Another company in a deal that could put a smile on investors faces. Welcome. It is 7 00 on monday. It is back to work for the japanese Prime Minister shinzo abe. Big problems for the third economy. Full 1. 6 . A lets go live to tokyo to speak our economist. Where does this leave the debate on tax increases . Works pretty much dead pretty much dead. Raising taxes in the next 12 months would be economic suicide. When you the debt gdp numbers today, a enough damage was done with the last tax increase when you look at gdp numbers today, enough damage was done with the last tax increase. Down, but boj double we havent seen any of the Structural Reforms the Prime Minister needs to implement to make japan more competitive, to increase the growth rate, to unleash the economy. There is a lot of potential, but there is a lot of red tape. There is a lot of deregulatory taken. Hat need to be what happened as a reminder how little has taken place over the last two years. What does it mean for the likelihood of a snap election . Do the numbers make it more likely we will have a snap election in japan . The snap election is confusing for a lot of us. You could argue Prime Minister abe has a mandate. The snap election is about saying, give me a fresh mandate. This is a bait and switch. The election is about shoring up his own support in the government so he doesnt have to worry about elections next year or the year after. Is politicalit kabuki. It is four years we wont be focusing on making japan more vibrant and competitive. To me the next four weeks when were talking about campaigning and the election, it is a bit of a lost period. If youre wondering when it will appear, it wont appear anytime soon. We are looking at early 2015 at best. What should he do to get japan back to Sustainable Growth . Just announce immediately the tax increases off, forget the election, and spend the next five or six weeks redoubling efforts to boost the economy, loosen labor markets. He needs to think about reducing trade tariffs. He needs to think about affirmative action for women. Be doinga lot he can to make bank of japan more about startup companies. We dont have a lot of young and across with a laptop in a dream in a new company. Laptop andage with a a dream in a new company. We have a lot of talk. Todays numbers are a reminder of the lack of progress abenotics have made in the last two years. You. C. You thank breaking news for our viewers. The Consumer Goods Company is in thepharmaceutical side of business. They would take the business and spin off. They are going for a demerger. The Pharma Business they hope will be spun off. Share, you will get one share in the new company. One of the big issues to convince the marketplace is it will be a selfsustaining pharmaceutical company. They have one huge product. It is an opiate addiction treatment. Revenues are going to fall. Revenues are expected to fall by 7 to 680 million pounds. That is a hard business to be in. The board considers the demerger is in the best interest. It is a fairly standard kind of line they are putting out there at the moment. A general meeting to approve will happen. We are getting more on the relationship with telefonica. Story was covered widely this weekend. Telefonica u. K. Will provide access to two g, three g, and 4g. The ceo of talk talk talktalk is saying this is a Significant Development, building on the companys success in mobile. Idealys they are in an place to benefit from the market. There is a growing number of customers already choosing to take mobile from them. They have a deal with vodafone. Add. Is another one to the leaders from the g 20 nations have been heading home from the australian city of after the summit. The leaders agreed of a gdp by 2015. 2. 1 very ambitious, but is it achievable . They say it is achievable. Must implements the policy they discussed over the weekend. More than 800 initiatives were discussed over the meeting. They want to raise growth across the globe and port 2 trillion into the global economy. Meet 2rillion trillion into the global economy. Christine two guard sai dugard is skeptical it can be achieved. Our goal will be to monitor country by country, action by action, reform by reform whether there is delivery or not. We will dutifully report to the so everyone can understand who is doing what and whether it contributes to the growth and jobs that are very much needed. The challenges are many. If you take australia, the Prime Minister lamented the problems he is having here getting his budget passed. That was tabled way back in may. Having trouble getting a lot of those measures through. Japan has slipped back into recession. Next year the g20 presidency is handed over to turkey. They have compelling issues on their borders and have indicated the next years summit is going to focus heavily on climate change. In terms of keeping momentum heading towards the ambitious growth targets, good luck. Thanks, paul. We will see you later. Over the weekend the g 20 summit in brisbane. Vladimir putin received a chilly reception from world leaders. Ryan chilcote joins us. Some of the imagery i watched over the weekend reminded me of british politics splendid isolation. Over hisft sitting lunch. That was it. A difficult reception in some of the leaders. This was extraordinary. David cameron mocking the russian president , saying he had becauseht any warships he felt safe. We had the canadian Prime Minister saying, i guess i will shake your hand to the russian president , but one thing i want to say is you have to get out of ukraine and the russian president himself telling everyone he has more important business to attend to. Have a listen. Nine hours to travel. Home, andve to get monday i have to be in the office. I need four to five hours of sleep. I came to tony abbott and explain that to him. He responded with understanding. I think our work is done successfully. We