Transcripts For BLOOMBERG Countdown 20150408

Anna flights over france are cut at a plant air Traffic Controller strike that could affect aircraft space for r 48 hours. Mark welcome to countdown. I am mark barton. Investors pushing to a fresh sevenyear high today and trading from mainland investors are growing to a record. The surging chinese tech scares tech shares is making the day of the. Com bubble look mild. We will bring you the latest in just a couple of minutes. First up, oil here in europe today and what could be the biggest deal in more than a decade or the Energy Sector. Shell makes a 46 billion pound approach for gas producer bg group. Caroline, you have more on this possible deal. Hi caroline as you said, this could be the industrys biggest deal for a decade. This could create the secondbiggest Energy Producer in the world. It would be behind just exxon leaping over chevron in terms of size. And in fact, it could be the biggest gas producer in the entire world. These are the statistics that we are looking at, and as you said 46 billion pounds. A 50 premium over where it currently is trading if you are looking at bgs market value. That is bigger than average in general in the past. We have seen premiums at about the 40 level of the past decade. But bgs value, if you cast your mind to july, was higher. It has seen a slump by some 29 in recent months as of drop in crude oil prices, of course. This is an opportunistic time for shell to be analyzing what stock picks could be out there. Is this all about timing gekko is this all about all about timing . It is all about upping the ante. The deal would boost shells reserves by 28 . It is also about diversifying itself. Bg has had some pretty phenomenal discoveries across the globe, brazil, mozambique. If you are looking at shells previous production, they are rectifying their situation will stop the look situation. If you look at bg Group Reserves are up the past six out of seven years. Diversification is where it is that. It is also about liquefied natural gas. Terminal network is pretty substantial. It would inherent it would inherent the shell Management Team with a real niche for liquefied natural gas. The emerging markets want to get out of the more dirty fuels such as coal and bg could be a way to do that. Could this spark a wave of mna . This is the biggest deal since the oil price started to slump. Of course this is back in the summer of last year in june. Last quarter was the weakest quarter for mna since 2000 and nine. Opportunities are rife because weve seen such decompression in overall stock prices. Interesting times. Top paid executives in the industry for bg group. Two months into the job, now he has mna on his to do list. Many analyzing that move. It seems that the whole oil and gas industry did pretty well. Mark chinese stocks are taking the headlines today. The Chinese Central Bank the Japanese Central bank is keeping its stimulus in place. The most recent reading has inflation dropping 20. John dawson is our man in hong kong today. Steady as she goes then, for the bank of japan . John 81 was the vote. ¥80 trillion or 450 billion pounds fouryear in stimulus. They want to hit the inflation target of 2 . The next one is april 30. The bank of japan governor looking at the impact. The key message is to really bring that goal of 2 . We said the yen reaction was to fall below 130. Bank of korea is said to keep rates low as well. No change for them. ¥80 trillion is a lot of money. Steady as she goes. Mark in china, we are seeing a stock surged today specifically in technology. It begs the question, are we seeing a bubble in Chinese Technology stocks . John it is a great question. The valuation of 220 times earnings in china. Back in march it was 155 times earnings. China is looking to push tech and wean themselves off the reliance of industry manufacturers. It means that many investors say they will continue. The tax, you can see, are surging. The techs. The nasdaq is only barely short of it of work was in march 2000. Mark john, we will see you later. Caroline lets check on the greece story now because the Prime Minister Alexis Tsipras is going to moscow today for an audience with none other than president clinton. None of it president putin. The visit could threaten greeces fragile relationship with brussels and berlin. Hans nichols joins us in moscow. Angela merkels view on the visit, she has tried to brush it aside as a sideshow. Hans according to three german officials, merkel thinks that separatess merkel thinks that Alexis Tsiprass visit is a sideshow. He said the idea of world war ii war reparations is a dumb idea. He may be looking for a little bit of help to cope with the austerity that has been imposed. There may be some forbearance, some relief from russia for greece for the export ban on fruits and vegetables. This could help greece exporting little bit more. Remember, russia imposed that dan eu wide in response to the sanctions that russia is enduring. At the same time, remember that sanctions rx sections are set to expire on russia in july. They will be looking for greece to block the renewal of any sanctions. They are also looking at some discounted Natural Gas Prices. Earlier yesterday, there was a report that there could be an asset swap. Some greek state assets in return for a reduction on gasoline prices. Officials in moscow downplayed that, while at the same time they said it was possible that you could have some sort of deal on the reduction of gasoline prices. Over the weekend, the news was that you are going to have greece make their imf payments. The euro was up on those news. We will see if the euro traded the other way based on what is come out about this meeting between mr. Tsipras and mr. Putin. Caroline on anna, what is the russian goal here . What does president putin hope to get out of this visit gekko is just about stirring up tension in the eurozone . Mr. Putin would try to exploit divisions between the eu countries. Greece and russia have historical and economic ties. It is also an orthodox country. With all of that, he will try to have someone on his side when the time comes for the sanctions to be renewed. Also, it helps his profile that it is not just you who is deciding. Caroline a longtime relationship that we have to keep in mind. Anything concrete . We heard hands weird hans talking about train being increased or sanctions being reduced, what do we think will be tangible . Anna yesterday, the kremlin spokesman said he doesnt rule out some loans and discounts. But honestly speaking, the russian budget is also stretched out. We have a deficit this year. International reserves are at the level that they were in the previous crisis during 20082009. There is not much russia can do in terms of loans, deftly not as much as greece needs right now. Also some officials are saying that russia considers lifting the food ban that were counter sanctions after russia was sanctioned by the eu. Now, they are considering maybe lifting it. That would definitely alleviate and be of some help to greece just not as much as they need right now. Caroline anna, thank you very much. Mark now the top stories on bloomberg at this hour. As much as 40 of flights in and out of paris airports could be obstructed by an air Traffic Controller strike today. The strike could last for as much as 48 hours. The strike will affect airlines that use the countrys airspace. The government sees gdp growth of. 7 this year. The Italian Economy will grow 1. 