A beat for sap. The Software Maker tops analyst estimates. We speak to ceo bill mcdermott. We are less than a half an hour until the european open. Lets have a check on how futures are performing. It looks like a day of green, a day of gains. Click on the futures button on weei. The ftse 100, slightly underperforming. This could be related to the minors, bhp billiton showing less production than expected. The minors. R we are getting some big beats when it comes to the earnings season. Goldman sachs, microsoft among them. The s p 500 has been in terms of profit. Guy guy looking forward to carrying on the conversation surrounding the earnings story. We will have more on that with bill mcdermott. 0. 3 on unchanged, the german 10year. Dollaryen, keep an eye on that one. An interesting survey talking about the fact that we could see a fall of 5 . His will be interesting to see as we work our way forward on that one. Lets get you up on what you need to know. Heres our first word news with juliette sally. Donald has told supporters he is going all the way after formally securing the republican president ial nomination. The tycoons son made the theuncement in new york as home state of new york pushed him over the line. Trumps team has been looking to get the convention back on track after an opening day rocked by questions of whether his wife plagiarized part of her speech. Roman as named emanuel its next chief executive. He will replace Douglas Hodge who presided over the departure ceo. E former iran is exploring a return to International Debt markets for the First Time Since 2002. Economy minister whose ministries at the forefront of securing the countrys access to the Global Financial system spoke to bloomberg. Right now, the groundwork for issuing bonds and various iranian Debt SecuritiesInternational Markets exists, and im certain the situation will improve in the future. We have Something Like 45 billion worth of signed agreements with Different Countries for financing iranian projects. Juliette the turkish lira is plunging to a close to alltime low. Moodys says it is reviewing the countrys Investment Grade credit rating. Turkey central bank lowered its overnight rating by 25 basis points. This is bloomberg. Thank you very much, indeed. Hot on the heels of her first cabinet meeting, uk Prime Minister theresa may has a packed day ahead. New chancellor Philip Hammond and she will get a snapshot of the eu economy. Shes in parliament for her first Prime Ministers questions as premier. Then may start a twoday trip to europe, attending an event with germanys angela merkel. Tomorrow, she meets Francois Hollande in france. For more, we can go to editor Alan Crawford. He joins me in berlin. Our reporter Emma Ross Thomas is in london. So is christopher derbyshire. Of the a sense pleasantries and the hard bargaining if, any will occur. Is this more a meeting of minds . it will be a fascinating encounter. These are two Women Leaders who are very pragmatic. They are both daughters of church ministers. Generation, same and i think the german chancellor will be very appreciative of the fact that theresa may chose berlin has her first destination. Merkel, we time, have to take her public statements at her word, and we hear from what we have heard is she will stick to her line that there will be no detailed discussions before britain triggers article 50. I dont know what kind of conversation they will actually have. I think they will talk about the weather. Caroline how british. Guy if anglo merkel doesnt want anything detailed, what are we looking for . I think she will probably be trying to establish some kind of working relationship. Favors lot that that argues in favor of them having a close personal relationship. That will be key through the negotiations ahead. Wont dive into nittygritty, they are talking about common challenges, terrorism, migration, all the rest. Caroline Caroline Brexit is kind of the dominant elephant in the room, which they cant talk about, but what they should talk about. Alan talks about the similarities the women share. How important is that relationship going to be . This is pivotal. This is the relationship that is going to define what the story looks like. Emma absolutely. That is why she is going their first and going herself, not sending Boris Johnson or david davis. Caroline give us a sense of how much this actually means, a statement of power from germany really. Is that what is being assumed by the eu and german onlookers . Misses merkel does meet with may 1 out of any leader. Alan there is no doubt that this is a discussion between the eu as a whole and the u. K. Nevertheless, this place to both audiences, that she wants to develop these bilateral relationships. Merkel, shes the longestserving leader in europe. Thatcrucial, as emma said, they develop some kind of personal rapport. Both theresa may and merkel have said, these are going to be tough negotiations ahead. Caroline lets bring you into the conversation. What will be the market affect . Christopher i think you would see a boost in sterling. What the market is looking for is pragmatism. I think its looking for common ground, anything to reduce uncertainty, and i think the market is looking for some sign norway are brexitlite, rather than canada in our arrangements with the eu. That would be a big boost to sterling. Caroline give us a sense if its right of may to be coming to germany first. Youre talking about other key economies they should be negotiating with, israel, germany. Christopher i think it is, because i think it is our closest ally within the eu. Germany holds the keys to the migration and immigration issue, which is what the referendum in brexit was about. If theres an acknowledgment of that in the press conference later today, i think you would see