Transcripts For BLOOMBERG Countdown 20160525 : vimarsana.com

Despite the 62 billion bid being rejected. Good morning to you. Lets get straight to what the markets have been doing overnight. It seems like there is good news once again for equity markets. Have a chart that shows the moose we seen in global equities. Thats what you will the here in blue. This is not just the april numbers for us home sales. We have asian stocks rebounding nearhe dollar holding twomonth highs even if it is retreating just a little bit this morning. Manus its going to be a very interesting day. Thing . Te hike such a bad lets check into what weve got in the markets. Their but wege have risen over the past two weeks, markets factoring in the fed hike potentially in june, back in the cards. You have negative yields elsewhere in the world. Strong data in the u. S. New home sales coming in the strongest in eight years. Never far from a barrel of oil in this region. On the way to 50. Inventories dropping by more than 5 Million Barrels and the norwegians are saying 100 is history and toast and its not coming back. The first word news. Agreeing to step down after almost six years at the helm of the bank. He will depart once his successor has been named. He agreed there was a need for management change. Still optimistic in his pursuit of months and told says it will six the despite its bid being rejected. Address thedoes not execution risks of the deal. Shares rising more than 3 in new york. It would create the worlds biggest supplier Farm Chemicals and seeds. Leaving the European Union could add tens of towns to u. K. Government borrowing and forced chancellor George Osborne to extend austerity into the next decade. 201920of returning in 20 is currently planned, they deficitce of budget next month. Is on the cusp of crossing the delegate threshold wire to formally secure the nomination. At the same time House Speaker paul ryan has begun telling confidants that he wants to end his handoff with donald trump. They said his decision is in part because the split has sharpened divisions in the republican party. The oil market is rebalancing, but dont count on ever seeing prices at 100 a barrel again. Telling bloomberg is not planning or hoping for prices to go back to where they were. Reap the benefits and tax it like we obviously do. But to plan for 100 and in depth with 60, its better to plan for 60 and let the people who want to vote for a hundred vote for 100. Prosecutorslice and have rated googles offices in paris as part of attacks brought investigation. Google releasing a statement saying it complies with french law and is cooperating with investigators. For more stories, just go to the function top. Lets find out how asian markets are performing. Tope had a few clues to performance. We have a great session coming out of asia. This after a couple of days of hefty losses and falling volumes. Following to the lowest all year earlier this week. Having said that, we are seeing gains picking up from the Higher Oil Price and lower again, part of a perfect storm driving up equities appetite in asia. A very strong session here in hong kong. Sector, uphe energy 6 . Putting on over 4 as well. Elsewhere around the region, if there was a drag, this would be it. A couple of concerning pieces of , there is some concern theyre trying to outpace the fed when it comes to getting ahead of what the fed might do to try to manage the currency. We also had the government reporting profit numbers on the enterprise sector, down almost 10 through april. This is what weve seen when it comes to southeast asia, singapore gdp meeting expectations, a little bit of relief there given that is an exploring headwinds coming from china. The Energy Sector driving gains when it comes to the sydney session. Other commodities doing very well. Having a good not session at all, down over or percent. Its looking like a very solid session here in asia after what has been a very trying week for asian investors. Goes. Lets see where it creditors have reached an a in greece. Theyve also committed to taking steps to relieve the debt burden on the nation. 321 billion euros of debt following an 11 hour meeting in brussels. Am very glad to be on to say that the imf has expressed its intention to recommend to the board to approve a financial arrangement before the end of the year. Imf will go to the board on the basis of this agreement to , apart again of that Program Support program for greece. Its an important moment for greece after so much time. On the now an agreement ,eview and structural measure they collided into wine, if you remember this summer we agreed to finish the first review and then there would be a discussion on debt but these two things have collided and now we have an overall package. Bloombergs european politics correspondent from brussels. What exactly was agreed last night . We had the headline, 11. 