Transcripts For BLOOMBERG Countdown 20160425

7 00 if youre watching in amsterdam. Get to the phillips breaking numbers. , 374 quarter adjusted million euros. They are saying that the lighting separation process is well on track and that is a key topic of conversation. They are trying to exit the lighting business. Whether that is an ipo or a sale. How well is the medical equipment part of the business doing as they are trying to suffer out the lighting separate out the lighting part . They are looking to streamline their costs, adding on Servicing Agreements and incorporating more technology into their health care products. They have hired banks to prepare for this possible ipo of the liking business. We will speak to the chairman and ceo at ex 40 this morning on countdown. Just for a little bit of comparison, that revenue number looks to be ahead of estimates. That is the Early Morning earnings season that started monday. Over in asia, a conversation a combination of oil prices and a strengthening yen. Lets put that in a little bit more broader context. You can see that, generally speaking, we have been in this rallying position since the beginning of february. This highlights some of the supporting moves we are seeing globally, whether that is the bank of japan, the ecb, or the fed. All of that generally has been fairly supportive. We have the fed and the bank of japan meeting this week. With that in mind, lets check out our risk radar. The yen strengthening in the asian trading session. That has taken the edge on some of the equity moves. It weaken a lot last week, partly on the back of a story we had here. Oil prices are a little bit weaker, down by 1. 3 . Sincencreasing production january, according to the iran oil minister. We have the pound in there as well in the wake of president bamas visit to the u. K. He continues to warn with regards to brexit. The comparison with the estimates, 374 million is well ahead of the estimates. Firstget the bloomberg word. Rishaad good morning. Ofk of japan, about 90 nikkei 225 companies. Black rock, the biggest money. Anager, and Vanguard Group critics say the bojs growing influence are undermining efforts to improve Corporate Governance. Nonoil economic expansion in the middle east is set to 4 lode to between 3. 5 and by 2021. All of this according to a survey by the International Monetary fund. Private businesses will be able to create about 7 million jobs, about 3 million shy of the number x acted to be needed. The vision for the kingdom of saudi arabia, seeking to reduce the reliance on revenues that include exports. President obamas prediction that may take as long as a decade for the u. S. To agree to a new trade deal with the u. K. If the u. K. Were to leave the eu is unrealistic according to nielsen. Recall that it took seven years for the eu to get a trade agreement with canada. Sterling rising to onemonth highs after president obama try to deter british voters from leaving the union. Billionaire charles koch says that Hillary Clinton may take a betterpresident by president than many of the republicans. Said she was not interested in an endorsement from people who deny Climate Science and try to make it harder for people to vote. , 24 hours a day in more than 150 news bureaus around the world. Thank you very much. Themestay with the asian and get back to hong kong with david inglis. That combination of moves in the japanese currency and a weakening oil price not good for stocks this morning, it seems. David spot on. That is going to do it across the equity section. Let me flesh that out dollaryen. There was quite a move up on friday given the news of what might come. In any case, we are seeing dollaryen, up slightly. To 111 at theser moment. By carla keep in mind , the strengthening of the yen is enough to push the japanese currency stronger against every single one of its major counterparts so far this morning. Have a look at where brent is at the moment. Oming up 1. 4 the Oil Prices Last week touched a fivemonth high. Correlation between stocks and oil prices. In of the major catalysts the rally, apart from Central Banks coming in. That is doing enough to take equities off their highs. Concerned,sia is asian stocks are up 18 compared to the bottom back in february. Lacke moment, there is a of catalysts. Really pushing investors to hit the cell button. Wednesday and thursday was the first time that asian equities traded higher for the year. Chances are, probably not. Anna thank you very much. Lets talk about what is going on in the middle east. Nonoil economic expansion in the middle east is set to slow to between 3. 