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(generated from captions) Live. This Program is Captioned Good morning. Welcome to 'Business Today' for Australian

network. I'm Whitney

Fitzsimmons. Coming up on the

program - taking heart, US

investors welcome a comprehensive plan to support

Europe's troubled banks.

Currency clash - China reacts

angrily to American angrily to American legislation

targeting the Yuan. And slow

motion - Black berry users in Asia the latest to suffer from

service problems. Those stories

coming up shortly. First let's take a quick look at take a quick look at the

markets. We'll have more in

what will happen in trade in a

moment:

For more on market action,

I'm joined by Chris Weston from IG Markets. Good morning,

Chris. A mixed decision around

the region. What's in the region. What's in store

today? Good morning, Whitney. We're looking for more of the

same, I think. We're looking

for gains coming through on the

open. We are certainly not

expecting to be as high as we

were looking, because the S&P and Dow came off their highs

overnight. We're looking for a

positive open. The ASX 200 up

about 30 points, the Nikkei

well. should see decent gains as

well. What's interesting is

moment seems to be breaking the dollar/yen pair at the

out, a very good night

afternight after being stuck in

a tight range for osome time.

It may help some exporters in Japan. Here in Australia, BHP

is just up over 1%, Rio had a

good night in US and London

trading as well. The

employment numbers come out at

about 11.30. If we see good

upside there, that could be

good for the Australian market.

China comes in about later on,

up about 3% lending, lending support to the Asia region. What's the latest on support to the Asia Pacific

the US earnings front, Chris? We've had four companies on

the S&P coming out k with

quarterly earnings, two

positive and two negative.

About 7.5% EPS growth has come through, okay, just below the

expectations of the market.

Peps Coe came out and saw good gains on the markets, 4.1%

through because of strong trading revenue growth coming

increases to some of their

sales in Latin America. The eyes of the world will be very

much on JP Morgan tonight.

That will be very interesting,

because they're expected to see

big declines in the third-quarter trading numbers.

The investment banker fees are

cut about 50%. It could have

big ramifications on the

investment banking industry as

a whole. In Europe another

positive session? It was

indeed. We saw the FTSE again

under performing, up 0.8%.

It's pushed above 5100, the DAX

up 2.2%, it has a bigger component because of what's up 2.2%, it has a bigger risk

going on with European banks

there. The banks were up there. The banks were

around 3%. The consumer goods

up 3.4%. A lot of goodwill to

what's going on in Europe. The

feeling Slovakians will vote it

through and Jose Manuel Barroso

came out with comments suggesting they're looking

seriously at the concrete plan

to solve Europe and

recapitalise the banks. Moving

on to currency, the Australian dollar jumped above parity

again? The Australian dollar's

move last night was

breathtaking, we about a 290

point move, about 3%. It got

up to 102.07. It's pulled back

about #r50 or 60 points from

that level. We're looking at

closely what happens in China,

employment numbers coming out

later today will be interesting, as will trade

balance numbers coming out at 1 o'clock. In commodities, can

you give us a picture of what's

happening with oil and gold?

Oil was a bit disappointing

last night, but we saw International Energy Agency last night, but we saw the

revising down its 2012 forecast

for demand. The oil price is

hovering around $86 per barrel

at the moment. Gold prices are

up a little from close. They're about 10 bucks up a little from yesterday's

stronger than from when we went stronger than from when we

home yesterday. Thanks for

joining us, Chris. Let's take a closer look at what's happening

with currencies and

commodities:

The President of the European

Commission has outlined a new

plan to shore up Europe's plan to shore up Europe's banks

in the latest efforts to bring

an end to the Eurozone crisis.

Jose Manuel In announcing the initiative,

Jose Manuel Barroso has called

for a more decisive action on Greece

Greece and stringent reviews Greece and stringent reviews of

banks to avert a second recession. The European banks to avert a second global

Commission has described its

latest plan as a comprehensive

response to the Eurozone debt

crisis. The changes are the

most ambitious yet and outlines

a five-area action plan to

crack the vicious cycle

the sustainability of sovereign

debt. The stability of the

banking system and the European

Union's growth prospects. So

far a truly cohesive response

has been lacking, but hopefully has been lacking, but

that's about to change. The

problem of Europe is

problem of Europe is not too

much integration, it is in

much integration, it is in fact

a lack of a European approach.

