On. The sky is the limit. Pounds. Offers 12. 50 the question is, how will fox respond . Lets talk about these markets. We await Jerome Powell. Remember, janet yellen boost the market by six basis points on her first address to congress. We will see what was the powell does later on. The fair values here in europe point to a positive start. There are good individual stock stories out there. Dont expect much movement. Keep an eye on sky. Keep an eye on german stocks. A diesel ruling coming up later on. Standard chartered is standing is trading well. That is going to be an interesting story. The Hong Kong Market is trading softer. Lets show you what is going on in asia. Lets show you what the gmm looks like. The Chinese Markets are softer. The csi is down. This follows the move yesterday on the s p. Probably a little more cautious today with the nikkei trading up by 1. 1 . There is an interesting mixed market at the moment as we prepare for what is going to be the story with Jerome Powell. The are fascinating stock stories. We are going to be delving into. We are going to talk to basf doing this program. The story surrounding what is happening in energy. What that means for the chemicals market. Frome going to be hearing it is not all about the fed today. This is the u. S. 10year yields at the moment. We are trading some 3 . We got a long way to go. Yellen moved the market by six basis points. It would be aggressive by mr. Powell to move the market more than that. Meantime, when we get back to this into banks, we will be doing a lot more later. Lets get to abu dhabi. Global leaders have gathered for the forum. Erik schatzker is there. Over to you. Much. Guy, thank you so mubarak. With good to see you. Thank you for having us here. Let me begin with the news of the day. One of your largest investments, emirates global aluminum among the largest aluminum purchases, but it results this morning. 60 . T is up he was what i would like to know, why is that such an important milestone . Guest this is a company that has a rich history. 40 years industrial champion from the uae. It is a company that is a result of a merger between emirates aluminum and dubai aluminum. This company is now the largest exporter outside of oil and gas in the united arab emirates. One of the largest employers in the uae 50 by the government of the by. Left. The bond it is a partnership between abu dhabi and dubai. There was a history for this entity. It is a global player. It is a company that we for virtually about. Info about the future. Erik the future of all supposed offering. This ipo is not take place in 2018. Anyone who is taking a company public, that is sensitive to market conditions. Natural Resource Companies are trading at the highest body wish and. Highest valuation in seven years. The company is wellmanaged. Go just khaldoon , 24 6on we produce billion [indiscernible] this year we posted a 1. 8 billion in even the. We instituted a dividend. The company over the last couple of years has been working very well to get to this point where we are ready for an ipo. I think the time is right for many reasons. The market is in the right place. Will it happen in the first half . We are confident we will do it in 2018. It depends on the market conditions. It is difficult to get the specifics because we havent made the decision. Erik lets talk about some of the parameters. Khaldoon that is what we are debating. I expect to make a decision in the next couple of weeks. Erik 3 billion is the number previously. Khaldoon i think we will be around that. Erik where is it going to trade . Khaldoon that is a very important decision. Yet to decide yet to decide where. These are the decisions we are in the final stations final stages. Erik is it better for the stock to trade in london . New york . Only here . Calton koike want what is best for the longterm. Calderon koke i want what is calderon what about abroad . Khaldoon we are going to make a decision soon. Erik what kind of investment posture do you have in 2018 . Are you focused on deploying cash or harvesting cash . Khaldoon the stages many of our business are in the right place. We have done a lot of that. We would more of that in 2018. Newill pour capital and sectors in new sectors. [indiscernible] biotech, agriculture. Erik what other companies of yours might be ready for it an initial Public Offering . Khaldoon [indiscernible] erik what sector . Khaldoon [indiscernible] erik you are a Development Company and investment company. When he took about rates of how much rate return are you expecting . Calderon we look at benchmarks calderon koke we look at that is one of the Biggest Challenges we face from a risk perspective. Where a longterm investor. We are a longterm investor. Erik how much capital will move bottom line flow in 2008 will move by the last flow in 2008 . Khaldoon it depends on market conditions. We have a decision we married in terms of investments. In the next couple of weeks you will see [indiscernible] monetization. The question here is erik [indiscernible] khaldoon i am not at liberty to disclose that now. Erik i dont know what substantial means. Many billions of dollars . You have maintained a cash position. Are you interested in working that down . Khaldoon we have a strategy. We have a minimum threshold. Erik people are interested in knowing what youre doing for technology. Softbank15 billion in you have put 15 billion in softbank. Makingvestments are you to establish that . Khaldoon technology is now a priority for us in lou barletta move bottle a. Web deployed 500 million of that already. Important were working on the policy. It is given us a lot of access. Us thatnew sector for allows us to set up a new office. We started a small fun there. Erik have you made a couple of investments at . What should we expect in the future. Khaldoon [indiscernible] erik how much money heavy set aside to do that . Khaldoon this year . Erik i want to thank you very much for spending time with us. Guy, that is khaldoon al mubarak. He is the ceo of mubadala. Indeed. Eresting stuff Erik Schatzker joining us from the conference with mubadala. Krona, that is millions. We are going to speak to the ceo, rickard gustafson. We will talk a lot about buying airplanes. That conversation is next. This is bloomberg. Guy 15 minutes until the market open. Onestory we will be watching is what is going to happen with sky. Offer. About comcast this is a business that had been cornered by fox as well. He is saying no comment on interest and other fox assets. Sky didnt get contacted on the offer until this morning. 