Interested in a deal with ge as it scraps its dividend. While media reports suggests siemens is pulling out of the bidding. And investors react to the vicious business plan, they say the ceo is being too optimistic with his turnaround goals. Youre watching worldwide exchange, bringing you Business News from around the globe. Hello, warm welcome to todays edition of worldwide exchange. Plenty to get through today. Well be talking about autos, phil lebeau will be talking about tesla. Well talk about janet yellen. First, alibaba has filed fon an ipo after weeks of anticipation. The filing offers a look at a business that controls around 80 of chinas online commerce market. Eunice is in beijing for more. Shes been waiting for this for some time as well. 2,300 pages in this filing. But key questions unanswered. Definitely key questions unanswered. I think everybody wants to know wheres the price, how many shares are going to be sold . Give us more detail exactly about what this ipo is all about. Mainly because a lot of investors are going to know what the valuation is going to be, whether or not this is worth their time. Is it going to be worth the risks and the Corporate Governance issues, the corporate regulatory issues. Some people say wed like to see a discount to invest in this company. Theres plenty of good stuff to say about alibaba. It is, as you noted, a behemoth in the ecommerce industry here. It controls fourfifths of the Online Retail business. And that industry is expanding. It has 231 million active users. It has 248 billion worth of goods that are moving across its site. So the question Going Forward is, they are twofold. One of them is that a lot of people are wondering about the competition, the competitive environment here. How long alibaba will be able to remain that Massive Player in the market. But also and more specific to this ipo are a lot of questions about the regulatory and Corporate Governance issues around this. There have been plenty of people complaining that its unclear at least doesnt seem very optimistic about how investors will be able to have any influence over the board. The way that its structured really indicates that the management and in fact just the founders would be able to have a complete control over who gets on the board and the direction of the company and a lot of investors and shareholders just might not really be turned on by that. Ross . Plenty to get to. You talk about the governance issue. We know where they are going to list, the new york or nasdaq. We dont know if theyre going to choose the nyse or the nasdaq. Traditionally, there has been Tech Companies listing on the nasdaq but theres been a lot of movement on the nyse. The reason people are uk toing so much about the Corporate Governance issues, theres a lot of suspicion and discuss about how alibaba would have pursued or at least had pursued the new york listing as opposed to a hong kong listing because of the regulators in hong kong. The regulators wouldnt have allowed the Partnership Structure that the alibaba management wants to keep in place so they can have a lot more control over the company. And thats something that a lot of investors dont like to hear. They dont like to hear there isnt a lot of transparency in the decisionmaking thats going on, especially when the company is raising a lot of money. They are going to be putting more cash in their coffers. They have been on this acquisition trail. A lot of people want to know what theyll be doing with that money and whether or not this is a worthy investment. Ross . Plenty more to come from eunice in beijing. Plenty more on alibaba as well. Head to cnbc. Com to find out plenty more on those numbers. Meanwhile, here we are, just over an hour and five minutes into the trading day in europe. You can see we are weighted to the downside this morning. A little bit less than 73 decliners outpacing advancers. European equities, the ftse down 23 points yesterday, the dax down 0. 6 . The xetra dax is flat, the cac current is off 0. 2. The ftse mib is down 0. 6 as well. The u. S. 30, the tenyear yield down at threemonth lows. Were running off of that at the moment, 2. 58. The big focus will be two days of janet yellen testimony. It starts today. How dovish is she going to be . Well talk about that later as well. Italian yields also following spanish yields below 3 . On the currency market, the dollar index is down near sixmonth lows. Were on that at the moment, euro dollar, yesterday hit 1. 3952. A twomonth high. Were sort of just below that. Well keep our eyes on sterling. We got close to the 170 mark yesterday. 1. 6972 is where we stand at the moment. Not far away from a fiveyear high. A number of individual stocks were looking at today, fiat, down 8 . Yesterday fiat had an allday briefing to investors. But theyve reacted negatively to sergio ma markhionnis plan. Hen henkel up 3. 5 , this on the back of strong emerging market demand for washing powders, Beauty Products and industrial adhesives. Sky deutschland up 3. 5 . Revenue at around 419 million euros. The company added 64,000 subscribers in the quarter and also announced record retention levels. Finally, up 2 today, natixis. Speaking to squawk box, the ceo was asked about investment decline activity. It has been difficult because the activity of clients have been declining compared to what it was for the last quarters. We think it is not a longterm trend. We think fixed income will peak up again. We are devoted to developing our fixed income business in europe and also in the u. S. Where we have invested significantly in our platform. We have tim harris this morning. If you took ukraine out of the picture, where would we be. Emerging markets is as much about araby and china and the risk assessments in ukraine. I was thinking about overall sentiment. Theres a Tipping Point there as well. Hes trying to turn emerging markets up. Were showing inflows beginning to come back in. Thats a sign of Risk Appetite thats building in that part at least. Coming back to your core