5 in 2017. Ed miliband is announcing today that a Labour Government would abolish the nondomicile rule that allows individuals to limit the tax on earnings they receive outside of the u. K. It is thought around 100 and 10,000 people use the rule which is unique to the u. K. The Growth Potential of the worlds economy wont return to levels last seen before the 2008 unanswered crisis anytime soon according to the imf. The lender is urging officials to come up with ways to stimulate the market as the Global Recovery stalls. Caroline you can join in the conversation on twitter. I am carolinehydetv. Mark one of the trending subjects is Royal Dutch Shell. Caroline the 60 premium has to be quite expensive. Mark our next guest says this could be the first election to move the market since 1997. We will find out why, after the break. Mark just over a month until u. K. Voters head to the polls. It could be the first election since 1997 to move the market with no party able to form a majority government. Were now joined by the quite swiss the Credit Suisse managing director. Lets start off with a pretty straightforward question. What are the likely permutations and the potential impact on the Asset Classes we care about, equity, the pound. It is a unique collection because and i would go back even to the 70s for a political event that could potentially bring so much volatility. My word for it is fragmentation. Fragment tatian of the big parties fragmentation of the big parties and possible fragmentation around the u. K. You could have the possibility of another Scottish Referendum as a quid pro quo of support for labor. I think the main scenario, and you have to be brave to come up with hard scenarios here, is one of the main parties leading the government with smaller parties. Im actually not sure whether the lid dams the lib dems kind of change color. Is vince cable becomes the head of the liberal head of the liberal democrats. The snp is certainly the kingmaker and they will have the capacity to support a Labour Government. I think the tories will probably win more seats than labor but labor will potentially have more friends in the sort of small, satellite parties. In terms of the Asset Classes, i think it becomes traded in sterling because of the sensitivity of sterling to capital flows. Reduced capital inflows, capital outflows in an Eu Referendum. A continued tory government would be marginally better generally for the u. K. Equities and then there are certain sectors where a Labour Government could actually have an impact. Caroline you talk about a vulnerability when it comes to capital inflows in terms of the u. K. Foreign direct investment could be under pressure. What sort of numbers are we talking about that could actually be dissuaded . Particularly when it comes to real estate. Oddly, for the last 10 years it has correlated quite well with real estate sentiment. I would say that the volumes havent been big enough to move sterling on a daytoday basis. What im thinking about is that if you are a Japanese Company investing in the u. K. , or you are a tech firm or one of the big healthcare firms and you have these big investment projects, you think that there could be a potential for u. K. Exit of europe maybe i will delay that for one or two years. Then on the other side, you have a Labour Government come in and they made will impinge upon the private sector in banking, utilities, etc. You may get some uncertainty there. I think the Downside Risk for sterling is probably greater in the case of an Eu Referendum with a Eurosceptic Tory Party behind it. Mark how vulnerable are we to a second election yet second election . Could 1974 play out again gekko . Michael the recent parliament makes it all the more difficult. I think we have a 1520 chance of a second election. With that, i think that the possibility of a weak government as well, and ongoing political stress and market volatility as a result. Caroline we look at a huge m a deal in the work today with shell buying bg group. Shell is listed in the United Kingdom and a Dutch Company as well. What do you think about m a . Michael m a has been a big driver of moves in sterling in the last 510 years. Really big m a deals have caused big changes to sterling. I dont see this as a logical consequence of the housing and the price of oil because this really is what we should see, we should see the whole oil industry adjust to the lower price of oil. I think there would be more m a. We already saw some of that in the latter part of last week and certainly yesterday, the oil started a very good session yesterday. I think today, the politicians will feel obliged to react and will paint this in their respective ways. On one side, a national champion, and on the other side, are we concerned about a big and powerful energy group. Mark would you be brave enough to think of a day when bp could be snapped up . Could one of the big four or two of the big four, and up merging . Are we looking at those days, sort of late 1990s . Michael you overlaid what happened in health care sector. I think from one of the other big groups you would probably have to think quite hard about who would do that. Would it be a private oligarch type of individual involved or would there even be private Equity Companies involved . Some of the m a that weve seen in the u. S. Recently with Warren Buffett for example partnering with private equity firms. To me, it seems like a constellation of bidders. Caroline of course, you are chief not just for the u. K. But for europe and the middle east as well. With many countries accessing the european debt market right now, will we see more and a day go through with European Assets. Michael across a whole range of Asset Classes, u. S. Investors are getting more active in europe. They are using the weak currency. We are in a very on Investment Climate in that we have low to negative Interest Rates. It creates lots of problems. Fx moves account for a bigger part of your total turns. Fx volatility couple make fx volatility cupcake that even further. Mark just some breaking news france is to buy a maximum of 4. 7 of red oak for as much as 1. 2 billion. Friends already owns. It will have as much as 23 of red oh voting rights. It is not all about oil today there is some share buying within the Auto Industry as well. Credit suisse cio. Caroline sippers Alexis Tsipras bus to be a timing to go to moscow is crucial. With the danger of greece leaving the euro still very real, could the relationship because the concern the west . Mark this is where you can find us on twitter. Royal dutch shell is trending. Caroline hyde is always trending. There i am mark you are watching countdown. Time for your foreignexchange checkup. The dollar is down today after the boj and all the economists that we said at bloomberg said there will be no change in policy. Year to date, the dollar is flat against the yen. It is stuck in this trading range of 116 21 21. 