Transcripts For BLOOMBERG Countdown 20160204

Welcome to countdown. Anna welcome to the program, everybody. 6 00 in the morning here in london. Manus warmer here than in zurich. Anna the to have you back in the studio. 1. 6il Company Giving us billion, after estimates of 3 billion. That looks to be below the estimate. Focus on Capital Expenditure and dividend is always going to be manus i am reading the wrong numbers. You are right. Capital expenditure. Anna talking about maintaining the dividend while offering the option to reinvest, do introduce a script dividend. There was concern in the Analyst Community about to what extent the dividend would be protected this time, and into the rest of the year. We will talk to the ceo about that a little bit later. Manus a significant shift the first to do this. They protected the Dividend Rate this is a first in terms of going into the cash, a form of paper. Let us talk about ing. We have full numbers. They come in the what have we got here . 890 million. So, that is a beat on the headline for ing. They have gone with the dividend of . 65. Down about 20 for the dividend of double nickels. Underlines profit at 4. 2 billion. Looking like that dividend is a beat on the top line for ing. Anna we should tell you we have an interview surrounding these businesses over the next hour and a half. We are going to speak to the ing cfo, patrick flynn. We will also talk to other oils later on. though. This is something that was triggered by Data Services in the u. S. It forced people to reevaluate the fx market and were the fed was going. Manus this was the dollar index. It has been a real drop. This is a resetting, there is a lovely line in the story this morning where the currency traders are catching up with the rate traders. We had such a cracking run on the dollar, embracing the fed new reality. Can they do a rate hike . That is the bottom line for both equity markets and for the fx market. And dudley at the new york fed, we are focused on janet yellen, acknowledging that the world has changed. The dollar is definitely under pressure. Anna as we are talking about the reality for the central bank, lets talk about the yen. Banklimit of the central power, we see diminishing returns that quantitative easing, negative rates announced by the japanese. The yen jumped 1. 9 . We have gotten that back. It was not all about the currency. But it might have been. Da says heernor kuro does not see negative rates passed to the man on the street. He does not ignore the fact that you could go deeper and more negative. Do negative rates really, really work for the economy . Anna a little bit later on the program, we will talk about that. Oil has risen for a second day, extending his rebound in the biggest drop in almost seven years. That is after the dollar plunged following poor data, and after opec members said they were open to attending a meeting if one were called. Negativeof japans Interest Rate can fall as low as possible. Boj advisers say there is no floor for exit rate, and a stimulus could still be expanded, if needed. The bank of japan has signaled that it has many options in the armory. Tocould even lower rates achieve 2 inflation. Clever, i am sure the current policy will band inflation. Hasa meanwhile, the yen already undone all of its 1. 9 drop since friday, when they made the negative rate announcement. The parity shows the currency is still far from expensive. The Commonwealth Bank of australia is betting on the yen strength, saying it will be a bullish trade if the currency holes firm. A report that the company will billion rescue plan. They did not give further details. The chairman met at headquarters last week to make his case for the raise bid. The u. K. Chancellor says that eu proponents will be protected, holding out for the deal that safeguards london this month. His comments come as Prime Minister David Cameron he negotiates the relationship with the eu. Global news, 24 hours a day and more than 150 news bureau around the world. Anna, manus. Asia, lets move to standing by. Zeb, the chinese have made some noises about the money they will allow to flow in and out of the economy. Interpretingrket that come the new bandwidth of 6. 5 . Mind the gap. Ze3bb and watch your step. Ahead of the lunar holiday, making the attempts to buy. Most of the major markets, except japan, singing a nice boost. Hang seng doing a bit better, the movement in the yen has been driving stocks lower. Underpinning the gains in oil, they continue overnight from the new york session. And oil at 32 and above four west texas intermediate. That lifted Energy Shares in the hong kong session, and you see petro china doing well. Take a look at the top performers, all of them oilrelated names. No surprise there. That story has been repeated across the region. And japan, the biggest oil and is rising, asthat well. We do see casinorelated shares as the outlook for macau is down. And the emergence are among the biggest decliners now in the hong kong session. Let us take a quick look at what is happening across the asiapacific. Nice gains across southeast asia, getting earnings later from singapore airlines. We will be watching that, shares today seeing a modest decline about three quarters of 1 , as we look at that in the singapore session. Up by about 1 now. You heard the nice performance of sharp, rising just about 17 today in tokyo. Watch that on the news, as maybe it is preferred for the investor as it seeks a bailout. Reporting they will receive the preferred bidding rights. Back to you in london. Which is responsible for its caption content and accuracy. Visit ncicap. Org] and upon the Bank Announces its Rate Decision later today come alongside the latest economic forecast. Book of the next move be a cut for the bank of england . Joining us now is Dartmouth College professor of economics, hflower. Anc great to have you on the phone. What do you think is the next move from the bank of england, it might sound like a daft question. More and more people are asking. Danny certainly, they are. The comments by mark carney at jackson hole saying the rate rise will be coming into the rest of the year, they dont look right right now. I think the prospects are pretty strong now that the next move will actually be a cut. Not necessarily negative of are. 5. Ecause rates but the u. K. Economy is slowing, china is certainly slowing. Financial conditions in the u. S. Have tightened. And we see evidence around the world that trade really is slowing. So this is not great. There is obvious concern about the referendum that is coming, and the possibility of brexit. All of those things come together, survey suggesting that, once again, as i have said many times to you, a rate rise is off the table. And the suspicion is that the bank of england today will have to downgrade the forecast, starting to get real again. Especially about things like wage growth. And so the worry is that this may be the turning point downward. Manus danny, good morning, good evening. My question to you would be this of cuttingng impact rates, the fading impact of negative rates we have seen it in the japanese market. Cuty, really, does a rate from such a low level in the United Kingdom have any potential impact . Should we not be looking towards fiscal easing from this administration of the tories . Cut to help a rate the u. K. Economy . Ny fo what happened in 2000 and eight. 