question, economic rates running in excess of 3, it looks better and european retail sales, some of the surveys looking better. The underlying store is one where earnings and momentum will move from negative to positive throughout the year. Were looking at growth in the high single digits. Valuation, europe at least in the 13, 14 level is not excessive. Thats a recipe for equities driven growth through the balance of the year. We saw so far, earnings on the whole beating the average. Exfinancials, yes. On the other hand, sales arent. Yes. Weve been talking about this for a number of years, the quality of the earnings. I think we do care. Obviously theres a little bit of Balance Sheet restructuring in there, the cost of capital. Theres also margin, which companies are squeezing out. The top line should come back if youre looking at domestic growth of 3 . Thats real. You put an inflation rate on top of that. That should manifest itself in corporate top line growth which should come through later in the year. Thats on the domestic side. If we look at the export position, obviously as the dollar weakens, that must improve terms of trade for u. S. Companies and that must manifest itself, again, in earnings as the year comes to a close. The earnings picture for the u. S. Looks brighter today than it has for six or nine months. The dollar of index is down today. Your forecast is the dollar strengthens. Isnt that going to impinge on this . Its a 1. 30, 1. 40 range. I dont think that kills or cures the u. S. Recovery. From a dollar u. S. International company. Its a help and a hindrance. But i think where were near these ranges, its not the key driver. I think u. S. Corporates over the last five years in particular have done an immense amount to improve their competitiveness, their labor, turnover, the use of capital, the cost of capital is being carefully controlled as well. I think the u. S. Corporate sector is in good we avoided the Banking Sector there. Coming up, well hawk about hsbc. Well have the First Quarter numbers with analysis, straight after this. Having the cloud allows us to rapid prototype a lot of ideas. Being able to pay as we go is crucial for a start up. Having to fork out a lot of money up front was risky. We can launch a feature really quick, and if the feature doesnt work, we havent lost anything, and we can have something up and running in days. And this would not be possible without the cloud. We are now supporting over 25 million users each month. Youre watching worldwide exchange. Just remind you where we stand, just an hour and 15 minutes into trade, european equities are down. Talking about hsbc, we didnt recap the hsbc market. Activity coming in slightly slower clip than in march. 51. 4 in april. 51. 9 in march. Employment growth also down at a sevenmonth low. I thought wed put that one into the mix. We just wait for hsbc numbers. We are looking for the pretax profit to be down somewhere around 10 , 11 , should come in at 6. 92 or 6. 93 billion this morning. Joining us in the studio our two guests. As we wait for the numbers to come out, the key for you . The key for us is impairment. We want to keep a close eye on, see whats going on in asia. Pretax profit has come out, down 20 in the First Quarter of 2014. I think thats lower than anybody was looking for, 6. 785. 6. 785. The underlying down to 968 million off 35 at 6. 621. Thats the underlying profit. Return on the shareholders equity, 3. 2 lower at 11. 7 . Lets see if we have anything else. Reaction to that number first . Whilsh we wait for more details. That number is about where the consensus was. We were looking for a number slightly actually lower than that. Thats slightly better. In terms of the return equity, 11. 7. They want to be achieving higher than that. Ill be quite interested to see where the cost income ratio is on the numbers coming out here. Yes. Still waiting for that to come through. They come out in drips and drabs is the problem with this, edmond. Transitional basis, seek capital ratio 10. 7 , down from 10. 8. Yes. We are aware there was going to be pra adjustments coming through for the First Quarter. Its something they stated in the Fourth Quarter results. What were interested here is to find out if they can kind of outline what the capital plans are. This is something the other companies in the uk bank sector has done. Were quite interested to see if thats possible. Yes. Here we go. Hsbc, loan impairment, 798 million versus 1. 17 billion last time around. Thats a very good number. Thats a much lower impairment. Thats following from the trend we saw in the Fourth Quarter. I think we are looking around above 1 billion. Thats much lower than we would have thought, which would imply the actual Net Operating Income is probably slightly lower than expected. Which can be taken poorly by some analysts. They kept the dividend as well at 10 cents a share. Operating expenses, 8. 85 billion versus 9. 3 billion as well. In the comparison. Thats another good number. Operating expenses is something that management has been very keen to outline is to kind of reduce the cost base and bring down this cost income. Without that number there, its actually slightly better than we would have thought. Quite positive on that. They talk about muted customer activity. Tim, what do you make of the bank sector . Its the Investment Banking side which has pulled back most of the global majors. I think youll find hsbc will be an exception. As we move into midyear, that part of the cycle should improve. Obviously equity markets are still at the moment. Bond issues are picking up. We are beginning to see the mergers and acquisitions global activity pick up, were talking about alibaba this morning. Were beginning to see new insurance come back into markets in both equity and the bond side. There is value in banks. I dont think theyre particularly aggressively rated. Hsbc, the share price terms, its been one of the more disappointing performers of the majors. You get a 4 dividend yield. You mention the last 12 months. Hsbc