are going to hear back from the european union. The Foreign Affairs council will meet. Sanctions. Ct more the diplomats are gathered over the weekend with u. S. Diplomats. It is going to probably be limited to personal sanctions and assets of individuals that have been sanctioned for helping the rebels in the east of the country set up of elections. Will it go be on that . We will have to see. Everyone suggested they might have to see more sanctions against russia, but that wouldnt happen until the 18th of december when eu heads of state gather. That continues the sanctioned conversation. Putin has been trying to deflect criticism away from himself towards ukrainian leadership, hasnt he . Talking about some of the move the ukrainian counterpart poroshenko has made recently surrounding the Financial Services industry. Its important to watch how the conflict is evolving. The russian president is talking about a decree president poroshenko issued as part of the peace talks that gave the region a special status. As long as they recognize they were autonomous and ukraine. Over the weekend he said they it. Not recognizing he is also telling state Companies Operating in the east of the country as well as banks you cannot do business there anymore. If you think about it, there are 3 Million People in the rebel held areas. Four pointn from five before the conflict began. They cannot get money. This is already a. Isenfranchised group of people anybody who could get out pretty much did get out. This is the russian president saying, that was the wrong move and i am going to take this up with the ukrainian president. I think escalation is more likely at this point than deescalation. Thank you very much. Stay tuned. The president of the institute for economics will be joining the poles. Digesting some of the information coming out of the g20. Join the conversation. Tell us the stories you want to hear more about and the stories you want to hear less about. What do you think about this bydge to boost gdp by 2 2018. Big numbers. Will they ever deliver is the question. manuscranny. Make his dreams come true. Our next guest says the future is small. E is the managing director williams tells us why he is investing in small caps. Our next guest says the future is small in a world where growth for Large Companies remains sub normal. Joining us is the managing group they tone managing director. Your book about the best performing market. When the world is not growing Large Companies are struggling to dodge the bullets. Intoof us are happy to get smallness and Small Companies. We see japan going into recession. A lot of conversation about the state of the eurozone. You are saying because Global Growth is not delivering the Big Companies are caught up in that. How is it Small Companies can stay away from that trend . Like Small Companies will be struggling. Some companies can buck the trend. Happens much more often in Small Companies and Big Companies. If you can back those companies they will grow. As they grow the Share Companies depreciate and that drives shares up. You also draw dividends into this discussion as well. You say investors may put a little more pressure on Smaller Companies to reconsider the dividend policy. What does that involved . Why should we think about that . I think a lot of us have gotten used to being lucky on stocks. You get in a stock and it goes up a long way. I think we have become more hardnosed. I think if we are going to invest capital we want to see capital going in, but we want is the cash coming out. If you go back to the 70s and 60s when the comp the economy was struggling, Dividend Growth in Big Companies was quite muted. Mall companies grew their dividends much faster. In the last x months that is beginning to happen again. Months thatst six is beginning to happen again. Suggesting investors should put into small cap stocks. Tell us how big a shift it would be . They are putting in i am saying they will put in smaller micro cap stocks. In the 60s and 70s investors were not getting much growth, so they had to put a decent portion in micro caps. Markets developed around the world in smallness is japan. Tell us about the individual businesses you like at the moment. Oil prices falling. It seems to be fleshing out some him an a and the sector. I know that some him in a m a in the sector. I am quite hopeful we are not going to get low prices compared to where they have been. I am trying to resist takeovers at the moment. A good example is the Oil Companies need to reduce costs anonymously. One of our Larger Companies is marine services. It does jack up arches, which cost about a third of the value of a jack up rig. Well companies cannot make them fast enough. They are getting fantastic returns, growing dividends. They should be doubling. There is a structural change or a technological advancement, and that Small Company is on the forefront. Therefore they buck the global trend . Absolutely. Earnings will probably double, against the flat markets where growth is very low. It is sensational. Investors have been on the sidelines of late. What is your feeling when you talk about recovery. Where are we . A lot of people are very confused. The information keeps switch backing all the time. A lot of investors get caught up once or twice. A stand back. We get a lot of investors who are very confused out there. Smallness is not very convenient. It is a liquid. Liquid. Our il is the ftse underperforming this year . Why is it underperforming . Him of the Largest Companies have done badly this year. Was 4. 