Transcripts For BLOOMBERG Countdown 20150205

Future of orange as it closes in on its ee deal. Vodafone reports Third Quarter results in the next hour. Mark welcome to countdown. Anna coming up, bill gates reduces his stake in truck microsoft to 3 as against 1. 5 billion of stock to his foundation. Mark frances biggest banks earnings for the previous quarter. Net income rising to 1. 3 billion euros from 110 Million Euros per year. That is when the bank set aside money for legal costs. That 1. 3 billion euro figure just below the 1. 4 billion average that analysts conveyed. Escalating levees on europes biggest banks will dent 2016 that income by 500 Million Euros. That will endanger the profitability target once more. The economic recovery is winker weaker than the bank had foreseen and Interest Rates are lower. On the dividend front, bnp will pay 1. 5 euros per share for 2014. That is unchanged. It did maintain the payout even though annual net income fell by 97 . It is the lowest since the bank was created by a merger in 2000. Bnp paid a record 8. 97 billion fine for violating u. S. Sanctions against iran, cuba and sudan. The firm is spending 250 Million Euros to improve compliance. The chief Financial Officer has been speaking to bloomberg. He began by talking about that u. S. Fine. Of course there is a major exceptional, the settlement to u. S. Authorities. As you know the bank has taken remedial action. This is basically witnessed in from the top line. The top line has grown in all of the businesses. Costs are managed on the back of our program and cost risk is down, so this is a good operational performance. How do you plan to slow down in any u. S. Activities . Lars what we have seen as weve got the confidence of our clients. We had an increase in 2014 of 9 topline. There are a lot of challenges in the u. S. This waiver you are waiting for from the u. S. Department of labor to remain qualified as an asset manager in the u. S. How do you handle the challenges . Lars we should separate our u. S. Activities which have not been impacted. The u. S. Settlement has to do with the u. S. Branch transactions. The thing you are talking about is already being handled. From that point of view, as i said it is being executed and there is no impact on servicing to the clients. You did more on acquisitions last year, you do more this year or could you reduce some activity . Lars we are in a situation where he can use capital. We might be able to redeploy all the capital if guided on an dividend of 45 . It is not impossible there will be excess. I stress, it is not something very sizable and is not something that really integrates well operationally or market wise, or client wise. We will keep our eyes open. Mark that was the bnp chief Financial Officer lars speaking to caroline. Anna the european restricted loans to its Financial System. The government may run out of cash by the end of this month. According to two people familiar with the company. The move puts pressure on greeces new Prime Minister to stay the course on the Bailout Program. The timing is interesting. Later today the greek finance minister meets his german counterpart. Lets get life to Honda Nichols who is in berlin. Hans nichols who is in berlin. Where the crucial meeting will take place. Hans it is the meeting between these two and the german finance minister seems to have them all on the same page. There are two issues, one is with greeces ability to issue short term debt. Before, we thought they would not have to breach that limit until the summer. We learned last night some great reporting that february 25 is the new date. That means an immediate cash crunch. Last night we got an announcement from the ecb saying they would no longer accept greet that greek debt as collateral for ecb cash. That gives an indication that everyone is unified on the troika and the ecb will not allow access to greek banks because they have given every indication that they plan to leave the Bailout Program which technically ends at the end of the month. And away, the ecb has accelerated that program saying it is over now and if you want to leave the program you will not have access to the crucial funding. The Greek Finance Ministry seemed to put on a brave face and say the greek Banking System remains adequately capitalized and fully protected under emergency liquidity assistance. They continued to restate they are open and want this idea of social salvation. We dont know what greek bonds were doing, they were not trading. The euro did drop 1. 2 on this news. Anna it looks like the greek banks still have access to some ecb windows. They are pointing to the emergency liquidity assistance window. What is available and for how long . Hans they have ela access, back its reviewed every two weeks. The issue with ela, it is much more expendable. The rate is 1. 55 . The other rate they have been getting is. 05 . It has clearly increased the cost and could give them a taste for what is to come. Clearly we have a hardline out of the ecb that landed last night. Anna thank you very much, hans nichols our Bloomberg International correspondent. Mark the swiss watchmaker made the news after the Swiss National bank basically binned the swissfrank euro cap three weeks ago today. Fully operating profit, 1. 7 5 billion swiss francs. Analysts miss estimated 1. 9. It is an earnings miss. It is proposing a dividend of 7. 5 swiss francs per share. That is ahead of estimates. It is the high singledigit growth excluding currency shifts. It is the continued healthy profits. Several of the brands have raised things by five to 7 . It plans to add numerous Innovative Products this year. January sales were strong in local currency. The word local is the key there. No comment from swatch, from the headlines on the swiss franc. But the chief executive said everything that needed to be said to on january 15, when the central bank scratched the cap on the currency. Finally, for the entire country. The watchmaker also sees high singledigit growth excluding fx shifts and quoted exactly despite the highly overvalued swiss franc and at the same time earn continued healthy profits. Basically, 2015 has started very auspiciously. With a strong january and computed in local currency. Anna a pointed statement. Manus fact of the day. Lets look at some of the other stories we are following. Sony shares rose as much as 18 after posting its best quarterly profit in seven years. They make the image sensors that allow smartphones to take high quality selfies. The investigation which comes six years after the bank resolved a second Tax Evasion Case is said to focus on their securities. Anna more detail in the mobile sector as orange closes in on a sale of its ee mobile network. That is according to people familiar with the matter. Vodafone, through voter, reports its vodacom reports its thirdquarter earnings. Manus bill gates gave 1. 