Transcripts For BLOOMBERG Countdown 20160405

Complicate things. Welcome to countdown. Anna we have some breaking news coming out. Bill on the comments yesterday evening. Charles evans said the feds have will depend on the economic outlook. Channeling janet yellen carry too early to tell if inflation rebound is sustained. This is the chicago fed president evans who has said that two rate hike this year will be appropriate. Duck killing what he said yesterday the market is very much mistaken if it thinks we are just going to get the one hike this year. This Charles Evans latest comment. Anna those concerned about whether inflation rebound is going to be sustained echoing what we have heard from some of the other more dovish comments we had last week. Worried aboutas whether inflation would be sustained. Compounded with retreating oil prices. Where oil goes, stocks follow. We were wondering if that link would break down. It seems it has been reinstated by the session. Asian stocks hitting a fiveweek low. Index is justld beginning to come across. The resurgent rally we had in the price of rally drove the emerging marts. Rba left their rates unchanged. Saidwiss National Bank negative rates are key to further easing. If negative rates negative rates are indispensable. They are talking about their experience with negative rates. Such a longe had experience with negative rates. Of us bring up the charts the Australian Dollar to show you the impact. The Australian Dollar we saw it before the announcement falling. There was a lot of talk about whether the rba would change its rhetoric around it but it seems the market when they saw the rba say that aussie dollar appreciation could complicate economic adjustment, it went higher. Manus it jumped 13 . The currency is now Strong Enough for the central bank to become worried about its overvaluation. What else is on the radar risk . Dollaryen. Japanese equities are weaker. On dollaryen. Sizable news. Risk aversion trend. Exhibited by the gold prices. Manus keep an eye on that dollaryen because it is up. 83 . Does the young care about what kuroda says anymore . Bloombergus get the first word news. Toldha credit suite has Bloomberg Television that the Global Financial system is safer thanks to banks raising capital and deleveraging. He said it is a great time to invest in the region and he is confident in china in the medium and longterm. Trend toes is on double profitability. Soon asy approve as this month a plan to make it easier for banks to convert that into equity according to a person with knowledge of the matter. They say the government may allow conversions of as much as wan. Trillion thousands of icelanders have taken to the streets to express their anger against the government after documents were linked in a Panama Papers scandal suggesting the Prime Minister allegedly benefited from offshore investment accounts in tax havens. Police erected barricades around the parliament to protect lawmakers from protesters. Earlier, Opposition Mps put forward a motion of noconfidence and called on the Prime Minister to resign. To double thelans size of its stock market which is among the most closed in the world by adding dozens of companies and making it easierf. Attract privately owned firms hoping it will boost the market. This is according to the Capital Market authority, the countrys regulator. The next three months will be all about the loony. Buyer says not only will the Brexit Debate way on the pound it will also wipe out the euros biggest quarterly advance in five years. Bill gross was warned and acknowledged that he would lose his bonus if he quit the fund before the Third Quarter of 2014. The companies response came in a court filing challenging his allegations that he was forced out. He is suing for 200 million. If there is a settlement, it will be donated to charity. News 24 hours a day powered by our 2400 journalists in more than 100 news bureaus around the world. You can find more stories on top. Manus the chinese are back. Little bit of pressure. chinese and hong kong markets coming back online after the Public Holiday yesterday. Look at the convergence between the shanghai and the hang seng which is down 1. 4 . Very much what we are seeing across the rest of the region. Directory trajectory. Index isnal benchmark holding at a fiveweek low. A different story in shanghai, coming after the lunch break and adding to the morning gains. The state listed companies are dumping by the 10 daily limit. Saying that it has been quite cyclical and they are seeing some upsides to the a shares. You can see the selling coming through elsewhere particularly in japan. The nikkei two to five down by two point 2 as the yen appreciates to an 18 month high against the dollar. E players and you were talking about the aussie the aussie dollar before. There was a spike. , its strengthlar is one of the governors concerns and we have seen the aussie tick . 