German Software Giant delivering a mixed bag. Two french luxury stocks today. Shares fall in part to japanese consumer demand and shares in the drinks maker lower. And to our top story in the last couple of hours toshiba announced the resignation of his ceo over the accounting scandal. Hell be replaced by the japanese firms chairman with 8 of the 16 Board Members expected to step down. The changing management is due to this scandal. The president and chief executive will be replaced by the chairman. His predecessor who is vice chairman will also quit. Now we are awaiting for the Leadership Team to announce and tell us about it being made. Its helping the tokyo index approach an 18 year high. The japanese index already trading at a three week high. Investors are cheering the management change. Its going to take time. 8 out of 16 Board Members will be standing down. Thats a lot. Its a big management shake up. More Board Changes to follow they say. Incidentally also now you need to look at the rating agencies and all the big investment houses. S p already putting toshiba on negative watch on this move. Reported profits and toshiba trading hire with people welcoming the changes at the top. Maybe theres speculation that this was going to take place given all the difficulties they have been seeing. So Management Changes at the top with regards to toshiba. We should point out that the channel of investigators found out top execs were tangled in accounting mall pack trisractices. We are waiting for leadership to make an announcement about what to expect Going Forward. And youve also got comments from the finance minister talking about how toshibas accounting problems are regrettable. The japanese finance minister also saying the tokyo market will lose trust without appropriate Corporate Governance. Well keep you up to date with any more breaking news happening with regards to this particular story. Moving on a number of earnings to bring you up to speed with. Shares have been trading at the bottom of the swiss market. Good morning. Novartis shares off by 2. 25 . This is partly due to the stronger u. S. Dollar. Theyre saying that fx volatility caused it to take a hard look at its cost space around the world but speaking to cnbc earlier the ceo denied it would move headquaters away from switzerland. Were a swiss based company and theres a lot of good reasons to be in switzerland so well weather the currencies like the others around the world reporting in u. S. Dollars. You have to look at our results on a Constant Currency basis. Our sales were up 6 . Our operating currency was up 6 and we were able to show margin improvement of about 30 basis points. Now the swiss rival upgraded its outlook for 2015 core earnings despite missing Second Quarter sales expectations. They cited progress in its lung Blood Pressure drugs for the move. We asked if the firm is guarenteed to hit guidance. Guidance is always a guidance. Its what we expect. You never know what happens but its doing very well. We have launch in spain. We have launch in japan. The safety of the company is excellent and for all the specialists this is really an extraordinary drug. So were very confident. Now a mixed picture from Second Quarter earnings as net profit dropped by 15 on manufacturing and m a associated costs. Revenues that came in above expectation because of higher demand for the low margin internet based Cloud Software but speaking to cnbc earlier the ceo remained bullish on its prospects. We were able for the Third Quarter in a row to sequentially raise the Gross Margins in the Cloud Business and that was a key contributing factor for us to raise operating profit for 13 . Im happy with the trajectory that were on and the cloud is becoming a more significant and meaningful part of our overall business. Lets get stuck into a discussion about earnings and what we see at the moment. Our expectations as well. Good morning. Good morning. How are you . Im very well. How are you doing . Are you happy that greece has moved along since we had had you on last . That weve seen some development and we can focus on earnings . Absolutely. You could argue that still the resolution, how much of a resolution will it prove to be ultimately but i think our view toward the greek situation is that it hasnt really it wasnt really going to dominate the direction of corporate earnings and european equities for the medium term. Its been an interesting thing and moving on from the crisis. Most people i spoke to so far said that earnings expectations have come down far enough. Do you agree . Absolutely. If we go down to the start of this year you could see that toward the back end of last year we saw earnings expectation for europe continually being downgraded as people were much more nervous about the rate of economic recovery. So we started this year with a much more kind of realistic base of earnings and for a number of reasons there was scope and aggregate for those to support on the upside. You wrote that the miss of capital misallocation is rising. Explain what you meant by that. Because you have a situation where the cost of funding, the availability of liquidity is abundant and you have an environment and the Balance Sheets are strong the temptation there is to really go for corporate activity and thats were very much seeing that as characteristic of the market over the last 18 months and as that corporate activity cycle rolls on theres always that rising risk that capital gets misallocated. I mean even if you think about share buy backs in an elevated market theres the risk that youre just buying back quite expensive equities. Thats a form of capital misallocation. Another story were following closely and something we discussed was negative Interest Rates. For the first part of the