5 billion worth of microsoft stock to his foundation. The worlds richest man donated 31 million shares of the software maker. Decreasing his stake in the company he cofounded to just 3 . Mark they struck a deal with google to make twitter more searchable. Twitter will start appearing in google results as soon as there are posted thanks to giving the search giant direct access to its systems. They are generating more advertising revenue from a large audience. You can join the conversation on twitter. Tell us what you think of the show. We want to hear more about the stories you are following. At any tweets today . Anna a few of what is coming up on the program. After the break, why some are breathing a sigh of relief to see chip sales in china falling. Manus you are watching countdown and these are some of our top stories. Greece has lost a critical source of funding after the European Central bank removed loans to its central system. The new Prime Minister has encouraged people to stay the course on its program. Later today the greek finance minister will meet his german counterpart for talks. The owner of pizza hut and kfc has posted fourthquarter revenue that beat analyst estimates. Sales enter china have slid less than expected. Overall, the company had a net lot loss. Compared to the profit one year ago. Yum has been struggling to repair its prep reputation it are china after one of its vendors was allegedly wrote for using out of date meet. The flight that clashed in taipei the survey made a distress call after being given the goahead to take off. A male voice was heard saying, mayday mayday, engine flamed out. At least 31 people were killed. 15 of the 38 people survived. Mark our top story today, the greek Financial System is losing a critical source of funding. We are joined by the global head of economics. What is the ecb up to . What we are seeing here is a reminder that these negotiations would never be easy. We start from a point where greece was quite farrow far away from the troika program. There was a lot of optimism that we had the finance minister come over from london and tell us they are no longer asking for a debt writedown. I think a lot of optimism was spared by that but thats still not bring the parties that much closer together entre the economics. And my reading of yesterday is clearly were still far away from agreement on the economics. I think we have to remind ourselves that greek banks still have access to financing. What i am current concerned about is what this will do to confidence in greece and what could this put on the deposit outflow we are already seeing from greek banks. That is the immediate risk. The next risk is going into talks that will culminate on the 11th of february when leaders meet to discuss the plan. I think a grexit is a loselose situation but also not a risk we can ignore. We need to be aware and this is just a reminder to everyone that to the markets and policymakers that there are very serious questions opened. Anna if we are trying to work out when we see a cash crunch for greece, how do we do that . Lots of people are coming up with different dates of when this starts to hurt. How would you define a crucial cash crunch moment . Michala the key point is we have been here before. The question is which day do they run out of funding . They run out of funding the day the ecb no longer authorizes the greek centralbank to provide elas to the greek bank. That is the most critical day out there. Then we can discuss two bill insurance and how many can we issue, but it is really the ecb allowing that ela to go ahead anna the government said yesterday that we do still have this ela access. They have taken away the cheaper sort of funding. Michala the ecb emphasized that in its own communique. Clearly the ecb is making its clear and the greek banks to the extent they have other collateral are allowed to come to the ecbs window. This is a move directed to the greek government bonds and greek government guarantees. We have to distinguish those two things quite clearly. To my mind, it is a day that ecb says no more elas, that is when they believe the euro area. Manus that, you say, would have a bigger Geopolitical Impact akin to russia in day one of this governments administration. How concerned should we be that that is the kind of geopolitical posturing that might come out of this . Michala that is the lose lose situation. I strongly believe that it is in the interest of everyone that greece stays within the euro area. We have to remember, most importantly that while this government was democratically elected, the greek people give the message clearly that we want to stay in the euro. The tough challenge here is can we negotiate agreement. This gives some reason some hope in these negotiations there are a number of points in which the new c raza government syraza government would help. Reforming government, that has been a constant question. Getting rid of some of the oligarchs, something that the troika would like. Some of the things that are very much disliked reinstating minimum wages. Redistribution policies. Those are some of the toughest things in the negotiations. Mark michala will stay with us. No break. Michala apparently so. Mark lets talk about the bank of england. And of two date meeting, seems like nothing will happen today but with Interest Rate expectation moving further into the distance, do we need to stop worrying about a rate increase . Michala i dont think so and that is good news, not bad news. It is the same discussion where having on the fed. The rate hike would be an expression that we are confident that this is a robust recovery that the growth is there in the central bank is able to normalize. We are essentially normal rates. In my career, this is an exceptional situation. I can not believe we have 10 year yields in switzerland. This is uncharted territory. When we look at the Monetary Policy or the fed and bank of england, is the recovery Strong Enough . And should tightening take place before you have a strong acceleration in the headline Inflation Numbers . Probably yes if you want to secure a gradual have to normalization. There are a couple of areas to look at. One is the question on credit. If you start seeing credit accelerating, that is a good thing but you dont want it to happen too fast. Another is financial stability. You dont want to create a situation where the economy is growing robustly. You keep monetary addition so easy you end up spurring financial levels. A nominal situation be something very healthy and positive. That comes with a few issues around it. This is where the rest of the world comes in strongly. A concern we have had, is the asymmetries on Balance Sheets that can result from currency movement. Coming back from china, one of the big concerns is that china has significant volumes of dollar denominated debt. A lot of that is in the shortterm and when the fed does start to hike, some of that debt will come under pressure. That is the reason why china cannot join the lets deflate our neighbor rate. Anna do we entered the fed into the currency war . A lot of it is against the dollar but we were having a conversation about when the u. S. Says hang on a second. Michala i see a little bit of a paradox in the u. S. , but i also see the very low Interest