12. 50 pound a share. Doesnt see any regulatory issues. It is going to be interesting how this one works its way out. They are talking about maintaining sky news. Lets turn to another corporate scoring just story. Another corporate story. Aircraft andxtra is in talks with airbus. Joining us now with his first interview of the day, rickard gustafson. Good morning. A number of questions around capacity. Lets talk about your desire but lets talk about what you are expecting this business to look like Going Forward. How do you expect yields to develop . There is an awful lot of capacity coming in on european routes at the moment. Rickard that is correct. We do anticipate to see more seats that will be available in the markets. That will put further pressure on yields. We response is to make sure have a very strong offering and network for our target audience, those who target to and from scandinavia. At the same time continue to drive cost efficiency and create more flexibility. With the variation. Hardcene is working very in the last two years and will continue also into the future. Guy less about your capacity plans lets talk about your capacity plans. You are talking to airbus. You are talking about the 20 neos. When the expect to start taking delivery of those meals. Delivery of those neos . Haverd we already delivery of 320 neos. Roughly half of them have been delivered so far. Ahead and into 2020 and beyond, we know that if we do nothing, we start to shrink. We have a number of aircraft with in the aging limit and we need to replace those. We need for the capacity to cook with the growing demand to coat with the growing demand. A company can order of an additional 50 airbus 320 neo. To ensure that we can maintain our size and also have some flex ability in a growing market. Guy i am sorry i dont know this, which engine option do you have under 320 have on the 320 . Rickard we have the cfm lead engine. Problemsou think the will affect your ability to get newer aircraft because people are going to be wanting this cfx swats Going Forward slots Going Forward. Rickard i dont think that is going to be an issue. That is true they have had significant issues with a new engine. They will sort those problems as move into 2020 and beyond. There will be a well functioning engine. We should not forget that cfm also had some initial issues with their engine. Not to the same exact but new Technology Comes with some problems as you put them into production. That talk about an order will start to take delivery from 2020 and beyond, im convinced those things will be behind us. Guy want to become more centered around the 320 neo that that will make it easier for sas to think about him in a just think about him and a test think about him and day. From an aesthetic point of view it easier. Rickard i dont want to speculate on that. Sas whiche an would be the first time in our 70 year history, that would reduce complexity. That will enhance our ability to adopt and further optimize our production. It will further drive cost efficiency for a business. My take on this is europe longterm will need some sort of consolidation. What we can do and no to control our own destiny is to build a strong scandinavian Business Structure with a strong all of those into travel frequently to and within scandinavia. Can we do that efficiently . I am sure when a further consolidation of her takes place. Thank you very much for your time. It has been a pleasure speaking to you. We are minutes away from the start of european trading. We are going to be looking at which stocks we should be looking at this morning including Standard Chartered. Dividend after a twoyear suspension. The open, eight minutes away. Guy five minutes until the market open. Lets talk about the stocks we need to be watching. Equities caught broadly flat. Standard charter trading stronger in asia. Standard chartered with a resilient message. They resumed their dividend after a twoyear suspension. The bank is still coming out of the period after doing with bad loans. It is on track to turn itself around. Were expecting a positive reaction. Million rights issue which is less than one Million Pounds which is less than some shareholders expected. We are expecting a positive reaction to that. The stock has fallen about 80 in the past year and with a lot of regulatory issues. They will use this money to pay a fine art like fine partly. Guy sky soaring. That is the most interesting story this morning. Sky has the potential cash offer from comcast. That is in addition to an offer it has from fox. We are expecting the stock investors are expecting a bidding war. Guy going to be interesting to see how that one plays out. We not expect murdoch to sell the stick to him. Thank you very much indeed. If you want to follow the stoxx team, go on your bloomberg. It is available on the mobile app. Futures pointing to a flat us start on trade. We are performance away from cash. We are four minutes away from cash. Guy minutes to go until the start of cash trade here in europe. Today is a day of individual stock. Let me give you the context and background of where we are. Oil is trading at 6733. Foundan naira gdp just that we get vibrant as well today out of europe. Spx is up by 1. 2 . Here are the futures of they are not that exciting. 1 . E up by. 2 of dont expect fireworks at a headline level. Individual stocks could be out slowly fascinating. Lets get you some numbers. 