Transcripts For BLOOMBERG Countdown 20140512

Of countdown. Im anna edwards. Were going to bring you an exclusive interview later on. Richard holmes will be with us here exclusively to talk about the way that their business is performing and something a little different, a race that takes place every year here in london. Prorussian groups have hailed a large majority in favor of secession in a referendum they organized in Eastern Ukraine. The referendum was dismissed as legitimate by the government in kiev and its u. S. And european allies. Chris, thank you very much for coming to talk to us. What is your reaction, a shortterm reaction of developments over the weekend. No surprise. Those were organized and seemed to suggest for a strong voting in favor of independence. With this key is with the kremlin says and what president putin say in the next couple of days. That is what were waiting for. Thee starting was probably most critical two weeks in the whole of this crisis so far. In two weeks time we have got ukrainianles for the president ial election. That will be a game changer to some extent. There will be a lot of nervousness. We will be waiting to hear what governments say rather than reacting to speculation in the media. What about what media aboutors have to say president putin . Not to endorse the and not to endorse the right for independence. There needs to be dialogue and negotiations. The news to be some way to give an untie me to the Eastern Ukraine. That is what investors are hoping for. What they dont want to hear is any sort of escalation of more threats or intervention. That would scare the markets. Looking at Global Markets, does that mean anything, the next couple of weeks . Discount on going on in Eastern Ukraine . It was the best week in about 10 months. Mostly on the back of president putins comments on thursday that he is going to pull back troops. Separatists should hold back on the referendum, even though they didnt. The markets are now reacting to the political rhetoric. Now we hear there will be a direct reaction. If it is something calming, we could see further gains in the market. If we see something that raises concerns about an escalation in sanctions, markets will go down. I think Global Markets are standing back from this. There are a lot of variables and scenarios. Theres not a lot of point in making a big bet at this point. Behink the key issue will more of the may 25 election. We have heard this from the french and german leaders are last couple of days. Theyre now very focused on a successful election. Lineis where the next red in terms of escalating sanctions will come. That will have market impact. John boehner, the u. S. House speaker is suggesting that penalties imposed by the west need to be greater, sanctions need to be greater. You think we will see greater sanctions coming through, either from this meeting taking place in europe this week or into the following week . Not based on what has happened so far. It is quite clear the u. S. Has a much more political agenda and is being much tougher in terms of calling for sanctions. The europeans have a much bigger economic stake and are focusing much more on specific events at crimea and ukraine. They will only consider these tougher sanctions that the u. S. Is calling for if rush is. Ccused that in the bigger issue it looks like the west despite the tough rhetoric has moved on . They have forgotten what is going on there. It andst attention to compartmentalized it. Least that is how they reading a situation now. They are exactly right peo it could result in some countermeasures by russia. Spat. Just a little as far as investors are concerned, it will never be more than that. A think we will move on. Russian investors are little more sensitive. The Global Markets have now decided this is an issue that is going to get resolved. When i print across these dangerous red lines. In a few months time it will be history. Change and there is a ratcheting up of threats, then i think we can see an impact on Global Markets. I think that is the case. What does that do to the growth story in russia . Does it mean the growth really slows down, but we dont actually see recession coming . We do assume that there is a legacy of quite a few months where investors are cautious and direct investors to back. Russia was able to use its budget resources. Remember, the Current Oil Prices , the budget is in surplus. They are on course for an additional 25 billion dollars 30 billion this year. Case without going into further sanctions is we could still get about 0. 5 gdp. Chris joining us from macro advisory. Up next, we bring you an exclusive interview with richard holmes. Stay with us on countdown. Time for todays company news. According to people with knowledge of the matter, the company is evaluating offers for its plant, including one that divides ford with steel. They might receive as much as 1. 5 billion for the asset. Shareholders and swiss politicians push for his resignation over whether the bank helps americans avoid taxes. Investing at least 2 billion in pfizer pharmaceutical. In biopharmaceuticals. Im an edwards. Anniversarythe 10th of the Standard Chartered great city race. Richard, thank you very much for coming in to talk to us. Were going to look ahead to the race. It is going to take place later on in the summer. Lets start with the race. It takes place in july. Hot time of year to be running. Tell us what it means for Standard Chartered. We have about 6000 people signed up already for 400 companies in the city. Bankers, lawyers, journalists, inclined you ill if you feel inclined. It is at 715 in the evening. If youre raising money for seeing is believing. It is a charity that we sponsor. We have been doing that charity now for 10 years. So far, we have raised 63 million to help eradicate blindness. The entrance money goes toward that charity. 10 pounds per person, per runner. Our company matches those 10 pounds. People seem to come back. They enjoy it. They get out with her colleagues. There is a bit of teambuilding as well as raising money for a good cause. Lets talk about growth globally. You are the european ceo Standard Chartered. It is a very asia focused business with increases in africa. China is talking about a new normal over the weekend. Thisre you looking at attempt by the Chinese Government to slow down in a controlled way their economy . How do you evaluate their chances of success . We are pretty optimistic that the chinese will be able to do that. Slowing down to them mean 7. 