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QUEST MEANS BUSINESS
Dow Hits Fresh All-Time High; Macron Offers Warm Reception to Trump; Snap Bounces Back After Stock Upgrade; Shareholders Revolt Over Burberry Executive Pay; EU Cracks Down on Social Media Screening;
Aired July 13, 2017 - 16:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[16:00:00] RICHARD QUEST, CNN HOST: Enel and Formula-E cheering there as they ring the closing bell. And somewhere on that balcony is actually the
CEO of DHL will be joining us in half an hour from now. So, do stay tuned for that. The Dow ending the day on a record high. Stocks have literally
been on a tear and we'll discuss it as well. My friend it is Thursday, July 13th. Tonight, there's no stopping stocks as the Dow hit the second
straight all-time high.
And we will always have Paris, President Trump and Emmanuel Macron enjoy a friendly dinner at the Eiffel Tower. And Snap gets a Wall Street upgrade.
Now the shares are bouncing back. Hello, everyone, I'm Zain Asher and I mean business.
Good evening everyone, I'm Zain Asher. Coming to you live on this Thursday evening from the New York Stock Exchange, where the Dow has just closed at
another record high. Ending the day up just 23 points. It was a tiny gain but certainly enough to push the Dow to a record high once again. The S&P
500 and the NASDAQ rose slightly as well with financial stocks further into the green. We'll have more-on with our Peter Tuchman in just a moment.
Meantime I want to give you the breaking sort of big political news of the day. It was all smiles in Paris as President Macron hosted President
Trump. The American had kind words for Paris, and for Mr. Macron as well, which by the way was a huge dramatic turnaround from some of the previous
comments that Donald Trump had made about France and Emmanuel Macron as well. At this moment as I speak, the two leaders are having dinner
together in the Eiffel Tower. It follows a day of talks and a tour of historic Paris sites as well, like Napoleon's tomb. The reporters on this
trip were focused on the brewing scandal in Washington, that President Trump cannot escape. Questioning Donald Trump for the first time about his
son's meeting with the Russian lawyer. The president insisted that the meeting was standard political practice. Take a listen.
(BEGIN VIDEO CLIP)
DONALD TRUMP, PRESIDENT OF THE UNITED STATES: I think from a practical standpoint most people would have taken that meeting. It's called
opposition research or even research into your opponent. I've had many people -- I've only been in politics for two years, but I've had many
people call up, oh, gee, we have information on this factor or this person, frankly, Hillary. That's very standard in politics. Politics is not the
nicest business in the world. But it's very standard, where they have information and you take the information. In the case of Don, he listened.
I guess they talked about as I see it, they talked about adoption and some things, nothing happened from the meeting. Zero happened from the meeting.
And honestly, I think the press made a very big deal over something that really a lot of people would do.
(END VIDEO CLIP)
ASHER: So, you heard him say it there. He believes that the press made a whole big deal about this meeting. I want to bring in Nic Robertson, our
international diplomatic editor. He's live with us in Paris. So, Nic, before we get to the whole Donald Trump Jr. meeting with the Russian
lawyer. I do want to talk about what it was like when Emmanuel Macron and President Trump being on stage together. President Trump interestingly
enough heaped a whole ton of praise on Emmanuel Macron, which was somewhat surprising, considering some of the differences the two leaders have had in
NIC ROBERTSON, CNN INTERNATIONAL DIPLOMATIC EDITOR: Sure, he was asked by a French journalist. President Trump was asked by a French journalist
about his comments he made on the campaign trail. About France being unsafe. About Paris being unsafe. About there being so much terrorism.
Implying that the French couldn't keep on top of it. We asked him, well, do you still believe that? And you know, that was the opportunity for
President Trump to lay praise on President Macron. Which is what he did. To the point of saying he's strong, he's tough, he will do well, I'm sure
he will be good. And he said you better do well, otherwise I'll look bad. It was a joke, it felt sort of relaxed in a way. More relaxed than it had
been. So, yes, the sort of the language, the body language, I mean they did keep shaking hands in a nice way. They did keep patting each other on
the back. I mean at one point I think they both had arms on each other's backs. There was a very clear effort to make this look good. Whatever was
happening behind closed doors, they did seem to deliver well on that part.
ASHER: That is despite the differences over Russia, over immigration, over the Paris Climate Accord as well. What do you think was the purpose of
this trip for Emmanuel Macron? Did he succeed in achieving it, do you think, Nic?
ROBERTSON: Yes, look, reset in part the relationship with President Trump, the imagery had been bad.
[16:05:00] He is a rising political star. He has a lot of political capital to invest. He can project himself as a very important leader. Not
only in Europe but on the world stage to engage with President Trump to tell him why the Paris Climate Change Agreement is a good thing. Why he
thinks the United States should partake of that agreement along with everyone else. They do have the commonality on views on trade. This was
an opportunity for President Macron to project himself as an emerging, an important world political player. And it just seemed to have been able to
do that. Of course, the real test is going to be how does this relationship fare in the future? And does President Trump listen to
everything that Macron has said. And does he live up to Macron's expectations. We've seen, of course, the president of China seemed to be
quite disappointed now with the way his relationship was going with President Trump after appearing to get off to a great start at Mar-a-Lago.