76ve the 70 sent level. Sticking with that part of the world. Evans, he has again expressed his view that to who will be appropriate this year. Anna he was speaking in hong kong. He said it is too early to tell if the u. S. Inflation rebound will be sustained. And a shallow rate hike path is needed given the risks. Fxemy stretch is head of strategy. Good morning. I believe it will be appropriate to make two more rate hikes and follow a gradual path of rate increases thereafter. What you make of these comments . Jeremy relatively appropriate. There he much in line of what we are thinking. I think it ties into the assumption that we are talking about a gradual progressive rate path. We saw one hike last year, two hikes this year. Continuing that theme is the Global Environment remains on track. It makes sense. That is still going to be relevant. I think we have seen dollar longs trimmed aggressively over the course of the last three months and if we see markets coming back to realizing that earlyd could inflate as as june, it provides impetus for the dollar. Manus people were saying that Janet Yellens speech last week was a game changer. Here we go again. Mr. Evans saying get ready for two. , the selloff we overn in the dollar the past three months, we are down 4. 2 . Toigroup says it is too soon buy into this downdraft. Is it too soon for you . Jeremy patients he is required. We may need to wait until the april fed decision. And further confirmation that june is on the table. I think there is an element of patients in that context. There are still other opportunities in some of those dollar crosses, sterling is an interesting one. There is a case to be made for some degree of patients but it is going to be a scenario that will play out over the next three months. Anna the fed is concerned about the Global Outlook because they reference the globe when they make their statements. What do you think they make up the next environment . Barclays is suggesting that negative rates in japan was limiting the feds ability to increase. To jeremy the landscape has changed dramatically because of the preponderance of negative rates. , we talk about Monetary Policy differentials in the context of japan and ecb. They are moving further into negative rates adding to the difficulties that the Federal Reserve has. In terms of Global Conditions, it almost feels like a bit of a fig leaf for the fed for the fed. It does seem to be the case that janet yellen is moving away from being a pragmatist and is still concerned about moving rates too early to soon. She is using Global Conditions as we saw last autumn in the wake of the equity market she is using those conditions as a fig leaf to provide justification for doing nothing. Manus ethically for justification. One other story we have this fig leaf for justification. One other story were following this is the number one threat. They are convinced that the euro is potentially set for a much bigger fall if we on the 24th of joan and we have 24th of june and we have voted. There will be a enormous ramifications of which most of us cannot accurately quantify. Was also dizzy one of its largest members of voting to leave the regime it does have ramifications in europe and in the dynamics of the growth. And also in terms of the other members left behind. We have seen some of those other ifs starting to say the u. K. Was able to renegotiate its membership, what about us . The dutch and the ukrainian reaction is a bit of a lightning rod. Anna the chief executive of Credit Suisse says he is confident about the banks compliance overtax issues. Over tax issues. Among hundreds of banks that referred clients to a law firm to set up shell companies. Good to see you. It looks as if we have a problem getting to him as you can quite clearly see. A bit of a problem getting to him. A fascinating conversati. He touched on the Panama Papers suisse saiddit they did not want to comment on that. Rishaad 11 million pages which have been revealed by the International Consortium of investigative journalist. The Panama Papers is reverberating throughout the world. It is something that the chief were they involved in illegal activities and panama . . In panama . He denies there was any wrongdoing. Accept vehicles if they serve legitimate purposes. Every client has to certify they are compliant. Structure we a insist on knowing who is the beneficial owner. We are very confident in our practices. Ad wide ranging interview. We were talking about headcounts. Seeing hundreds or thousands of e sincet by credit suiss he took the helm. One part of the world where they are increasing is in asia. Theyre building their Wealth Management business in china. Japan is very strong in that field. Trading losses that we have seen and is liquid positions he says it would have no material impact. Has changed over the last five years dramatically and people are talking about where is the next financial crisis going to come from. He says lenders are in a better position than they were before. Financial situation is in a stronger place. The Global Financial system feels safer. There is now more debate about centralbank policy and would and what Christine Lagarde described as the cyclical nature of policies. Rishaad manus the ever pressing fortion, are they planning brexit orsupporting a how it will impact business. Has he given us an answer . Aad manus, wiggling he said they had no contingency plans that they were prepared to reveal but there are contingency plans. He is very much in the camp of staying because he sees britains future as more secure. That is one of the reasons he says britain should remain within the european union. Whichned the open letter had been signed by most of the ftse 100 companies. Manus good to see you. The day ahead an hour,just under there is a factory orders data from germany. At the same time, we get the numbers a slew of pmi including from russia, germany, france, and the eurozone as well as the u. K. At 8 30 a. M. , Christine Lagarde presents her agenda for the imf meeting. Will be in speech it frankfurt. In the german finance minister