Welcome to countdown. It is 7 00 in london. Numbers,eported its annual profit drop. The company cfo Howard Miller will be joining us to discuss the outlook for the airline and its expansion plans. Pfizer has raised its offer to buy astrazeneca 269 billion 69 millionsays to pounds billion pounds. What exactly are they hoping to achieve . They say it is the last offer they will make. I do not think astrazeneca is going to accept it. And in they say they will not go hostile. Point . The weve had a number of discussions between the two companies. This is a pretty chunky deal. We have done a lot of analysis and we found that this is valuing the Company Based on the numbers astrazeneca has put out. That seems pretty much in line for how the company should be valued. Perspective, they can go without really getting to a point where the costcutting is not so deep that it becomes pretty difficult. They can go up to about 4 billion in terms of cost cutting. Something that is a criticism that has been laid at the door of pfizer by those a little bit politically motivated. They have been suggesting the pfizer has a history of cutting costs in research and development too much. Very interesting point. Does that hold water . R d expenses at astrazeneca fell by around 4. 7 . Pfizer fell about five percent, but their revenue fell about nine percent. Both companies have been rationalizing their expenses and Everybody Knows what astrazeneca has been doing in terms of trying to get the ship owing in the right direction. Ship going in the right direction. Pfizer has made some commitments to keeping some r d in the u. K. It is about the right sort of number. Somebody was asking for 10 years. At the end of the day, these are two Public Companies that have a duty to their shareholders. Is that duty going to mean that astrazeneca will come to the table to talk to pfizer . Only they can really tell us and i am pretty sure we will hear something in the next hour or so. Everybody is speculating that they will reject it. Offer on thes best table for shareholders to look at. Whether shareholders can turn them around, that will be an interesting outcome. At the end of the day, astrazeneca has said pretty strongly they want to carry on on their own. Rexam, thank you for joining us. Sam, thank you for joining us. Monday once again. At t plans to spend more than 48 billion to snap up directv. For more, caroline hyde. Tell us about the motivations. This is a huge deal. This could be the third biggest a deal a deal m today. Huge amounts of money that we are talking about. Huge amounts of competition because we have already seen comcast looking to join together. Comcast tried to buy time warner for 68 billion. This is going to produce huge amounts of competition within the cable industry and this is why directv seems to work in its strategic favor. Directv has pressure, it does not have an internet offering. It does not have a phone offering. There is pressure on directv. At t wants more tv to add to its lineup. A video service. Wireless, phone, highspeed internet. That tv has got the relationship with content directv has got the relationship with content providers. This is an area that at t really wants to ramp up. Communications is the second most act of area. To add what he wants more content. Is at t going to have to move for regulators . The chief executive of at t has said they are making unprecedented concessions to get this through the regulators. We will divest of our holdings of theica because presence in latin america. In brazils a presence and colombia. America mobile is head to head with directv in brazil. Trying to get out of latin america and east fears that competition will be reduced ease fears that competition will be reduced. Clearly, they are worried that this deal will not go through. Are slightly worried that someone might try to buy directv because at t would get money if directv said yes to another rival suitor. We know that our rival Satellite Company was interested. There is reason for concern. Thank you very much. We had ryanair earnings earlier on. The first annual profit drop in five years. Cfo,ng us now is ryanair Howard Miller. Do we lay this at the door of greater competition, pressure on yields . Summerad a very warm last year and thought of people decided to stay at home rather than travel abroad. We had weaker sterling. 25 of our business is sterling. We had higher fuel costs. Those three factors impacted business. It is a weakness we would have seen last year. We see profits growing by 15 or 18 . A good outturn for the coming year. Easyjet says they are boosting capacity by more than six percent. What is that going to do to prices . We have less capacity, although we are a much bigger airline. We will grow by about four percent this year. Strongly in the first half. We expect the average fare to be up more than six percent. The winter is the unknown factor. We are cautious on the outlook for the winter. Zero visibility on second half yield. Is that normal . Absolutely normal. Most people have not decided what theyre going to do this winter yet. We have a lot more bookings in place than we had at this time last year. It is normal to have very little visibility. Ask if the world cup going to be something that distracts people if the world cup going to be something that distracts people . They may make more plans, but our booking profiles, we are in a strong position. Tell me about some of the other initiatives you have been launching. Allocated seating, a better improved website. Our customers noticing . Our customers noticing . What kind of feedback are you getting . The business is going through a transition process. They said they did not like the website so we have changed that. Through ato transition process. The feedback has been really good and we can see that in our forward bookings. It has been a fog a positive decision. Why did you wait so long . A small impacten on cost because we have shifted some of our