58 is where we are trading. Were at. 1 of 1 . Out of the london markets. Today. Ky the cac is now opening up. 3 of 1 . Up. 3 of 1 as well. Lets say the sector level. A little bit of weakness in materials, Everything Else is pretty green. To see what the financials the liver. They are a big chunk of this market. Energy is interesting as well given what is going on. The breadth looks pretty positive. Lets go back and say what we are getting now. London is getting a little more traction up. 4 of 1 now. Smi andto see how the dax go this morning. Lets show you what the individual movements look like. Probably a more interesting story. Lets start with the upside and give you an idea of what is going on. Some of the u. K. House builders are trading strongly as well. I wonder whether we look at the bidding war for sky. Lets say with a downside looks like and give you a look at what is going on there. This is the picture we have got. All trading down this morning. We will come back to the stock story as they settle down and give you an idea of what is going on as we work our way through that first hour of trading. We are coming into the end of the month. February has been fairly busy. What have we learned and what do we need to know . This is one of the most interesting things because if you look at models, im specifically looking at equity you have nonts, idea that anything happened in february. You have no idea we had a selloff, that the 10year got close to 3 , you would not of volatility came back into the market, you have no idea which is not only confusing a law of nts, but it also says a lot about where we are in this economic cycle. These factors aligned with how we expect markets to look at how we expect the economy to look. This chart i brought with me in the white is momentum. For cheaplyking priced stocks. Analysts atve most the end of last year, they said value is going to make a comeback. We will have inflation come back this up the good for cheaper stocks. Momentum has had its day in the sun and it is over and done. That has not happened, especially this month. I have two red bars the show when the selloff happened. Other models broken in the market or investors . I think what it says right now is that it is just a very indicative of how they staged and how late staged this economy is. When they are gaining a lot and when their earnings and how latd this economy are very good, but when it is a tired bull market, when theres not as much momentum in the economy, it really is those stalwarts that continue to take us higher. Guy tight market, narrow market. We did learn a few things. What did we learn and what can i take away from the fact that the market is big going into the end of the month . Things. Nk there are two selloff, wasnt clear in the beginning was what kind of fraction is due to short volatility position and passive investments. What kind of fraction is technical nature and what kind is really fundamental due to inflation scares . I think what we have learned in the middle of february was sort of a betterthanexpected inflation print. Of could kind of get a sense the selloff being much more technical nature than we initially thought. The second thing, that is a very whenown perspective now, you look at what kind of factors you tend to say if there is a selloff, im good to get out from a topdown perspective, what we have right now is very to risks. Two risks. Other will be placed with a growth shock or an inflation shock. If growth is suddenly surprising to the downside in both developed and emerging markets, the rotation to defensive stocks might actually work because yields come down in these sectors. On the other hand, if you have an inflation shock or inflation scares coming back into the the rotation into defensive stocks will not work. Will Bond Properties actually be beaten down even more. In an environment where you have inflation scares, guy we dont know yet is the point. We have learned is that investors are taking a quite a view of higherthanexpected inflation. Guy we had a rally in january and a selloff in february and march. Are we going to see a reappraisal of what they are thinking about the moment in terms of where the models were any kind of outputs you get from them . What next i guess is the question . I dont think there are any huge fundamental changes going on right now in terms of how people are structuring their models. Just because one especially short month does not meant necessarily make for a short. Even when you look at fundamental positioning, they are still very much in momentum stocks and very out of value stocks. That would seem to indicate that if you are using some sort of momentum strategy, that could continue. This is a democrat is favoring. This is where the crowd is favoring. Momentum it did not crash. If you are following momentum, february cannot tell you anything differently. Indeed. Nk you very much us. Is going to stay with coming up in an hours time, bridgewater founder joins Bloomberg Television and radio for an exclusive interview from beijing. Youre going to have to watch the entire hour. Take a look at what the stock is doing. We may have a bidding war on our hands. Comcast is stepping into the ring. Ring. We are up 18 . This is bloomberg. Guy welcome back. Were just over 11 minutes into the trading day. There are some fascinating stock movers this morning. Lets find out what we are getting. Lets start off with sky, up more than 18 . That is because we may have a bidding war on our hands. It did formaking sky. Bid for sky. Onlyst is talking about contacting sky this morning and will meet with independent directors. Uphave Standard Chartered 2. 5 . Earnings came close to analyst forecast for revenue and profit. Seems like it could be good for the ceo gaining some ground and getting it back on track. Finally, basf is down 1. 5 . Slight sales growth in 2018 22 auto in Oil Chemicals is the driving force, but it could see a significant decline and chemicals. Another came out saying that fourthquarter results say that quality is weak. We do see basf under some pressure, but definitely sky and Standard Chartered up in the. Reen today guy im anxious to see what he has to say. He is the outgoing ceo over at basf. Whats out for stinging detail in italy and germany watch out for stinging the tail in italy and germany. We had charlie in here talking about that yesterday. Lets start off with germany. Any surprises coming this anyend, do you foresee chance that mrs. Merkel will not get her grand coalition . The chance that they are 20 b