Hello. This is todays Worldwide Exchange. Im ross westgate. And im kelly evans. Rio tinto shocks the market. The mining giant reveals it will book a 14 impairment charge. And boeing hits more turbulence. This as top rival airbus gets set to report its commercial results within the hour. The biggest retailer in paris talked about sales improving in the Fourth Quarter because of strength in its two biggest hkts. And bank of america and citigroup will report earnings in the u. S. With mortgage lows expected to weigh on results. Hello and welcome to todays Worldwide Exchange. Plenty to get to on the corporate front. Maybe things are getting better. So much corporate thus. Much less of the European CentralBank Crystal Ball action. Well get to all of on those stories. Were going all over the world to bring them to you. Rio tintos ceo steps down ask well ask whether the miners mozambique actions are to blame for his sudden exit. Boeing is set to report 2012 orders. Here in london, well take you from the luxury road to the high street with december sales in focus. And with another set of u. S. Bank earnings on tap, well speak to the former chairman bill isaac. First, rio tinto opened lower this morning after the ceo announced he would step down. The resignation follows a 14 billion impairment charge related to assets in mozambique. The acquisition is one of the biggest operations carried out. Hell be replaced by the iron ore chief sam walsh. Lets get the latest reaction from sydney. Mac, how is it being viewed . Thanks very much, ross. You showed us the reaction to the shares in london. This news came out after the sydney market had closed for the trading session. The stock initially down by about 4. 5 . But improving, as you just showed us, down about 2. 7 . Really, you have to say, this is just the final straw when it comes to a series of budgetels as tom albanese has been the ceo since 2007 with respect to a series of acquisitions. Theres been writedown after writedown. You mention dollars that 14 billion impairment charge that has been announced today that is going to flow through when it comes to the 2012 results. 3 billion of that related to the recent riverside Coal Acquisition in mozambique. But 11 billion of that associated to the carrying value of its aluminum assets. The company saying its deterioration in the aluminum market in 2012 in certain regions, Higher Energy costs and raw material costs resulting in a negative impact on the current market values of the aluminum business. But in terms of what the chairman had to say in an announcement today that the 3 billion writedown of those coal assets in mozambique is what he calls unacceptable, tom albanese will be standing down effective immediately. Hell be replaced by the current ceo of rio tintos iron ore operation. Those are the iron ore assets in the northwest part of australia. As i mentioned, just the final straw when it comes to writedowns concerning mr. Albanese. It was a 38 purchase of alcan at the top of the cycle back in 20307 that scored numerous writedowns including one last year for 8. 9 billion. Ross, back over to you. Much thanks for that. Matt, if you could, i want to get into this point about the alcan acquisition for a second. It was early this time last year that they wrote down the value of that deal from 2007 by half. Where in the history of overpaying for deals i mean, this has to be pretty close to the top. Yeah. And we should point out that theyve sold off a number of those alcan assets, as well, after we got the downturn in 2008, 2009. There essentially was a fire sale with a number of these assets. Last year we got the writedown of 8. 9 billion of the remaining assets. But you dont have to look too far when it comes to overpaying for assets. Bhp, for instance, just in the last 12, 18 months or so buying those shale gas assets in the United States at the top of the cycle. Theyve already written down the value of those. So significant writedowns coming through from rio tinto has now claimed the scalp of this ceo. Its a standalone story. Bhp writing down a number of its assets it bought at times that were curiously at the top of the cycle. Where does this leave the sector . We know going back to 2007, rio was looking at alcon to fend off an acquisition by bhp. Obviously, Market Conditions had changed. Where is the landscape today . What is the sentiment about some of these Major Mining Companies today and whether there will be further consolidation . Yeah, well, the price of that that you talked about never got off the ground. Not only did it knock off the ground because both parties couldnt agree on a price, but the significant hurdles, the government probably wouldnt allow a tieup between two of the biggest miners in the country. Its looking not too bad right now. Weve had the Iron Ore Price jump up to levels that we havent seen in more than 12 months. But rio is out with production numbers earlier on this week revealing that its sought Strong Demand for iron ore innous trail ya over the 2012 calendar year and it is, of course, pressing ahead with massive expansion plans in northwestern australia. Just how successful those are, of course, time will only tell. Great. Matt, thank you very much for joining us this morning. Fascinating story. Whats interesting, sam walsh, who is going to replace him on the scene as an operations guy, and it probably looks back at the reason hes going is because they misunderstood the operation or requirements in mozambique. They may have overpaid for the assets, but they also underplayed how difficult it was going to be, the infrastructure requirement, right . Because they were going to load this stuff on to a barge, take it down the river. The amount of infrastructure they need to put in place they underestimated. And the mining partners. They were looking at this as major opportunity and now essentially requesting those two. If you hadnt had alcan, mozambique on its own