The government takes control of anbang and charges its dealmaking founder with alleged fraud. Rbs. Ehabilitation of they reported annual profit for the first time in a decade. 2. 5 billion pounds restructuring charges will put a dampener on future earnings. It is less than 30 minutes to go from the start of your european trading day. The cash markets futures are up and running. Have the bank you if you thought the bank of japan was ready to take a hike, forget it. Their Inflation Numbers are nowhere near that level. The dollar is on the up, so that is hitting the market a little bit. Moved its position on bonds. We will get to that in a moment. Germany is up. Lets have a look at some of the markets. 500, the stocks rallied by 1. 1 , they gave that back. This is your 10 year Government Bond yield. Five rate hikes. It could be on the card in 2018. Its not a crazy idea. Pimco has moved their position on the bond market. 10year Government Bond yields have weekly gains for eight weeks in a row. We have not seen this kind of momentum in bond prices and years. In 25 1994 was the last time you saw this. The market has graded the auction as a be. As a b. Are we lighting the torch paper of a 1994 bond market . Lets take a look at gmm. Dollaryen, the dollar is rising. It is breaking trend, but is that momentum based on yield . These are the commodity currencies. You see oil slightly better bid. You saw the Global Growth story go a little bit higher. Complex is sety for a loss of nearly to report 6 this month. Big euro is down is down. The dollar is bid. That is a key story. The dollar is on the turn. Lets have a look at the next graphic. Maybe . Aking to you fast, im speaking to fast, maybe . Iron or is up. Believe on the pricing of iron ore, gold is down, which is a slight inclination in terms of what is happening using u. S. Treasury. The dollars bid. The fed is on the move. Gold is offered. These arepure stash your sovereign bonds, dropping slightly. These are your sovereign bonds, dropping slightly. Critical the u. S. Are to todays trade. Debra mao a standing by. Theresa may held an eight hour brexit session with her top ministers yesterday in an attempt to win unanimous backing for her divorce plan. Devices arere devices. Her proposals are devices. Ivisive. Roposals are d the ceo of airbus personally promised u. K. Could government the Committee Plans to retain its british operations. In a turnaround from a staunch brexit critic, he made the guarantee and a letter this month to the business secretary. In a nod to the companys 15,000 you can employees, he wrote that airbus would continue to see the country as a competitive place to invest. Manafort and a onetime associate have been indicted a second time on new charges that include failure to report correctly to the tax authorities. Robert mueller used a new 32 count indictment to raise the legal stakes against manafort and his former Deputy Robert gates. He is innocents of the allegations and is confident he will be acquitted. Tom green, aed longtime washington criminal defense attorney. Both men pleaded not guilty to the original charges. Global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. This is bloomberg. Manus thank you very much. Treasuries with tim adams. But if you make of the recent volatility what does he make of the recent volatility . Said theeven mnuchin trump administrations policy will wear it will raise u. S. Wages without causing broader inflation. Investors are growing nervous about rising prices. 10 year Government Bond yields are hitting highs of two point are hitting highs. The dollar looks to end the week on a positive note. Are we had a printable a Pivotal Moment . Is looking at the bond market auction. Good morning to you. Steve mnuchin has come up with an interesting theory in economics which is that you can andulate the economy deliver growth and we dont need to worry about wage inflation. It is all good, according to the treasury secretary. Mark it is very ambitious. It sounds like he should join the ergo one school of economics. School ofogan economics. It has got to be a worry for the markets, because most of the market is selling treasuries and pushing yields higher on the whole basis that higher wages will eventually feature inflation. The feds hawkish attitude is based on the curve not really being broken and it will assert itself. Higher wages will lead to inflation. Steve mnuchin is not only dashing the hopes of the market but also contradicting fed policy. Be worried forld short treasuries, because it doesnt play treasuries may rally a bit and yields make become lower. And yield a become lower. And yield may become lower. The trend is something, which often times, put options prove a dangerous strategy. Eight weeks in a row, rising youth, losing bond prices not seen since 1994, and get pimco say it looks rich and they have changed the direction of travel on their positioning. The point you raise about the trend is really important, because it is the overriding thing that has driven yields this high. Real use are exceptionally high. Attractive notg only on a historical basis in the u. S. , but also relative to inflation and developed market peers. On many levels, u. S. Yields are looking exceptionally attractive. What has happened in the last couple months is the momentum has taken over and squeezed out the