operation to more primary airports because we got incentivized. There have been some increase in cost, but the gap is widening. , the nearestost competitor is 80 higher. How much of an road can you make into business passengers . What is what easyjet has been targeting. We will have a business there increase thelso schedules and frequent saying. We could see our penetration rate of business travelers increasing. Ask howard, thank you howard, thank you for joining us. Lets take you back to one of our top stories. We have some developments along the esters and a cut story. Astrazeneca story. Pfizerneca rejecting the offer. Pfizer had increased its offer for astrazeneca once again and that has once again been rejected. Astrazeneca says it has confidence in its profitability. Value, theort of the proposal undervalues the company and its attractive prospects. The final proposal is only a minor improvement, according to astrazeneca. It is not enough to change astrazenecas mind. Rejecting this final offer from pfizer. Interesting new developments. Gut willasters in the tell us something astrazeneca will tell us something in the next few minutes. Stay with us. We were just discussing ryanairs numbers with the deputy cfo. The coo of ryanair will be on in the loop. Tweed will join us from berlin. At t plans to buy directv for 48. 5 billion dollars. The purchase gives at t the satellite revived her to combine with its u. S. Cable and highspeed internet offerings. Provider to combine with its u. S. Cable and highspeed internet officers offerings. General electric is an early frenchalks with companies about asset sales or partnerships. Ge is awaiting direction from the french government to see if it has to sell assets to get the deal done. Welcome back. Bank deutscheest bank has a new major shareholder, the qatari royal family. Ofwill boost capital ahead European Central Bank Stress Test this summer. David tweed is in berlin with the details. They are going to spend 1. 7 5 billion euros on their stake, which represents, when you look at what theyre paying per share, represents a five Percent Discount to Deutsche Banks closing share price on friday. It has taken quite a battering the sheer. This year. It has been under a lot of pressure because speculation that Deutsche Bank would have to proceed with a big capital issue. There is going to be 6. 3 billion in a rights issue that takes the total to 8 billion euros. The entire market capitalization of Deutsche Bank on fridays close was around about 31 billion euros. You can deny an idea of how massive this is. , he signals a failure always said they could recapitalize Deutsche Bank through retained earnings. They had a collapse in profits. Thing, it will bring Deutsche Bank up to become one of the best capitalized banks in europe. It will be around about 11. 8 . The coceo of Deutsche Bank commenting just now and saying the company the bank is on the right strategic path. This is the only truly universal bank in europe. How will these developments affect their ability to deliver on our profit goals . Return on equity goal of 12 and that was for 2015. They will have to postpone that until 2016. I am just looking at a note from citigroup. They are quite positive on Deutsche Bank. Investors will start looking through this issue into improving profitability. Their price target is 43 euros. It will be interesting to watch that stock when it opens in under an hour. David, thank you very much. Coming up, if you need a reason to celebrate new talent nutella, you now have one. From Humble Beginnings to worldrenowned and the billiondollar fortune. Lets talk about chocolate spread. Half a century ago today, the first batch of nutella was made. Jessica howard reports on the hazelnut spread. The italian spread that has nothing to do with the financial market. s holding birthday parties for itself all over the globe. It was born after world war ii. When food rationing forced pastry makers to add hazelnut to their chocolate. Now it is a cold classic with more facebook fans and jayz now it is a cult classic and has more facebook fans than jayz. This was something solid that you could cut with a knife. That is the origin. His efforts has become italys richest man, worth more than 25 billion dollars. The company that bears his name also makes chocolates and take , but nutellas remains its bestseller. Every time we enter a new market, there is an immediate wave of interest. We almost need not to do anything. There you go. It seems to sell itself. For more on the billionaire, lets bring in our billionaire editors. Rob, good to see you. How big a fortune is there behind nutella . The son of the founder, his father and uncle created it after world war ii. An extremely private family. He is the 28th richest man in the world. It is a family fortune. He is just behind the three children of the mars family, the Largest Candy fortune in the world. How does it rank among the Worlds Largest food fortunes . It seems to play up there against some of the other chocolate fortunes. Lets look at the 200 richest people in the world. The largest food fortunes are candy fortunes. They control 175 billion. More than 100 of that is made up erofor arrow and mars ferr and mars. They were born out of custom candy making. They had the knack for creating chocolate. Thank you very much. Up, europe goes to the polls to vote in the first election for the European Union parliament in five years. What will be shaping the discussions . Welcome back. I am an edwards. Were watching the pound and the rupee this morning. Poundgreat change for the against the dollar. One of talk about the Housing Market. The governor of the bank of england naming the Housing Market the number one risk to the u. K. Economy. A lot of interest surrounding whether the bank of england will decide to act to try to move the Housing Market. The rupee continues to be in focus after we solve the results of the indian elections. We saw the indian currency strengthening. Three