8. You had accommodation of fiscal policy loosing, all bankers. The central bank cutting rates and doing quantitative easing. So obviously the question is would you have all of those things going together . For the central bank, they can act pretty quickly. If things do turn that you want to see all of the above. It is not just a rate cut. Thenings were to get bad, you would see presumably a rate cut perhaps go to negative. A move to do quantitative easing at varying times, and presumably a move by the fiscal authorities. But as it sits at the moment, there are no plans whatsoever from the government to do fiscal stimulus. We are still in a world where there is lot of tightening coming. So the central bank has to act alone at the moment, but we will see. Obviously, you are right. You would like all of those things in combination. The question is, would you get them . Brexitou mentioned the word. I will go down that path with you. The banknside of england, the vote that might take place on the 23rd of june. Maybe. What kind of preparation should be going on at the bank of england for this brexit vote at this point . Danny certainly, you want to think about a number of possibilities. The first one, obviously, is at the moment there is some degree of uncertainty. You might be concerned that certainly have to start to think about what would happen if the vote was actually to leave . What were the effects of that be . How long a period with that go on for . They would have to think about what would need to be done if that was happening. So a transitioning as to actual brexit would be something they would have to be thinking about. Obviously, so that it is the unknown. That would be planning for, thinking that there is so much uncertainty going forward, stopping investing but that certainly might mean they would have to put stimulus in. This will be something they are thinking about. There is lots of uncertainty. We know of the discussions going on. The bank would be trying to think about what would happen if actual brexit took place. You sounded very Donald Rumsfeld this morning. The unknown knowns. I want to stick with a few facts, which is sterling is under pressure. 6 in the december, past few months. You you sat on the mpc, know, how aware are this group in terms of sterling and its impact . Where you think we should be about this move . That move in sterling, to a certain extent, some people are saying it is wrapped up in brexit, wrapped up in the worry about the trade balance. Sorry that the deficit he is running. What do you attribute this move in sterling to . Is it helpful . Danny certainly, the central bank would be very mindful of the Exchange Rate. I mean, during my time, we were very conscious that we tried very hard to push the Exchange Rate down. I actually lived in the u. S. And was paid in pounds. My salary went down rapidly as the Exchange Rate went down. The first that is thing. They would be mindful of the Exchange Rate. Of thehink a lot reasoning in some set is the expectation of rate rise here. The markets certainly do not expect that any longer. Obviously, pretty hard to explain shortterm movements in the Exchange Rate. But certainly, that is a help, a level of stimulus, i guess. Anna danny, thank you very much for joining us. There fromng us Dartmouth College, a former member of the bank of england Monetary Policy committee. We are getting Credit Suisse numbers coming through. 2. 4 billion swiss francs. We were waiting on these numbers, of course. The first set of numbers since he introduced that big program of change. They set up a fairly tough outlook just the other day. So what we have is profits before taxes at 2. 4 billion swiss francs. And this was market will want to see what the next state is in the redevelopment of this company. Profit is what we will keep an eye out for here. Of 2. 4 pretax loss billion. Manus the stock hit a 52week low. And as we went into the numbers, we want to see if there is any update on the ipo timetable. He is the man that suggested they will actually release an ipo. So we are just sort of getting into these numbers now. Anna it is in the air, it seems. We have a loss in Credit Suisse, fouryear dividend of . 70 per share. And we have an alternative. It gives you the option to take the dividend or to reinvested back into the company. In terms of money raising by the business losses,ourth quarter you are right, this is where the institutional shareholder is being offered. Trying, one would assume, of avoiding the possibility of having to do a major Capital Raising exercise. That is the interesting point in terms of these numbers so far. The word ofms of the day, back to the story we brought you news of profitability that there would be the dividend. But now we are hearing from the Norwegian Oil ministry. This is important because norway has a 607 stake in the company. Our first thought that went through our mind when we saw this news, what signal do they have from investors . Now, we know. 67 now in favor of the move. Manus lets put it in context for you, about one billion more than the market was looking for. Was 4. 32. Ted loss but the dividend was back in line. Anna Francine Lacqua has been there, interviewing. We will bring you that here right down on countdown. Manus let us get the Bloomberg Business. Nejra shares of sharp have surged, after a 5. 