ASHER: Despite all of that, Nic, the American media -- I'm in the U.S. -- the American media was heavily focused on what Donald Trump had to say
about his son's now-infamous meeting with that Russian lawyer.
ROBERTSON: Sure. Look, he defended his son and he also deflected standard fare for President Trump as he does when he gets any sort of criticism
aimed at him. He said the meeting was short. That three people there, one of them left almost immediately, one didn't really pay attention. It
wasn't important, any other politician would have taken this meeting. And then he deflected it, to say, who gave this Russian lawyer, Betty pointed
out, the top of his statement on this. This was a Russian lawyer, not a Russian government lawyer. And you know, raised the question of how did
she get a visa? Who gave her the visa? Deflecting the blame for this, if you will, on someone else.
President Macron, on the other hand, handled this in a very different way. In this was really the difference of styles. When asked this tough
question, is President Trump tough enough on President Putin. The French president said look, President Trump met with Putin for more than two
hours. I've had two meetings with Putin. Who don't always agree with President Putin. But it's important to talk. It's important to discuss.
It's important to have dialogue. There are important issues like Ukraine, like Syria. And there was talk about the cease-fire in Syria and the
political path ahead. Those important issues came up.
In a way, that was Macron's object lesson to President Trump not stated but supple. that there is an alternate way to handle the press and two handle
the tough questions they throw at you. There are straightforward answers for why you're dealing with Russia. Because it's necessary and important.
And that's how Macron gave his support to Trump. But also showed him an alternate path in a way to deal with journalists.
ASHER: All right, Nic Robertson, live for us there in Paris, appreciate you joining us. Thank you.
As I was mentioning at the top of the show. The Dow has really been on a tear. We had a record high today. The Dow, by the way, has logged 41
closing records since Donald Trump actually one the presidential election, November last year. This Thursday it rose, as I mentioned, for the third
day in a row. President Trump tweeted across the U.S. stock market while on his way to Paris on Air Force One. It seems as though the Dow has
largely shrugged off any sort of political turmoil that has surrounded his presidency. The Dow, S&P 500 and NASDAQ our all up right now. I want to
bring in Peter Tuchman. Who's joining us now. So, just explain why is the stock market so resilient? Why are investors shrugging off all the
political uncertainty do you think?
PETER TUCHMAN, QUATTRO M. SECURITIES: OK, I think we're in newer state of new rules altogether with this market. We have not engaged anything in a
negative fashion, even raise interesting rates or unwinding a balance sheet by the Fed should put pressure on the market. It's not doing. Basically,
the lifeblood of this market are corporate earnings and the fact that money is cheap. Fed funds rate basically is very low. We're talking the
interest rates at one point, right? Basically, money can be borrowed virtually for nothing.
We got very spoiled with zero interest rates, we must remember that back in the '90s, interest rates were at 16 percent. So, net-net, it's sort of a
self-fulfilled prophesy. And if money is still that cheap and corporate earnings are good, and the economic data supporting that, that the market
should -- what's going on in Washington, net-net at the end of the day doesn't affect the stock market. I kind of think the market is too big to
fail. There's money fueling it.
ASHER: It's interesting you say that. Because initially, and I just mentioned that stocks rallied when president Trump got elected. Because
people thought listen, he's got to introduce these progressive policies. And we're waiting for tax reform. What is the market so excited about?
[16:10:00] In the beginning, after the election, the market was excited about the potential for his agenda. OK. And then that didn't happen and
the market reacted slowly away from that. And I think the market is very smart, right?
ASHER: It readjusted its expectations.
TUCHMAN: Correct. So, that now they've realized that it doesn't serve the market to react every time there's a headline or a tweet. Because there's
a guarantee that tomorrow something else will happen. We've not seen a follow-through on the sell side since the election. We saw yesterday there
was the sell side. The only two times the market has really broken down was with the Comey incident after the election, and with yesterday, with
Donald Trump Jr.'s things.
When the accusation went from accusation to potentially criminal intent. Yesterday the market bounced back beautifully. When they postponed the
August vacation for the Senate and Congress, market rallied back. We came to all-time highs. There's money in the wings fueling the market.
Economic data hasn't changed.
ASHER: How much are stocks overweight right now? And do you anticipate a correction sometime soon?
TUCHMAN: You know what, I don't really believe they're overweight. They're at all-time highs. But if we follow the normal -- you know,
markets tend to trade up and trade up and trade. They'll be a pause. We're building a foundation in the market. Markets will peak quickly and
then they'll selloff. We haven't seen that normally, historically, right, you'll get resistance and the market will break down. And then you'll
build foundation. And the market will rebound. We're not seeing any of that.
If you look at the S&P since the election and stocks, we're up double-digit percentages in the financials and in the only thing that's slightly lagging
is oil. But still that hasn't broken down, either. I think we have to look at it in a whole new way. I don't think we should engage just the
impulse to sell. That's the way I'm forensically breaking down the way the market.