is a speech on the future of the eu. Anna stay tuned. Will be speaking to Christine Lagarde in her first meeting of the day. If you are just getting seated at your desk, let us get you up to speed. Allergan shares plunge in late trading after the u. S. Treasury Department Announces rules that would limit the ability of American Companies to avoid avoid paying taxes by issuing debt to their foreign parent. Allergan is run run new jersey but has a legal domicile in dublin. It agreed to merge with pfizer in a 150 billion deal that would give rise are in for an address and a lower tax rate. In extended fell trading after the company missed its sales estimate. It shipped fewer than 15,000 vehicles last quarter. Tesla says that was mainly because of parts shortages and hubris in adding too much technology. The Company Reaffirms plans to deliver 80,00090,000 vehicles this year. Disneys chief operating officer stags is stepping down modeling plans at the company. He was widely seen as the air to the current ceo bob i bob bob eichner. Shares fell after the news. Anna the canadian government planned promised to spend 1. 2 billion to develop green energy but the Natural Resources canada wouldests continue Oil Exploration in the mediumterm. The job is to convene the premiers summit talk about our National Objectives and determine the best mechanism to get there jointly. Manus jeremy stretch is still with us. What a time to have a canadian representative in the bloomberg studio. When we talk about canada and australia and the relief rally that has been for these commoditybased economies, it is been an interesting run for march. The oil rally is cap doubt by the new of what we see cap ped out why the new ones is. Nuances. Canada is not just an oil related economy. Direct relationship in gdp is less than 10 . In terms of the oil rebound, we have moved too far too quickly. We had seen some sure covering and now it looks like we are seeing shorts the rebuilt. Having said that, it april historically does tend to be a month where canada performs very well. Be the case that if we do is dollar canada going higher, it has to beat history to do so. Have been paring shorts aggressively. We could be in a scenario that there is an opportunity to find a slightly cheaper Canadian Dollar. About those loosing of the pursestrings . December, then bank of canada was talking about opening the door to potential break and canada. In the context of canada would have been a further drag. Because of the fiscal expansion, it hask of Canada Limited the downsize of the Canadian Dollar as well. The bank of canada would like to see the Canadian Dollar proving to be a little cheaper. We will see that over the course of the next three months. Dollar canada reversing from the past appreciation. Manus the centralbank implemented negative rates. Further easing is possible. Negative Interest Rates are indispensable. If you talk about sweden and is slightly it different motivation in terms of the negative rate position versus the others that are battling with negative rates. How low can they go . Right tooure distinguish between sweden, switzerland and the others. Easy to lump everyone in because they have rates below zero. There are different reasons. They have taken some extreme action. Weve seen that in the reflection of market movements. They are reminding the market that they are there in the currency does not appreciate to significantly. We continue to see action in the fx markets. The smb would say we still can do more. Manus they will have to trump this verbal intervention. I am tired of listening to jordan. 75. How low does he have to push it to defend his position . Manus josh jeremy talk is cheap. We are on a path of diminishing returns. Reaction you have to be more aggressive. If the as and be really wanted materially change the game i dont think that justification is in place at this time. He is hoping that is not going to be an appropriate door or strategy. Anna Australian Dollar. No change this morning. Markets were wondering whether the central bank would say anything about the strength of the currency, that beta bit of a head when and they did Say Something about that but looking at where the Australian Dollar spiked in the results of that, what did you make of those comments . Jeremy we are seeing a significant appreciation since those february lows. It was almost inevitable that the bank could not ignore that. They have given the market what it wanted. To see aould like cheaper aussie. They would like to see the fed doing some of the heavy lifting for them. Anna thank you very much. We will stick with the rate story when we come back. Manus we will talk about india. The expectations are for a cat. We will bring you those details right here on countdown. Anna welcome back. Getting details of the indias Central Banks rate decision. Cutting their benchmark rate. Manus this is the critical line. This is a theme we have listened to from our team in india. Talking about the cut potentially but also the facilitation of being more accommodative. That is the critical point on the rupee. Little Immediate Reaction there in terms of the rupee. Anna we previously heard from the Indian Government committing to Fiscal Consolidation. Liquidity is a crucial factor here as well. We are looking out for any comments there. Something of an issue of late. We will get some analysis on that in a short while. That is get the bloomberg first word news. Banks says reserve the aussie dollar appreciation could