5 growth. Europe orthe same u. K. That we are used to. We do have enough tools to successfully manage the economy Going Forward around the level. 3. 5 ink were looking at growth locally. The linkagesaluate between emerging markets and developing markets . You seen emerging markets have the kind of tick up for global growth. How they see things developing now . Is good to have a broadbased economy. Europe is surprise on the upside recently. Like liverpool football club, we did better than we thought third were looking at over three percent Growth Potential in the u. K. We didnt imagine that a year ago. A strong europe, a stronger u. S. Is good for a more balanced economy Going Forward. And investor poll here at said that 40 of people say that as a Global Economy improves, 59 said that in january. People are positive about global lessh. A little bit positive than they were four or five months ago. There some certainty out there. We are experts in asia and africa and middle east. Within these markets for 150 years. We are probably more optimistic from what we see on the ground then other people looking in. There is some politics going on as well. A lot of elections. A lot of elections, yes. Does that come from having more believe that these governments can deliver what they think and say they can deliver . Yes, that might be spotty patches here and there, but we think over the medium term, these developing markets are great places to be invested. Risks talked about this investment poll is deflation, the risk of deflation, specifically in the eurozone. Do you think it is going to be, will the ecb do something to stave that off . Certain are down 0. 25 they could reduce slightly. I think they could do some quantitative easing. Again, europe is in one situation. The u. K. , we are suddenly thinking about when we could raise rates, because growth is predicted to be over three percent this year. We think bank of england could well look at raising rates may be First Quarter next year. Leave theoes that strategy for banks such as standards charter has been so asia focused . Word is a leave your strategy with regard to europe . We bank with people across europe theyre trying to invest and trade in asia, africa, middle east. A healthy europe is good for trade flows and investment flows between europe and our key markets. It puts us in a really good key position. Richard holmes, Standard Chartered ceo. We be racing . I do. Will you be racing . I do run. Im curious about is when it starts very is 7 30 p. M. Us see if i can step that late. We will be digging into Rupert Murdoch plan to creating a paytv colossus. That is coming up on countdown. Welcome back to countdown. We just got new details from a Bloomberg News excuses exclusive. Rupert murdoch wants to create a gigantic paytv network by combining german and italian media with skype. For hiss it mean european tv businesses are aware this is this all about for Rupert Murdoch . We think it is a plan to consolidate all of european tv businesses under one Holding Company. That makes them so much stronger in europe when it comes to trying to win broadcasting rights and advertising. He is creating what we see as a real media behemoth, expanding in europe. Who knows, maybe the u. S. And asia. He doesnt have full control, does he come of bskyb. What are the roadblocks or difficulties he could face along the way . He owns 39 of bskyb. We saw a similar attempt with the phone hacking scandal. They dropped that. Then a First Time Since that theyre trying to consolidate again. As you saw bskyb today confirmed the talks. We dont know at the endgame is, but we think you would probably try and increase his stake in bskyb after consolidation. Is this all about football, then . A little bit, yes. That is where he comes from. Red does it leave Rupert Murdoch and john malone . These two men have been up against each other in various geographies around the world in the past decades. It looks as if it could be the latest chapter in a battle between the two. You are right, anna. Most notable, within an u. S. A decade ago when this happened with direct tv, this could probably pick malone against murdoch. We may see more of them going headtohead against each other. Especially if this deal goes through. Here in europe, remind us of john malones seat role in europe, what is artie doing in this part of the world. They have much higher subscription numbers. Skypekyb manages to get deutschland and skied tell you, it would have up to 3 million skygu bers. Utschland and sky italia Angus Bennett attended the graduation. People who are able to afford a , these areayground people that are going to want things done their way. She is the founder of the bureau which trains the staff for the worlds most expensive yachts. These girls are the latest batch of recruits him about we catch you the faces. Most have signed privacy agreements with their employers. Within the yacht industry, it is of the utmost importance to be discreet. Anything they hear or see stays with them. Very strictto sign confidentiality agreements. The megawealthy value their privacy. Theyre prepared to pay their crew handsomely. Hardworking recruits can expect to start on more than 60,000, often taxfree. It is lucrative. You mustnt forget that they work really hard and they do earn their money. Still for long hours. From an outsider point of view, these girls and boys work very very hard. Issue atoney is not an a small army are on hand at all times, requests can get dinner at 4 a. M. , latenight parties demanding guests. Workers often get little sleep. What exactly goes on on board is kept close to the chest. Anyone working in the marketplace doesnt talk about it. Andrew is a professional butler, but he wont say who he has worked for. It isweek of training, graduation time. Most of these girls are heading back to their yachts in time for the summer season. Long hours, latenight, and a chance to make some big money. Angus bennett, bloomberg london. Inside the secret world. Still to come on the program. Investors are less optimistic about the Global Economy than they were three months ago. Stay with us to find out if it is the unrest in ukraine or deflation in europe that is worrying them the most. Bloombergs Global Investor poll is coming up. 6 26 in london. Welcome back, im anna edwards. Thank you very much, anna. Lets look at the euro. It does not get boring. The euro dollar drops from about to 1. 