2 billion. I am afraid it is growing much more slowly. We have seen a few other stocks comewhen dale quindale down. Many other companies which have gotten lucky have also been badly affected. If you look at Underlying Companies generating regular dividends, they perform much better. Inc. For joining us. Thanks for joining us. Coming up another wrinkle in the face of the botox maker. Why there could be a 64 billion deal on the table. Time for company news. A deal to buy the botox maker for 60 billion. The deal could be announced as soon as today, and activists could pay actavis 216 a share. Lastfollows a takeover bid month. Facebook is developing online tools for the office. To theaccording financial times. The new venture would allow collies to chat and collaborate on documents. Facebook will face competition from the likes of microsoft, google, and linkedin. Alibaba has resumed merger negotiations. The companies have restarted talks after initial discussions last week. An announcement could come in the next few days. Any deal would face scrutiny from u. S. Antitrust regulators. If you ever wanted to invest in shanghai comp is it comp is it, now you can. Opening up chinese stocks to overseas investors and giving those on the mainland and ability to trade hang seng chairs, there is a limit to the total of shares, there is a total revenue. Of tom mckenzie filed this report. China is opening its doors to the outside world. A 4. 2 trillion dollar market unlocked for foreign investors. It had previously been off limits for all but a select group of money managers. They had to strict stick to strict quotas. Now anyone with an account can buy shanghai listed equities. Stock markets have rallied in expectation. Expected to turn shanghai into an International Financial center, and it doesnt stop here. Investors are betting on similar links with london and paris. 7 26 here in london. Coming up, we will bring you an exclusive interview with israels biggest listed tech company. That is coming up after a short break on the program. This monday morning in london. 7 30 in london. Thele are taking money off table. The dollar index is a little bit lower this morning. 87. 46. ,fter good numbers on friday which means good economic data, two days in a row, and the dollar struggling to rally on good data. Could that indicate the end of a pretty good run . Japan is back in recession. Headline news. The underlying data components were less than enthusiastic. Begin is rising. The market is taking risk off the table. Equity market set to open lower today. The yen yen is rising. Have a look at all or ruble. Uble. Llar r we are just a little stronger. The volatility of ruble is that a sixyear high. Is the highest level in almost nine years. That puts some context around it. Three times the volatility of the rand. Putin is warning of catastrophe based on oil prices. Tople are beginning to refer 1998. I will give you a clue to what happened in 1998. Russia defaulted. Blunder, ifor my have rewritten my note. This is mcnamara i would rather have root canal than by the ruble. There you are. These are the top headlines. President obama says the beheading of the american aid was an act of pure people. The video showed the aftermath of his murder. He was 26 and converted to islam after his capture. David cameron reported there are red lights flashing on the economy. There is a dangerous backdrop of uncertainty that presents a real risk to the u. K. Economy. Those risks have been highlighted by mark carney in and mark carney. Carney says the u. K. Has huge Deflationary Forces coming from trade partners, particularly europe. His remark comes days after the bank of england lowered its inflation forecast. Bird fluke causing concern in england. Up to 6000 birds could be cold at thefarm culled farm. There is also an outbreak south of amsterdam. The strainent said can be transmitted to humans by direct contact. , if you are catching a flight there is a chance your actions could be captured. Shares in israels Biggest Tech Company are at an alltime high. Good morning, elliott. I am pleased to say the ceo is joining us in his first ever tv interview. A great time for you. You have been on the job seven months. You had recent earnings that beat estimates. Shares at a record high. You probably couldnt dream of being in this position. We are proud of thirdquarter results. For us it is just the beginning. We are starting to see the result of the plans we put in place about a couple quarters ago, and we have seen improvement across the board. Marketrovement in the the thirdsult in quarter. We believe and hope it is the of what will happen in the next few quarters. You have three areas of business. You have call centers, security, and Financial Crime in compliance. Which of those areas are showing the most promise right now . We are very fortunate to operate in these markets. They are all growing market for us. We see a positive momentum in all businesses. All of those are key drivers of our business. A common thing for us in all of those businesses is analytics. We bring Analytics Solutions into these markets. Never far froms our thoughts. It was seemingly unstoppable, but it has weakened about reporting 8 from the dollar about 3. 8 on the dollar. Is that a level that is acceptable . It is a company that has a lot of engineering in israel. A stronger dollar in order to benefit from the situation. To have it more sustainable, we probably need the shekel to be a bit weaker. Has it impacted earnings at all . Has it hurt you . Definitely in the past we are exchange. R if it will continue to have a positive impact on our business, our ability to invest in engineering in israel. Isone of the hottest things big data. Are you focusing on that right now . Is it just educating . You have been doing big data before most people even heard of it. We are able to do gigantic data. We take a tremendous amount of data since we started the and we 28 years ago, bring analytics and applications using this data. Of havingbination even more technology. A lot of education, which is is helping our business. You talk about strong organic growth. Plan to also said you aggressively pursue acquisitions. What kind of area are you looking at