And the number the headline number for the Business Front index, 109. 7. Thats, again, the reuters Consensus Forecast for 110. 2. So missing expectations. Current conditions index, 1. 48 in june. Again, below consensus expectations, calling for 15. The expectations index, 104. 4 excuse me, 104. 8 in june and, again, thats below forecasts, reuters consensus calling for 104. 9. I guess to a large extent this was to be expected given the softer pmis we saw yesterday. It follows the survey we had for this month, too. We will dig into some of the more details about that. Scott, weaker there on some of these german numbers from the ifo survey in this month. I think its very much in line with the pmi as we saw earlier this week. I think that maybe reflects the fact that you have a lot of your political answers going on. Right now, we have the situation in the middle east. I think many corporates are concerned about Oil Prices Going forward and, of course, i would say when i look at ua, we see this kind of end of the recession, that we still have lots of problems and lots of political problems. And the ecb, even with the stimulus its add hasnt done much right now and needs to look to add more . Korea. Im very concerned about Inflation Expectations. Inflation, you could say that is history. The central bank cannot do anything about the current inflation rate. Inflation expect ages tell you something about the future, how those corporates can change their consumption behavior and i think Inflation Expectations are at too low levels right now. We have especially a problem in germany, i would say, because low inflation in germany makes this rebalancing even more difficult. So i think they have to do more. What does that mean for qe . I think that has to do more qe. I think that should be the most efficient instrument, if you would like to change the direction for Inflation Expectations and also if you would like to get the weaker euro. And i think that finally the ecb, draghi, he has to start focusing more on the euro, the strength of the euro. Its a negative factor for exporters, but is a negative factor for inflation. With a strong currency, you get this disinflationary fourses. But right on queue, the ifo, more clarity here, reiterating exactly what you said about geopolitics and the tail risks, the German Economy fears the impact of ukraine and the iraq crisis. Japans Prime Minister shinzo abe may finally be about to fire the third hour in an attempt to get back on track. The press conference is scheduled for late this afternoon in tokyo. Abes third arrow has always been aimed at structural reform. However, reports are surfacing that todays focus will look at deregulating the labor market. Lets get more with the chief economist at seb still with us. This is going to be a very hard sell for the abe administration, given the fact that they have some very deeply entrenched interests. When is it going to start to be material . That is a very good question. I think what we have seen so far, we have delivered the first two arrows. Thats the easy part, to get the more expensive fiscal policy and to print money. But the big challenge for japan, that is, of course, aging population, that the amount of labor is sinking. And i can see only two solutions to that kind of problem. The first solution is to see if you can krez productivity in japan. But we are at quite high levels. And the second solution is to increase womens participation in the labor market. Thats a huge, huge source. To get women out in the labor market, you have to change the factor around the house and the family. Maybe either because tax changes, benefits, etcetera, and i think its quite interesting that japan is looking at to see how we have been able to increase the labor and supply and participation in labor market. The bottom line, in the eurozone, is Structural Reforms take time and you dont see the impact of them in a year into 18 months, you need to look towards further forward than that. In the case of abe, if youre about the message that hes sending here. So is he going to get the message right as far as what theyre actually hoping to achieve and what can he do shortterm to at least sell that message . And is he doing it . I think that he will probably if hes addressing these kinds of problems, i think that could be kind of a relief for japan. But i think it will take a very long time to see the effect of this. And the aging population, thats a problem that they have right now. We cannot wait for the solution. If we could say that, well, in 10 wrb 15 years time from now then we are going to have these problems in japan. I can see hes kind of long political processes and that it will take a very long time to see the results. But im quite concerned about japan. The cuts in the Corporate Tax rate for enterprise, is that long . I think its a long way to well, it will not increase, but it will help to get maybe a hopefully stronger economy and also improve the situation for the corporate sector. But i think that you have to think about the mentally how to change the point. I think that the head of chiefs of society in japan. Speaking of concerns about abe nomics, head to our website to find out why one economist thinks abe nomics could ultimately fail. Also coming up on todays show, mumbai calling with indias new government looking to boost trade. We speak to the Bombay Stock Exchange ceo on luring foreign investment. Find out why yahoo s big boss ended up having dinner for one at the Arts Festival in cannes last week. Finally, see the latest at the sleeping mobile industry, it involves nothing more than the lesser words. We are joined by the ceo later on in the show. Im looking forward to that one. Hedge funds have had a difficult first half of 2014 with struggling returns. Not helped by the unrest in russia and ukraine. The great and