Rate environment of being a result of the shrinkingdollar economy. We are getting this pull coming down from the rest of the world on u. S. Bond yields. On the one hand the stronger dollar could be said to delay, but keep in mind that the dollar effect is much less than the euro economy. But at the same time bond yields are so low that you could argue it should force the fed to tighten less. Mark i think that is it, nicola michala. Thank you very much for joining us. Anna coming up, claims that the ubs is being investigated about whether it helped americans invaded tax. Manus welcome back to town down. Time to check how countdown. Time to check now what is trending. You have a clear definition here of what is selling at this time. Japanese yen does not know what it wants to do but dx why is what we use or the dollar dxy is what we use for the dollar. We just caught up with michala one of the chief economists saying the fed should move earlier. The chairman of Berkshire Hathaway says go to bloomberg, you will see the article there. Michala says do it now. Very tough is what Warren Buffett actually says. That risk still exists in terms of the debt market. That is the dollar backdrop. That sets the tenor for where we are in terms of the unemployment report which is tomorrow. Now, what is going on with the euro. The European Central bank says we will not allow week sovereign bonds as collateral anymore. You have to go to your own banks. There has been a little bit of reprieve. It is germany day. I am seeing notes that say anything that moves back up to 150, any kind of correction in the eurodollar is an opportunity to consider your shortterm trader as a cell opportunity. The volatility in this currency and this caught my eye this morning. Price swings are at the highest level since 2011. That is what is driving the eurodollar market. That is the critical issue. If qe doesnt take the euro lower, what will greece do . You saw the dollar rise and the real fall. What you have here is again moving toward strong u. S. Federal reserve. Petrobras, you saw the ceo and five senior positions resign. Growth was cut yesterday and inflation was raised. So the brazilian riel starts to trade today. Back to you. Anna these are the top stories this morning. Greece has lost a critical source of funding after the European Central Bank Restricted loans to its Financial System. They put financial pressure to stay the course on the Bailout Program. Later today the greek finance minister will meet his german counterpart for talks. Bnp reports its lowest annual profit in history and it is because of a fine from the u. S. Last year. They pleaded guilty by processing almost 9 billion in trouble and transactions. The lender says it is taking remedial action. Zimbabwes aging president took a fall after speaking at the airport in the capital terry and his aides quickly helped him up. He turns 91 late of this month and had just returned from ethiopia where he was asked elected chairman. Mark the gas Company Released earnings yesterday. The company says the revenues could fall to as low as 2. 2 billion in 2000 14. Bruno joins us now on the phone. Thank you very much for joining us. Thank you and good morning. I believe there is a strong backlog, we have a 1. 8 billion backlog 64 should translate into a breaking cash flow. We are in a strong position for a bad time in the industry. Mark how long do you think this bad time in the industry could last . Are you preparing for a sustained low Oil Price Environment . Bruno it is difficult to say. The only thing we can say is there is a high level of uncertainty regarding the price of oil. Over the long run, a lot of resources need to be developed. Therefore, the opportunity for a Company Offshore are great. Mark you say the backlog is healthy, 21. 8 billion, but do you expect on top of the cuts capex cuts, do you expect further cuts . Bruno in 2015, mark will you be taking up more cost from the company in december . Is there a need to reduce cost further . Bruno there is a need to review what is happening in the industry and to see what is happening in the market. To adjust up and down depending on the market. More importantly, there is a need to be in close con tact with our clients and to find Solutions Mark . How are the needs changing in this environment . What are they saying as oil declines 60 from its peak last year . Bruno they were already saying that the cost of development was too high at 100. We already need to work differently with them. When you did different type of relationship between contractor and client than we have had and try to get the benefits from the supply. In order to be a look to decrease the cost of building new projects but also creating fields. Mark lets cut to the chase could oil fall below 40 and how long will it take to rebound . Bruno i have no idea about all of this. We are watching the market the same weight you do and we are looking at all the forecasts. So, we need to see what is happening on a day by day basis. Mark quickly, can you give us details on this investigation into your brazilian sales rectus is . Practices . Can you give us the specifics about how long it will last or will you settle . Bruno we have been in contract contact with the authorities worldwide. We are a discussion with them and trying to find a solution in order to find another settlement. If it takes a long time, you look at the time it is taken to get a settlement with the dutch and american authorities, it took almost three years. We do not have a clue at this stage. Mark thank you bruno, see you soon. The ceo of sbm offshore. I just want a ceo to say oil will stay. Anna i love the way they say they dont know. Manus lets talk a little bit about tech now. Tech nation is the First Comprehensive analysis. Here to explain a little bit more is damien kimmelman. Glad to have you with us. This is a great report, when you read it, regional job growth predicted to outperform all other areas. 7. 5 of the u. K. Is involved, digital is turning into an explosion. Damien by 2020 digital will overtake all other forms of employment in terms of growth. And i think it is not just an explosive report. What tech nation is, is the first living index of private companies and technologies. That is pretty massive. Anna if i cast a skeptical eye, i ask, how you define Digital Businesses because every business wants to call themselves digital these days because it is a word for the brand. How do you come up with that . Damian there are so Many Companies being disrupted. Definition is the toughest part. It is difficult and it is not precise. Previously, the way digital has been described is through six codes zip codes. Now they are notoriously bad. A quarter of all businesses are other. It is tough. We have a methodology that is laid out on the website that describes how we describe digital. It is not perfect. Mark how can we as a nation state ahead of all these other capitals trying their hardest to be the tech hub of the world . The stats are incredible 1. 