3767. Mario draghis magic tricks have not lost their sparkle. The ecb should go swift. Thinks. Erkels advisor you get to ecb speakers today. Look to them to give you color on the table for next months meeting. John, thank you very much. These are bloomberg headlines. Final results are due out later today from a referendum by prorussian groups in Eastern Ukraine. To break away by margin of 91. Leaders could issue more sanctions against russia as early as today. Ceos of pfizer and astrazeneca go before committee this week. Bid to to ask about the acquire the company. Cameron told the bbc he is ready to stand up for british jobs. Jet you are land rover has created 9000 jobs since ive been prime minister. Several senior former executives at barclays will be the probe looks into alleged corrupt arrangements in qatar. The Financial Times says the former ceo bob diamond will be among those questioned. In just underarts half an hours time. Manus cranny will be anchoring the program. Manus, youre back to tell us what to. Bob parker. Nobody meant to take us around the globe. We will have him for about 20 minutes to talk about everything macro, and micro as well. Weve been talking a little bit what is the shape of that deal going to look like. Team some interesting takes in terms of collateral. If you want to do a deal and you want to get sky deutschland and what does it take . Trying to get it done before u. K. Elections. I saw a lot of that written up late yesterday. Murdoch is succession planning, is it . We will talk burma, india, as well . Yes. From ubs is that is already discounted and that india is squandering its demographic prime position. Ill tell you what that means after you finish talking. To bob. Report shows concern about events in ukraine. Bloomberg editor joins us now for more on the polls. On the positive take Global Economy, isnt it . Not quite as positive as the beginning of the year. No, that probably reflects some of the things going on in the ukraine. Tends to heighten concerns that were artie there about russia, for example. Overoverall, as you have 80 of people feel that things are Getting Better globally, or that their stable. That, generally, is good news. What about the preoccupation of the investor communities. His deflation the eurozone . The biggest continues to be the slow down in growth in china. That is no surprise. That continues to be a big concern because it is such a huge economy and it is so important to the United States and to europe. Item ins the headline the sense that that is what is in the news to talk about the referendums yesterday and so forth. What is russia going to do, what is put in up to, what can the United States and the eu do to counter putin, etc. There is concern over that. There was already concern about russia, about capital flight, which, as a result of a number of things including Corporate Governance concerns in russia. That is no surprise. Again, the front pages are all about russia and that heightens investors concerns. Putin is not ro popular with this investment poll. He is not the least popular Global Leader in the polls. No, Francois Hollande is. For extremely different reasons, theyre seen as , asncentives to investment opposed to angela merkel, the german chancellor who always comes up quite well in these polls. What about the u. K. . The growth story. Things are Getting Better here. When apple introduced the iphone seven years ago, brought the touchscreen to the masses for the first time. Has gonesraeli startup one better, enabling you to turn your phone yourself into a smart phone. Elliott gotkine sent us this exclusive report. Film a futuristic minority report, tom cruise was able to track down criminals before they committed their crime. The first target is overhead projectors. Installationinute process, you can take any one of the projectors installed worldwide and transform them from a regular projector into an interactive room just like that. By putting the bird on your finger. Newhe bird, which is a index finger, is just half of the technology. That brings google earth to the table. Project the image from any device onto any surface. , iphone to the sofa. Its impact which is as impressive as cornings image of the future, except the maker of gorilla glass screens for ipads is betting on almost everything being coded in touch sensitive glass. Movement andture, touch are all parts of that. When you think of touch we see a toddler interact with a tablet or smartphone, it is very natural. That intuitive nature is why we think touch stays around for a long time. Covering everything in glass may not be to everyones taste for it whatever comes out on top, Science Fiction technology seems to be heading toward a screen or surface near you very soon. Elliott gotkine, bloomberg israel. Were looking at the future Wearable Technology. It may be so bright that you may have to wear shades. Welcome back to countdown. Im an edwards. It is 7 42 in london. Future hold for these devices . Lets head to tel aviv and bring our middle east editor, elliott gotkine. Good morning, anna. A little crazy because there is wearable tech israel taking place today. I will take a picture of you year. What is going your mind in wearable tech right now that youre seeing around the world . What is really blowing your mind . Innovation and watches. We are all expecting apple to come into the market. We are waiting to see how it changes the market. Bought this company for more than 100 million. You can see that the big boys are lining up and making bets. Samsung has a watch, google announced a watch. We will hear more at the google i o conference. There are new shirts or sensors coming in for people who are athletes to steady themselves in new ways. It shows the data to iphone. Tshirtsout charging where you are the battery . Have a pack for it. Theres one called loomis, which is a rival to google glass. Everything, seen but there are several companies that are starting up here and doing interesting work. Plus, theres a lot of expertise on contextual software, which is a big tease of what these things need. If this is showing me and add why am an ad while i am in a meeting, that would not be good. Is going to show you appropriate things at that time, because it knows what youre doing and