Transcripts For BLOOMBERG The Pulse 20240622

Bloombergs European Headquarters in london. We are getting some breaking news in terms of pmi. Euro area figures pretty much as expected. Greek july manufacturing pmi falling to a record low of 30. 2. We were expecting a figure of 46. 9. 30. 2 is a record low but also very low indeed. Anything below 50 indicates retraction contraction. The Athens Stock Exchange has plunged this morning. We will have the latest from the greek capital in just a moment. First to manus, whos been taking a look at how the market has moved. Not a pretty sight. Manus the biggest oneday move on record on the ase in athens. Down over 21 at the open. Weve been closed for five weeks. The longest closure since 1970. We will go to hans nichols outside the exchange in a moment. You had two quarters of contraction. We are on the way to recession. National bank of greece down 30 . Within the first four minutes the price has crashed. What youve got here is a not necessarily that it saw a huge amount of volume, but the prices were marked down so dramatically because people dont know the answer to how much capital these banks are going to need. Efg euro bank down 29 . The Unemployment Rate in greece stands at 26 . When it comes to the biggest component of the greek equity index, there are a couple others that are worth keeping and i on. Bank of cyprus down 17 . Weve now got cocacola. This is the single biggest weighted stock. It is over 10 of the index. That is critically important. Down 10 at the moment. You also have ote a telecoms company, down 25 . That is about 5 of the market. That is 15 . You are looking at 20 of the overall weighting. The banks are down. The question is whether greece goes to set up a bad bank or recapitalized their banks before the end of the year. If they dont do that, then you are looking at bail ins for some of the depositors and bondholders in greece. Manus francine manus, thank you. Lets cross over to hans nichols in athens. The market tumbled more than 20 . We werent quite expecting this. Hans we were expecting a great deal of volatility. We are expecting more volatility. Some of the members are saying the numbers we get for the first few minutes arent necessarily going to be accurate. These are a liquid moves. We have a lot of sellers. We dont have buyers. The restrictions are on the buyers. Greek buyers are restricted on what sort of cash they can use to purchase shares. The ministry of finance wants to use this Athens Exchange and make sure that it doesnt turn into a backdoor for capital flight. We see the bank stocks down 30 . We saw the Overall Exchange down close to 23 . We have to not only look to see where it ends this afternoon, but also in a couple days. Once everything sorts its way out, theres a lot more volatility. We can expect a lot more volatility throughout the day and the week. Francine what restrictions are in place now that the market has reopened . You were mentioning them. It helps explain this big fall. Hans the big one is on domestic buyers. They basically need to use new sources of cash. There are a couple other triggers. Mainly, it is when you halt trading a stock. The old rule was that if a stock went down 10 in five minutes, that would trigger a halt. Now, they are going to trigger a halt much faster. If it goes down 7 in 10 minutes, that could potentially trigger a halt. If we look at those bank stocks and how quickly they dropped they would have been halted based on the rules the ministry of finance put in place. Manus Hans Francine thank you so much. That brings us to todays twitter question. Would you be buying any greek stocks if you could . Tweet us. We have that pmi figure out of greece. Absolutely horrifying. That july manufacturing pmi falling to a record low of 30. 2. Ive never seen such a low figure. It was the two weeks where the government essentially shut down. Our next guest has been managing global macro strategies for more than 25 years. He is with us for the next half hour. Great to have you on the program. Good morning to you. We wake up this morning, Athens Stock Exchange down 22 , and we have that terrific pmi figure. How much do you read into it . Is it just because it is july the capital controls, complete shutdown . You hit the nail on the head. The confusion is around the Stock Exchange reopening and the state of the current economy. What we do know is it is pretty poor. From a macro sense, youve got to expect that things arent going to get better very quickly. With bailout negotiations ongoing, theres going to be further austerity. It is difficult to see any shortterm light at the end of the tunnel. From a macro point of view, to get interest in in greek stocks you would have to see something changing. You can imagine something changing in the next five years because greece seems unsustainable. Either they get some debt relief or they come out of the euro and go back to the drachma and you see a big currency devaluation. The stock market is down. Theres going to be some bargains at some point. It is just what your timing is. You need something to change. Manus debt read francine debt relief, we understand that this was discussed and pretty much acquiesced to. Is it reprofiling or debt relief weston mark weve tried that before . It just doesnt work. Greece needs to approach 200 debt to gdp. They need a nominal writedown. Might as well make it a big writedown. A small writedown just one clear the deck. Francine we have a big week. We have u. S. Jobs a little later. On thursday, we have super thursday. How much does greece still worry you . How much do you actually look at greece . From a global macro perspective, it hasnt affected markets that much. It has not had that big an impact on the markets. It is not actually affecting our global thinking. In terms of the issues youve been covering china, those are the big macro drivers for markets in the next several months. Having seen very little in terms of news from the fed last week we are going to see that news coming from gdp. Weve got more data today and later in the week. Nonfarm payroll will be very important. Weve been told that the data is not picking up. Im sure they will want to be comfortable with hiking rates. The economy is not doing quite as well as the fed would have hoped. Francine thank you very much for now. Stuart richardson stays with us and we will talk more about china. Heres a look at what else is on our radar. Chinas stocks have extended the benchmarks biggest monthly loss in six years. A drop in manufacturing brings concerns that the economic slowdown is deepening. Hsbc has reported an 18 climb in earnings. Pretax profit rose to 6. 