tv World Business Today CNN May 20, 2011 1:00am-2:00am PDT
>> the really important thing after meeting you and seeing this in action is the incredible power of you as a role model now for deaf people in america. incredible. this show must have transformed that for you. a really extraordinary interview to watch. a very good afternoon and a happy friday to you. i'm andrew stevens at cnn hong kong. and good morning from cnn london. i'm nina dos santos. here are the top stories. europe and the world economy scrambles over its successor as the former imf bails.
tepco bows out as the world's largest energy company pays a record price. and they double on their market debut. ceo jeff weiner tells us there's no trouble in the media sector. we begin with the former imf managing director, strauss-kahn, who's expected to walk out of jail in a few hours from now, but he will not be a free man. the judge granted him bail on thursday but with strict conditions and a warning. and even as the judge was approving the bail request, grand jury indicted strauss-kahn on multiple felony charges including attempted rape. he's accused of attacking a maid last saturday at a manhattan hotel. he denies it. >> he has to post a $1 million
in cash and a $5 million bond. he also has to agree to a 24-hour confinement and an armed guard at the door. he has to surrender his travel documents and agree to wear a monitoring device. the judge said, quote, we don't want his money. we just want to make sure that he comes back. >> so the top job of the imf has been vacant now for a little more than 24 hours. the hunt is on for a successor. john lipski is filling in as managinging atting director and as he told richard quest, they're wasting no time. >> the board of directors will meet shortly the next day or so. they'll agree on let's call it the technical process and details of how the search will
be made and the selection will be made once the process is agreed and transmitted, then it will be put in place and the selection process will begin. >> but that's the formal, if you like, nuts and bolts of it. but you know as well as i do that the jockeying for position around a consensus candidate gets under way pretty much while you and i are talking now. >> it's important to note that the members recognize the role of the fund and the importance of having talented and effective leadership and leadership that can create consensus around decisions and action. so this process is likely to be under way soon. the formal process will be under way soon. and hopefully a consensus will emerge in a very expeditious and effective way.
>> i need to ask you bluntly. can you hold the job? >> richard, my term ends on august 31st, and it's -- i had already announced prior to these events my intention to retire from -- at that time. but the important thing is not personalities. the important thing is that the work of the fund needs to carry on. it's important work. and let me just note, richard, that i'm the first-step managing director. all three of us have spent positions as managing director so this is perfectly normal. >> the acting managing director john lipsky speaking with richard quest. many say the replacement should be one of their own.
the french prime minister is well respected among her contemporariries. on thursday she praised the role of the imf on thursday but she did keep tight-lipped about her potential candidacy. >> translator: which has played or continued to play an important role. second, i'm very attached to europe. i'm wanting to stick together. the europeans will be together, all together. >> silvio berlusconi made it clear where he stands. he said, quote, i consider it fundamental to reach as soon as possible a shared european position that expresses one
candidacy for the direction of the international monetary fund. in replacing dominique strauss khan, in order to his his goal, i believe that doesn't french finance minister can represent an excellent choice. so what's the root to the top job at the imf? they've asked for a fair and open process, but, of course, with so much power held in europe and the united states, it's considered. people must convince a member of the imf executive board to actually nominate them. the first point, of course, is a compatriot, so somebody from their own country to give them their support. too bad in the case of gordon brown that the prime minister has already written off that possibility. they must then meet with the executive board in washington.