trend. Anybody who tried to buy into early is nervous. They are on the back foot. If we go to 3 , it will be more stops again. It is hard to fight that trend. The flipside is, if treasuries get traction and yields become lower, you could see a trend reversing quickly and suddenly all those people looking to buy treasuries who think they are attractive but were too nervous. Filing in and chased treasuries higher, yields lower. Manus lets see what happens with the dollar, whether we are at the beginning of a pivotal change. Bloombergre is our mliv strategist. You can follow the target insight of the team around the world at any time come mliv. Any time, mliv. Ross sat down with me for christmas. He said there are certain things beyond my control. This is what he is saying at the moment. He is talking about investors beginning to understand that the core bank is performing well. It is now a british lending institution, a mortgage bank, smaller, Medium Enterprise been. There are no further updates on the department of justice investigation. Crg report makes for tough reading, but he doesnt specify the impact of jobs before consulting staff. It is back to black for them. Meanwhile, you have lenders and some of europes biggest banks did they have been speaking to bloomberg about their upcoming plans about returning cash to shareholders. Hopefully shareholders will take comfort from the fact that we are going to increase dividends as planned in 2018. We will also talk about, as we generate access capitals, given we are over our instate capital number, the bank will start to look at buybacks. That is down the road, but that is something on the table. Our policy with respect to how we manage capital has not changed in any way. Buybacks are still a part of the Capital Management toolkit. No change of policy there. The decision is informed by a technical decision to get alternative tear when instruments into the marketplace during the first half of this year. Manus lets take a closer look at the sector. The president of the institute of international finance, welcome to the show. Happy friday in the bank world, isnt it . Hsbc, buybacks, buybacks, buybacks. How is your world looking at the moment . Is there a shift in gear in terms of optimism . Tim we had a board reading about be biggest institutions in the world. It was the most optimism the most optimism i have seen in a while. Trading volatility helps on the trading front. Capital rules are coming into greater focus. It looks pretty good. Manus we talk about volatility. You have got various investment banks that have cut back aggressively. Have they cut too far . I talked to you about the bond market 1994. Is there an issue between volatility . It is tough and a competitor market. There has been this aggressive effort to take cost out of the system. I think they had successfully done that. The comments yesterday were spot on. Manus are there any systemic threats . We become myopic, dont we . Everybody said it is great, it is good. It blew up. It all blew up in terms of closing down sophisticated products that were developed by bankers to sell. Arent we overlooking Systemic Risk . Tim those are esoteric products that need to be sold. I worry about is more mediumterm concerns. The headlines this week about huge runup in debt whether the sovereign house order on the corporate level. I think those are mediumterm problems. Manus what is the biggest debt issue we see . Look at chinas debt to gdp. We are is the biggest concern about debt . Where is the biggest concern about debt . The it was a topic of 1980s. The u. S. Fiscal front is not sustainable. It will add 14 trillion to the u. S. Debt over the next 10 years. That is not sustainable. Manus where are we on the consolidation story . I look at the germans, deutsche bank, others, really in change mode. What is the probability in consolidation somewhere, acrosstheboard consolidation the side of the pond in the nearterm . Tim i think it is coming. Regulators have to know it is allowed, they wanted. Bigger is not bad. We need to see across the board consolidation. Ultimately, it is good for consumers. I think it is coming. Manus do you think we will see a big change in regulation . I did a roundtable with akzonobel. We were talking about the difference and landscape here versus their there. It is a harder touch in europe and the u. S. Will be are be a progressive change in regulation in the u. S. For big banks . Tim it is a bit of a myth that there is some sort of deregulatory efforts. The treasury came out with their latest report. It is about finetuning a better balance. We promote International Consistency across regulation. We think it should be harmonized. Are we get that because Capital Requirements . About buybacks, dividends. Reaching the end of a very aggressive road, but rebuilding Balance Sheets and confidence. We shifting to a new paradigm of return to shareholders . Tim that is what they should be doing. We have more capital and better Quality Capital been we have ever had this year. The can withstand a crisis two or three times over. We have more liquidity. It is time to remind herself we have shareholders and return capital. Flows,acrosstheboard you talk about those and emerging markets. I would like to touch on that. You said recent volatility has been interesting, and you talk about many boom and bust