complicate economic adjustment. That came as it held on interestrate for an 11th month. Yossi was the strongest performer among a group of 10 currencies soaring more than 7 . Credit suisse ceo has told Bloomberg Television that the Global Financial system feels they for thanks to banks raising capital and deleveraging. He says it is a great time to invest in the region and he is confident in china in the medium and longterm. Track toisse is on double its profitability. China may approve a plan to make it easier for banks to convert that into equity. Debt into equity. Yuan. Illion people in iceland have taken to the streets to express their anger against the government after document leaked in the penama papers scandal suggests the Prime Minister allegedly benefited. Police are erected barricades around the parliament to protect protesters. Om hours earlier, Opposition Mps put forward a motion of noconfidence and called on the Prime Minister to resign. Saudi arabia plans to double the size of its top market which is among the most closed in the world by adding dozens of companies and making it easier for foreigners to invest. Hoping to attract privately. Wned firms hoping to boost the market. According to the Capital Market authority, the companys regular authority. German lender says that not only will the Brexit Debate way on the pound it will also wipe out the currencys biggest quarterly advance in five years. Global news, 24 hours a day, powered i our journalists in over 250 news bureaus around the world. Us let us take the world let us take a look on the chart of the hour. The biggest markdown in profitability in the united states. This is what the bart chart is telling us. Guy this is the downgrade we have seen in the First Quarter. The biggest drop since the Fourth Quarter of 2010. Get longe looking to stocks, this could be a good reason. The bar has been lowered quite literally. As a result of which it will be easier for stocks and their numbers that they posed to get over it. That they post to get over it. Anna you can turn it into a good story. to the rational person the market is filled with a lot yourrational people because see analysts lowering the bar. Investors are becoming more cynical. They are worried about what is happening and they are worried is the p youre seeing go up and the e not go up. Manus what about headwinds in terms of Global Concerns . When we began to see some of those trades change around. It is the encapsulation of all of the headwinds in china, the more stimulus whether more is to come. Will the fed remain very dovish. We are talking about the s p 500. Let us return to the indian story. Manus the reserve tank of india. They have cut their benchmark rates by 25 basis points. That puts them at 6. 5 amid mixed signs of economic strength. In line with analysts expectations. Anna analysts have been expecting this. Let us get with our bloomberg executive producer joining us from home by mumbai. Governor has walked by the book. This is what the market was anticipating. The governor has said he hopes to continue the accommodative stance for now. The Consumer Price inflation number has been steadily declining. The latest from february was at five point 8 . Five point a present. The government when it presented stuck to the Fiscal Consolidation plan and reduced budget deficits. The debate was that it is only a matter of time that the bank of america bank of india will lower lending costs. Anna thank you very much. Allergan shares have gone to 20 . Limiting the tax cutting power of corporate inversion strict the new rules may put in pfizer. The merger of is this merger really at risk . Under existing rules, when the u. S. Company mergers with a foreign firm u. S. Shareholders have to own less than 80 of the new for a prey to be considered a Foreign Company and benefit from those tax benefits. To changery plans that threshold to 60 . Case you are shareholders and up with 60 or more, the merger could be subject to antiinversion penalties limiting any tax benefits of the deal. Merger doesllergan not meet that standard. Pfizer shareholders would end up with 56 which puts the deal beyond the reach of the treasury will but the Treasury Department also said on monday that the rules would limit companys abilities to redesignate in inverses if they have already done that within the last 36 months. Allergan has been involved in several mergers in that timeframe so if the rule meet at some of allergans merger driven growth since 2012 was not allowable, that key ownership ratio would swing more towards pfizer in the treasurys analysis and the planned transaction would be rendered less beneficial for tax purposes. If it it is unclear if the treasury has the authority to enforce that change. And was have been pouring over the rules. Some say there is little chance that it will affect the pfizer acquisition of allergan because the tax consequences were not the main thrust of the deal. The companies have said they will not speculate on any potential impact until they have conducted a review. The companys appear to have anticipated what we are talking about because the terms outlined in the regulatory filing layout a 400 million break up the in the event of an adverse tax law change. Anna thank you very much. Theus bring into conversation our next guest, nigel wilson. Nigel, great to see you this morning. Topics get to all of the that we know we want to talk about with you regarding the investments and environment of infrastructure spending. We want to