year the market was condition certaineded about the implications of negative Interest Rates but now investors are becoming a little more comfortable with this idea. Would you agree . Absolutely. The work weve done on negative Interest Rates was highlighting the point that negative Interest Rates were unlikely to sustain for any extended period of time. The view on inflation was that it was a kind of demand driven phenomenon where actually what we were seeing was that they were being shaped by import prices collapsing. Then actually we should see Inflation Numbers move up quite significantly toward the back end of the year which would accompany moves in the yield curve. I know that you mentioned passive investing because are people passively investing now . Its quite active investing now or sitting on the sidelines holding cash. If you look at the flows we have seen into equity funds over the last few years you can see that passive strategies have developed and formed an increasing part of that proportion. I think somewhere between 25 to 35 . Its always difficult to get the exact numbers but youve seen that as a strategy being much more embraced. Now the challenge that one has then is to think about when you do have a surge of demand for a certain type of investment strategy, do those people end up getting disappointed and what does that surveillance is jest for the shape of the overall market and the scope for investors to add significant value. When looking at the equity trade right now do valuations imply that the equity risk premium is rising or no not at all . Its a really interesting question to you. What some have argue sd thatd is the equity risk premium has risen because the rate is so low and some people, some have argued that actually that that could warrant or justify higher prices. If you take a normalized over the last two decades equity risk premium we could justify higher evaluations for stocks and shares. The question i would ask is when we look around the corporate sector and we see some of this going on the Business Models in the sharing economy and so on and so forth maybe actually the equity risk premium should be rising as competitive advantages are shrinking rather than growing. Lets look at how theyre trading for us. We were pretty flat this morning and were currently down just a tad keeping in mind that we have been sitting pretty very close to the 6 week highs on our European Equity markets over the last couple of sessions. We had a nice run here in trade the last week or so. The stoxx europe 600 lower at the moment. Down by a quarter of a percentage point. A mixed bag of earnings out as well. Revenues coming in surging due to the amount of Cloud Software delivering by the internet. A real surge there. Europes largest bio tech lifted its earnings as well. The survey indicating a slightly weaker than anticipated july. It was closing out flat in yesterdays trade. New record highs on the close. Once again well be talking about the tech earnings and what we can anticipate here later on on the show. The ftse off. The xetra dax down and off by. 4 . Just showing you the trades were seeing there. Oil coming off quite significantly over the last couple of sessions. It was a little bit weaker than that when i first came in this morning but were hanging on to that 50 per barrel level for the time being and brent currently lower right around 56 and change. So thats what were seeing when it comes to the commodities. Spot gold around 1100 also having come off quite sharply. Were seeing a little buying in gold once again. A lot of it has to do with the strong buying story given yellens comments that the fed stands ready to hike. Were moving closer to a hiking scenario. Just rounding up what theyre doing, euro dollar higher by by. 2 . But were higher by 108. Just 2. 5 weeks ago we were at 110, 112. Now were at 108 so still quite a bit going on even if it is a quiter news day when looking at the big picture stories i should say like greece for example. Absolutely. Something well continue to watch. In the meantime. More and more, data is visual. In fact, the number of mris has increased by ten percent a year. And a radiologist might view a thousand images to find one tiny abnormality in shape, contrast or movement. Because its so challenging a Research Project is teaching ibm watson to see. In the future, it could help clinicians spot key patterns quickly and precisely. Ibm watson is working to make healthcare smarter every day. Now we are still monitoring the tokyo press conference where toshia ceo resigned over a 1. 2 billion dollar accounting scandal. Well keep you up to date with any developments that come from the conference. Meanwhile, Japanese Business confidence was pursued in july. The survey shows the manufacturer sentiment at 14 unchanged from june while the Services Firms index dropped by the most in over a year. Now this happening as japan policy makers also expressed concerns about the economic picture according to the latest bank of japan minutes. Several Board Members said that the effects of the Central Bank Stimulus program could be fading. Sri joins us live out of singapore on the latest from asia. Good morning, sri. Hi goomorning. That picture does tell me a couple of things. The external picture is looking dire especially coming from china. Lets not forget the trade linkages are very tight between japan and china and they suggest perhaps the boj might still be in the game in terms of delivering stimulus. I wanted to bring you a recap of what shares have been doing because they were up by more than 6 at one point so investors applauding this change of leadership with toshiba and there will be downward revisions to report of profit. Placing toshiba ratings on credit watch and negative. Near four week