that's officially a secret process, wu the movements of certain individuals must be closely monitored during this time. and then, of course, there's the selection process. that's down to the board. there are 24 members and a majority vote decides who the next boss of the imm will be with nine hailing from europe and two more representing european interests. of course, a lot of people are saying it will take quite a team effort by the rest for europe to release its grip on the top job there. >> a lot of people are saying the u.s. will support a european nomination as well. okay. we're going to turn now to a story here in asia which is reverb rating through the japanese markets and is certainly in the interest of the nuclear clie sis in the japanese industry. it's the biggest loss, the ongoing crisis at tepco, the tokyo electric power company has taken a brutal toll on the
company's finances and they've cost the president his job. now, japan's biggest utility has reported losses of 15 president $2 billion for the year, which ends on march 31st. the financial ended 20 days after it found itself at the center of the world's worst nuclear incident since chernobyl. that news from tepco didn't deter -- didn't have to much of an impact on japanese stocks. the nikkei was down. it was actually higher earlier in the day. sony, toshiba and hitachi. here's how the market ended. the nikkei, as you see, down just a fraction. australia after being one of the
best performers around the region yesterday, now one of the worst performers down to about half a percent. nina? >>. well, andrew, markets in europe have been open for about 20 minutes. let's look at how that's affecting things particularly on the ftse 100. do remember that banking stocks and energy stocks like bp are weighty components. they're currently leading the charge by seven-tenth of 1.0%. we've had about five days worth of heavy losses before that. for the moment, things quite positive. >> yeah, i know. as opposed to the u.s. which has been volatile, it did finish on a better note today.
linkedin's oak nomic report. we've got more on that. the indices up by between a fifth and a third of one percent. well, the japanese economy is still reeling from the earthquake in tsunami that hit it on march 11, and now the owner of the crippled fukushima daiichi plant has revealed how much money it's lochlt it's not a pretty picture, but we'll bring it next on "world business today." for those of us who have lactose intolerance, let's raise a glass to cookies just out of the oven. to the morning bowl of cereal. and to lactaid® milk. easy to digest and with all the calcium and vitamin d of regular milk. [ female announcer ] lactaid®. the original lactose-free milk.
shareholders. now, i want to show you the amount that's actually been knocked off the company's shared price since that particular date. take a look at this. it's a staggering 83.22%. that's equivalent to 25.5 yen or 31.5 cents every single day since march 11th. >> it certainly is an extraordinarily large number. 83%. let's show you how quickly and dramatically that stock collapse actually took place. now, what you see here is in the month before the disaster, the triple disaster, the tsunami, the earthquake, and the disaster, tepco's share price was hovering fairly steadily. around 2,100 yen. that's around about $26 per share. now, here is march 11. the share price that day was 2,121 yen. within six days, though, it had dropped by 62% from here down to
here. 62.5%. a little bit of bargain hunting going on at that level. a little bit though. and then it appeared that the nuclear threat might be contained. then the reality and the cost of the crisis really hit home. the price reaching its lowest point here in april, early april. the equivalent of about $4.12 a stock. remember, this is a stock here on march 11. now, this friday, though, it might interest you to know that tepco is actually up by about 2% at the close of trading just a couple of hours ago. so there was a little bit of bargain hunting going on. but certainly tepco has got a long way to get out of the wood at the moment following the disaster that crippled them. it has, as we've been saying, just reported its losses plus some big leadership changes as well. let's go to kyung lah with the changes on that.
certainly the changes not surprising after that terrible, terrible numbers. >> reporter: not surprising at all, but this is for a lot of people justice being done, at least in the corporate world. this is a man who had become a symbol of an inept utility company that had been failing on multiple fronts for weeks. now, what many people felt is that tepco simply wasn't prepared for the earthquake or tsunami. the pictures have really shown that. in the weeks after that, tepco also appeared to be lost and unable to control the crisis. and the president was even absent and ill from fatigue and when he finally came back and started the process of apologizing, something that is very, very important to japanese people, it was truly too late. there were people who were screaming at him when he would go to apologize to the residents. so what he said today as he was announcing that he was going to
be stepping back is that there needed to be a line, a sign that tepco was going to change. the person who's going to take his spot, the incoming president said he felt it was fate for him to take this role. he will get no pay or bow necessary as part of the restructuring plan and many of the executives will see severe pay cuts can. andrew? >> when will they actually be able to put this behind them, close the reactors and start afresh, if you like? >> there is that six- to nine-month roadmap where they're looking at a cold jut down. they're looking five to eight months when it's going to be -- the immediate crisis is over, we can say there's a coal shutdown at the pleasant. tepco said they're going to close the reactors. as far as getting residents back
