Later today is going to be announced. Welcome to countdown. A warm welcome to the program everybody. It is 6 00 here in london. Bloomberg reporters a standing by around the world ready to deliver stories. We are looking for clues from the ecb forum on any potential action. With detailskiev on the president elect plans to stop separatist violence and Caroline Hyde is on the lookout for potential short sale. We have some big interviews coming your way today on countdown. How does a 44 return on your money sound . That is how much is happening. We will have an exclusive chat with the ceo of feder holk nielsen. We will spoke to that speak to the former president of georgia. That is the first on bloomberg. Lets get to one of our top stories this morning. Just over a week to go one to the next ecb policy meeting and officials are in the portuguese town for the first ever ecb for him. Um. We have been following developments over the last few days. Any clues of any potential action . We need to get everybody up to speed. Day two. Big speech yesterday. It is about 3000 words long. The top line really is this which is about low inflation. I looked at Commodity Prices food and energy. The klein accounts for 80 of the total decline in euro zone inflation since late 2011. The euro has been a big part of that. These are common factors across the euros are. Zone. This would require adjustment of conventional rate cuts. We caught up with the ceo and he shares that view. The most likely would be Interest Rates and negative deposit on the ecb. What could be important is to work with and attention to be euro valuation. Banking ina big europe. The rate cut is the minimum people expect next week. There was a variety of opinion and what is conventional tools he might use. Are we any further in terms of understanding of what might be delivered . Yet to look beyond the common factors because when he talked about local factors, the big clue was in credit. And some ofraints these countries across the eurozone. The percentage of viable constrained smes. These are smaller and Mediumsized Enterprises with the possible turnout for the last six months that are unable to seek a bank loan. A minimum of 1 in germany to 25 in spain. As much as it third of smes and in portugal are financially constrained. They lead to lower inflation. The credit market picks up throughout the recovery. Banks across the eurozone are raising capital. You want to make sure that credit supplies are there. The big debate is how to a dress credit supply address credits apply. Rate cuts is the big expectation. The unconventional tools is about how they address credit supply. We will find plenty of skeptical academics in portugal talking about the Asset Backed Securities program and whether we will cc be buying assetbacked securities. We will have more on that later ron. Thank you. The ukrainian resident elect president elect of i to step up opposition against this is an interesting sort of shift in record from him, isnt it . It is. Ukrainian central authorities have up the ante in their conflict with russia. Russia warned ukraine not to use more force in the east. The foreign minister saying that what be a colossal mistake but that is exactly what we have seen over the last 12 hours. Ukrainian forces using helicopters, using paratroopers, trying to take back that Regional Airport in the east of the country as a train station there. There was fighting and not just those two spots but elsewhere in the city and the other cities in the east as well. Russia or i should say the separatists have also escalated their contributions to this conflict. A number of prorussian fighters were seen in the city yesterday. Local agencies reporting as many as 40 trucks came in from russia into ukraine. Identifyingrs themselves as chechen volunteers. As you can see, there wont be any sitting down and friendly relations between ukraine and russia now that the president elect is here. They are on a collision course and we will have to watch what happens next. Sergei lavrov warns of a colossal mistake if they do not get it right. Lets talk about the big issue which is gas. The twoand russia, countries seem to be inching towards a deal. Give us some of the details. You might call it the other battleground really. Gas and a deal between russia and ukraine. The two sides met with eu aviation in berlin yesterday. It looks like we have a tentative deal by which ukraine would pay 2 billion by the end of this week and another half 1 billion by the end of next week to avoid a supply cut that they dont pay, the russians warned would come by the middle of next week. This would really be a starting point. Russia saying that if russia pays ukraine pays that back debt, they would be willing to look at the price at which ukraine buys russian gas. That price went up 80 from the 268 they were paying under heavily discounted prices under the former reaching which was regime. We have to see where this goes. It is consistent with the kind of approach we have seen from the russian side when it comes to gas up until now. The kind of hardline tough love approach. You must pay top dollar for cash, you must prepay, you missed a all of the debt. We are willing to negotiate on all of them. We are going to leave it there. We look forward to your interview with the georgian president. The u. K. And Lloyds Banking group will unveil its sale of its psb units a little later this morning. Sale mayn market for not cash in as much as originally hoped or will it . Caroline hyde is here. What are we expecting to happen today . We could get an unveiling of the sale which could value the unit, a brand bot back to the dead brought back to the dead. It was folded. Now, four point 5 million customers, 631 branches in the u. K. Could be cashed in on. It have a value of 1. 