cycles within em. They have been increasing the limit since november. View in terms of the flow around the world. A real have seen recovery and capital flows to em and frontier markets. We had a conference yesterday with bloomberg. Flow ofseen a robust capital into markets globally, but what has been missing is fdi. It is not occurring in emerging markets are developed markets. The future of capital flows will be do will be determined by volatility and the larger dynamic in the developed markets. Manus the tax reform is one of those lines that came out in all of the bank reports. Tax reform in the u. S. , welcome to by many, what is it mean for your members in reality . Tim it is great for them. It is a reduction, but also support of economic growth. The best thing for banks, better fees, at the end of the day, a robust economic and macroeconomic environment. Manus tim adams, the president of the institute of international finance. Minutes away from the start of your trading day. S. Ople keep an eye on rb the ceo is on the tape at the moment. Manus lets welcome our guest. She has the latest. There are a few negatives to look at. A lot of financial this morning. Rbs is one of them. It had its full first profit in a decade. It is also settling its probe of the u. S. Department of justice. That is not great news. The resolution is not within the banks control. It needs to reach an agreement before it can return dividends to help sell the governments majority stake. We are getting some indications that the stock could open in the red. Manus mcewan has been on the. Ape the core banks performance. Aberdeen, with the shocking news last week that lloyds was fromrawing their Business Standard life, but a bit of breaking news in terms of restructuring going on. What is it . Reporter we have news scoop frombloomberg yesterday. Standard Life Aberdeen has been in the news a lot. With the merger talks lloyds fell apart, they were about to merge their insurance businesses, but talks fell apart because it was unclear who would control the new entity. It turns out Standard Life is selling its Insurance Unit to phoenix. That should be positive for stocks, so we are expecting it to open in the green. You have one of the worst hurricane seasons in a long time. Numbers and the key issue . Reporter quite a resilient message from the company. Even though the prophet was wiped out by the hurricane season, it did increase its dividend, and nothing near a new Share Buyback program. We are expecting it to open in the green. Manus thank you for the roundup there. You can go to your bloomberg terminal and get all of the information in terms of the flow. Coming up, we will take you through the market open. We are looking for a slightly better opening around the European Markets. Retail. Under pressure like never before. And its connected technology thats moving companies forward fast. Ecommerce. Real time inventory. Virtual changing rooms. Thats why retailers rely on comcast business to deliver consistent Network Speed across multiple locations. Every corporate office, warehouse and store near or far covered. Leaving every competitor, threat and challenge outmaneuvered. Comcast business outmaneuver. Manus its been five days of rising equity markets as we go into lunchtime sweeps followed by a selloff. This will play into some of the major market components. The dollar is on a turn. It is rising its fourth straight turn. That is giving sterling a better offer. When it comes to the nikkei, if the bank of japan thinks its done with its job, thats one take. If you look at inflation data, its telling you a different story. Its far from hitting the target , which has moved on. This is the futures, indicated for a slightly higher opening. Germany is growing at 2. 9 , the strongest growth since 2010. The bund is in for a bund time. Yet is falling, stocks are rising. Yen is falling, stocks are rising. Lets look at the cash market. This german data it could hit more enthusiastically. That could take a moment to open. Sterling is a little bit lower. Rbs, averaging is selling assets. You also see a flow from the banks about dividends, about renumerations, repaying the shareholders. Talkinghad Tim Allen Rick shares from the break. The ibex is a little stronger this morning, up 0. 4 . Lets see whats on the move. Sally different complexion slightly different complexion this morning. Overall, you have this equity markets opening slightly stronger this morning. Financials are a little better off. Lets see how the markets take the numbers from aberdeen. We are just flicking into the red. On thisome good runs side because of the miners reporting. We were talking about the overall change in sentiment toward the metals and the miners. Oil is fairly good. If you look at wti, you are rising. Arabia,ort and saudi they thought about taking u. S. Assets and exporting to asia from the United States of america. They changed their mind. It wasnt going to be logistical for them. Financials are going to be the key. Germany is growing at the fastest rate since 2010. We are holding the bid in European Equity markets. Youve got the factors that can give you a slightly stronger day, but you are seeing a little tepidness creep into the markets. There is one fact and it is this. This is a debate for all markets. It is about bonds. Bond market yields have been rising for eight straight weeks. We have not seen a rise like that since 1994. That is what this market is deliberating about. These are the individual movers and shakers on the markets this morning. There you go. Forgive me when i went into the sectors. The market likes the divestment sectors. On the downside, lets look at the downside. You are looking at slightly better off on one or two stocks this morning. Lets look at it across. There you go. My wish is its command. Scarlet is down 3. 