wouldnt have been enough, right . This on top of that, thats it. Weve had enough. The question now is whether the shares finally respond positively saying, well move this source. Sorry. Things fall apart. Okay. That was symbolic. River nation had a Fund Management will join us today. The other major news story were following this morning, the federal Aviation Administration has issued an order temporarily grounded all boeing 787 dreamliners pending a check of the batteries. The faa says the cause of the battery failure is still unknown. United is the only usair line with dreamliners currently in its fleet. Boeing could have more issues in place with questions by its engineers. The union, the Engineers Union presented its best and final Contract Offer on wednesday. Lets take a look at boeing shares now. They are shedding another 3 or so in trade in frankfurt today. Theyre still roughly up in the last quarter or so. Yeah. And then the interesting thing here is its going to take a while to work out the battery problems. The faa is saying theyre grounded indefinitely. Theyre grounded until they can figure out whats wrong and then fix whats wrong. So we are now into its not a couple of days. This is weeks. Let me just remind you, some of the customers, about the fleet, as well. United firsts 787 domestic flight was on november the 4th. Here we are on january the 8th. Theres quite a few flights that have been grounded. Yes. That is the essential timeline there. You can take a look at a lot of the customers and supplies affected by this news. We know were watching the batterymaker in particular, but were talking here about the airlines that ordered and in some cases have been delivered. A lot of Major Airlines listed there. You can see all Nippon Airways with more than a dozen aircraft. The next biggest is Japan Airlines which had reported troubles. United is in the air, too. India is looking into trouble. A lot of airplanes are in the pipeline. And Qatar Airways, that is the one where we havent heard anything. If youre now a passenger, right, on the dreamliner and you go off flying, you think twice about it. You think twice about it, right. Meanwhile, boeing will release its 2012 earnings today. Airbus officials reported they received orders for more than 8800 airplanes last year, which is still less than boeing. Stephane joins us with a look ahead to this. Stephane, is it true what they say about the a380, there is boeing. There were problems with its plane, the dream liner, and if airbus is getting many orders for their a380, people will look at those two huge projects and whether all this investment, all that time, are they paying off in the way they thought . Its what we call in french. [ speaking Foreign Language ]. Something that ee volumes when youre too young or too new on the market. Thats exactly the same thing that happened to airbus. If you remember, they went from a slow crack on the airbus 380 and the planemaker came up with a fix plaster. But the results of these technical problems were the poor commercial results of the airbus 380, the commercial chief for airbus said that the company suggested very low orders for its planes last year because of the technical problems that the plane experienced last year. And thats something very similar to what boeing is likely to experience in the next few weeks. The technical problems with an aircraft are never a good publicity inspect is likely to overshadow the announcement by boeing today will regain its crown of the largest planemaker in the world for the first time in more than three years. Airbus is going to announce probably 800 orders for the full year. That will be a significant improvement. But it will be much, much lower than the orders that boeing reported for the latter year. Boeing has announced for the latter year, 601 deliveries. The announcement will come very shortly. Theres a press conference at 10 30. We will keep you posted. Thanks for that, stephane, for now. Well talk to you later. Also coming up, we will hear from airbus around 1300 cet. And its another pair of big u. S. Bank earnings this morning. Before the opening bell, bank of america will release its Fourth Quarter results at 7 00 a. M. Eastern. Mortgagerelated charges will hit bofas bottom line. The settlement from fannie mae and other parts of the u. S. Government. Citigroup reports q4 had numbers at 8 00 a. M. Eastern. Analysts expect earnings of 96 cents a share on revenues of 19 billion. Shares today, we can check on an early frankfurt trade up in bofas case by 1. 25 . Citigroup is down by. 6 . Stewart richardson joins us on the program this morning. How important is what these banks say to you . Do you like citi versus bofa or do you like them both relative to the investment banks . What are you thinking here . In terms of the banks, operating results seem to be in its weak spots. Standing results when you strip out some of the exceptional items. Were looking at it from a broad sector point of view. The key for sus theyve been in a long repair process which should continue. I think relative to markets, bank overall, big money for the banks will be okay Going Forward. That is wunl of the concerns is that the easy money may well have been made. In terms of price of the value, clearly more expensive than they were a year or so ago. So, yeah, to be putting a lot of money into work today, you have to be aware of the longterm Recovery Process where the hurdle and the Balance Sheet performance and earning performance will continue. Maybe 2013 wont be quite such a flat year compared to. 20 think theyre okay relative tos. The markets. What kind of year to you expect . A lot of people think 2013 will be much stronger in the second half. For the economy . I think we have to divorce the economy from the market. Have we been price thatting that out . We have to be clear that markets are totally different from the economy. For the markets, were looking at 2 