talk to the about taxation as a motivation for how you run your business. Were talking allergan and pfizer, just two of many businesses trying to put themselves together because of the areas tax rolls. Does it strike you as a positive reason to put businesses together . One, everyone seems to be under earnings pressure at the moment. At alternativeg ways of boosting their earningspershare and tax features far too highly in that. There is not enough investment to drive growth and earnings. We are seeing a lot of tax deals. We would prefer the u. S. To make a big decision and allow all of these companies who have all their money offshore to bring it back into the u. S. To greater investment in the country. A tax amnesty. Otherularly apple but Drug Companies as well who are holding too much money offshore for tax reasons creating tremendous inefficiencies in the global economy. Attempthis is the third by the Obama Administration to smack tax inversions. Where in an Election Year Hillary Clinton and donald trump are the front runners. They are both very aggressive in this sphere. You see a significant opportunity . Will they lobby more to bring money on shore or closing down the inversions . What does it do to our marketplace . Nigel the first would be positive for the markets and for the general World Economy to allow u. S. Accompanies u. S. Companies to bring their money back on short. And get it invested in the economy. Justifiable is a reason for putting together a transaction but it is not one that we would rake in particularly highly. We want people to invest for the longterm rather than take shortterm arbitrage. Anna what does that mean when you say rent highly rank highly . We dont like that kind of thing or do you along with it because as you say there is earnings pressure . Nigel we have to support the right things for con companies to do. We would prefer them to think longerterm though. Manus we have the penama papers and the leaks, banks rushing to defend their position. What i want to know from you is the usage of offshore for extent is ito what used and what are the benefits . Explain the benefits to your business of the use of that. Part of ouris not Business Model. We build public trust. Manus why do you not use offshore . Nigel it is not part of our Business Model. Taking advantage of shortterm tax arbitrage is not part of what we do. We have talked about investing for the longterm. Creating real Economic Growth. Others are experts at this. Anna you can facedown shareholder pressure. Not part of our Business Model so we dont ask. It is not what we want to do. We want to be seen as a company that invests in the long term to create real growth. That we will talk about coming up next. Fashion. E future of find out what happens when i caught up with Tommy Hilfiger for an exclusive conversation. Francine la plata stay with us for that. Anna welcome back. Expecting futures to open down when the u. S. Gets up and running. Manus let us talk of fashion now. I sat down with Tommy Hilfiger in an exclusive interview. We spoke about many things including social media and the challenges they sink and icons. Facingthe challenges fashion icon. Many are female now. Beyonce, katy perry. Miley cyrus. And many of the female pop stars. They are iconic fashion brands under themselves. Manus we have moved from male dominance of the space to females. If you had to choose now between kim kardashian, adele, and the duchess of york to put your female clothing on, who do you think could really drive a brand . Think the duchess could drive a brand like kim can i would prefer to dress the duchess of york because i think she has a certain class and grace and sophistication. 69 million instagram followers. She can drive a fashion idea. Look, it is a difficult one because then you look at others like rihanna, beyonce. Look at models, actresses, from hollywood. Look it musicians. Look at musicians. She who has the most instagram have the ability to drive a brand. Manus take me to the future paradigm. Retail in the future. Touch and feel versus purchase online. Tommy you need them all. Up to date be very with technology. You have to have great ecommerce. Have to have a mobile app. You have to have brick and mortar. You have to be digitally advanced. You need it all. Many people like to touch and feel. Many people like to buy from their phones. In china, only over 60 of young people are buying by mobile now. In the future, that may be the case in the rest of the world that the majority of the world will be shopping by mobile app. We have to be ahead of the times where we have to be right on point. Manus a smart man. They are when of the backers of the exhibitionism for the stones. Fascinating. Fascinating icon. Let us move on to something entirely different. The next three months will be of about the looming vote britains membership in this european union. Manus the german lenders says not only will it weigh on the pound that it will also wipe out the euros biggest advance quarterly advance. Nigel, your thoughts. We have seen some comments suggesting that it will not make an and normas impact on your business. Feelings on brexit. Will we do not think it have a big impact on our business in the u. K. Or the u. S. The issues around brexit are poorly debated. It is a fear driven debate. No one has presented a vision of the future. What will the u. K. Economy look like as an in or and out . That is what the British Public wants to cure about. Airbus is a big employer. These are the