The market is telling us what it wants to do. It wants to go higher. It's not artificially going higher. It's going higher because money is coming
into the market. Everyone abroad is coming into the market. There's nowhere else to put your money. And if you're borrow money at a cheap
interest rate and you put it in the market -- if you if you were to give me three bananas for every banana, or three oranges for every orange, it's a
win-win on a daily basis.
ASHER: Peter Tuchman, live for us there. Thank you so much for joining us. Us Always fun to have you on. Thank you.
ASHER: My pleasure.
ASHER: European markets closed mostly higher on Thursday with investors reacting positively to Fed Chair Janet Yellen's second day of testimony.
Shares in France and Germany closed in the green. Getting a boost from some positive retail earnings. The U.K.'s FTSE 100 ended marginally lower
following a rally in the pound.
The U.K.'s budget office has warned that a bad Brexit deal for Britain could do major damage to the country's balance sheet. This all comes on a
day that Britain unveils the next phase in its Brexit plan. The so-called great repeal bill. That will combat EU laws into British ones. Political
analyst, Carole Walker joins us live now. This is a huge task for the U.K. government. It is a bureaucratic nightmare. And naturally there was bound
to be some tension with the opposition.
CAROLE WALKER, POLITICAL ANALYST: Not just tensions, this going to be guerilla warfare in the British Parliament. That's what we're hearing
today. The idea of this bill, which is actually called the EU withdrawal bill. The government wanted to call it the great repeal bill, but it
actually wasn't allowed to do so.
The idea is that it does repeal a law that took the U.K. into the European Union back in 1972. And then it transposes all those rules and regulations
which relate to the U.K. which are currently part of EU law, and makes them part of the U.K. law, so the government can decide which it wants to keep,
which it wants to throw out and which it wants to change.
The government's opponents are going to use this bill to try to press their own agenda and indeed, to try to make life as difficult as possible for
Theresa May. The Labour Party, the main opposition party are already saying they're going to try to make changes to improve workers' rights. To
prevent the government using the extra powers it wants to try to push things through without even going through Parliament.
[16:15:00] Add to that the fact that you've got the leaders of both Scotland and Wales saying, well look, if all these powers are going to come
back to the U.K. from Brussels, we want some of them decided in Wales, in Scotland. We don't want it all going to the central government in
Westminster. So, Theresa May is going to face a real battle night after night in the houses of parliament. And don't forget, that even with a deal
that she's got with Northern Ireland's Democratic Unionist Party. She's only got a very, very small majority over the rest of her opponents. And
so, a rebellion by just a handful of her own MPs and she could be facing defeat in the Commons.
ASHER: So, she's dealing with not just a strengthened opposition, but also as you mentioned, rebellion within her own party as well. When can we
expect a vote on this bill?
WALKER: Well the bill is going to be introduced in the autumn. I think what you will see then will be a whole long series of votes. Every single
specific measure is going to halve to be got through the Commons. It will also have to be got through the House of Lords. Where the government
doesn't even have its own majority. I think there's a real danger that this bill, which the government says is essential if there's going to be
confidence for business, for international investors. That it's not going to be some sudden legal mayhem when Britain leaves the European Union.
The government is facing a huge battle to get this through. End of course, if Theresa May was to lose significant votes on this bill, she could then
face a vote of no confidence in her own leadership. It could even bring down her whole government. This is absolutely crucial. Not just to the
path of Brexit. But for the survival of the government before we even get there.
ASHER: It's a fascinating time in U.K. politics. I can't even remember a more exciting time in U.K. politics. Bring the popcorn is all I can say.
Bring popcorn. All right, Carole Walker, live for us, thank you so much. Appreciate that.
Still to come, Snap has had a turbulent few months since its IPO here at the New York Stock Exchange, but its luck could be changing. We look at
the latest rally in Snap shares. That's after the break.
ASHER: It's certainly been a tough week for shares of Snap, but things could be looking up. They rallied 3 percent Thursday after a Wall Street
firm raised its rating on the stock. It's already been a turbulent week for Snap though. On Monday, the shares fell below the IPO price of $17 for
the first time, just by a penny on Tuesday. Morgan Stanley, the bank that took Snap public, priced its IPO, actually downgraded the stock. Sending
it sliding almost 9 percent.
But today the investment bank, Stifel Nicolaus, upgraded Snap and said the stock can go to $22. Well above its current level, low 16. There could be
more turbulence to come though, things are not looking up quite yet. And that's because the first lock-up period for pre-IPO investors expired at
the end of the month which opens the door for insiders to sell the stock.
[16:20:00] I want to bring in Lance Ulanoff who joins us live. I like to consider myself a positive person. A glass half-full kind of girl. I'm
curious, in your opinion given that you have this investment firm upgrade the stock, are you hopeful about Snap right now?