Some of these changes to the

nature of our union may need to

be enshrined in changes to the

treaty. Banks are again firmly

in sight and the European Commission President says they

need to set aside more assets

to help guard against future losses. The current losses. The current lending uncertainty between banks and

the broader economy threatens

to throw the Eurozone into a

new recession. Many would need

to raise new capital to improve confidence and guarantees on

future loans and if they can't

raise funds privately, raise funds privately, they'll

need to look to governments or

the European bailout facility. Banks should use private

sources of capital first. If

government should provide necessary, the national

support as the next step, and

that allows - as a last resort

drawing on a loan granted from

the EFSF. So everyone and every

facility appears to be pitching in. We must, in. We must, therefore,

urgently strengthen the banks,

because in fact those two

issues, the sovereign contagion

and the banks, are now, and the banks, are now, whether

we like it or not, linked.

This must be coordinated

through the member States, the

European banking authority, the

ECB and Commission. And ECB and Commission. And there's

been progress on the political deadlock over the deadlock over the stability

fund. Politicians in Slovakia

have agreed to support a

crucial bill ratifying changes

to the European Union bailout

fund in exchange for early

elections after they rejected it on Tuesday. I commend those

in Slovakia who have risen

above partisan attitudes and

voted in favour of what is important for all Slovak citizens, for the Europe citizens, for the Europe area and the European Union as and the European Union as a whole. A second vote is

expected by the end of this week. Beijing has slammed a

bill that would punish China for alleged currency

manipulation condemning it as a

breach of WTO rules and raising

fresh fears of a trade war. In

a defiant response to a US

Senate approval of the bill,

the nation's Central Bank set

the guide post for the Yuan substantially lower and warned

that the bill could impair

further currency reform. The US

currency bill is a proposal

that even the White House that even the White House feels

may be in breach of

international law, but it was

still approved in the US

Senate. On this measure, the

ayes are 63, the nayes are 35, the bill is passed. That

prompted a swift and furious

reaction from China, who described the bill as a

protectionist step.

TRANSLATION: It won't solve

the economic and job problems

of the United States, but will severely disrupt China-US

economic and trade relations

and the shared efforts of China

and the United States as well

as the international as the international community

to promote vigorous recovery

and growth in the global

economy. The US feels China's

currency is severely

undervalued against the undervalued against the US dollar. Some of its politicians say the

artificially low value of the

Yuan has given China an unfair

advantage and at the expense of

American jobs. If the currency bill is passed by the House of

Representatives and receives an unlikely presidential unlikely presidential approval,

it would allow the US to impose

cons vating duties on goods

from countries whose currencies

it feels are undervalued.

China says it's committed to gradual currency reform and has

pointed out that the Yuan has appreciated by 30% against appreciated by 30% against the

US dollar since 2005. US

President Barack Obama, who

faces a tough faces a tough re-election

battle next year, will be put

in a difficult position if he

has to decide whether to sign

the bill into law. Signing it

will anger China, a major trade

partner. Ignoring it could cost him much-needed votes. Business groups have

vowed to maintain the rage

against the Government's carbon emissions legislation, even

though it's set to become though it's set to become a

legal reality. While it's been claimed Tony

claimed Tony Abbott's promised repeal repeal to the legislation adds to uncertainty, there was

support for his stand. But some suggest that support won't

last forever. The certainty of

the carbon emissions legislation passing through

parliament was supposed to

deliver the certainty business

craves, but not if Tony Abbott

can help it. We can get rid of

it, we will get rid of it, it, we will get rid of it, we must get rid of it. If business lobby groups still feel insecure about the future,

they're not pointing the finger at the Opposition at the Opposition Leader's

refusal to play ball. Business

generally will keep up pressure

pretty strongly to seek to have

this deferred or this deferred or repealed. The business representatives object

to a plan with a fixed-price

period that ignores the prevailing

prevailing economic

environment. Until those

things are built into the

legislation, we won't consider

this to be a workable and

responsible piece of

legislation. But climate change

lawyer Antony Hobley, who's

worked on the European trading

scheme, says repealing the

legislation with its built-in compensation measures will compensation measures will be

too difficult and prove too

painful for business. They're

not going to want to be plunged

back into the sort of realm of

uncertainty again. I think many businesses who many businesses who perhaps

remained quiet during the recent debate would perhaps,

when this is the law of the

land and has given them business certainty, make a

little more noise than they have if a future government

were to try to repeal this. And there are those suggesting

there's a time limit on their

support for Tony Abbott's

stand. There are certain

stages when that repeal is easy

er and less costly than other

stages. You would have to stages. You would have to look

at each of those stages as to

whether you'd agree with that

statement. At the moment I do,

but it could change as you get

into 2013, 14 or 15. But some

will carry the fight well beyond the tax's arrival.