the good of the economy have gathered in monaco. Karen drew the short draw and joins us from monaco now. Karen, hearing what you told us earlier and the managers focusing on special situations, they are outperforming, it seems, their peers on the macro front. Do you think they can turn it around in the balance of the year . The Specialist Fund managers are having a very good time. But these are people who look at the longterm performance. Longterm performance is made up of different parts, different volatilities thp theyre enjoying the past three months. But lets talk more about that. A fund manager who invests partly in Global Markets, 100 billion in management, henrik, welcome, great to see you. Thank you, karen. Nice to be here. Its not a bad gig. Now one spent a lot of time going after u. S. Money the likes of frontier markets. How significant has the sentiment shift and how willing are investors to engage in these markets . Large u. S. Institutions dont take shortterm bids. Theyve been diversifying their portfolio systemically over the last few years. Even in the emerging market pullback of last year, we havent seen a slowdown simply because they are so far from being balanced and, therefore, being according to the future weight of the global economy. There is a message in that chasing markets higher is not necessarily always the right approach. Some people feel as though emerging markets are just not ready for an investment, they feel like its too early to buy in emerging markets. Do you think thats true . Or do you see opportunity right now . If you look at the relative performance of the last 12 to 24 months or even longer, emerging markets have been derating relative to developed markets. If youre a longterm investor, this is an opportunity to expose yourself to a change in the World Economy which is not disputed any more. We have been talking about the fact that the largest the weight of the World Economy would be in asia and some people would have been called your profit. Its a bit like global warming. Similarly, the emerging market exposure challenge is there and Institutional Investors understand it very well. Many people think africa could hold some kind of gospel teaching, as well. 37 billion is the amount of money you have invested in africa. Where do you see the upside . This is a market that some people say have enormous barriers to increase. Africa has done quite well over the last decade when it came from undiscovered continent to now a news worthy item. And i would say going forward, africa faces a number of challenges simply because things dont go up in a Straight Line and it does struggle to absorb large money. So its an extremely specialist area. But if you look ahead, where is the next 1 billion market after india . Well, that is the african continent. It has divided subsa hair ras desert into three large play blocks. You have to be willing to engage liquid and nonliquid and this is not for the day trader. Phoenix would say tough yield debt products, money has gone into emerging market equities, so the next is a spill over to frontier markets. Do you think thats true . I think i can argue with you that high quality mid sized local companies are having to borrow mope at roar expensive rates, particularly if they want to fund in dollars compared to, say, low Quality Companies in the development world. The countries are pretty sound. You stay away when the record bond issues happen. But i find the stress, youll be able to buy at sensible prices and, of course, you have a very, very Strong NationalBalance Sheet as opposed tot developed world which remains overleveraged. Can i ask you quickly about some geopolitical events . Weve been russia, ewe crepe, now insurgencies, but even across the country of africa theres been different terrorism acts, as well. Why do you think retailers are want to go invest in Global Markets despite some of these concerns . I think geopolitics is back in a big way and geopolitical risk is back. That doesnt mean opportunities are going away. An example is russia. It was taken to absurdly cheap levels earlier this year and its still extremely cheap. In the end, investment is about your ender price and timing. The risk really is background. So it brings a kind of volatility which were not seeing displayed in the vix yet that can be used to access markets that havent accessed. I thank you very much for joining us. The ceo of investec management. Youre just here for the day, about 24 hours. So ill let you go and peel off and have a swim before you leave monaco. Its a pretty idyllic spot. Its a tough job, but someone has to do it, karen. Thanks for that. In m a news, syngenta is trading higher. Mon san toe was considering a 40 billion takeover from the firm. Syngenta has no comment to make on the news when contacted by cnbc. The two Companies Held preliminary talk bes the deal before sib again ta walks away. Thats according to reports from Bloomberg News which said talks fizzled out in may. The tax location for switzerland was said to be a key note factor for the u. S. Company. Meanwhile, ges Ceo Jeff Immelt is expected to join other ceos after General Electric significantly resigned the company aefs offer for alstom. Stephane is outside the plant now. Theyve managed to organize this event in just 24 hours. They agreed to do the deal. Am i missing something . Perhaps it was organized earlier, but the board of alstom said over the weekend that it would accept the offer from General Electric. Today, the ceo will visit an alstom factory where the turbines are built. These turbines are used in the french power plant. Its part of the agreement that was sealed over the weekend. Now, jessie mills will explain the strategy of ge in france. Hes due to talk to the press after this visit. The ceo perhaps will give an indication about what the company is going to do with the cash because at the end of the day, there will be less cash than expected. Ge will pay a bit more than 12 billion euros to buy most of the power business of alstom. But the French Company will have to invest 3. 