5 billion. The bank has also put aside 1. 3 billion to cover a currency investigation and announced that it is selling its brazilian unit. U. K. And french leaders have appealed to the eu to help ease the calle migrant crisis. Each night, hundreds of people are attempting to reach tunnels. It is said that it is part of a global migration crisis. The wing section washed up on an island beach last week has arrived in france for testing. Air safety investigators have identified it as coming from a boeing 777 Malaysian Airlines flight 370 is the only such plane known to be missing. The Obama Administration will issue rules to cut Carbon Emissions from u. S. Power plants later today. The plan is among the most complex in the history of the Environmental Protection agency. It will put the United States on track. Coming up, we speak to the ceo of the Athens Stock Exchange. That is at 10 past 10 00 right here on the pulse. Francine welcome back to the pulse code we are live on the pulse. We are live on bloomberg tv and radio. Hsbc has reported an 18 rise in profits. Higher income and shares in china boosted figures. They have put aside 1. 3 billion to cover a currency investigation. Lets get more with bloombergs tom mackenzie. There are a lot of key takeaways. This is a positive story. Tom it is. It is part of the ceos plans to sell off those assets, shore up the earnings, after that string of misconduct scandals. The sale of those shares in china has helped that as well. Revenue from equities was up 75 . That is positive as well. Revenue from the fx unit was also up 25 . Positive for the ceo as we head into the second half of the year. Francine the earnings were boosted by the trading component of all this. They also set aside the 1. 3 to settle any investigations linked to currency rating. That puts that aside. This is now, gulliver is looking at job cuts as well. He outlined plans to cut around 50,000 jobs in june. He is pushing that strategy. Hes also got to question whether or not he relocates the head orders from london. That is a big topic for george osborne. They have the review they are planning to wrap up by the end of the year. Francine we havent heard anything on that relocation. He is going to be grilled on it today. Tom they are concluding this review by the end of this year. Thats all we know so far. Francine tom, thank you so much. Stuart richardson is still with us. I know you dont follow specific banking stocks, but hsbc, big exposure to asia and it is now getting rid of the brazilian unit. Does it make sense, selling off brazil when it is a growth story . Brazil was a growth story several years ago. The last two or three years have been really tough going for brazil. I think from the shareholders point of view, they would be glad to see that unit go. I think asia they are a global bank but asia is the home. Investors would rather see them focused on asia than disparate or too farflung. Weve seen markets generally they are outperforming economies around the world. That continues to be the case today. Markets some markets are caught up with that. The other side of the bank, the lending side of the bank that would be where potential worries could be if we see a slowdown in china. Interesting to get more details on the lending side of the bank. The trading site has been good. Francine it would be quite difficult not to have made money on the equity side over the last year and a half. The environment is all there. It is rich picking. What happens when we get off that easy monetary cycle . This is one of the things about banks. The banks have been looking to cut Balance Sheets back a bit. It cannot be so easy. If we begin to see rate rises come through, that may help margins a little bit. It is actually difficult to see what the big driver in growth is going to be. Theres still a lot of hard work for these big global banks to be doing in our opinion. It still looks like we are in big restructuring mode. It is cutting jobs, setting aside money for previous misdemeanors. That seems to be the hard work. Theres still work to be done. Francine thank you so much for all of that. Stuart richardson there. Up next, the china stocks stall again as the drop in manufacturing reignites concerns about the slowdown of the worlds second largest economy. Francine welcome back to the pulse. Here are bloombergs top headlines. Microsoft has agreed to invest about 100 million in you are in uber. That is according to a person with knowledge of the matter. Investors view its technology as the future of transport. Nokia selling its maps unit to bmw, audi, and daimler. The luxury automakers approached nokia about the sale. The unit supplies data to about 80 of cars with Navigation Systems in north america and europe. Oil is extending its slide this morning after iran vowed to increase production after sanctions are lifted. Irans oil minister said the country could raise output by 5000 barrels a day within a week. Both crude and brent are down. The head of the failed Mt Gox Bitcoin exchange has been arrested. He was detained in tokyo. He was accessing the exchanges computers and insulating his account. If convicted, he could face five years in jail. In other news, chinas Manufacturing Industry has suffered another setback with pmi data falling short of estimates. Stocks falling to a threeweek low on growth concerns. Lets get more now with nick wadhams in beijing. With continued volatility, what is the outlook for the chinese economy after this reading . Nick we are starting to get a better picture of what is happening in the economy. It looks like the numbers are not good. Car sales are down. Bloomberg economists estimate that in the first half, chinese economy grew at a rate of 6. 