Well, if it's implemented, the

business argument s will move

into examining the impacts.

But they will continue, because

the absence of an international agreement with our offer

competing nation s means that

even once implemented, this

carbon tax will be a slow burn

on the economy and for

manufacturing businesses even

something faster than a slow

Bourne Deutsche Bank said that

the tax will have a moderately

negative effect on earnings in

the 2013 financial year the 2013 financial year and, ironically, some of ironically, some of the

hardest-hit companies aren't

among the loudest complainers.

Probably the airlines, we think they'll struggle to pass on

on the carbon price, just as

they've struggled to pass on the increased cost of the increased cost of fuel. On

the other hand, Deutsche Bank says higher electricity prices

should be a plus for companies like AGL Energy. Qantas

passengers have been told to

expect further delays and

disruptions as baggage handlers

and catering crews launch a

fresh round of industrial

action at airports around the

nation. Adelaide nation. Adelaide workers

walked off first, with Sydney

staff soon afterwards. staff soon afterwards. They'll

be fold by other capital cities

later this morning. Union members are holding two-hour stopwork meetings this morning

and again this afternoon. In Canberra, they'll strike for

four hours in the afternoon

peak. Qantas says nearly 7,000

passengers will be affected,

with 14 flights cancelled and

38 delayed. BlackBerry users in

Asia and North America could be

in for a frustrating time

today, as outage problems with Smartphones continue to spread.

The issues began in Europe,

with a backlog of emails, with a backlog of emails, but

have now run into a third day,

with millions of customers

unable to access

services. BlackBerry users say

they depend on being in touch

at all times and two days is

far too long to be

disconnected. RIM, the Canadian company behind the phone, blamed its problems on

the failure of a core switch,

in effect a computer and a

back-up system. At its UK

headquarters, the company

finally spoke. Rest assured

this is our number one priority, fundamentally from BlackBerry the service we provide is crucial to our

customers. It enables our

customers to interact with

their friends, families and

work colleagues. It's our

number one priority to get that network back to the level we expect. Now, the BlackBerry has been hugely successful over the

years, with 70 million users

worldwide. It's been the

number one phone with UK

teenagers, but in recent months

it's been overtaken by it's been overtaken by Google's

And droid and by the iPhone

from Apple. BlackBerry - there are so many problems are so many problems with

BlackBerry right now. I don't

know if they can compete with

the new droid products out there. The of the iPhone is

getting better and better and

better. I've been a stalwart

when it comes to BlackBerry,

I've had them for a while, but

I'm right at the edge, I might say goodbye to my

BlackBerry. For the BlackBerry

company and its customers company and its customers this

is a serious matter, and with Apple launching its latest

iPhone on Friday, it's not a

great time for its rival to great time for its rival to go

off message. Sony's efforts to

repair its online security have

suffered another blow after it was

was forced to suspend was forced to suspend about 93,000 user accounts as a

result of more unauthorised

sign-in attempts. Sony

suspended the accounts on

PlayStation and online entertainment networks after

the October between 7 and 10

October. The company says credit card details associated

with those accounts were not compromised as a result of the hacking incident. The

entertainment giant has

temporarily locked the accounts and is continuing investigations into the extent

of the access attempts. A

spokesman says the latest breach was not on the same

scale as the one in April scale as the one in April that compromised more than 100

million accounts and forced it to temporarily halt its PlayStation network

services. Starting a company

from scratch is considered not

only to be challenging, but

also very risky. Then finding and sourcing partners and sourcing partners and suppliers in the region also

adds to the challenge, if your business is in a business is in a competitive

sector like retail, then the situation is merely compounded.