LANCE ULANOFF, EDITOR-AT-LARGE, MASHABLE: I am right in the middle. Honestly, it's almost like no one quite realized how they were going to
wake the sleeping giant. Facebook wanted to buy Snapchat for $3 billion a little while ago. Evan Spiegel said, no, not interested. Went its own way
and wanted to go public. Went public, building he stuff and then by the way, Facebook owns Instagram, and starts building out Instagram like crazy
with virtually every single feature you can find --
ASHER: Snapchat's features.
ULANOFF: -- so what this means --
ASHER: And it's really frustrated Evan Spiegel.
ULANOFF: What investors see is an indefensible business. Meaning that there's nothing unique to Snapchat that can't be recreated on Facebook with
Instagram, Instagram Stories. You know, when I talk to influencer and I met a bunch of different people who are super big on Snapchat. When
Instagram opened up Stories, what they did almost immediately was started reproducing or producing the exact same thing and putting it on Instagram
Stories. Now they're feeding them both. I think they're not sure of what to, do they're going to keep going because they see how fast Instagram
Stories has grown. The level, the numbers are super big and Facebook uses the leverage of Facebook. You know, the billions, two billion people on
Facebook, to drive people to Instagram and Instagram Stories.
ASHER: If Facebook Instagram is copying Snapchat's features. Then how does Snapchat say, well you know what, despite the fact that they're quote-
unquote ripping us off, we are still going to try and grow and increase our users. How do they do that?
ULANOFF: By introducing new features like Snap Maps. Now people know where you are. Or doing things, they have content. Snapchat Discover is a
content platform that is actually quite popular. Mashable, I'm for Mashable, we're on it. And we see the numbers from this. There are a lot
of people reading this content. And the exact people that is so difficult to get to look at content on any platform, which is the youngest people.
So basically, you're getting them early and you're going to keep them with it. That's something that you don't actually have on Instagram. You have
a lot of content on Facebook.
But Instagram isn't like that. The stories are all sort of the user- generated stuff and they kind of disappear. But the Discover is more like a magazine, but designed for the platform. So, Snapchat is going to have
to innovate super-fast basically to try and stay ahead of the thing right on its neck. Breathing down its neck which is Instagram, Instagram
ASHER: They have to Reinvent themselves as a company. Reinvent their identity, reinvent their goals, their focus.
ULANOFF: To be fair when they --
ASHER: This could be fair because I'm running out of time.
ULANOFF: When they put out the IPO, they indicated all these things as risk factors, that's when we saw how scary it was going to be and it lived
up to that. It is a scary time for Snapchat.
ASHER: It's a far cry from the exuberance we saw around the time of the IPO. Lance Ulanoff live for us there, thank you so much. Appreciate you
being with us.
Uber another company for you. Uber needs to grow up and stop behaving like a start-up. That's the message from the company's top executive in Asia
and in Latin America, Uber's board is I'm sure you've heard, looking for a new CEO to drive the company forward following the resignation of Travis
Kalanick. The new leader will need to navigate a host of challenges. A culture that has drawn vocal criticism, vacant positions in the C suite and
preparations for a IPO.
"The New York Times" reports a number of candidates are interested in taking the wheel. Some, but not all, come from the tech industry. They're
including firms including Twitter, Disney, Softbank and Virgin America. Some say Uber needs a woman -- need some diversity -- needs a woman at the
top to change a culture of sexism. Marissa Mayer of Yahoo and Susan Wojcicki of YouTube, have been floated as possible hires. Andrew Macdonald
heads over is Latin America an Asian operation. He's also a friend of ousted CEO Travis Kalanick. He told CNN Money's, Cherise Fong, about the
moment he found out Kalanick was gone.
ANDREW MACDONALD, REGIONAL GENERAL MANAGER, UBER: I actually woke up to the news. Which you know is obviously a bit of a shock. And I worked
closely for Travis with my five years of the company. And he was both a boss and a friend. And he built Uber. He set our mission in motion. So
much of my experience here has been defined by his vision. So, it's a shock. But at the same time, I know that the ask from Travis is to keep
growing this thing. Keep making it [16:25:00] better. Keep serving riders and drivers, that's what I'm focused on.
CHERISE FONG, CNNMONEY CORRESPONDENT: How can you keep growing it and Uber? Are you going to continue to be going for this principled
confrontation, you guys, it's driven you guys has been a disruptor?
MACDONALD: I think it's more of an evolution of the style. So in on, on the one hand I think we need to continue to be principled about doing
what's right for drivers, doing what's right for riders, serving cities. Which are all big parts of our sort of mission. And being principled about
how we approach conversations with government, with stakeholders. But I do think we need to work to be more collaborative. To consider the starting
points or view of the different people involved. And to recognize that people don't view us as a startup anymore. They view us as a large company
that has a big impact in local economies, that has a big impact in the world and we take responsibility super seriously.
ASHER: Uber is pulling over in Russia and yielding the road to Yandex Taxi. The most popular ride-hailing service in Russia. It was actually
investing $225 million and folding its own Russian operation into Yandex's business. Uber is facing intense competition outside the U.S. In April,
it shut down services in Denmark and just last year sold its Chinese operations to its rival, Didi Chuxing.
