What could $250 million do for Lebanon’s economy?
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This is Andrew Peach with World Business Report from the BBC. Good to have you with us. On the way, the World Bank approves a quarter of a billion dollars for Lebanon to repair areas destroyed by Israeli forces. There are reports that the oil giant Shell could acquire its rival BP. I've been talking to a former BP executive. BP...

is undervalued against the value of its assets. So the breakup value, as it were, would be at least 20% higher than the 364 pence a share that the London stock market put on it today. And why Mexico could sue SpaceX over rocket debris on the beach. We start in Lebanon, though, where the World Bank has approved $250 million to rebuild infrastructure after the conflict between Israeli forces and Hezbollah.

The funds will help restore essential services and the sustainable management of rubble. The bank had previously estimated the cost of reconstruction at $11 billion. Let's talk to the Lebanese economist Sami Nader about this. So it's a lot of money, but the size of the job is absolutely enormous. Yeah, as you mentioned, the size of the jobs is enormous because the amount of the destruction is...

I mean, accounts for billions of dollars, at least five billions of dollars. But the move by the World Bank is significant because it's symbolic. And it says that the international community is ready to assist Lebanon. And it is because it has been a problem

that financial assistance will not come if UN resolution, namely the 1701 resolution, is not implemented, meaning that Hezbollah gets disarmed in southern Lebanon.

Today, this decision of the World Bank is significant. In that regard, it means that the Lebanese authorities have implemented this 1701 resolution, namely to the south of the Litani. And this has been a contentious point.

because financial assistance has been promised to Lebanon as long as Lebanon is ready to implement

There's some confidence in the stability of the situation on the border there. Obviously, Lebanon has been through COVID like everywhere else. And then there was the explosion. And now there's been a conflict. So there's been damage, physical damage and damage to the economy piled on chapter after chapter. What's the first thing that needs to be sorted out?

Yeah, as you mentioned, I mean, Lebanon has been going through four consecutive crises. I mean, it started in 2019 with the financial collapse, one of the most severe crises over the 100 years. And then we had the COVID and the Beirut crisis.

port blast and then and which was which destroyed like one third of the capital city Beirut. And then we had this war into is in 2023. And all of this put a lot of stress. I mean, put Lebanon under too much financial stress.

So now the question, I mean, how to rebuild with what financial assistance? This move of the World Bank, I mean, is a good move in the right direction, but it's far from being enough to get Lebanon out of this turmoil. And just finally, where does the rest of the $11 billion then come from?

I mean, the rest should come from the GCC countries. And up to now, the GCC countries, I mean, wants the Lebanese government to...

to have full control all over Lebanon, not only south of the Litani, and to assert its authority and its sovereignty all over Lebanon. And this does not seem to happen in the very near future.

Sami, thank you very much indeed for that. Sami Nader is an economist in Lebanon. Now visitors make up a substantial contribution to the Lebanese economy. So I wanted to hear from one business. This is a hotelier from Beirut, Michelle Shebly, who runs the Grand Meshmosh Hotel there.

Let's go back in time until October 2019. Business dropped by 70%. Then the airport was closed due to COVID. And on July 1st, the airport was open again and we started hosting a few people again. One month later, August 4th, the Beirut explosion happened. And the hotel I'm running was quite badly damaged.

To continue, it was a personal choice to say that we won't let an explosion kill us. Like if the business stops, then in a way, whoever was behind this explosion succeeded in what they had to do. Up to 7th of October, 2023, and it was like,

the downfall, like literally there was no one coming to Lebanon apart from like an occasional Chinese guest or a few Arab guests here and there. But for like one week, we would, the entire hotel would have one or two guests

And it is the most difficult thing to have a business running and no one coming. And Beirut was quite empty at the same time. And of course, your business and the whole city is so reliant on people visiting, sometimes tourists, but also people who've got family in Lebanon coming to see them. Yeah, absolutely. Because we're like the business itself is...

consists of a restaurant and a hotel. And the restaurant also relies quite a lot on people coming. Like the more you have people in the area where very close to downtown Beirut, it's an area that is extremely touristic. So yes, not just tourists, but also Lebanese expats who come to Lebanon. So business picked up about one half, two months ago.

and we started going back to the levels of pre-October 7th, 2023. And all of a sudden, the Israel-Iran war started.

And, yeah, now we're back at very low levels of occupancy. We're talking about 15%, 20%, whereas we were around 75%, 80% two weeks ago. And I guess it might just take time for people to have confidence that the ceasefire between Israel and Iran is going to hold. What else needs to happen, do you think, to help your business to boost it back up again?