risks. We will lay them out for you. Should you, would you come is that the role to talk to your employees . Would you consider doing Something Like that . That is why we put out the statement. We will do well regardless. We have communicated that to our employees. Anna you have talked about wanting to take a leadership role in the u. K. Economy. The does that mean speaking out . Is this something you dont want to talk about or want to stay on the sidelines of . Nigel there are a lot of issues that are not clear. When we movedean to a world where we are not part of the eu in a few years time . Having isle we are the main message about how do you grow the u. K. Economy and that is being drowned out by the Brexit Debate. What we are saying is that we have to invest in the new to drive Economic Growth in the u. K. Regardless of whether we stay in or out of europe. Anna the eu directive. Some changing the way businesses in your sector are doing business. What you rather not have to comply with that . We would rather that it was a u. K. Set of rules. You talk about the longterm direction. Direct investments. 7 billion pounds today. The target is to make more. One of the biggest risks in the Brexit Debate is Foreign Direct Investment would be put at risk. Are some of the projects youre Foreign Direct Investment a big risk as you look at the future for us . Nigel we have a contrarian view around that. That in ourg partnership. 30004000g to build houses for rent in the u. K. We have been out to japan and china to talk to longterm investors. People want to invest over the long term in the u. K. Will always be a great place to invest. Of the u. K. Outside of london have a Huge Investment opportunity. Fors even if we vote brexit . Nigel yes. Anna is there any shortterm volatility in the markets you have to put that to one side. There will be shortterm volatility but we have to put that aside. The pound has come under some weakness against the dollar. In part, that is driven by our poor performance injury. The issue that we are not talking about. The trade deficit on goods is approaching 10 at the moment. Weve done a terrible job of exporting. Anna wouldnt that make it worse . We are doing a poor job now. We need to fix that. Opportunities to increase the exports from britain by putting in a better export infrastructure around the world. We are not doing the day job while everyone focuses on the big issues. A man gettinglike ready for public office. Stay with us. Anna up next, an exclusive interview from the ceo of Credit Suisse on the penama papers and investing in asia. He says it has been a useful experience. We also speak with Christine Lagarde. The Panama Papers hit european banks. His lender does not engage in tax avoidance. Tough on tax. The tax treasury and cutting of corporate inversion. The pfizer deal is in jeopardy. Rates are cut to a fiveyear low. Centralbank warns that stronger currency could complicate economic adjustments. Welcome to countdown. I am manus cranny. Anna it is 7 00 in the morning in london. Factory orders to start the hour. Germany factory workers unexpectedly decline on an export slowdown. A 0. 3 nth on month over increase. Very much below expectations for that number. That was led by sluggish growth in global trade. Many people have been looking to , ofany and see evidence where china in particular was going to show up in their numbers. Manus this is a great personification of the end of the worst quarter. A great deal of volatility. Factory orders following is not going to be good news. I will just blow it up for you here. We have london, paris, and frankfurt. 121 points on those numbers as well. Asian stocks fell. All coming in lower. Rba is unchanged. Potentially watching fx markets. Jordan says more negative rates. They are indispensable. We were wondering yesterday if the link between oil and markets had weakened a little bit. It does seem to be very much intact. Asian stocks hit a fiveweek low. Very much still in play. Up the riske bring rate, we can see what is happening there. Manus we can have a look at some of the commodities. The oil market continuing on from that huge story. 18month high. At the bank of japan . Eye on it. They will monitor additional need for monetary stimulus. Their mojoks got back to keep low rates. Talk about with the imf director a little bit later. Francine lacqua will be speaking with Christine Lagarde at 9 30 u. K. Time. Credit suisse ceo tidjane bloomberg d speaking at the Asian Investment conference in hong kong, he said that it is a great time to invest in the region. He is confident in china in the medium and long term. China may approve as soon as this month a plan to make it easier for banks to convert debt into activity. Into equity. As oney allow as much trillion yuan under the plan. Thousands of lenders have taken to the streets to express anger against their government. Leaked anddocuments the panama paper scandals suggested that the Prime Minister benefited from investment accounts and tax havens. Barricades around the building in reykjavik to protect lawmakers from protesters. Plans to almost double the size of its stock market, which is among the most closed in the world, by adding dozens of companies and making it easier for foreigners to invest. Privatization of state owned assets will boost the market. That is according to the Capital Market authority, the countrys regulator. The next three months will be all about the looming vote on britains membership of the eu. Not only will the Brexit