I want to bring in Clare Sebastian who is following the deal. So, just explain to us -- what I don't understand is why does Uber continue to
yield, continue to hand over power in these major markets like Russia, and China? Is it giving up too soon, do you think?
CLARE SEBASTIAN, CNNMONEY CORRESPONDENT: I think it's an acknowledgement. This is a company that we've have learned -- we got used to them
aggressively expanding around the world pushing for dominance. But I think this is an acknowledgement that Russia is different. I think they've
realized they're never going to be the dominant player. Yandex Taxi started two years earlier than Uber did in Russia. It's got this brand
recognition across Russia. It's the leading provider of internet services. It's a leading male provider in Russia. And it has more brand recognition
than Uber frankly ever will. And this deal allows them to keep a stake in the country to continue to make a profit while at the same time not
creating this bottomless pit of investment that's never going to yield the kind of dominance they were looking for.
ASHER: So, in a way this deal will actually help them grow not just in Russia, but also, in Eastern Europe as a whole?
SEBASTIAN: There's a chance that the combine entity that they're creating with the Yandex Taxi, which Uber will still own about 37 percent of, is
going to be able to expand. The executives from Yandex on a call today were saying that together they're still only 5 percent to 6 percent of the
Russian taxi market, so there's an enormous potential for expansion. This is in six countries, don't forget not just Russia. Uber itself, they've
given no other signal apart from these deals in Russia and China that they're going to stop their expansion. But perhaps we are looking at a
more chasten type company. It is a different time for their reputation globally.
ASHER: And what will the deal mean for consumers in Russia?
SEBASTIAN: Well just a bit of context. This is the introduction of these ride-sharing, these taxi-hailing apps in Russia was a revelation. This is
a country when I first moved there 10 years ago, the only way to get a taxi pretty much --
ASHER: You go there quite a bit.
SEBASTIAN: -- was to hold out your arm and wait for the first moving thing to stop. The illegal taxi market in Russia is a huge force, it is still a
huge force. But this gave people particularly in big cities like Moscow, Yandex and Uber and now Get Taxi is a big player. Now given an option.
There was a fair amount of shock today, where there was barely a rumor that trail does deal. And I think people worried because of the three top
players the prices have been coming down recently. And that's been some concerned that they may now go up, now that three have been reduced to two.
ASHER: Before you go, I do want to ask you about Uber looking for a brand- new CEO. So, if you're a potential candidate what are the advantages, what are the benefits of working for a company, who's quite frankly, has had
scandal after scandal and its reputation pretty much dragged through the mud over the past few months.
SEBASTIAN: I think it's about as big of a challenge as you can get as a CEO. The biggest private company in the world. The evaluation is around
70 billion. That's the approximate sum of the GDP of some small countries. And this is an exercise, in not only building reputation, but in actually
trying to make a profit. Which is something that Uber hasn't done yet. And it's been forgiven for that by its investors. Like many of these tech
companies, including Amazon, which for many years didn't make a profit, because it has been making a play for dominance around the world. But I
think this will be a balancing act for whoever takes this over. Not just the CEO, don't' forget, they are a host of other top executive positions
they still need to fill.
ASHER: We are hearing that it could be the CEO of YouTube, it could be Marissa Mayer, we shall see. Apparently, they're looking for diversity.
So, I guess that's a good thing. Clare Sebastian, live for us. Thank you so much, appreciate that.
It's been another record-breaking day for the Dow. You saw the head of DHL up there on the podium express, helped bring trading to an end. That was
at 4:00 p.m. local time today. He'll be joining me right here in the studio after a short break. Don't go away.
[16:30:00] (COMMERCIAL BREAK)
ASHER: Hello, everyone. I'm Zain Asher at the New York Stock Exchange. Coming up on the next half hour of QUEST MEANS BUSINESS. Burberry
executives survive a shareholder revolt over pay and bonuses. And if you're in Europe and looking for a job, the EU is looking out for your
privacy. It says your next boss cannot, cannot just go snooping on your social media account. But first, here are the top news headlines we're
following for you at this hour.
U.S. President Donald Trump defended his elder son during a news conference in Paris and called Donald Trump Junior a wonderful young man, the
president's son sparked fresh controversy after releasing e-mails about his meeting with a Russian attorney. Mr. Trump said most people would have
taken that meeting.
Now Chinese democracy activist and Nobel Peace Prize winner Liu Xiaobo died from liver cancer, Liu passes away Thursday at the age of 61, still in
Chinese custody. He was serving an 11-year prison sentence when he fell ill. China ignored demands that Liu be allowed to seek treatment abroad.
The parents of a terminally ill British baby battling to keep him on life support stormed out of a hearing on Thursday. Charlie Gard's parents want
to take him to the U.S. for experimental treatment for a rare genetic disorder. The boy's doctors argue he may suffer and not benefit from the
Former U.S. President Jimmy Carter is in hospital. The 92-year-old collapsed while working for a charity home-building organization in Canada.