6 . This is not really to do with the headline, getting back to profit, this is about litigation and revisions in the fourth quarter. Obs says its part of a cost and litigation at 1. 0 7 billion pounds. Lets bring in christine pitino are. Good to see this morning. What do you want to start . I think the bond story is the biggest story of all. But where do you want to start . Guest i think it all into place. The bond story is the biggest story of all and that plays into how stocks are doing right now. Stocks cant get a bid in and that has a lot to do with the bigger story of where is the tradeoff between the bond market . We have seen the yield go higher in the u. S. And that seems like its starting to prove to juicy for investors to miss out on. Stocks are suffering as a result in getting put to the wayside. Manus this would be the debate between the return on bonds versus the return on equities within the stock market. Im putting on the bloomberg chart that you sent me. We do things a on the European Market open. Its a lot better now. Is the btv 11 486, which s p 500 earnings yield versus the u. S. 10 year Government Bond is the debate. You have the dax and the s p 500 on the counter side on the downside. This is about the debate between your as well. In this age where there are worries about yields going higher, you see a lot more divergence playing out and people kind of being more discerning and focusing more on differentiation. , yields in europe are not rising as much. Its not as much of a threat versus the u. S. , where its headed more toward tightening. We are seeing this divergence giving valuations between the two regions where the u. S. , you could argue very richly valued at this point. Manus dollaryen, the data that came through and this is the point that i made, which was anybody thought kuroda was going to step back and change the bond yield targeting, may be dissuaded from that, volatility drops a little bit. Shift in dollar. There is something more prophetic in terms of dollar but also the inflation data are didnt rock anybodys worlds. Kristine for sure. Storyat underscores the of the bank of japan still having to stay in their and keep going with the accommodations because they have a target and they are not meeting their target. If thats the case, they have to keep going. Terms of germany, we just had gdp numbers reaffirming what that bank told us, which is we are booming. This goes into the growth story in europe in terms of whats happening. Certainly something that would embolden the hawks on the ecb. You have the euro, thats a dollar story. And actually thats cable, what am i saying . It better be the same trend. It is. Saved by a trend. That german data is going to embolden the hawks from the ecb, isnt it . Kristine absolutely. It brings the focus back to the guidance chain, when it will happen and how strong the change will be. Well be hearing from the ecb in next couple of weeks. Really, the question is, at what point will they decide yes, its time to definitively say we are turning a bit more hawkish here and after september its time to peering back those asset purchases . Manus thank you for being with us this morning. You can follow everything on the team from mliv. This is not going to be good news this morning. Stock falls. We are down 4. 22 . Profit, just a little bit below the estimates. They are being held by their restructuring charges along with the lack of clarity on the department of justice charges. The details next. This is bloomberg. Manus its just on 8 10 here in the city of london. 10 minutes into the european trading day. We have the very latest on stocks. Rbs, downtart with nearly 4 this morning. They reported its first fullyear profit in a decade, but a dark clad hanging over the banks, restricting costs, settling the probe with the u. S. Justice department. Mover to the upside this morning, down 1. 8 . Fromll to 331 million 3. 6 billion, but the market understands this is due to a heavy season of hurricanes. The bright side, the company raising into dividends and it also mentioned they are assessing a potential deal with softbank. Certainly thats what the market is keen on. Finally iag is down nearly 3 . Parent company is british airways. Revenue is the lowest analyst estimate on the company. They are seeing profit to increase this year, but they did miss the lowest estimates. That stock is down under pressure this morning. Manus thank you very much. Had wti above three dollars a barrel. Its trading 1. 