of the house is this morning youre saying they think the rupee will continue to thisgthen as a result morning saying they think the rupee will continue to strengthen. These are the Bloomberg Top headlines. The bank of england governor says u. K. House prices are the number one risk for the economy. His warning could mean policymakers will shift focus and pull back the Housing Market. He was convicted for his part in a record banking laws and faces three years in prison. He is protesting about how his case was conducted. I regret and im ashamed to have been part of the system. I was in the system and i let myself get drawn into the system. I do not know if that was called ambition. Government has sent five ships to vietnam to evacuate its citizens. There have been violent antichinese protests in vietnam. The demonstrators are angry about the Chinese Oil Rig in disputed waters. Participation has been declining during the eu election process. Less than half of the people eligible to vote are dissipate. Many voters are frustrated with the lack of power the parliament has to really reform the European Union. Hans nichols has the story. Two buildings, one parliament, and the first european wide elections in five years. The challenge . Excited toopeans vote for parliament with little power. Participation has declined the most 20 points. Almost 20 points. More than half a billion people from the 28 Member States are eligible to participate in the largest transnational vote in history. To increase turnout, the parties have nominated candidates to be the president of the eu commission. This time, it is different. 751 seats are at stake, but the larger issue is the eu debt crisis. Growing costs are down, but on oyment has remained elevated. Strong turnout from voters is a higher participation then eu officials. History suggest the new parliament will face old problems. It can only modify proposals drafted by the eu cap legislation not sound. The parliament does get to approve the eu commissions budget and that leaves the European Parliament in a better position to say no instead of reforming for the better. For more on mobile domenech elections, im joined by james ashley. Why is it going to be different this time . A they have tried to make it little bit different by having greater accountability by having an elected segment to the president of the commission. It is elected by the mps. The bigger difference would be, how to the votes play out . Most people are expecting a greater push back and rejection of the eu by the electorate. That will be the big headline on sunday night. Years,ave seen in recent andicipation declining, perhaps it will be peopless annoyance with the eu that brings out voters and bigger numbers for the smaller extreme for these more extreme parties. For most people, the eu is irrelevant. They think it is very remote and even if they do follow the policy, they do not think it has much impact the national level. Most people are quite this engaged. This engaged. Engaged. Those who were opposed to the eu , i think they are the ones that will turn out in force this week. What kind of role does economics and he economy of europe have in these elections . We have some very different stories going on. The eurozone struggling in the latest round of numbers. Bmi suggesting not. That. Suggesting they are in vastly different places. The u. K. Likely to enjoy growth that three percent. You still have the strong antieu sentiment. The economy is important, but what is more important and more pervasive is general senses towards what is going on in europe. Domestic politicians tended to me the eu i apologize. It seems we have a problem with your microphone. To i very much for joining us. Thank you very much for joining us. His view on those forthcoming european elections. Coming up, we will be digging into ryanairs first annual profit drop in five years. Welcome back. Pfizer has raised its offer to buy astros and a cut to astros is a cut to more than 60 billion pounds. Astrazeneca has rejected that bid. Interesting. We spoke a minute or so before they rejected the bid. Bid to get you back into update us again. No surprise they are rejecting this offer. Obviously, i am clairvoyant. We have to think about, what are they looking for . They have kind of given a hint. They would consider something, 10 . Pfizer said this was their final offer. The operative word is may. Will we really do not want to do it. Whether shareholders will be in a position to go to the company and say, we have made your stand, but we would like you to sit down and talk to them. That is pretty unlikely because that would almost be a vote of noconfidence in the management ability. Going to be very interesting to see how it pans out. Pfizer used the word final and i think it was in capital letters. These guys have said, a bigger offer. 10 above the offer. Number, but the cash element is big. What is this number . Where does this number come from . Me. Ou thought you tell it is very hard to come up with a rocksolid way of looking at this. We took what the company said they could make over 45 billion from their drugs, took that back to todays money, apply the , which turned out to be the same as what the company had suggested, then put on a multiple of what this offer is. Is about the highest level it is pretty close to the average trading multiple. The highest valued pharma company. Levels which are possible in the pharma industry. Is these are very close to valuations which one might say a reasonable. What is pfizers next move . Pfizer made this offer they said was final, he said they did not think the astrazeneca board would accept it. It sounded like they had an idea as to what they would accept and did not go that far. You wonder whether they walk away. I think they have to. I do not think there are any other opportunities out there. The size of scheier is not big enough. To qualify for the 25 , i have not done the math, but a difficult one to