what you are attempting to do in life. We talk about the internet of things. We get along to the internet of people. This thing cannot just take a picture of you, but inside it hasnt i sense a watching where my eyes looking. It knows a lot more about me than even a phone will know. Note im aiming myself. Consultant kinds of data that leads to new kinds of privacy concerns. Everything is turning contextual. Or cities Just Announced theyre building a contextual car that will know who was sitting in the car and what their behaviors are. If your kids are in the car, it wont suggest a fivestar restaurant to you, right . Of data on you that you didnt have to give a car before or give a wearable before. Sevenre will be a hundred or be a hundred 70 million devices by 2017. , iphones says apple have out there, 280 million phones . The numbers are starting to go up and the costs are coming down. Are new capabilities coming online. That is what is exciting. I come here to see with a bleeding edge is and how soon it will arrive. Certainly there will be health packs to steady her blood in new ways. Ive seen needles at a siliconbased that dont cut you very much, so if youre a diabetic, you will like these new needles when compared to the old way or can you finger every hour to see if youre eating enough sugar area i will look forward to seeing the day when we dont have to put our fingers. Good to have you with us for this wearable tech israel that is taking place later on today. Plenty more on wearables later this morning. Elliott, thank you so much. 7 40 six right now. Lets talk about one stock that has been making the headlines. We will be watching bskyb very carefully. The biggest paytv provider in the u. K. Is looking at german and italian assets. Handss, what is murdochs plan . What we have seen this morning is confirmation from bskyb that they are in fact interested in these two other ,roperties, sky deutschland which fox owns a 57 stake in where fox has 100 . 39 stake in bskyb. What this means is that you will have the remaining shares of sky deutschland maybe being acquired. It is an attempt to have european wide control, mainly over sports and entertainment. Sports. Ostly you cannot negotiating power that is centralized for european wide packages. Already theres a fair amount of synergy between these companies. It is unclear what what they get additionally by formally tying up areas is also unclear if murdoch then makes a full play for the entire family of sky units if indeed they do come together. Through fox he just has 39 of the british sky arm. There are a lot of questions left on this. We have much more clarity this morning because sky has. Onfirmed there in these talks , bskyb isck call down two percent this morning. This may be an indication that investors think this deal is not worth it and there arent that many synergies to capture by combining all three of the satellite providers. And i . A story we will continue to run with. Hans nichols joining us from berlin. Why expectations at German Companies may be too high. We will have more on which stocks to watch after a short break. Welcome back to countdown. Is nine minutes until the start of European Equity trading. Chief market analyst at cmc markets joins us now. Lets talk about the bskyb news over the weekend. Toy are in talks with fox buy the german and italian sky assets. Does this mean for bskyb . Im not quite sure where theyre going with this. I can see why theyre doing it. Theyre under increasing pressure. Got quite a few synergies in any case. I have this thought. Im just wondering if this has something to do with the fact that maybe theyre making themselves a little bit bigger so theyre not so much of a takeover target. Earlier this year, vodafone, there is some talk of vodafone might be interested in them. I think the growth areas tablets. Portable devices streaming on streaming content to these devices. With bskyb looking at this particular area, theyre obviously looking at what Liberty Global are doing, what the tease sport are doing with respect to their content offerings. Obviously theyre trying to create synergies there. Theres art a lot of there in any case. We know they have got a cash pile. Thereve artie got an agreement with bskyb to stream content to their four g services. Im thinking to myself, theyre looking in the wrong area. Why make yourself bigger when you have the synergies anyway. Im sure you can make much better use of that money and may your tie with vodafone. Astrazeneca, the ceos of both companies will be in front of u. K. Lawmakers. How does all this play out . Big must admit, im not a fan of politics. I dont trust big ceos. Great dealer with a of suspicion. If you look at what if you look at what theyre done in the past 10 years, what value has a billion they are a 185 company. They paid out 240 billion in terms of acquisitions and they are smaller than the cost of acquisitions. I think is real is a bad deal for astrazeneca. I think pfizer needs is more than they do. I think the competition should be a driving factor behind steel. I dont see where the value is for astrazeneca shareholders. Weakness in astrazeneca pipeline. Maybe they do need some outside intervention. How decreasing competition can resolve that. Drugsuch more competitive and much more competitive pharmaceuticals. Lets talk about where they are in markets overall. Weve had some decent values in the u. S. And europe. In germany in particular, things are coming off the boat a little bit. The pmi seven disappointing. You dont like germanys exposure to china and russia . I dont. I certainly think russia is already in recession. I think it is likely to remain so. Think all the good news is priced in. Actually, if you look at the rallies in the daxor the past five months, each high has been lower. Obviously, u. S. Markets are holding up fairly well. Again, there is a disconnect between the lower caps and the big caps. Michael, thank you very much. Lots to think about this monday morning. Is up next. Is up next i will see you tomorrow. Welcome to on the move. Im manus cranny at europe a bloombergs European Headquarters in london. ,he team has everything covered companies through to currencies. Ryan chilcote and Jonathan Ferro , our International Correspondent hans nichols joins us from berlin. What is going to drive us . Any concern over russia is still there. Gauge, it is ryan chilcote. Markets are really shaking that off right now. Speculation as to what the stimulus are going to get. Of a ing a little bit this morning. Global politics, the ukraine had the referendum this weekend. It would appear, at least according to the separatists, overwhelmingly in favor of selfrule in the easternmost part of ukraine. Russia market is down by 1 5 of one percent. It is hardly armageddon. Was just saying, it is ly your tracking potential megamergers. Takeover andce a get full ownership of its german and italian cousins. Bskyb is down just a little bit at the open, just 1. 