Estimates to the value of coming under a unified structure. Were open to all ideas which can simplify our business. This is a project that still has a wide possible range of outcomes and raking in the cash covestro valleys as they say theyre generating cash faster than expected due to Strong Demand but the ceo says he is not eyeing any specific acquisitions theres lots of opportunities. What is missing is value created opportunities. We have a fixation on any deal, if we were to do one, has to be value creating. Shares in ihg check in at the bottom of the stoxx 600 after the hotel Group Launches a Strategic Review and halts special dividends. The ceo tells cnbc how the firm is spending its cash we announced a number of Strategic Initiatives to accelerate those trends and bringing new brands to new markets, launching new brands, investing in technology and funding more efficiencies in business to fund that growth good morning lets look at how european equities kicked off the morning. The stoxx 600 well into positive territory, up around a fifth of one percent at this early stage of the day as we look at individual markets, only the ftse 100 in the red. The dax in germany, up 0. 2 . In paris, the cac currant up 0. 30 . The ftse mib up 0. 50 . Banks are down significantly almost 0. 61 shares of bhp have fallen to the bottom of the stoxx 600 after net profits fell 3 1 . Despite that, the Mining Company is raising its dividend sharply. Underlying profit rose 25 but missed expectations. Bhp said the costs and risks of collapsing its dual structure outweigh benefits. The mine has been under pressure from Elliott Advisers to rethink that dual listing. The ceo said he was keeping an open mind ahead of a meeting with the activist investor theres a wide range of estimates to the value of coming under a unified structure. Were open to all ideas which can simplify our business. We have driven cost savings with most to come with the way we simplified the portfolio and the ways in which we operate and created a culture of simplicity. So its on strategy for us to have this debate ive been looking at the dual listed structure since i became ceo and trying to find a way i could do it for value, but not take undue risk in unifying the two structures into one. The issue with the calculations is theyre silent on a couple of significant Downside Risks one are the real costs of unification which result from us losing the tax cover on some of the plc revenue streams. Thats about 1 billion the much bigger source of uncertainty is when you unify the company, what will be the makeup or the resident of the Shareholder Base that would own the unified company . If you make an assumption that there is a big move towards more stringent owners, that pushes up the value of the credits on other assumptions you could make the point that the unified company would have less stringent owners, this pushes down the value of the transaction. We also asked about the type of environment he would be willing to sepend there is more confidence in the markets. We saw most recently the much more aggressive bids for the acreage that was happening on the mexican side of the gulf of mexico we always said it could be a twoyear program we have to maximize value for shareholders and take time to do so we are well into that. Weve only been at this in a formal sense for about six months the teaser is already out. The data rooms are open for the fayetteville operation within weeks all the data rooms will be open we had a wide range of interest from buyers who would like to buy the whole lot, buying small parts of the shale business. We feel were selling our business at a good time into a firming oil market we would expect to start to receive bids and look at them by the middle of this year. That was the bhp chief executive talking to cnbc earlier today. We are joined by alon ulsher a mining specialist. Lets talk about what he was talking about the u. S. Oil business he was talking about maximizing value for shareholders didnt they spend too much money for this business in the first place . Is a problem. The miners now are a picture of health generating more cash than they need and in the past thats been a harbinger of value destruction as they do m a thats not happening for now not for the time being the miners at this point are deciding what to do with that cash and are streamlining portfolios, which is what they are try doing with onshore they already have a fair amount of value on that asset we think they can realize 8 billion to 10 billion if value by selling it. Its unclear if they will sell it piece meal or as an entire packa package. Its encouraging that the process is moving along. Ive seen headlines saying they have with these results today shrugged off concerns expressed by elliott isnt selling these u. S. Assets what elliott wanted them to do its debatable where they bowed to pressure or whether that was always the plan it did coincide with the activist strategy that was deployed by elliott on this. Its something the broader Shareholder Base was quite pleased to see fortunately the sale is coinciding with a rebound in the oil and gas market so that they can maximize the value left in the assets lets talk about top line numbers. Given the increase in Commodity Prices and the expansion of the global economy, it would have been a shock if these revenue numbers had not come in where they had, wouldnt it . Would have. The earnings numbers were a bit soft they also did flag cost and inflation increases, productivity gains went backwards over the period. So weve been talking about productivity gains for the last several years. For this period productivity gains were a negative 4. 