make. And i do not think pfizer is interested scheier is interested in pfizer. Give it three months. Months, sixe months, things go wrong in the pharma industry. Will see thatders it is going to fall by 10 . Sam, thank you very much. , caroline hydeok is here. Ryanair . Not going to follow as much as astrazeneca. They could fall around two percent. We are getting some cautious towns about the second half of the year. We know they gave us the first annual profit drop in five years, that they were starting to turn a corner. They said sales were up three percent and profits will gain in the next year. Traffic is up four percent. They say this is very cautious. Zero visibility when you. On yield. When i spoke to Howard Miller, he was saying this is pretty normal for this time of the year. Absolutely totally opaque. They are very cautious in their words, but there is future growth. There are hints of a bright spot. Have 70 Million Euros in savings on fuel because the foreign exchange. We know the business passengers are starting to be wooed by their allocated seating. It is interesting, we are getting those next calls, that there are some stocks. This is the first annual have to drop in some five years. They have been making some changes to their Business Model and trying to win over new customers. Can to bring in business customers trying to bring in business customers. That is something that Howard Miller was talking to me about. That is getting competitive over the atlantic. They have talked in the past about ambitions in the long haul arena. Things that you would have to pay to use the loo and whether they will be able to go abroad, but suddenly, theyre getting more cozy. I was wondering why they took so long to be so nice but Howard Miller told me they were always nice. Game digital announced lance to sell shares to the public. My next guest says the momentum will continue with relentless fervor. We will need between 750 and a million digitally skilled people over the next 56 years. In order to be able to go and fill the jobs and the economy. That was the duke of york speaking to me about the Digital Economy and his support for that. Welcome to countdown. Lets take a look at some of the stocks you should be watching today. We are not short of news. Lets talk about some of the stocks that could be on the move. Astrazeneca could fall as they reject this final offer from pfizer. Months,e going back for there was concern about the pipeline. Drug. K of this oncology shares were down to 35 pounds. All of a sudden, pfizer show some interest and we rocket up to the final bid of 55 and all of a sudden, cambridge is the utopia for drugs. We need to look at the economics of this. Your previous guest talking about earnings in 2023. That is rumpelstiltskin land for me. I want to know what is happening tomorrow. At 55 quidd, that i would be running to the hills. Deutsche bank is looking for some money. They found a piece of it from the qatari royal family. Upy see themselves keeping the banking traditions were ubs and barclays the chief executive knows that because of its very profound presence in the Investment Banking market, they have gone for the first shot across the bow of a billion euros. The qatari royal family will take 1. 7 billion. They are not unfamiliar with banks. They have a credit they have a share in Credit Suisse and bank of america. Deutsche bank knows that when the ecb gets hold of regulations , they will make them sit up and take notes. Best to be forward thinking about this. Some of thehead to stocks that might be in focus, t. Have results from dmt they think it has been extremely well run. In may well be another online property company. An asset that can be extremely valuable and we like that very much. That is something that could we think on friday, it will come to the market with a valuation of 3 billion. Thoughts, butd what we like is the fact that it will have a very Broad Shareholder register, but it needs to have the support did you it the and the kiss. To give it the impetus. The other thing is the retail outfit which started back in 1976 with the aurora family. All top brands at huge discounts. Despite what is happened to others, we also have a card factory drop 10 on friday, we need to be careful with these ipos so there is no indigestion. Tsp, lloyds. These need to be exciting and give investors the prices for want to bite your hand off. Mark carney talking about how house prices are the biggest threat to the u. K. Economy. There is a limit to what he anddo with Interest Rates for making banks more capital. Land. Got to release five years ago, 177,000 houses were built. It is a drop of over 20 . They will be forced to sell the land at reasonable prices. We will see what happens with that supplyside. David, thank you very much. Five minutes until the start of equity trading. On the move is up next. That will do it for us. We will see you again tomorrow. Welcome to on the move. I am manus cranny. Moments ago from the start of the trading day and week, our reporters have everything covered. Our europe editor david tweed. Jon, lets kick it off with you. It is hard to call it the futures. No clear direction. Despite gdp numbers, we are higher across the week for a fifth straight week. The stocks keep pushing higher. Credit suisse, the focus. Do we final close the chapter . Willow bay pleaded guilty . Willow bay pleaded guilty and what are the consequences . Caroline, what is on your agenda . Thehey are cautious on second half of the year. Profit is down 8 . Fares are dropping. Competition. You have no region airlines as well. Sales are up 3 . Profit is likely to gain. Why . We have traffic up on the four percent. Still remaining cautious. Wordsro visibility, their on it yields. With had mixed calls. Higher than 3. 