5 billion pounds making it the seventh biggest lender in the u. K. 25 ofy to sell about the stake so we could see anything from up to about 375 Million Pounds being raised overall. As was the big question are we reaching . Are they coming on the last moments of ipo. There is a bit of fatigue out there. Ipo. Killed off the market. I am guessing the irony is because it is a holiday. It was a disappointing share sale. They were at the bottom end of that pricing over also clearly there is some fatigue. A lot of these private equity backed share sales have not been performing as well. They are still trading below its initial offering price. The current retail entirely pulled their plans the shared sales. There was a portion coming into the market. Initial share sales, ipos up 80 year to date across the world. Europe has been the bestperforming region with the shares have gone after the initially set. Financials have performed the best as well. Maybe thet institutional clients, the pension funds, the Asset Managers will still be lured into the unit because you are betting on this u. K. Economy, the potential rate increases that would make the money back the mortgages that much stronger. Also, this is a bank that is not tainted by the previous insurance scandals. It is not it is a clean player in the area. Maybe this is a force that actually money want to get into. We will see whether Retail Investors say yes to this and whether they are lured back by some freebies. I think has been months. Me. Aga disappointed they cashed in on the retail buyer. The people at home who are customers have been offered bonus checks. Tsb . Put it into they are saying if you do buy shares in tsb when it shares sales, we will give you one free one for every 20 that you hold in about a years time. In fact, we understand it has been in the reported press all this week and that they are going to be depending up to 30 on the retail bias. They could be looking at 100 Million Pounds coming. Thank you. Look out for that at 7 00 this morning. We might get an update from Lloyds Banking group. Investors are playing detective as the search for clues at the remarks that the ecb forrum. We will see what the choices are for action when we return. Time for todays company news the largest u. S. Drug maker pfizer has abandoned its efforts to buy astrazeneca. Saying the offer rejected represented its full value. Pfizer is now required to wait at least three months before talks can restart. The worlds second business secondbiggest Mining Company agreed to an investment with a company. It involves a potential mine and rail project. Airlines has ruled out seeking bankruptcy and will instead accelerate an overhaul to help it break even next year. Malaysia Airlines Shares plunge the most since 1998 this month. The government made that the company fail. The jetser says disappearance in march put additional stress in operations. Welcome back the countdown. The ecb meets in southern portugal. The markets are increasingly looking for action next week. The central bank met with jpmorgan, david leibowitz. Forum, they preecb bill it as something different. All the indicators are that we are going to get something substantial about this inflation. What will it take to actually move the markets convincingly . I think a lot has been priced thus far. If you look at why people are expecting action in june is because we see those longerterm expectations. With this finally occurring five years into this entire crisis, i am not sure that another Interest Rate cut is going to be the thing that moves the needle. I think we need something that gets credit creation going, it is going to look very different from the quantitative easing we saw in the u. S. And u. K. The point is to get credit back into the business. He seemed skeptical that whether Interest Rates will do enough to stimulate the economy. Other academics we have talked to over in portugal, at the ecb forum are skeptical whether an asset buying program will the thing to get credit flowing into businesses. Is a saga that has played out for the past five years. We need to see Decisive Action on the part of the ecb. A what is the commitment from them that theyre going to solve this problem. Theyre going to expand product to adulation. That is up for the markets to decide. With Interest Rates at zero bound, it is not helping in the periphery. How does that whole how does that play into your perception as an asset manager when you look at the currency, when you look at the peripheral of europe . Just try and draw some of those thoughts together. I think that starting with peripheral markets, we have seen quite around the over the past few months. Bondse cases, the 10 year of these countries are trading through the u. S. Treasury. The question i ask myself is it isk to an extent, something similar we saw with European Equity markets over the past year or so whereby Everything Else had approached its value. European equities were still cheap and investors float into that class. We have seen investors dive into peripheral debt now that default risk has essentially been removed. The question is are these overvalued . Default risk has been removed and you think it is all about the ecb and whatever it takes . Is that anything to do with the european elections we have seen over the last 48 hours . I think default risk is certainly much lower than it was a few years ago. It is a relatively insignificant. We saw,to the elections think a key message is that europeans are unhappy with the current pace of growth and they were looking for new solutions. That dont see the answer and austerity in austerity. The leaders come together to discuss the kick in the posterior politically speaking. Do you think that is going to play into your thinking all . The politics. Politics around the world are always playing into my thinking particularly in places where emerging markets drive more volatility. We kind of know the state of play in europe. We understand why people are upset. We understand why the skeptic parties are starting to gain some distraction traction. If we can generate stronger growth that will make people happier. People want jobs and money in their pocket