5 . The government has this year end goal of 7 . If we keep seeing more figures like this, we have trade on saturday and inflation on sunday, it does make the case for more intervention from the government. Francine we saw the government intervene to shore up the market. Does it look like it is going to act again . Nick analysts from mizuho put out a note saying they expect a largescale stimulus package. The premier said the government wouldnt take preemptive measures. It is sort of a question of how big of a step do they want to take. Theyve indicated smaller measures so far supporting the tourism industry. Also a couple bigger ones, giving more lending money to the policy banks. We are waiting to see what is next. Francine thank you so much, nick wadhams. Stuart richardson is still with us. We talked a little bit. Thank you for sticking around. We talked a little bit about china. How concerned are you that for the moment china growth is stable, weaker, but stable but markets is all over the place . The market is the canary in the coal mine that should other us to something more concerning about the growth. We are separating the market out from the economy. There is a relatively small number of local Retail Investors that seem to dominate the market, as opposed to the u. S. Where the links are much greater. In terms of the economy we are probably at the poorest economic reading for at least two years. We know the growth figures are open to question. We are seeing a pretty entrenched slowdown. Theyve cut rates four times in the last three quarters. Theyve cut the rrr. Theyve been cutting money to banks. This is not helping the real economy that much. They are trying to balance many other things. Theyve got a problem with government debt. Nonperforming loans are much higher than state levels. Theyve got his Corruption Campaign as well. Trying to balance all this and keep the economy going is probably something thats never been done before. A lot of investors have faith that the chinese authorities will do a great job. Now that youve seen the stock market under pressure, they realized that no small group of men can control an economy with 1. 3 billion people. Francine what does it mean for commodities . It must have repercussions. When you look at the performance of commodities and the emerging markets in general, this is clearly a sign that chinas slowdown is here for real. Lack of demand for commodities in particular. Global money has been slowly but surely sucked out of emergingmarket assets because of potential risks. When you add all this together this is clearly an emerging market problem. We think the stress is probably the greatest at the moment. We have seen this in prior cycles. The emerging market crisis will feed through into developed markets. You saw this in 1997. We see parallels with 2007 as well. There is a focus on financial engineering. Theres a lot of worries here. This will affect developed markets as well. Francine thanks for all of that. Up next as british and french leaders appeal to the eu for help with the migrant crisis, we go inside the tent city. The only way to get better is to challenge yourself, and thats what were doing at xfinity. We are challenging ourselves to improve every aspect of your experience. And this includes our commitment to being on time. Every time. Thats why if were ever late for an appointment, well credit your account 20. Its our promise to you. Were doing everything we can to give you the best experience possible. Because we should fit into your life. Not the other way around. This is a great place to work. Not because they have yoga meetings and a juice bar. Because theyre getting comcast business internet. Comcast business offers convenient installation appointments that work around your schedule. And it takes done. About an hour. Get reliable internet thats up to five times faster than dsl from the phone company. Call 8005016000 to switch today. Perks are nice. But the best thing you can give your business is comcast business. Comcast business. Built for business. Francine welcome back to the pulse. i am francine lacqua. Here are bloombergs top headlines. Hsbc has reported 18 climb. Pretax profits rose to 6. 5 billion. The bank has put aside 1. 3 billion to cover our current investigation. Chinas stocks have extended a benchmark monthly loss in six years. A drop in manufacturing have reignited concerns the economic slowdown is deep. We will follow that closely. The asset Stock Exchange has plunged following a fiveweek shutdown. It will be easier to sell stocks that swing wildly. What we have from the u. K. Pmi. The greek was terrible at the top of the hour. The u. K. , better than expected. For the month of july, rising to 51. 9. Anything above 50 shows expansion. It is a little better than economist estimated. More on that. Manius has been looking at how the Athens Stock Exchange has been moving. Wild gyrations. Manus wilds gyrations is the right word. You touched on pmi. Pmi in greece slumped the most on record. 30. 2. Manufacturing not the biggest component of the greek market. But it show you the challenges of getting the capital controls on a global basis. A representation of the ftse. The long disclosure since the 1970s. We opened with a drop of 22 , the biggest oneday drop ever. The index is trading at 2012 levels. The banks opened some limits. Within the first couple of minutes, not a huge weight of volume of orders got executed, the Market Makers marked the soldier medically lower, thats a critical element market them dramatically lower and that is the critical element for National Investors do not have the same level of restrictions. The bank of greece and efg. Look at some of the bigger waiting stock names on the Athens Exchange. Cocacola trading all the while on the u. S. Equivalent opened down nearly 10 . A little reprieve. Down 7. 3 . And 10 of the market. The bank of cyprus is down 15 . You have back at 2011 lows and del potro authority. Something in little at different. Down 26 . 2011 lows on bank of cyprus and cocacola almost overstating the case what you have is a discursive in terms of cap relation they will need in terms of how much capital lasers capitalization they will need . New european rules about how to recapitalize banks. The greeks have got to get it done in the last window of liquidity. Create a bank and revitalize. Fran . Francine manus cranny the latest on the breaking figures for Athens Stock Exchange. U. K. French leaders have appealed to the year role for the migrant crisis. Hundreds of people are attempting to reach britain. Have appealed to the European Union for the migrant crisis. A micro economy has emerged. Bloombergs reporter. The most a restaurant. What kind of food can you get here . Spaghetti potatoes. [laughter] enjoy yourself. Many people come here to enjoy themselves. Come and player cards. Drink. If you need something to eat, you can ask them. They will cook for you. You just pay them. This is our discotheque. Our speaker. Table. Here people can dance. Disco lights. What part of the camp are we in now . [indiscernible] no shchool here. Only restaurant. This is the hospital. What happened . [indiscernible] like that. The police hit you in the face . Yeah. You have to be careful. If you see police, you run. [indiscernible] time to start church. Come to pray. Ask god to give me something. How old are you . How old are you . Old . 