Waching daily Nov 28 2017

Money is a powerful force.

From the notes and coins in our pockets to the billions that flow around the world each

day –It drives business and the economy.

Money is the topic of this second chance to hear Insight Plus - your guide to the language

you hear every day in the news, first broadcast in 2001.

For BBC Learning English.com, here's Lyse Doucet.

Money and financial activity are essential to our world.

Technology and communication are now developing at such a fast pace, fortunes can be made

and lost in minutes.

Our world is also becoming a smaller place.

Contacts between countries are growing and what happens in one place can have a profound

effect around the world.

That's especially true of money.

You can hear it when you listen to programmes on business and finance.

They usually include reports on what's happening on the most important stock markets or stock

exchanges.

These are places where companies can raise money, by selling a share of their business.

Investors try to buy shares in companies with the best prospects.

The more profitable the firm, the more the value of the shares will increase.

Shareholders are effectively buying a piece of the company, or equity Most countries have

their own equity or stock and they list their most important companies, and the value of

their shares, on a list or index.

The names of the most powerful indices are famous – you've probably heard about the

Dow Jones in New York, the FTSE in London, Hong Kong's index is called the Hang Seng

and in Japan it's the Nikkei.

This report from Russell Padmore of the BBC's Business Unit mentions the Dow Jones, and

the Nasdaq.

It's been a rollercoaster day for stocks in New York as the technology driven Nasdaq

Index again dropped in value.

At one stage the Nasdaq fell around five per cent to reach its lowest level for a year.

The Dow Jones Index also fell but has steadied slightly.

Stock exchanges have traditionally been buildings where traders buy and sell shares on a trading

floor.

But now, so much trading is done electronically, through computers, some exchanges don't

even need a physical space.

Nasdaq is the largest electronic stock market in the world.

It's based in New York and specializes in high technology companies such as the makers

of electronics and internet software.

The BBC's World Service Business unit reports daily on the movements of the world's main

stock markets.

Here's that report from Russell Padmore again.

He says it's been a rollercoaster day – what does he mean by that?

It's been a rollercoaster day for stocks in New York as the technology driven Nasdaq

Index again dropped in value.

At one stage the Nasdaq fell around five per cent to reach its lowest level for a year.

The Dow Jones Index also fell but has steadied slightly.

It was an exciting and nerve wracking day for Nasdaq.

The value of shares in its companies went up and down like a roller coaster.

The value of shares traded - bought and sold – on the Dow Jones Index was lower, but

there was less dramatic movement and the market eventually stopped its huge fluctuations,

it steadied slightly.

What causes this movement?

Here's more of that report.

It's been a rollercoaster day for stocks in New York as the technology driven Nasdaq

Index again dropped in value.

At one stage the Nasdaq fell around five per cent to reach its lowest level for a year.

The Dow Jones Index also fell but has steadied slightly.

The markets were driven lower by news from Hewlett Packard admitting that its fourth

quarter earnings fall far short of forecasts, by as much as 20 percent.

Hewlett surprised the markets by releasing the news two days ahead of schedule.

The computer and printer making company also revealed that it has ended talks to buy the

PriceWaterhouseCoopers consulting business.

Hewlett's stock dropped around 15 per cent becoming the latest in a series of technology

groups to take a battering on Wall Street …which is already unsettled by political

indecision, from the presidential election.

We heard the phrase driven up or down.

The value of the stocks and shares is strongly affected by news or developments which have

an impact on the company's financial position.

For example, the company Hewlett Packard realised it would make less money in its fourth quarter,

the last part of the year, than it forecast, or predicted.

Forecasts play a key role in the financial world.

Investors decide where to put their money based on expectations that companies will

perform in a certain way.

That can be easier for older, more established companies such as banks - stock markets call

them blue chip stocks.

But newer industries like computer software or the int ernet which trade on the Nasdaq

are less well-known, they attract investors willing to take more risks.

In our last report we also heard how technology companies or groups took a battering on Wall

Street, the financial area of New York.

It's not just Hewlett Packard, but the entire industry which is suffering from problems

and that's reflected in the value of their shares on the markets.

The world of business and finance is the subject of today's Insight Plus from the BBC World

Service – your guide to the language and background to the stories that stay in the

news.

