Plan. We see russia as a large, promising market. We wont change our mind. Theres more to be done in this market. And more warning signs out of china, investment, retail and factory data all disappointing in april with data hitting multiyear lows. Youre watching worldwide exchange, bringing you Business News from around the globe. And a warm welcome to tuesdays edition of worldwide exchange. Plenty to come through on the show today. Are you looking forward to it . Happy tuesday. Happy tuesday, everyone. Well get opecs latest report. Retail sales coming out of the u. S. As well. But before all of that we continue to look at m a on the astrazeneca pfizer story. Pfizer making its last push reiterating to uk jobs and r d if the proposed deal goes ahead. The ceos of pfizer and astrazeneca are due to appear before uk lawmakers in london very shortly. The unions make their way starting in 30 minutes time. Then pfizer ceo ian reed is in an an hour after astrazenecas ceo will appear. Katherine is in westminster. If we strip out some of the emotion from this story, what are the rational reasons for preventing this bid from pfizer from going ahead . The racheltional reasons see be what they will talk about. They want to keep 20 of r d in the uk for five years. I lot of people saying that may or may not be legally binding. Well see ian reed hold over the call here, discussion of obscure uk takeover law and all sorts of different angles on this story. Well be talking to a lot of the people here, really making the news over this story. I have one of them here. Why shouldnt this takeover just be about astrazeneca shareholders getting a nice payout for their investment . We have to look at this from the point of view of the National Economic interest, we being clear, what matters here is the impact on uk growth and jobs specifically in our pharmaceutical sector here. What will this do for the research, science and skills base of the uk . And does this represent a longterm investment . That is as much in the interest of astra shareholders than anyone else. If this deal goes through they will receive shares in pfizer as the deal is currently constructed. The big concern people have, in pfizer, you have the largest world Pharmacy Company which has made since 2003 very big acquisitions. The aggregate value of those companies when acquired by pfizer was in excess of 200 billion. And now, having gobbled up those companies, pfizer is actually worth less. It has a market capitalization that is less than the value of the acquisitions they made. This is the issue that people have worries about. Is to what extent, is this going to represent value extraction from a successful British Company . Yes, of course, astrazeneca, people know, Market Makers know theyve had problem in times past. This is probably one of the two or three companies which will find a cure to cancer in the next few years. Peoples great worry is theyre going to tear the heart out of the company. In particular, its r d capacity. Its bad for the company, its bad for the uk dart suit cpharm sector. We need to understand why the fate that befell the three companies will not befall astrazeneca. And also theres an issue of task. This is a transaction that is being tax driven because of the inverse structure u. S. Companies can take advantage of when they have 20 being held outside of the u. S. That is not having a transaction primarily based on a tax inversion structure. Look, if theres one thing we know about british business, we have one of the best business communities in the world but we need more long termism, not so much of the fast buck weve seen in times past which, of course, much watching this will have seen the negative affects of over the last decade or so. Of course. One of those deals often cited is the takeover of cadbury by kraft. Your party leader has come out this morning with a sort of much stronger statement, sort of looking as though he might potentially oppose the deal. Is there really much you as an Opposition Party can do at the minute . Well, look, ive never been so frustrated about being in opposition as i have during the course of the deal. You have so much so many more tools at your disposal in government to impact on something. There are two issues. One is to the extent that the assurances given so far by pfizer to the uk government are binding. Were scarred from our experience with krafts takeover of cadbury. Many of the company corporatiers will know only too well rule 19 of the city code on takeovers and mergers. Assurances need to be kept to 12 months following the transaction. Thats subject to a change in material circumstances. We know that no Due Diligence has been carried out by pfizer over astrazeneca. If that Due Diligence were to throw up anything that was surprising, i think thats probably likely to be material circumstance to allow them to get out of the application of rule 19 of the code. I think in terms of the extent to which the commitments beforehand are legally boyning, very questioning. Here in the uk, the government has the power to stop mergers on the basis of media plurality, competition and financial stabili stability. We are advocating the introduction of a discreet, specific extra category which would relate to the uks science base and r d. That is what we are pressing the government to introduce. They can do that. We are saying they should do it now. Thank you for your time, of course we will also be speaking to astrazeneca chief executive pasc Pascal Soriot. Thank you. Joining us, the Program Manager of the Life Sciences and Health Care Practice at frost sullivan. They were laying out the case of being cautious on this deal. Overall, youre quite positive. Why . One, i think its good for the economy. From the last offer, what pfizer has given, 6 billion will be pumped into the uk economy. Thats a plus. Its not cash, though, is it . 