9 billion rescue plan over a rival bid. The forecaster did not give further details. And last week to make the case for the bid. The Company Behind pizza hut, postedd taco bell has earnings above expectations, thanks to rising sales at top rebel and kfc. That comes as the company is spinning off this year. Gopro has fallen, after the company forecasted well below expectations, boeing a disappointing holiday sales. Sources tell us that the Jefferies Group has cut employees in the fixed income products tiedg on to mortgages. Revenue from fixed income tumbled 83 in the Fourth Quarter because of the Energy Market route and weakening demand for energy assets. Cutting investments to maintain dividends, as the collapse in crude erodes prices, norways capital its reduce managers to 13 billion, from a revised 14. 7 billion last year. It came in at 1. 6 billion norwegian krone. That is your Bloomberg Business flash. Anna thank you very much. Let us continue the oil conversation now on earnings. Of crudee miss extending the rebound from its biggest drop in almost seven years. Let us get straight to Ryan Chilcote who has been analyzing the oil story. Ryan, oil, despite the rising u. S. Dollar, a great picture it seems. Ryan yes, i a you a big apology. Back manus was knocking the fondue in switzerland, i was telling you fibs saying that it would rise more than expected. That means the glut is extending. Course, that was all wrong. I forgot about the dollar, right . You should have bought that aboveground Swimming Pool and filled it with crude. You would be a 9 . Not only that, but now that we have this bounce in the pound, you cannot use the Swimming Pool. Manus everybody told us, you and various ceos, it was to do with the dollar. 70 would be the supply. Was the dollar. Where do you stand now, make the call . No pressure. Ryan i feel like every single day we have to come up with a Extraordinary Oil prices. I heard from scott who talk about Guggenheim Partners them when you get close to the bottom you get extreme volatility. However, in this case the we do extreme volume. Everybody says the oil price should go up sometime soon. I will hold my breath and by my fuel while i can on the cheap. Anna we will continue to press the ceos that we talked to every day. Many admit they dont know where it is going either. With that in mind, lets talk about the earnings coming through. We have shall coming up. Ryan just the worlds thirdlargest producer, this is the first time they can speak freely and honestly and in depth about their plans. Which they hope to complete the acquisition of bg by the end of the month. Anything they have to say will be very interesting. Of course, everybody on the investor checklist will want to hear the dividend is safe. I think we can expect that. Anything short of that . Beenord of the day has script. Are they listening, i dont know . Fair oing to be ryan they want to hear the basics of how he will maintain the Balance Sheet, the cost cuts billion as a 3. 5 result of this deal. They will want to know, although it is a huge affair, how much fourthquarter profit fell by. Throughe already guided the shareholder meeting, where 83 of the shareholders in shell voted for the deal. We shall see. But the onus is now on ben to deliver. Everybody gave him the benefit of the doubt. It is a longterm play. But they would like to see a little bit of joy in the short term, as well. Anna away from this story, it is certainly a reminder of how it is not quite binary maintaining the dividend. There are other options. Manus and the bank of japans governor kuroda stunned the markets. None of the markets returned the favor. Is now stronger, prompting the question if they will have to go more negative . A source told bloomberg there is no limit to how low it will go. The bank of japan has signaled that it has many options in its armory. It could even lower rates further to 1 , if absolutely necessary, to achieve 2 inflation. However, im sure the current policy is enough to lift japan out of inflation. Manus let us get to our tokyo bureau chief. How likely is a cut to 1 . We have a lot of the bond analysts who have it right, talking about the bond market. Where are the rate analysts in terms of the view . How real is 1 in probability . Share, so we have to remember out kuroda himself has come and said he is definitely willing to do more. He has really pushed against this narrative that the boj is running out of options. It is certainly possible. You just have to remember the tradeoffs get bigger and bigger, and the costs get bigger as you go more negative. But we will get switzerland, the lowerhey have even negative rates. Anna how effective has the certainly been, the currency move is going to look at things . Share, so it is really been disheartening how it has come back from where was before the meeting. I think it really does speak to how difficult it is to change the course of things and you are fighting against these large, external Market Forces these things that are much bigger than japans domestic economy. That said, it totally could be that if the boj does not stop in on friday, does not to really help the gains, the yen could be even closer to a level that does hurt manufacturers. So i think it is a little too early to say it has been ineffective. We will continue watching. Businessr bloomberg chief there and tokyo. We have oil and credit sui sse. The impairment charge is 3. 8 billion. Really dealing with a clean up here. Anna this is the first time they reported since reorganization, delivering last year. Wealth management, just like some others. Our word of the day . Script. Different businesses, different industries, but that is the word this morning. Up next, we hear from Credit Suisse, tidjane thiam. Since that overhaul was announced at the swiss franc. That is coming up, right here on countdown. L raising script. Let us hear from the ceo, tidjane thiam, speaking to Francine Lacqua. We willthiam what announce, it is really good news because we started with strategy in a very challenging environment. Everybody knows what happened in q4. It has produced already promising results. Ouraid that we would grow three core divisions, asia, switzerland, and International Trade profit in asia is up 1 . And profit in internationally is up. 6 , depending on how we count. That is very profitable. They had a difficult 2015. But you have to realize that there is a lag between the result, after having the best Fourth Quarter in the last five years. 