After chinese regulators give the firm the goahead to close its deal with microsoft. It now has all the relevant approvals. Youre watching worldwide exchange, bringing you Business News from around the globe. Welcome again to worldwide exchange. Now russia is calling on kiev authorities to put an immediate halt to military preparations in the southeast of ukraine. Saying the troop buildup could lead to an outbreak of civil war. The Russian ForeignMinistry Statement follows an announcement by ukraines interior minister that antiterrorist operations are now under way in the eastern city of kharkiv. Under a bit of pressure today as well. Meanwhile, u. S. Secretary of state john kerry will meet with top diplomats from russia, the ukraine and the e. U. Over a new push to calm tensions in the eastern region. Now, Vice President at Intelligence Joins me. With me is also another guest. Good morning to both. Are we looking at a crimea take two situation here . Well, some of the evens that we saw in kharkiv yesterday and on sunday suddenly were reminiscent of the situation in which the crimea even started. That was the take overof the Regional Administration buildings and declarations of separate independence of willingness to join russia and calling on russian help. However, the situation in eastern regions is quite different to what we had seen in crimea. In times of the ethnic makeup of the population, the control of the Central Government as well as eastern regions dont have the military presence of russia that crimea had. We got comments from russia this morning in the potential about the potential for civil war. The kiev government are walking a fine line. Were still in that situation, arent we . Exactly. It is a thin line but were maintaining public order and restoring the control of governmental buildings in the regions and not being seen as too heavyhanded on what seems to be the russian ethnic minority representatives in the eastern regions. Any sort of powerful move on protester protesters and perhaps casualties on their side would give a good excuse to intervene in these regions. If not directly militarily, perhaps sending some of the force regulations through the ground as weve seen in crimea. Youre talking about a smaller proportions of ethnic russians in these region s. We dont want to get distracted by the pictures or headlines we see. Whats your probability that this situation escalates do you think . You see every time there is a separatist declaration, what we need to have a look at is do these people declaring independence have an actual control of the ground. If they did, that would be a dangerous situation. If it is 50 people sitting in the room proclaiming independence, that is still not thats very different. Yes, thats right. What do you think . The markets are keeping an eye on this but not really impacted right now. Have the sanctions weve seen give enough to give russia pause for thought here . Irrespective of what were hering from russia, yes. This is not a majority in this area. It is probably a minority and, well, we had a revolution in the ukraine. You have instability afterwards. Thats quite normal and to be expected. At the moment were watching the situation but not getting too excited about it. They do continue to threaten the ukraine as far as Energy Prices are concerned, the civil war comments this morning. What about what happens for the president ial elections on may 25th . There was always a belief that russia would do their best to try to influence them and get somebody in sympathetic to their line of reasoning and approach at those president ial elections. Is this going to be a key element there, too . Indeed. Russia said the military exercise is on their side of the border will continue for 45 to 60 days, a time line for the president ial elections and we expect the russia pressure in terms of gas prices, in terms of statements in regards of potential civil war situation in ukraine, pressure on federalization to continue at least until the first round of president ial elections. When we might see russia willing to engage with whoever becomes the new president of ukraine. But it is still up in the air. We dont know who that person will be. Its a continual buildup. We have talks with the west and hopefully ukraine and russia going on now. Otilia, great to get your updates. Great to get your impressions. Relatively little change for the stoxx, down by 0. 1 . We did lose 1. 2 yesterday which bucked a trend of nine sessions of gain for the stocks europe 600. It is the tech stocks, the momentum names that continued to see losses, taking their cue from what we saw as far as the u. S. Sessions are concerned. The key underperformer, were only talking around 0. 2 . The ftse 100 in the uk markets this morning. Lets move on and have a look at what else is driving this market. We have some of the top stocks, the key movers in this mornings session so far. Shares in sugar produce r suedzucker, it expects profit to go down. Another one were watching, sportsdirect. They are saying investors reacting to news that the founder of the uk retailer has sold 25 million shares in the company taking that stock down just shy of 6. 5 . Weve also got nokia, bucking the trend trading higher this morning after the company says its received approval from chinese regulators to sell its handset business to microsoft. The long awaited deal now expected to close this month in a signoff now on all the approvals the company needed for that. Quick check on the Foreign Exchange markets this morning. Interesting to see whats going on in u. S. Equity markets this morning. Not translating in terms of risk off environment. Dollar under a bit of pressure, were seeing that again. Euro dollar trading higher. They are saying thats the most oversold, perhaps looking for a boun bounce. The bank of japan meeting lower by around 0. 