12. 12 . Yeah. Francine heartwarming. A pretty normal life from difficult decisions. Find out why airasia is offering more than 100 million in damages from an international airport. Francine welcome back to the pulse. Here are some more of bloombergs top headlines. Airasia is offering more than 100 million in damages from the operator of Kuala Lumpur International airport. The carrier client problems at the new budget terminal has hurt the reputation. The billion dollar terminal is sinking with cracks and standing water on the taxiway. Malaysia airport said airasias claims are baseless and will challenge them. The wing section washed up on reunion island has arrived in france for testing. It has been recognized as a fal laperon. The Athens Stock Exchange has plunged reopening after a fiveweek show down. The shutdown. There are a host the restrictions. Fresh data shows that greece shrank at a record pace. Joining us now for more on greece is deutsche banks research. George, great to have you. Thank you for joining us. When we look a greece, we were expecting up lunch. How worried are you it is just the beginning . We were expanding a plunge. George hard to call it just the beginning. It is the culmination of quite a long crisis. I was say what matters now is if the deal is concluded with the europeans and the Political Developments in greece. Francine i know it is a difficult question but one of the problems is it is exacerbated but not everybody can come into the markets. You have to have previously been in the market to buy stocks now. George saravelos the restrictions are a function of the bank program. The timing is hard to predict. It should be at some point this year. The earlier the recap takes place, the better. Francine we have been asked on twitter would you buy any greek stocks . Are you trying to catch a falling knife . For not just the beginning of the five weeks culminating . George saravelos very difficult to apply a valuation framework right now. What is critical is to see the program put into place. The bank recap within the program and then it makes sense to look at the market. First he banged we will talk about fx in the market. What was your take on the pmi . Francine we will talk about fx in the markets in a moment. Should we worry a lot more about what Alexis Tsipras has to contend with . George saravelos absolutely reflection of the policies put into place. We knew it would be weak and damaging. The question is very similar to the one related to the stock market, how quickly can the program be put into place . And the bank recapitalization. It is what matters the most for normalizing the economy as well. Francine a very big week in terms of data overall. Super thursday in the u. K. And was not seen this in at least 20 or 30 years with inflation and u. S. Jobs report. What is your favorite currency right now . George saravelos the height this the dollar and the pound which continued to perform well. The currency will still function and a dollar environment. If the u. S. Does well and the u. K. Correspondingly they will perform. Even if they are not doing well in the rest of the world which is what we are seeing eye of china, again at those two economies outperform in the economy. We remain bullish on the dollar and sterling as well. There are show some of the funding currencies, the yen and the euro and commodities as well. Francine the said, december or september hike . George saravelos deutsche bank, our official call it september. Call is september. My personal opinion is we need to get it out of the way. It has been a major point of uncertainty. Looking at the first rate hike as risk appetite. Once we can get it out of the way it should be fairly positive for the stock market and historically, ironically the dollar weakens in the weeks around a rate hike. The timing is pretty critical but i am hoping sooner rather than later. It is really impacting the Market Sentiment and volatility. Francine is there a risk that they would have to reverse it and would it matter what smart next line and would it matter George Saravelos yes and it will be a credibility issue. It means something is wrong with economy. There are risks they go to. Equally francine china is a risk . George saravelos yes. If they go to late as they go too and inflation picking up Something Like the 1994 environment and they have to a difficult job and september is not a slamdunk but there are good things happening as well. The u. S. Is generally doing inflation domestically because of the labor market. We will have to see. I feel fairly comfortable as they will go this year. And exact timing is more difficult to call. Francine what is your call sterling . George saravelos we are looking for it to fall to . 70 by the end of the year. Cable, we are bearish. For the bank thank you for all of that. Francine thank you from of that. George saravelos for more on why german carmakers are interested in the product called the product is called here. Lets bring in our reporter. Why are they interested in buying mapping units . Reporter he is all about self driving cars. To make cars that can help steer themselves and guide themselves these carmakers need access to detailed maps very there are only a few companies in the world that make maps like these. Here is one of them. They decided to pick up that asset. Francine how will the ownership the structured . Naomi kresge it is completely equal ownership. The three carmakers want on an equal stake here. They will function as investors and the company will be more or less independently run. First the bank ok, thank you so much. Naomi kresge uber editor. Francine ok, thank you. Why afterhours entertainment is having an impact on australias digger in dillers conference. Francine heineken reported betterthanexpected sales. The ceo spoke about the results. You have seen it which is quite good. We do not see any reason to change our outlook. And we expect this year to grow and volume and profit. Despite europe remains a difficult turf to operate but we are making progress and we see many and the majority of our developing markets going in the right way. Anna can you give us more direction on where organic sales will go . What are your expectations and what will be the driving seat . Guest the usual suspects are the growth of the heineken brand close to 5 which is a pretty good performance. Still a couple of emerging markets. Performing well like mexico and vietnam. Ethiopia and we expect further