116121. As i said, that was forecast by all 34 economists in the bloomberg survey. Government corrode or is what he is praying for inflation to reach his target but he is facing a test because of cheaper oil and the weakness in japans recovery. Most economists forecast another boost in stimulus by october. Policymakers are confident for now that a cycle of writing profits, wages, and expectations of price gain will lift inflation to their goal. Many economists are certain hence they are forecasting that the the oj will loosen policy once again by october. Strategists surveyed by bloomberg expect the dollar to strengthen to ¥128 this quarter 100 and ¥35 in the Fourth Quarter. The most bullish on the yen is hundred ¥15 called for the Fourth Quarter. Commonwealth bank of australia is the most bearish on the yen, coming into the year with a ¥135 forecast. The news today, the boj maintaining its Monetary Policy stance. Caroline lets take a look at some of the other top stories. French Media Company vivendi denied a report that it is looking to acquire tv provider sky. The parisbased company was reported to be looking at sky is one of several options to expand its business. E. On is said to acquire a company to work with jpmorgan. Analysts estimate the sale could be worth 18 billion as it shifts its focus to renewable energy. The japanese owner of the hello kitty cartoon character says that more than six have thousand shareholders in folk may have been late 6000 shareholders information may have been released. The u. S. s top Homeland Security Commander Warns that north korea deployed a new Ballistic Missile and it is capable of mounting a miniaturized Nuclear Warhead on it. He added that two of fire to the u. S. , he was confident that forces could knock it down. More on that story and many more at bloomberg. Com. Mark for another story that will be monitoring for throughout the day, reef Prime Minister Alexis Tsipras is in moscow meeting Vladimir Putin. The timing is crucial as greece owes the imf on the ninth of april. The prospect of greece leaving the eu is very real. Greece is involved in a game of brinkmanship. The players are Vladimir Putin alex severus Alexis Tsipras and the Group Formerly known as the troika, which includes the European Commission, the ecb, and the imf. At stake is greece of austrias future in the eurozone. They must pay 360 Million Euros on the ninth of april. Before then, Alexis Tsipras met Vladimir Putin. The decision was basically a negotiating chip to suggest to the west that the greek government has options if they are abandoned by the european partners. There are a number of cards they greece and russia can play to each others benefit. Russia can announce the lifting of sanctions to greece to allow the import of fruits and vegetables to resume. The sanctions placed on the entire eu by russia in response to the second placed on them. In return, greece could balk on the additional sanctions being applied by the eu. They could renegotiate their gas dealmaking natural gas cheaper for the greeks. One thing that is unlikely to happen is any kind of bailout from the russians. Their Financial Resources have already been curtailed by the fall in oil prices, leaving their economy in a weak state. The danger is is is that if the eurozone partners failed to be intimidated or that russia does not extend any eight. We think greece will greece will agree on an acceptable list of reforms to keep the country afloat in the russians are likely to remain at a distance. Mark a reminder that tomorrow, we will be debating the euro issue and its role in the u. K. Election. The panelists include the former chancellor and roger carr chairman of the 80 systems of bae systems. Caroline dont miss us on twitter as well. Give us your view about what the debate about europe could mean for the british pound and british access and british assets. Private banking telling us that the british pound could be under some pressure. Mark coming up, i will speak to the Hotel Booking at that you can use in just 10 seconds, they say. Mark time for todays bart ch art. As Royal Dutch Shell is in talks to buy bg group i thought it was a good moment to look at shell shares. First, the price of brent crude over the last 12 months. Brent crude is the yellow line and shell is the white line. Brent crude peaked on june 19 of last year. That was at 115. Shelti almost three months later, september 1, at 24. 15 pounds. That was the highest listing listed in london since 2005. Brent crude then goes all the way down here back in january, january the 13th. That is the pink circle right there. Shell, following suit in the middle of march. March 13 19 pounds and 21 pence. Shells 5 drop from when brent peaked in june since yesterday makes it the fifth bestperforming european oil and gas stock. Bg is 20th on the list with a drop of 28 . Oil dropped from peak to trough almost 60 . So what is the outlook for shell stock, which is rebounded 9 as the middle of march, since that yellow circle . Before last nights news analysts had a 12 month price target for 30 30 pounds and 43 pence. That is a potential return for 6 return of 6 . 40 of the 35 analysts we surveyed had a buy rating on shell. 49 had a hold rating. 11 had a cell rating. On the negative side, the 50 Day Moving Average is below the 200 Day Moving Average. And it has been since last november. That does signal a downtrend in shell shares. If the 50 Day Moving Average was to move above the 200 Day Moving Average, that would signal an uptrend. That doesnt seem likely in the near term. Essentially when shorter history is better than longer history, that is a positive signal. A small plus is that shares are trading above the 50 Day Moving Average but it is still below the 200 day average. Very quickly, shares are either are neither overbought or oversold. The last time they were oversold was in midmarch just when the shares bottomed. Shares havent been overbought since june of last year interestingly when brent crude peaked. There you have it, everything you needed to know about Royal Dutch Shell in under three minutes. The top stories on bloomberg this hour. As many of 40 of flights in and out of paris airport could be affected by a planned air Traffic Controllers strike today. The strike could last for 48 hours. The French Airspace is the busiest in europe and the flight will affect Airlines Using the countrys airspace including those flying through its airports. Italy has upgraded its forecast for growth in the next three years. The economy will grow 1. 4 next year and 1. 