5 area this may make it a lot easier for you to watch your german football, your beloved bonus bundeot your beloved sliga in england. We saw mr. Reid from pfizer talking about the synergies that could be involved between pfizer and astrazeneca. Of course, both ceos will go in front of the British Parliament to answer questions. David cameron talking about jobs, protection of jobs. His deputy saying any assurances on the paper theyre written on. Percent. A third of one i think the question will still be asked for him as Investigation Continues to build. They settled with the fcc. With the sec. Social Democrat Party had talking about the credibility of Credit Suisse management. They should assume responsibility. It is very aggressive language. U. S. Investigators are likely to be just as aggressive and stern with Credit Suisse. A great deal has britain been hasten about the fact been written about the fact that see what he says in the next five minutes. His expectations from what the ecb could do next month. With data like today, monday after four weeks of gains on the stock market. A third of one percent higher on the dax over in frankfurt. The spite any concern over china must adapt to new normal of slower expansion. It is not really an indication of a Chinese Government that is about to implement largescale stimulus. Lot more action. The euro dollar at 1. 3768. This one continues to be a catalyst for news flow. This one is not low enough. The ecb should go swiss. Target the Exchange Rate and defendant. Manus, is that really an option for the ecb next month . Were going to get into that. Were going to kick it off with one of the top themes first of all. He is a Senior Adviser and a member of the banks committee. Lets kick it off. Ryan, we started talking about the vote in ukraine over the weekend. How Vladimir Putin reacts. We have artie had the referendum. The russian stock market down about 1 5 of one percent area of hardly armageddon. Really, in the west, tf us said the vote is not legitimate. As far as president clintons isers are concerned russia still a story . Crimea is now part of russia. That is done. Is, what is the endgame. The endgame inevitably is that Eastern Ukraine, weather becomes part of a federal structure or an independent country, i very much doubt whether it will become legally part of russia, but i think it is going to remain a messy situation for a long. Of time. Will the west, will the United States and European Union do anything about it very it is likely we have had some tightening of sanctions. It is likely that we will see you mention the downside in the russian stock exchange. It is actually one of the worst performing markets. If you look at the hit on Financial Markets from what has been going on in ukraine, basically it is the ruble, the russian bond market and the russian equity market. Wouldcontained i say the impact of Global Markets is a constraint on Global Markets advancing. We havent had a major setback in Global Markets. Last week, russian stocks have the best week. Putin started to make some nice comments. I think one has to look at how Foreign Investors are positioned. The answer is, theyre largely out of the russian market. Theres no investor overhang in the russian market. I think one very troubling statistic for the russian authorities is the volume of capital outflow from russia, which is which has accelerated in the last couple of months. John boehner on tv said go after the banks. Put more restrictions on the banks. Theyre likely to increase her tighten their sanctions. Us going to happen before these referendums take place. Theyre likely to sanction some russian companies, something they havent done yet. They are only going after individuals so far like in the United States. That, the german chancellor in the u. S. And the u. S. , you raise incredibly important point. We said Foreign Investors are not long russian equities. The ownre positioned is bonds issued by russian corporate. Wesanctions apply, have to go. We will be right back after the break. Im manus cranny in london. This is on the move streaming online, on apple tv and on amazon fire tv. Rupert murdoch is reviving a plan to build an empire of some size in europe, combining bskyb in United Kingdom with sky deutschland and sky italia. Ive seen a lot of press over the weekend. Youd need a lot of stars to align to get this deal to actually go through. Thats go to our International Correspondent in berlin, hans nichols heard what is the plan ino put the three together one Holding Company . Yes. You said stars align. The satellites need to align. You need to have all three have alls the line and three be one part of what and company of one controlled by bskyb. What you do is have more synergy with all these other broadcasters or it would get you million or 24 million subscribers across continent. More importantly, the front and being getting the right to sporting events. The backend being advertising. It would create greater unifieds there for one company. They confirmed this morning over the weekend, bloomberg wrote the story. Heres the confirmation from bskyb. This combination would have the potential to create a worldclass multinational paytv group. Manus, what that means is they want to go ahead. We dont have a good sense of when the final deal would be consummated. Look for the summer. One quick note on what they would have to pay for the german shares of sky deutschland, theyre saying they were. Current share prices. They would not pay premium. We will also be watching sky deutschland to see how that reacts, as well. When we look at this deal overall, murderous plan for bskyb, he wanted fulton for all, didnt get that. This is the next best thing . There are some synergies there already. These companies are remarkably aligned already, and not just to name. The question is, does 21st century