7 higher than the whole week. They have beginning to dissipate because egypts foreign minister is saying oil is 70 a barrel is a fair price for crude and his country has no plans to join local production cuts. He spoke exclusively to bloomberg. I think the current level of prices is good for us. Us, i have inout egypt a lot of people operating thisnd Gas Companies and level of price is encouraging them to invest and when we need investments in order to grow the production and going the production would help us to decrease the importation of crude, which is good for production. Manus there you go. Another joins the fray in terms of what the fair value of oil prices is. Joining me now to find fair value in the Energy Markets and guest. Is our he is the ceo of tiberius group. Good to see this morning. Chris thank you. Manus the world is rejoicing. Oil is trading higher. We are talking electric video go electric vehicles. Why security is critical. This electric vehicles story, small and actual numbers, big can begin coverage. What does it mean for market . Chris at the end of the day, its all about perception. Thats what they are trading higher. Thats probably 1015 years down the road. Well see more electric video electric vehicles in the street. Think there is an interesting analogy when you look at this technology as catalytic converters when introduced in this 1970s, you see platinum prices spiking because it was clear every car Going Forward would have a catalytic converter and contain a couple grams of platinum. The market traded perception. Price. M came back in until all cars were converted, its a time. ,e might see a similar pattern but a little bit stronger in magnitude. It will take another 810 years before all these car producers will be able to put more cars in the streets. It will eventually take my industry a similar time frame and timeline in order to compete with that. My gut feeling is me we will see in all electric vehicle related materials, but we will see in the long run that we will have to have other solutions for the Automotive Industry because it is clear in the long run that if we have all cars electrified, there is not enough materials for it. That brings us to other disruptive technologies, such as the fuel cell very fuel cell. Toyota is betting on that. Its not a oneway street. Just let him, just cobalt. Lithium, just cobalt. Its other stuff, as well. Manus we had the apple story this week. To mind. Going direct they are concerned about supply and a they are doing a rather different approach. The market isof going to change, as well. Chris we have seen that in many other metals. You see the end consumer contracting directly with the supplier. Its somewhat different in cobalt where a lot of money has to be pumped into the development of projects. A company such, as apple, are they willing to fund ruling campaigns . Are they willing to Fund Replacement reserves and resources . And at hot topic right now all the sectors are trying to curate supply. In the long run, it will come back to a traditional mine trading environment with a will play a role and the end consumers will be consumers from those suppliers. Manus you are going to join the fray. Tiberius is joining in terms of aggregate currency. Give me a sense of the a cryptocurrency. Give me the sense of the backing. Entirewiped out an Marketing Budgets campaign. Chris we have been there for over a decade. We want to do something everything related to metals. We have seen the market slide and we survived this market environment and realized this crypto trend is very much lacking substance. We see the trend moving toward stability coins, which means you need to bring something of substance, so we designed a metal basket. Manus then its not really a cryptocurrency. It backed. Chris its a cryptocurrency. Its divided into utility tokens, its divided into assetbacked tokens. Essentially, the attributes of the currency, whether a cryptocurrency or traditional currency, is all about price stability and you can use it as a pointofsale and for cure a procure autility copy with utility. Technologyisruptive that enables you to use metals as means of payment, which is nothing other than what we have seen hundreds of years ago, a bartering industry, good for goods. Manus what do you say to the governor of the bank of england, of the myriad of voices bitcoin current see has failed. Its not a useful way to buy things. Ift would you say to carney he was sitting here now in terms of his perception as the poster boy or girl for crypto . Right inthink hes certain ways and maybe wrong in other ways. Its questionable, what does it represent . There is no tangible thing behind it. It betrays a value to be. Which is anndustry early adopter. Is, you will see a lot of existing cryptos disappear. There will no longer exist in one or two years. Will there be sustainability . Will there be demand from this products . From that point of view, we will see a changing environment which essentially will mean the ones that have a real utility and can be used will survive. Manus i am buying my coffee and i am paying or it with copper. Ristophou very much, ch eibl. We have equity markets. We are starting this friday morning with a tough stance. We are seeing london softer by. 8 . Dax, then the strongest growth since 2010. We will be with you very shortly. This is bloomberg. Open. The European Market lets give you a quick perspective on the map behind me. In terms of bonds falling into europe this week, 3 billion has come into the European Market this week. The u. S. Stocks have 2. 