in their homes, there's no prediction. tepco simply saying they cannot make a prediction. they can't say anything about what it's going to look like going ahead. if you look at the amount of damage and still the ongoing crisis there, it's certainly understa understandable, but this is an electric company that's got its hands full. and looking at the losses today and all the talk about how much the government may or may not have to help is going to be very difficult to not see some sort of outcome where the taxpayers are going to have to pick up part of this tab. >> that's right. we're talking a about $50 odd billion as compensation. is there any way of knowing yet how those numbers are going to be broken down? >> we expected to see maybe some sort of sign about how much compensation is going to be handed out, but right now tepco says that they don't have it. there's not really a clear picture of exactly when hard cash is actually going to end up in the hands of these people who
all these weeks later still are not home, don't have their possessions, and in many cases they had to leash their dogs and cats behind that have simply died in their houses because of starvation, and they just don't have a plan. >> okay. kyung, thank you for that. kyung lah joining us from tokyo. nina. one company doing better than tepco is mcdonald's. that's despite the big decision over the fate of its mascot, ronald mcdonald. as the firm mcdonald's has been facing, of course, glags that its meals marketed the children using this figure, the clown, affect obesity. but shareholders reject add proposal that would in turn require a company to issue reports outlining its role in the obesity epidemic. the ceo said ronald mcdonald is here to stay. they gained 12% if the last four months and hit a record o high
of $82.63 on thursday. let's go to a break now. we're going to be coming back in about two minutes' time with plenty more "world business today" headlines. dust in here, and the pollen outside. but with 24-hour zyrtec®, i get prescription strength relief from my allergy symptoms. it's the brand allergists recommend most. ♪ lilly and i are back on the road again, where we belong. with zyrtec® i can love the air®. [ male announcer ] get up to $6 in savings on zyrtec® products at zyrtectv.com.
live from cnn hong kong and london, you're watching "world business today." welcome back. they're sending a clear message to the world's oil producers. pump more crude. after its quarterly meeting ended on thursday, the iea's governing board said despite the drop in prices said it's affecting global economic recovery. the agency also has said the higher prices are putting upward pressure on inflation and interest rate and there's an urgent need to supply a further tightening of the market. opec is due to meet on june 8 to discuss future levels. it's worth remiejding you
just how volatile oil prices have been over the last few months. what you're looking at for the moment we're going to be showing you is nymex crude. the price is pretty stable throughout the winter but look at what happens after february. that's when the crisis in libya really started to take hold. the wave of unrest across the middle east just has kept rising -- kept prices really high, rising up to their peak here. that's short $114 a barrel on april 19. the commodities run of early may extended its oil. a little under $99 a barrel. so what's the price of crude doing at the moment? well, following a fall on thursday, take a look at this. it's currently up by eight-te eight-tenths of 1.0%.
it's still below $100 a barrel. andrew. in a pitched battle over land once again erupting in india, on one side, farmers who say they're getting too little for the land that's getting taken from them for development, and on the other businesses are saying it's halting the country's future. pau pau paula choiu reports. rock-throwing farmers over a dispute over lachbltd a centuries-old law gives the government the right to purr iowa choir land. these farmers are angry at how little they're being offered for land which is needed for development of a new highway linking new delhi with the city where the taj mahal is located. this 72-year-old said armed police raided his home, beat him
up, and took his son into custody after fierce clashes broke out. he said while he and the other protesters are being shortchanged, somebody is making money off of these latest land acquisitions. there are investigations under way into possible criminal involvement in demonstrations and alleged police accesses. at least four people have died in the latest clashes. a senior police officer says the farmers are being exploited by outside forces. >> they're uncertain of the anti-social elements who are trying to gain -- take benefits from private partyies, from som big land mords and they have their own motives, and it's they are doing it. >> reporter: allegations of police attacks on homes run high in this village.
soot, daneling fixtures, a broken motorcycle, furniture, appliances strewn on the floor. this woman covers her face as she alleges the police barged in her house, ransacked it and starts it on fire. >> i presume it would go much faster if they sort it out. certainly we can't go in there unless they report it. so it's kind of a chicken-and-the-egg story. >> reporter: police have stepped up patrols and have been meeting with villagers in an effort to maintain order. a possible key to breaking the impasse, legislation amending the old law that farmers say is so old it's been stuck in parliament since 2007. paula choiu, cnn.
