Of the morning. We will have the latest from the egyptian capital. So were less than 30 minutes now until the European Equity market opens. How do we think its shaping up . Negative. This is the impact of the fed minutes, rippling through asia and the effect in europe. Looks like we will get a negative start. There are duties in the market today, down by a tenths of 1 , on the fairx lower value calculation. Why . Let me show you. This is the work function crest go and you get a whole lot of other asset classes. This is whats happening on the work function, and what it is showing you is what was only a tiny fraction a few days back is now at 32 . The june selloff could be july because we have brexit in the referendum in june, but we will watch carefully how it works its way through to the market. Lets get you caught up among me you need to know what the bloomberg first word news. Haslinda an egyptair plane headed to cairo with 66 people on board has disappeared from the radar. It was operating an airbus a320 and took off at 11 09 local time last night. The airline says the pilot made a distress call before communications were lost at around 2 45 a. M. Cairo time. Movies has lowered maldive oodys is accounting for a week First Quarter, rising 2. 3 in 2017. They say the more pronounced slowdown in china is a big risk and that the outlook across countries remains an even and largely weaker. Monsanto says it has received an unsolicited offer from the takeover from bayer. They say the proposal is nonbinding but has not given more details. The offers about 42 billion. Bloomberg reported that bayer was exploring a potential deal to create the worlds top seeds and Farm Chemicals company. Global news, 24 hours a day, powered by our 2400 journalists in more than 150 news bureaus around the world. You can find it more stories on the bloomberg at top. Guy thank you very much. Just to say, if you are following the egyptair story this morning and you are a bloomberg customer, take a look at top live. Details onthe latest what exactly is happening surrounding that story. We are waiting for more; i think that is probably the main issue. Lets move on to one of our big corporate stories. Deutsche Bank Investors coming together, the first since john cryan took the invesco ceo. Gone fromr has berlin to frank for an joins us now. Matt thanks. With anding here 7 10 ofder about a percent in Deutsche Bank. The main question is how will you be voting . Your vote of confidence for john cryan, for paul at lender . We vote against the old management as we believe over the last decade many things went especially from the new ceo who is in the right position, the right man to restructure the bank. Chairman, you are going to vote for him as well but with reservations . Yeah. Overall, the Supervisory Board did a good job as they reshuffled. In addition, their exchange dimension last year some dark , a dismissalpast that should be done internally and not by the media. In general, in our opinion, they did a good job. Matt you are going to hold a speech in there, pointing out they did three Capital Increases and yet their market cap has shrunk to 20 billion. Do you think they need another Capital Increase . Will you address that . Time will tell. Overall, for investors, when you invest in Capital Increases and the stock is only about 20 million we have to wait and see we have to wait and see what is going to happen and also have the restructuring is going, then we have to decide whats going to happen. Matt the litigation continues. Lawsuits racking up billions and billions of dollars in fines and costs. How do they put an end to that . What can they do to stem those lawsuits . First of all, they have to stop new litigation. You can stop the old ones, thats clear. Stop new litigation with Compliance Systems and everything around logistical issues. The biggest question is how much provision is taken for the current litigation and how much additional money do they have to take to get litigation off the table. Matt what can they do as a bank to go the right direction . A lot of people are saying to dissolve is the only choice i cant imagine the client would choose Deutsche Bank as half the staff is out the door. Is a tough question, and an important one. First of all, john cryan has to reduce costs and we should also think about the employees not just the Investment Bank but the entire Deutsche Bank. Its a tough decision and they have to be kept and multirated with the potential earnings they. In addition, we have to think about the Capital Allocation and maybe allocating capital in regards profitability. Matt thanks so much. He will give us a speech at the shareholders meeting. Did i call you manus earlier . Guy i am sure that would be an honor of which i am not worthy. Matt im sorry. Theres so much going on here. So much going on right now, a little bit of confusion. Guy weekend move on, dont you worry. Up next, the fed talks june. We will look at the fomc minutes, and the chance of a hike next month. Guy 20 minutes to the market open. Lets talk about how the day will start. We do have hsbc and royal dutch shell, both going to dividend in london, so be aware of that. London looks like it will open softer, down by nearly 1 . Dax downn 3 10 of 1 , one half of 1 . It looks like it will be a softer story this morning around europe. Lets get you caught up on what you need to do with the Bloomberg Business flash. Tesla is to sell 1. 