4 billion of outflows, so outflows of nearly 5 billion according to bank of america and merrill lynch. Auto, travel, and tech on the downside. Lets take our attention to the Chinese Government. Of anbangd control insurance. They would take control of the company for a year and oversee a restructuring. Tom mackenzie has it from beijing. Its a major step for chinas government because they are taking over a private company, what was the secondlargest Insurance Company in charge in china, 30,000 employees. They brought in an elite team. They are going to take it over and run it for 12 months. Its also the toppling of a Major Business leader here in china. Was arrested in june, the first time we have heard about him since then. He has been forced out of his position and he will be prosecuted for allegedly economic crimes. What regulators now have to do is peace through and work out and unwind some of the Financial Risks they say pose a risk to the company, but more probably, as well. This is a company that went on a major acquisitions spree. Billionworth about 320 , not just the us story a hotel in new york, but resorts across the u. S. And Insurance Companies and Financial Companies from europe to korea. It is a major task for regulators to do risk this Company Without triggering Systemic Risks for chinas financial system. Manus tom, thank you very much. Banglatest with the an story. Markets. , we have the ceo will join us for a conversation. How is pricing leading markets . Let me show you some of the markets. What is driving these markets . The bond markets perhaps one of the strongest indicators. Just trading a little bit yearer, 2. 9 on 10 Government Bond yields. We will keep an eye on that. We will keep a close eye on the likes of lets see what the analysts make of that. Rbf is back to black by taking litigation charges. What does ross mcewen actually think . This friday morning struggling to get up. 1 , dax a done by. 2 . We use our phones and computers the same way these days. So why do we pay to have a phone connected when were already paying for internet . Shouldnt it all just be one thing . Thats why Xfinity Mobile comes with your internet. You can get 5 lines of talk and text included at no extra cost. So all you pay for is data. Choose by the gig or unlimited. And now, get a 200 prepaid card when you buy an iphone. Its a new kind of network designed to save you money. Call, visit, or go to xfnitymobile. Com. 30 minutes into your trading day, these are your top headlines. Traders pay the price. 10 year yields climb for eight straight weeks, the most since 94. Chinas crackdown goes into hyperdrive. The government takes control over anbang and charges the founder with alleged fraud. The bank reports in annual profit for the first time in a decade. 2. 5 billion pounds of restructuring charges will put a dampener on future earnings. A very good morning to you. Welcome back to bloomberg markets, it is the european open. Im manus crny. Lets get into some of the movers. Its an interesting complexion in the market. If you still believe in the overall growth trajectory, youll perhaps see some of these cyclical stocks a little bit better. There are some individual names calling us a problem. We have had the results pretty much disappointing. That would be jeffries take on it. We have this space in technology. They have had a dividend. Telecom and utilities, telecom up at one point sent 1 . Real estates are a slightly better bid. Minister theresa may held an eight hour session in attempts to win unanimous backing for her divorce plan. Some andsee keeping breaking away in others. They say what is heard of her plan wont work. The central bank chief is freed on bail and regrets not forcing a hint of a bright in the past. Orhas never accepted a bribe been offered one explicitly. Guy johnson asked him if he would consider stepping aside. They asked me to sit down, you step down. Thats it. Guy could you not step down on a temporary ijbasis . This is impossible. The shortest is 710 years. I have decided that for the moment, if all the terminal charges would not be presented, i have a possibility to protect myself. U. S. Treasury secretary Steve Mnuchin says the illustration policies will raise wages without triggering broader inflation. Concernedvestors are about rising prices, saying wages can grow without inflation being problematic. A former Trump Campaign manager has been indicted a second time on new charges that includes failure to of failure to report correctly to the tax manager. He raised the legal stakes. A Spokesman Says he is innocent of the allegations and is confident he will be acquitted from all charges. Both men pleaded not guilty to the original charges. Global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. This is bloomberg. Manus . Aberdeen is to sell for 3. 2 billion pounds and it seeks to focus on asset managements. It frees up cash for the scottish firm, which will retain its platform. We felt that phoenix was a more natural owner of the life company. Its a capital heavy business. Our model is more capital light model. I think its great news for the people at Standard Life, the customers and of course our shareholders. Without this was a better route to go for our people. Heisey reported for your outflows. The market for standard Life Aberdeen. Tell us about the most recent trends in outflows. We have seen the Banking Group news, but what is the underlying outflows at the moment . Its better. 