Markets are also affected by what's happening in the world of politics…markets get nervous

when political activity is unstable, unpredictable, or in some countries in a state of upheaval.

When that happens, it affects not just one company, or group of companies, but the economy

of a country or even an entire region.

Take a country like the Philippines.

The business community there lost confidence in the President Joseph Estrada when he was

charged with taking millions of dollars bribes.

It reinforced the growing doubts over his management of the economy.

The Philippines is also still suffering from the effects of an economic crisis that swept

across Asia in the late 1990's.

Many countries are now recovering but the Philippines' economy is still struggling.

This piece by World Service Business Reporter Karen Hoggan shows how this is reflected in

the stock market.

The financial figures are depressing.

The Philippine stock exchange has fallen by around a third so far this year and last month

the currency - the Peso - hit an all time low against the dollar.

A leading credit rating agency has downgraded the outlook for the country from stable to

negative - an indication of how risky it thinks investing there could be.

The Philippine's financial position is described as depressing – that's a very big cause

of concern.

The value of the currency, the peso, has hit an all time low against the American dollar,

one of the world's strongest and most stable currencies.

It means the peso has never been worth so little, on the markets it's hit an all-time

low.

And it's not just the currency.

Serious concern about the country's financial and political future means its credit rating

has been downgraded, or reduced.

That sends a signal to the financial community that the Philippines is an unsafe place to

do business – you could lose your money if you invest, if you put your money into

stocks and shares there.

Compare the Philippines with some of its neighbours.

The wealthiest, fastest growing countries in this region used to be known as the Tiger

Economies but even strong economies like South Korea saw their currency collapse in the

financial crisis of the late 90's, their economic policies couldn't sustain such

rapid growth.

Some south Asian governments were also guilty of financial mismanagement and in some cases

corruption.

This next report from Manuela Saragoza looks at the progress made in South Korea.

She focuses on two of the country's largest corporations, Hyundai Engineering and Construction

and Daewoo Motors.

They're both known as chaebols – conglomerates, or groups of companies which have merged.

They were wallowing in debt, in other words, they owed more money than they actually had.

But the government tried to help them to raise more money, or to return to liquidity.

Let's see what happened.

Hyundai Engineering and Construction is wallowing in debt to the tune of 4.4 billion dollars.

Creditor banks have agreed to freeze repayments while the mess is sorted out but the South

Korean government has resorted to some interesting tactics in returning liquidity to the company

Hyundai was pulled back from the brink of bankruptcy last week, but another Chaebol,

Daewoo, was not so lucky.

The motor company collapsed with more than 10 billion dollars in debt was forced into

liquidation by its creditors after labour unions refused to agree to restructuring which

would have involved 3500 job cuts.

Daewoo is awaiting another court decision on the receivership it applied for last week.

The South Korean government saved Hyundai which was on the verge of bankruptcy, the

point of saying it couldn't pay its bills.

But Daewoo Motors collapsed.

It was forced into liquidation, of selling everything it owned to try to pay its debts.

And it had to go into receivership, a court appointed someone to take control of the bankrupt

company.

Bankruptcy may be the worst fate a company can suffer, but a takeover can also be unwelcome.

That's when one company wants to buy and own another.

We'll hear the word takeover in this next extract about the London Stock Exchange and

the OM group, listen out for the word that's used with takeover – a word that means an

offer.

The London Stock Exchange has beaten off an unwanted takeover bid from the OM group, the

operator of the financial market in Stockholm.

OM's failure had been expected as the Swedish firm failed to get enough support from the

main shareholders of the London exchange, mostly investment banks and stockbrokers.

They voted by nine to one against the plan.

The end of the hostile bid from the Swedish company cleared the way for the London Stock

Exchange to form an alliance with other financial markets, to create a pan European share trading

platform.

After a failed attempt to merge with the Bourse in Frankfurt, London's future could be a

closer link with the Nasdag in New York.

The London stock Exchange defeated a takeover bid from the OM Group.

The bid was unwelcome or hostile.

The offer was made without the agreement of the target company.

Today on Insight Plus business and finance have been in the spotlight.

Next time you listen to reports about the Dow Jones or the Nikkei, in other words on

stock markets, expect to hear language that'll indicate how well those companies listed on

the index are doing.

And stock markets don't just reflect performance of an individual company, they also tell us

about the health of whole sectors of business activity and countries too.