5 . More the bright side of things. Lets leave it there. Lets go to david tweed. He is standing by. I look at Deutsche Bank. A look at it Deutsche Bank. They are going to take a piece of Deutsche Bank. Pressureld be a bit of. 7 royal family spent billion of buying a stake at a five Percent Discount. And 3 billion euros worth. Some say eight to billion in total. To give you an idea of what it ofns, almost 1 3 of the cap deutsche banc. I will be back in a little bit to bring you the conference call. An eye oneping astrazeneca. It is another offer from pfizer. Astra asen rejected by an adequate. Undervalued as a company. It has been rejected by astrazeneca as inadequate. Offer and their last they would not go hostility to negotiate a deal as a date. May, could they squeeze out another offer . No opening price yet on astrazeneca. Essence you get an opening price on the stock, we will bring it to you that as soon as we get an opening price on the stock, we soon as we gets the opening price on the stock, we will bring it to you. Markets,n the equity the futures are a little low. This is the opening. 0. 1 . Up by despite the bad today to last the stoxxe in 600, the benchmark up for a fifth straight week of agains gains. Looking at stocks. Today could be the day will we get information from Credit Suisse on the find from you as regulators expected to be around two point 5 billion. Will it, with a guilty plea . 5 expected to be around 2. Billion. With a guiltye plea . Easing the next month. Expectations are high. This is from the bank. If they are too strong, you are too weak. Right about now. Look for those remarks. He is speaking right now. We will speak to mark carney about housing prices. Cohort. E get mike let me run through some of the comments. Why not . Ofos gains are partly part and the ecb will monitor the influence on inflation was up Nothing Shocking there. Targeting a weaker euro could prompt is a headlight the headline runs out. Targeting the current is not the but whatmary focus of they consider. Nothing that prophetic. He is concerned about targeting the euro. What is the most we can expect from the ecb in the next meeting . Are trying they their best to recalibrate expectations and to an extent, use the carrot of unconventional policy as an insurance policy in case something goes majorly wrong. I do not think june is the meaning where they were embargoed qe. They are keenly aware of the euro. No doubt about that. That been a victim of their own success taking on the tail risk off the table have brought capital inflows. Part of what i was rid of the weekend was a mario draghi, his bluff is going to be called because extensively the easing in the United States of america into the periphery and people were by prayerful bond peripheral bonds. I wish brought irish bonds are under british bonds. Its recovered, mario draghi said it himself, it has been uneven. It is still in his very early stages. One of the challenges they ecb has is essential you have germany that is doing fine and the referee that is not. I think theres a bit of mispricing. Periphery perphery that is not. Your proclivity for taking the risk. It is still there. More asset management. What is the view . Terms of equities, absolutely. What jpmorgan is looking at in those areas, dominant companies dominant and their industries that have good global businesses that are not beholden to to the macro. If you are a greek bank, lets say, or italian manufacturer, and you have made it this far, you are probably worth a second look. And those are the kind of themes we are looking at. I like how you said if you made it this far. I will interrupt our conversation. Take a look at astrazeneca stock. Inis down 13 after a astros the car rejected an offer from pfizer after it is down rejected antra offer from pfizer. Thing. Le m a we are chasing a m a story for it unravels. Its a lot of cash. They will want to put it q uickly. America, 9000 people a day will reach retirement and companies are preparing. Web and lots more to get through in the next 20 minutes we have a lot more to get through and the next 20 minutes. Andrew goldberg. What are the implications . Join me after the break. I am manus cranny. This is on the move. One stock we noted before went to break its astrazeneca. as pfizer13. 3 raised their offer. Astrazeneca has subsequently rejected the offer. The pfizer deal would disrupt the development chain according to the chairman. Adequately value the company. It undervalues the company at risk to shareholders if they choose to except that bid. Pfizer, 25 shareholders. Wn a piece of astrazeneca. That is one stock on the move. Lets talk about the banks. Credit suisse and Deutsche Bank. Credit suisse could plead guilty forarly as today and pay accusations that they helped americans avoid paying taxes. The band aims to boost its capital ahead of the stress test was that lets get into the stores. Jon ferro has a more. I head of the stress test ahead of the stress test. Lets get to the stories. Jon ferro has a more. The chairman resignation. Lets talk about some fine. 2. 5 billion. Or 2 billionllion dollars, the consequences of a guilty plea. What does it mean . Is moreant because it than symbolic. Will the bank continued to deal with Credit Suisse . Lloyd blankfein said he would be very reluctant, reluctant to change in the structure of how they do the business. Precisely. The banks will be reluctant what to cease doing business. This about and to requirements that may prohibit the companies from doing business that is pleasing guilty to a crime. There are many unknowns. If you look at some of the comments, people do not know what the consequence of the guilty plea are. The regulators, other institutions are worried. It is not a president s. It is a rather ironic message for regulators to say not to worry. Lets go after a foreign bank. Regulators want to make a case. They were under pressure to get if and a big guilty plea. It could come later today. , where more serious note does this entire story leave doo . An dugan he was rather quite a defensive. The uncertainty is what happens to management. They are under pressure especially mr. Dugan to stab at down. He has been the ceo since 2007. At he did not know what was happening. In february at the u. S. Senate, he said of the wrongdoings were a few bankers that skirted bank control. The talk now is the Parent Company could admit is a u. S. Tax evasion was fostered by the bank. That is a big if. If that is the case, thats a Big Development where it was a few bankers were you could get a company that could be turned around financially. A massive difference and it means something. Down 0. 