The hospital spokesperson said Carter was dehydrated from working in the hot sun and is OK.
U.S. Senate Republicans are pushing forward with efforts to pass a health care bill. The revised version would allow cheaper plans with fewer
benefits and two senators tell CNN they are working on an alternative, they say it would keep popular provisions of Obamacare while giving more
flexibility to states.
On a day when the Dow raced to a new all-time high, it was only fitting that the closing bell should celebrate the next generation of high-speed
racers. Somewhere in that excited crowd was the executives of DHL including Ken Allen who is with me now. Joined Enel and Formula E to
celebrate the first-ever electric-powered race in New York City this weekend.
[00:35:00] Ken Allen joins me live now. Interesting, I have so much to talk to you about. It's interesting because in terms of your business
strategy here in the U.S. we are hearing a lot as I'm sure you know of protectionist rhetoric coming out of the White House, I'm curious how that
affects your strategy right now.
KEN ALLEN, CEO, DHL EXPRESS: It doesn't affect our strategy at all. Because I don't believe that anybody is really protectionist. Business is
global. And with the digitization, the new technologies that link the whole world together, for the first time in history in theory, everybody
could be connected. Everybody is a customer everywhere. Business continues to grow. In fact, as a part of the rhetoric, it seems to be
stimulating even more growth. Because we see in every part of the world, our businesses really doing well, growing very strongly. And so, I don't
think anybody takes any direct notice of some of these things. Quite honestly.
ASHER: It's interesting that you say that obviously your business depends heavily on cross-border e-commerce. If NAFTA is renegotiated, if there's
changes to the trade relationship between the U.S. and China, doesn't that worry you slightly? None at all.
ALLEN: None at all, seriously, a lot of these agreements are about tariffs, a lot of goods and products if the government decides it wants to
put on a big tariff, but you still want to buy that internationally, you're still going to go ahead and do it. What we see at the moment is two
things, first of all, traditional business-to-business is growing strongly again. If you think back 2008-'9 we had the Lehman crisis, and 2010-12, we
had the euro crisis in Europe. And in 2012 to about '15, the end of the China boom. It wasn't the downturn in China.
A lot of commodity prices collapsed and there was a lot of restructuring going on in the world. All that is behind us. Business to business is
growing now again faster than GDP, international trade. That's giving us a strong basis for growth. A lot companies are re-investing and we
definitely have seen that. And then the second one as you said, b-to-c, e- commerce globally. Trunk cross-border is growing 25 percent plus. So that's giving a real fill-up to our business, right? We've seen 30
consecutive quarters of growth.
ASHER: One of the areas I'm excited to talk to you about is, areas in which you're investing here in the U.S. you're very much focused on
technology, on innovation, on drones. A lot of people associate drone delivery with Amazon. You've heavily invested in that area too along with
electric cars. For example, you guys are all about efficiency, making it much more efficient for the consumers when it comes to e-commerce.
ALLEN: Absolutely. So, when you think about it now, as I say, anybody, anywhere in the world can be instantly connected. So, if you see something
on the internet in Nigeria that you like --
ASHER: I'm from Nigeria, by the way.
ALLEN: Who better to pick it up for you, tell you how much it will cost to fly it over here, clear customs and deliver it to your door. Any single
entrepreneur anywhere can use our service to grow their business, we see many small entrepreneurs that started off -- on the old days, you start a
business in America, you if you stay in New York, you go America-wide. Today, from day one you can be totally international. Put your goods and
services on the international network. And a company like DHL can help you become a global player almost instantaneously.
ASHER: Actually, since you brought up Nigeria, I do want to ask you about Africa. One of the issues that Africa has had to deal with for a long time
is they import way more than they export, so for you guys, that means you have a lot more planes going into the continent than the other way around.
What sort of challenges does that present to you?
ALLEN: On the outbound flights, we bring a lot of commodities and foodstuffs and flowers, we make sure we've got a two-way flow of traffic.
But it is a good point. I think Africa overall needs to focus on the small- and medium-sized businesses. The whole digitization revolution,
enables people to trade a lot more easily.
[16:40:00] It is going to pass Africa by unless the government starts giving better access to broadband, invest in small- and medium-sized
business enterprises. Everything that the first world countries are doing, we just need to do more of it in Africa. In fact, part of the G20 and the
B20 going on in Germany. There's a whole drive to help Africa improve its customs clearance processes, its trading position. So that we put
something back in there. We need to see Africa growing. Even to date, it's not hitting, its potential. As you say, people are selling a lot in.
But there's not much coming out. Another the big problem with Africa is they don't trade amongst themselves. Most African states are trading with
Europe and the United States, there's not many trade between Nigeria and Kenya, for example.
ASHER: Trade and also flights, the connectivity in general is poor. Well, Ken, we have to leave it there. I'm glad you brought up my home country.
That was perfect. Shout-out to Nigerians watching. Thank you.