scenario. Scenario a would be similar to 2012 where i think actually the economy doesnt do that well. The first half is difficult. Second half is a bit better. Weve still got the fed printing 5 billion a month. We could see a rerun of 2012. Maybe mid to single high digit returns. Did you get exposure of citi to bofa here . We wouldnt be. Were taking a little bit of money off the table or indeed i think we did. The level of implied volatility makes perfect sense here. Well leave it here for now. Thanks very much. Over to you, ross. Kelly, thanks for that. So we are just about an hour and 20 minutes into the trading day here in europe. You can see advancers just about outpace decliners by a ratio of 6 to 4 and were up near the high point of the session which has dragged us back into prospect on that particular indices. The ftse 100 at the moment is just up two points. A lot of focus on the retailers today. Xetra dax down. 25 . Ibex is up. 5 and the cac 40 is up. 5 . We keep our focus in the next half hour on the bond auction out of spain. We dip below for the First Time Since march last year. Well see where we go with this auction. Were looking to auction up 4. 5 billion of 2015, 2018 and 20411. If this auction goes fairly well, then they will have issued 9 of their total issuan plans for medium term debt. They are taking advantage of these lower yields that we continue to see and narrow spreads, as well. So well keep our eye on these as we go through. On the currency markets, euro dollar, the euro has been up to 30month highs against the swiss franc. Trying to crawl back some gains. Dollar yen, 88. 84. Today the yen is a little weaker today on japanese reports ministers saying he was regretful his comments will be misinterpreted. Aussie dollar, 1. 0517. We begin to focus on whats going on in rio. Lets bring you up to speed with the rest of the news out of asia. Li sixuan joins us for the first time out of singapore. Thank you, ross. Asian markets finished on a difficult note. The shanghai composite lost about 1 today, extending losses for the second day after krit swiss downgraded china life. The hang seng ending lower by a touch. No curbs were introduced by the executive yesterday. Taiwans taex is down over 1 led by technology shares. Tsmc shares ended a touch higher before its results of announce wantme wantments. It posted a 32 jump meeting forecasts. But the Company Expects q1 revenue to fall due to seasonal factors. Elsewhere, the nikkei is finished just a tap higher. Sharp shares jumped over 7 on the back of tv joint venture talks with chinese lenovo. South koreas kospi ended weaker. The countrys Producer Prices in december fell the most in three years due to lackluster demand. And down under, australia had down beat jobs data. The asx 200 climbed to a 20month high with banks lending support. Indias sensex now trading higher by about. 6 . Hcl technology rallied to some 12year high as its earnings beat forecasts. Back to you. Sixuan, well see you a little later. Still to come on the program, christmas sales rocketed, so what is the online retailer doing . Well get into that when we come back. Welcome back to the program. Shares of carrefour came in just below expectations. Shares in france came in shea slower rate prior to the quarter. And ahold has posted a gain after hurricane sandy. Customers at its u. S. Operations stocked up on Consumer Staples ahead of the storm. Ahold runs giant carlisle super markets in the oouts which generate 60 of the groups sales. I have been a long time customer of stop and shop. I never knew it was owned by another company. Is it general merchandise . Yep. Its a big super market. So, yeah, its interesting, though. 60 of their sales. Wow. Meanwhile, it was a happy christmas for british Online Fashion retailer atoff. 79. 9 Million Pounds in december. As far as the stock was concerned, down slightly. But we get a bit ahead of the news and some taking on it. Home retail sales are higher this morning. Britains biggest households retailer raised expectations. This is one unit up 2. 7 , although sales home base was down 2. 9 which is worse than analyst expectations for the stock, you can see. Doing very well, indooet deed, up 17 pence. Up over 14 . Richard hertz joins us now. Not bad numbers today from asos and home retail group, as well. How do you define the winners and losers from the Christmas Trading . Difficult to generalize. Its not been a bad christmas. And i think weve got to see retail sales up on value and volume terms. Those figures are better than weve seen for a long time. But i think part of that comment suggests to me that they didnt have as much not every comment is a competitor. Absolutely. Its a no longer retailer. And we know tesco thinks badly. So i think asos has been given some breathing space. Asos figures are superb. A real surge over christmas, i think. We werent seeing figures like that earlier in the year. But it has been an online christmas. And actually, the winners in terms of sales growth as weve seen so far have been the multi channel retailers. Fantastic figures from the likes of john dose, very, very good, indeed. If you didnt have that good multi channel line or you werent very good online, then you werent going to suffer. Its much, much more challenging at the moment. You can generalize, consumers are much more selective. They dont give second best the benefit of the doubt. It would be interesting to know, for instance, how those changes weve got i have to say, if i had to pick a word to describe retail sales and the general economy, it would be sporadic. It doesnt seem theres a consistent message, a theme, a story. Am i missing something . I think its fair. I think we saw in 2012 very, very slow improvements in Consumer Confidence and retail sales are up compared to other areas of Consumer Spending were weak. And i think it will be much the same next year. But have a look at the rest of europe. So you would rather buy