5 in 2000 17 in 2017, according to government excellence. Ed miliband is announcing that he will look to abolish the nondomicile rule, which limits the amount of tax people have to pay unencumbered outside the u. K. It is thought that around 110,000 people use the nondomicile rule, which is unique to the u. K. The Growth Potential of the worlds economy will not return to levels last seen before the 2008 financial crisis anytime soon according to the imf. The lender is encouraging officials to find ways to stimulate the economy. Caroline there are many players in the online Hotel Booking market, but if you claim to find a place for the night in under 10 seconds postop Hotel Tonight is one of them and with 15,000 Hotel Partners and counting, is now expanding here in europe. Here is Hotel Tonight cofounder and coo, derek simon. Thanks for joining us today stop what does Hotel Tonight do gekko do . Hotel tonight is the easiest way to book a hotel on the go. If you find you are in need of a hotel even if you are staying close to home, it is the easiest place to get a great discount and see great hotels and discover new places. Caroline many would say, i can look online. What a clever ways are you trying to push certain deals towards us . Jared for us, it is all about bringing humanity and bringing the fun and serendipitous experience back to travel. That is what travel is supposed to be about, but the alternatives for booking travel today online are not the most human, fun, exploration oriented experiences. Hotels tonight aims to bring that experience back to the equation. We find those small hotels that dont necessarily get the airplane anywhere else, that will be fun for a little getaway right now. And because we are filling rooms for hotels and would have gone empty, because because trade exclusively on lastminute, we can give the hotels a really nice way to discount to those customers. In philly room that would have gone empty. And fill a room. Caroline what is attracted you to europe in terms of expansion . Jerod l we had we have been in europe for a while now. Our hypothesis is that the infrastructure is better here for traveling, people are more adventurous. It is more of a regular type of occurrence to take a Weekend Getaway to the south of france to spain or wherever. It is perfect for Hotel Tonight. We think the opportunity here is even larger than the opportunity in the u. S. And in the u. S. We are doubling yearoveryear over the past couple years. Caroline what numbers are you looking at now . Jared we are looking at big numbers in europe. In europe, we are up 500 . Caroline how many hotels . Jared we were good about 15,000 hotels in about 500 cities around the world at this point. Caroline any countries that particularly attractive right now . Jared any country that has Interesting Hotels that are fun to get to and it is easy to get there at the last minute is a place that would be perfect. We want to encourage people to explore more, to live life a little bit more. Caroline interesting that you mention latin america. An economic downturn in brazil does that affect you in any way . Jared it is interesting, and economic downturn is a good time for us because those long considered vacations and holidays turn into more constrained Weekend Getaways. Hotels and i really help with people who are on the go and want to make a spontaneous decision and also people who are watching their wallet people who are looking for a great deal. Caroline you have the expansion plan. What is the funding access like at the moment . Are you raising money from american base venture capitalists . Are you finding europeans are more interested . Jared we find that there is interest anywhere around the world on anything that is a true anything is innovative especially in the mobile space. We are dedicated exclusively to mobile and travel. There are lots of folks that are interested in getting involved getting involved in helping us out on the investment side. We raised mainly from u. S. Investors, but is mainly because there is more access. Caroline do you think there would be opportunity to access money from europe . Do you think the barriers that you felt do you think that excitement is building here in europe as well . Jared we are always having conversations with folks in europe and in the u. S. We find that the interest level is really high. It is up to us to find that the model works around the world, and so far that has been the case, growing leaps and bounds in europe and extending to new places. Caroline give me a sense of you . What made you move into tech . Jared i realized, this is where the fun is. Travel is a fun place to be. Everyone does it, everyone enjoys doing it. I like to build businesses where everyone i come into contact with might find use in my business. I like to talk about what i do and travel is just a fun thing to talk about. I found that the offerings that are out there arent very fun. There is nothing interesting and emotional to the alternatives. We thought there was a gap in the market, so lets bring that back and make is a fun experience. Caroline where is the talent coming from . Jared we have had an office in london for a couple of years. We just opened offices in paris and berlin and we also opened an office in sydney and were opening an office in toronto this week. We are hiring all around the world including in our headquarters in san francisco, mainly in talent on the marketing side, talent to work in hotels and also engineering talent. Caroline getting in touch with you on twitter. It has been wonderful speaking with you. Think you very much. Jerod simon is the coo and cofounder of Hotel Tonight. Mark coming up, we will be looking at our favorite stories from bloombergs digital output including the secrets to a success for restaurant. Caroline welcome back. Just an hour from the start of most european trading but time does but time to check on our stories from bloomberg digital output. This is the perspective on what makes a great restaurant. We spoke to the main manager there and there is a beautiful video, i wouldnt watch it in less you are wanting to get hungry. It looks spectacular. Interestingly, the key thing is food. But it is by no way the most important thing, it would seem. He talks a lot more about the service, the ambience, the lighting. About the discretion when you are serving. But also, consistency. You have to read the person who is coming in to eat and you have to keep on bringing freshness. He interestingly says your guest is the number one ingredient. Their mindset, the feeling that they have. You have got to change them make them relaxed and immediately that makes the entire restaurant and more enjoyable place. So yes, food is simple it is important. Mark he has had a tough times the left pimco but his fortune might be turning because his bond fund is returned to. 4 in the last month returned 2. 4 . He actually bet against the dollar. He said in an interview recently that he is betting that he had been betting for several months that the dollar would stop rising and the gap between u. S. And european rates would narrow. That trait hurt him in until recently. Gross said it is not the trade of the century or even the trade of the decade, but i do think it is the trade of the year. His fund has returned 1. 