1 . Lets turn our attention to Deutsche Bank. Just been speaking on a call into analysts. What are the highlights so far . One of the things you want to address it speculation that are going i had with the cap they capital. Ead with the because they are expected to fromase of fines litigation. What he is saying as the Capital Increase is not to do too updated litigation estimates, but what it does do is raise a buffer between the future regulatory actions. Are quite a few issues for the bank to deal with and as a pipeline. He talks about how Deutsche Bank will be able to remain and be the only european fixed and, currencies fixed in, and andencies a plot income currency supplier. He is not oblivious to the risks. He said this in a, will not go away. Incomeaid that fixed will not go away. It is one of the reasons why he was not able to recapitalize and retain earnings. , they areal Family Spending to buy their stake 5 discount of fridays closing price. A 5 discount on a fridays closing price. Qatarisar and the are known for investing. A return in equity. One of the key issues. How should we look at Deutsche Bank in terms of the delivering on profitability . Targeted 12 . That is for next year. They have extended that target postponing to 2016. Citigroup so we have the capital out of the way and that will start to look at improving profitability at Deutsche Bank. They have a price target on them around 40 three euros. They are trading under30. Edit are trading under 30. We will leave it there. David tweed. Andrew goldberg is with me. When you look at the banks and every Geographic Area is different, regulation and raising capital are the two most dominant things. How does that play into allocation model when a look at banking . One of the things an investor has to be a where of is the onset would regulation becomes onerous or a bit of a burden. It will slow down the companys ability and is important to look at a long term view. Iner the stock market crash 1929, you got to the United States, the fdic to ensure. I think 1933. The point is forever more, the Banking System was safer and a better place to do business in the United States. Yes, at first, it takes a year to work through the things. Over the long run, was you i have is a more stable Banking System. Especially in europe with the ecbs comprehensive review of banks which i think we did the results in october. And in the meantime, the top one of your notes. [indiscernible] valuations arey back at fair value stop please adjust of five. Ok, sure. Are back at fair value. Please justify. Ok sure. I changefacts change my mind. They have not changed. Low inflation stock may be too low any year. A low inflation. The global macro recovery is gaining which should help support profits. We are not covered double digit returns like we saw last year. Valuation, it is simple. Value valuation our fair value. More importantly, not valuations that cause a downturn is anyway. It is recessions at commodity price spikes and aggressive rate hikes. Say would counter back and you potentially have a geopolitical concern which could interfere. Somenited states is were is a worry some. Worrisome. Perhaps with their presumptive. It will not always be rosy. The most recently lordly gdp numbers was written most recently released to gdp numbers were down. Three percent growth overall, that is not a bad scenario especially with the low inflation. Kind of hight, single digit kind of return environment with more expansion. Money is going to remain cheap. When you talk about rates and fixed income, and was web and we have and what been running talking about the shift. 11 months lows. This for more on certain parity for more uncertain quarter within the portfolio . We do not think it is that. Some people point to repair and weve preparedness, seen there are couple of technical things. For on, a bit of a bump up for strong tax receipts. That is less issuance. Mutual Fund Investment flows have stayed strong. The retail investor, shame on t hem. And foreign demand for u. S. Treasuries. China side has remained robust. The fed is still a buyer. There is demand for u. S. Treasuries. This not predictive of a recession or an economic slowdown or geopolitical or any other usual suspects. Yunnan the bond markets was a be the smart money . I do not buy it. You know how the bond market is supposed to be the smart money . I do not buy it. Im going to get in trouble. Your top line. Breathingn given space. A little bit of a reprieve. The key things to focus on if you are an investor is to differentiate. Will i commodities. Importers and stead exporters. We like countries if they have a pick, avoid a country like india that is aggressive with reform. And the consumption story. Look at some the numbers from Companies Like bmw selling at a record because of chinas direct the years in china. You are still committed. Absolutely. Gdp has got to throw that out. You think about chinese, the underlying demand from the key sectors. That is where we are finding the best opportunity. When you ask about em, the result of my answer comes from a place where there are companies that are being successful and a bunch of them happened to be in india and china that i like, i like india and china. Leave it there. We have covered a bit. Andrew goldberg. Great to have you with me. Ryanair posted is first drop in profits was a at t plans to snap up directv for more than 48 billion. Welcome to on the move. Manus cranny. Only one stock story. Astrazeneca. Ainer