growth to come. Our growth has been steady. The second of the year and innovations like line extensions of existing brands around the world watch our main which are mainstay which our mainstream brands are performing well. Outlook is positive. Including in europe and your businesses. More difficult because once more macro trends are against us. You do not have economic growth. We are still market the leaders in europe and dedicated and committed in many countries in the first half and on a strong year last year. We have the continue to improve our shares and value in most of the markets for it at a bank i shouldve markets. Anna i shouldve said my colleague is joining us. Manus you have got to improve your margins relative to some of your competitors. How are you going to do that . What away . We know the emerging markets strategy and you have the lower euro. How you will build that margin. Guest obviously a country makes it for us. Essentially what we do is to post a premium part of our innovation part of our portfolio. And the third leg is to work in our cost base and we have been doing that for the last decade and will continue to do so so steadily by improving in premium friends in the first place and we improve steadily our margins year on year. Francine the remote australian city of kalgoorlie is the center of attention. The Mining Industry means for diggers and dealers conference. In the 23rd year, it is known for socializing and networking. Hall alan reports. Paul allen reports. Paul kalgoorlie is not the easiest place to get to but each year to thousand mining representatives 2000 mining representatives get to it. This historic goldmining town is inland from the state capital of perth, one of the most isolated cities in the world. A lot effort to attend the conference. Why have it here in kalgoorlie . Surely perth would be more convenient. Kalgoorie is perfect for this conference. It is probably one of the best in the world. People like to come here and visit the operations. They stay for the whole three days. It is much better here. Paul not just the delegates that make the trip will pretty much everything else. Industrial kitchens, food, audiovisual and the venue is self, the largest marquee in the southern hemisphere. Hotels are booked solid and many locals cash in, fleeing town and renting out their homes. I am feeling the Economic Impact is costing almost 200 a night , for me to stay in this caravan. We get about 1800 people that we have several thousand people coming to kalgoorlie. Hotels, restaurants accommodations it is very good , for kalgoorlie. Paul most of the big names are here. There are a few notable absentees and some have stopped coming up a the afterhours entertainment. Goldman sachs has stopped coming but has not said why. Nobody wants to talk about the skimpies. Of the skimpies issue is a side issue. Paul kalgoorlie is infamous for skimpies, the barely clothed waitresses who serve the drinks. I am not allowed to film them. But skimpies are in economic measure. Paul allen. Francine for listeners on the radio, first word. For viewers, the second hour of bloomberg the pulse. Well have a former director of the act is Stock Exchange. We are back in two. Francine to act is stock ashamed the active Stock Exchange plunges. Brazilian back out. Hsbc said it is telling the entire business and the south American Country for more than 5 billion. China slowdown, the stocks as factory gauge slides to a twoyear low. The worlds secondlargest economy. Francine good morning to our viewers in europe a good evening to those in asia and good morning to those in the United States. I am francine lacqua. Bloomberg the pulse this is. This is i am francine lacqua. we will have the latest from the greek capital in a moment. First to manus cranny and has been take a look at how the market has been looking. Manus depending a what you want to use. What kind of adjective you use. The biggest oneday drop on record. Just over 19 . We dropped 22 at the beginning. It was closed for five weeks the longest stretch since the 1970s sprint it is a market for the brave and the local brave act as that. This could be the contrarian. The absolute contrary and. What you see is three of the biggest banks. The question is they opened limits. Youre not seeing us to mulch was volume to mulch was tumultous as we have seen. Trying to find fair value, it will be the challenge over the next couple of weeks. The greek banks on the downside. The manufacturing numbers out of greece and the worst at 30. 2. The biggest slump on record. Capital controls decimating the greek manufacturing business. The index at 2012 levels and gdp data this week which will confirm recession and that is what you will have to get used to in the greek story. Some of the biggest blockbusters, the big boy and girls of the exchange. The first is cocacola. It has been training in the united dates and form of american deposit. Down a by 10 . That has improved a little bit. The bank of cyprus. 13. 4 . A stock back at the 2011 levels bring 10 . Youre looking at about 20 . 16 . Those 2 stocks. That is the biggest privatization story. Francine, back to you. Francine manus cranny with your movers. Over to hans nichols. We were kind of expecting a very steep plunge but this is exacerbated by the restrictions. Hans friends saying, it may be exacerbated but we do not quite know yet. You can see behind me nothing but a read. I am in the Athens Stock Exchange. The most important question and data point is what will the market close at . The restrictions may be impeding the actual pricing. We need to wait. We have been talking to various of Market Participants and we have to wait for the other day in to see how far things are down. The aggregate exchange is down. Many of the banks hit 30 drop limit within the first four or five minutes of trading. In some ways come the main number im focused on is the pmi number all the way down at 30 . The expectations was 40 . We know greece is in recession but we do not know how much. These numbers are not good indicate greece may have a much deeper economic hold to dig out off. In terms of investors and get accurate pricing. It is the story of the day and in a few minutes, we will speak with Socrates Lazaridis the ceo of the Athens Stock Exchange. We will get his take and what we can expect moving forward. Francine i am looking forward to the interview. Thank you. Hans nichols with the latest for coming up, we have to remind our viewers. One of the big interviews of the day. The ceo of the Stock Exchange Socrates Lazaridis in about five minutes from now. What else is on our radar. China stocks extending the largest monthly loss in six years after a drop in manufacturing reignited concerns the slowdowns deepening. Hsbc has reported an 18 climb pretax profits rose 6. 