4 billion in stock to help pay for an expansion that includes its forthcoming model 3 electric car and boosting annual production to half a million vehicles in 2018. That will be about 2 billion with the rest of the shares to be sold by elon musk to cover tax allegations in stock options. Suzuki has recovered some of the losses of effort yesterday over improper fuel economy testing methods. After yesterdays market closed, the carmaker issued a statement withg it retested models appropriate methods and found the data to be within acceptable ranges of deviation. They told the government it found no evidence of data manipulation. Mark zuckerbergs has met with political conservatives who are concerned about liberal bias in his newsfeed. Week claimst facebook editors have deliberately downplayed conservative sources on the trending news feature. Zuckerberg says he wants to do everything he can to make sure his teams uphold the integrity of facebook. And that is your Bloomberg Business . Business flash. Guy we are already caught up on the latest with the missing egyptair flight from paris to cairo overnight. If you want to follow the latest on this story, go to top live, where we had the latest updates on the story. Cited sayingeing that it appears the aircraft has crashed. Militaryve egyptian and forgets arriving in the area. At the moment, we have more questions than answers. Coming up after the break, we will go to germany. We will talk to merck, this family business. What is the future . How was it integrating . Key questions on cost, still to come. We are called lower but we will talk to merck, next. Guy 7 46 in london, 8 46 in germany. Merck has reported firstquarter profits that were better than estimate this morning. One of the three divisions doing well. We are joined by the cfo of the company. He joins us in a bloomberg exclusive. Good morning to you, sir. Lets talk about sigmaaldrich. This is a key question that all investors are watching when it comes your business the integration, how is he going . Good morning. The integration of sigmaaldrich is going very well. As you know, we have consolidated sigma in the First Quarter of 2016, and we have for the first time reflected in our numbers. The integration is fully on plan, and we will also deliver on the synergies that we have forecasted for 2016. Guy do you think you may start to exceed those estimates . Do you think the benefits of buying this business could be greater than you assume . At the moment, that businesses are going very well. To make a precise forecast, whether we will be able to exceed in 2016 but so far we are on plan and we will most probably talk later this year in a bit more detail. Guy where are the savings coming from exactly . The savings at the moment are predominantly coming from the area of infrastructure and administration. Through how ite is going to work. What does that mean in reality . Its too early to talk about that, so we will inform if we have news to tell. Lets talk a little bit about the pharma unit. Progress there how would you describe it . You have pharmacology and how doy as a focus you see performing and what will the next . Division,health care we had a good start to the year. Our biggest franchise has seen good performance in the First Quarter, especially holding up well in the u. S. Despite some competitive pressure. Oncology was our second biggest product. We have a much better start in 2016 than one year ago. All the other franchises predominantly are growing well behind the Dynamic Growth in the emerging markets. We are on track with our Strategic Program with our antibody. We will release in due course more information and data. Guy lets talk about immunotherapy and whats happening in the oncology spectrum. You have a relationship with pfizer. Do you think thats the area that will be the prime driver . It is theely, strategic priority going forward. Immunoncology has a big part in our strategic operation with pfizer. 2015, we entered with pfizer with 20 Clinical Development programs. There are additional studies, and we are continuing that way into 2016. Guy do you think this is the model now . This is the way he will pursue Drug Development . Obviously, partnerships and strategic weels are good for us, and are carefully evaluating further opportunities in that field going forward. Guy the cfo of merck, thank you very much for your time. Congratulations on the numbers; we look forward to hearing more details. Of our other big stories the Federal Reserve saying officials want to raise Interest Rates in june. Now it is up to the u. S. Economy to confirm the views. The slow growth in q1 was effectively temporary. Minutes of the fomc april meeting used the word june 6 times in a policy context. Oft follows several warnings not dismissing a midyear hike as they moved close to zero. Jonathan bell joins us now. Why did the market this crisis . Has it . The news coming out at april , sowe are going to hold off the market was hearing what the fed was saying, we will because if and data dependent. This is not only yesterdays fomc minutes but what we have heard from previous speeches and will probably here later today. Data has got slightly better. They were data dependent and as long as there is no shock, it looks like there will be a rate rise either in june or july. It, and nowxpecting it is 32 . Almost a 50 chance you will have one in june or july. There has been a big shift in market sentiment. Guy would you say july is more likely . In june, there is so much happening. The