Burberry has suffered a new shareholder revolt over executive pay, three years after an embarrassing defeat in an earlier vote on pay. This time a
third of the investors rejected the compensation packages for former CEO and current creative director Christopher Bailey, as well as the CFO, Julie
Brown. Royal London Asset Management actually owns a stake in Burberry and actually, led the backlash. Their corporate governance manager Ashley
Hamilton Claxton told me why.
ASHLEY HAMILTON CLAXTON, CORPORATE GOVERNANCE MANAGER, ROYAL LONDON ASSET MANAGEMENT: Burberry has got a long history of pay issues, actually. So,
this year the issue has been more around the recruitment of the finance director. So, she was recruited from a company called Smith and Nephew and
provided a bunch of shares to compensate her for the shares that she had given up. Basically, she was forced to give back those shares this year.
Because the award was deemed to be too high. And generally, the governance around at the board level has been confusing and chaotic this year, the pay
decisions have been -- the company has changed their minds about pay. They've changed their minds about the role of the CEO, Mr. Bailey as well,
and the role he plays on the board.
ASHER: So, overruling, it's not the first time that shareholders have revolted about pay particularly at Burberry and shareholders still at times
have not ended up getting what they wanted. What do you think the message isn't getting through?
CLAXTON: That's right. So, you know, in 2014, the company had more man 50 percent of shareholders vote against the pay package. Which is very
significant, we don't see that very often, really. Again, this year, regarding this pay package, it was more than 30 percent votes against. I
think the main concern for us is that the board doesn't seem to be getting the message. And the governance around pay has been poor. There's been a
lot of confusing messages coming from the board about the pay packages and the criteria leading to the payouts for these executives and so the issue
for us is really who is in charge of those pay decisions and the governance around those decisions.
ASHER: You said governance, but you mentioned also in addition to the pay packages, the governance structure at Burberry hasn't worked for you.
You've got Gobbetti, reporting to the chairman. You've got Christopher Bailey, wo is now the chief creative or creative officer. Who is also
reporting to the chairman. Why don't that structure work for you?
CLAXTON: A company needs to be run well, in order for a company to be run well, there needs to be someone clearly in charge. We have the new CEO
reporting to the chairman and Mr. Bailey reporting to the chairman and ultimately, we don't really know who is in charge. Making sure that
there's good governance in place is really important for the best interests of the shareholders. We manage money on behalf of millions of pension
savers and many of us wouldn't know, but our pension money would be invested in Burberry, so it's really important from that perspective, from
the management of the company, that we have very clear lines of control.
ASHER: What do you want to see going forward from Gobbetti the new CEO?
CLAXTON: The new CEO is starting off with a clean slate, I think he will be a good appointment and I think he can just get on with managing the
business. That's not our concern. The concern is the role of the chairman and the board as a whole in overseeing the strategy of the business and
overseeing Mr. Gobbetti and Mr. Bailey.
ASHER: Donald Trump says China's president is a friend and a great leader. That's not enough. He's calling on China to get tougher with North Korea
on a day when trade figures show they're only getting tighter. That story, next.
[16:45:00] (COMMERCIAL BREAK)
ASHER: At his news conference with the Emmanuel Macron, Donald Trump says Chinese President Xi Jinping is a friend, but he needs to do much more to
help with North Korea.
(BEGIN VIDEO CLIP)
DONALD TRUMP, PRESIDENT OF THE UNITED STATES: A great leader, he's a very talented man. I think he's a very good man. He loves China, I can tell
you, he loves China, he wants to do what's right for China. We've asked him for some assistance with respect to North Korea. Probably, he could do
a little bit more, but we'll find out.
(END VIDEO CLIP)
ASHER: He could do a little bit more. But we will find out. Mr. Trump may have to wait a little bit longer for China to quit trading with North
Korea. New figures from Beijing show that trade between the two neighbors is up about 10 percent this year. Most of it due to an uptick in exports
from China to North Korea. China's imports, their imports fell. Crucially coal imports were down 75 percent. A ban on all imports of North Korean
coal. The main source of foreign currency for Kim Jong-un, appears to be working. Patrick Chovanec joins me live now. It's interesting that
China's imports from North Korea fell. But exports rose. Are sanctions, are the embargoes working? Are they enough?
PATRICK CHOVANEC, CHIEF STRATEGIST, SILVERCREST ASSET MANAGEMENT: That's something that gets missed in a lot of these headlines. Let's say that
trade is up 10 percent.
ASHER: You have to explain the details.
CHOVANEC: It's hard to figure out what is going on in North Korea's economy. First of all, take the figures with a grain of salt. A lot of
North Korea's economy is illicit that could mean criminal activity. It can also mean just black-market trade. What actually crosses the border either
way between China and North Korea, this is capturing some aspect of that, right? But not necessarily the full thing. But it does show that
particularly with coal, that the Chinese are making some visible effort to look like they're cracking down on North Korea.
ASHER: Seventy-five percent, that's a significant decrease. Is that enough. I think the big question is that enough to squeeze North Korea
into curbing missile testing?