Well, it's definitely confidence in the ceasefire, but also you have a lot of European airlines that stopped their connections. And once you stop a connection, it takes time to reestablish the connection to Beirut.

the flights coming to Beirut. People, you know, they want to come to Beirut, but at the same time, they are like, okay, am I exposed? Am I being exposed by coming to Beirut? Am I physically safe? I think it's a matter of time, of confidence, of the guarantees that the Lebanese government can give that this situation in Lebanon is stable and it's not going to change.

What do you want to see the World Bank money spent on? It's not what I would like it to be spent on, but the need is to rebuild the infrastructures in South Lebanon. There has been a lot of damage with the water infrastructures, with the power network. There is quite a lot to do.

And that was Michelle Shebley, the manager of the Grand Meshmosh Hotel in Beirut. Now, the oil giant Shell is looking to acquire its rival BP, at least according to the Wall Street Journal today. If that happened, it would be the biggest oil deal in a generation, although Shell's been talking it down. US-listed shares of BP still popped up on the news, though, up 10% at one point during the day. Our North America business correspondent, Michelle Fleury, is in New York.

Well Shell has denied the talks but that hasn't stopped BP shares from spiking on the rumours of a possible oil mega-merger, with commentators suggesting that a tie-up makes strategic sense.

The move would bolster Shell's position against US rivals like Exxon and Chevron. But why BP and not, say, an American rival? Well, BP has struggled in recent years, going through leadership changes, strategic pivots and underperformance, all of this making it perhaps more of an ideal takeover target. There's also, of course, that pressure from activist investor Elliott Management.

A successful takeover of BP would also allow Shell to regain exposure to the US market. Remember, it sold its shale assets in America's Permian Basin to ConocoPhillips back in 2021.

Something to consider, though. BP is a national champion of sorts. So will the British government let these two companies combine? After all, it does have to consider the national need for energy and worry about jobs. Or will they decide that since both are British companies, bigger is in fact better? Well, I've been picking up some of those points with Nick Butler, former Group Vice President for Strategy and Policy Development at BP.

Something like this has been coming for some time, so it's quite plausible. I've no inside information as to whether it's actually true or not. So it's interesting that we've been led up the hill, as you say, several times on this before. Why does it make sense? Why does there seem to be pressure to make this happen? BP is undervalued.

against the value of its assets taken individually. So the breakup value, as it were, would be at least 20% higher than the 364 pence a share that the London stock market put on it today. Why does the sum of the parts not add up to the same number as the parts? I think the company has somewhat lost its way and it is...

trying to do too many things. It doesn't have a clear strategy. I think people have seen that undervaluation and the market is not sentimental. It has been a great company, but if it doesn't perform well,

it won't be able to stay independent. You've been in the room where it happens at BP yourself. What will their reaction be, do you think? I think the first reaction is naturally to be somewhat defensive, to think that they can do it better. I think they've had a good chance to do that over a long time now, and they haven't done it. And I'm not surprised that the speculation is as it is. It may not turn out to be Shell, but...

I think it could be one of the other international majors. And the change that is needed could have been done within BP. But now I think it's much more likely to be done by somebody coming in and taking it over, probably selling some of the parts.

but making better use of them. Right. And in terms of what's in it for Shell, taking the bits of BP it wants makes it, what, more able to compete with ExxonMobil or Chevron? Yes. And also, I think there are a lot of pieces that might not all be wanted by someone like Shell or Chevron or anybody else who puts in a bid, but they would get a good value on the open market. I think BP is a good company for,

There are a lot of good assets and a lot of excellent people who I feel a bit sorry for tonight, but I think they're good enough to survive all this. And if it was Shell or Elliot, the hedge fund manager, they could get a good price and a good profit because the company is so undervalued. It feels like a big moment in that these are brands that have been around in the UK since I was a child for decades and decades.

Yes, but companies don't always survive. Woolworths has not survived. ICI has not survived. GEC in the UK. All these companies from when you or I certainly were

their children are no more. Companies have to perform to remain independent. Now Shell's shooting all this down and saying, you know, don't get overexcited. Do we read into that? Well, that's what they would say, whether it was near completion or whether it was a long way from going to happen. As I read it, and I have no inside knowledge, let me stress that, I didn't think it was an absolute denial.

I'm not sure this will be led by Shell. They might prefer to come in as a buyer of some of the pieces and let someone else go through this process of a takeover or a merger. It could be any one of a number of people, but I wouldn't be surprised if in a year's time we don't see a restructured company here. That was Nick Butler, former BP executive, want to watch.