brexit referendum, the boj, whole bunch of stuff. July may be a safer bet. Well, at the moment, that is what the market is thinking. Either that or you wait till later in the year. I would have thought that unless there is something really jobs, growth, inflation the market reacts badly. Thats what happened in january. On thethe market setback back of an Interest Rate rise. It started to worry people initially, and you could see that again if we get a market setback. There has been a little reaction, but not significant. At the moment it is telling you june or july. Guy i dont understand. The market is looking pretty calmly at this story. European equities open a little softer, but i the beginning of the week we were at 4 . There is something missing here. Those two things are not connected. You see whats happening with the u. S. Curve front end is coming up, and the back and staying where it is. Where is the best price . There must be one. It has changed quickly. More overhave moved the last 10 days but we were , two orhawkish comments three rate rises this year, and you cant have that unless you have the market perhaps was a bit slow to pick up. Its because of this data dependency issue which was going back to what was being said in april. The market saying the data hasnt changed that much. Theres a little more good news in terms of consumer spending, but q1 seems to be a bit of an anomaly, and growth is picking up. But it wasnt yet significant enough that everyone was saying guy but we have full employment and inflation close to target. Well, that was the case at the beginning of the year. We saw the first hike in december, and of course that scared the market quite considerably, so they had to hold off for a bit until markets digested it. It may be that things are picking up in the market can take it. Guy if the fed hikes in june or july, what happens . Talk me through the Market Reaction. The market is likely to have a shock, but what we have got to accept is that rates are going up. It will be over a protracted period. This is not the period where you raise rates and then raise them again the next time. This is a slow process. When you are looking at 10 year bond yield, you know where they are today, and you know that in for five years they will have much higher Interest Rates, and there has to be an adjustment at some point, but you dont want it to happen to rapidly. Is tryinge looking at to manage market expectations. Guy jonathan will stay with us. Jonathan bell, the cio stanhope capital. Thank you. Coming up, what is happening with the market open, next. Guy good morning. You are watching on the move. Here is your morning brief. Following last nights minutes, the market prices and the possibility that the fed might raise rates in june. Shares are down more than 50 since the last agm. How russ ough a ride will management get today . Flight is missing this morning. The latest from the egyptian capital. Lets talk about how this market will develop. It looks like this will be a negative one. Fomc, pointing to june or july. 0. 5 . L that remember, hsbc and shale both ex dividend today. This i ths the market open. It looks like we will see a negative start. The cac opening up soft. The ftse 100 opening up soft as well. We are going to push down from there. Germany might take a few minutes to develop. But the ftse 100 is down down 0. 5 . Lets see how the details are developing around the open with nejra. Nejra i am looking at how the different Industry Groups are opening on the stoxx 600. europes equity benchmark is not looking as buad as it was in asia. Energy is down. 9 . Health care is the only Industry Group in the green at the moment. Lets take a look at some of the stocks we are watching. A lot of mma in the news. I will start with the facts we heard from santo today, thing they got an unsolicited purchase proposal. Bloomberg news was reporting about the possibility of this deal a week or so ago. It looks like buyer shares might be lower. They were called lower by analysts ahead of the open. We dont have any more financial details from this deal, but monsato has a market value of 42 billion. With a premium, a buyers takeover could surpass chemchinas purchase of syngenta as the largest acquisition globally this year. This industry has liberty seen 84 billion of has already seen 84 billion of deals this year. Fmceard that technip and have signed a memorandum of understanding for a stock merger that would create a Company Worth 18 billion. Ofhnip would get two shares the company for every technip share held. We are still waiting for technip to move. Moving higher as analysts predicted. Guy . Guy thank you very much indeed. The market is open. How will it go from here. Isathan bell from stanhope rejoining us. I think that was a mild open, given what we got from the fed last night. Jonathan we were talking earlier, has the market price in the rate hike, but the market is excepting it, however. That means it is more likely. Fulfilling. Y is so is self fulfilling. If the market can handle the raise, then the fed will do it. Guy we talk about being data alsondent, but we are market dependent. Jonathan well, markets are self fulfilling. Consumers worry about spending and businesses worry about investing. So, it is a self fulfilling prophecy to that extent. Guy does the fed or ecb how does it work in terms of that relationship . Jonathan the ecb cannot go down the route the fed can. We are still going to see further qe continuing in