5 billion. So those factors seem to weigh on the result and offset the good news on capital returns, with the dividend being 15 higher than what we were forecasting. Its a Power Generation of 72 , well above the 50 minimum they established. So they are demonstrating a commitment to the new Capital Management framework but probably still 12 months behind rio tinto, which is much lower net debt and has greater flexibility. 12 months behind. In the next 12 months do you anticipate them getting more cash back in the form of dividends . We do by the end of this year they should be well on their way to reducing debt into the low teens. You have the u. S. Onshore shale sale hopefully coming before the end of this year maybe the cash coming next year. But that provides upside on capital returns. 8 billion to 10 billion. A big chunk of that coming back to shareholders. You heard the dual listing structure, he will go in with an open mind. The firm says they see the costs of that outweighing the benefits is there hard evidence thats the case bhp needs to come in and present their case i think they will. They will respond to elliotts proposals. There are press reports that other shareholders are quite keen to see a response on this its complex theres no question. Its not a new issue its something thats been debated for well over a decade not just with bhp. So, we do need to see some hard numbers, but at the end of the day, because the process is so complex, you can never be sure how it will turn out you have the authorities in australia, the tax authorities, regulatory authorities that will give a determination before i let you go, one more question about the oil price what impact does the Rising Oil Price have on the wider Metals Market it does have quite a Significant Impact first on the cost side of things, we estimate that, you know, the Oil Price Increase to the back end of last year raised the whole complex by 5 to 20 it does push up costs, particularly for bulk commodities. Thats where its most pronounced, where you are using a lot of fuel. But it also signals a change in the price dynamic. Usually when the Oil Price Goes up, people tend to become more bullish around the commodity complex in general so it does provide offset. As you move into the more mature phase of the cycle, you have to watch for costs starting to rise and margins compressing. Well leave it there. Thank you very much. Hsbcs pretax profit for 2017 fell well short of forecasts despite rising more than 140 from a year earlier. The 17 17. 2 billion figure was hurt by a 1 1. 3 billion charge that related to u. S. Tax reforms. The bank said it would carry out share buybacks as and when appropriate and plans to raise 5 billion to 7 billion in capita over the next few months more on those results in a half hours time, at 10 30 Central European time we will talk to colin mclean. Covestro says it is generating cash at a faster rate than anticipated the material manufacturer says it will reach its Free Cash Flow target within three years instead of five. The Fourth Quarter ebita beat expectations and doubled yearonyear hitting 879 million euros. The chief executive spoke to cnbc about his views on growth theres lots of opportunities, whats missing is value creating opportunities we have a fixation on any deal, if we were to do one, has to be value creating and with the current multiples on the assets we would look at, thats very, very difficult to see how some of these deals can be value creating. So Value Creation comes ahead of doing a deal the only hint i can give you is our coatings adhesives specialties business, which is a beautiful business, it has across the cycle more than 20 ebita return, its a stable busine business we would love to add on extra pieces in that business. Shares in ihg are trading at the bottom of the stoxx 600. They have frozen special payouts to investors this year they reported better than expected fullyear profits the hotel groups ceo explained where the company is going to invest as part of that new strategy so china continues to grow from strength to strength with that economy being focused, moving to services and consumption. Real strength across europe as well as certain markets like france, belgium and turkey recovered from the terrorist events, a strong Fourth Quarter in the u. S so generally positive trend. Today we announced a number of Strategic Initiatives to leverage those trends and accelerate growth by bringing new brands to new markets, launching new brands, investing in technology and finding more efficiencies in business to fund that growth. If you have views on the hotel change, bhp or hsbc get in touch on twitter you can follow the show at streetsignscnbc. Coming up, latvias central governor has been released from jail on corruption charges more after the break welcome back to street signs. The Energy Minister from the United Arab Emirates has been talking to reuters and saying opec and its allies need to continue Oil Cooperation beyond 2018 theres apparently 10 trillion worth of Oil Investment required by 2040 to meet global demand. He says that the future cooperation between opec and current allies including russia may help avoid an oil glut and any shortage he says the oil Market Monitoring beyond 2018 is the least they can do. Shares in Banking Software supplier temenos are trading lower after they said they are in advanced talks for fidessa at over 35 pounds a share temenos has one month to make an offer. Last week cnbc spoke to the chief executive about the company being a potential m a target itself after rumors of an approach from softbank take a listen. This is an industry in change temenos has all the all mahat ho a Good Software company. All Good Companies do one thing very, very well, they