28 increasing mma. But there is one division where we have had a lot of pressure and negative results, and the loss in the Fourth Quarter is global markets, where we are seeing suffering from the current market environment. We have there a number of positions which are real negative from our old strategy. As we turn to a new one, we are putting them quite aggressively. But we took losses on those materials. So the asian lost about 900 million in the quarter. Asncine capital markets, you are pointing out, should you have been more aggressive with the cuts . Tidjane thiam the cut them by 37 in two months. We have been quite aggressive. It is what it is. That is why we have cut it. There are really two theories on the table. One is that there is uncertainty about regulation, litigation that we should wait and then raise. We should not do it now. You remember in our previous conversation, about 2016, and we decided to go early. We really had to cut the rates at 6 billion. More importantly, we did a deliberate 3. 3. We are in a strong position to get into a difficult place. Francine asia was a bit better than expected. How do you explain that . Tidjane thiam we were prioritizing the region. We said we would take our relationship managers from 520 two 800, we are recruiting. After the 70, we had 40 in the Fourth Quarter. People are coming to us because we have Balance Sheets. We will invest in asia. We have 17. 8 positive assets in the Fourth Quarter, contrary to the expectation of 3 billion. And we will see this trend continue in general. Francine what will struggle the most in 2016 . Capital markets . Tidjane thiam no question. They are the ones that control this. Member, there is a lot of commentary that i did not give a target for those divisions. That was because that report was proven very quickly. If we had put out a global target and profit target for Investment Banking, where would we be today . We want to retain the flexibility to restructure Investment Banking. But what we are doing to fixed income, we have the equities aside. Want the franchise to become the same. If you actually look at the stream, it is very stable. Very volatile. Relatively of elongated and liquid activities and moving towards whatever is more consistent. We want to have an Investment Bank that is stable. Francine what would it look like postoverhaul . Tidjane thiam less capital, more profitable. Francine when we have more details about exactly it will look like . How big . Tidjane thiam we said we would be between 8385,000,000,000. We have really shrunk it below the target. Outsame thing, we will come about one trillion. We are below that. I am very pleased with the way the organization has handle the challenge of reorganizing the entire company. Jobs in a few months, we have raised capital, and at the same time, not taking our eyes off the ball in profits in switzerland, asia, internationally. And facing very tough markets in global markets. We have also, as you would imagine, it is a tough cocktail to absorb. Francine how much is the bonus . Tidjane thiam about 11 . For the divisions that underperformed, more than 30 . Which is very strong. Francine joins us now from zurich. Harsh messages if youre a bank er at Credit Suisse. He doesnt like businesses he cannot control. What does he say about the volatility ahead . Well, we spoke about volatility at length. We asked if it was fair for markets to be correlated to the price of oil. He said no, he does not believe there is something that they may be mispriced. He was expecting a difficult 2016, though he has been bearish for a while. Longterm, he is optimistic. But he explained to me there is something out there in the markets that he does not see in the real market. He wants to focus on really positive signs. I know theyre trying to spin this, but if you look at some of the strength we saw and wealth management, does point to a little bit of a stronger economy. Theainly in the markets, economy is not as strong. Anna interesting to get his thoughts on the global economy. Also, how the business performs and how that translates into remuneration. We heard what he had to say about bonuses. Francine yes, so i did ask about the bonuses. There was nothing in the earnings book about that. People are one thing focused on, after rivals have cut bonuses. The bonus pool will be cut around 11 for businesses. Sawthe division, were they the biggest loss, bonuses because around 30 . That heto get a sense came in last june, july. And he overhauled the bank, not had a great time because the market volatility. But he regretted not being a bit more aggressive with the Investment Bank. He said no, it was right to do so. He wants to keep the options open. Bonusesthere would be where the main losses would be affected. But again, he wants to keep an open mind about how to do this next. Manus francine. Anna a noisy zurich this morning. Thank you. Manus that is one way to communicate with your staff, not in official medication, but on tv. Let us bring in our next guest, erick nielsen. Touching on this correlation between markets and equity markets and oil. It is all come at one stage from the relationship was not quite there. The we are locked in this relationship, emotionally, arent we . Erick i think were at a place where it is very difficult to make head or tails of what is going on. Real block there so far has been equities. The fixed income market has just gone nowhere. It is not surprising when he cut the bonuses in the market part, because in this business, no bank makes money in the fixed income market now. It is quite a brutal place. Anna what do you make of this link between oil and equities . I know you said in the past this should not be the case. Weaker oil prices, you keep reminding of this, it seems that everybody forgets, that is supposed to be good for the global economy. , at leastor the oecd for the coil and the oil sector. Said absently correctly, when oil prices drop, that is good for the consumers and 90 of businesses in europe. Lower in america, but positive for the group. Strangely, we have come for a while and this positive correlation, oil prices go down and they go up. Some argue that it is because that sort of correlation only holds when you go from 200 down to a whole different game down here. I dont buy that. I dont see any real possibility that is what is happening. Because the big Oil Producers, when they need liquidity, they do not first sell the equities. A first sell fixed income. That correlation. Anna because we have not see that, you think erick it is a market that is confused. Manus help me out of it. On the terminal, i was talking about the return on bonds. Bond markets have returned and overall return of nearly just over 3 . If i go down to the u. K. , ive actually made around 4 . I know you probably think it is a heinous crime to talk about