Dropping to the bottom of the European Market after u. S. Investor wilbur ross jr. Sells his entire holding in the lender for 26. 5 cents per share. Andation stocks are closing mostly higher today, following a slightly higher than expected pickup in Chinese Consumer inflation. Youre watching Worldwide Exchange, bringing you Business News from around the globe. Hi, everybody. Welcome. Very glad youre with us. We have two hours together today and a lot to get through. Lets get on with it. On todays show, the battle is on, tech giants rival is out at the e3 exposition in san francisco. We head to the golden state to talk game strategy. Hillary on capitol hill, the former secretary of state releases her latest book as rumors persist as a possible buildup to the 2016 u. S. Elections or is this maybe more about the money . Energy haven or environmental hazard . Thats the question, the shale debate is as hot as ever. Stay tuned. Well go head to head with a ceo who aims to bring shale further into the european sphere. And also we will be in doha to get the latest on the world cup whoas as the fifa president labels criticism of qatars 2022 bid as racist. And go daddy does an ipo. Think financials are far less exciting than their racy ads. Will the latest listing send the hears of investors racing . Shares in italys monte de. Paschi di siena, launches a 5 billion euro sale share in a steep discount. The chairman said the capitol hill hike got off to a good start but also acknowledged there are technical issues. The cfo and deputy ceo of the bank. Welcome, bernardo. What are these technical issues we keep hearing about . Technicals are related to index trackers basically rebalancing their exposure to monte dei paschi. They need to buy shares to maintain tracking toward indices. That and sale of options need to settle during the offer period have led to a large demand for our shares at a time when were still trading the rights and new shares are not being issued yet. We saw shares suspended most of the session yesterday and they managed to close higher by some 20 or so. It was down to a portion of 3 million shares placed late in the day. Thats not a large amount. Some might say it looks like people, they dont want to support this rights issue thats happening. They might be afraid that youll be diluted massively. People who dont subscribe and sell their rights will be diluted massively. Thats compared to the market cap before we launched the offer. I dont think id read Investor Intentions in the share price moment or failure to open but rather id stay to the technical adjustments that need to happen and will happen during the course of the offering. This is not for us, unfortunately for us in italy is not news. Its happened before. Weve seen it happen before. It will iron out. Definitely has happened before. Recently also if we broaden it out to europe. We saw Deutsche Bank offering a discount of around 21 in the first bid of their rights issue. Your discount is 35. 5 . Its a steep discount. As a matter of fact, its pretty much in line with recent Rights Offerings in italian market. Weve seen discounts ranging between 32 and 34 . Our offering is twice the size of our market cap when we announced it. Compared to other offerings and deutsch banks much recent offering, its a much larger risk component than for the other offerings. At the same time, i dont need to look back too many years ago to see offerings with discounts much higher than 40 . I wouldnt say that this discount is the particularly steep, given, id say, the size of the offering. When looking at the situation that the nps is in now, you received 4. 1 billion euros of state aid and that has to be repaid, you have the asset quality review coming up by the ecb, the stress test coming up as well. There are a lot of people questioning the 5 billion euro rights issue, will it be enough . Initially it was 3 billion, then decided to raise it to 5 billion. Are we going to have to see another 2 billion or 3 billion down the line . Tough question, clearly. I know. I know. Thats why they pay you the big bucks. Thats why they pay you the big bucks. Salary cap, starting to think so. The rights issue was increased to 5 billion rather than 3 billion precisely for the reasons you mentioned. We were stepping into aqr. By way of the mechanics of the process, it became clear it would be better to try and build a buffer ahead of the aqr to manage potential impact which may or may not materialize. What we did by increasing the size to 5 billion is basically position ourselves walking into aqr at par with our best competitors in the market. So in terms of will we need more later on on our conviction is that we wont, otherwise we wouldnt have launched a 5 billion rights issue, we would have done more but clearly well only have assurance after the results are published in late october. Were optimistic about our ability to pass this given the size of the offering. We kept hearing about bad loans in italy. We were looking at data on the shows yesterday afternoon. Bad loans at italian banks up by around 2 billion euros from march. Increase of 22. 3 . 22 . Thats, i think italy is clearly dealing with its asset quality issue. We have struggling economy, which has been in a recession in the last quarter and has come out only briefly came out of recession in the last quarter of 2013, clearly that is the key for us to reestablish the value of our collaterals, the inflows into npls. I think italian banks are doing the right thing in recapitalizing. As youve seen in the market, weve announced a 500 mpl movement. Recapitalizing is the first step for italian banks, theyre able to deal with this quality. The 500 Million Euros of bad loan to fortress in the u. S. Private equity group. You being the oldest italian bank, one of the oldest european banks as well, when you were formed . 