5 really dollars and eight payout but the political impact of this is unstated. It was always really going to be about politics rather than economics. Politically, the Prime Minister has a bit of respite now, he can make repayment while in germany chancellor angela him or can go into next years general election confident that the International Monetary fund is on board and also debt relief is assured. What they did not agree on was any of the details, that argument still has to come. Is the strawent that breaks the proverbial back every time we talk about greece. Where do we go from here . Could the deal fall apart in any way as a result of no new news on the details of debt relief . Thats right, its all still very fragile. Wording that satisfied enough people to make things progress a little bit, so there was a little bit of wording about debt relief in the shortterm that satisfies the and national Monetary Fund in germany and greece. All it has done really is kick the can down the road until next year, maybe even 2018 and the Greek Bailout Program concludes. Then we will have to talk about it all again. There is no agreement yet. Theres still a long way to go in there could be a few more late nights like last night still to come. You almost got through that whole brexit hit without kicking the can down the road. Guestlets get to our this morning. He joins us on set here in london for much of this hour. Great to have you on the program. That cliche seems to do quite nestle quite nicely. Decided. Ains to be it seems very much like an agreement of convenience more than anything else. Now,e needed the money they were already behind on payments. Europe really needed to show a stable hand in front of the brexit vote. They need to put greek concerns to the side. The imf was willing to fold it not really stand up straight. So this is easy for us to move forward with without having to solve the issue. Theyre estimating greek debt to 2060. Und 250 i its completely unstable, but right now it will make the headlines that make investors feel good for a short while and allowing europe to continue to unify a fragmented into me enemy. The agreement was political in nature and it really lacks the detailed economic rationale that would say otherwise. They have to move greece off the table so they can deal with the brexit issue. Now its critical from brussels as well as ecb matters. So it is really important. Manus i want to show you a chart that we have been looking greece. Debt to gdp for 70 higher than it was in 2008. Its hugely under pressure. Would you buy the bonds or banks . How would you play a recovery trade in greece . I would first look forward to a recovery. We are concerned that the weight its alsoon greece, the immigrant season where they will have to forward an enormous amount of spending just the salt that issue and theyre not getting help from brussels. I have a hard time thinking theres going to be a recovery. There are a few assets in terms of utilities that i think would be kind of interesting, but overall the longterm greek story is one that is quite difficult to buy into. Anna in terms of the broader its a around the euro, very dangerous question, but is the greek story not going to be as it has been . They could pay their people and go back and say we have the money. This is the nature of the whole greek crisis. Its always been a shortterm patch, crisis, shortterm patch. So we are kicking the can down the road. I dont think well hear about greece for the summer other than perhaps the immigration is and where the money is going to come wrong for paying that. Terms of bringing back the grexit, i think for now we have a pass. Anna thanks very much, peter. A snapshot of europes biggest u. S. My, then midday we get Mortgage Application figures. The reality later the bank of canada is scheduled to announce its latest Interest Rate decision. Fed president is due to speak in houston. Of italysthe ceo largest bank has agreed to step aside. Anna welcome back. Its 7 19 if youre watching it italy. Hes agreed to step down after six years at the helm of italys it is a. He lost the support of investors. Peter is still with us here in as well. O jonathan, thank you for coming in. Att were the problems unicredit that got us to this place . Lowest had the second ratio across europe. The straw that broke the camels back was clearly the issues that need to be addressed. Underwrite, and the november strategy day, there is still a hodgepodge. This is a bank that went through massive acquisition spree and theyve written off 15 billion. 15 billion euros it looks very bleak, frankly. What kind of capital do they need to raise . How will it play out and where with atlantis in terms of cleaning everything up . Problem is, where the , theresey need to do something they could do there. Theres a lot of tidying up around the exits. In terms of how much they need right now, it depends what your view is on the bad debt. Really the coverage ratio of 50 thats where in the market is getting to between five and 10. Its quite daunting. Anna you mentioned some of the assets that could be sold. Were talking about a lack of ambition may be around that. What can we expect then from the new ceo . Of the highprofile ceo changes at other banks been working out . Learned,e thing weve they have stepped in to late. It is clearly making good inroads. Seen ubs early turnaround. Have a bank that is mired in problems and has been for a very long time. There is no simple solution. Theres a lot of pain ahead and they will have to write down a lot of the bad debt and dispose of things that perhaps the wrong prices. Then they can think about a rights issue. Manus we have this chart between us, my question is, some of the big dividend payers, the stability of dividends. Would