percentage rates on bonds, but be bond market has delivered quite favorably relative. Erik i particularly did not like these bonds that have done well. [laughter] manus there was no provocation. Anna everybody is making that same thing. Erik i still believe that the fundamental Economic Outlook most likely is looking good. The risk of suffering going back has gone up, yes. But what i had underestimated is that this fear that has grabbed us so far this year. Youth, are very low. On the other side, you covered before i came on, the issue of the japanese. Right . We are in a place with a major Central Banks are in fx competition. So you go into these extremely low rates, you talk about the rank of england. Theyre going to sound quite dovish. There you go. Anna negative rates in japan, listening to governor corona overnight, details on where to go for the rate story there. Talking about how we cannot guarantee that we will not see negative rates for Retail Banking customers. But at the same time, he does not envisage that happening. You have some its various in the part of the world that you hail from. How effective the you expect negative rates to be from japan . Erik it is a terrible, terrible thing. We started by calling qe. It is the negative rate that is unorthodox. It is really all it does is it weakens the currency at the moment. And then it cause back. You see the euro. It into negative territory in order to weaken the currency, and after a while, it goes up it is only a signal. There is no real transaction. Anna does it make people spend more . It means that you actually say more because you see the value of your savings declining. Dont really see that because we dont have statistics on it. Negative Interest Rates is a tax on the financial system. Period. None of us are passed on to retail. We are taking the hit. Right . You can credit the strong increase in deposits in italy, but we cannot lend it out faster than we do. What do they want us to do with the money . Manus bill gross said this, they all seem to believe there is an Interest Rate so low that resultant Financial Market wealth will ultimately spill over into the real economy. Is that just diluted centralbank thinking . I know he comes up with great oneliners. This is a good one. Erik this is the problem. All ofll of this this problem in britain. But do we actually have to get away with cash . Because then you can tax the money away from people. Do they spend more or do they save more . Do you buy gold . You put it into another currency . Here is the issue. If you really want to force this on by taxing people for holding cash, chances are retail people go to another place. Andeholds start to get to to arrest. Is that what you want . Think about what happened and hungary, . It is completely madness. Anna up next manus it is all manus. One group of people, mark carney and the pathway ahead. It is thursday at the bank of england. And investors do not see a hike for almost two years. Let us see what erik nielsen thinks of that. Manus it is 6 47 in london. Let us get the Bloomberg Business flash. Has swungdit suisse to a net loss in the Fourth Quarter, as it wrote off billions of dollars in goodwill, sacrifice provisions, and put a multibillion loss. It will accelerate the cutting of 4000 jobs. Deepening cuts and maintaining dividends, as the collapsing crude erodes profits. Norway will reduce Capital Expenditures, after Fourth Quarter fell below well below analysts estimates. The 5. 9 billion rescue plan will be chosen over the rival. Sharp lastman met at week to make his case for the raised bed. The Company Behind pizza hut, paco bell, and kfc beat estimates. Coming in at . 37, two cents above expectations. It was after rising sales relying more as it prepared to spend off the china unicom sources tell us that the Jefferies Group has cut employees with a focus on staff handling mortgages. Revenue from the fixed income tumbled 83 in the fiscal Fourth Quarter because of the Energy Market and weakening demand. That is your business flash. Anna thank you very much. Global strategist erik nielsen. Super thursday, lets talk about the bank of england. A ratesaying that increase is now off the table for the bank of england. Look at what markets expect. Expectations of a rate hike. What are your expectations . Erk it is going to sound quite dovish today, we still think there is a rate hike possible at the end of the year. But they are caught by the same issue as the ecb was, which is lower prices that lower the inflation forecast. How do you react to that . In normal times, a central bank looks through that. This is not normal times, as we talked about. We are in turmoil, so it was sort of dovish to be hopeful. Manus there are three parts to this that they have to look at. One is the value of sterling. That has dropped, as danny. The second part is oil. We were just talking about this during the break. I want to get your opinion. It is a political weapon, that is the mood out there at the moment. How important is that to the u. K. Consideration . Erik oil has always been a political weapon. If you go back to 1973, certainly 1979. It has always been a political weapon, energy. To some extent, less so today than it has been before because we used to have saudi arabia as this producer who could sort of squeeze israel, or the west if they wanted. We see now they are losing power to the gas resolution. To a much larger extent, it has become economics that because of the short cycle of investment in shale. Gas you are seeing people like the Saudi Arabians being desperate, keep pumping and allowing the price to get so low to see if they can squeeze out some of the higher cost producers. Anna lots of people talking about how we will not see the bank of england contemplate moving on rates before we get a vote on brexit. What kind of scenarios are you running in terms of brexit . Do you expect it to happen, or are you relying on the pollsters . If you are modeling what will happen, how bad could it get . Erik in the bank, we spent quite a lot of on it in research. Number one, and looks like we will get the vote in june. We think the vote will be tuesday. But it will be a close call. Interesting, if you look at the deadline, they are conservatively more sure that the forecasters do stay in. We are publishing here in an hour or two, a quite substantial piece about will happen if the u. K. Were to leave. Coming through the trade channels and the city of london, we think it could cost u. K. 6 of gdp over time. It is a very substantial point. This is even assuming that the u. K. Would go into a situation like norway or switzerland. Anna given the lack of investments . Get a lott term, you of turmoil because you do not know what we will get. Certainly cameron would have to step down. And osborne. A lot of uncertainty after that. But over time, the investment that the u. K. Need so desperately because of the current accounting deficit will maybe stay away. Who will make the fundamental direct investment if you are not sure that you are fully in the Central Market . Manus you paint a big picture there. For a time, in terms of currencies, and the pound is under pressure. We are down 1 8 on the day, down over the month nearly 2 . Down 5. 