do things to scale we package our software, make it upgradeable, everybody gets the same software an were leading the industry. Latvias Central Bank Governor has been released on bail after determinations are being made whether he accepted a bribe. Investigators raided his home and office but he denies wrong doing. Hes led the bank of latvia since 2001 in related news, latvias largest bank, ablv is seeking emergency funding after accusations of breaching sanctions against north korea. All payments have been frozen by the lender claiming its Liquidity Position has deteriorated after the investigation. Im joined by Otillia Dhand via phone. For those of us who dont follow the latvian Banking Sector what is the back story to ablvs problems good morning. First of all, it appears to have little to do with each other, the two are in the same timeline but unrelated. Ablv is one of latvias nonresident banks, which is a type of bank that does business mostly out of moving money that comes from growth into the latvian bank and shifted to at location around the world. Recently these banks have been trying to move into Wealth Management and other less controversial areas, but the fact remains that the core of the business is shifting money from point a to point b around the world it tends to be usually money originating in russia. But the latest reports suggest it may have been north korean money as well. The challenge from my previous reporting in latvia is a total fall yilure of kyc these big banks rely so heavily on foreign deposits, they dont bother to find out where the money is coming from is this seemingly the problem with ablv . Indeed. The accusation is that the supervisory mechanisms within the bank itself were lenient and insufficient to identify our sources of money flowing into the bank but the fact is that latvia for a long time has had two parallels of Banking Systems effectively. The resident banks deal with normal Legal Operations and the nonresident banks which are a majority in latvia, that live off of shifting foreign money. So this problem is not new the challenge is that the u. S. Has gotten so strongly involved in this case, this is not something that can be brushed under the carpet no. Latvia has seen issues with nonresident banks before, especially since 2011. But in this case, they got the foreign regulators attention on the problem, that we will have to see some sort of moment from the latvian government to deal with the situation perhaps the timing is right, too because latvia will have general elections in october and that pushes the politicians along. Lets talk about the politics of the situation with tand the a bank governor. He has been asked to resign, but because of Central Bank Independence thats not so straightforward. Will have to be his own decision unless hes accused and convicted in the case that hes probably facing. Theres so much pleasumresh pree on him that he will probably decide to step back. Whats your final takeaway . Alloyd tvoid the latvian bankino at all costs right now its probably a sector to watch i suspect the latvian government will wait for the negative news to wear off, but with so much pressure we may see some positive changes in the latvian Financial Sector coming forward. Otilia dhand, we will leave it there for more head to cnbc. Com where you can find a full report on how we ended up in this situation. The euro group picked spains luis de guindos as the favorite for the next head of the European Central bank. He was picked after phillip lane withdrew from consideration. For more on that and europe itself, head to our website to find out why one commentator thinks shorting the euro means taking on both the ecb and the pentagon thats on cnbc. Com the gun debate continues to rage in the u. S. Several medical groups are calling on the Trump Administration and congress to confront gun violence as a Major Public Health issue. Hallie jackson reports on how the president s views may be evolving on the issue. Reporter the president is back in washington, a small sign of movement maybe in the gun debate the white house saying he supports a bipartisan plan to strengthen federal background checks, so do other republicans. I have no issue with more extensive background checks. Reporter a narrow proposal forcing federal agencies to improve reporting of things like criminal convictions making sure they come up on background checks it would not have stopped the florida shooter, but another proposal might have. Why is an 18yearold, a 19yearold, not allowed to purchase a beer in a restaurant, not allowed to purchase a handgun, but can purchase an Assault Rifle . Okay. So makes no sense. Reporter thats exactly why Senato Dianne Feinstein plans to propose an age requirement 21 and older buying guns like an ar15. Often the weapons of choice for mass shooters in places like florida, massachusetts and orlan orlando. The ar15 is als one of the most popular guns in america. In some places, raffle off in fundraisers, also for firefighters in sacramento this weekend nancy luggo walked out. The timing of seeing that weapon after reeling in the grief with the rest of the country. Of the death of the children in florida. Reporter but in kansas, where Tyler Tannehill is running for congress, he has no plans to stop his own ar15 giveaway. I believe in the second amendment. Theres a solution to protecting our students and teachers while still letting people have firearms and guns. Reporter at the state level, 22 states are looking at allowing guns on school and college campuses, while eigh states expanded background checks for gun buyers. Action locally on both sides of the debate, despite almost none federally. Speaking of mr. Trumps evolving views