Debate pound, it will wipe out the biggest quarterly advance in 10 years. We are powered by over 140 journalists around the world. Manus thank you very much. Lets get to what is going on in the Asian Session as london get set up for a negative day. The chinese are back and trading at their desks. How is it looking for you . Good morning. We are seeing the markets in hong kong and shanghai back on track. It is a different picture between what we are seeing in hang seng and here in shanghai. This all closes within the next hour. That will be its fifth close in three months. Stocks leave the way in china. A lot of analysts coming through pretty bullish on the asian market. Of course, that falling oil price. Stocks follow that oil price lowered and we are seeing a lot of Energy Producers like we are seeing in hong kong and indochina. Downsx 200 is closing 1. 7 . Nikkei two 25 is the worst performing. It is down by 2. 4 . Exporters affected by that very strong yen we are seeing. The yen holding at that 110 spot. They could get to 110. It is getting close to that level. That is a high against the greenback. We know the story of the u. S. Dollar strength, i should say weakness. The strong yen really playing into that weakness we are seeing in japan today. Julia, thank you very much. One of the top headlines i wanted to bring you, bbva could closes many as 200 branches. Of course this is the quantum challenge for everybody in the industry in terms of banking. s new chief of central banking caught up. The 2020king at event taking place in copenhagen. It is all about timing. He has been talking about the shift. We will see what further details come out on that. Speaking of the banking scene manus lets talk about Credit Suisse. The ceo is confident that his bank will get over tax issues. He believes the Credit Suisse was among hundreds of banks that help set up show companies. Was speaking thiam exclusively to rishaad salamat. Had to say about these allegations around the panama issue. This is the man that has been at the helm of credit squeeze since july of 2015. One of the things that he called for was a cultural change at suisse,uites credit describing some of their past practices as unacceptable. Illiquidity on credit losses. We get relegations of 1100 pages of leaked documents. Stress thatkeen to he really just wanted to brush aside any idea or conjecture that there was wrongdoing here. We only affect the structures or vehicles for legitimate purpose. We do not engage in that. Otherwise, they have to leave the bank. When there is structure beneficial for the thirdparty, we insist on knowing who it is beneficial. It is very considered. Of course, Credit Suisse is among 500 banks that have been mentioned. The socalled papers are referring to. Let me stress why he was here in asia fundamentally. The Wealth Management bank is tied in with its investment arm. Japan right now surprising him with the amount of growth theyre getting. They have doubled the profit for three years. Manus great interview. Great breaking headlines. Rishaad salamat speaking with tidjane thiam. He is with us in studio. Lets talk about the global hunt for yield. When we speak to you, you do not like that we speak so long about where the feds Interest Rates are going to go. There is a lot of that conversation that we do have. Go does that impact when you looking for yields on the investment you are making . Selfgenerate assets. We just think that this huge structural opportunity, particularly in the u. K. And across the world, our cities are very much to under demolished than overbuilt. There are many things that can be done in terms of the infrastructure space and investing space. They are hardly top rated places. We see many opportunities. We are building the biggest factory in europe in selby to manufacture houses in the u. K. There is a demand problem. There is not a supply money problem. Everywhere we look, we are seeing opportunities rather than the negative things going on in the world. There are a lot of positive things. Manus you have to invest in the new. Hopefully, that produces a banner return like Japanese Corporate hans. . O where is your benchmark the new paradigm that delivers a new perspective on yield . We arewe nigel getting doubledigit returns on the investments that we make. We are getting almost an 18 return. There are opportunities out there. People are very, very, very nervous about investing in the eu. They are all getting a zero return. To me thatering these Interest Rates are happening across the world. Toa you say that we need move away from Financial Assets and more into real assets. Niche is that and a proportion of what you are investing in, for example . Will it always be that way . Nigel i would like it to become an even bigger part of the portfolio. It is not a huge amount right now. 15 billion pounds is almost a percent of gdp. We are not the only firm that can do this. Is a great place to invest. Here is our plan. All of the Exciting New Technology is being developed across the world. Whether that is in our Big Companies or major universities. There was this moment of great panic in the First Quarter globally. That past . Are you more confident . We are not more confident. Is that we arese heading into a world of zeros. Zero Economic Growth, zero Interest Rates, zero inflation, unless we change direction. People are not debating on how we change direction. More negative Interest Rates will not help us create Economic Growth. It is staving off problems in the asset