5 billion. The bank has put aside 1. 3 billion to cover a currency investigation and is selling the brazilian unit. U. K. And french politicians have appeal to the eu to help the calaias migrant crisis. The u. K. Secretary and french counterpart say it is part of a global migration problem and similar calls from the greek and italian leaders. The wing section on reunion island beach has arrived in france for testing. Air safety investigators have identified it as a flapper on from a bowling boeing 777. And the Obama Administration will issue rules to cut Carbon Emissions from American Power plants later today. It is among the most complex and the Environmental Protection agency and will put the United States on track to meet obamas goal. Here are talks about the this earnings season. Head of equities. In drew, great to have you. We have had a lot of banks reporting. Hsbc and the stock is gaining. An open trading quarter and set aside 2 billion for investigations. And 12 not heard anything about roque and with not heard anything about rotating. Do you like the bank . The interesting thing is the process to improve their equity and we saw that with hsbc. Particularly the sale of brazilian unit and the market will like that idea of getting on with the strategic plan. It is too early to judge the success of it. It was only the 16th of june that it was announced. To judge him already is a bit premature. What we know from other big banks is it take a long time to determine the supertankers. This is interesting. It to does not mean where negative on it. There are better ideas like ing, ubs which further advance in the restructuring. Francine you color the supertanker and a lot of calls for the bank to be broken up. Some say it is too massive. Will the sale of the brazilian unit be enough to acquiesce criticism or they will have to go further . Andrew parry is a will probably have to go further and as they will probably they will probably have to go further and as they will probably want to go further. What the bank did in britain. Being built in birmingham and resurrecting they will want to bring back the midland name. And then the question arises does it make it easier for them to exit the eu are relocate to hong kong . Th a lot of that will depend on the attitude of the regulator. Ey do they do not yet know. If it becomes independent subsidiary investment, in my precipitate moving to hong kong. You talked about what is going on in china. Hong kong is francine talk to me about their earnings season. We are a week and a half into it more or less area a lot of companies on the upside. Is it costcutting and leaner and more disciplined or really Growth Potential . Andrew parry quite a few things in europe. Expectation is still low. The number of cell sites is as low as it was in 2003, 1998. People have been skeptical of the eurozone to deliver. We think the eurozone is beginning a two to three earnings cycle. Gratified by the announcements. It is more of internal recovery story than external recovery. A lot of people focused on a weak euro and that has been helpful and benefited translation. However, external demand is weak and a more competitive currency does not lead to more orders. The real story, more domestically where we see signs of life, in france and spain is doing well. Francine what kind of stocks will you be buying into . Consumers . Andrew parry a mixture. We like a mixture. Pharma is a lead index. Novo nordisk, longterm favor. Glaxo is good. Probably hit the earnings. Look forward to the pipeline. Roche. A lot of change in a care and technology is transforming. Francine a lot of it is done by m a. Is it too dangerous . Andrew parry consolidations quietly going on in the background for some time. It is not always about m a and that is on the agenda. An industry like homebuilders in the u. K. Is hugely consolidated. M a is going to be a life driven by the need of American Companies who cyclists turning down to buy growth. M a will continue. Francine , thank you. Andrew parry. Coming up in a few minutes well be joined by the ceo of the athens dock exchange. He is Socrates Lazaridis. Francine welcome back to the pulse. Greeces financial markets, the Athens Stock Exchange has plunged after a fiveweek shutdown. Live to the greek capital were hans nichols is joined by the ceo in his First International interview since the reopening. Over to you. Hans bank i am joined by Socrates Lazaridis the ceo of the athens stock to change. We are surrounded by a sea of red. What is the story of early trading . Socrates lazaridis after one month of the stock market closed, so we are facing every action of the transactions which is logical after one month of not having it open. As i said from the beginning, it goes up trying to find a new position of logic. Hans that new position of logic will we got to the equilibrium . The end of the day or tomorrow, would you expect it . Socrates lazaridis difficult for me to predict it. I believe we will find it soon this new environment of acceptable new environment. Hans if we look at the last five weeks, throughout europe stock is changes down. This one is down quite of it. Is it in line of what you expected . Socrates lazaridis first of all, as i mentioned after five weeks of no transatlantic trend, it was important. To incorporate the changes taking place in the International Environment of the capital markets. The environment another group of things. Hans greek buyers, retail buyers have a lot of restrictions placed on them. Is it fair . Socrates lazaridis i must mention in order to be care clear, 60 65 investors are formed. 