6 00 in london this wednesday morning. Standing byters are and ready to deliver stories that will drive. I bloomberg reporters are standing by and ready to deliver stories that will drive your day. And talks to sell its japanese pc business. And facebook footing pressure on rival, twitter. At the had has a look commercial future. Stay with bloomberg. From an auto expo, ralf speth. He is expected to make an announcement that will impact the markets. That will happen later on during countdown. They also got the chance to sit down with philip green, the majority owner of the arcadia group. He has nine retailers, including top shop. Interview onhat the pulse later on. Eye oneeping an operating profits coming in at 2. 3 one billion francs. This is swatch, the watchmaker based in switzerland. Sales have been very. They expect a healthy growth in 2014. They say they are in an excellent decision for longterm growth. Lets get a look at the markets. Management are advising clients not to panic. That is after equity suffered their worst start to the year. Ofe is the global head equities, gary evans. Thank you for joining us for this halfhour. Asias are a bit calmer in and on the u. S. Equity markets in the last 24 hours. I think this is an overdue correction. We havent had that since last june. It is the longest we have gone without one. Things are looking a bit bleak at the end of last year. The Retail Investment in the u. S. It was a natural whole that that lasted a bit longer. Some point, you get another good entry market. Those factors still present in developing markets . In the last two or three years, the market has been dread with the fed pumping the crudity into the market. It is no longer enough. Fromlly, the pe has gone 10. 5 times to 14. It cannot go for the than that. Watch. The key thing to how have earnings been living up to your expectations . It increased at its fastest pace in two years. For a range of factors. A range of factors. I think the signs are that they will. The Fourth Quarter the u. S. Has been strong. Year atooking this about 10 Earnings Growth in the u. S. And about 14 growth per year. Marketves you a decent here it will not be as good as it has been in the last two years. This is because over the past performance has been and it has not been in europe. European growth earnings will be higher. The u. S. Part looks part expensive. I think europe is probably the most interesting place globally. Thank you. Lets move on. India is asias at thirdlargest auto market. It is shrinking. Small cars account for the bulk of sales in india. We have the details. Delhi thisoff in week. We had to talk about the reality. In india, we see growth slowing. We talk about oil pricing looking quite stable. At the government can subsidize those rising costs as much as you havebc, they got a shocking car market. ,ut most of the market shift theres a massive potential for the car market in india. Youre looking at car ownership over around 800 cars for every 1000 people in india. That is most recent data. We are nowhere near developed status. You can see the potential for growth, but it is not easy. Saturationa classic in paris and. When you look at automakers, in china, it has been very much about luxury or the midmarket luxury. The indian story seems to be shaping up around the small car market. Is that still the future . Some of them are hatchback. Tatau look at the likes of motor, the nana was meant to be it is not doing that well. The car that promised so much, but they will lunch National Launch another hatchback. We are looking for a car called out. Olt to come whether that can change things around remains to be seen. We may see another tech to you on the next few days. This time it is from japan. Sonyminent news story on you are bringing in. Good morning. Yes, absolutely. A big story. According to someone in the know, sony is said to be close to an agreement. They will sell their pc business. That memorandum of understanding may be released as early as thursday. A price tag given by the nikkei newspaper is just under 400 million. They were considering various measures for the pc business. Ites just egypt tense makes strategic sense to some people. We all know that pc shipments are shrinking. The question is the price. How much can sony get for this . That includes the brand of laptops. Another japanese stock that is moving and making headlines stunning headlines, in fact is panasonic. Since we have been keeping records, goes all the way back to 1974 if im not mistaken. 90s 90 gain, surging out of the gates. This shift in strategy away from unprofitable assesses has taken shape. 20 popping income. It is a pivot toward making cars and homes. Half of the revenue comes from these businesses. And before, he had mitsubishi and Deutsche Bank to outperform and buy. We see what happens tomorrow. Back to you. David, thank you. Named its new ceo and is inviting bill gates back to campus. Its firstll announce Quarterly Earnings later on today. Hans nichols joins us now from berlin with more. Will nadella make . The first question is easy to answer. It is 18 million in total compensation for the first year that is quite a bit of a boost when you compare it to steve balmer. Here is what we know about mr. Gates. He is going to be coming back to be founder and Technology Advisor here at he will be spending a third of his time on campus. Before, they said he spent about 1 5 of his time at microsoft. What ishis role of microsofts future . What is the news coming forward . Adella has hinted he will focus. That could mean Cloud Computing and may be their search division, being. A lot of challenges there. He will have oversight. He will have some of that knows his way around the tech story with bill gates on campus. You isher tech focus for that numbers that are due out from twitter. Many people are comparing them with facebook and try to do some analysis. I wonder how long it will take to release these earnings over twitter in a limited number of characters . You need revenue and a percent of the mobile ad. You could probably do it in two tweets. You are clever. Youre good at abbreviating. You could probably do it in one. Forth. Re models going we do not have that much information about twitter. Looking at the earning since theyve gone public, you look at the comparison with facebook and the number of users, it 232 million versus 1. 