5 billion euros with General Electric and it will have to pay a bit more than 600 Million Euros to buy the rail signaling business from General Electric at the end of the day. There will be less cash than expected and perhaps less cash than what we thought for the shareholders of alstom. Thats the reason why. Yesterday the share price was down more than 4 . That was the reaction of this deal over the weekend. So perhaps of that point well get some information from the ceo of alstom who is going to attend the visit in this building right behind me. Stephane, try to tell us about the workers, as well, and how they feel about this deal since french jobs were so central. Stay tuned as we head back out to monaco for the worlds large just fund forums, well hear from charn cho. Humans. Even when we cross our ts and dot our is, we still run into problems. Thats why Liberty Mutual insurance offers accident forgiveness with our auto policies. If you qualify, your rates wont go up due to your first accident. Because making mistakes is only human, and so are we. We also offer new car replacement, so if you total your new car, well give you the money for a new one. Call Liberty Mutual insurance at. And ask us all about our auto features, like guaranteed repairs, where if you get into an accident and use one of our certified repair shops, the repairs are guaranteed for life. So call. To talk with an Insurance Expert about everything that comes standard with our base auto policy. And if you switch, you could save up to 423. Liberty Mutual Insurance responsibility. Whats your policy . Welcome back to worldwide exchange. Markets are evenly split between the losers and the gainers with the stoxx 600 relatively unchanged if in market session so far today. The german ifo coming in below expect ages 109. 7 versus 110. 2. Very little move as far as the euro or the market is concerned right now. A bit of a strength of core in the weakness of the periphery. Slight movements. Low volumes of gain comparing yesterdays session, too. Lets have a look at the Foreign Exchange market. All the focus today on both whats going on in sterling. Weve got mark carneys testimony this morning at 10 30 cet. How is he going to justify that shift to a more hawkish start we got on june 12th . And, of course, dollar yen, we were talking about this earlier on the show. Were waiting to find out what abe can do. That exactly is the big story. Thats informing the trading session for the nikkei 225, tokyo equities so broadly. Ending fairley flat. The markets are looking for some spans and some clarity later on today. About half an hour or so from now, we should hear from the japanese Prime Minister on the third face of this longer Term Economic program which could include a phased tax cut, pension reform and also some other longer Term Economics including possibly more flexibility in the labor market. Thats going to be a very tough sell from the unions perspective in japan. So deeply entrenched interests there. The nikkei backing away from fivemonth highs at the settlement. The kospi strong, the outperformance factor up by 1 . The shanghai composite stable at 2033. But the s p asx 200, got some news from bhp looking at further cuts in its iron ore division. Were looking at the miners because of what has been happening in south africa, the fivemonth platinum strike is over. There should be some stability returning into the pgms market and the miners following that, one, as well. Back to you now, jules. Sri, thank you. Now lets get straight out to karen cho in monaco. Karen. Thank you very much, julia. Pollen to talk about here. Jim mccochran joins us. Normally you would be in the studio. Lovely back drop today. Lovely back drop. Glad to be with you. What sort of sentiment were looking at, you were saying you dont think theyre as foolish as i think they are. Well, i think after five years of really Strong Equity markets and particularly strong last year, you would think that everyone would be fully into the market and saying, hey, its great. But were not actually seeing that. I think there are quite a few people around who have money on the sidelines and who are thinking, hey, i want to start back before i or maybe its not as good as it appears. So i would say sentiment is kind of mixed which gives me some confidence that maybe theres still more to go in this bull market. In terms of some of the decisions or strategies, people are saying should see strength with the upside . Well, the upside is really from the ecb. Its in contrast to the u. S. So theres a very good fundamental for the equity market. I think in the case of the european markets, the ecb did the right thing earlier this month when they went to negative rates on balances with the ecb. They cut the blending rate further. That means that the ecb is really pushing the european banks to lend and get the economy going, get the eurozone economy going. However, the european banks cant really do as much as they need to. There needs to be other sources of credit creation. With too much debt in europe still, i feel that although the ecb will push the market up with some kind soft moves, i think that may be an opportunity to sell because i dont see where the growth is coming from in europe. That is in contrast to the u. S. But i see another couple of years of pretty good growth in that economy. You can see this stretch higher for the s p 500. Lets get over to japanese equity as one of the other asset opportunities. Shinzo abe has been talking today and talking about the third arrow and delivering reform which the market said has been missing which is why we didnt