you ever taken opportunity on a stock like unicredit, a. Urnaround stock they are all turning around but nobody has got there yet. We would be quite concerned about the ability for any news eeo to go in and turnaround. Unicredit is more or less an extension of the Italian Government and assuming a lot of theres stability of holding up the italian Banking Sector. I think it would be difficult for any new ceo matter how innovative and aggressive they are to turn around given the old infrastructure that is already in place. It would be quite difficult for someone to step in a reverse , perhaps different than standard credit or Standard Chartered where they have more freedom to do that type of innovation. Aboutevery time we talk the Banking Sector in europe, we compare it to the u. S. , and there seems to be many lenses through which you can look at the underperformance of the european Banking Sector. Does that fundamentally show any signs of changing . Andow far has portugal greece actually come . Italy is a problem that is not been addressed. Of saving itt way shortterm from taking that rain. The government wants a National Champion. Is clearly saying we will do the right thing, which does make you think, are they going to be asked to create a National Champion and dispose of mistakes in the past and become the it would rebuilt make sense, but it would be a painful road. What i have is the league table in terms of dominance in the Foreign Exchange business. Deutsche bank has gone from number one down to number four. Theyve lost 15 of market share. There is a huge shift, isnt there . Beinge your customers are pushed away, and once you lose the number one spot in the business cycle, its tough to get them back, isnt it . Very much so. Acrosss fragmentation the world, its becoming a very easy market to get into from an i. T. Standpoint, from a personnel standpoint. A lot of people on the street are looking for work unit that one of the key reasons why it from 10me fragmented majority players to a variety of smaller players that are chipping away at the dominance of people like deutsche bank. Ups is saying that the Banking Sector is the cheapest sector in the world. Is there another appetite from investors taking risk on this . The fact is if you look at the expected returns, the cost is 15 to 16 for some of the more troubled restructuring. They are cheap for a reason. Peter will stay with us. Up next we will talk african telecom. A. M. it is 6 30 lets get first word news with rishaad salamat. An agreement will allow the release of a, taking steps to of debt. He burden the imf did stand down from its hardline stance as the great programs did not offer sustainability. Almost pictures at the helm of , the boardgest bank agreed there was a need for a management change. Are is optimistic that his is optimisticr its pursuit of monsanto will be successful. It does not address execution risk of the deal. The deal would create the worlds biggest supplier of Farm Chemicals and seeds. According to the institute for fiscal studies, instead of returning the surplus and the 2020 fiscal year is currently planned, redmayne face it deficit of 30 billion pounds if next month. Brexit he appeared before the u. K. Treasury community. In the same spirit of goodwill, i will you to dismiss something and that is we know , you are an sachs former managing director of goldman sachs. I will give you the opportunity to refute any suggestion the government has pressure on you. Yes, i refute it categorically. Global news 24 hours a day. Found onstories can be the bloomberg terminal. Risenasian stocks have from their sevenweek lows after a surge in u. S. Home sales data fueled speculation the worlds biggest economy can withstand higher Interest Rates. Some risk taking it seems this morning. It does look like risk has gone pretty much across the market. The msci jumping the most in a month. We saw a pretty by broad based. Its a broadbased rally today. Gainingustry groups are , led by energy stocks. Thats whats happening in stocks. The big news coming from china, weakening the you want to the lowest since march 2011 after the Dollar Strength drove the bloomberg dollar index to a twomonth high, having reached that the previous day. This is a key thing because it fixes figures weaker because back in january it drops below the fixing. This could be a sign we are not at that level of january turmoil that we saw back at the beginning of the year. Fx volatility. To we have a lot of questions of whether we will see a rate rise with u. S. Home sales data fueling that rate. Ise you have to go back to march to see the same low level of volatility. I will not steal manuss thunder on Oil Volatility but lets look at crude oil and copper rising ahead of u. S. Inventories expected to show a drop in stockpiles and copper also rising after the u. S. Home sales data. Anna lets pick up on that theme there. Volatility is fallen to november low. Manus, you have the chart of the hour. Manus lets go back to the , look at theyear dissipation as wti has rallied slowly. Im calling it the corridor 46. Is the narrowest price range in six months. While it till it he is below 30. We havent seen this since the start of the year. Inventories were down by 5 Million Barrels. We will wait for that data a little later today. This, is it the volatility stuck calm before the storm . Anna and oil prices a little bit stronger. Norways Petroleum Industry spoke exclusively to bloomberg television. 