4 6 Million People currently employed in industry. How do we in the u. K. Stay ahead of other nations . Damian i think it is really tough because there is a natural luddite sort of there is a natural feeling that you need to go against the digital disruption. Right now, when we look at disruption across the tech scene it has been about social if you look at the future disruptions they are the foundation. The thin tech, the biotech, the error not ask industries. Aeronautics industries. These will have huge disruptions. Then when you have over disrupting taxicabs, imagine uber disrupting taxicabs, i imagine what happens when we disrupt the things we are so used to. Rather than take the luddite approach and go against it, i think the best way to deal is to embrace it. Manus anybody who is watching this, if they are sitting at home are working for another company or a bank what is the reality of startups that you encounter . What can you earn and achieve . Everybody knows facebook and twitter, set that aside. What is the reality of getting involved in a digital startup . What do you see around Silicon Valley . Damian we are actually based just around the corner from you. It is quite exciting. Four years ago when we started this business, there wasnt a scene. I think what is more exciting is that the scene is sort of spreading to not just tech city but tech nation. 70 of businesses manus did you have to find yourself, pay yourself to get it going, or were you in a more luxurious position . We talk a lot about digital what is the reality of the businesses that start . Damian there has always been this idea that you raise funds originally from friends, family and idiots. Then you move on to other forms of capital, Angel Investors and seed investors. That has not changed that much, there is just a plethora of options. Another is crowdfunding manus so much more. Damian so, so much more. Manus its good to know what is going on literally around the corner. Damien kimmelman, thank you so much. I think anna has been popping away on twitter. I have been talking about what Warren Buffett thinks heres our our names. Anna when we come back, we will be joined by the ceo of death us and talking sweet energy. Anna welcome back, now we had earnings this morning. Fourthquarter revenue missing analyst estimates. The Company Also Announced it aims to expand its Digital Consulting business worldwide. We are joined by their chief executive bernard schaad. It looks as if the Fourth Quarter revenue is a little below what analysts had estimated can you explain that . I think of the Fourth Quarter of 2014 has been a good quarter for us. Both showing acceleration in gross growth of gross revenue. On the full year, we ended up overachieving on all of our commitments. New license are up significantly and he not the year with 56 gross. It provides a good sign for what we believe four 2015. Anna so are analysts just being too optimistic . Last time we spoke, your european is this was doing well despite a sluggish european economy. Is that still the case . Bernard still the case, we were positively surprised by the revenue in europe. 14 growth in asia and 20 america. We noticed that especially in europe or germany, u. K. , the nordic countries as well as italy has been good for us. Not only the Fourth Quarter but on the full year. It shows that the Company Continues to invest to prepare their future. Anna so lets talk about where the worries are anna any part of the world that you are concerned about your business . Where are the worrisome spots . Bernard russia is a small part of the business from one perspective. Russia has not been doing well at all but Eastern Countries entered germany and some parts of europe have been extremely dynamic. We believe that this is why it got this 14 growth overall in 2014. So, the positive aspect of 2015 is we believe we can see doubledigit growth on both organic and total growth. Anna how much is your business being held by weakness in the european currency . The ecb says it is doing whatever it takes and trying to boost the economy, how much is the weaker currency helping you . Bernard that is an interesting question. For the last eight years we had this phase win with the currency effect. You made a call we were always you may recall we were always publishing our numbers 48 years in a row, the currency was against us. For the first time in the Fourth Quarter the numbers when it comes to excluding or including the currency effect is neutral for the Fourth Quarter. I think that is good news, but at the same time we dont count specifically on that. Frankly speaking for our clients, i think it gives them a new way to accelerate direct sport. That is clearly visible. All in all, i think it will be positive based on trends. Anna lets talk about the Political Climate in france. I know france is usually less than 10 of your sales, but lets talk about the political environment. Last time we spoke you said you were disappointed at the speed of reform. You said some had very good ideas but things were moving too slowly. Update us on your thoughts. Bernard maybe this time i have more hope. I think i have two observations when it comes to the french climate. First, the social environment is positive toward enterprise and for your ship. Entrepreneurship. I think that is a good sign. Things are going in a good direction. And i think socially people are expecting that to happen because people understood that the one creating jobs are the companies. It was interesting to see that more than 200 startups from france were going to ces a few weeks ago. There is a lot of innovation. Anna bernard, thank you for joining us. That is all we have time for. Bernard charles, the ceo of dassault. Mark coming up our favorite stories from bloombergs digital output. Same with us. Anna welcome back to countdown. Some of our favorite stories from the digital output. Twitter reaches a deal to show tweets in google search. The deal between twitter and google is the essence. These insights of 140 characters will be easier to find through google. Google used to have to troll the Twitter Website and now they are being fed them directly. Manus i have gone for a billionaire story. Rich gold. I am not just yet, but this man is. Bill gates has given 1. 5 billion worth of microsoft stock to his foundation which leads him holding 3 . Obviously the fight against aids and malaria is something they are pushing. Mark steve jobs who of course was the apple ceo who died, his wife added 1 billion to her net worth when disney shares surged to a record. Mrs. Jobs owns almost 8 of disney shares, they surged to a record high. She also inherited a stake in apple when steve jobs died in 2011 and apple shares hit a record high. She had a good day. Anna countdown continues after a short break. Mark concerns grow athens could run out of money. Thaanna we speak to the finance chief and frances biggest bank. As you know, the bank has received [inaudible] and the plan has grown. Manus vodafone reports its thirdquarter numbers. We bring you those numbers in just a moment. Mark welcome to countdown. Manus bill gates reduces his stock as he gets 1 billion in stock to his foundation. Mark big news from vodafone. Who better to tell us about it then caroline hyde. Caroline bp has agreed to buy ee. The consideration will be payable as cash and new bp shares. It was a joint venture between orange and deutsche telekom. Dr. Telekom will hold a 12 stake in bt. As was expected. Orange will get slightly less of the overall combined bt and e. This is combining the most advanced 4g network and gives bt scope for future investment in product innovation. The company that has been left out of all this m a this rife dealmaking that has been going on that seems sees sky teaming up with others. Vodafone is doing well in terms of its numbers. Thirdquarter organic Service Revenue is falling but not much is expected. It is down 0. 