16 is local. Restrictions go only to greeks. The distinction is use or utilize the deposits. They are available to 165 million depositors. They can utilize those areas. So, the area is related to capital hans capital controls. Is it fair to the greek Retail Investor . Socrates lazaridis it is difficult to say whether it is fair or not fair. Greek investors have the ability to use other money they are bringing from abroad. You know the greek braking system Banking System before capital controls and look at 8 billion. They can utilize. As you see, this is a buyers. Hans it gives you a sense of where you expect things to go and shake out. Socrates lazaridis and i must mention also, a discussion by ecb that the position will take place only for the short first period. Where they the new environment will be stabilize. Hans after one month, the restrictions will be limited . Socrates lazaridis it is protective. Hans that is a fair point. When we look at what is happening today, have any stocks been halted from trading . Some banks down 30 , are they technically halted . Socrates lazaridis you may know they are halting the much activity. For the pedal of time, we have extended it to 10 minutes to give time to investors and sellers to rearrange possibly. Hans have the tripwires in triggered . Socrates lazaridis of course for that was the delay in the opening. Of course, that was the delay in the opening. It is logical. I do not think it was not anticipated at the beginning. Hans are you worried about any banks or stocks or companies delisting from your exchange . Is it a concern for you and your exchange . Socrates lazaridis always an exchange wants to attract new listings to will avoid to avoid the listings. This month where we did not have the ability, it was a it was a disadvantage for us. Hans do you expect the listings as a result delistings as a result . Socrates lazaridis at this point, no. The new environment in europe where banks deliver, i believe the Stock Exchanges will be utilized in the near future. And better stronger than we of scene and the last five to eight years. Hans you were walking me through the sectors do you expect any sector to end in positive territory . Socrates lazaridis today, a difficult prediction for it for tomorrow, yes, i am anticipating. The month though falling a newly created 2012 index that the ftse, foreign traders. And this index has had a very good performance from the beginning of the year. And it is composed by stocks that have important activity and they are listing and the stock market. Has been your bullish on exporting stocks. Hans you are bullish on exporting stocks. Socrates lazaridis it is logical. I am just mentioning. Investors to follow the performance. Hans sir, we thank you. I will send it back to london. Francine hans nichols with the ceo. Pmi data add to whichs to chinas troubles. Francine welcome back to the pulse. Chinas Manufacturing Industry [no audio] back with pmi data short of estimates suggesting that economics low down the deepening. Stocks fell to a threeweek low. Lets get to beijing. With continuing volatility the downturn is deepening. Car sales are down. Ford predicting it will see fewer cars sell in china for the first time in 17 years. Bloomberg economists predicted gdp growth in the first half was 6. 5 . It is starting to look more difficult for the government to hit at growth target of 7 by years end. Francine we saw the government intervene. Do you think they will act to boost up the economy . Nick wadhams their premier said last week they would take preemptive measures. The government has left little doubt about its intentions. The question is, how big will the steps of the . So far, they have done big rings a given banks more room to lend. Focusing on pipelines underground pipelines in cities and development in the tourist sector. It was isaiah they are considering a broad range. What we expect in the next couple of weeks and months to see the big tools coming up like a cut the Interest Rate and Banks Reserve requirements which would free up more money. Francine thank you for all of that. Nick wadhams bloombergs beijing bureau chief. Why is that the bank warning on cost . We will speak to the chief Financial Officer next. Stay with us. An exclusive interview. You can follow us on twitter. I am flacqua. We had a great story on the Stock Exchange in athens and hans nichols was talking to the ceo and said the off all was logic because we have been closed for five weeks and he expects gains tomorrow. Is that true . Tweet us. Francine welcome back to the pulse. Here are the top headlines. An 18 climb in secondquarter earnings. The end of june rose to 6. 5 billion. Is selling its brazilian unit 45 . 2 billion. China stocks have extended the biggest lost in the biggest loss in six years. A gauge fell to a twoyear low. The average Stock Exchange has plunged. A host of restrictions to the capital controls. Fresh data shows greeces Manufacturing Industry trying at a record pace. Lets check on the markets. Jonathan ferro has the latest. Jonathan the continued row in the ftse 100 is the reason it is in the red. A fifth day of gains in europe. Up 4 10 of 1 . It is green on the periphery. 2 10 of 1 on the ftse in italy. To pick out some of the data a fifth straight month and contraction territory. A twoyear low. A 2009 low. That is hitting the minors in london. Iran, pledging to boost output. Brent lower as well. It is hitting the minors in london. Nothing like the ugly picture for the afc. Look at this. Down by 18 . You think things are ugly and greece, look at the greek pmi. 30s is ugly. A record contraction of a pmi index. In underscores how fragile and unstable that economy is. Eurodollar at a dollar 1. 09. The bank of england releasing its decision in the same hour. It is going to be against the euro. Mark carney, laying the groundwork to hike Interest Rates. Back to you. I know you are looking at oil and grease. Tom west texas intermediate maybe five dollars away. Some of that wrapped into greece. You know the Economic Data we see later, the United States with a speech this morning. There is ferocious push back to what the president wants to do. Francine germanys secondlargest lender has doubled its profits, beating estimates. The bank has warned that there will be more costcutting measures as it works to enjoy profitability. On the phone, Commerce Banks chief Financial Officer. Thank you for joining us. Talk to me about cost. You expected above 7 billion euros. We keep investing in digitalization for our customer segments. Do you expect the cost to continue increasing . It is too early for 2016 guidance. Can we beef up our continued improvement in such a way that we keep it under firm control. Francine do you think it will be flat . Are you concerned these may continue creeping up . We expect cost to be above slightly 7 billion. It is probably too early to give guidance now. Francine eu said the dividend depends on capital development. Any update . We are at 10. 