and that is two things theyll have right now. Thank you. You can see our conversation about the big scenes around investments at the moment. The ipos are very topical today. We will continue our conversation with david when we come back. Welcome back. The time in london is now 6 23 a. M. David, lets talk about some of the scenes very topical in the markets. We might get news about another ip euro in the london market in around 37 minutes time. Some of them have had mixed fortunes. Are we still riding the crest of that weight oave . When i think about ipos come i tend to put them in the same bucket as in doses they can be very good but when this irrational exuberance takes hold and there was an ipo, it must be a great idea that is when i question it. Certain companies have come to market very good deals. There are good opportunities for investors just like we have seen very positive merger activity. We have seen some not so good Companies Come to the market and. It is something to be evaluated on a casebycase basis. Mna and retracement and technology and the ipos, is about earnings . Earnings you are seeing so far this quarter, are they enough to substantiate new money coming into the markets . Earning growth is key. It is something that has grown to be allusive. Equity markets to push higher, we need to see Earnings Growth materialized. U. S. Was a in the very sharp vshaped recovery in earnings. That has not occurred in europe. For Earnings Growth to come in and take the reins and drive higher equity markets. Are looking for more consumption to drive that . I know you were talking about the leveraging deleveraging. We are almost at a point will receive changing consumer behavior. People have been deleveraging households. We need them to focus a little more on consumption. Doubled up create stronger nominal growth which should create strong revenues with Profit Margins where they are. That should still translate. You talk about emerging markets. Some assets are cheap but they can always get cheaper. You still quite like a margin markets. Emerging markets. Emerging markets are screaming buy. The baby has gotten thrown out with the bathwater in a lot of cases. Find those highquality companies that are trading at a very low valuation. As long as you do find some low volatility. The gdp is holding an election this year and that is bound to great volatility. Thank you very much. Antichina protest could ramp up again in vietnam as the country claims the country sank one of its swimming vessels. We will have the story after the break. Welcome back. Lets get the john to john. Im going to look at the eurodollar. Not much action on the price but plenty of news around it. Day two at the ecb forum. Yesterday delivered did very letter to temper little to temper expectations. At the very least, rate cuts are on the table but the question is how much of that action is priced into the market. David liebowitz tells you it pretty much already is. Thank you. These are the top headlines. The euro is nearly at a threemonth low ahead of a speech today. European Central Bank President signaled yesterday that policymakers are ready to expand the meal is should they see inflation taking root. The confidence of u. K. Service companies gross to a record this quarter according to the confederation of british industry. The survey shows expansion of businesses like hotels and restaurants and professional services. The industry accounts for 75 of the british economy. The Prime Ministers of pakistan forthe india meet today talks centered on trade issues. Sharif attended the swearing in ceremony for modi as well as 3000 other guests. Tensions are escalating in the South China Sea after weeks of cat and mouse. Vietnam is accusing china of sinking one of its ships. David has been watching this story developed. David, what do we know so far . What are the details . We all know the fact of what happened right now, but each side has their own version to the story. What happened was earlier this morning we had this report out newspaper thatse a fishing boat was attacked by a chinese vessel. That has since been confirmed by the Foreign Ministry in vietnam. They said the incident took place Late Afternoon monday. Some chinese vessels circled the ship from vietnam. One fishing boat was rammed with 10 people on board. Those 10 people were eventually rescued by vietnamese ships in the area. The chinese have responded and according to the officials, they came out with a statement about an hour back. Esey are saying the vietnam send those ships to disturb an operation in the area. China has adopted a firm stance in dealing with these things. The fishing boat just overturned and they now ask vietnam to stop this behavior. It took me very serious. David, just give me a little more context on this because it all boils down to there was a Chinese Oil Rig that was brought into the seas and that is part of the dispute, isnt it . Right. It was earlier this month when they started drilling in that oil rig in this incident took place not very far from there, about 17. 5 nautical miles. The first it is not time weve actually seen a chinese ship ram into a vessel. It might not be the last. These are disputed waters. China maintains that the oil rate is within its territory. You can basically do anything it wants. Them Prime Minister of vietnam was in manila, and he maintains what china is doing simply violates against international law. We are back to square one. Tensions are quite high in this part of the world. Thank you for that. Malaysia airlines is carrying out a full review of its business following the disappearance of flight 370. It was struggling with losses and increased income occasion but aims to break even next year. Bankruptcy is not an option. I am very confident we can do that. Malaysia airlines has been around for over 40 years. We have a worldclass reputation. We are one of the only seven airlines in the world that has a five star rating. Our cabin crew in the last 10 or 12 years the