europe, as we are in japan. Japan will have to extended as well. There is a difference between what is happening in the u. S. , where the economy is returning to normal. Remember, in the u. S. , they talked about growth, jobs and inflation. Those need to be under control. In europe and japan we have not got that. So, europe, youve got to the policy study for quite some time. Guy what i think is interesting and we talked about this chart yesterday on the program. This is the eurozone and this is the economic surprise index. The data has been Getting Better since mid february on aggregate. U. S. Investors have decided that the data has nothing to do with europe right now. What changes that . Economically, we are starting to get more traction. Jonathan you can go back to what is happened economically over the last four to five years in europe. You have seen the economy recover, but Earnings Growth has not come through. That is the problem for equity investors. The Earnings Growth has not been there and the Profit Margins have not recovered in the same way they have in the u. S. Yes, we have had a pick up, pointing to the pickup we had recently, but until these th until we see it in Earnings Growth, we wont recover. Guy you think that is coming . Jonathan it is coming. The u. S. Has had its Profit Margins peak. Europe is still kitchen sinking by the banks. But i think what we will see is the potential for margins to pick up. For european equities by comparison to the u. S. , they will look attractive. Low expectations that earnings can pick up and secondly, you are paying a lot lower multiple and you are with the u. S. Guy stay with us, jonathan. Plenty more to come from him. Up next, we will talk about what is happening in germany. We are going to go to frankfur s to talk about Germany Biggest Bank under pressure. The stock is down 50 since the last gam. We will talk about what is happening there with matt miller and john cyer, what is he going to say today. That story, next. Guy welcome back. Eight minutes into the market session. Lets talk about what has happened with the equity story thus far. The dax is now down by 4 . Were going to talk about deutsche in a few minutes time. In terms of where you can see the real heat this morning, the Mining Sector is very much off the pace. That is one of the reasons london is expert forming. There were a few extra evidence in there ex dividends in there as well. Oil is trading lower. Copper is trading down by 1 as well. You can see the brent story continuing to fade. We also need to talk about what is happening with bayer as well. The monsanto news overnight seems to be electrifying that stock and it is trading software. Bayer is down by nearly 7 this morning. Lets turn our attention back to another stock in germany. And what is happening surrounding Deutsche Bank. Its agm is in frankfurt today. We are waiting to hear exactly what kind of a story we are going to get from that. Matt miller will be joining us very shortly to talk about that. In the meantime, let me get you caught up with the bloomberg first world news. Reporter guy, egypt has deployed naval ships to search for an egypt airplane that went missing overnight en route to paris. 66 people were on board. A distress signal was sent at about 2 30 a. M. Cairo time. s appearance follows a string of aviation related incidents. Federal reserve officials want to raise Interest Rates in june. It is up to the u. S. Economy to confirm the view that slow growth in the First Quarter was temporary. Minutes of the fomcs april meeting used the word june six times. That signal follows several speeches by the original fed Bank President , warning investors not to dismiss a mid year hike after the odds of such a move eding closer to zero. The growth forecast has been lowered for the year to come. This is 2 , down from 2. 3 . , that is the count for the week, the First Quarter. They see gdp rising 2. 3 in 2017. A slowdown in china is a big risk and the outlook remains uneven. Shares are lower this morning. They received an unsolicited take from the german company. They said the proposal is nonbinding, but they have not offered any more details. Is 42os market value billion. This month, bloomberg reported that bayer was exporting a potential deal to great the worlds top seed and pharmaceuticals company. Monsanto failed last year with a 46 million bid for syngenta. Global news 24 hours a day, powered by 2400 journalists in more than 150 news bureaus around the world. You can find more stories on the bloomberg at top. Guy . Guy thank you very much. If you want to follow more on what is happening surrounding the missivng egypt air aircraft, you can follow the life block of that event. The latest story we have surrounding this is we now know there is a press conference scheduled at 12 30 london time. Lets get back to the Corporate News in europe. Deutsche Bank Investors are gathering today for the lenders agm. This is the first since jon cryer took over. Matt miller now joins us from frankfurt. Matt . Matt guy, indeed he will be a solo ceo from now on after this meeting. There is a lot of trust being placed in him here. There is a vote of confidence that happens at german shareholders meetings. The management members and the apervisory board might give low vote, enough to keep him in. But the shareholders are angry because they lost 50 of the value of their shares over the last year. Jon cryer on the other hand, as the new incoming ceo, is going to get a vote of confidence. Shareholders are much more behind him, as far as his turnaround plan. Indeed, they have no other choice, right . This bank is stuck between a rock and a hard place. It is losing money by the billions every quarter six or 6 billion or 7 billion each quarter. It is also getting sued left and right. New milliondollar and billion dollars suits come in every few days. This morning, we learned about a new classaction suit for a fixed income market. So, real problems for Deutsche Bank and this will be a long day for shareholders. This is so they can figure out a direction in which to take this bank. Guy matt, you look at the bloomberg and you look at what happens with this stock and the value at 0. 