5 now. For our Business Model, it is a comfortable ratio. We have accrued 10 cents per share. There has been more pressure on banks to get that higher. Is that why youre comfortable with it . A number of factors can be included into the judgment. Our Business Model is customer driven. We are less impacted than some of our peers. The number has reached 4 . That is something that makes us feel comfortable for the time being. Looking forward, on one hand the risk adjustment a level Playing Field needs to be the treatment of dtc, it is different in some companies. Francine if we take a step back, how concerned, or what are the biggest risks . We talked about your cost going higher. Stephan it is not necessarily easier. It feels easier. The environment is obviously a challenge. There is a certain level of cost pressure we need to measure. It is not something we are concerned about. Francine thank you for joining us. The chief Financial Officer of Commerce Bank join us in a bloomberg exclusive. We will speak to the seo of the biggest water company. Francine welcome back. Profits almost tripled. This, on costcutting and improved waste treatment. We are joined by the ceo. He is joining us from paris. You are firing on all cylinders and doing very well. Good morning. For sure, we are advanced of our objectives on the net result and the free cash flow. We will beat our objectives. It is too early to tell you how much we will beat them. We are confident we will beat them. It is a bit too early to set new objectives. We set this guidance at least 500 Million Euros for net result and 500 Million Euros for free cash. Francine you could be the financial targets you could beat the financial targets . Antoine i could not tell how much we would beat them. I could not tell you if it were 50 or 100. We are in advance. Even for free cash, we reach the goal. I could not tell you where we will be at the end of the year. For sure, they will be beaten. Francine if you are sure you will beat these figures, when will you update the markets . Two or three months . When will that figure changes. Antoine i am sure we will beat them. I do not know how much we will beat them. I could not tell you or the markets how much we will beat them . Francine why wait until the end of next year to outline your strategy. Antoine we finish this year 4year Strategic Transformation plan with of this plan deleveraging, organization of the group that we finished for one year. Costcutting, we will beat our global goal of 750 Million Euros of savings in the four years and repositioning of our business. It will be finished this year. There is a new strategy program. [indiscernible] we will have an organic growth problem. We would use all of the net free cash to the label to invest in growth and that will feel and both growth and efficiency will grow further. Francine do you feel you have delivered what you have set out to and turn around the company . Antoine yes. We could say that now. We could go carefully on a new profitable growth period. [indiscernible] francine how can veolia benefit from a Climate Change deal by the end of the year . Antoine one of the key positions is to help to treat the position and deal with the Climate Change affect. In our Energy Business first but also in the waste and water business, we have a lot of solution proposals. We could boost our activities and other means to use [indiscernible] to feel cities fuel cities. We have a strong experience in Energy Efficiency to increase the quantities of volume of energy used to reach the goal. We will push this. Francine Antoine Frerot thank you for your time. Interesting to talk about Climate Change on a day when barack obama will introduce measures to reduce powerplant emissions. Hundreds of people are attempting to reach the United Kingdom through the channel tunnel. A micro economy has emerged. Tom mackenzie reports. [indiscernible] i do not know what to say. How are you, brother . Feeling good, feeling happy. Tom what kind of food can you get here . Friday, rice, spaghetti, potatoes. You can enjoy yourself. You can come and play your cards, drink if you need something to eat, you can ask them to do it to cook for you. Just pay the money. This is our discotheque. We have a speaker. People can dance. Here, you have disco lights. Disco light. Tom what part of the camp are we in now . No school here. Only shop restaurant shop, restaurant. [indiscernible] tom the police hit you in the face . Yeah. You have to be careful. If you see police, you turn back. Time to start church. They come to pray. How old are you . 12. From afghanistan . What is your name . Francine we will have more reporting from the migrant crisis throughout europe in the coming week. Francine welcome back. For a look out what we are watching, we are joined by hans nichols. What can we expect in terms of further movement . Hans the present of the Stock Exchange was explaining it could only go up. The question is, will they end of the day in positive territory . That is unlikely. By tomorrow, you could see some stocks trading in the green. The broader story, we talk about politics and negotiations. Is it a fluke when you can have expectations bf 46 and have the number come in at 30 or an Industrial Production in athens or greece grind to a halt in july. Will they have to refigure and put the new numbers into models to figure out what legit surplus greece will have to come up with. Will this affect negotiations . Francine thank you. Our very own hans nichols. That is it for the pulse. Stay tuned for the surveillance team. You can follow me on twitter. flacqua. Manus cranny will be here with me on set tomorrow. We have an interview tomorrow. Also what we are watching for today, oil. It has had a fall by 2 in todays market trading day. This is on concern about the iran supplied trading. Manufacturing data from china points to lower demand from the second Biggest Country in the world. Surveillance is up next. We will see you tomorrow. Announcer this is bloomberg surveillance. Tom Oil Continues its dissent. The russian ruble continues a retest of march lows. Greece enjoys a one day bear market. The Athens Stock Exchange signals further depression. Forget the gloom, lets go the other way. Detroit booms. Good morning, everyone. This is bloomberg surveillance , live from our World Headquarters in new york. August 3. Im tom keene. Joining me, vonnie quinn in brendan greeley. The kids are going back to school. All the kids will disappear the fourth week of august. Brendan i am barely aware that they are there to begin with. They are so well behaved, they are likely on trap like the von trapp family. Tom here are top headlines with vonnie quinn. Vonnie good monday morning to everybody. After going dark for five weeks, the Greek Stock Market reopens today, and some investors probably wish it happened some invest