4 . Well be talking about what this means for the bank of japan and policy going forward, too. Quick check on sterling, too, we have uk data out this morning. Asian markets while choppy continuing the trend we saw from overnight in the u. S. Session. Well focus on the nikkei, down 1. 5 . Yen strength feeding into that in particular, the tech stocks, too. Twoweek low. 14,606. The nasdaq posting the biggest threeday losses of a drop since november of 2011. A bit of a bounce here that were seeing across these indices. Were around 33. 5 for the dow, the s p 500 by around 3 points and 7. We have a few hours until the open of those markets. In a reversal on its more bullish takes on u. S. Stocks, Dennis Gartman told cnbc hes getting out of equities and sticking with cash and gold. He said unusual market trading last week scared him into action. Something happened between 11 00 and 11 15 turned on a dime. I havent seen anything quite like that in that short a period of time. In a bull market there are three positions you can have, really long, pleasantly long and neutral. Its still a bull market. Its time to be neutral. You dont need to be short but you dont need to be long. I think cash is the right place to be. Dennis gartman there, saying cash is the place to be. You, however, say when we analyze shortterm trends using tech analysising with the s p 500 looks increasingly buttish. It does. What were seeing at the moment is very much the markets, very much focusing on Company Earnings. With the Company Earnings season just kicking off this week, the nervousness is whats reflected in the markets, the Market Participants thinking have we gone too far . Earnings perhaps going to dispoint us and thats why were seeing a son solizaticonsolidat its not only about the large cap names, its also about the small cap. The russell lost almost 6 in the last two weeks, too. Does that fit into this picture. It does. This market is driven by sentiment, the hope that things will be better in the future. If that is undermined, yes, markets fall. If i look at what the expectations are, the bar has been set pretty low. 111 negative eps announcements versus 17 for the s p 500. Is this an opportunity for investors to get back in, is that what youre saying . For those who are more courageous, yes, it is. You have to have the longer term in view. This will bring volatility because sentiment is quite brittle. It goes up and down. Investors seem to change their direction with every piece of news. Do you sit on your hands and perhaps wait for better levels . Germanys cabinet reportedly approved a reform of the countrys Renewable Energy law, this according to sources speaking to reuters news agency. The reforms are aimed at slowing down the expansion of green power which is contributing to a rising cost of energy in germany. We go to frankfurt to give us the latest. It feels to me like its reform on the margin and the bottom line is consumers will pay for green Energy Reforms in germany. Is that the case . Thats very much the case. Were still looking into a renewable search of roughly 6. 3 cents per kilowatt hour. Thats still a lot. The estimates are about a household of four people as approximately paying 200 euros per year just for the renewable surcharge. But that is actually going down for the german public. The majority of germans want to have that Renewable Energy shift. I think carolyn has introduced the term already in english as well during squawk box. What is going to happen now is we have less exemptions here for german corporates. The big ones, they still are benefitting from the exemptions and those exemptions to that surcharge are worth more than 5 billion euro per year. This have been challenged by the European Commission and that also today is allegedly after the table. There were flashes from reuters saying that German Government officials are saying that the European Commission has said has agreed to that Renewable Energy law, our economy minister is today presenting and the cabinet has approved. Really good news from that front. And the other side, who is benefiting as well, will be windmakers or wind mill producers, for example. The only Renewable Energy area which is still benefiting from more surcharges or more capacity is the wind energy. The German Government is saying its the cheapest power and we should support that power, because above all, there was a long standing problem getting them connected to the grid on the mainland. Those shares have been rallying on the news also when it leaked last week but we see a little bit of a rally as well today. With that, back to you. Thanks so much. Annetta outlining those points there. Samsung suspects its profits will continue to slip. Whos winning and losing the battle in the smartphone war . Its coming up right after the break. Youre watching worldwide exchange. Welcome back to the show. Samsung electronics estimates operating profit fell by 4. 3 in the First Quarter. Slightly below analysts forecast. This marks the tech giants Second Straight Quarter of profit declines. Now june is in seoul to take us through the numbers. Thats right. The slightly lower than market expectations, First Quarter preliminary numbers are showing that operating profit is expected to come in at 8. 