4 of the last few days. That is not just brexit. I know that. Erik it is two things. The fact that mark carney in october of last year shifted to become a target like so many others. When we flip to the dovish side, he didnt because he saw that the fed was going to hike. And he realized the ecb was going the other way. Everybody told him the dollar was going to parity, and he did not want the pound to stay on the strong side. Anna fx targeting, he would be in good company. Erik nielsen joining us from unicredit. Manus come back early again. Fourthquarter earnings, at the top of the hour, analysts expecting a solid quarter. If you are a mercedesbenz driver. I know you dont drive it all. Anna i dont have a car. I dont have a car. Hans nichols is in berlin. Dont talk about my driving. Tell us what to expect from daimlerchrysler. Daimler Truck Division is what we will be looking at. Here is what we are looking for, namely. The profit margin, will it come before 10 . Analysts expected to do so. We saw the Fourth Quarter, really a question of the two countervailing forces. One, the slowdown in emerging markets. Although mercedes held up in china when you look on sales. And what sort of bunk they get from the week here, what will that factor into . The main number we are looking at is the profit margin, also looking for the outlook in 2016. You will get this in about four minutes. Not only truck sales in the states, we saw them taper off in january. Something funky may have happened with the numbers. A could be an indicator. But also looking at iran, in january, they announced they would be returning there. If sanctions were lifted. A lot of opportunities for Daimler Trucks in iran. Anna hans nichols joining us from berlin. Coming up at the top of the earning our, history cap we had numbers from oil. Norways biggest deepening the cuts in investment. A lot going into this Capital Expenditure Dividend Rate what do these Oil Companies say about these things . And we kept that discussion upgrade they want to maintain the dividend as they see the crude rice collapse. The company is trying to reduce to 13 billion for Capital Expenditures, from 14. 7 billion. They continued to cut, and also the script issue. Manus this comes after the finesse balance. The state owned 67 , backing the script. You dont need to worry about anything else. Also going for a payout and a script the dividend, a fourthquarter loss and impairment. And the message from the ceo, no plans to sell a lot of the Investment Bankers, as expected. Anna moments away from the ll, astrazeneca, daimlerchrysler we will bring you those as those happen. And our conversation with the ing cfo. All of that is coming up in the next 30 minutes of countdown. Crude comeback, oil rises for the second day. Venezuela says eight countries could be open for extraordinary meetings. We get numbers from shell and nestle. How will the price plunge hit their bottom line . Manus credits winds were lost. Super thursday, mark carney will present the bank of england latest economic projections. Will be get any clarity on the future . Manus youre welcome to cou ntdown. Anna lots of breaking news this hour. With it to Caroline Hyde with the details. Estimatesan line with come we have 1. 4 growth in that organic service revenue. The fouryear guidance is confirmed. That was for the earnings from 11. 7 towards 12 billion pounds. And that is positive cash flow. These racing to dig into numbers. Overall, their sing Fourth Quarter group revenue, the Services Revenue up 1. 4 . The seems to be matching estimates. Iny are seeing improvements this company, improvement in germany and italy. Competition is still very tough in the United Kingdom. That is most lucky to affect underlying growth in spain with perhaps a drag from handset financing continuing. A bit of a concern over all for vodafone, but it is a match overall. We also have one interesting take on the Liberty Global combination we are talking about combined in the dutch businesses, what does that mean . Will it expanded to other countries as well . Manus i give her a much, lets get into these numbers. We they read the sticky on the earnings. Anna it seems Like Astrazeneca adjusted at . 84 per share. The estimate was for exactly 94. The revenue coming in just ahead of estimate at 6. 4 billion. Getting all the details of the very strong scum a lot of focus on what competition was going to do to their sales. That is coming and above estimates. Against the estimate of 514 million. He says as anticipated firstquarter performance reflects a loss of exclusivity on several large drugs. We remain focused on judy chu priorities and achieving scientific leadership. That is the standard cell line. Getting some guidance in terms of where they see the full year. They see mid digit percentage decline. A little bit of guidance there. That includes the recent transactions. Let to go to hans nichols was the details. Well daimler came in with a beat of the overall revenue. Euros that is for the Fourth Quarter. The estimate was for 38 billion, a clear beat they are. At what theyre saying in terms of earnings, also it looks like they are outperforming for 2016 interdicting a slight profit increase. Terms of whatt in analysts are expecting the Truck Division. They came in better on the revenue there. The one part where they might be disappointing expectations looks like the dividend will be paying at a 3. 25, it looked before like 3. 