1 since he took over compared with a return on the pimco unconstrained bond fund. Because he lost money in february, it could be that the tide is turning for bill gross. Countdown continues in the next hour. We will go to paris as European Airlines brace for a planned strike from air Traffic Controllers. Mark shell is in talks to buy be pete gross. They feel it would catapult shell to the top of the global gas export industry. Caroline the bank of japan keeps stimulus at a record as the thirdlargest economy fights inflation. The 2 target gets put to the test. Mark we go live to the russian capital of the greek as the greek leader cozies up to putin. Caroline flights over fronts cap old france canceled. We bring you the latest on the cancellations, plus what it could mean for the industry. Mark welcome back to countdown. Investors will not be so happy the japanese owner said thousands of investment details were leaked. There and if to shareholder data was released and in the meantime the share price is reacting. We bring you the details in the latest data breach. Some details crossing the bloomberg terminal on the bg deal which we have been telling you about for the last few minutes. Shell has confirmed and offered to buy bg 380 pence in cash. Bg recommending the cash and share offer for bg group as well. It has been confirmed. It is a story we have been telling you about all night. Bg and shell confirming that shell have made an offer. The offer is 383 pence in cash and four b shares. Caroline this could be the biggest deal in the industry in at least a decade. Back to see when they merged two entities to see when they had this kind of scale. It would create the secondbiggest Energy Producer in the world second only to exxon mobil. Biggest energy deal in a decade. We get to see what the exact numbers will add up to. Telling us when the share price will have been paid and how many shares that will be with respect to bg group. There were reports a could be worth up to 46 billion pounds. If this is the value, that would be a 50 premium. That would be above the usual average. Usually we tend to see energy deals coming in at a 40 premium. Think what bg group share prices have been through. Down 29 since the oil price plummeted since june. The fact may have been slashed is why the assets are looking so juicy. Suddenly good assets at a much cheaper price. Lets take a look at what is in it for shell. It looks like they are getting reserves, this deal could see it up by as much as 28 , largely in gas. Bg group is a key gas player in the u. K. It is looking to diversify itself. They have discoveries in brazil, mozambique and australia. They are giving themselves Geographical Presence when it comes to lng, liquefied natural gas. The emerging markets want to use energy more and the terminal the management tenacity, the expertise is also particularly appetizing. A key question will this spark a wave of m a . He thinks this could capitalize more deals. This is the biggest deal since the oil price started to slump last year. Last quarter we had the weakest quarter since 2009 in terms of dealmaking. It could now be the time we see it galvanize the opportunities. Were suddenly seeing some of the majors. Why not look at what assets they could be buying. It will be interesting as to whether the European Assets become appetizing. An interesting time for the helmer bg group. The chief executive has only been there two months. He is the biggest, most highly paid executive in the Energy Sector in europe. And of course this is a company that has seen profit warnings. New times for the company, more expansion to come. As you see, we are having all of those headlines confirming the deal, they are indeed in talks. Mark the deal is worth 47 billion pounds in cash and stock just crossing the bloomberg terminal. Bg says the terms represent value of 1350 pence, 13 pounds. 5. 13. 5 pounds. It does equate to a premium as you said of roughly 40 . Point 4454 b shares as well. It will result in them holding about 19 of the entity separately. Further news for the shell shareholders. Shell sees its Share Buyback program in 2017 of at least 25 billion dollars. The big news, shell agreed to by bg group 447 billion dollars in cash and stock. That is the big one today. Watch out for both when they start trading in 54 minutes. Elsewhere, the bank of japan and chinese stocks taking the headlines. We are just hearing the shanghai composite topping 4000 for the First Time Since 2008. The Japanese Central bank keeping his record stimulus policy in place. The governor struggling to meet his 2 inflation target. The most recent reading has inflation dropping to zero. John dorset is our man in hong kong. The boj deciding to keep policy unchanged. John this is 450 billion pounds a year almost 9. 5 times that. 81 was the vote. We look forward to that speech at the press conference which he himself brought in. The inflation target of 2 , that is the pledge he had to make. But overall, no change and no surprise. Theyre going to blow 120 and the market is steady as she goes. That is the key one for the governor and his team. Mark these stocks go from strength to strength. The shanghai composite tops 4000 and doubled 14. It leads to the question, are we seeing a bubble in Chinese Technology stock . John that is the concern clearly, look at the rest of the u. S. Stocks, they reached at the most 20 on the year. So we also have chinese stocks seeing huge valuations. With the is that is way more than the u. S. Just you the government is pushing back the Manufacturing Industry and ipos have been quite strong and novice investors coming with their money. For many investors here in china, they continue with valuations stretched. Indeed, a lot of the tech, a small amount of tech has the stoxx picture for china but in the u. S. It is far bigger. China is different the moment economically and on evaluations. I salute you mr. Barton. Mark thank you very much. Our very own john doerrs and in Hong Kong John dorsen in hong kong. Caroline it affects all airports in france and as many as 40 of all flights in the country. For more were joined by kerley. How bad could this be you be . Initially this strike was supposed to happen march 20 sixth, just a couple of days after the german wings crash, but after the emotion they decided to postpone it until this week. If youre traveling today it is better to check with your airline they could be stranded across all airlines. It affects all airports across france. Short hold flights may be even more affected. Flights departing from the airport might affect easyjet canceling over 100 flights. Ryanair canceling 250 flights and air france saying they will only guarantee about 30 of their short hold flights. If you are traveling to a further destination you might get lucky or. Air france luckier. Air france said they will transfer almost all of their long hold flights. This will also affect flights flying over france some flights may have to be rerouted because france is one of the biggest air spaces in europe with 8000 flights per day. Caroline already seeing some backlash, why are they striking . Caroline c this strike was called by the Biggest Union representing about 40 of air controllers in france. They want negotiations to start. They say because of the increase of lowcut flights, this is having a big impact on their workload, so they want new negotiations to solve the workload. They are protecting against the increase of the retirement age from 57 to 59 years old in 2017. They say that in the u. S. The air Traffic Controller can retire as early as 55 years old. In france, because of past negotiations they now have a 50 minimum service requirement. Meaning that when they strike, they have to make sure that at least 50 of the planes take off. Caroline she will be keeping us abreast of all of it. Mark a 47 deal resulting in them holding 90 of the entity. Shell offering to buy bg for 13. 