1472. Its tactually the oldest bank n the world. You also have the largest bad loan portfolio. We do. I think, again, its adequately provisioned i would say. I think the problem for monte dei paschi, its common through other italian banks like us and in general in peripheral countries, was the capital structure of monte paschi. It funded this acquisition only half by equity and the rest was debt financed what were doing today with the Rights Offering is plugging this capital hole which will allow us to have better alternatives in the future in terms of managing asset quality. Ive being told we have a little bit of news from the ecb. Thats just hitting our wires. One of the governing Council Members saying that the governing council has shown determination and capacity to act. He goes on to say that the ecb is determined to keep a high monetary accommodation stance and that the ecb is conscious of risks of low inflation to price stability. This of course coming after the ecbs recent move to continue to support markets just this past week. Lets continue our discussion on italy and the italian banks as well, in particular, on monte dei paschi di siena. Youve been cutting costs, cutting jobs, youve been selling assets as we spoke about as well. Is your motivation to stay independent . Ill say that if we can stay independent, its all for the best. I would say myself and the rest of my team members are motivated to create shareholder value in whatever form this takes. The better our work is, the more the chances of remaining independent because the more the company will be worth and the more expensive, as our chairman said the other day, it would be to buy monte paschi. Im agnostic. I dont see consolidation as an evil, frankly. I wouldnt i dont live in the fear of being acquired and at the same time we all try to do our jobs to make sure we become a target which is appealing to other potential bidders because that will be testament to value of the work were doing. Youre setting are you putting it out there, that you potentially would be interested in its up to the shareholders to decide what they do to the shares. More importantly its up to potential partners or buyers to be interested. Frankly speaking, i dont think at this stage in the Restructuring Plan or the comprehensive assessment, i dont think its unlikely that people would step out and start looking at consolidation play. Different story might be in 18 months time when things have settled down and we found we delivered more cost cuts, turned the bank into what we wanted to be a profitable retail franchise in the center and north of italy. Back to that point, the goal is to reach a profit in 2015, thats a year away. Youve had eight straight quarters of losses. Were on a run. Another massive rights issue as well. Can you turn around to a profit within a year . If you read into the numbers and normalize for what has been in the past eight quarters kind of recurring set of exceptionals, so hard to argue theyre exceptional, the fact of matter is, on an operating perspective in the First Quarter of this year, were profitable. If you strip out the cost of state aid, we pay more than a million a day in terms of enelectricest to the state on the bonds we issued last year. Clearly the minute we reimburse that, well have a huge amount of uplift in our margin. Profitability is moving in the right direction. We are ahead of target. All of those which are in our control i would say. Weve had some headwind with regard to economy. We spoke about that earlier in terms of asset quality and the cost of credit for us and competitors in the italian market is substantial. Which has stopped us from being able to be profitable. As things normalize, the measure introduced by the italian government, the ecb will help us. We believe well be able to meet our targets. Maybe not maybe theyre conventional, unconventionals. Good luck with it. Thank you very much. Thank you very much for coming in to talk to us. The cfo and deputy ceo of monte dei paschi di siena. All right. Just glancing at europe very quickly here as we continue our f f foret, flattish as well this morning. We were called pretty flat, too. Thats what were looking at right now. When it comes to the too ftse, the xetra dax and the cac all trading pretty flat to a little bit lower and the ftse mib bucking the trend higher by 0. 2 . Moving on and just looking at some of of the main stocks were watching today, the u. S. Top investor wilbur ross is to sell his remaining stake in the bank of ireland. Hes resigned as the director of the lender. Rosss 2011 investment in the bank was seen as crucial to its surviving during the financial crisis. Now, reuters sources suggest the placement of rosss bank of ireland shares will be priced at 26. 5 cents. Sports direct has been cut from a conviction buy, this on the same day that the company gathered Share Holders in an effort to win support for a new bonus scheme that failed to get shareholder support back in april. Mike ashley would have been rewarded 73 million pounds. Just checking in on the european bond markets as well, weve been following with great interest how yields have been continuing to push lower across the board. In particular, weve seen yields pushing lower in periphery europe. In fact, weve seen the portuguese yield nudging down to lows not seen since 2006 and the spanish yield just capping that of the bund as well. The bund yielding 1. 3 on a bit. You have the u. S. Treasury around 2. 6 in comparison. The italian yield around 2. 7. Sub3 still. The gilt, 2. 6 there. Currency markets, were seeing steady trade here across the board in in currencies, the euro dollar around 1. 