3, which is a stunningly low number. Will shareholders be prepared to put their hands in their pockets if there is a capital call . Is that really what they are coming to find out about . Matt that is exactly right. I mean, that is the main topic at hand. Will they have to have another Capital Increase after the last three raised about 22 billion euros. The shares have dropped and left only 20 billion euros in total. To raise be asked money again. Most of the investors i have spoken with think in the next 12 months. But one of the other main topics be removed duration. Remuneration. A lot shareholders will be happy that they have lost so much money. Guy great stuff, matt miller joining us out of frankfurt. Turning to the deutsche agm this morning. Jonathan bell is still with us. Lets talk about the european banks. Let me get this up on the bloomberg. This is the anr function for Deutsche Bank. If you buy still on Deutsche Bank, that is the green at the bottom, but thee share price has gone down. If you were an investor, would you put your hands in your pockets and say, i am prepared to give management mark capital . More capital . Jonathan if you are an investor, to protect your investment you either have to give more money or get Something Else to. The problem is, they never really got to grips with the problem after the financial crisis. They never raised sufficient capital to be able to recognize a nonperforming loan that they had is close to a zero Interest Rate environment. At some point, those things just slowly come out of the woodwork. And so, they still have a nonperforming loan problem and still have more work to do. They still have to raise more capital. Guy thanks in your banks in europe should be the big player. In theory, you should say, iw an want to play the banks. Jonathan they are not really in the position to play their businesses yes. Banks in europe, they are still slightly on hold. That is the problem the ecb has had. The banks have not been able to pass on the credit to get the lending the ecb would want. Guy whose fault is that . Is that managements fault or the regulators fault . Jonathan we come back to regulation. The regulation had a tough position. Do you scare people by telling them the banks are not solvent, or, do you let earnings slowly repair the Balance Sheets . That is what the ecb has allowed them to do. The regulator is complicit with management. Guy is deutsche a special case . Other Investment Banks, other uisse, ubs,its they have other ways to reshapes the portfolio. Jonathan there are clearly banks that are able to withstand what is going on, they can withstand the crisis better than others. There are differences, but it is a pan eurozone banking problem. The u. K. Has been slightly better at raising capital earlier, writing off loans quicker, not as quickly as they but they are one stage further than the eurozone banks. When we are talking about the recovery in europe, hopefully we can say, we are getting towards the end now. But we still have to recognize nonperforming loans. Guy have european Investment Banks been beaten fair and square by u. S. Investment banks . Jonathan they have one hand tied behind their back in terms of what they can do. You are heading towards that route, clearly. The big global Investment Banks in the world are now u. S. And europe is struggling. As flat ass. Curve it has been since 2007, until that steepens up, do you think banks will struggle . Jonathan the steepiening does help them. In the u. S. , it should be rising. An an we are in environment where Interest Rates are rising very slowly, but you should have a steepening yield curve. In europe, it is still very difficult. When we see the ecb this afternoon, you will see that low Interest Rates have a long period to come. Guy thank you for sharing so much of your time this morning, jonathan bell. , we go to cairo for the latest on the egypt air flight. That story,m next. Guy welcome back. We are 22 minutes into the market session and we are trading at session lows. Equity markets are edging low. It is now turning into a bit more of an aggressive selloff. This is all in light of what happened with the fed. A big Market Reaction to the downside makes it less likely that we get a fed move, and vice versa. The Mining Sector is really taking it on the chin this morning, which is very understandable. Think about the dollar and where the commodities come in, and that makes sense. Lets talk about the stocks this morning and then talk about how it is going to work these ovis a vis, the fed story. Bayer is down 6. 