This is World Business Report with Andrew Peach from the BBC World Service. Now, eSports is a multi-billion dollar industry these days. Some people making a lot of money, but while traditional athletes retire into coaching or punditry, what does an eSports player do when they hang up their controller? Well, Chalk's been finding out.

At this Rocket League tournament in Birmingham, England, around 50 gamers are living what many would consider to be the dream, playing their favourite video game in front of thousands of fans with hundreds of thousands of dollars up for grabs. Archie has a long set to his... Oh, yeah, don't...

And Archie has it for free. GK, game one. But speak to the competitors and they'll tell you the reality can be a little different. Archie Pickthall plays for a team called GK. I think it's kind of weird on the brain because now I kind of have like a money issue where I see like money, that's a lot of money. That's like a thousand. To me, it doesn't seem that much because my brain is so...

like, fried from seeing the crazy amounts of money that... Which I don't think is a good thing, to be honest, because then after Rocket League, you get kind of brought down to earth and you're like, this is the real world. Like, the job security is, like, very poor. You can get dropped at any time.

any time for nothing and that's it honestly it's like scary to to be in despite the fact it's not a physical sport there is also a consensus that esports is a young person's game because as you get older your reactions get slower slater thomas is 22 and is the fifth oldest player here he's already making plans for his post-competition career

I think for me, I want to teach in elementary and middle school and high school. I had a couple of teachers that I love and I still think about all the time. And for me, that's I want to make an impact. And I think teaching is the right way for that for me. But that's if you compare this to something like tennis, this is like interviewing Novak Djokovic or Carlos Alcaraz and then going, yeah, I want to be a middle school teacher in five years time. So what does that say about esports and the way it's structured? It's true. I think...

If anything, it says that I've lived through the stress of, I think, a full lifetime at this point. I'm balding. Esports is stressful, content is stressful when you don't know where your next check is going to come from. One of the major differences between esports and traditional sports is how young it is. The industry has only been around for a couple of decades.

And this means there aren't many examples you can draw on if you're trying to carve out a lifelong career. Robbie Derrick is the CEO of Blast Esports, who put this tournament on. The global gaming market, depending on statistics that you follow, is worth between 200 to 300 billion. There are some statistics that say that would be half a trillion industry by 2030.

The esports industry inside of that is worth anywhere between three and five billion. So the total market size is not as big as one would hope. It will grow and it will get bigger. And therefore, there will be opportunity for many, many more going forwards. But I think at this point, you know, are there jobs for all?

Probably not, but there will be. And eventually, I think the individuals want to stay within that space. And that's what's encouraging. Phil Cook lectures on the esports course at the University of Suffolk. He says, unlike most traditional sports, esports doesn't have a central governing body. And this makes it harder to establish career pathways. There are organizations trying to do it already. A couple of years ago, there was the International Esports Coach Federation. It's just a case of recognizing that. And I think it has to be a wider industry step rather than any one organization.

Back in the arena, French team Carmine Cor have just won the final and the $100,000 grand prize. So for this team at least, the wider worries about the industry can take a back seat for now.

That report from Will Chalk. If you'd like to hear more about that, just search for Business Daily wherever you get your BBC podcasts. Next to today's companies and markets news with Susan Schmidt, who's the Portfolio Manager at Exchange Capital Resources Inc.

In Chicago, Susan, thank you for being with us. We're going to start with dating apps because Bumble says it's shedding a third of its workforce. Chief Executive Whitney Wolfherd said she was responding to pressures in the market, the dating industry facing an inflection point, according to the chief executive of Bumble. What does that mean?

Well, it means that they're really trying to make sure that they can continue to make a profit. Bumble, since it went public, has declined in value. Once valued at over $7 billion, it's now a market cap of almost $700 million. So quite a difference. This is the second time that they've cut the workforce. We heard about this in February of 24 when they also cut.

That's 30% of the workforce. It's definitely an indication that online dating and this type of service isn't as in demand as it was. They're trying to improve profitability and improve their throughput, those matches that are made, to try and increase the overall returns of the company. Right. People are still dating. So does that just mean that they are able to make the matches using AI rather than needing so many people to do it?