30 otherwise it looks like good numbers. Manus thank you very much. A good set of numbers coming through there on the auto side. Lets get out of the asian market. Inh the new trading ban china, take us to the markets. Government in beijing revealed for the first summit 20 years showing almost 7 growth, the expectation of the Chinese Government for this year. Going into the Lunar New Year holiday, certainly many market in the asiapacific a lot of optimism today. Gains, the first to gains in three days. All the major markets rising with the exception of japan today with the nikkei and back a bit by the currency moves there. The japanese yen having an inverse affect on the stock market giving the repatriation of earnings by companies. Energy related shares are doing well, commodity producers and the Oil Producers doing very well. Petro china up 6 today for the hong kong session. Anna thank you very much. Way for theking show numbers. Adjusted profit coming smack with in line with estimations. The estimate was 1. 8, thats where they are, you compare that to bp which their profit you are from 91 . About 45 . Rop of there actually outperform but it comes to how much money they didnt make on the back of that declining oil price. Also get in the quarter was 3 billion. Everybody wanted to see the dividend there. We were talking about a program earlier they introduced a Script Program in the First Quarter of last year. That will be in place until 2017. That is assuming that the oil price its about 60 a barrel by then. We are expected to report a dividend of . 47 a share for the First Quarter. The devil is in the details and the comments from that is what we will be looking for. The gearing at 14 we just got the top of the terminal. 20 will shoot up to about as soon as they completed that. Eal to acquire bg they will need to borrow some money to pull that off. Even 20 is far below what to bp might be looking at an in the near future. Anna thank you very much with the latest on shell. Thee now joined by companys ceo from paris. Great to see you. 2016 youre talking about and giving us some targets. Talking about doubledigit since revenue growth. Volatile macro backdrop cartel is us how default tillie in the macro is influencing your experience at the micro. Areell, first of all we seeing 2015 being doubledigit growth. Acceleration Fourth Quarter, we want to make sure that we do not have acceleration and growth for the full year of 2060. That is the purpose of that. Is coming from the dynamic in asia. Its the doubledigit growth in asia as you can imagine. Balance going between japan, india, on china. Confident on top of the First Quarter we beat a slow start because the base is very strong. Bernard, when you talk about the world, you are in a prime position to give your take. Theres a great deal of speculation that the world is slowing down. What are you hearing from customers, what are they saying to you . Where are the negative comments coming from. You do 40 of your business in the u. S. , europe, and over 20 is in asia. Where of the most levels of concern coming from, if at all . First quarter we got different signals that it was an excel ration and growth. Precious aboutbe 2016. I think the signal were getting from customers come even in india and china specifically is that they are investing to conform manufacturing with innovation. It is becoming pervasive for us. Are considering that despite the Macro Economic signals from a customer standpoint we are getting positive traction. Areas in these three areas of the world. Anna that is a structural change he talked about before when we are seeing on the program. One area you put this to last ise we spoke with some areas the amount of investment you are seeing the oil and gas sector. We talked about how companies when theyre really in trouble sometimes make the decision to do some kind of transformational digital investment. Are you seeing deepening and oil and gas making that call at the moment . That is a very interesting remark. I will confirm what i said last time. We are announcing today that we signed a very nice agreement related to the way that they package product to conform the products any value. The products that do we see the same thing by the way in the mining sector. As you now, that has been suffering a lot in the last past two years. They need to transform their business. We have seen this in our numbers. Of course, these Large Companies are slowly conforming and liberating the digitalization. Growthor us a lever for going forward. Not only oil and natural resources, but the Energy Sector at large is also strong driver for longterm growth. The digitalization is happening in the industry. The innovation platform is very critical for all of them. Bernard, thank you very much for joining us this morning. We had the ing numbers, lets hit straight now into that conversation. One of the biggest dutch lenders were joined on the phone by patrick rejoins us. Thank you. You beat the numbers, but still a job nonetheless from a year earlier. Pressures abound in the banking system. Lets talk but your business. You have two areas of the market that will be most interested your exposure to russia and the oil and gas industry. Can you give us an update in terms of the credit worthiness . The 6 billion euros of credit that you have towards russia. Patrick good morning, i would like to start i will come back to your other results. They are up 23 year on year. I think it is a very strong growth and profitability driven by steady margins and an increase in our lending. We are doing well. On the back of that, were also able to announce a fullyear dividend of . 65 and the introduction of a dividend policy over time. We are heading in the right direction. In terms of your question , we lend to the highest quality in russia. Our npos are negligible, close to zero. As she goes and no deterioration is visible there. I think overall oil exposure you have to look at. That is about 4 billion, and we stress tested that at various price points. The impact there is entirely manageable. Anna good morning, youre talking about improvements in the dutch economy this morning and a drop in loanloss provisions resulting from that. What kind of strength are you seeing in that economy . How is that helping you confront a competitive environment in mortgages in the dutch . Environment . Atrick the dutch bank is major player, we are a major player. The economy is improving. That is good. They represent a third of our business. The growth were seeing that you referred to is actually outside in places like germany, where our profit has reached the one billion mark. Bank, no branches grow by 30 year on year. That is what we are seeing. Also our commercial Bank Industries athletic ability which is a global has been growing. Those are the two engines that has helped us to grow the 2 billion iran year. Manus one of the defining attributes of ings strategy. Obviously, this is an important part of the business for you. What is the biggest opportunity for ing in 2016. This is pretty much court to what we do. To what we do. We are an innovative. That is what our dna is. Maybe a bit more mature innovator than some. You are seeing the power of that innovation and that disruption with ing in germany. Full the digital, growing, fantastic customer appreciation. 