pfizer and offered revised deal. It has been rejected by the company as being too low. Executives said they may do a deal. We will talk about after this break. Stay with us. Welcome to on the move. A quick check on the markets. A lot to deal with. Capital raising and results. Game gains. For the spanish market. Banks, on the down side. China, housing prices are down in 34 cities. Thats something for the markets to take on board. The keyupdate on some stocks he is watching. Less with 33 of them. Credit suisse is down by over 1 . The and the allegations and to the allegation into the bank. How big are the fines . If they plead guilty, what does that mean . And what are the consequences for management . Billion by selling shares. The stock saves a lower. Gher by almost 6 . It is about the outlook. Fare up. Back to you. Thanks for it. Markof englands Governor Carney said surging prices with housing is the number one risk to the economy. It arose a record high in may. Warning camino policy makers may shift back to pull back of the markets. He is now being held in a french jail. He is protesting how his case for a record banking loss was conducted. Face a threeyear prison sentence. I reject and i am ashamed to be a part of the system. I was and the system i let myself be drawn into the system. I did not know if it was called ambition. At t has agreed to buy directv for 48 billion. A is and tcc it gives at t satellite provider. On thees the top line story. More on the details. Caroline hyde. His is cable war it really is heating up, isnt it . Lot of consolidation. Content is king to once again. Offering 48t t is billion. Thatll be the third biggest m a of themwe get some going through. Why is it good for at t . Building relationships with content providers. It has a late start with packages. At t could get under it. And offer not only the phone and wireless but more content and more tv particularly at a time when we are wanting yet more and more content on our devices, tablets and phones. Directv, it is a joyous moment. Look at the competition it has been under. Ensuring the amount of sunlight viewers. Many more people like streaming. They are going to netflix. Look at the number of satellite viewers. To bey, they wanted partnered with another company to take on the ongoing battle. Time warner cable consolidation, it is heating up. All of the gradient is a winwin on each side. Is a winwin on each side. It is not easy to get through these regulators. What to do they have to do to agree . Looked about a decade ago to buy time to buy directv and were not allowed to do it. They are taking is squarely and see how they can avert. The chief executives are saying ions especially in latin america. Thats a large stake in america movil. It has direct competition with directv in latin america. Fighting in off, cell. Get after the latin american businesses. Directv will compete. But clearlytments, it is word by regulatory issues. Does not gon through, at t does not have to pay direct tv and he cash. Directv would have to do the paying. Deal. L at t gets cash profits. Fascinating stuff. That shantou waylaid concern. It will be the third biggest deal. That would away leg concern. Waylay concern. General electric is in the early stages of areva about partnerships. For 70 french approval billion bid to buy alstom. They are waiting direction from the government to see if it has to get it done. Lose after swiss voters rejected. The contract for 22 airplanes was opposed by more than 53 of all voters. First drop in its five years. And rising fuel cost competition. We spoke to the companys cfo earlier. A lot of people decided to stay at home rather than travel abroad which is general across the industry. Most represents 25 of our businesses. H we have [indiscernible] those three factors impacting the business. Have seenakness we the last year. Wouldve seen strong growth in profits. Nearly 600 million. Message from the sea cfo. To discuss ryanair and all things airlines. Promiseremises is it s . And they guided the market. It willerest to see rise again. Personally, i do not taking this news at the main thing to focus on or moving to major airports. Just how to emulate. Very different. And make Customer Service changes which they can do with very little cost. Major airports where we have seen the cost of rising. At lots of thats more about strategic battles with other airlines. Is more aboutat strategic balance with other aline. With other airlines. [indiscernible] they want to take of the best. They have fallen behind. They can widen their markets. People can say i hate ryanair and will never fly with them. Taking people from people like ieg. So long localase, carrier which is a family, standalone airline which is ryanair. Take it seriously. They have moved into brussels a few months ago and wrong. And rome. They are fighting the battle. Airports without the same cost reductions. Is Legacy Airlines coming ba ck . Or is0 making or is ryanair making too big and assumption . Of, none ofake sure which is treated as serious threats to buy ryanair. They have acknowledged is a wellmanaged airline and is it low cost that delivers profits and of the same right. Point of view, they do not want to interfere and suffocate. Talk about ryanair more specifically. In terms of a marketing . Change . Its takes time to change the perception of an airline or a prophet. Profit. Is one of the sharpest ceos around. He promised to deliver change. That is right. He takes a backseat and the public communication on the consumer side of the business. And allocate seats now and plays and easy to use a website. The cfo was here earlier asset scheduling and frequency, or are those messages . It is interesting to watch. Good froms been capturing passengers from Traditional Airlines with higher frequency. May be secondary and is not able to do that. Just a big deal. They built of highfrequency to secondary airports. Or other airports of that type. P frequency and