32 cash. So yes in the sense a company like pfizer is going to uk and probably one of the biggest corporate takeover in the uk. That will have a profound impact and not just an economic sense, both social and political. Job cuts, yes, its bound to happen. Its not just in the uk. I would imagine theyll be job cuts even in sweden, for instance. The majority of the Science Community against this, that goes to your point about job cuts. If you look at the pipeline that astrazeneca is saying is part of the reason they can continue to go it alone. Right now if we look at pfizer influence, theres a risk they influence that pipeline negatively. Those drugs arent at a stage where pfizer could come in and help them. Would you agree thats a valid point . I dont think so. Because pfizer has got its own expertise in some of these areas. What astrazeneca has in cancer as well as many of the auto immui immune diseases. This could help it with the combined entity. What was the last drug pfizer on its own blockbuster pfizer on its own, successfully brought to the market . Not many. Pfizer as a company its a sales force, isnt it . If you look historically speaking, pfizer has grown. Two acquisitions. Why is that . There must be a reason for that, right . The critics will say the reason for that is theyre pretty awful at developing their own drugs, right . They have to buy other peoples drugs. They bought warnerlamberts. Lipitor was a lot further down in development. The concern will be actually this is a culture business. Its a culture business, right . Its not about the total number of jobs. It will be do you keep the key scientists. Theres concern that those people dont want to work for people like pfizer. A lot of the people developing lipitor left. If youre dependent on human intelligence to develop the next blockbuster an thats why youre buying the company, the people developing for you walk out the door, youve bought a lot of business with nothing in it. Absolutely. I mean, i agree with you but this is the strategy that pfizer has been following for a long time now. And in this particular case, its clearly a case of tax inversion, where there is the they have an accountant in their ceo, it helps. Consolidation in the Pharma Industry overall will help big pharmas Bargaining Power with payors and big government. Do you think thats a good thing . Have you read the book bad phar pharma . Can we do anything about it . Industry is consolidating and companies are. If you look at the past ten years or more, the number of companies have been coming down overall. This is going to increase. The reasons are obvious. The bigger you are, the chance you have to get a better deal. I guess. We have to say thank you. Plenty more to come on pfizer. Also on todays show, putting the u in the e. U. How big is the challenge . I cant wait when we do that segment. Very excited. We will also speak to the ceo of austrias omv. Stay tuned to find out how much of an impact this has had on the energy group. And they hope to challenge beijings exchange rate. I feel like weve been here before. Well be in beijing, coming up. Over 1. 2 billion eyeballs are on us during the two weeks at wimbledon. True tennis fans want to know whats happening, they dont want to just see whats happening, they want to know and understand why its happening. Anybody can just put data up, but we want to get a reaction, make it far more interactive. We rely on the cloud to provide that immersive digital capability. Youre watching worldwide exchange. Welcome back to worldwide exchange. Weve had comments made by the Deputy Governor for Financial Stability at the bank of engl d england. He said market liquidity wont return to precrisis levels after too big to fail has been tackled. He says we still need to do more work, still steps needed before no bank is too big to fail in the uk. The reforms have made the Financial System more resilient and less risky. He does believe we need to agree on International Standards on leverage ratios and need to agree on standards for net Stable Funding ratio across the banks, not just in the uk but more broadly on those rules. Ross . Were now 17 minutes into the trading day here in europe. Weighted to the upside, 73. We have record close once again from the u. S. , the dow and the s p up and the best day in around about three months for the nasdaq, finally getting a rebound in some of those beaten out biotech stocks as well. Into this mornings trade, the ftse 100 up 0. 3 . Yesterday it was up 0. 3 . The xetra dax was up 1. 2 during the course of mondays session, up 0. 75 this morning. The cac current up 0. 25, the ftse mib down 0. 25. The danish jeweler, pandora at the top of the market, after raising its fullyear revenue outlook. Sales up in all regions. The stock doing pretty well in denmark, up 8 . Airbus group, up over 4. 5 , the jetmaker confirming fullyear targets after posting a narrower than expected drop in First Quarter earnings. Airbus says its making progress on test flights of the a350 jet. Not such good figures for lagardere. Quarter revenue down more than 6 . Lets recap asia today as well. The hang seng up 0. 4 , the nikkei up 2 as well. We had credit data out of china which shows credit growth continuing to ease a little bit. Pboc may be fairly relaxed about that. On the bond markets, continue to see a selloff in treasury prices yesterday. Treasury yields 2. 65 on the tenyear, moving away from 2. 57 which we hit a couple of weeks ago. Going to be looking at retail sales and inflation data out, Producer Prices wednesday. Cpi on thursday. Going to be the big mover for treasury this week. Theres Something Else here worth pointing out. Yields between 10year gilts, continue to see spread convergence in the periphery with bunds. Tenyear uk government paper yielding 2. 73 . Thats also reflected as well in whats going on with euro sterling, hitting 81. 