fox try to own bskyb out right and then have a complete ownership of it, or do they totally sell it, Celtic Company Like Vodafone the 170 your present in europe for both tv and mobile and internet and broadband, or is it simply something that murdoch then trades a Third Company with and then you have a showdown with john malone. That would give us plenty of events to report on, manus. You almost want to buy the tv rights to Rupert Murdoch versus john malone. You sure to get more subscribers. Absolutely. That was hans nichols and berlin. Hourbe joined later in the by audio. Claudio. Theres a hundred billion dollars worth of coupons it needs to be paid. Of sanctions, how concerned are you . Very concerned. The sanctions are only against individuals, the escalation of sanctions, if it happens, and it somebly will, obviously stage has to move away from individuals and to the Banking Sector and into the corporate sector. You have to ask the question, and actually i dont specifically have the answer yet , but you have to ask question, if there are sanctions against russian companies, does that prevent them from paying coupons or repaying their euro dollar or euro debt that they have issued . That question is going to start to worry investors and quite rightly so. Things from our Global Investor poll, as been quite a good call markets. One of the things drag it back is a geopolitical situation. China andern about japan. Still, the u. S. Leads as a top opportunity. You concur . Broadly, yes. And things you need to worry about her markets come i think is interesting that investors are actually very cautiously positioned at the moment. Whetherconcerned about abenomics works. Skepticalare very about arrow three. Theres is a point in japan that is artie in the market. Investors quite rightly have been concerned about shadow banking or to quantify it, the shadow banking market in china is approximately 3 trillion u. S. Dollars. Over the next 23 years we could see default rate in that banking market move up towards about 20 . Having said that, the shanghai composite is down three percent year to date. Theres a lot of bad news on china. I would argue, discounted within the chinese market. Comments frome paying over the weekend from ping over the weekend. What does seven percent growth mean for you . The answer to your question is that seven percent7. 5 , when . Clearly, there is a merger schlueter duster is a major slowdown occurring. Fore talk about projections 2016, we could be looking at growth of six percent or less. This longterm slowdown is taking place. The focus of the chinese authorities is very much this reform program. Is a very aggressive reform program. It cant be implemented quickly. Theyre focusing on issues like reforming the financial your, dealing with corruption. Theres an extraordinary crackdown on corruption in china. These are all very positive reforms for the longterm. But, i think you have to get china being a five percent growth economy, not a 10 growth economy. It is certainly not what we saw four or five years ago, which was a 12 14 economy. You are still taking some serious risks. The china slowdown story, as you said, some of it is priced in. Risks taking some serious according to notes. Some of this is driven by the u. S. Recovery rather than what is going on in asia. In terms of our overall position with regard to neutral position, we are flat on the big decision of equities versus bonds. Inequities, we continue to like europe versus the United States. Correlatedkets which with the United States such as and korea. Th k , on the ukraine problem, as a setback, i think Central Europe is looking very interesting. If you buy the argument, which i do, the eurozone is out of recession. Germany, were going to be of theed by the strength economic numbers, particularly over the coming months. Then, markets which are highly correlated with germany such as poland, look for a attractive indeed. In terms of equity exposure . Yes. Separately to european debate. Find a cleard Exchange Rate target. So says peter buffing or, and advisor to angela merkel. Over 70 of our global poll, that is a big view, we will have deflation in europe. One, the euro is too strong. Theyre not going to get an Exchange Rate target. Is not going to happen. The ecbally some of would like a weaker euro. They would like a reduced risk of deflation. There are like more lending to smes, particularly in countries like spain. It is not a convincing rhetoric is coming from a think what you will see, and markets will be very disappointed if the ecb does not take any action in june, but that the press conference last week, you have a commitment from mario draghi and the ecb that some form of action is going to be taken in june, possibly in the third quarter. But, whether it is quantitative easing, whether it is lt ro plus , it has to be targeted lending to smes, whether it is negative Interest Rates where banks put money on deposit, they are actually about 10 Different Things there are 10 Different Things the ecb can do. Youre certainly going to see. Ome action by the ecb in june one of the objectives is a weaker euro. Bob parker. Thank you for your time this morning. Richard branson weighs in on was apples biggest ever acquisition. Why it might be good for musicians. We were very fortunate to sell out our Record Company when we did. It was right at the peak of the industry. Since then, it is largely due to apple that the industry imploded. Merchandising of music as well. Making money from the sales of the music is pretty abysmal. Apples new move may be a small way of giving back what they have taken. It would be great if it could succeed an artist could make a. T of money out of it or i beats business, we will bring you more on this with bloombergs cory johnson in the next hour of the pulse. Giant saysa mining blackman shares platinum shares fell. The mining strike has been running since january of this year. Lonmin posted a drop in sales. Carmaker sees its net income climbing four percent for the year ending march 31 very is the highest since nissans 2008 fiscal year. It is still below analysts estimates. Pfizer chief executive ian read faces u. K. Lawmakers this week over his companys bid for astrazeneca. Will provide lawmakers with the first opportunity to grill former executives on whether the biggest takeover and u. K. History would mean job losses and research cuts. Indiasp, the