53 . Everything else is reasonably related to the fed, or the stocks going ex dividend. Negatively and that might be on a Capital Raising concern. Let me show you what is happening with the work function on the bloomberg. So, the beginning of the week, the possibility of a rate hike in june was that a staggeringly low 4 . We are now at 32 . The probability of getting a july hike is significantly higher. The market is looking at june and july, try to make up its mind. July is now looking increasingly possible. The prospect of a rate hike by the end of the year is beginning to ramp up bu. This, you need to Pay Attention to. It will be interesting to see how this ripples out to the other asset classes. Equities trading in europe at session lows. Lets go to one of the big stories outside business now and get the latest on the egyptair plane that disappeared on its way from paris to cairo. We dont have that many details. We are now joined by bloombergs north African Bureau chief. What do we know and what do we need to know . By now, we need to know a lot more than we actually know. There is not a lot of information that has been confirmed, aside from the fact that the plane has gone missing. Egyptair said it disappeared shortly after entering ejection airspace. The Egyptian Military has launched a search and rescue operation. It is not clear yet, what may be behind the disappearance or what exactly happened. We only know the number of people on board, and the fact that they lost radar contact. Nobody is ruling out any possibilities either on the egyptian side or the french side. Guy we are seeing the travel operators here in europe Share Price Fall sharply this morning. This follows a series of other events. What will this do to the egyptian Tourism Industry . It is not something they will welcome. Their tourism figures are down 45 since last november. That was triggered really after the metrojet crash over scion nine at the end of october sinai at the end of october. That has compounded a foreign currency crunch in the country that is really leading to a pretty vibrant black market here, where the pounds Exchange Rate versus the dollar has widened. It is not a good situation for the country. Guy thank you very much indeed, joining us. Thomas cook trading at 52week lows. More on this story when we come back. We will also talk about the brexit. Guy welcome back. You are watching on the move. We are 30 minutes into the trading day. We are softer, and trading your session lows. There is a look at what the fed minutes had to say last night. The egyptair plane also being priced in right now. This is pushing the red. Lets find out which stock stories we need to Pay Attention to. Nejra it is a day of doubledigit moves and there is nothing like abit of mma to get things moving. Techbit is the best performance, up 13. 5 . The shares are up the most since 2008. This is after technip and fmc said they would merge to great a Company Valued at 13 billion. We are talking at a. Merger. Will geters at technip two shares, while fmc shareholders will get one. Speaking of mma news, we are seeing bayer down today. The shares of hit their lowest since 2013. Of course, Bloomberg News did report earlier this month the bayer was considering a bid for monsanto. We have heard from monsanto. They did receive a nonsolicited proposal. We know that monsantos market value is 42 billion. This is within the Global Chemical industry that has seen 84 billion of deals this year alone. What is really interesting is according to bloomberg data, with a premium, a takeover of monsanto could surpass kim chemchinasrpass purchase of the junta. Purchase of syngenta. Moving onto thomas cook, shares are down the most since 2014. We got numbers on first half net debt. We also got a first half preta x low. The outlook has come in a bit poor, and they share price might be moving on that missing egyptair flight. Guy i think income nation of those factors coming in will affect the numbers this morning. Thank you, nejra. Speaking on this show last week, kenny denied his country was looking to capitalize on the eu referendum. Know, we have not been actively courting the possibility of a further investment here if britain were to leave. Those who wish to invest in a country like ireland know phil welby opportunities we offer. In the last number of years, we have had extensive investment from the banking financial services. Guy there was courting to be done. It would be done by the man who is sitting next to me. Good morning. Nice to see you. Look, your job in some ways is to get out there and sell ireland to the rest of the world. Countriesss, are coming to you and saying, if this happens, can we come to you . Clearly, ireland will be attractive place to invest at the moment. Clearly, the competition is between britain and ireland, even though over the last decade we have seen ourselves on the same team. So yes, it is game on. I agree though, i dont think people are using the event itself. The damage of britain living fundamental for everybodys Business Model. Guy precisely. Lets talk a little bit about though, what could happen. In terms of, are you ready . If it were to happen, could ireland absorb this kind of business influx that could come . I dont think so, to be honest. The economy is back near its full capacity in many ways. Guy precisely. Letswe have a lot of deficits n infrastructure and housing. We have to build as well and that is one of the things we have been pressing at a european level. We need some room on fiscal levels for investment purposes. One of the things the Irish Community has said is, our population is increasing, we have had huge growth last year. In value terms, gdp rose 13. 