30 growth year on year. We are developing that. Romania weovation in in investing with others particular sme lending. We are pursuing this innovation space bigger sleep. Jonathan anna cabbage is a brilliant name. Predicted regulatory cost of the about integer million euros. 800 million euros. Pushedthink theyll get back further, how ready is the sector for that kind of level of change in terms of more transparency . Patrick i think it is there, certainly we see it in terms of our operating and what we are applying it already. It is part of life. This business is not something that really is on our radar screen. That is more for the big asset managers. That is not something that we do. Thankfully, that does not constrain us. Regulations are a part of life. The unfortunate part of this is that these keep going up, new government are looking to the banks as a source of revenue. Anna we leave you with that thought. I always had the only two things that were absolute with floods which was death and taxation. Now it is taxation and regulation. Next, to continue to slash spending to maintain their dividends. Anna welcome back. We have earnings at this morning oil, making cuts in investments to maintain dividends as the Oil Slump Continues to weigh on them. Manus we are very lucky, joined the company ceo. Ryan alongside, our oilman and residents. Lets get to the dividends. Because you have offered a descriptive dividend. Why go for this . Is this to provide protection having to do more with the youtic this year that will perhaps have to have lower oil prices. Why dividends today . Are deeply committed to our dividend policy. That is but a maintaining the dividend in a tough environment through the cycle reflecting our longterm commitment. Cript dividend has been introduced in the industry more and more. It is an additional tool. That represent an option for the shareholder. Add strengthen over financial capacity. We think that is also very important. We can pursue an Investment Program that also benefit our shareholders. The biggest shareholder on board owned by the norwegian government. You have some backing for that kind of decisionmaking. This is an industry where you have to make many tough decisions over the last year or so. Government,by the is that the different pressures on you compared to other management in this sector . In terms of making those tough decisions to cut back on expenditure . Is an arms like the distance with the government. Theyre very professional shareholder and very pleased to have them on board. Ryan and what point does the cutbacks are going to this year, you have been gearing at 26. 8 at what point does the gearing gets too high or asked to much of a level in the cap gets too close to the bone that you say i actually do love to address the dividend. Are deeplywe committed to the dividend. [laughter] eldar not exactly those words. We have a great Investment Program at of us. They be announce were taking project byortfolio 30 in terms of breaking prices. That is something we would like to pursue. There are two priorities, and we can do both. Dont see any inconsistency between the Investment Program in the dividends that we have. We have a strong Balance Sheet and flexibility. We have opportunities to move the needle. Manus when you talk about preparedness, here we are, bp said they could right the ship at 16. We are touching 30, where is this that there is a capitulation point . 50, give thea market some guidance in terms of how you are shaping statoil for the lower for longer, are you doing that . How much lower, for how much longer . Eldar we are forcefully pursuing efficiency and stepping up our Efficiency Program by 50 . We have two thoughts in our mind, first of all we have an aggressive strategy also preparing us to invest for a rebound in the market. High quality project will be pursue those investments. There is uncertainty on the commodity market. We have a flexibility in our program as well. Meetbrings our capacity to the potential situations where this could be even longer for longer than we might expect. It will be a rebound come and we are prepared for it. Anna what kind of timeframe are you talking but for the rebound . The battle for the market share was reaching its final conclusion. Is a rebound imminent . Eldar my guess would be that we are getting into a time of rebalancing. There is a lot of stock out there. Within the next year or so, i suspect we would get into that situation. How long that rebalancing will take i dont know. There is a lot of uncertainty on that. Capital is down, investment in our sector is down significantly. Last are coming even more so than this year. And access to new capacity is not coming into when the market needs to. That will support a rebound at one point in time. Ryan the Venezuelan Oil administrator is in iran today. Are on board. Ries it doesnt include saudi arabia, crucially. Nonetheless, the question to you is a nonopec country, should norway support this idea of a coordinated cut . An oil and gas company, i dont make any bets on oil prices. As such, i focus on what i can deal with the terms of policies. I would not speculate in that. Manus should norway support opec in cutting . Ryan would it make sense . Eldar i believe that the policymakers. What about your investment in london . They dont see you increasing your stake in the business. It is not that expectation. Eldar we are very comfortable with the stake we have taken. Vinceis very attractive exposure. We would like to have more exposure to that, and we are starting to do that. It is a longterm perspective. The result timetable for us. Anna thank you very much for joining us. Next is next. The move equity futures up about 100 point in london. To on the move we are counting down. This been a crazy 24 hours. Swings itthe intraday has been mayhem. But im really interested in today with credit sweeps and the backdrop the bank stocks on the 600 the worst performance in 20 alone. We have to talk about that. Guy stocks continue to tumble. Oil definitely front and center. Coming up, looking at the impact it has had