its own ranges. on thursday the imf managing director who had resigned hours before was in a courtroom facing sexual assault charges, asking for bail. the judge granted strauss-kahn's request but with strict conditions. he's due back in court on june 6. he says he is innocent. >> andrew, since the imf founders have always found the top post there and now there's dissent, representatives from developing and emerging markets say it's time for change at the helm. emily reuben is here with the story. emily. >> they're all making their feelings known. they say economic power is shifting toward asian, african, and next american countries and the top leadership should reflect that new reality. let's take a look at what thailand's minister has been saying. quite bluntly he says there's no logic that the imf is run by a european. he says they've come a long way
in the past three or four years. and in brazil the finance minister echoed that. time has long passed when it could be remotely appropriate to reserve this position for an eu national. an indian imf board member reported that means whenever there's an asian crisis, there should be an asian managing director. they say there should be someone outside, independent from the debt crisis. sit time for say an asian candidate for the job. well, here's what some economists had to say. >> asian countries have every right to have great representation at the imf. it would do wonders for the image of asia if they were to lead it.
this somewhere they're held in some disregard as a result of the state since asia's national crisis. so there's obvious benefit to them considering it seriously. >> nina, the question is now with the strong fill of candidates could they coalesce around one candidate? only then might a lone european have a credible shot at the top job. of course, china still interested this buying bonds from the imf. so the financial relationship between that country and that institution is, of course, ever deeper. emily reuben, thanks very much for that insight there. andrew? this whole debate is actually going to cloud the issue of merit. i mean she may well be the best person for the job but if she's chosen, a lot of people will say she's chosen for her nation
analyst rather than. you end up with a lose/lose. what do you think? is that a possibility? >> the interesting thing is christine has been a very, very ambitious and also very commended woman. she's the first g-8 finance munster. holding the position of french prime minister 2007 and the first chairwoman of bacon mckenzie, the u.s. law firm. she's keeping tight-lipped even if she does have berlusconi's endorsement. >> that's a different story. we'll talk about that one. let's get to the markets. ims is being watched closely by businesses around the world. the concern here is there's going to be a stalling in
stalling out the euro-zone debt crisis. let's take a look at what's happened in the region. the nikkei was initially up but finished down just a fraction there. confidence among the tech investors looking for potential extra exports as the yen weakened. that didn't last long and the exporters are up. the nikkei was down. hong kong down a fraction. hang seng dow hang seng coming up half a percent. >> it seems as though we're firmly placed in a third straight day of gains after five previous days worth of losses. take a look at that. the fotse up by 1.0%. of course, the ma condo oil
well. that is some relief to bp investors who have had all the deals to deal with for the last couple of days after that fated swap of shares between the two companies didn't materialize. >> yeah, absolutely. and bp is hope all they'll be able to salvage something. in the u.s. markets finishing high for a second day in a row. it's shoeking mixed economic number. more on that in a moment. but all the major indices closed by between a fifth and a third of one percent. after the close, gap, the apparent maker, said igts first quarter markets one down. it's america's largest clothing retail retailer. in fact, it says sales are sliding. the rising cost of cotton has increased gap's overhead. they're being forced to pass on some of those extra costs to consumers.