5 . The debt to gdp ratio has fallen. We now need the capacity to absorb greater investment. Guy the u. K. Is a substantive economy and in some ways, the rest of europe is not. There are clearly, huge parts of the area that are service driven. Serviceushing to the sector, making it work and deliver on the promises. Presumably, ireland would benefit as well. Indeed, we would, but we need britain there. The Business Model in ireland is very similar to the u. K. We are both open to globalization. Who owns the capital is not the issue. Defined Foreign Investment has been a great driver over the last 50 years. In the last 10 years, the cameronosborne nexus, has really opened us up. Britain has gotten much more aggressive on the Corporate Tax run, also in terms of offering on capital gains. The new Irish Government needs to be on their game now to make sure that a gap does not develop int han that regard. Guy if i brexit what occur, most people i talked to said the pound would go down. That would hurt us immensely. We just had numbers up this morning. Business sentiment is coming from incredible highs, but still down. This is already having an impact. Guy lets talk about the new government you mentioned a moment ago. They are talking about all kinds of things. That has got to make business nervous. That kind of intervention from government is not something business likes to see. Exactly. There are holders out there paying high mortgages, at least relative to those who have the fixed rate. We really do want to get the banks out of Public Ownership and functioning again. I think this is distorting the story. Dont think this fundamentally will happen. I think the government will hold the line on that, but it shows populism coming in that does make business nervous. Guy is irish business benefiting from what the ecb is doing . That is a fundamental question. We are, but the monetary transaction function is not working as it should be. We are paying for extensively for their loans. Guy a single area. Absolutely. So, it is not working. Guy up next, the bloomberg exclusive. Manus cranny as spoken to kuwaits finance and acting oil minister by the budget gap caused by the oil from. Oil slump. Guy 8 40 in london. Bloombergthe business flash. Reporter shares in technit have jumped this morning. It could merge with a 13 billion tie up. The deal will be shareholders with technip tgget two shares, while fomc investors will get one share. They will deliver the 4 million in annual pretax savings in 2019. Firstquarter profit be analyst estimates. Andings before taxes, excluding rose 27 to 1. 1 billion euros. And a suzuki has recovered some of the losses it severed yesterday over its admission of improper fue economy testing methods. The carmaker issued a statement saying it retested models using appropriate method and found the data to be within acceptable range of deviation. Felt little the government had found no evidence of data. Little conservative have accused facebook of liberal moves. Big loop included tea party figures. The group included tea party figures. Deliberatelyebook downplays conservative sources on the trendingn news feature. Zuckerberg says it wants to do everything we can to make sure facebook maintains its integrity. That is your Bloomberg Business flash. Guy lets get to kuwait. There is a budget gap after oil revenues slumped. Manus cranny spoke to the countrys oil minister and acting finance minister. Manus you have an amazing oil business. Do you see the possibility of selling part of kpc . Not kpc, no. That we are talking about the services. Upstream, downstream, we are not yet ready to action on properties. But on the services, psp are thinking o yes, we are thinking of that. Manus nobody escapes the bloomberg chair, not even his excellency. I need your prediction for oil this year. 50 a barrel is the expected price for 2016. Manus if we get a phrasfreeze, can we make 70 . We will talk about this when we get a freeze. [laughter] manus well done. Remember the sovereign wealth funds, that is where i spent my very initial years. You have the second largest fund in the world with 500 billion. It is for a many day. It is for a rainy day. The world wants to know, are you adding money to kia, are withdrawing money . We are doing good. Manus i need to know the [laughter] seriously, we have used some theur two millions tons in futures, the future generation funds. And the general reserve. We have used some of the general reserve to finance our budget. This is no secret. Yet, what ever the coming budget and existing budget, we calculate, we deduct 10 of our income, whatever it is, we transfer it to the future generation fund. This is why i tell you, we are doing both. Ejecting, and and taking out of it to finance the budget. Manus a couple of questions for you. Takee hearing, you might 100 billion and put them into a special vehicle and fellows off . Off . D sell those we are just putting some ideas on the table. Manus the market, this is how we are going to finish. It is what i love, it is what i do and it is what i look to talk about. For you in the kia, what is the big focus . The norwegian are going towards real estate, looking at equities. Where is the big shift of focus. We have been in real estate for a long time. Manus would you shift it . I am just try to get a sense of the next move for kia. We are doing everything. Kia is involved in so much with the market. We are doing it as per the book says. We dont buy an