5 pounds and. 4445 b shares. It is a premium to yesterdays closing share price. It is a whopping deal. Caroline you have from her when shell sold his last two entities. What is notable is they are creating the second Biggest Energy company in the world. Second only to exxon mobil it is all about the gas reserves that they will be adding to shell. Shell has been in an deteriorating state. They have seen their production decrease in the reserves going down. Bbq bg group are paying the reserves and paying their production. Mark does this put other Oil Companies and play . The perennial speculative target. Many have suggested that exxon and bp would make the perfect that will continue today and beyond. Prime minister tsipras following the road for an audience with putin and a meeting with the leader, who is perhaps more sympathetic than his eu creditors. At the visit could threaten greeces fragile relations with brussels and berlin. Bloombergs hans nichols joins us. Hans according to three government officials, and low merkel views this as a sideshow. At the same time it is showing what many view as the other sideshow. A dumb distraction. That is how this whole debate on world war ii war reparations was determined from germany to greece. Ahead of the visit, some russian officials have indicated they may be willing to help greece cope with at least some of the effects of austerity. Perhaps discounted oil and natural gas and maybe lifting the counter sanctions imposed on all eu countries on fruit and agriculture. That could provide a little bit of a boost to the greek economy. In return, russia would ask to not have greece support another round of sanctions. The current set is set to expire in july and late june. They will be rediscussing those. Yesterday there was a report that russia may be willing to buy some greek state assets giving them discounts on oil and gas. Russian officials downplayed that and said they are open to discounts on gas but not necessarily an asset swap. One final note, about 40 of the strawberries imported into russia come from greece. 25 of the peaches, we will collect fruit diplomacy and i have our next story idea. You and i will get on the back of a truck and follow a crate of strawberries from athens to moscow. We will get the editor to sign off and they cannot say no now that we talked about it on live tv. Mark i am with you, booking my ticket today. Lets get to athens, thats Ellis Karen Manus karomanis. Good morning. The could be relationships between two orthodox countries is it the longawaited trip since he was a teenager, is this just another way to put more pressure to european peers are they going to talk about the lift of the embargo . I think there is a bit of truth in each and every one of the questions. At the end of the day this is more of an energybased discussion given the amount of natural gas. And the fact that greece pays over 60 more than the european average on your russian imported natural gas. On that front is where the discussions will get constructive. Mark are we likely to see any concrete results . On the energy front i think so. Greece pays a hefty price on Natural Gas Prices from russia. We could see some discounts there and the alleviation of some of the penalties that supply from russia maybe this will be alleviated and will give some leeway to greece on the fact that it uses less natural gas than are constructional he contractually obligated to do so. I think it depends where you stand. In the European Commission you dont see any constructive talks here. Theyre balancing on a tight rope. Mark thank you and thanks to hans nichols and Vassilis Karamanis in athens. Caroline lets check in on the other top stories, italy has upgraded their forecast for growth in the next three years. The economy will then grow by 1. 4 and 1. 5 in 2017. Ed miliband is announcing the labor government will push for a nondomicile rule which allows some individuals to limit tax they pay. He will say around 110,000 people use the nondom rule. That is according to the imf. They are urging officials to come up with ways to stimulate demand. Mark greek by minister tsipras visits putin in greek Prime Minister tsipras visits putin in russia. Caroline greeces Prime Minister is often russia today to woo hooton. Can. Putin. Lets get more with Daniel Murray the chief economist at efg. Thank you for joining us, what are your base Case Scenarios at the moment . Will this just be used as a tactic to push the eu further towards giving them hand to mouth until they can agree . I think it is just a bit of political gameplaying until they reach the Funds Available on little bit earlier. Greece really is back up against the wall. The debt to dp to gdp is really very high. Youre trying to focus austerity measures. Going to stimulations we have done it. It will certainly be a real challenge to get it down to the gdp target. Mark in the meantime they have the imf payment deadline tomorrow. When you look at figures from the imf and greece, it shouldnt be problematic but it seems their living hand to mouth, daytoday, week by week. Does that come to a head . There are longterm pressures but also shortterm pressures. One of which is funding as you said. Imf payment is one of a series of payments. Over the next 12 months there are 30 billion that greece has to repay. It is quite a heavy repayment schedule. It is going to be quite a challenge to meet those repayments. I think have about 12 billion in government funds. That will expire pretty quickly. Caroline game playing in greece and all eyes are on the Federal Reserve minutes to come out. Be you think this will see more dovish views . The fact that they are pushing back Interest Rate hikes. Whether they push them less is what people will be trying to read and tease. What is interesting is we have come full circle in terms of policy prognosis. Before the crisis we would hang on every fed meeting and try to anticipate. Then we entered a situation where the fed and other Central Banks became good at letting markets no what they would do before the event. Now were back to the situation where we would take each meeting as it