2 billion, ipo 26 compared to 38. One of the challenges with bracing pricing twitter is that the stock has been all over the place. It dropped down a little bit in part because people were concerned about its ability to go forward. Some things that people will be looking at when they report later after the close is you will look at the number of users and the percent of advertising for mobile and how they are monetizing, how much do they get per ad and per tweet . Those numbers have been pretty low in the past. Their goal on the challenge is to bring those up and eventually when they stop comparing it with facebook, but for now, he like facebooks little brother. In terms of their model Going Forward having real income, that is the bar that has been set. Thank you. Knows if twitter is in the same game . Lets move on. Nderground worker strike Caroline Hyde is at a station to see how this will impact. What is it like . Jampacked withe people wanting to get onto the bus. It is transport chaos. They are trying to avoid the London Underground. There is the opportunity to embrace business. Is luringfor london in some of the biggest u. K. Retailers. They want to bolster its balance sheets. What other International Cities they can look to for inspiration. Fascinating stuff. It is a little bit early. Thank you. We would here for more later. Find out what he thinks the decision could cause a suing in the microsoft share price. We will get richards advice. Time for todays company news. The shares of panasonic sword in trading, the most since 1974. This after they posted profits that was higher than analyst estimates. Two brokerages raised their ratings for the stock. When Company Expects healthy growth in 2014 after posting that 2013 profits that beat analyst estimates. They had an auspicious start to 2014 and proposed a Dividend Increase of 11 . Talksny is said to be in to sell its japanese pc business with the japan industrial partners. An announcement might be made as early as tomorrow along with quarter results. Welcome back to countdown. I am anna edwards. Lets start with a belated top ache. Was that with a related topic. We are joined with richard windsor. Thank you for coming to talk with us. Thatdo you think background tells us about the future of microsoft . Many are concluding this means the future will be about the cloud. Yes. Not just the cloud, but the enterprise. If you look at what the market wants from microsoft, the is aed basically is it microsoft focused just on that emphasize enterprise, and thereby trying to increase the pe of the company. To implementking that strategy. That could cause a significant rally in the share price. However, if you look at the commentary that microsoft put out there with very carefully crafted to basically give him space to decide which way to jump, they did not say they were eating out a consumer, they mention mobile first. That is why the share price has not moved appeared the market is sort of nonplus. Nonpluss. That does any bill gates is stepping away from the business. How significant will that be to you . I think it is quite significant for a couple of reasons. The focus has been very much on the cloud where is the microsoft has spread much wider than the cloud. Ringing the old dates closer to him to help in some areas where he is not such an expert, but also i think there could be something going on here which is if satya decides to massively restructure microsoft and turned it into a proper ecosystem company, he will need bill gates on his side in order to convince the troops this is a right way to go and this is the Biggest Issue that microsoft could face. You do not think they will be selling any consumer assets . You think the innovation is coming from the consumer side, the social media side of things . My hope, if you look at the , the opportunity for microsoft is to become the third ecosystem. They have got the assets. They are miles ahead of the competition. They have got to break down the company and reshape it in that image. That is a long and hard road. I think the market would be disappointed if that is the road that satya takes. As an investor, that is the right road the Company Needs to take. The integration of nokia, how significant will that be . Questionthat is a good. If they decide to go down the , i think at the moment if you look at the overall size of microsoft and the news that generated at the moment, able not be a big impact on the overall microsoft numbers. At the end of the day, it will be a big issue. You. Chard windsor, thank he was joining us in dubai. We will be back after a short break. Welcome back to countdown. I am anna edwards. Vans. E back with garry e the emerging on markets theme. That has been a big thing since the start of this year here bill gross saying that china is the mystery link in emerging markets. Not really sure what is going on there. Seem a lack of visibility for you . When you look at the pmis, they have come down. Gdp growth. E they do more disgusting us to get. The other thing about china is that last year, there was one group that did very well. That was private sector companies. And the Chinese Government is trying to make that bigger part of the economy. Indeed. The state owned companies would probably suffer shared the profits will suffer. That is a problem. Where do you invest . Are you selective in investing in some of the private ones . If you do buy the avid sector businesses, the countries that have a good current account position in which you have got a great story, mexico is the one that stands out to me. He euro was to popular it was very expensive. It is looking more reasonable. You see it as a geographical story . A structural story . Are they doing the structural reform that people have been wanting . They are. They are also benefiting from the chinese slowdown. The wages are too high for it to be achieved manufacturing sector. Youre seeing a lot of Foreign Investment going to mexico. Now. Ut it in mexico are there other emerging market currencies that you think are taking the tough decisions and indonesia. Focus on , has done a lot of things. The currency holdup quite well this year. It is a country in which with an election coming up in july, that could see a rerating again. Investors do not like that. Too fragile. It does have a deficit. The central bank has been raising rates. There are risk. The longterm story is a good one. We think theyre taking some of the right steps. In terms of the overall emerging markets, some overall markets, when do you start to look again at the emerging markets as a whole and say there might be some fragility there . I think that you still have to be quite cautious. Be selective with one or two countries that we like. There is a temptation. Some markets look cheap. China is another example. If you look at the private sector, it is about 25 times. It is the banks that are cheap. I would be a bit cautious. As an asset class, there are still consequences of the Current Issues we saw last year that still have to emerge. It does not like the crisis and 97 or 98. Lets see how smart you have been around the japan story. There were losing value. We have got underway on japan. How long have you had that . A lot of people have said there have been changes the government has been bringing about. Too cautious early last year. It seemed to me that everyone was overweight on japan. Everyone likes something. The risk is only on the downside. The third aero structure reform was not happening. I think one of the things that was makeed is that it clear that the bank of china is not going to do any more liquidity injection measures for the time being. He is happy with the way inflection is picking up. I think the market had expectations. Stocks,echnology twitter and facebook, microsoft a lot of moving parts in technology. I know that this is a sector you like. Why do you like it . I think partly because of that. What is says to me is management in tech, particularly the older tech companies, are getting smarter. Theyre not just going money at businesses. Issue we being consumer . Should we be in pcs . Changing. At is it is still relatively cheap. Important distinction. Thank you. , these are the Bloomberg Top headlines. Investors and your have had their worst start to the year in a decade. Stock offerings fell 22 last month. Thanks faced a massive sale for the emerging market. A two day strike by the London Underground employees. It is grating travel chaos. The union called a strike to against the closing of johnson ticket offices. And parts of the United States could see more trouble delays as the second big snowstorm hits the big east. New york and boston face as much as 10 inches of snow and ice. Forecasts call for below normal temperatures for much of the country. On one of those top headlines. The London Underground workers are striking in protests over changes that will see the loss of many jobs. Caroline hyde is live at a station for us. How much will this affect commuters . It is costing the commuters time. It is tough to get on the buses. That one queue is working before 7 a. M. It is a 48 hour strike. Everyone is trying to avoid underground. It did it could cost the London Underground money every day. The reason is all about modernization. They have got plans to shut down ticket offices in more than 200 stations. That would mean the loss of 750 jobs. That is about 13 of their workforce. As part of the modernization, the London Underground is also raising business. What are we expecting . This is where the modernization could see a growth in business. We could see them embracing business. In cabal this ticket offices being closed, more than 200. Already, they have been trying to collect service. That has gone successfully. They are expanding that. In the biggest grocer wants on the game as well. They want to get in with transport for london and gold that click and collect service at the underground station. Even. S parcel and post the retell potential is quite extraordinary retail potential is quite extraordinary. Theres a potential for retail. One of the lot the groups, conservative groups said is far more potential. We have got the bike service in london. The got barclays bikes. The sponsorship is there already. Could that be expanded . That havetions parents or other avenue shops good we have stations that have harrods or other avenue shops . Somef this is to generate 3. 5 alien pounds over the coming years. That is a commercial 3. 5 bi llion pounds over the coming years. That is the commercial strategy. Vodafone would provide wh ifi. Kia. He South Koreans have a story couldiled take pictures of virtual products. For thehave barcodes products Going Forward. The opportunity is phenomenal. Fascinating opportunity. Thank you. Lets move on. A billionaire is often referred to as russias vodka king. His next goal is global domination and deep droning the maker of smirnoff vodka de throning the maker of smirnoff vodka. He is interesting. He is sort of the self embodiment of the selfmade man. He imported chocolate and martini. Some money. Up he said russia should have its own premium vodka. It didnt. When i caught up with him, he had started miss russia competition and started a bank. He was busy taking his vodka global. A polish vodka producer. How many cases will you make this year . Your sales have grown tenfold. Exactly. They make just over 30 billion. They are the Worlds Largest about the producer. Youre planning to overtake him one . 23 years from now. Is that realistic . I hope so. We need to be optimistic. Strategy . Change in to compete. You need to compete in every segment of the market. You have moved into luxury. Um, so premium, i would like to be dominant in every segment of the market. And your territory is what . I would like to do dominate the market. Were talkback eastern eur