last of persons head to the polls. Today wraps up the worlds biggest exercise in democracy. As we had to break, we will indiasu with a look at sensex. The Opposition Party named its pm candidate. A modi victory look like . On theme back to move. We are 30 minutes into the trade. Lets take a look at how the markets are shaping up. Rising equity markets, generally. Move. We are 30 minutes into the trade. We have the Bloomberg Markets poll, 40 sees the Global Economy improving. That is a little less than what we saw in january. Of the risks on investors minds. The u. S. Is still the number one destination for capital. The paris market is off by a quarter of one percent. Lets get across to Jonathan Ferro. I will dig a little bit deeper and give you two companies. Rupert murdoch looks to be making his move, a deal to give bskyb over sky deutschland. Down by over two percent. It is driving sky deutschland higher. That is up the most in three months. That is the biggest move higher on the stoxx 600. What get you some of the top headlines. Takehinese government will steps to bolster equities. The government said it would relax limits on foreign investment. Jinping set the nation will adapt to the new normal in terms of Economic Growth, but the government would take timely countermeasures to reduce negative effects. Final results are due later from a referendum organized by the prorussian groups in Eastern Ukraine. Russian News Services say voters backed the breakaway i am margin 9 nine 21 by a margin of to 1. The general election in india draws to a close today. To million voters eligible cast their ballots. This is the Worlds Largest and longest electoral process. More details, lets head live to mumbai. Absolutely right, it is the final lap of the big elections. It has been one of the longest and indian history. Placest phase will take as we speak. 41 seats are going up. Of the longest processes, not just for india, but anywhere across the world. Today is going to see one of the most highprofile contest. In the templeen significantis because the seat is important from a number of perspectives. He will take on the common mans party. The main Opposition Party has not had much success in any of these areas. , they gotime around about 16 out of 18 seats. Watchit polls, we will out for those starting at 630 p. M. This evening. The final results will come out this friday. The markets have continued rallying on the back of some indication of those exit polls. I am sure we will talk to you a little bit later. Reat to have you with us we will continue that conversation after the break. What is it that is going on in india . Tv titans go toe to toe. We will talk about the media megadeal. Titans going head to head. Who will win . Place your bet. U. K. Lawmakers want to ask bid what it means for u. K. Jobs and developments. The opposition labor already accused David Cameron for being a cheerleader of the u. S. Takeover. Cameron told the bbc that he is ready to stand up for british jobs. Benefits massively. Land rover, it has created 9000 jobs since i have been prime minister. Lets get back to the recordsetting general election in india and look at the impact for Global Investors. Joining me now is the head of emerging markets at ubs. Great to have you with us this morning. 800 Million People going to vote. How much of the potential for i exceeding two power is already priced in . , great shape. Tics the turnout in this election has been massive. This is a record turnout. It has been largely free and largely fair. That says good things about a nation. That is where i think the good news ends. In by the market. Theyre expecting a majority. Or aould get a rebound continued rise in the market in the short term. You could see numbers improving in the short term as far as the macroeconomic numbers. Whether this government is likely to revive the structural downtrend remains in question. As a percentage of gdp has completely stalled in one of the india is that the risk of squandering and democratic ryan. Squandering its democratic prime. We are missing the fact that large chunks of people from indian villages are not able to find employment in the manufacturing sector. 10year note, that has a fiscal in your note, that has a fiscal impact. Uge ramifications that is the fiscal albatross around your neck. You need to reduce subsidies and move away from current expenditures. When we speak about reform in india, we speak about retail. Those issues are completely tangential. The main issues are issues like the labor market. Can you make it for easier for business to deal with labor . Scale. What prevents you are concerned that even if he gets the majority, he will not focus on that and the immediacy . The history of economics and politics of india has not addressed this main issue at all. Fair, in his interviews, the person presently in opposition has made some very sensible comments. I am hoping that if he does come to power, we do see a change, but that is not a given. That is the main reform that india needs. The situation is so bad today in terms of the cycle. The reels the real structural change is likely to come if we see a change in labor laws out there. The rupee is on the move. Our u. S. Convinced are you as convinced in that kind of move . This is Foreign Investors. If wemestic investors do see a market friendly government, you could see further the markets have a little further to run. I do not think the risk abroad is to attract it for the rupee attractive for the rupee. I do not think you can get much appreciation past 58. Lets broaden our perspective. It stoppedsaid, getting carried away, get used to in new normal. Emerging markets, the frenzy seems to have abated. What happens in china has a Significant Impact in terms of. He near asia story chinese stocks have come off consistently this year. The tear most the two most clear trends has been a decline in u. S. Yield and a decline in volatility. Both of these are great for emerging markets because they give them more time to reform. To reduce their external deficits and two people to attract and refinance their debt externalal tufted deficits and to be able to attract and refinance their debt. If all a till it he begins to rise again, as we expect it will, we could, under pressure again. Theyat point will stabilize the Property Market . The chinese have used stimulus, but it has not had much of an impact. We have not seen a big improvement. The difference between the stimulus today and the stimulus two years back is the Property Market is declining. The Property Market is the most crucial sector of the chinese economy because it is about 50 of chinese gdp. If that market is stalling, it is difficult to see strong Economic Growth in china. Our the chinese policymakers able to revise the Property Market . They cannot get too loose, because you may have a problem down the road. It is a very tough balancing act. I want to get some of your main calls. It is fascinating in terms of china. You have some broad calls in terms of emerging markets debt. Local currency debt. You have a pretty big call on the mexican peso. We think it is a good asset class for the long haul. We have seen lower returns in the long haul. The last five years was the honeymoon period. That is a process that i do not want to extrapolate. We are seeing signs that the u. S. Economy is coming back. 1. 