combined lowfare and easy to use website and they will get more business customers. They may not give a corporatewide business customers, but small businesses. They can buy into more of the share. We look at legacy carriers. Light era tally a like air italia s they fail. Should easyjet to be worried . I am sure she is keeping a close eye like of a boat to do. John strickland. We will leave it there. Coming up, as good as it gets. Pfizer. One last time. Or is it one last time . Weave all of the det will have all of the details nex t. I am manus cranny. This is on the move. One stock that has been moving. Down 13 in one juncture of the day. It is astrazeneca. Byy said no to a deal pfizer. Wait and see what happens. Its a date and the calendar that its put up or shut up proverbially in the market. For more on the whole deal is our specialist. Thanks for coming down. Different direction with this. Why would be so bad for two companies together that have more power . You have to think about it from the perspective of job cuts. That is the only way you would say it is a bad thing. Astra speaks about the integrationof process. Nobody is particularly happy knowing if they have a job or not a job. Those are all fair points. This a world now where there is Major Pressure on drug pricing and you have to put in ther d in in thetem the r d system to get them out. Potentially more focused on r d. You look at the First Quarter and itd declined by 5 . Of both companies. Year over year was 4 7 . 7 . There was a follow in r d. Nevertheless, it has happened. Both companies would cut their cost relative to needs. Pfizer lost a significant chunk of revenue from the Animal Health business. You would expect that some of that. Nevertheless, they were at the highest levels of any of the companies. What is the risk . Part of it is where the present of all of the pharmaceutical companies resent how they are doing with trials. What is the risk that astrazeneca is pushing through drugs at too fast a pace . Is it something we should be concerned about . We do not know if that is the case or not. Whether the company would have been doing that or not anyway. There are a couple of signs and im sure im not the only person worried about the pace. For instance, they have an asthma drug. Are just announce they moving into phase three and they will make a decision in this quarter and they have. We look at the data being presented this week, i think tomorrow at a big u. S. Conference, it does not look so convincing. It makes you wonder what they see and the data and ive talked to a few analysts who think the Companies Think there is something in the data. You look at the data and see it is not competitive to some of the other drugs. Makesare some signs that you a little bit worried that perhaps some of the decisions made on the fence. What next . Dd 55 pines. I am sure astra would say no. I do not think you disagree would be at it strange situation if they went to push now after the press release they put out to go and sit back at the table. I think that will be a really strange move. Or negative for the board. What does the possibility that a gets past and there is another and the bidding is gone . Well, thats a very good argument to make. Enough time for this to happen. The point is it has to be somebody who has a strong strategic move or financial reasons. You have to make the same argument again. I will leaveees. It there. It is down nearly 14 . Sam from bloomberg industries. And big mark barton banks . Could lose itse chief executive because of the looming deal with the u. S. Authorities. The last time Deutsche Bank will raise capital after raising a 2 billion euros. We will be speaking about that. Aboutlk to sam astrazeneca and pfizer. What is the next . Astra rejected the sweetened deal. Big week. Eu elections on thursday. An interesting body that calls for eu membership terms to be revived for the automotive the members are some of the bosses of the biggest companies. Is 50 years old. What does create what does it take to create such an enduring brand . Young. S happy birthday, nutella. Protein only. Es. Ot look at the pul pulse. If you are a u. K. Pension advisor, how much has been taken . Welcome to on the move. For a recap of the biggest themes, i am joined by jon ferro. Will we start the show, the ecb government. Targeting the euro could cause a counterreaction. He went on to say on the level of the euro was too strong. One side is folks on exchange rates. Its hard to imagine the monetary policy. What is your take on the comments so far . Hasnt had an impact . The key line is the straw euro has been easier. He talked about influx from the capital flow. The key part is the 10 year yield is the yield is so much lower and more inflows and that pushed it higher. Something mario draghi himself has talked about. Got balance that you need to talk about. Not just the stronger view. A lot of these politicians are complaining. We have to look at today easing off financial conditions as a wall. That is something they are pushing. It is part ofce an institution that could go down the road. I did the exchanger rate. Thats a massive concern. And the exchange rate. And when he said it is too strong a you are too weak. He is very conservative. What he is saying is the strength of the currency should bring discipline and you should innovate and be more creative and not rely on shortterm fx mobile. Spain as further along the way in terms of restructuring. In terms of valuation and also the issue of some of the countries have a bad banks. We will leave it there. Tomorrowo it all again morning. That is it. Stay with bloomberg television. The pulse is off. There is a young lady who has traveled across the pond to be with us. Olivia sterns. Join me on twitter. We will be back tomorrow at 8 00 a. M. European time. , astrazeneca tells pfizer a taking for bid is too low. Banks, a guilty plea from Credit Suisse looms
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