3580 at the moment. Really we need to get the full picture, get a check in on the markets in asia. Sri jegarajah joins us out of singapore. Sri, take it away. Hi there. I want to update you with breaking news were getting across the wires, both reuters and dow jones reporting. A group tasked with securing the Karachi Airport has come under fire in the last hour or so. We dont know whether the main airport is under attack as well. Remember, though, that these headlines are coming just a day after militants stormed pakistans largest commercial airport thats in karachi, early on this week. Well leave that aside for you and bring you more detail when we get it. Elsewhere, one of the gain serz the shanghai composite. The markets seemed to like targeted stimulus. So a cut in the triple r for some banks, thats going a long way to restore confidence in the markets as well. Remember, we got Inflation Numbers earller on today, too, for the month of may. They were hotter than expected. But it looks as though its going to be one off for the month of may. The low base effects in the prior months and the uptick in food prices. Expect to see moderation and that should give the authorities a little bit more wiggle room to perhaps bring more stimulus to the able. Economists are saying possibly in the Third Quarter. Very different story for the nikkei 2 5. Some give back on the japanese market after it scaled threemonth highs. Were down by about 113 points at the close. The yen weighing on the export section as well. For the rest of the week, its going to be down to the macro picture in china. Because on friday, remember, we get the big data dump with investment retail sales and industrial production. So the big story there is really whether were going to see further hints of stabilization in the worlds second longest economy. Back to you now. Sri, good to see you. Thank you very much for that. Chinas ipo market looks to be on a rebound after four months of relative quiet. Final approval has been given. These are the first to go public after china security Regulation Commission approved 50 listings in january and in february. Meanwhile, go daddy, well, hes going somewhere. Hes going public. The Web Hosting Company has file for an ipo looking to raise up to 100 million, although that number could change. Go daddy which was founded in 97 has learn 12 million customers and drew considerable attention until recently with some pretty risky super bowl ads. You saw a bit of one right there. The form reported a loss last year but revenue rose by 24 . And finally, stock market operator euro next has launched its ipo. The pricing would value the company up to 1. 8 billion euros. The first day of trading is expected on the 20th of june. Still to come, does chinas inflation reading for may leave the door open for more easing . Well be speaking to one investment manager who feels that way, after the break. We started zya with the thought that the kid on the back of the bus might have a song that he has in his head but he just cant get out. With the technology of cloud, we change all that. I can sing something into my device. Up to the cloud it goes. Back down it comes sounding better. We break down the walls of creation, and we give music creation for the masses. 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 next day you have all these candidates. Makes my job a lot easier. [ female announcer ] over 100,000 businesses have already used zip recruiter and now you can use zip recruiter for free at a special site for tv viewers; go to ziprecruiter. Com offer2. Youre watching Worldwide Exchange. Hello, everybody. You are indeed, im loui louisa boysen. Concerns about deflation which were sparked by a drop in april have now been put to bed you could argue. The increase in cpi has been mainly driven by the rise in food costs, particularly a 20 surge to the cost of fruit. We have an investment manager at abedin Investment Management joining us from singapore. Good to see you. What is driving the rise in chinese cpi . Is it all down to food . Well, its largely down to food because if you look at the nonflood inflation, its up quite a bit. Its actually food, particularly apart from fruits its due to pop prices that have seen a tick up this month versus relative to the decline weve seen from the beginning of the year. And then at the same time were looking at ppi data. The factory gate state showing us a drop for the month of may a resurgence in the drop, an improvement from the previous month as well. Whats going on there . Well, were still in negative territory as you can tell, the negative number. There is an improvement and thats largely driven by, i think, rather flattish, the steel and coal prices that we have seen within the month. Okay. So what do you think that the government is thinking at the moment . Are they looking at the 2. 5 cpi thinking its still quite a ways away from our target, were feeling pretty safe at the moment . Well, not quite difficult to see what the government is thinking but if you were to look at 2. 5 inflation, its quite a way from the 3. 5 target. That also means that that gives them room to put in this measure should there be a need to support the number which is have been coming weaker than expectation within the First Quarter and if you see the slew of measures that has been coming on the last few months, pretty targeted rate cuts sorry, pretty targeted cut that help to lose in terms of agricultural loans as well, enterprises lands. That gives them room to boost the economy a bit. Last but not least, do you think well see more direct stimulus . I think it really depends on the state of the economy and how strictly the government wants to stick to the gdp Growth Market to the gdp growth target on that front so there might be more. But so far, what weve been seeing over the course of this year is that these are pretty targeted and you see in terms of fiscal responsibility shifting to the Central Government that has the room to take on more debt rather than the local government. So far its been pretty targeted but its quite hard to tell how this will end up over the longer term, especially if the economy should slow further from here. Good to see you. Thank you very much. Investment manager at abedin asset management. Now, the sconsole wars are revving up again. Microsoft and sony seem set for the next faceoff between their video game consoles. Jul jul julia has the details. The mood here at e3 is upbeat and the focus is on the new game announcements that will get consumers to keep buying games and the new consoles. At the Xbox Press Conference the focus was not on a console as an entertainment hub b