60. Ts bound for read the benefits and tax it. But to plan for 100 and indepth with 60, then you have a problem. That the people who want to vote for 100 vote for 100. Anna we will speak to the cfo of norways weakest oil company at 8 30 london time. Peter is still with us. Its tempting when you see them more than 80 rally in oil prices to wonder how far they can go. Its a little ought if you believe its going to be 100 a barrel, then you should forecast it, not underprice the market and then hope for the best. The collapse of oil prices was a supply issue. We also see the rise of oil as a supply issue. The lack of investment, the upkeep of all these types. Were seeing an increase in the number of production. Right now its the wildfires in canada, those are manmade, but we will continue to see this erosion of the quality in the of because of the lack it will lie allow oil prices to drive higher. Of 50, you look at this and you have the ruble on the march, but these exporters, is that where the bang for the buck comes or is it all to do with the fed . I think your idea of consolidation is 100 . There is an enormous amount of concern about june in july with brexit, with the fed meeting, with the republican convention. People are just throwing up their hands, like what is going to happen afterwards . The only way to play it is to wait in see what is going to occur. I think it is causing volatility to sort of contract because people just dont know which way to move. If we get a revolution from brexit without the u. K. Leaving and we get a fed hike that the market tolerates, i think we could see places like mexico really improve, places like russia get a boost as well. As well as the Risk Appetite story. Anna give us your thoughts on the fed. Give us your take because its difficult to see how good news is interpreted in equity markets. It has not always been the case. People think the u. S. Economy can handle a higher Interest Rate. Are two things. What we are seeing probably now is frontloading in the housing the higherd of Interest Rates that are expected. People clearly now see that the yield curve is deepening and they need to get involved now if ever. We are not buying into the story that the recovery in the u. S. Should be good news for everybody. Clearly you will have a rotation dollart into the u. S. And thats a primary concern for many of these countries as well as the u. S. As the strong dollar starts to appreciate. You have the ability for that strong dollar to derail any time of recovery that were seeing now. Also because of the external environment that were looking at, its unlikely that the fed is the the u. S. Is the only we havewhere acceleration and inflation issues while the rest of the world is looking at then we list for demand, cutting Interest Rates. There has to be spillover into the u. S. And we think that will keep the fed on the sideline for now. Manus how would you play the dollar trade then . Goldman sachs had a huge note out saying the dollar has to go to 130. We dont think there is enough data out there to support a rate hike even though the numbers are coming in and making is concerned about the forecast. I would look for a euro yen , morein policy divergence likely that the boj will act very aggressively to stimulate the economy but from a fiscal and monetary standpoint, its unlikely that the ecb will do something aggressive. We think the euro yen might be aware a better way to play it. Anna peter, thank you for joining us. The annual meeting following a series of missteps that has culminated in a 3. 9 billion fine and the nigerian operations. Itsfirm has since seen stock lose almost one third of its value. Thanks for joining us. How did it come to this point . The company has been working to build this big company and they went into markets where few rivals wanted to go, and it paid off for them for a very long time. Unfortunately what is happening now is the Risk Appetite has been catching up with it and there are now seeing a massive fight and prices have fallen by 50 . ,ts rival has surpassed them even though they are still the in the market. Can this be fixed, is it something the company can turn around . Basically investors are asking for clarity. With nigeriand it. Orities on how to fix talks have been suspended so it is unclear where the fine will go and what the resolution would be. ,ut that is what investors want according to management of the and governance within the company. That is bloombergs africa telecoms reporter. Manus up next, the house that jack will. Chinas Biggest Ecommerce Company alibaba and the man behind it. Anna welcome back. Excuse me,ndon the time in new york, 1 48. Goes insee where europe the meantime. 6 48 here in london. Rishaad the lowest level in , one point 5 million in base salary bonuses and deferred remunerations. Losses abroad swell. Plans may have hit a setback following tim cooks recent visit. They told apple if it wants to open its own stores in india it must commit to sourcing 30 of its components locally. Apple currently does not meet that criteria but it could still be overruled. Deutsche bank shares have ago. Ed after 14. 