Telling to fight the sunni insurgents. President obama has not ruled putting troops on the ground. Andrew david is with us now. Andrew, can this violence be stopped . It is very unclear. They have swept in. This has been going on for a week. We saw a good chunk of the iraqi army collapse and evaporate. They are within 60 miles of baghdad. Clearly they have more support in the north than they would in the south and as you mentioned we are seeing calls for civilians to take up arms. But calling for that to stop an insurgency shows how desperate the situation is. There are reports that a quarter million iraqi soldiers may have defected. Al qaeda thinks they are too violent. That is pretty frightening. They have a lot of experience earned in syria fighting the civil war. They took much of the north in less than a week. They captured a lot of equipment. The iraqis have air support. You know the army evaporated in the north. Yes. Obviously we look at Market Reaction to all of this. We have seen stocks in the gulf in particular take a bit of a hit. Oil prices being key. Yeah. So far the equity markets have been relatively muted. We saw oil at 114 yesterday. Highest in nine months. Averaging 116 in the final quarter of the year. Most of the Iraqi Oil Production is in the south. Clearly there is some disruption in the north. Are not yeah. I think they wouldnt have had time to do that anyway. You know the iraqis will want more air support. Obama is in a tough place. He declared the war over. He wanted to get as far away from iraq. The republicans are pummeling him now on the fact that these forces are coming in from syria where they criticized obama. He is in a really tight spot. There is not all that much the americans can do there. They are evacuating personnel from the embassy in baghdad. That is not a good sign. Discuss how the oil markets lets have a look at how they are doing. David. We are seeing in equity markets. Still very early, obviously. It is about back to level. To see what is happening. In japan we are looking at turnover there. 25 to 30 thinner. Perhaps you can see it in this time of the day. The Energy Markets are continuing to fall. There you go. Crude and futures were contained. Now closer to 107. 15. Basically we are looking for brent above 113. Bloomberg did a survey and the thinking out there, the average at this point. Right now that could change as developments progress. 116 a barrel is the average price by year end. That is what is happening with the Energy Markets. Dollar index, there is any sort of dollar effect there. Just about flat there. A sharp up tick on friday with petroleum. The Service Provider in the energy sector. Upgraded to overrate. We are also seeing gains across most of the gold mining stocks in australia given that they do benefit from this defensive play of money moving into hings like gold. Six Straight Days for gold futures. A lot of risk aversion and defensive plays coming in. Yen, gold and the oil price at this point. Back to you. Thanks for that. Bloomberg market is out with the latest list of the worlds Strongest Bank it is. Once again it is a lender from this neck of the woods on top. Yes. Hang seng bank. Ssets are 1. 14 trillion. Strong capital base. They have come back from risky investments. The regulatory requirements, they are really on course. Very stable. Those are three of the reasons they are in this top tier. They were ranked 10 in 2013. This year number one. That is the situation at the top for the third year in a row an asian lender. 8 of the 21 banks are asian banks. Which are the other ones . O. B. C. , overseas china was number one in 2010 and 2011. Now they are number four. That is one of the examples. D. B. S. Does well as well. Yes. I agree with you. One of the key measures is this. You have to have a return if you are an equity investor. But you have to measure it the right way. Return on equity but this is a bank with very Strong Capital base. If you have a weak capital base you will always be higher. If you do it on a conservative basis like that returns of 25 . It is not just last year. It is consistent. You dont find that. Certainly it is better than any bank in asia. It is of course better than any bank in the u. S. Or europe. At least he agrees with both of us. That is the important thing. Retail banks in this survey. That can apply because clearly you are seeing a lot of the investment banks, british banks. Canada. Canada again. Three banks from canada rank in this ranking as well. That is very encouraging. John, thanks for that. You can read more about the worlds Strongest Banks in july in the julyaugust edition of bloomberg market magazine. In half an hour we will speak with the magazines executive editor to get more on this story. And the First Chinese bank to get a british license. They are set to get a license by the end of this year. That would be the worlds biggest lender to boost transactions and lend larger sums. China eastern agreeing to buy 83 jets in a deal worth 7. 5 billion. The biggest ever from boeing for a chinese carrier. They increased estimate for demand from china expecting airlines to need at least 5,000 more aircraft over the next two decades. Worlds biggest steelmakers says it is good news china may lift a decade long ban on Foreign Investment in the industry. Steve, how will chinas protective ways changing . Well, there is an argument on what should china do and what will china do with their ailing Steel Industry . The chinese mills are losing money, many of them. They are riddled with inefficiency. China consumes half the worlds steel as it has been urbanizing but it is also the worlds biggest producer and there is a glut of unused capacity at these inefficient chinese mills. To curb this overcapacity the government has been squeezing credit to the industry. About 80 of the major steelmakers had a combined loss of 2. 