43. A single month low against the pound. As far as cable is concerned, below that near 170, near that fiveyear high. The fundamentals in terms of yields going high, its thought it could be the first economy out of the major cross rates to start putting up. That is driving gilt yields and the pound higher. Euro dollar, 1. 3765. Still above the onemonth low we hit on friday at 1. 3755. The french bank remains committed to its business in russia, despite the impact from sanctions and the economic slowdown the country faces. Stephan is in paris. Thats the problem for socgen, they are so heavily invested in russia that they cant pare back. Did you get the sense that he would if he could . Not really. Socgen said it would remain committed to russia and eastern europe. The statement came just a week after the bank announced a significant charge, 520 Million Euros to adjust the value of its russian bank. I caught up with the ceo of Societe Generale and asked him if they would remain a Significant Growth driver. We confirm our commitment to russia. We see russia definitely as a large, promising banking market. Weve not changed our mind. Theres more to be done in this market and in particular, for us, we are the number one owned bank and we think we can provide added value to the banks. The crisis currently is leading to a slowdown of the russian economy. Let me just remind you, the crisis is particularly severe in ukraine but we have no what we see is a slowdown of the russian economy and we have to adopt to that. Our growth has a strict risk and liquidity management. We will be able to implement a strategy which will lead to a 14 we think we can develop growth in russia. Are you concerned about the level of the ruble . Not really. The majority of our businesses is done in ruble, we collect in ruble and lend in ruble. You know thats part of the strategy to, again, have selffunding strategy based in particular on the collection of deposits by retail plans for two or three years weve done that. That would reduce like any Business Done in the currency if it goes down. Not the capacity to grow and the profitability. You ruled down recently the value of your russian unit. Is there a new risk . You think you could announce additional charges in russia. What i decided in the First Quarter was to take into account the decrease of the ruble, more certainty, write down the goodwill which means the value of the assets but we have no impact on the capital as you know from a Prudential Point of view. The goodwill is deducted. We made money in the First Quarter. Going forward was important to manage the risk but its just a question of traditional p l with cost of risk and provision. We are confident to maintain a positive consideration of russia and thats why. We have a plan to meet 14 return on equity Going Forward. Do you think russia will increase the cost of risk . The cost of risk has slightly increased on the First Quarter. Any slowdown can increase the risk. We are confident in our strategy which we focus a lot on Cash Services and the russian economy is also based on cash, compared with the virtual markets. We think we can deliver profitability there. Societe generale will increase its payout ratio to 50 within the next two to three years. Up front, 40 expected this year. The bank will increase its return on equity to over 10 in 2016. Thats to compare with 8. 3 last year. Ross . Stephan, thanks for that. Good stuff. Catch you a little bit later. Staying in the bank sector, the lender riding the coat tails of italys recovery from recession as bad loans for the First Time Since 2008. Caroline has been speaking to the ceo and asked whether the bank was better placed to pass the ecb stress test. Since the announcement of this stress test, i think it will be done in a strict way by ecb. This is the reason why we tried to anticipate, rather than wait for that. Having done a lot of provision in the fourth quarter, confirm any high level of coverage this quarter, we feel quite confident. We go through this without major problems. But really, for the european Banking Sector it will be fellow italian lender has posted its eighth consecutive quarterly loss after taking 174 million euro hit in loan default charges in q1. Also in this sector, Credit Suisse said that a longrunning tax probe could cost up to 2 billion. New yorks banking regulator is seeking hundreds of millions of dollars. They are reportedly seeking as much as 1. 6 billion. Credit suisse stock today in zurich is off 2. 5 . And citizens lao files for an ipo, looking to raise 25 million. They face pressure to sell off noncore assets. Citizens operates nearly 1,400 branchs in 12 u. S. States and in its filing, the company noted the annual plan was objected to. Have you got too many shows. I definitely dont have too many shoes. I have many shoes. I could never say i have too many. A new survey apparently says that most consumers say they overconsume. If we stop consuming, what would happen to the economy . Do you think you have too much stuff . Is a sharing society a more caring one . Let us know. Join the conversation on worldwide exchange, email us, tweet or direct to us. Or rather than saying i own too much stuff, is there something you cant own too much of like shoes . With red soles and other things. Exactly. I like your style. When im reporting somewhere, theres something calming about being in a hotel and not having too much to choose from. You take two suitcases. One for the clothes, one for the shoes. I certainly only take one bag. Still to come on the show the chinese currency, we pros to beijing with jack lew is calling on the nation to ease currency controls. Stay with us. We needed 30 new hires for our call center. Im spending too much time hiring and not enough time in my kitchen. [ female announcer ] need to hire fast . Go to ziprecruiter. Com and post your job to over 30 of the webs leading job boards with a single click; then simply select the best candidates from one easy to review list. You put up one post and the