5 year the bank is now the worlds fourth biggest traitor by market share. After holding the top position from 20052013. Arguing saying it remains fully committed to settling the governments claims. That is your Bloomberg Business flash. Our next guest is the author of a new book about the band behind chinas Biggest Ecommerce Company. He joins us from singapore with a little more on alibaba. Great to have you with us this morning. The question i have for you is this, when i read all the stories about jack ma and when i see him do bloomberg west with it whole world looking in, is revolutionary. Is he a revolutionary man . I think he is. In a country where revolution obviously has overtones. The reason i wrote the book was to try to turn the camera around and not just look at jack but look at why he has this appeal, not just within china but internationally. What is it about his message that resonates, and lets dig deep into that story. The revolutionary aspect hes brought to china is bringing convenience and trust into consumption that was not there in the offline world. The big question is can he go deeper with that revolutionary approach. Anna and what did you conclude as to what his appeal is . I was struck by the clear message he was giving to customersrs that my and staff are my top priority. It was something a little different. Number one for him his customers, second is employees. Its great to bash the shareholders in public, but of course he needs capital to achieve his ambitions to read , thewere talking about is longterm is 20 years as opposed to the west who might say five years in terms of the horizon. , and thettention Second Chapter is called jack magic. His employees have described this sort of where charisma that he has that gets people on his side. The first chapter is his iron triangle. Its a combination of the machinery hes built and his charisma. Question is can they go beyond the founder into all these are areas. It is still a tall order. One often has someone in their life or career that they would perhaps in me late. Does he look more toward warren buffett, bill gates, the businessbillionaire builder, or is he more drawn to western europe . What is it that drives jack ma . Mashup, tot of a be honest. Its a bit of east meets west. Hes always been focused on International Trade from the beginning. Hes been inspired by jack welch , although thats not why he chose his name. Also chinese traditions and got, which isrest a wellknown cliche, but he has a strange fascination with heroes and history. Its part of the Company Something but its that jack really believes in, taking on impossible odds. Anna he will be cinereas with of chinese history. Who hasl be a man really connected into that. That way,e himself in of playing a key role in the big change in the chinese direction . Needs government actually signs to consumers that things will beginning better. Theres a lot of challenges right now in the chinese economy. Its all well to hear about how things are blooming in other areas, but new jobs are coming. So many service jobs have been created, more than have been lost in manufacturing. China like the number of are employing lots of people. The sort of a script of how government can be useful to the consumers and the economy. There have been tensions with the government over piracy, let challenges,ational but he has never shied away from a challenge. Im just curious because hows trying to get popular is jack ma with the power . He really embraced, or is there just a tacit acceptance that they have to go with him because he is a lot more powerful than they . Thats an interesting way of putting it. Think anyone whos trying to get ahead in life has to coexist with the government. I dont think he is looking to be the poster child that he is for this economy but it certainly helpful for his ambitions. When they arender centralizing power, what is the relationship between the two men . Slept step down as party secretary. Its always interesting to think about their utility to each other. It is the utilitybased relationship. Anna duncan, thank you for joining us therefrom singapore. , how well has the new ceo fed fared after less than two months during the job . Whoill speak to the cfo will join us at 7 20 u. K. Time. Stay with us on countdown. Manus greeces creditors reach an agreement. They agree to ease the debt burden as the imf stands down. It is an important moment for greece after so much time. We have now an agreement, not only on the review and structural measures. Manus goodbye to the unicredit ceo agrees to go after his efforts to improve capital. Choice. The German Company says it is optimistic of its pursuit of monsanto. Willing succeed despite the bid being rejected well it succeed despite the bid rejected . Manus you are welcome to countdown. I am manus cranny. Anna i am and edward. I am anna edwards. To the futures. Manus we are going to have a brisk open as far as european markets are concerned. In the u. S. Equity markets, rallying the most in two months. Weve got these features. London up. 6 . Oil near 50 a barrel. Inventory is down by over 5 Million Barrels. The norwegians are saying that you are not going to see 100 oil anytime soon. Dollar yen, goldman says keep face with kuroda. 