3 billion yuan. That in the First Quarter alone. What is being described by harshest s one of the perating events. The overcapacity issues need consolidation and he is raising his hand to help. But there are regulations prohibiting him from taking control of steelmakers. One of the few foreign steelmakers with investments in china since this ban on overseas control was imposed in 2005 but chinese authorities, given all of the troubles in the Steel Industry and the reform push, they are considering scrapping the ban which would significantly shape up the landscape here as china has seven times more steel demand right now than the u. S. And the u. S. Is the next biggest market after china. The big evaluate problem is that a lot of these steelmakers up in the north are stateowned and big contributors to the economy. They are big employers. So this is a politically charged discussion as well. Growth there are big areas in steel intensive industries such as car making i guess. The economy may be slowing but automobile sales are not. He says he sees that industry growing by 60 over the next eight years. They are already the worlds biggest auto market. That is why he says they are focused on making steel for Industries Like autoive as well as white goods, washers, dryers, refridgerators as the consufpblgeds trend in china increases. Mittal is opening up this new venture. Guess what they are go to on . Ly be focusing automotive steel. Still to come, thailand accused of modern day slavery with thousands held against their will. Thailands military rulers are denying claims that they are forcing Migrant Workers to go home. Tens of thousands of cambodians have left the country. What are the authorities saying . Well, they are saying the accusations are groundless that there was no order to excel cambodians or other labors from neighboring countries and say the workers are returning home for the harvesting season. So essentially the allegations are just rumors. That is what they are saying. Still, we are seeing panic among cambodian workers, thai employers. More than 100,000 cambodians have fled tie lan on crackdowns here crossing the borders since the army seized power in late may and in recent days the number has increased. Reported that seven were killed over the weekend in a truck carrying returning cambodians crashed. The military ousted the government following seven months of political unrest. They denied the crackdown but they said they will take steps to control migrant labor because of concerns about Human Trafficking. What is happening on the thaicambodian border at the moment . Chaotic. Workers say tens of thousands of undocumented migrants were trying to flee over the weekend. The border checkpoints were overwhelmed. Thailand says that many as many as 4 million Migrant Workers in the country. About 400,000 from cambodia. About 2 million from myanmar working illegally in Industries Like agriculture, fishing, holding jobs not wanted by thais themselveses and make an important contribution to the economy. Thanks. Up next flash point iraq. We will look at the wider implications of the fighting on the oil price and the regional balance of power. This is on the move. It is monday june 16. These are your headlines. Lets start off with the top story. Fighting in iraq continues over the weekend. Iraqi military forces struck back at sunni militants as the government tries to reassert ntrol over large chunks of territory north of the capitol. They say the situation is improving. The sectarian war has now started to hit emerging market currency. Indian rupee drop to a onemonth low as concern the country a trade deficit will widen further. Keep in mind india is highly dependant on imported oil. Now to eco data. Remittances from the countrys 10 million strong overseas workers. Aprils figure is expected to have topped 1. 9 billion. Money spent from abroad is one of the pillars helping to drive consumption and property demand in the cunlt. Coming up, i was talking about the indian rupee. We saw on friday. 80 in ow north of 59 early asian trades. For india it is basically risk aversion. We look at a lot of these high yielding currency. The aussie dollar down by about a tenth of 1 . It has recovered a little over the past 0 minutes or so. Taking it above water there for the kiwi dollar. The measure of the u. S. Currency here we go. So those are the stories driving your market this monday morning. Lets get back to the top story, the crisis in iraq and how it is all affecting Energy Markets. Victor, thanks for joining us. What is your take on all of this . Well, you know this is a serious situation in terms of the global oil markets. Iraq is now the second largest producer within opec. The world market is counting on much more production coming from iraq going forward. So this situation in iraq really threatens potential supply growth going forward. Absolutely. Is there anybody out there . The saudis are the key swing producer. Can they make any difference with the short fall . Lyou know iraq produces about 3. 