CHOVANEC: Probably not. Particularly, because North Koreans have come to the conclusion that this is not a bargaining chip, this is the nuclear
program. This is their survival of their regime. And I don't think they're likely to trade it away. No matter how painful things get. But
you know it also is an indication that things are not necessarily smooth between China and North Korea. I'm not saying that the Chinese are
completely on board with sanctions. Chinese enforcement of sanctions is very, very patchy. They're not necessarily pleased with the Kim regime.
They're frenemies, actually. A wouldn't be too far to say that. Just because they're a bit fed up with Kim doesn't necessarily mean they're on
board with U.S. priorities, either.
ASHER: Is it fair for the U.S. to basically place the whole, you know, task of getting North Korea to comply -- is it fair to place that mammoth
task on China's shoulders?
[16:50:00] CHOVANEC: I think it's proportional to the fact that, that China is North Korea's largest trading partner. And nobody else has the
kind of leverage that they have. If they were actually willing to put it to use. If we could see some kind of alignment of priorities between the
United States and China. We're not even close to the kind of sanctions on North Korea that were placed on, for instance, Iran. Chinese banks are
very involved in facilitating not just trade with China, but North Korea's trade with the rest of the world. That's what you actually saw, the
beginnings of the United States and the Trump administration placing sanctions on Chinese banks. That's a game of whack-a-mole. You place a
sanction on one Chinese bank that's involved and another one pops up to do the same thing.
ASHER: So, the Chinese can do a little bit more to hold their feet to the fire in terms of North Korea. Patrick though, we have to leave it there.
I am running out of time. Up against the clock, as usual, thank you so much. Appreciate that.
So social media has changed the way employers recruit. Now the EU is telling companies to stop snooping on their employees' social media
accounts or they could be breaking the rules, up next.
ASHER: EU is issuing a warning to employers, when you're weighing up a job applicant, you have not, you have not got the right to simply snoop on
their social media profiles. It might save some of us a few blushes, a little bit of embarrassment, but will employers have to change their ways?
We want to bring in Peter Church he is with the law firm Linklaters. Peter, thank you for being with us. What do you think of the rule? Is
this fair, is this a good way of protecting potential candidates, potential employees? What do you think?
PETER CHURCH, DATA PROTECTION LAWYER. LINKLATERS: Well, it's not an absolute bar on looking at people's social media profile. There's a
distinction between the private bit of someone's social media profile and the public bit. In relation to the private bit, employers can't go in
anywhere near that. So, it would be completely unacceptable for an employer to ask you for your Facebook password or to try friend you on
Facebook in order to look at the private section. In relation to the public bit, it's not an absolute bar, it's a question of making sure it's
proportionate to look at that.
ASHER: It's interesting because as soon, I imagine as soon as employers say listen, we're going to look at your social media profile, that's a time
to make yourself completely private.
CHURCH: Well look, that's absolutely right. I think as an applicant you've got to be realistic, you've got to be responsible. When I say
realistic there are rules that say you should only look at someone's social media profile in certain circumstances. It's very difficult for
organizations to police that in practice, you interview a candidate. You go back to the desk, Google their name. The information is there, it's
very difficult to prove you've ever done that, you need to think about setting the privacy settings on your social media accounts appropriately.
Google your name. Think about what information is out there. Try to clear it up. You've got a right to be forgotten under EU law, if when you Google
your name all sorts of unsuitable information appears, actually you can go to Google and ask for that information to be removed.
[16:55:00] ASHER: I am curious about the strength of this law then. You bring up an important point, what is the strength, does it have that
actually any weight if it can't be monitored? Employers can still illicitly go and check your profile online and there's no proof to say that
they did or didn't.
CHURCH: Well, they will be a lot more strength to the new law, it's part of the European general data protection regulation which will come in in
May of next year and will apply across the whole of the EU, there's a really significant change in sanctions, so breach of that law can lead to
fines of up to 4 percent of annual worldwide turnover or 20 million euros. There's a lot more skin in the game. I think people will be a lot more
diligent than they have in the past. But yes, you are right, very difficult to enforce in practice.
ASHER: Is it fair to say that we live in a world whereby if you have a social media profile, you should realistically expect that potential
employers are going to want to look you up?
CHURCH: If are an employer and you want to look at the public bit of someone's social media profile. You need to be thinking firstly, I should
tell the candidate I'm going to do this. It has got to be proportionate so if someone is moving into a public facing role, then there is a very good
case for looking up that. And you ought to give someone the opportunity to challenge your findings, if you find out this information, you think you
want to withdraw the offer, you are in theory telling them to give you an opportunity to challenge that.
ASHER: Peter Church, live for us, thank you so much. Appreciate you joining us.
CHURCH: Thank you.
ASHER: You're welcome. By the way, a note for viewers at home if you missed part of today's show or just want to take us on the road, you can.
As we always remind you, you can download our show as a podcast. It is by the way it's available from all the main providers, including Stitcher and
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MEANS BUSINESS. I'm Zain Asher live for you at a very quiet New York Stock Exchange on a day that the Dow closed at an all-time high. We'll see you
again tomorrow, take care.