125. Treasuries, anna, youve got Marks Spencers. Anna we got the numbers from the u. K. Retailer. Implement and actions to recover and grow, closing at home. They will be reviewing their crawlspace. They are going to focus on shareholders returns. In terms of the numbers they are reporting, the fouryear profit before tax, 600 Million Pounds. 4. 8 tenths interesting to say they are going to focus on holder returns at one of the questions is if they are going to keep up efforts to reward shareholders yet go they brought back shareholders . That was one of the key questions going in. They are saying their and limiting actions to recover and grow clothing. That has been the heart of the business they have been struggling with. They want to end a fouryear slump and closing sales. Formally they were formerly the market leader. They are saying that they are lowering their prices and reducing the amount of promotional stunts. Them whoto see they are aiming at. Under this new ceo, he is only been on the job seven weeks. Not very long for him to make his presence felt. He has kept direct control of that clothing business. Interesting to see what he thinks he needs to do to turn this is this around. They are talking about sharpening prices and putting more employees into stores. We are going to be speaking to the cfo, helen weir. Manus. Manus anna, a little bit of breaking news coming in on mitsubishi. Its relation to the data scandal. They havent rebated 2015 numbers. ¥75. 58 billion. N we got here is a chart what weve got here is a chart. Related to the fuel data scandal. Charge. L be a onetime the operating profit for mitsubishi motors, ¥138. 38 billion. Revenue for the company, 2. 27 trillion yen ¥2. 27 trillion. This is a onetime item for mitsubishi odors motors. Futures rising. Auxin spencers are in play it with got the cfo. Ishaad. Et out to r the cfo of unicredit has agreed to step down. That is after his efforts to improve capital and lost the support of investors. If onlyhe board agrees for a management change. Bayer is optimistic that his pursuit of monsanto after the bid rejected. The share undervalued the company and does not address execution risks. 7 er shares drop more than since the offer was revealed. The deal would create the Worlds Largest pharma. Osborne, whoever it is to extend austerity into the next decade. Instead of returning to surplus in the 2020 fiscal year, britain is facing a deficit as much as 30 billion pounds if it votes for a brexit next month. The market is rebalancing but dont count on every single isis at 100 a barrel again. Seeingdont count on ever again on ever seeing oil at 100 a barrel again. [indiscernible] the plan for the plan for 100 an end of it succeed dollars. Let the people who want to hope for 100 hold for 100. Rishaad French Police have raided google as a part of a tax fraud investigation. Lower. Taxes are much google releasing a statement saying it has complied with french law and is cooperating. By 120powered journalists. Indeed for more stories, if youre on the bloomberg terminal, go to top go. Anna, manus. Anna thank you very much. Lets get up to speed on the market action. We have seen a lot of strength coming through. We are in the money which is a good thing given the past couple of days. Asian markets eking up where the u. S. Really left off picking up where the u. S. Really left off. This is really a confluence of events of a weaker yen, stronger oil prices, a pickup in commodity prices. That is feeding through into risk capital when it comes to equities. It is the energy space that is driving the game. Apex. Look at the refiners oil services as well as miners. Php tracking those 80 oh gains. Top recliner in sydney leading the client when it comes to the gold miners. The imminent fed fed rate hike could be putting that rally very much at risk. Japan also higher. That weaker yen is very much helping exporters. Sony, the top gainer. Investors looking past the report card into the future. When it comes to the chinese session, it is a picture of two markets of hong kong here. Very strong buying into financials. Hong kong based property developers. This is largely due to Short Covering assets. Home sayers home Service Number beat falling into the red, up by. 3 we have the pboc causing some doubts over management of this currency. Sparking concerns of the potential of future capital outflows. We have data from enterprises reporting their profit down by over 8 from the start of this year. Just last week, quite a bit of strength coming from emerging markets. We got the likes of banks in india leading the way. We have got the likes of banks in india leading the way. Anna. Anna the cao for u. K. Eastern europe and africa joins us now in the studio good michael, great to have you on the program. Lets take a global look as we stand. Interesting to see the strong data out of the u. S. That was well received by the markets. Well received as if investors think that now the u. S. Market anna with a higher Interest Rate. Is that the right conclusion . Michael i think the bond market disagrees. The bond market thinks the fed, if it does three rate increases, could slow the u. S. Economy. I think this kind of charts that bf sealeeing by the i think the markets have not priced that in yet. Equities are vulnerable. Getse bond market, which it right more than the equity market, it is a note of caution here. The u. S. Is beginning to ease. There are patches of labor market where