a positive response. Crateay is trying to fiscal stability by making it clear that she feels brexit is brexit. We are going to be leaving the eu. Shes trying to take that question of whether the u. K. Will deliver on that off the table. Shes put interesting characters into interesting places within her cabinet, and given the the key profiles in negotiating this story, and yet she is the one who is going to dictate. Shes made clear, its my way or the highway. How much ofontext, this is going to be done at the most senior level, and how much is going to be done by johnson or davis . Emma iemma think its early to tell, but what is clear is there is not unanimity within the cabinet as to what brexit will look like. Given she has appointed people who dont necessarily share her view were hammonds view of what , some will look like people suggest it will indeed be may who is the decision maker. There are very differing views as to what brexit will look like. Single Market Access is key for may and hammond, not so much so for others. Guy thank you very much indeed to our bloomberg team, Emma Ross Thomas in london, Alan Crawford in berlin, Chris Derbyshire staying with us. Pimco poaches man groups ceo. Details coming next. Then we speak to sap ceo bill mcdermott. Then we are going to be talking about all the equity Market Action. We are heading towards the market open. It is 19 minutes away. There, busy morning out and we will talk about the Market Action as we run up to that. This is bloomberg. Guy weve got some changes at the top. Roman is ceo emanuel stepping down to become the new ceo at pimco, replacing Douglas Hodge who presided over tumultuous time at the firm. We are joined by ryan chilcote. New boss pretty well. Hes been based in london. Give us the background. Group,e has been ceo man the Worlds Largest publicly traded hedge fund, since 2013. You can go on the bloomberg and look at how he has performed versus his peers. During that 10 year, he outperformed his peers, 12 2 . Eturn, versus 2 it was a very difficult time for man group, clients pulling out money, trouble with the funds. Is he didl feeling well. Pimco putting out a note saying, we think his experience with global markets, Investment Strategy pimco itself is in a process of change, different from the pimco we had a few years ago his general experience is going to bode well for his time at pimco. Caroline luke ellis is going to be taking the helm at man group. Tell us about the outgoing pimco chief executive. Douglas hodges on the way out. What it much mulch was time he had to oversee with the farewell the growth after Mohamed Elerian departed in 2014. Ryan it kicked off with the an in januaryeleri of 2014. Then you had gross leaving later that year. Gross, when he left, he said part of the reason was in fighting. He said his partners were after his bonus. He also said pimco was doing the wrong thing with its strategy and verifying away from bonds and burgers and 82 im looking at my notes Something Like the varied menu you would get at a Cheesecake Factory restaurant. Far as he was concerned, pimco was making a wrong move in diversifying away from what it was good at and viewed everything as for all investors. This was a difficult time. If you look at the companys assets, they declined by 25 since 2013. They were managing about 2 trillion in 2013. That has declined. They are cutting jobs. What we have seen is they are bringing in new leadership to try to manage this period. Guy let me ask you a question. These are smart guys. They have global reach. Yet the world is moving money, pushed around by central banks. Why do i need smart guys who can understand what is happening . Money keeps going passive. Who wants to pay a fixed income manager anymore . The expected returns are not that high. Firms have the choice to move away from passive and too active. This is a management decline at pimco. Caroline thank you very much. That was Chris Derbyshire. You are staying with us. Ryan chilcote, great to get your perspective. Next, our conversation with sap ceo bill mcdermott, after the companys profits topped estimates this morning. We are going to dig into that number, and then of course, its the market open. Up next, another round. Sab miller is said to be facing mounting pressure from investors for higher cash bid from ab inbev. Details are up next. This is bloomberg. Caroline welcome back to on the move, 10 minutes until your trading day begins. We are talking sab miller. The board will discuss pressure from investors to seek a higher cash takeover offer from ab inbev. This is after managers complain the deal is less attractive following the plunge in the pound. Bloomberg reporter Thomas Buckley joins us to dig into this. Why are investors seeking a premium on the ab inbev bid so late in the game . Is it purely about the pound . Thomas i think it absolutely has to do with the pound. Weve seen the pound, ever since the referendum vote on the european union, crash to its lowest level since 1985. That sent a number of Consumer Companies on the ftse very drastically up. Rallys missed out on that , owing to the fact that the cash offer remains 44 pounds per share. The value is being talked related by analysts to be 40 pounds per share. Guy shareholders are also getting a better deal. Guy how does that get resolved . Thomas that is absolutely right. What we have seen is that the two largest shareholders are entitled to a partial share alternative. That is a mix of cash and stock. That has climbed to be at a value of 52 pounds per share. Caroline what about pressure , actuallym investors putting the deal on ice entirely . Thomas its difficult to imagine a ceremony where it will be blown off course. Theres 3 billion ab inbev will pay sab miller. At this stage, i think its a deal that investors