3 Million Barrels a day of crude. Within opec the spare Production Capacity is just about 3 Million Barrels per day. The spare Production Capacity within opec can offset all of iraqs production if the production gets disrupted. But you can see that. There is not really a whole lot of spare Production Capacity within opec. So if any iraqi production is really disrupted the market will get quite uncomfortable with the limited Spare Capacity within opec and we are going to see crude prices soar if there is any real disruption out of iraq. Indeed. We have not seen that yet because the insurgency is still taking place, north of baghdad in predominantly sunni areas. And mosul where it all started. If they encroach further south we will get to that pain barrier, right . Right. You know the much of since much of the revenue for the iraqi complement comes from oil. O the oil fields and the exports infrastructure in the outh are going to be attempted targets for these insurgents. And right now the disruption or the attacks have all been in the north. The Oil Infrastructure in the south has been out of harms way. But these are indeed tempting targets that we will need to keep an eye on developments going forward. All right. The thing is if the situation continues to escalate how high could oil prices go . I had a guest on last week suggesting if things worsen dramatically we can see oil at 130 on brent. I think when oil prices go above 120, you know if there were some disruption in oil, consuming nations will start discussing releasing strategic stocks. And that is going to put a lid on any significant surge in pricing. But i do agree that if there is real disruption out of iraq we ould see at least a 10 to 15 dollar rise in prices and consuming nations will discuss releasing stocks. Some of the airlines and car makers out there, are they feeling it yet or is their position already hedged so that they will not for a while . They are feeling that quite yet. In fact i would say the oil markets response to the situation in iraq has been quite muted so far. In large part because the world has seen a lot of growth in nonopec production out of north america so the crude supply situation is quite robust at the moment and no disruption as happened to the iraqi production. But if pricing rises by 10 or more sectors Like Airlines are going to be really quite severely affected. Is this the time to be buying oil . Stocks at the moment. Given as the prices go up, they become more profitable. I think that the oil market is going to get tighter. The iraq i situation is did not going to be resolved any time soon. We do have quite a bit of oil out of the market. Libyan supplier problematic. In the latter half of this year we are likely to see Oil Demand Going up. We are entering into the summer season. The demand for gasoline typically goes up. O we are likely entering a stronger market. Il producers will benefit. Victor, great talking to you. We have to take a break. On the move returns in a couple of minutes. We are rising for a fourth straight day waiting for the fourth straight day on news of violence from iraq. Bloomberg industries remaining optimistic on casinos in macau. The numbers on capital strength. One bank has risen to the top. It is hang seng. At the origins of Hang Seng Bank and how it made it to where it is today. Lets have a look at why hang give us an idea of some of the preconditions to get on. E list we assess the quality of their assets, their reserves, balance against the extent of their risks. Theyre not very exciting banks. They are very safe. That is one way of putting it. Take it early with what the world has been through and the Banking Industry has been through with the financial crisis of 2008 in 2009, safe and boring is a good place to be. Many are warning that hong kong could be facing a property bubble. It could have a negative impact. They have faced that before. It is cyclical. Hang seng bank is prudent and well protected in terms of balancing its risks with its reserves. The 10 of them on the list are asian banks. Out of the currency crisis of 1997 and 1998, the regulators here are mindful of what can happen and have imposed reserve requirements that tend to be in excess of what is required by the bank of international settlements. Hsbc and Standard Chartered are not on this list. Top 20. Te only the you have to have assets of 120 billion. There is only one u. S. Bank, which is u. S. Bank corp. Of minneapolis on the list. None from the list. What is stopping them . As i said, it has to do with the regulatory regimes. It is also a matter a measure of the kind of reserves you have versus the risks you take. Thank you very much. What is get a look at going on market wise. Thanks, rich. Youre talking about hang seng. For thisabout 24 years version of the worlds Strongest Bank. We have to go through a lot of numbers, five sets of criteria to be well above. Exactly as far as growth, but that is where your money is safe. That is another way of earning it. Here are three other banks have always been among the top 20. Dbs. Ave you kobe and let me clear this up so it is more clearer for you. Three other groups that did well. You have the three banks from singapore, hang seng is number one, then he have the german bank, three banks from germany. You have nordic tanks and the canadian banks also doing well rounding up the top 20. If you look at the top 29, out of 21, you have to banks tied for second place, they are from this part of the world which is obviously a big market. It has to do with the regulatory framework. Helps that the Hong Kong Monetary authority basically follows what the fed does. We have low deposit rates in hong kong. If you are borrowing 0. 1 , you dont have to be very aggressive to make a return on your capital. Rich, there you go. Ofg seng bank and of bunch eastern banks in singapore doing well on this annual list. Thank you. Lets have a look at some of the top corporate stories. Here is john. The uks sunday times says they are britains third richest train. Buy French Company alstom by siemens could be made today. They would buy alstoms gas turbines business. Mitsubishi and he taught she would merge your steam turbines with those of alstom. Japanese companies would take a Minority Stake in the venture. That is according to a report. They declined to comment on the number of jobs being lost. The company is involved in a review of its business. Those are the Tech Corporate headlines. Argentina kicking off their World Cup Campaign with a win against bosniaherzegovina. Scored another goal to give argentina a healthy lead. Bosnia could not force the draw. Thrash honduras 30. Germany is celebrating with victory at the u. S. Open. He led the field on all four days. Americ