comes. Next, a rates will be up and we do not know the specific timing. I. E. , when the economy will be strong enough. Mark and today the biaggi kept things relatively the boj boj kept things delegate relatively unchanged. Could they realistically not boost stimulus again . There is a good chance we will see more stimulus from the ba g this year. Boj this year. Its a sign that some of the policies are starting to work. The disappointing thing is the inflation data has been so weak and even if you ask out the impact the numbers are still looking quite fragile. There is a fine balance between headline inflation and wage growth data. Perhaps that will do for the need. Kirilenko chief a, set efg. A positive on their outlook. Mark you are watching countdown. Time for your foreignexchange check. The dollar against the yen is down. Year to date it is flat against the yen. The news today is from the boj the central bank in japan. It cap a policy on change and maintained its plan to expand the monetary basis at an annual pace of 80 trillion which equates to 666 billion. It was forecast by bloomberg. What they are trying to do is boost inflation to the 2 target but the governor of the boj and his colleagues facing third test because the main gauge of inflation has sunk to zero. Most economists forecast that the boj will boost stimulus by october. Policymakers are confident that a Virtuous Cycle of rising profits, wages and expectations for price gains will lift inflation. Many economists do not agree. They expect the dollar to strengthen to ¥128 this quarter 100 ¥30 in the first quarter, ¥135 in the Fourth Quarter. In the most bullish a ¥115 call for the Fourth Quarter. Commonwealth bank of australia is the most bearish with a ¥135 forecast versus the dollar the Fourth Quarter of this year. No change today. Big news boj also keeping Monetary Policy unchanged. Caroline lets have a quick check on the other top media stories. Vivendi denied a report that may seek to acquire sky. They disputed the report that claimed the parisbased company was looking at sky as one of several options to expand its tv business. The sky spokesman declined to comment. Eon is said to have hired Morgan Stanley to work with jb and jpmorgan. The estimated sale could be worth 17 billion. This is their biggest utility shift since its focus to renewable energy. Sanrio is investigating how the dita data could have been released. Shares fell 4 before recovering. Mark lets get more from francesca, the Global Leader for tax services. What is going on . There very positive at the moment. What were doing a surveying every quarter of business optimism. The perception is about whether you think your country is doing better and whether you want to invest more. The future for ireland and whether you should be investing. 92 is pretty phenomenal. Caroline what shocked or surprised me was spain looking optimistic as well in terms of their desire to invest. All of the countries are having a very difficult time of looking far more positive. It was as low as 5 not too long ago. A big shift driven by the European Central bank. Mark does this herald a shift in thinking, an upturn in the european economy . The data seems to be pointing to an economy that is slowly gathering steam. This gives Business Executives confidence. It boosts the Virtuous Cycle. You are getting ceos looking out there at local training conditions and saying revenue will go up and profitability will go up. A very good sign for the eurozone and for several quarters of a pessimistic outlook. A really strong signal and compare it to latin america where european positivity is completely the opposite where they are very pessimistic about the future. You are seeing quite an interesting global shift in different parts of the world being far more positive about the future. Caroline whats interesting is how france remains resolutely pessimistic. They have gotten a little bit better, but what do you think it is that is holding back country such as france that are outliers . On these surveys, they are often the least optimistic. Perhaps there is a cultural element. France still has difficult trading additions and difficult political situations. A lot of concern about where the current government will go. Taxation is still a large issue. Some of those factors are playing a part in keeping optimism down whereas spain has rising house prices and people beginning to get back into employment. There are different cultural issues. Mark can you talk on touch on Eastern Europe and how that ties into russia. How are ongoing sanctions affecting them . Surrounding Eastern European countries. Not a surprise to see that russia is far less optimistic, 5 is where they are coming after concerns of optimism and future. Oil prices are clearly impacting their view of the world and sanctions are continuing to be affecting the way businessmen are looking at the future. Caroline we had just had breaking news. Interesting to get your view on asia. The head of the central bank in japan saying no change in stats and they will adjust policy as needed. They are saying that japan inflation is likely to reach 2 by the end of 2015 and they will continue easing until the inflation is stable. The sales tax came in and met overall there favorite measure of pricing remained flat. But the 2 target will be meet by fullyear 2015. Francesca, what are we hearing about asian sentiment . You have a huge variety of things going on. Abenomics has been slow to take effect. Hong kong had the best stock market results yesterday. A very interesting movement. You look at india and china and it is a little bit flat. A huge area and a massive differential taking place. Everyone is looking to japan to see how they are going to move forward. Mark we havent spoken about matters closer to home. Less than a month before the u. K. Election. How is optimism among Business Leaders . The u. K. Is always quite a strange country in terms of how it views the world different from the eurozone countries. But a slight dip in confidence of serious change. You do tend to get that optimism drop just before an election when nobody knows quite what will happen. You expect a much stronger result after the election. Strongly upward or strongly downward. Caroline overall, you think this is painting a picture of improved optimism, or apart from latin america and Eastern Europe, idiosyncratic things that are happening . You have quarter on quarter trends, but maybe on the upward trajectory at the eurozone is far and away the most optimistic. Caroline thank you very much. The Global Leader at grant thornton. Mark up next, the bar chart. A shortage in shell shares. Stay tuned. Mark time for todays bart chart. A short history of shell shares. They greeted by bg they agreed to buy bg for cash and shares. Compared to brent crude these are shares shell listed in london brentcrude is the yellow line. The little red circle is when brent crude peaked last year in june. 115. Shelti roughly three months later, the green circle. Peaked at 24 pounds 24. 