well, the online networking company linkedinpositioned itself nicely. its shares made its debut of $45 each. just under 8 million was snapped up with that price and then they subsequently skyrocketed to an incredible $122, hour of the start of trading. they closed at a price of $94.25. and that's still more than double the price as which they started trading at and the sort of increase witnessed we haven't really seen, it must be seen, since the dark boom in the late '90s. perhaps back in bubble territory. who knows. it's good news for the people at linkedin. this hasn't been lost on some. facebook poised to go public in the new future, speculation has
been mounting. earlier maggie lakes spoke with jeff weiner. he says both he and his rivals are too sophisticated in their business approach to repeat the mistakes of their predecessors. >> we're focused on our fundamentals and lodge-term plan and that was a primary oob jekive through this road show was to attract investors that were on the same page as us, that understand why we wanted to invest in our platform today. as for the industry, more bro broadly speaking, you see facebook in this horizontal utility platform, groupon, and each of those companies have amazing fundamentals driving those businesses. these are the fastest growing industries. so i think they're drawing a contrast with where we are today and say where we were in the late '90s, i think it's a little off for that reason. >> i'm sitting here thinking if
facebook and google are listening and watching which we know they are and enterprise and sort of that target customer that's so valuable, what would prevent them from creating a vertical business that does that, cuts out the noise and targets yours. >> what we hear from our membership time and time again throughout the world, we do meet-ups in dubai, amsterdam, europe and throughout the united states, our membership is consistent. we're the only social platform in the world to have had a social mass. >> one person we heard from is i like it when i'm searching for a job. when i'm not searching for a job, i don't really check in. is the strategy to continue to focus on that core job, which you've done so well or do you
need to diversify these other business dreams? >> the job seeker activity among numbers have very small relative to overall engagement. so as i mentioned a moment 'wrks we have over a hundred million members. we average 75 million unique users throughout the first quarter, and those folks were generating an an aislized rate of 30 billion pages. the engagement there, would we like there to be greater engagement? absolutely. i think peel have thought of linked in as a great place to find work. it's so much more than that. >> what are you going to do with all the money you just raised. it's a lot. >> i think you may see us do acquisitions going forward. they would be toward the smaller or median end. acquisitions for technology that could help accelerate our current roadmap and perhaps business lines that could be created at the top and bottom
line. >> and then you'll be watching very closely. interesting, linkedin finishing at double its ipo price. not bad. it underlines more and more the talk we hear about the new dot-com bubble. it's an interesting story. is linkedin worth double the price? we'll have to wait and see. we're talking about performance from companies like lived in and renren. i want to show you how quickly some of the major tech players are growing in terms of employment. now, of the five fastest growing companies on the fortune 500 companies last year, three of them are in the tick sector. coming in at number one, amazon, the online retailer. it added nearly 9.5,000 employees. that's a growth rate of 39%. it's been hiring in allary yas
from software engineers to product buyers. perhaps not a huge surprise there. apple coming in at second plachls now, steve, jobs' company did boost his head count by more than a third as demand rose for iphones and ipads. 34% to be exact. and google. so there is real growth going on in the tech stocks. now, if you're just wondering about these other two here, levi and las vegas sands, levi opened a slew of stores selling its own brand clothing and sands, of course, is a big gambling outfit. gambling is taking off in asia at the moment. time will tell if the tech firms are the big egest. >> really, we'll be watching
one of the most powerful men in finance, and this week the head of the international monetary fund appeared in court to answer charges of attempted rape and unlawful imprisonment. dominique strauss-kahn has been credited with transforming the imf and helping to promote developing economies. he was due to speak at a forum here in brussels where the arab uprising are a key talking point and how it can assist the region during ongoing unrest. leone lakhani has the story. >> reporter: that's welcome news for the middle east, particularly egypt and tunisia, the economies of the two north african countries have been struggling since their respective revolutions. they've not formally asked any lending institution for help, but the country's authorities have reported immediate results saying that'll need $10 million
to $15 million to fill a funding gap. they recently gave their growth forecasts for them. the imf forecast egypt's forecast to fall to just 1% in 2011 from a very robust 5.1% from last year. tunis tunisia's at just 1.3%. tourism ktss for 11% of its gdp. business is almost at a standstill and foreign investors say they're likely to hang onto their cash until they're confident about the security situation and political stabltd in the region. leone lakhani from "marketplace middle east," abu dhabi. as egypt grapples with its funds concerns, some $4 million in the near term. our ben wedermam sat down with
the egyptian finance minister. >> it has. production has slowed down. tourism has almost stopped. it's coming back a trickle. it was better during easter, but it went back again, and exports were down 40%. factories are working at 50% capacity. so overall, budget deficit has increased from 7.9et% of gdp to almost we are inching toward 9% of gdp now. so that's it in a nutshell. >> and prior to that there was
high level of foreign investment but money investment is always scared away by instachblt is there any sign of that money coming back? >> there is a tremendous appetite wherever i go and i have a stream of visitors to egypt, and they all want to come back and investigate. i have been to the spring meetings of the world bank fund and attended the meeting of the g-8, and there's tremendous appetite. wi went to the gulf. the same appetite to come back. but for those people to come back, they would like the security situation to improve. >> one thing that seems to be on the minds of many egyptians is all of the money stolen by the previous regime. do you have an estimate as to how much is missing, and what are you doing to get it back? >> egypt has asked our friends
abroad to get back this money. but this is a long-term process as you very well know. first of all, we have to guarantee a fair trial of those people. a fair trial in front of the national judge because these are the laws, kangaroo trials and so on, you'll get nothing. >> in the long run, was the revolution good for the economy? >> absolutely. absolutely. you will live and see. and i bet on that. i bet on that. this revolution has done what my generation has not been able to do in 30, 40 years. they did it in 18 days. they've transformed the rules of the game. >> egypt along with tunisia relied heavily on tourism to bring in revenue.