asset because it is a landmark. Asset because it gives us our target returns. Muchg said that, we are so we are available internationally. T of thosees, mos major cities, we have a good foothold. Our interest now is within the infrastructure projects. Iia has been actively think the last project, and it was publicly announced. The london city airport. And we have Strategic Partners looking for opportunities internationally. Guy manus cranny joins us now from kuwait. Manus, what is the single biggest takeaways from this conversation . Manus the biggest take away is this. That man runs the oil ministry. He runs the economics of this country. My sense is doha was very constructive. We are underplaying the construction. He is optimistic about going to eopec in june. He is the chairman to the sovereign wealth fund. They rarely speak. He is going to plug that deficit, according to him. He is a cutter and slicer in terms of subsidies. He is going to balance the books by 2020. He is a very determined man. That is my take away. Also, he seems to trust his counterpart from russia, that they would play ball in an opec nonopec agreement. Guy thank you, manus. Lets fgo further north. According to an unnamed airport source according to the disappearance of the egyptair aircraft. The aircraft is reporting to have crashed within begich and airspace according to afp. At happened apparently just off a greek island. We are going to get a few more details on those stories. We will get more in a moment and continue to monitor this story and watch out for exactly what happened, but those of the details we are getting. 8 48 in london. There is a 12 40 news conference. Remember, if you want to monitor this story, top live on the bloomberg. Button. Top more on that story when we come back. Guy eight minutes until the top of the hour. Breaking news about the missing aircraft, egyptair flight ms804. They are now hearing from the egyptian aviation minister. He is now commenting on egyptian television. What he is saying, and this is clearly indicative of where the mindset is moving right now, he is saying it is too early to call this an accident. That we have learned from afp is that it did crash in egyptian airspace and aircraft appears to have crashed off the greek island of karpathos. We will get more details as the day progresses. Pliv is what you should go if you want the latest on this on y our bloomberg terminal, a fantastic function. See all of the events there, be they fed minutes or the disappearance of the egyptair aircraft. Let me show you some of the trouble stocks around europe. Remember, numbers came out this morning. That story surrounding the numbers is partly being reflected in the stock, but we can see a broader weakening in leisure 600 travel and sector. Line withetty much in market performance. Airbus is trading down by. 6 . Number, it was an airbus aircraft being used on ms804. More on that story as we progress. We are working towards a 12 30 news conference. Here are some other things you need to Pay Attention to. Deutsche Bank Executives are set to face investors in a few minutes time. Then, we get a decision from the South African centralbank. We then get updated on the russian gold and Foreign Exchange reserves. Them, William Dudley is due to deliver a speech on macroeconomic trends. That sounds interesting, it is more interesting in light of the fact that we had the fed minutes last night. That is changing Market Pricing this morning. Bayer shares are also changing Market Pricing this morning. They made an unsolicited bid for monsanto. Nejra has only need to know. Nejra the initially heard from monsanto that it had received an unsolicited offer from bayer bayer has confirmed that, but we do not have financial details. We do know that monsantos market value is around 42 billion. As you say, we have seen bayers stock price tumble on this. This coulde saying be because a Large Purchase companysh on the credit rating. We reported on the possibility of this deal and there was speculation that bayer might have to sell some units to fund an acquisition of this size. Interestingly, our data shows that with a premium, this takeover of monsanto could surpass chemchinas purchase of syngenta as the largest acquisition this year. That makes sense, given that that deal was valued at 43 billion. If this does go ahead, it will be the latest in a record string of deal. Guy how likely is this to go ahead . Nejra as always, this could come across regulatory hurdles. Regulators have really honed in on a number of industries. We have seen some deals in the past few weeks hit stumbling blocks and fall apart because of regulators. Interestingly, analysts have told bloomberg that although monsantos management might forse this deal, it is ripe a takeover because it has been facing a lot of challenges. The share price has gone down my 2 . The earnings forecast has been cut. It is locked in disputes with argentina. it is the Worlds Largest global seed company, but it is reliant on seeds. Guy we will continue to monitor this stock. We are going to take a break. Throughout the morning we will continue to monitor for you the development surrounding the missing egyptair aircraft. Customers can go to top live on this story. The press conference we understand, is scheduled for 12 30. We will bring you all of the headlines surrounding that story. Stay with us. The pulse is next. Jon ferro and i are on the radio.
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