4 . Analysts will expect a doubling of that. Fullyear earnings will be [inaudible] the question is what does but a phone do next . They themselves have said in the u. K. The used to be the dominant force and there are now bottle bottom of the heil. We are expecting them to go to the bottom of the heil. How can the come back . When we want to understand how quickly. It is trying to organically grow a competition to the southern quad play players. They could get in with Liberty Global which owns for urgent media. Automatically they inherit tv capability, broadband capability. It has been something that has been debated within vodafone. They have been looking at the regulatory issues, a thought Liberty Global would be a good combination. Liberty global and vodafone have been racing off to the same sorts of assets. Bvodafone knows how to be all things to all men. They have been doing it in germany and spain. Anna talking about the cap ex that is big but then you compare that against the revenue they are getting out of this and bt expects to generate 1. 6 billion pounds. Bt is about the quad play. There are some costs but this is about growing the top line. Countdown caroline and loyalty. They do not want everything to be provided by one player but they do. Manus i have always had the two things as being separate because i go back, sky told us that their churn rate was low. People are not now vicariously i have become a double player, even quad play with bt. I am the kind of customer they really want. Anna it stops to jumping and this is why the companies are scribbling to make deals. There is the most amount of dealmaking in telecoms and a decade. The u. K. Is catching this wave bt have started the fire blazing. Now we have sky offering mobile. Caroline we wont go there. Manus [inaudible] mark more breaking news. Manus we have asked her zeneca. They have missed on their numbers and they are doing a deal. Earnings per share at . 76. The estimate was 85. They missed on headline numbers but he has announced a deal. It is from activists, they are buying, this is astrazeneca buying from activists for 600 million. They are also saying that their guidance for this year will be low singledigit earnings per share growth. And m a was the feature last year. Astrazeneca batting away at pfizer and pfizer wants to do that inverted deal with a saw tax advantage taking over astrazeneca. That fell apart. Lets try and do this on our own. 250 billion dollars of m a deals were done in 2014. It was the sector it was the industry that really drove the m a field and breakups. Also their Fourth Quarter sales that missed ever so slightly. 6. 6 8 billion underneath the sp estimate. Their guidance is low Single Digits very at anna we are getting numbers from daimler. A lot of focus going into these numbers on how it beat the company would be about the future. Expectations were set and they have given us numbers that Beat Estimates saw earnings before interest and tax from Fourth Quarter operations. That is above the consensus estimate of 2. 61 billion. And on the crucial issue of the outlook they say 2015 ebit will increase. Some analysts were expecting a confident statement. We also had other banks talking about how this was going to be a good update, a positive update from the management of the company. Talking about the margins they have made on individual businesses. I saw some higher numbers than that so we had Deutsche Bank talking about 8. 8 and we had ubs talking about 9. 7 . Interesting to detail dig into some of the details and where than analysts had estimated. Mark the central bank had restricted loans to the system. That the government may run out of cash by the end of this month. That is according to two people familiar with the countrys financials edition. The move by the ecb puts pressure on greeces new Prime Minister to stay the course on its Bailout Program. The timing is interesting. The greek finance minister meets his german counterpart. Lets go live to our International Correspondent who is in berlin. Can he ask for more time from the germans . Hans he can, it is not going to solve the other two other problems that you enumerated. One of them is what do they do for their shortterm financing . Greeces ability to issue tbills. They want to go up to 25. They will need a waiver. Otherwise on february 25, they could run out of cash to fund their government before the estimate was always sometime in the summer and the midyear. The other big issue in this happened at 9 36 p. M. Last night, the ecb announced they were not excepting greek debt as collateral and that makes it much more expensive for greece to borrow any sort of money from the ecb. It closes a crucial window to ecb funding and raise the cost of borrowing for them. Here is what the Greek Finance Ministry said about that area did they tried to put a brave face on it. They said the greek Banking System remains adequately capitalized, fully protected under emergency liquidity assistance. The euro on the news last night dropped 1. 2 . When bonds start trading here, we will see what this moved by the ecb that indicates that the ecb is in line with the eu, with the imf, they want to resent a unified front and it looks like a stern front as well. Mark it looks like greek banks still have access to ecb, to some ecb windows. Tell us what is available and for how long . Hans every two weeks the ecb reviews whether a country can avail themselves of this. The borrowing costs are 1. 55 where you look at the normal overnight rate, it is. 05. It is much more expensive. This morning, there is an interview that is published. Strict standard should be apple ied so they review this every two weeks. This was an interview given last night. We do not know if he knew about the ecb decision. This interview is a little but dated but it does give you a sense of the standards the ecb may be applying to ela and if they lose gailey funding it will be him a more acute cash crunch. This is all the more interesting and all the more tense. I am looking forward to reporting on it. Mark we are looking forward to your report as well. Hans nichols, our International Correspondent in berlin. Manus lets take a look at the other stories we are following. More scrutiny for tesco. An adjudicator has launched an investigation saying there is a reasonable suspicion that tesco breached the grocerys supply code of practice. An investigation will take six to nine months and will examine practices linked to the overstatement of profits. Mark sony shares rising as much as 18 in tokyo trading. Posting the best corporate profit in years. Anna ubs is being investigated over whether they have been help to evade taxes. This comes six years after they resolved a separate Tax Evasion Case with the justice department. It is focusing on their securities. Manus caroline is taking those headlines to you. Sales of the bt mobile network. They explored various acquisitions. Meanwhile, vodafone which operates in was a big and tanzania. Reports its thirdquarter earnings a bit late. Mark bill gates gave 1. 