5 pounds. Brent bottomed at 46 right here. January 13. That is the pink circle. Brent job from top to bottom. Shells plunged from top to bottom the yellow line was 22 . Michelle plunged 22 top to bottom. From the peak of oil to yesterday, shells drop was 5 , which makes it the sixth bestperforming european gas and oil company among the 25 listed on the gas index. Shell fell over that period but not as much as its peers. Bg over the same period from peak was 20th on the list, down by 28 . So what is the outlook for shares . They rebounded from march 13 by 9 . Analysts said a had a 12 month rice target a potential return of 6 from tuesday. 45 said they had a buy rating. A Technical Analysis as well. The 50 Day Moving Average is below the 200 Day Moving Average as it has been since last november. That signals a down trend. If the 50 date were to move above the 200 day that would be a golden cross and is a positive trend. It does look unlikely in the last few months, a small plus if the shares are trading above the 50 Day Moving Average but are about 140 pants below the 200 day and finally shell shares are neither overbought or oversold. The last time they were oversold was midmarch. Just when the shares bottomed. Shares have not been overbought since last june when oil peaked. Fascinating stuff. Agreeing to buy bg group 447 billion pounds in cash and stock. Caroline stay tuned as we will be speaking to the shell chief executive this morning. And stay tuned for all of the m a because bloomberg will join us to talk through shell bg and some french deals that are brewing. This is a deal that we thought might happen, but what made the catalyst now . A couple years ago it was tnt and last year it was pharma and we knew this year could be the year of energy. Here we go, the first major deal in the industry that could trigger a wave of more to come. I think the catalyst was oil prices. Just a matter of when bankers expected that to happen. For shell, it was the right moment to pull the trigger. Mark another deal which has long been touted was vivendi and sky. The french Media Company and the satellite broadcaster. But vivendi has rubbished this report . Something we were hearing for a while but it was hard to stand up. It makes a lot of strategic sense. Whether they want to sell the stake they hold in sky remains to be seen. It is a deal that makes sense, whether it happens on the road caroline it seems that just as he put all the eggs in one basket ringing together sky deutschland and sky a tally a, it seems three other sky italia it seems rather preemptive. The they are also looking to buy dailymotion from orange. It is clear that the vendee has a ton of cash they need to deploy. They want to grow in media and content. That will not stop vivendi from doing more. They will be prepared to do more. In this petition oh particular deal it is a fear for their media strategy and also for orange to be able to leverage and sell some noncore assets. Caroline all about the energy. Mark thank you for joining us. Manuel speaking about quite a busy day for m a. This is a live shot of the city of london. Watch out for e. G. And bg and shell sky shares could be active today. Mark welcome back, it is 7 50 in london. Michael england joins us. I will say it before you say it, you are shellshocked. Somewhat, another day, another deal. With had fedex, ubs and tnt and now we have shell and bg. Sorry, i lost it. Something some great premiums for e. G. Shareholders to yesterdays and show with numbers yesterdays close. Things are looking good for bg. The big question is do shells numbers stack up. To my mind it does address part of the problems that shell had over recent years which is for Development Track record. Also you have to look at the lng situation in australia when i have stranded lng assets. And bg sunk about 20 billion into queensland in the can. They also need to monetize that investment and hear more from shell a little bit later. Mark does this put bp in play . They were always touted as a potential suitor of exxon mobil. I suppose that will persist now. Most bankers had assumed that another round of m a was going to be deferred until the latter half of the year. It looks like ben has very much fired the starting gun and there is intense speculation already that this procedure has a new round of m a activity in the sector. What comes after . Maybe it is mega majors. Mark it should give a boost to london. Stocks in europe finished yesterday at their highest since 2000. When does this rally and and end . I have written extensively on this. We looked at the earnings profile. The u. S. Hasnt been looking good this year. But it is also not looking that great in the majority of europe as well. So what we are seeing, multiple expansion and easy to see what the source of this will be. Centralbank. Activism i have this nibbling worry that the market to some extent is counting secular stagnation. If you look at the price action it is with bond performance and priceperformance. You are not seeing value outperform growth. You are not seeing cyclicals outperforming noncyclicals. But the rule seems to be go with the flow. Mark it comes as the fed released its minutes from its last meeting when they dropped patients patience, and janet yellen told us she would not be impatient. We have had a number of fed speakers speaking, has that all pushed back your month for when the fed will raise rates . Marginally. It is evenly split tween june and september, although by choice i would rather go with a june lift off. In any event i am more hawkish than the market. The market is discounting anything before the end of the year. The more recent Economic Assessment scale back its own expectation 1. 125 for the end of this year which presumably implies at least two quarter points of hikes. Mark always good to chat with you. Thank you for talking to us. Michael ingram, marketing strategist. Caroline five minutes until markets open and on the move is up next. Jon ferro will be speaking to the chief executive of shell talking about that deal to purchase bg group. Interesting that the bg group chief executive has only been in the group 42 months. The highest paid Oil Executive in the whole of europe. He is making a bit of money and making a huge company. It will be the second Biggest Energy company in the world. Stay tuned for that interview. A warm welcome. Moments away from the start of european trading. N a at the top of the agenda. Him in a m a at the top of the agenda. Stocks higher, the euro lower. I am looking at futures a bit higher. We are up by 45 points. Dax futures pretty much dead flat. I want to get straight to the morning brief. 47 billion pounds. The secondbiggest Energy Producer boasting a market value twice the size. The cash runs dry in just 24 hours. The greek Prime Minister sits down with russian president Vladimir Putin. The bank of japan keeps policy unchanged. The shanghai composite doubles in 14 months. These are the things we will be watching. Futures in london are higher. Caroline its going to be all about the footstse. Basically flat in germany