wages are increasing good health care, for example. Wholesale yesterday very strong. I think we will have a repeat of extreme volatility that we saw last august and september. I sense complacency. Manus that complacency, it is interesting. I really story, the treasuries are the worst performing bonds in the world. Produce 7 return in the last two years among 26 of its peers. Perhaps you dont want to have bonds on your book. A little bit of volatility. What if brexit would also of the risk radar what if brexit went off of the risk radar, would that change your mind . Michael i think yesterday rally wasriskon started by the telegraph pole on the brexit. It shows a whitening of the get a widening of the gap between the two sites. Rally inred a broad europe. If the market is pricing in lower the brexit risk already, think theres still a risk. It will perpetuate some of the spirit of skepticism in the u. K. And europe for years to come against a backdrop of rising political risks. We are not out of the woods yet. I grexit, i hear the sound of can being kicked down the road. [laughter] michael it is political in that it positions discussions on that relief from the german elections. Who knows where we will be in 2018 . It doesnt really solve the Balance Sheet issue for greece. I think it does for the moment take greece off of the geopolitical roadmap for the time being. Anna take us to your thoughts on how assets are positioned ahead of the eu referendum. As you suggest, we see some movements in the poll. What the polls are showing is that moving toward the remainder, the green light picking up here anyway to this peel blue line. Perhaps it is the most significant. The level on the other side has been high. Michael when we come to the referendum, the turnout is going to be very important. The remaining side they remain side in terms of the asset classes, sterling having a nice rally. That can go on beyond the referendum. It depends on how quick the recovery in the u. K. Economy is. We are having a recession of sorts at the moment, because of deferred spending investment related to the referendum. The ftse 250 has had a rally as well. Maybe some of the banking stocks are sort of still cheap and maybe a way to play a remain goal. The market is pricing in a remain verdict. Manus i want to pick up on , recession here the u. K. , there is was a big note saying that sterling wants to hold in a little bit more, which is if it is going to be euro sterling which goldman is saying youre going to see a pretty big leg. If we vote to remain, versus cable, versus the swissie story versus the ftse story. Michael the euro story can move. The level of growth in the u. K. Picks up to where it was perhaps last october, november. Given the fact that growth in the eurozone for the big economies is going to be cap at 1. 6 . Be cap at anna thank you for joining us. It is 7 15. 8 15 if youre watching and frank for. Haslinda top executives by 18 . Were awarded an average of 1. 5 million bonuses. This after profits at japans biggest brokerage slumped and losses have florida 12. Apples plans we have hit a setback following the recent visit. The Promotion Board has told apple that it wants to open its own stores in india and must commit to sourcing its component locally. That is going to people with knowledge of the matter. Apple does not currently meet that criteria but the panels decision could be overruled are the modi administration. Deutsche bank has gotten worse. The chair of the 5. 3 trillion debate currency market has tumbled to 7. 9 , down from 14. 5 a year earlier. That is according to a euro money Institutional Investor survey. The bank is now the worlds fourthlargest currency trader, sliding from secondplace in euro moneys 2015 reckons after holding the top provisions from 2005 2 2013. Anna. Anna has linda, thank you. With the reported results with net profits coming in at 193 million euros. It will expand its network. Oining us now is Jozsef Varadi thank you for coming to see is on countdown. Tell us a little bit about how you see the rest of the year shaping up. We spoke to Michael Oleary at ryanair and he was pretty gloomy on pricing. How do you see things into the future . We are seeing trading conditions being quite robust moving forward. What visibility we have on the business, we are confident in our ability to deliver proper resources. As expected, we are seeing the lower fuel prices feeding through into the fed environment. Fares are coming down. But it is good news for us because we are growing more than what people wouldve expected it were going at a rate beyond 17 . We are seeing some size decline, higher growth of airlines and a better airlines. Manus joseph, good morning. Youre going headtohead or Michael Oleary is taking the challenge to your doorstep. How do you make this challenge . Is it going to be on price . Or expansion headtohead in those airports where he is. It was the latest. Jozsef we have been competing with ryanair for a long time in different markets. This is not new to us. Competition is effective like. It is good to us because it makes us sharper. We are very focused on cost and this is the basic premise of our business. Our competitors ryanairan ask you, sir, are snapping at your roots. Are you seeing a drop in bookings as a result of ryanair to the challenge to you . Jozsef