5 billion to the Gates Foundation asset trust in november. That is the embassy that manages the foundations endowment. The worlds richest man dont in 31 million shares to the software maker, decreasing his stake in the company. He cofounded the company and is ticks greasing decreasing to 3 . Anna tweets will start to be visible in googles search results as soon as they are posted. The agreement underscores the progress that twitters ceo is making and getting tweets seen by more nonusers and generating more advertising revenue from a larger audience. You can join in the conversations we are having on twitter this morning. Let us know what we you think of the show. Plenty on the oil sector and much more results. Mark bt is buying 31 billion customers. And 834,000 fixed broadband. Manus i told everyone that vodafone would report the numbers. One of those member moments in live tv. Anna why yum brands is breathing a sigh of relief. Sales in china falling. Mark nus within the last half hour bt had announced [inaudible] the current war in owners will receive a mixture of cash and bt shares. Greece has lost a critical source of funding. A move puts pressure on the new Prime Minister to stay the course on its Bailout Program. Later today, great finance the greek finance minister will meet his german counterpart for talks. Yum brands has posted a fourthquarter revenue that beat analyst estimates. Sales were less than expected following a food scandal there. Overall, the company made a net loss compared with a profit of 321 million a year earlier. Yum brands has been struggling to repair its reputation in china after one of its vendors was probed for allegedly using out of date meet. The transasia flight that crashed yesterday in taipei made a disgrace call a distress call. On the recording of the air Traffic Control communications a voice was heard saying mayday engine flameout. 31 people were killed in the crash was 72 survived. Anna greece lost a critical funding artery when the ecb restricted loans to its Financial System. The pressure is on for the new government to yield to austerity demands and stay in the eurozone. As a clock ticks, what could be the next move for greece . We bring in our guest at head of research at Standard Chartered bank. What is the ecb up to . It is not as if they have not warned these measures might be taken. Since the new government came into place, they have stressed that greece needs to be in the Bailout Program in order for greek banks to access ecb funding. So they have held one of their meetings and decided perhaps a bit sooner than many in the markets have anticipated. There is not much chance at the moment of a successful conclusion and so the greek banks no longer have access from them. This was a regular fortnightly meeting that they Government Council holds and it was part of the agenda. Mark the great banks have access to funding under the ela program which the ecb can stop as well. How likely is that to happen . Sarah the emergency liquidity assistance through the bank of greece will keep the greek banks funded for a long time, as long as each institution remains solvent. It is to do with a liquidity problem but not a solvency problem. If the governing council by a majority of two thirds decides that it institution is insolvent, it will no longer be able to tap emergency liquidity assistance. The question is with great deposits leaving the banks and with increasingly increasing bad loans and nonpayment house off and are the banks . How softened are the banks . Manus what do you think investors would think of that proposition . They are under the program that they negotiated within the troika my you have to run at 4. 5 . How feasible is what he is proffering verbally . Sarah i would argue that me as maybe that is not the priority. Until there is more clarity about the proposed debt swat swap. I think it is going to be difficult to tell what the immediate future will be. There is potential in greece as the economy was starting to turn around. Some of the reforms the new government is planning to roll back that may not be very conducive to investment coming into the country. Caroline you mentioned this was a scheduled meeting and they turned up this big news. What are the key dates that needs to be on the radar . We have the eu summit we have on february 16 and the eurogroup meeting. That will be an opportunity for eu leaders to see what the Group Proposals are greek proposals are. And details about what greece is planning. And to start negotiations. At the moment, the two sides seem to be quite far apart. There seems to be a willingness to compromise but it is difficult at the moment to see exactly what the compromises are going to be and in a sense, whether they will be able to take greece forward. Mark do you think a bridging deal will be granted or not . Sarah they will need to be granted. There are funding requirements that they have to repay. On a monthly basis. The big loans have to be repaid the ecb held great government borrowing bonds that i have to be redeemed. There needs to be negotiations to allow some of the delayed funding to be released funding what should have been paid last year to be released. In order for that to happen, greece has to show that it is embarking on reforms that are also overdue. Caroline if you were in berlin, what do you think the focus of the meeting will be today between the two finance ministers coming headtohead . He has been on this great theatrical european tour. Gathering support from the periphery and other friendly voices before you go to germany. Now he is there in germany and has met with mario draghi and then meets with the german government. What is going through his mind what is he trying to get out of that meeting . The bottom line is that greece does not want to have to pay so much of its debt. On the other hand, germany so far has indicated that it does not want any of the terms of the debt restructuring from 2012 to be adjusted. So it is going to be quite a tough meeting one way or the other. Somebody is going to have to give ground. From the german side, they have a difficult sell to their taxpayers if it looks like theyre going to have to allow some sort of effective writedown of the debt, even if it is not called that name. Manus if i was to say to you give us some of the indicators that you are going to watch, is it bond yields going negative in switzerland