markets. Manus with that give you more confidence around the world . Nigel absolutely. We want positive tax deals. Encourage people to invest in new things, rather than negative tax deals. People entering into inversion tax deals. Anna thank you very much. Stay with us a little bit longer on the program. Manus stay with us. The r. B. I. Governor in mumbai earlier. Anna said they would look for more room to ease. Live on the terminal web on bloomberg news. Tuned tou want to stay bloomberg this morning. On the terminal, on tv, Francine Lacqua speaks with Christine Lagarde on her first interview of the day. Anna welcome back. These are live shots of london this morning. Allergen shares plunged in late trading after the u. S. Treasury department announce rule that would limit the availability of companies by issuing debt to their foreign parents. Allergen is run from new jersey, but is legally in dublin. Agreed to merge with pfizer in a 160 billion deal that would give pfizer a foreign address and a lower tax rate. He aint knowledged that he would lose if you quit the fun before the Third Quarter of 2015. There were allegations that he was forced out. Cofounder is suing for his cut. He said that any settlement or reward that he receives will be donated to charity. Stocks fell an extended trading after it missed estimates. It shipped fewer than 15,000 vehicles last quarter. 16,000 was the estimate. Tesla said that it was because of parts shortage. The company reaffirmed plans to deliver 80,00090,000 the a cold this year. That is your Bloomberg Business flash. Manus thank you very much. Everything going on there. We take you inside the world markets. We have declining equity markets. The dax is down by 118. We had those orders which collapsed. Our we being overly aggressive with that . The euro is trading lower. The dax at 116 points. Oil is dying. The reserve bank of australia with a rate change. More negative rates on the way. Not spelle numbers do out how negative they were from germany. 0. 3 increase. Manus that is the reality of the world. Anna this is all about the external environment and global trade. The ceo that has been with us for a good part of an hour. We spoke about regulation and how that impacts on things. Just to get more of a flavor from you of how regulation is impacting, are you moving away from certain things because of regulation at the moment . Nigel yes. It was a very onerous regulation regime as a firm. Thelack of confidence and ability of firms to deliver financial services. A lot of the banking weight in terms of the of capital, was capital used judiciously . Prudential has said that they started to withdraw from the annuity business. In . E does annuities fit are the margins too tight . We are in the Global Pensions transfer business. We will continue to participate in that. The Investment Business is part of our pension. , we will continue to develop that business. As differentese opportunities. We have to refine our Business Model as a consequence of regulation. We announced a 300 Million Pound deal a few weeks ago. Anna doing more and and a . A . M investing in the u. K. Is central to our business. Are you interesting in casting your eye around . Nigel a huge amount of assets are coming for sale around the world. People are becoming more rational about what assets they should have in their portfolio. Pressures. External what are you going to do to improve the performance of the business . Parts to this. You have been on a mission to declutter. To come . More sales think it is a regular activity that more Companies Need to engage in. Theyre not performing, you had better turn them around. You should sell them off. We have done that with a number of business and we will continue to do so. Of underperforming businesses is part of that strategy. Anna we will talk about your investment in infrastructure in the u. K. Internet and the like. The u. S. You talked about. Do you like europe . Nigel we are very excited about the asia prospects. I spent time in china and japan recently. The thing that really surprised us, legal and general, a very british brand, is very accepted across the world. U. K. , china, america, the eyes lit up when you talked about china. Who are you going to do it with and when are you going to announce it . Nigel japan is actually the next place where we do our transaction. Red. Apanese have negative a joint venture. We prefer partnerships to spending a lot of shareholder money. Nigel really great to see you this morning. The legal and general ceo. Team takestdown it. We were able to speak to john kerry. Show me movies with explosions. Show me more like this. Show me previously watched. Whats recommended for me. X1 makes it easy to find what blows you away. Call or go onliand switch to x1. Only with xfinity. Great time for a shiny floor wax, no . Not if you just put the finishing touches on your latest masterpiece. Timings important. Comcast business knows that. Thats why you can schedule an installation at a time that works for you. Even late at night, or on the weekend, if thats what you need. Because you have enough to worry about. I did not see that coming. Dont deal with disruptions. Get Better Internet installed on your schedule. Comcast business. Built for business. Welcome to on the move 7 30 in london, a 30 in europe. He is over in germany. The Panama Papers have the european banks in the spotlight. He says that he is confident in his lenders compliance. We will find out in under 30 minutes time. The deal with