One individual who has not only

developed his own electronics

company, but has seen it

succeed and grow substantially over the

over the past five years, is

Ruslan Kogan, who recently also

was featured on BRW's young

rich list for 2011. Ruslan

Kogan, founder and CEO of Cogan Technologies, joins me now.

Welcome to the program, Ruslan

Kogan. Good morning, Whitney.

How are you? What prompted you to start an to start an electronics

business? Very competitive

part of the retail sector.

Well, part of it is the

challenge that drives me. I've

run about 20 companies since

the age of 10. So I've the age of 10. So I've always

been in the market place

looking for what can you create

to add value to the consumer.

I've always been a tech geek as

well, playing with all the

latest technology. When I saw

that there's these huge margins

that our big stores are

charging and this technology shouldn't cost us much through

an on line business model, I

quickly created Kogan. You did

a very interesting thing in

that you actually went to China

- this is my understanding - and you sourced your own

components for each product and

then had them manufactured over

there. How challenging was that?

that? Look, it's quite a

challenge because all of our products are designed in Australia and then manufactured

in Asia using components from

around the world. When you're

just starting out, your volumes

aren't very attractive to a aren't very attractive to a lot of the manufacturing partners

over in Asia, because they're

dealing with clients from the

US and from Europe that US and from Europe that are

making 40, 50 containers of a

certain product at a time. I

was coming there and saying I

just want this one container manufactured. How did you

convince them of that? In

business I'm all about creating

a win/win scenario. Initially

they weren't interested in they weren't interested in the

business because it's just one

container, but the way a lot of

these companies work, and you

have multi-billion dollar

companies in China that when I saw all their marketing

material and documentation and

product brochures, they were in

chinglish, they had chinglish, they had different

fonts, different images, not a

professional western professional western document.

I remade all of this for I remade all of this for them

and I came back to them and

said the value and win/win in

working with me isn't the small

profit you might make of an

order to one container, but I

can add value in other ways.

They came back and said we

accept your order, we'll make

the order exactly as the order exactly as you've

specified and things like that.

So I overcame the barrier of

them not wanting the order to

making them want it. They got

back to me a week later and

said, "Look, we've just won a

massive customer in the US",

because they said they were the

most professional company

because of all their documents.

I alded value in that way. That's a really interesting

interesting idea you had there.

Did you do this all on your own

or did you have assistance from government organisations like

Austrade? When the business started

started it was all on my own.

Everything had to happen very

quickly and I saw the

opportunity in the market place and pounced on it. How

difficult is it to establish strong relationships with your suppliers and the trust,

because my understanding is

that you - the other thing

about your products is that you

sourced specific things, like

screens that Sam sunk and Sony

used and components used in

big-name brands. How do you

forge those relationships with

suppliers and really create

that trust on both sides?

Look, it's something that's very important because contracts don't really mean anything between Australian and

Chinese companies. It's all

about money on the table. So

you make sure you pay your

bills on time, you make bills on time, you make sure

that you do all your obligation

s and at the start of s and at the start of any relationship there's very

little trust. So you have to

make all the checks. You have

to go there and make sure

everything is being produced as

you said, everything is you said, everything is running

on time. It's your responsibility to make sure

that everything is running properly. Did you spend a lot

of time on the ground there, or

did you have people on the

ground there for you? Well, at

the start I flew there when our

first production was finished and tested every single TV

myself, saw it getting loaded

into the container. Then I

even got into a taxi and made the taxi follow the truck to

the docks to make sure that

absolutely nothing could go

wrong, watched the actual

container get offloaded on container get offloaded on to

the truck to get put on to a

ship. But now we have ship. But now we have these

long-standing relationships

with some of our partners over

there, so there's a lot of

trust in that. Nothing can

build trust like time. If over

a certain amount of time you do

everything right by them, they

do everything right by you,

that's when you get trust in a relationship, but it's nothing

that you can assume at the start of a relationship. So

then the other part of your

business model is that you

don't have bricks and mortar,

you actually are an online

store. Given that electronics

is really brand-driven and so

Kogan would not have been a

brand that anyone would have

known about, how did known about, how did you

develop that? Well, the great

thing about the internet is thing about the internet is it creates openness and

transparency with information.

So what I knew at the start is

if we do right by all our

customers, give them the best

prices, give them the best service, ensure all our

customers are happy, it's only

a matter of time before a few

start posting it in blogs start posting it in blogs and

forums and online and a few

media outlets want to review

your TVs and things like that.