from nestle, is it the flight of money into corporate wants the first time ever, is at the deposit flight from greece sovereignty ratios . Sarah by deals are going to be interesting. We are keeping an eye on the other peripheral countries. So far there has been very few signs of any of contagion elsewhere. That is the good news. That is what is giving germany in particular confidence that they can hold tight for now. Of course, if we do see greek deposits leaving the Banking System that will raise concern if we see contagion in that will be worrying. Caroline thank you. Joining us from Standard Chartered bank. Manus mark is risk and what is trending higher is the dxy. Warren buffett has a great article on the front of bloomberg. Com saying it is hard for the Federal Reserve to raise rates. It is a strong view. Get on with it was sofgens view. There is the trajectory of the dollar. A nice move higher on the overall dollar complex. Payrolls rose more in the fifth run month in a row. Setting up a nice banquet for the market to believe that there is strength in the u. S. Economy and the fed will move on rates. They are going to have to tolerate a higher dollar. That is the dollar complex. Lets have a look at the euro. How much reaction when you saw a little bit of reaction on the ecb news lats night which was a standard meeting. We heard from Standard Chartered. The greek banks are no longer going to be able to put greek sovereign bonds in as collateral. We should have come off those levels. Trade is up to 150. That is where we begin to sell the euro dollar and the other one that is worth keeping an eye on is the biggest declining currency in the basket of developing developed currency. This is the brazilian rio. The biggest name petrobras lost their ceo. Inflation was upgraded and the payroll number will be pretty them porton. The brazilian riel real, those are the triptych of crosses that matter to the u. S. By the way well the chinese do anything with their currency . I leave you with that thought. Back to you. Mark youre watching countdown. Greece lost a critical source of funding after the Bank Restricted loans to its Financial System. It puts pressure on the premised her to stay Prime Minister to stay the course. Ubs is being investigated by the u. S. Over whether it helped americans evade taxes. That is according to three people familiar. The new investigation which comes six years after the bank resolved a case with the justice department. Robert mcgarvey took a fall yesterday after speaking at the airport in the capital. His aides weekly helped him up and escorted him to his limousine. He turned 91 later this month. He just returned from ethiopia where he was elected chairman of the african union. House prices stay a lot about the state of the its a lot about the state of the british economy. Is this an opportunity or a problem for developers . The regeneration of an iconic structure. Reporter one of londons most iconic buildings is given the kiss of life. The powerstation consumed one million tons of coal year. And supplied 1 5 of londons electricity. The control room remains mostly intact. The art deco design was meant to appease londoners. Decommissioned in 1983, redevelopment plans have failed and it one point, there were fears that it would have to be demolished. But never write off property in london. In 2012, malaysian investors swooped in with grand designs. They expect decent returns. Total investment is expected to reach 12. 5 billion. The powerstation itself, similar in style to this showroom will set you back 2. 5 million for two bedrooms. We and four bedrooms going for over 6 million. Buyers include british rock star staying. In the neighboring construction, property prices are still high and are not quite as demanding on the wallet but the Developers Say they chose to build less prime residential opening space to the public means in some forms, it is still the peoples powerstation. The blend of uses is crucial and part of that use is 3. 5 million square feet of commercial space split between retail cafes, leisure. Reporter they will also see to subway stations built. The first time london has seen a new underground in over 25 years. Inside, expect highend shopping. That will be a mix of the best of british and the best of international brands. In the more residential buildings, more local and village retail. The butcher, the baker. Reporter perhaps the candlestick maker. It is those independent stores and bits of london like shortage that have made those places and that is what we want to do here. Reporter nearly the company says they have sold nearly half and that is all off plan. Is that a good or bad sign in a london market facing faller falling prices and higher taxes on pricey property . This would be what we consider a normal market. Reporter this desolate corner of london could soon see hundreds of homeowners and commuters traveling through here every day. Manus bnp paragraph parabasibas reported the lowest annual profit in their 15 year history. The chief Financial Officer has been speaking to bloomberg and he began by talking about greece. We do not have any great sovereign debt exposure so i think at this stage, this is handled that the right instance. Lets give it time to be managed and come to a sensible conclusion. Reporter will this squeeze more [inaudible] lars you have to work hard on your product offering. Specialized products and so on. That is something that one has to do. There is the jp. Gdp in europe has been lackluster. There are some things that can be a Silver Lining like low oil prices and the lower euro. And whatever the ecb is using as tools out of its toolkit it is probably a good one. So as you know there was the [inaudible] which participated. I think they are trying to find the right medicine for the gdp growth. Reporter if you put together the plus and minus, how could bnp benefit from the program especially in italy . Lars there are headwinds and tailwinds. If you look at the economy which is export oriented, it is not impossible that things like Lower Oil Prices and the lower euro might be instrumental. Lets see how the glimmer of hope unfolds going forward. Reporter the italian [indiscernible] lars when the situation would have gone into recover wheat recovery, we expected to have a turning point. The economy has still in impacted this year. We see the cost of risk still high but stabilizing. When will be the point when it comes down, initially we had in 2016, it is not impossible that it will be 2017. Anna lars talk about that fine and how the bank has been taking remedial action. Lars there is a major exception which is a settlement with u. S. Authorities. The bank has received the confidence and trust of its clients and this is the top line. The top line has grown in all of the businesses. It is up 3. 