2017 was better than 2016. We feel that we are making progress and one of the the transactions, the phoenix is, we are keeping the very high growth platforms. As you seen, the flows there were good last year. They have been growing at a compound annual growth rate of 35 a year. This gives us a chance to invest further in the platform business, where we see huge growth in the future. From the news around lloyds, the other outflows trends, is 2018 looking better than last year . Its too early to tell. We are just a month in. But apart from the lloyds, it is looking better. Twoave integrated the distribution teams, so they are from forward as a starting first to january rather than halfway to the year. So we are definitely seeing better trends. Clients globally understand that you either need to be big in this business or small. , the structure now lends itself more to a modern capital light investment company. Gilbert,at was martin the coceo of standard Life Aberdeen. Coming up, we will bring you the stock movers of the day, including the car parts maker. Given everything thats going on, its interesting to see this stock is down 8. 2 . The growth of margin is disappointed. Details to come. This is bloomberg. Its mmm. Thats midcap movers for you. We are 39 minutes into the trading day for you. A lot of things and the market to bet that to grapple with. Lets start with standard Life Aberdeen, up this morning under a percentage point, selling its Insurance Unit to phoenix. Thats the biggest stock movers in the stoxx 600. Its selling for 3. 2 billion pounds. Standard life will receive that in cash and a state of almost 20 . You keep those stocks higher today on that deal news. Finally we have the audio down at 5. 8 . Matches estimates but they put out a note, a bit disappointing. They still have a hold on the stock but they also see evaluation pressure and Free Cash Flow less appealing than their other peers and that stocks is the biggest loser right now in the stoxx 600. Thank you for the latest round of the movers. Punch. Taking a operators can anticipate in 2018. The increasing Network Speed and laying five reliance is a costly business. Guest says thats why rivals are better off teaming up and sharing the networks. Joining us is germanys ceo markus howard. How are you . Planre going for a big here. Growth of 600 Million Euros by 2019, 2022. Its a very Competitive Landscape that you trade in. Are these ambitious enough targets . Astien after we created it, weafter we created have been a very Solid Foundation and the German Market has an amazing market because the exposure is currently happening. In the last three years we have seen yearoveryear of multiple data usage. On top of that was the opportunities coming from digital is a and the problem we are going to pronounce in our Capital Market day. We will increase our profitability even further. Revenue growth and profitability for the next phase of deutsche land for the next chapter is an amazing opportunity for our customers and shareholders. How much of these numbers and that ambition is tied to pricing . Grabbed andekom bundled and slashed their mobile. You can give me that finesse word within your word, but they bundled the mobile side of the business to grab market shares. Isnt that going to continue pricing pressure for you . Guest we currently see does currently seek different data monetization. From our perspective, customers enjoy mobile freedom. We are really giving our customers. I would not comment on strategies of competitors, but what customers really want is a data in a way that they can use that they are not restricted by zero rating or other parts and other restrictions. This is where we see a clear opportunity. Our product is currently a 30 year tariff and in the past, the average is significantly you lower. So there is an opportunity for everybody coming from consumer demand. Manus sharing is caring. How is that project going . The Fiber Network you are rolling out . Guest we have a lot of competent sites. The question is, how can we get faster and more efficient . It doesntif we dig make sense. Note are doing a pilot of 100 sites. 50 sites to deliver. This is an amazing opportunity for an additional scale to bring faster fiber and give customers more capacity. Manus of course we have the coalition. We can from the sake connectivity is challenged in germany. Has that done enough in your eyes in terms of creating policy that would create better and activity connectivity . Are you happy with what youve heard . Guest we will clearly expect more bold moves. Germany is running behind. Compared to other european countries, so from our perspective, we need to what france has done his, they have given spectrum to free two operators. These kinds of dynamics would like to see for germany Going Forward because germany invested 60 billion euros in the last 20 years and the result is, we can only spend the euro once. We can invents nothing invest nothing into infrastructure. We need more bold moves to catch up. Manus what more do you want to do . What more team ups can we see . Thats a very tolerable thing to do because you still have control, but what other bold moves might you make . Guest from our perspective, we are at the forefront of digitalization in the German Market. We will use artificial intelligence. Internetntroduce things as the biggest mobile operator. We have the best