they're also busy trying to bring back international tourists, mainly from europe. according to the u.n. world tourism association, it's climbed 25% while tunisia witnessed a fall of 44%. declines that the secretary-general of the u.n. wto believes are reversible. >> our suggestion has been for both countries and they're quite receptive and even aware of it. you have to invest massively now in promotion. this is the time where you reassure the world who you are. it may take time. it may not pass by as soon as we think they are. >> there's discussion now amongst the circles that the gulf states with the oil exports and the rising price of crude should be investing more actively to get through the transition, and this is not happening yet.
>> i tell you what. this is the time to invest. this is going to be the -- this entire region is going to continue to be a primary tourism destination. areas around the mediterranean, consist settlement around the area, 42% to 45%. you can imagine how vital this area is. and it is -- it is not imaginable that a destination like turkey or greece or lit or france or morocco would blossom and then a destination right next to it won't. if things go the way they should go, the region will become more fluid and the energy will distribute itself in the right way. so the intelligent and wise thing is to invest. >> should we be thinking of a fund from europe or a fund from the gulf states, for example, to
support this transition though? >> yes. we need to try to prepare the grounds for investment. but i think the immediate challenge is simply to have people come there because with more visitors, you'll have more revenues. with more revenues, you'll be able to make more renovations and construction. so i think to be focused. in the coming eight to 12 months, the target should be let's get people back to these destinations. up next, expanding the horizons. how they're going beyond european capitals and setting its sights on european middle eastern market.
expand its region to bring luxurious french designs to the middle east despite the ongoing unrest as she found out when she visited the company's headquarters in france. >> delicate but strong enough to make an impression. from ma ha rajs to precedents, baccala raut has been making it since 1964. >> the customers today are certainly more than entering the past. entering a sense of constantly challenging what you've been and it's no longer a game of steady presentations of collections. it's reinventing what you are. >> diversity of product is importa important, but expansion is more. how important is it in the middle east? >> it's very important.
baccarat is very international and has been very international for many years, but we still have large pockets of wealth that we don't address well enough. and we've been strong in dubai, we've been strong -- i think qatar is a place where we could do much more. i think saudi arabia is a market with different situation, but it's a potential. >> last year they grew by 65% and the region now accounts for 10% of baccarat's total sales. >> it's not the only one. >> reporter: from blowing the glasses perfectly into the mold to tin spekz and selection stage before the glass is cut into shape, the production line is an intricate process, all checked by sight and touch. this is one of the ovens that has been in use since 1925.
it has 21 individual compartments of molten crystals, each one with a designated color mixed up overnight. it takes five men to make one price. and they're making glass. the centuries-old technique takes at least 15 years to master. roughly 300 pieces are made every hour and delivered to 89 countries worldwide. with the manufacturer situated in baccarat, it is no longer estranged from its roots as it continues to expand. >> that's all for this edition of "marketplace middle east" this week from brussels. i'm john defterios. thanks for watching. we'll see you next week.
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