I think that is definitely something that this industry is going to be digging into more and be able to apply AI. It would seem that that's a credible way to use that AI tool. At the same time, I think what you're seeing is a much more discerning consumer. Consumers are nervous about the economy going forward. They're nervous about inflation. They're nervous about that monthly spend. And they're shifting.

where they allocate their wallet, that's also a reason that they're backing away from the more premium services and memberships that they can have with these dating services. I see. So it's not anyone's going off dating. People are just nervous about going out in any sense. Exactly. Let's talk about NVIDIA next. Investors gathering for the annual general meeting today. What came out of that?

So positive news overall. Investor sentiment around NVIDIA is very high. And that's a big shift from where we were, say, two months ago when there was great concern over what the Trump administration tariffs would mean for the potential NVIDIA sales into China.

Instead, now we're 25% higher in the stock. NVIDIA shares hitting a new high, highest since January. And we're seeing this now, again, the largest company in the world at $3.8 trillion valuation. And that's right on par with Microsoft, just trailing behind it.

And you're seeing investors realize that AI still has a long way to go. And not only AI, but robotics mentioned today as the next biggest area where their chips would be able to be quite useful. So any sense that this was some kind of bubble about to burst seems to be off the mark?

It certainly does seem to be far from investors' minds at the moment as they've come back to the stock and embraced it. They're not at all concerned. We still have no clarity on a lot of the restrictions of sales into China and how they might imply to NVIDIA. So investors haven't gotten any certainty or additional information there that's making them more confident. It's just a general increase in confidence around AI, robotics, and where these NVIDIA chips might be deployed as the overall industry grows.

And finally, we've had this news from the NATO meeting in The Hague where countries have pledged to increase defence spending. Any evidence of that seeing an uptick in the value of weapons companies, defence companies?

Well, we've seen that. We've seen that already this year. We've seen a big increase in support as we saw weakness in the rest of the market. Defense companies were a sector where we saw strength as people were concerned about protection, nationalism, what would be spent on defense budgets. And so we saw defense companies do quite well thus far this year as a sector overall. That's going to continue. This recent announcement from NATO seeing that we're going to increase from 2% to 5% of GDP over the next

10 years to try and increase that spend. That commitment to defence is certainly a boon and a positive to support the valuation on those defence companies that have been getting increased orders and increased visibility as a result of countries stepping up that spend. Susan, great to have you with us. Next to Mexico, well, there's a threat of legal action against SpaceX because the president says its rocket launches are contaminating the country.

Mexican media has been carrying pictures of suspected rocket debris washing up on beaches south of the border with Texas, including some dangerous phosphorus. There were some rocket tests last week. President Claudia Sheinbaum says her government is investigating the environmental and safety issues.

We are not only going to conduct a review, but also look into everything related to the rocket launches that are taking place very close to our border and the impact they're having on the area. Under international law, we will file the necessary complaints.

that have to be done. Live to Dr David Whitehouse, author and journalist specialising in space, former science editor here at BBC News. David, this was a big fireball in the air last week with the test that happened. Is that directly linked to what's washing up on Mexican beaches? Well, not particularly that explosion, although that will have...

polluted the local area with noxious gases, which need to be looked at. What President Scheinbaum is mainly interested in is the recent landing of the super heavy bottom stage of the biggest rocket ever built. It landed in a touchdown in the Gulf of Mexico. It was deliberately put there because they were doing tests on it. But when it came down, it exploded.

So there's a lot of debris around, a lot of debris being...

been moved around. And international law is like with this. It's the same as, say, if an aircraft crashes and debris is washed up on beaches. It is the company concerned that has to pay for the cleanup. Now, if Mexico gathers this stuff and gives it to SpaceX, then it can charge SpaceX for this. But it is international law that says,

If it causes environment damage, if it causes economic damage to fisheries or to wildlife, then they may have a case. And this is part, I guess, of the hazard of involving big private companies like this in the development of space technology.

Well, in a sense, yes. But remember that this base in Texas was completely built from scratch by Elon Musk. Starbase City, Starship City. And SpaceX went through years and years of horrendous legal arguments and settlements and lawsuits, principally because of the environmental impact and because they wanted permission to do a lot of building and to transport rocket fuels.

So the SpaceX lawyers are well versed in this. But I think what Mexico sees now is that a smaller scale of the Deepwater Horizon problem of 2010, they may have a claim, but...

Mexican lawyers and SpaceX lawyers are very hot and they're going to argue this. David, I have to stop you there. I do apologise because we're right at the end of the programme. But thank you so much for your wisdom on that. That's Dr David Whitehouse, author specialising in space. More about today's stories at bbc.com slash news. And from me, Andrew Peach, thanks for being with us on World Business Report.