an attempt to "recharge a fragile economic recovery" and it seems like Prime Minister Shinzo Abe "is getting desperate", our very own Rico Hizon tells Wake Up to Money. He adds that the move "weakened the Japanese Yen against the US Dollar to a level not seen for six years".

     
  56.  
    06:00: JAPAN BOOSTS STIMULUS
    Bank of Japan

    This will give you a sense of how surprising the Bank of Japan's decision to pump more money into the economy was. Bloomberg reports that only three of the 32 economists it had surveyed expected the Bank to ramp up its stimulus programme. In its statement, the BoJ says it was worried about "downward pressure on prices" - or lacklustre inflation, to you and me.

     
  57.  
    06:00: Edwin Lane Business reporter, BBC News

    We're also looking forward to results from Royal Bank of Scotland at 07:00. In May the bank - still 80% owned by us taxpayers - reported profits of £1.6bn, but warned of a tough year ahead. Get in touch with us on bizlivepage@bbc.co.uk or tweet us @BBCBusiness. You email it, we'll publish it. Probably.

     
  58.  
    06:00: Joe Miller Business Reporter

    Good morning. The Bank of Japan has unexpectedly announced a boost to its monetary stimulus programme, in an effort to revive the country's flagging economy. The decision caused Asian markets to soar, with the Nikkei reaching a 7-year high. More on that, and the rest of the morning's business headlines, to follow.

     

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