want to see go through. It will be looked at as a good opportunity. Risk Arbitrage Funds are seeking a higher offer. Are there other deals . Are there other stories being affected . This is an absolutely massive rna m a story. How much disturbance is the pound causing . Thomas its an interesting story. Thomas there is a huge amount of uncertainty surrounding brexit. A couple people on the show before hand discussed how much the plunge in the pound has had to revalue into a deal. Softbank is still an acquisition that is a 25 premium on its highest stock price. A number of sab investors are thinking, there might be an opportunity. Guy chris, what do you make of this . Youve got this arm story sitting here. A lot of people are running the numbers and saying, the pound is down. There are opportunities here. Do we need to revisit all the stuff we are looking at . Christopher it has become the most volatile currency in the world, and massive deals are being derailed. We have heard anecdotally that ry transaction the works in the works will be stopped dead. Its quite worrying from an economic point of view. Caroline do you feel there could be more m a flooding in from the pound . Is their opportunity as well as other things being stopped dead . Thomas if you look at the commercial property sector, there are opportunities. You got the decline in the pound. Foreign investors will be taking a good look at it, but i worry about the volatility of the pound. You can do a lot of planning ahead of article 50 being triggered and see the pound at 1. 50. I do think people are going to be very cautious about the volatility. Guy they mustve been caught by surprise as much as everybody else. Thomas absolutely. They are holding a meeting today ahead of the annual general meeting tomorrow. We have heard that all these topics will be discussed. I think there is pressure from investors to seek a higher offer. They have a responsibility to discuss that. Guy think you very much for your reporting, Thomas Buckley from bloomberg. Chris derbyshire is going to stay with us. Up next, the conversation with bill mcdermott, this after the companys profits topped estimates. What is happening in the Software Space . Were about to find out. Well also get the take from bill on how he sees brexit moving forward and what effect it is having on his business. That conversation is coming up next. Well also take you up towards the market open. That story is next. This is bloomberg. Guy good morning. You are watching on the move. Im alongside caroline hyde, in berlin. Caroline has your morning brief. Mostine europes two powerful leaders size one another up. Can they see eye to eye on brexit. Pimco approacpoaches. And a beat for sap. The Software Maker tops analyst estimates after a rocky start to the year. We will be speaking to chief executive bill mcdermott. If you are seeing some green on the screen, that is futures, guy. Guy we are getting the right screens to show you what is going on as we can you down into the european open. Let me take you through what happened at the close yesterday. A very volatile start to the day. At the close, we did see a little rally coming through. A positive start for london. Paris is jumping as well. We are expecting to see more movement from berlin. Now, lets get the details from manus cranny. Manus we have a flash of green, financials up 1 8. Moodys turned negative here in the United Kingdom. Asian stocks of course, they are shifting around. Health care come up by. 6 . Let me show you some other stocks we are watching here on bloomberg this morning. These three stocks that i am watching. Youve got secondquarter operating profit, down by 1. 52 . They are saying European Growth was between 2 and 4 . A little bit of a trade lower for electrolux. Semiis europes biggest conductor of revenue. The shareausing on buyback. What carolinet hyde has a little bit more detail on. Caroline manus, i will take it from here. Lets get more on the sap story as we rev up for the stocks to open. We are joined now by the company ceo. It is none other than bill mcdermott. Bill, welcome to the program. I want to start with politics because you say amazingly, despite the widespread concerns, there are no affects from the brexit vote. Is that because there was not enough time to react . Are you expecting the thirdquarter to feel some pain . Interesting, caroline, its with a doubledigit growth in our software sales, our cloud sales, and our operating income. And that is a very pleasing trifecta. Sap is positioned like no other in our space. As we look at the realtime information on the pipeline, we actually see a very robust and everincreasing pipeline for our technology. And what is kind of interesting about the brexit specifically, just like the greek debt crisis are the china growth issue, our software tends to be very resilient in choppy waters because Business Executives start thinking a lot about their customers, their channel strategy, their inventory levels, their supply chains, their financials, and the Realtime Data to make smart decisions. And our architects are right in the center of helping them solve those problems, which is why we tend to be very resilient. Guy just a followup, bill, and i appreciate your comments on the resilience. But companies with big exposure to the u. K. , have they excited to resist making Big Investments at this stage . Any businesses you are expecting to win, but you have not . Walk us through the story surrounding the u. K. Specifically. Bill yeah well, specifically, you know, i need to give you an update on sap in the u. K. , which actually grew in the heart of this brexit issue. It actually grew in double digits in the cloud. So, we were quite interested to see how the u. K. Would react and how overall, europe would react. Euro