we are not. Were increasing capacity. We are the largest airline. We know the customers and we are in capacity to do it. We are seeing demand and weaken them and we can benefit from demand. Dont we still dont know what happened to the egyptair a disaster that happened. We still do not know what exact because it. There have been a number of terror related incidents in recent months that have weighed on some affects of the airline industry. D. C. That evidenced . Ent d. C. That evidenced do you see that evidenced . Paris, the market recover fairly quickly within two to three months. Muscles, the markets cover brussels, the markets recovered quicker. As life moves on, we see our trading were seeing trading conditions manus are you adding to your hedges in jet fuel you go is this a timely moment jet fuel . Is this a timely moment . Jozsef we have a fairly systemic this systematic hedging system systematic hedging system. If you dont hedge, you take a bet. If you overheads, you take another bet. Where hedged on 50 . We are hedged on 50 . Anna Jozsef Varadi, ceo. Lets move on to another company, Marks Spencer reporting for your results. The retailer ceo unveiled a new plan to boost its clothing and Home Business reducing Price Promotions and refreshing styles more often. Joining us is Marks Spencer, cfo, helen weir. Talking about the need to focus on holder returns. What does that mean for shareholders and the context what you have done previously . Helen what we have announced this morning is we are continuing the program shareholder return returns. That is continuing with the announcements this morning with special dividends. We are a strong cash regenerative business. We will invest in growth. Capex will be about four and 50 Million Pounds will be will beillion about 450 Million Pounds. Good returns going forward. Manus helen, good morning. One of the lines is that you want to restore rights position in clothing and home where. This is what everyone will be focused on lowering prices, give us a guide. The percentage across the is this. Is it a 5 drop . A 10 drop. Are you inviting rice war . Inviting price war . Helen customers are telling us they value the prices every day. The review that we have had against Customer Feedback is that we have gone to promotional too promotional it we would estimate that we will be priced up to a third of our range, 10 to 20 in terms of price reduction. Customers will notice. We were able to afford this because we are continuing to drive and if its by working directly with manufacturers. Therefore we are reinvesting some of that margin benefit. Anna can ask you about the balance of the business . You mentioned what customers are telling you. How does it manage to appeal to mothers and daughters all at the same time . With the change of management, with all of the thinking that is going on about the company, have you managed to get to the bottom of that . Helen that is one of the things we have been focused on. When we talk about now is style and design. What customers are telling us is they want to be stylish, and enduring look that they can feel confident in. It is not about highfashion, it is about having style. Age, butnd to focus on for us it is about the attitude. All of our customers from 20 to 80 tell us they want to look and feel good in the close the day by. In the clothes that they buy. Manus your demographic is rising and it is shifting more toward your 60s, doing these joint ventures, very appealing. It takes more than that to turn the dial in terms of getting people into those stores. What else are you going to do apart from those banner headlines . Helen we have over 32 million customers. It is hard to argue that they are all we have a wide variety of different customers. It is about the right design, style and price. It is about the execution and store. It is about mickey show we have the right displays so customers making sure we have the right displays so customers can find what theyre looking for. When customers come in the can find it product they are looking for in the size that they want. Anna how much is it going to cost to get the clothing offering and Marks Spencer . How much are you going to spend in getting this right . Helen as i said, what we are doing is taking the margin benefits and reinvesting those back into price. It will take time. The other thing we will be investing in his store stocks. The reason it takes time is it takes time to make the changes. It takes time for customers to notice. That should change their shopping behavior. Were not calling that specifically. We are confident that we are doing the right thing and then in time our customers will notice it. Manus yet gone from a huge number to six. You now a great deal from overseas. Sterling is under pressure. What does brexit mean to you and the team . Helen basically we think this is a decision for the country. It is a decision manus i want to know what you think for your company. Helen in the longterm, there is a lot of uncertainty. That is what you will mean for the business at a whole business as a whole. Sterling is a bit more expensive for us to buy things. In the longterm, it depends on what the alternatives. Anna ok good helen weir, thank you for joining us. That will do it for countdown. Okay, ready . 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