highs at the closure. China stocks continued to really see a lag impact from the very aggressive intervention. In fact were over 4,000 now. Shanghai bounced almost 15 from its recent lows and, yes, in terms of the commodities Market Impact we have seen gold come back and weve seen something of an oversold bounce today in the bullion market but the stocks and gold miners are still out of favor in australia. Its the Banks Holding up the broader index. One of the performers today is the bangkok set. So 7 month lows and broad case selling in the large cap banks thats to blame for the weakness on equities today. Thats where we stand. Back to you in london. Thank you so much. If rates stay low for the foreseeable future and janet yellen does not raise rates in september or even december do asian equities look attractive at this level. Its interesting. Asian equities in some ways from my perspective look in some respects similar to europe in that evaluations relatively look attractive but similar to europe it will really be more about looking at individual companies within asia and rather than saying its going to be all about certain markets and a broad based view about recovery and demand. Were going to see correlation within sectors fall. I think were going to see preferences in correlation but in markets it will move toward being a stock pick of the market. I dont know anyone thats not bullish on the nikkei at the moment or on japan in general. Its been a phenomenal trade over the last few years. We continue to hold japanese stock. Even if the yen continues to appreciate. The news at toshiba is an interesting one. For investors to get a lasting turn out of japan you need deep lasting fundamental improvements on Corporate Governance. On one hand its a negative outcome. On the other hand it brings to the fore the fact that unless companies are truly being run in the interest of shareholders are really focussing more on returns than this enthusiasm toward japanese stocks will end up becoming quite short lived. It was interesting when fears over the greek crisis were rising, lets say ten days back at the height of it chinese stocks were crashing. Gold did not get a bid. What did is the japanese yen. Does that indicate the investors are finding safety. Its very hard to look at the shortterm moods and when think about gold you mention gold thats really interesting. Gold peaked in 2011 and since 2011 we had quantitative easing in pretty much all of the major developed economies and you i was with that debasement of currency that gold would have probably have a bid. On the line despite quantitative easing it was a vote of confidence that the economy would normalize at some point and the currency system would prevail. Sepp blatter confirmed the date for the election of his replacement on the 26th of february and ruled out running for the job again himself. He also confirmed the launch of a task force. He was unable to totally move beyond the scandal surrounding fifa after a u. K. Comic interrupted proceedings to shower blatter with fake money. Security please. This is starting. Were starting a press conference. Where is my security. Come on. Come on. This video was trending on twitter. Aside from the shark video. Its unbelievable. This guy is one lucky man. God is watching over him. A shark within arlms distance behind you. I have snorkeled with killer whales and the finns are like a meter 60. Theyre like your height. Now imagine the rest of the shark. Huge. Moving on Electronic Arts breaks the virtual Glass Ceiling for the first time in the companys popular fifa franchise a woman will appear on the cover of the video game. U. S. Womens National Team member and world cup member alex morgan will share the cover with lionel messi and Christine Sinclair gets the honor in canada. Share the cover. Progress. Zach johnson battling through the wind and the rain of st. Andrews to win the open championship and fellow american Jordan Spieths bid for golfs grand slam. He won a threeman playoff after bad weather forced the tournament to carry into monday. They were at st. Andrews to break it all down. Well zach johnson, the 39yearold from cedar rapids iowa is not just as at the say over here the champion golfer of the year he is the man that spoiled Jordan Spieths bid for the grand slam. Spoiler alert for sure. He won the masters and among those he beat was the great name of tiger woods and now then among those he beat the great name of Jordan Spieth. Arnold palmer and Jack Nicklaus one shot short of continuing on in their chances at the calendar grand slam but when you talk about zach johnson youre talking about a tenacious man. 11 times winner before he got here and now 12 times. And because he doesnt have great length nothing comes easy for them. Hes now 31 in playoffs and nobody will forget this one. Its been such a marvelous run for Jordan Spieth but if you had to pick a moment or two today where did he come up short . People are saying he had five three putts and one four putt pointing to that but zach johnson had four three putts this week. If there was one moment it happened pretty early on either thursday or friday he drove it in four different bunkers and paid the price for that and ultimately what transpired there. Jordan spieth applauded the crowd. Well all applaud him for 2015 but it is zach johnson, just the 6th player to win an open on the old course and a masters. The others, snead, nicklaus, and woods. Theyre covering golf on the radio as well. Are they . This is great news. My producer was watching it and his wife was very upset. Walking walking walking. Still to come the schools of stocks will see why Chinese Students are interested in warren buffet and not in justin bieber. Well see you after the break on Worldwide Exchange. Youll