down 15 . Bank sector up 12 . Why is it such an underperformer . Its been pushed on the top line. The revenue numbers have been much lower. Theyve been revised down. Its theme of the sector at the moment. Theres been an exposure to the emerging markets that have seen a down trend in its top line numbers. Is it time for it to play catch up or not . It looks as if management will begin to deliver on the cost base and that will give people impetus to focus on 2017 on a kind of various ratios, cost income ratio which is attractive, there are degrees of ideas that people can say, yes, its become more attractive. Stay here. There are other bank news we want to get through. Well get your thoughts on that as well. Other banks reporting today. Frances socgen, blaming uncertainly because of situation in the ukraine for the charges as well as the decline in the value of the ruble. Apart from russia, net income of soc gen. French rivalen joyed a near 30 net income. The lender says its fully committed to implementing its medium term strategic plan. Improvements across Eastern Europe helping to boost the bottom line of commerzbank. I suspect anybody with Russian Operations that may become the story. I think socgen has had a bit of a lead when the markets opened up in the 90s and the early part of the millennium. Yes, youre seeing this is a theme. Anyone with activity which is exposed to that part of the world is reassessing. We know russia will face recession this year and we know things will be difficult. Socgen has exposure in that part of the world. Its interesting to control. You look at where it contrasts with that, very key. It is a retail and commercial bank. Its a key player in the French Economy and its interesting again. Retail banks just beginning to move ahead. Lloyds, for example the lloyds share price is up 40 over the past 12 months. Lloyds has done a fantastic job focusing on the uk retail and building up its capital base. The combination of those three has meant a sweet spot for what investors are waiting for. Then it was on cost and its trying to control the Investment Bank. Well hear more about it tomorrow. What do you think they need to detail tomorrow to gain Investor Confidence . They have to reaffirm where their main priorities are in Investment Banking. They have large market share in various operations. We know the cyclical and structural decline in fixed income, commodities and currency. What were looking for, where can it go, what market share can it retain and where is it losing out . Obviously its cost income ratio. The amount of cost, a percent of income will increase as employees require further increases of payments and as your income is diminished. Were looking for not a complete change but a reaffirmiation. Tim, before we let you go, i wonder what your view is for fixed income. These things are transient, ross. The fear at the back of our minds is where bond markets go in the u. S. I think were going to get more clues. I think chairman yellen understands the power of her house. Does the flattening yield curve make sense . 30year yield on friday hitting an eightmonth low. The tenyear at a threemonth low. Theres an excellent piece this morning talking about the clues the bond markets have given us. He argues very correctly that theres a little bit of there today. Tenyear bonds have to sell off, havent they, because things are Getting Better and there will be inflation pressures in the u. S. And uk, for example. I think if the markets continue to hold and we are seeing both corporates and governance coming back, the muni markets looking much happier in the u. S. As well. I think the markets look more stable. I think coming out of that dip of q1, again, as we move into midyear, numbers should begin to look better. Tim, always good to see you. Tim harris from harris capital. Good to see you as well. Thanks for coming in and helping us dissect on the fly those hsbc numbers. Always very grateful for the help, i can tell you. Thank you both. Chinese ecommerce giant alibaba has filed for an ipo. They control about 80 of chinas Online Ecommerce market. Jane wells filed this report. Lucky, just lucky. Reporter jack ma may be lucky but hes relentless. He launched alibaba, no one would open sesame to help him. I was rejected by so many venture capitalist when i talk about alibaba, they look at me strange, alibaba, what are you talking about . I went back to china with nothing, no money, nobody invested in me. But i was full of confidence. I saw the american dreams. Reporter the dream of hard work paying off. It did. Alibaba has grown into chinas largest ecommerce platform, beyond b2b, retail, online payments and more. Making this 49yearold former teacher who taught himself english worth 9 billion. We are still very careful for every penny we spend. Reporter ma is funny. Hes a different type of chinese businessman. Are you going to buy yahoo . Good question. Yes, we are very interested in that. Reporter he has a knack for analogies. This talk is just like like a peace talk on the united nations, very complicated. I call myself like a blind man riding on the back of blind tigers. Reporter he insists on telling everyone about failure. Like most companies we made hundreds of thousands of mistakes. We made so many mistakes. We were so stupid at times. Reporter jack ma believes you dont learn from other peoples successes but from the stupid things they do. As the company he founded prepares to go public, ma says his business philosophy is customers first, employees second, shareholders third. And he remains a dreamer who has defied critics inside and outside china. We find the best managers in finance, technology and marketing. My job is every day tell them the dream. Reporter for cnbc Business News, im jane wells. Plenty more to come on alibaba. Plenty more online as well. Still to come on the show, no one likes a flat beer. How will investors react to carlsburg missing expectations . We speak with rasmussen in just a few moments. Passenger road trip buddy. Lets put some music