opportunity to seize the opportunity coming from mobile data growth and from the new technologies as advanced data. Terms of the landscape, always curious to get a perspective for somebody of your position. Do thing that could be a deal . Onoffit has been an thing and i will not comment, but at the end of the day, i think if someone wants to create the cable monopoly in germany, monopolies have never been good for competition or consumers. We expect regulators will have a tight look at that and we would need to see manus what would that mean for you . It could be a bit of a challenge, couldnt it . , wet at the end of the day see more opportunities there. In order to overcome regulatory concerns, we would need to see if there is a possibility. If so, we would clearly expect tough remedies if there was a way to improve it. Manus thank you very much, the ceo of telefonica germany. The consequences for you and the business. Thank you for being with me this morning. Ceo will be speaking to the up next on the show, we will bes beginning to the ceo of russias private lender after it was nationalized. This is bloomberg. Manus welcome back. This is the European Market open, 50 minutes into the trading day. Whats going on in russia . Once russias largest private lender is set to receive about 1 billion of capital as part of a rescue package. But is that enough . The plans to recapitalize the banks over the coming months. We have the ceo since january and hes on top of fixing the bank. Good to see you this morning. Guest good morning. Manus no small job for you to do. Where are we with the strategy for the revamp . Whats the ambition . April, may, we need prepare something for the group. Its not only the bank. Its also holding for a big Financial Group. We have the second Insurance Company in russia and also the biggest funds. More than 10 billion in upper management. Its a Financial Group, one of the biggest and russia and of course, this year, to create the new this is model and operation model. Be of course, strategy will that universal bank and Financial Group will service for comfort and private people. Manus so before you get there, get to that point of those ambitions, there is a probability you have to create that is colloquialy known as a bad bank. Do know the size of asset transfer you need, the initial view of assets and the need to come off and go into the bank . Guest good question. You are absolutely right. Normal assets and lets say nonprofile assets in two separate licenses. Made nexton will be two or three weeks, and we need another three or four months to create this structure. Assets and the management of that bank, not less than 10 billion. Manus at least 10 billion . Guest at least. And it will be separate for two management teams. But one management will be responsible for both. Our price will be focused on all Group Financial developments. That, the consequence of liquid nonperforming assets and the bank, has gotten a consequence in terms of capital requirement. How much do you think you are going to need to sustain the bank . Almostfor the good bank, almost done in december. Maybe not just for the bank, but for insurance and assets. Very small injections, much less than last year. But for nonperforming assets, it will be bank license, but not fully capitalized because it will be unity with special regime for Capital Requirements. It will be special, special license. And they need money not for capital, but for funding of these assets. We hope for the next three years, the majority of these balance. Ll be from the typically, the assets will prove much more, lets say, much more recoveries than later. Manus if we look at u. S. Russia relations, they are fairly toxic at the moment. There is a repatriation of money back into russia in january, 5 billion has gone back into russia. Are you seeing the flow of money back in . Any trends in regards to dislocation in u. S. Russian locations russian relations . Guest last year, the new money from private people in russian Banking System is approximately 7. 8 growth. Capital frommore abroad. Now there are enough money for growth, not only Banking Systems, but economies and internal resources. Nottal from abroad is serious. Manus we wish you well with the capital and with having the good assets and the bad assets. Come back and tell us how it is going on. Down 4. 5 . Rbs this is the response they probably wanted today, the we are down 4. 5 . 1. 4 billion pounds has been knocked off the value. We are back to black. The stocks have set aside 1. 07 billion for litigation. Restructuring charges are still going to be around 2. 5 billion pounds in terms of that move, but it is the first profit in a decade. Look at this. Of an average day volume has traded through on the 20 day average. There you go. You are just seeing Real Movement in terms of rbs. Stay with her television because up next, its surveillance and the team will be speaking to a species global head of assets. You can say cable and you can say blue in the same sentence. This is bloomberg. Francine up, up and away. U. S. 10 year yields are set to climb for the eighth straight week. Upheaval at anbang. The Chinese Government seizes control. Minister. K. Prime reins of our cabinet after an epic brexit forum. Good morning, everyone and welcome
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