That's exactly what happened.

We have a policy in our

business where we can't afford

an upset customer. We can't

afford for someone to go on to

our Facebook page and write a negative comment, so we please

everyone. That very quickly

grew and grew and grew. Now if

you go to Google and type in

Kogan, you can read thousands

of reviews from customers and journalists and things like

that. So the internet that. So the internet has

alleviated all those barriers

to entry in that market and

it's a lot easier to spread your

your message. Did you ever

experience any pushback from traditional retailers from the

big ones? Yeah, look, big ones? Yeah, look, well -

Because you're eating away at

their market. Definitely.

We're taking a huge chunk out

of their market. They're of their market. They're not happy about it, because they've

invested a lot in all this real

estate Australia wide. That's been their competitive advantage, the fact they have

stores in every shopping centre

and in every town. Along comes

an online business model and

can achieve all of this with

with one centralised operation.

If I started Kogan 20 years ago, I would have needed

hundreds of millions of dollars

for all the retail stores, all the stock, whereas I the stock, whereas I started Kogan with 0 dollars. It's

definitely eating away at their

market share and allowing a

much more efficient operation

that can sell things for better prices. Are we seeing the

shifting landscape of the

retail sector retail sector permanently?

Yes, look, certainly. We have

a lot of online businesses

starting up and a lot of online businesses creating great value

for consumers. They can do

this much more efficiently than

any bricks and mortar store.

One thing that will always remain constant is the

businesses that will survive

are the ones that have a are the ones that have a clear

value add to the consumers. So

bricks and mortar stores used

to advertise prices and say

"Come to us, because we have a

good price". They know that

once you're in the store, you're unlikely to check out

other stores. Online you can

easily find the prices in other

stores. Online is the clear winner when it comes to

price. What's your view,

though, on the push to put though, on the push to put an

online - tax on online

purchases? With all of that,

there's currently - for

instance, Kogan has GST on all

of our Kogan products because they're imported into they're imported into Australia

under the Kogan business and

sent directly out of our

Melbourne warehouse. Sorry, I

guess - From international

sellers? That's right, yes.

What needs to happen in that

sphere is all the big retailers

have to stop winching to the Government and begging for

protectionism. They have to find

find ways to use their

commercial muscle in order to get better prices from their

distributors and pass those

savings on to customers. Our

big stores are buying, for

instance, a Cannon camera from the

the Australian distributor for

more expensive than they could

go to best buyers in the US and buy it. They need a push for

better pricing and better

commercial terms and pass those

savings on, rather than go and

winch to the Government. Just

briefly before we go, what advice do you say to people that want to do something

similar to what you've done -

just do it, take the risk?

Yes, definitely. I've always

said the best business price is

printed on Nike T shirts, just

do it. Be clever about do it. Be clever about what

you do, analyse the market,

make sure you can deliver the

best value to customers. It's

never been easier to start a

business, to market it, to get

the word out there, we have

great tools like the internet

and social media. We'll see and social media. We'll see a lot more of these ventures popping up. Ruslan Kogan,

thanks for joining us. Cheers.

Thank you. Now let's look at what's making headlines around

the region. The 'Financial

Times' reports China has for

the first time revealed the

estimated size of its copper

inventory is 1.9 tonnes inventory is 1.9 tonnes by the end of 2010. 'Standard' has more on the bill aimed at

punishing China for keeping the Yuan undervalued, triggering a backlash and sparking volatile Yuan trading. That's all for this edition of 'Business

Today'. If you'd like to look back over any of our interviews, please visit our

website. We look forward to your feedback. I'm Whitney

Fitzsimmons. Thanks for

joining me. Enjoy your day. Closed Captions by CSI

Live. This morning - Tony Crook

he will tells the Government he will tells the Government he won't back the asylum seeker

changes, accusing the changes, accusing the major

parties of playing politics instead of compromise. This

now sends a clear message to Opposition, to Government, to get down and get get down and get this

right. Another day of strikes

at airports. Qantas and Customs workers walk off the

job around the country. Six people

people are dead after a

shooting in a hair salon south

of Los Angeles. And the underwear bomber pleads guilty

to trying to blow up a plane on

Christmas Day in 2009. Good morning. You're watching ABC Taking a quick look at the