2 . Cost of manage on the back of the [inaudible] program. Costs are down and this is a good operational performance. Reporter can you explain any of the slowdown in your u. S. Activities . Lars we have gotten the trust of our clients and had an increase between 2013 and tony 14 of 9 topline within the u. S. Reporter the with the dollar clearing and this wave you are waiting for waiver you are waiting for, [inaudible] how are the challenges in the u. S. . Lars the activities have not been impacted. We are the settlement has to do with the u. S. Dollar transactions and the clearing that you talk about is being handled so there is a solution which has been put in place. From that point of view, is being executed and there is no impact on the servicing to the clients. Reporter are you going to do more acquisitions this year or do you think you could use some activity in some countries . Lars we are in a situation where we generate capital. Today with the gdp being lackluster, we night might not be able to redeploy all the capital. It is not impossible that there will be an excess and if there are opportunities, i stress both and that is not something sizable and it is something that integrates well operationally or market wiser client lies. We will keep our eye open for those. Mark that was the chief Financial Officer speaking to caroline cona. I am tweeting about the last interview we did with Standard Chartered. Gmercedes deliveries were trailing audi by 91,000. And bmw. Bmw still reigns supreme. What will you be talking about . Mark oil price volatility, the new norm. Mark time for the chart. Oil price volatility from 2007 22015 and right now, volatility is at the highest level since april 2009. The righthand side of your screen. Oil price volatility draft at 14. 5 on june 6 to 14. That is the red circle. That is when it reached a record low in data going back to may 2000 seven. Interestingly, that low came just 14 days before crude peaked last year on june 20 before embarking on a 60 plunge through january 28 2015. Oil investors are being whipsawed on a daily basis on daily basis. Crude slumped by its biggest drop since november as crude inventories expanded by 6. 3 Million Barrels to 430 Million Barrels last week. Almost double analyst estimates. The highest level in weekly records compiled since august 1982. Rising u. S. Stockpiles contributing to a global glut that post prices 50 lower in 2014. I have been looking at the stats in my 15. This year alone, crude oil closed more than 3 lower on eight occasions, closing higher on five occasions. There is the volatility for you. Yesterday we were talking about oil surging 7 on tuesday to close at its highest level of the year, 53 five cents a barrel. That was from a six year low of 44. 45 a barrel on january 28. There is still an overriding concern about supply. And analyst says it is about finding a base and the volatility we have seen shows it is still trying to do that. Get ready for a new oil, a new normal for oil between 60 and 70 a barrel in the next few years. Those of the words of the eurasia group. Oil price volatility the new norm. Anna yum brands, the owner of the ps kfc and pizza hut chains reported numbers that the estimates. And athe company made a net loss of 86 Million Dollars compared to a profit of 321 million a year earlier. Yum brands has been struggling to repair its reputation after one of its vendors was probed for using allegedly out of date meet. The transasian fight that crashed in taipei made a discretion call a distress call. On average according, a male voice was heard saying made a, engine flameout. 31 people work killed while 15 of the 58 people aboard the aircraft survived. Toyota has struck a deal with google to make its 140 character update more searchable. Tweets will start to be visible in search results as soon as they are posted. Thanks for twitter giving the search giant direct access to it systems. This underscores the progress that they ceo is making in getting tweets seen by more nonusers and generating more advertising revenues from a larger audience. Manus reacting to the news that the adjudicator is to start an investigation into tesco. This goes back to the misreporting of profits last year and what was involved in that story. His response today, he says this is an historic day for the adjudicator. We have created a regulator that has real teeth. Last week i secured the final agreement from government to enable the red regulator to impose fines for those supermarkets that were found guilty of mistreating suppliers. And also i agreed to increase the funding for the coming year so that it can carry out its important work. Now that the formal investigation has been launched, i would encourage anyone with any evidence of wrongdoing to come forward and be confident on that they can do so confidentially. Anonymity will be protected. That is the voice of the business secretary on what is the beginning of a journey for the adjudicator. She was on the bbc saying that the investigation is launched later than others because the breach of code is not the same as the issue that led to the prophet misstatement. Caroline we will take a short break. Minutes before we see trading. We will have details before the start of the trading session. The news out of bt and ee just minutes ago. More on that when we return. Caroline bt h announced they are buyingas has announced they are buying ee. Not everyone is going to like this. Anna we understood that perhaps vodafone would go to the competition and say maybe bt should be forced to sell some of its network spectrum. We have got vodafone saying regular should insure net work content. Finally the deal is done. We have been waiting for this announcement and i love this quote on twitter from justin stewart. Love that. Manus risque. Caroline they are both getting the equivalent to 5. 1 billion pounds. Deutsche telekom [indiscernible] the rest is cash. Orange once mainly cash and a 4 stake in the combined unit. Bt does not have all that much cash to splash on the premier league that is coming up. Do making is rife. Beaten by ee. Sky is doing a deal with 02. Vodafone numbers came out, best performance in a decade. Mark we will see how markets open reacting to that big news, the move by the ecb restricting lending to greece. We will keep an eye on the shares and the rest of the telecom business. See you tomorrow. Jonathan good morning and welcome to on the move. We are moments away from the start of european trading. The ecb turns the screws hours after the greek finance minister met with mario draghi piling the pressure on the greek governments. The finance minister heads to early in and he will meet with his german counterpart, wolfgang sureshrebe greek bonds a slide at an exchange rate. The Stock Exchange opens in 30 minutes time. At the market open you will be looking at bp stock. Finally they agreed to buy ee for 12. 5 billion pounds. Dax futures down by 52 points, futures up by 34 points, manus cranny has your market open. Manus down eight tenths of 1 is more than a little. Based on the reaction in new york, it really set it all. This meeting with the ecb was a regular meeting, we understand now from Standard Chartered. It is pressure on the government that banks will be able to turn to their central bank and the real risk we understand will be when the European Central bank begins to