4 trillion, down 2 from a year earlier. This is coming mostly from weakness in its smartphone business. This part of samsung was about 70 of the companys operating profit last year. Whats interesting is that samsung saw a Record Number of its smartphones sold in the First Quarter, more than 90 billion phones were sold. More importantly, falling average prices for its smartphones was the key point in this decline in profits. This is coming as a result of increased competition from lower cost phones from china. Also, funds set aside for legal costs for the samsung, apple peyton trail negatively affected the numbers. Analyst reports in korea are showing a mixed picture. Some are saying this isnt the end, samsung faces a more challenging Second Quarter as the two Top Telecom Companies started a new subscriber ban on all samsung phones. They may also see a bottom out in the First Quarter. In terms of what samsung is doing to avoid a further profit decline is theyre focusing on managing costs. Thats how the samsung Earnings Guidance look today. Julia, back to you. Thanks so much, june. Were joined by richard win sore, founder of radio fee mobile. Theyve had a weak start in south korea but they have competition at the top end, they have competition at the lower price end from china, too. I look at it and see a number of analysts saying this is the start of a further operating margin decline for samsung. Do you agree . Yes, im afraid i do. The real problem is if you look at the overall smartphone market, its very large and unit shipments will still grow double digits this year. Because all the phones pretty much look the same these days youre in a situation where prices will come down quite aggressively. That actually makes it very difficult to see Revenue Growth this year. Because of the price declines youll have margin pressure. While consensus is looking for about a 3 increase in operating profit for the full year for the sampson group, within i look at the numbers im looking around about an 8 decline. Im in that second camp. To go on from what you were saying, about generating revenues and margin, how crucial is it that they reign in those costs . These are also the things they need to address beyond the products, isnt it, surely . Well, this is the whole question mark, isnt it . The problem is, the hardware is becoming commoditized. In order to create value in the to do more and more services. If you look at the amount of revenue google generates from these devices is significant. Its moving out of hardware and into software and services. Samsung and position here is very weak. It looks like the 2007 samsung had massive market share. Lets move on ho htc, reliance on the htc for them, much weaker earnings we saw in q1 and 2. The life cycle just one quarter. How are they going to sort this business out . You have a death spiral. Yes, im afraid it is. Typically when you get a company in this kind of situation, you have to cut resources in order to stem the losses. When you cut resources, you then lose market share. Your losses deepen. You have to cut again. This is why you get that a death spiral. The way out of that is either you invest very, very heavily and incur massive losses in order to get a return slightly further down the line or basically you just carry on in this way. When you look at in terms of what htc is doing, they have a great product. But the Marketing Resources that htc has to go behind it is much, much more limited. This is where i worry. Plus the fact the htc 1m8 isnt cheaper than competitors. Smartphones have been around for quite a while. The question is who will be the next innovator . Quite frankly these phones pretty much look the same, have the same operating system as well. Theyre completely interchangeable. Who is going to be the one who brings the next innovation . Well, i totally agree with you. This is why the view i hold is that the value is moving into the ecosystem. You know, in terms of how an investor should position themselves in the smartphone world this year, its not really the guys who are making the phones on android. Its going to be the companies that have services that are able to generate revenue from the growth and the user base. The user base is growing quite strongly. Then you start to look more into the likes of google, yahoo microsoft, these companies. These are the ones you want to look at for the growth in the next generation. Richard win sodsor, founder radio free mobile. Thank you. Its interesting to look at apple and samsung. These charts suggesting that where the growth is is larger screens, and better price point. Everything that apple isnt doing. I think apple will come out with a larger screen product during the course of this year. I think actually now that the game has been leveled between samsung and apple to a certain extent because samsung is now struggling to grow as well, i actually have my stakes more on apple. Because i see apple as the more emotional product than samsung. Samsung is much easier to replace with htc or other products. Apple most of their customers, i think, are a little bit more attached to the brand. Emotional. Its the emotions. Interesting. Its complicated to move as far as apple is concerned. Everything is so connected. Emotional. I like it. Several Brokerage Firms have upgraded with lafarge. Pbs has a buy rigating on the stock at 2. The bane highlighting potential savings. Lets talk about what were seeing as far as m a. These businesses looking at deciding whether or not to invest in capex or go the m a route, go for the cheaper, lowcost option in m a. Thats what were seeing surely. Its the lower risk option. It tends to deliver more quickly. It gives you the pr boost. Really what we would like to see companies doing with their accumulated cash piles is not necessarily m a, its invest into future capacity. Thats going to give the economic recovery really the boost we need. Lets face it, at the moment its mostly carried by consumer demand. We need to get more of that industrial demand going as well. While were encouraged by what the m a tells us about increasing confidence levels amongst decisionmakers in industry, we would like to see that confidence also translating into capex. We talked about last year being the year of the buy backs. If i look at the s p 500, these companies are still spending about the same amount of money investing in capex that they are in buy backs. Its still the year of the buy backs surely. Thats why im not overly totally bullish on equities as i would otherwise be at this part of the cycle. 2014 will potentially be a slightly more borg year for equities than what we saw in 2013. Brilliant. Today is annual international payday, a symbolic day when womens