1 . Ion is at that will mean that that does not give you great return over the next six months. Ours in a better place than em equities. The bigger problem is that em equities. Mexico is a place where investors have been long in debt. I do not see any major problems in mexico in terms of major inflation. It is a decent centralbank. We do remain comfortable with mexico in terms of currency and debt and in terms of equities as well. Always great to have you and your perspective. Lets get back to one of our top corporate stories. Be in pursuitd to of sky deutschland. Up can see sky deutschland 6. 2 . Theyre not prepared to offer a premium and we have yet to work out what is the real value of sky italian, which is the third leg to the milking stool. A senior mediay analyst and he joins us by phone. You are not wholly convinced that this deal offers great rewards, are you . It depends where you are sitting. If you are foxx and you are going to be able to sell the 100 stake in sky italian, this may be a great deal for fox shareholders. It is not clear whether it is a good deal for bskyb shareholders. Ask how much centered how much synergy . They already have some joint technology dealings. Is it about the power of buying . It is not an issue for any of these companies. They have been able to acquire all of the content they wanted to acquire. Lets step back for a second. There are some softer synergies that exist in different european countries. It is not by chance that when news corp. To control of sky theland, there was Management Team of sky italian was deployed to figure out what to do with sky deutschland. Largely those are exploited at this point. Going forward, it may have to be with able being able to compete and acquire that is something weve talked about for a long time. A lot of speculation that regulation or Market Forces will options toeuropean rise. In a statement this morning, they said they are not prepared to pay a premium for sky deutschland. We have to wait and see what valuation comes out for sky italian. Do you think this will be a difficult deal to put down if you are not prepared to pay a premium to get your hands on the asset . Sky deutschland investors may resist this. In general, it seems to me that there will be conflicting points of view. Bskyb investors will not want to pay because they can invest in sky deutschland separately anyway. Great to have you with us this morning. The pulse is onto the top of the next hour. Mark barton joins us for a preview. I will be speaking to ryan and we discussed this in depth and he says three questions a person what does Vladimir Putin do next . Is this a precursor to an annexation of various eastern regions . Exactly what happened to crimea. What does the eu to next after 90 of voters backed this breakaway plan . The ministers meet today. Does this news over the weekend affect the timing and the town of the president ial elections on the 25th of this month . We will ask the chief economist at standard bank. Tel aviv is holding its first on Wearable Technology today. We are speaking to the man who is recognized as the father of Wearable Technology. There he is from the university of toronto. He has been wearing a cyborg ey e for 30 years. Do not miss my chat with a living legend, paula radcliffe, the runner, running legend, coming onto the show. Shes ambassador for the Standard Chartered great city race which takes place on july 10. A big show coming up. That is going to be absolutely cracking, that interview. Bringing the world to your hegertips, that is what hopes to do. We will have more on the start up who wants to make your whole home interactive. When apple introduced the iphone seven years ago, it brought the touchscreen to the masses for the very first time. The startup believes it has gone one better. Elliott gotkine has the details. In the futuristic film, tom cruiseeport, tracks down criminals before they can commit a crime. His first target, overhead projectors. With a one minute installation process, you can take any one of the 50 million projectors and transform them from a regular projector into an interactive room. , which sits on your index finger, is half of the technology. Table. Earth to the you can also project the image on any device onto any surface allowing you to interact with it as if you were there. Agent, iphone to the sofa. The agent is that the development stage. Workingnot show the prototype, but the impact could be just as impressive as cornings vision of the future. They are betting on almost everything been coded in touch sensitive glass coated in touch sensitive glass. Think of touch specifically, maybe you have seen a tall their interact with a tablet or a smart phone, it is oddler interact with the tablet or a smart phone, it is very intuitive with them. Onwhatever vision comes out top, Science Fiction looks to be heading to a screen or a surface near you very soon. Bloombergth television. Mark barton and Caroline Hyde will take you to the next couple of hours. Do not miss the interview with paula radcliffe. Follow me on twitter. I will be out tomorrow morning. Join me for interviews across morning programming. Do not miss that. Megamerger. Bskyb is in talks to snap up german and italian assets. Upping the ante. Considering meet to to consider widening sanctions against russia. This is as Eastern Ukraine votes to selfrule. And xi says china needs to adapt to a pace of slower expansion. Welcome to the pulse,