5 and 4 . Planhile, saudi officials to reduce the kingdoms of reliance on the kingdom by cbs reliance on exports from crude. Growth affectr miasteddle e economies . The imf here talks mainly about oil exporters. The biggest consequences that about 10 million job and trades are expected to enter the market between now and 2021. At this pace, governments and private sector businesses are expected to generate about 7 million jobs. That is 3 million shy of the number needed. This comes on top of what is already one of the worlds highest youth unemployment rates. That adds a lot of challenges on the government. Main messages that message is that, while they are doing the right thing in transitioning to oil transitioning from oil, cutting spending, this is not going to be a painless transition. Anna not painless, and the point, not enough jobs will be created in this area that has such high youth unemployment in general. Lets talk about what saudi arabia is doing. How are they expected to cope with this diversification away from oil . Arabia essentially has one of the most ambitious plans in the region. Today, they are expected to launch the vision for the kingdom of saudi arabia. It is a master blueprint for the post oil era. What theont know details of todays announcement are, we know it would encompass plans of the future of saudi aramco, the biggest wealth fund, and plans for nonoil revenue. In two interviews over the last three weeks, it was said that the plan seeks to add about 200 billion in oil revenue by 2020. That includes a program that he says is similar to other initiatives. Today would be the first announcement of these plans. We dont know yet the details of todays announcement, but we expect to include aspects of this. Thank you very much for joining us. Lets bring in our first guest ceo ofmorning, International Fixed income at jpmorgan. Thank you for coming in. We are talking about economies in the middle east doing what, 10 years ago, might have been unthinkable. Where do you see oil prices more shortterm going . Oil stays between 40 and 50 a barrel now. I think it is clear that when you look at both the supply side demandside that they are more in sync. Is what hasctor happened to iran this year. Something like 1 million per day. That puts it much more in balance. Anna where does that leave the broader economic picture . Many of the benefits people talked about didnt seem to have materialized the way many people thought they would. Lets be honest. Everybody thought consumers would benefit from the oil windfall. In reality, they have saved it. They have saved that windfall because levels of debt are still pretty high, but critically, consumers are not getting wage increases. When you look at levels of wage inflation, it is very flat. We have the fed meeting this week, the bank of japan meeting this week. What are your expectations from japan . We have some Great Stories on the bloomberg this morning about the role of the Japanese Central bank, stock markets in japan, the presence that they have, some of the big corporate names. What are some of your expectations about where the japanese go next . Nicholas i think what happened in january set the context. I think the bank of japan disappointed the market in january. Expect Interest Rate cuts, expect more in the way of qe. Really, the key is the currency. When you look at the japanese currency, it needs to be a fair bit weaker to help abenomics. Here thatve a chart we have been using the past few days illustrating some of the actions the japanese have already taken. This is the Effective Exchange rate. The strengthening of the yen in the past month or so. All of that despite what the japanese have been doing with negative rates. Is that because this is not about the currency . Is this because their policies have failed to weaken the currency . Nicholas i think you get diminished returns for the central bank policies, and that means they have to do more. Think about the ecb. It really surprised markets at how aggressive they were in different policies. That is the queue for the bank of japan this month. We just showed a chart that showed that the boj son boj own some 55 of the japanese etf markets. Do you think they go into buying individual stocks and be more easily identifiable in the market . Nicholas often, they do both. Ever doubt the ecb are buying individual corporate bonds. Why cant the bank of japan do just that . It shocks the market, it shows the banks are still ahead of the curve. Anna thanks very much. We have a really busy weekend for you. A lot of meetings from Central Banks coming up. Angela merkel has a meeting of socalled g5 leaders today. Inorrow, state primaries delaware and maryland. On wednesday, the fed meets to set Interest Rate policy. Event taking place in result. On thursday, a policy decision from the bank of japan and u. S. Gdp data. On friday, bloomberg will be hosting a debate on the implications of brexit. Well be joined by former politicians and individual business leaders. It begins at 8 30 a. M. London time. Up next, gathering under the clouds. Show struggling with the admissions cheating and fuel efficiency scandal. Anna welcome back, you are watching countdown. Lets get the Bloomberg Business flash. Rishaad yahoo s advisers have said they has spent the weekend narrowing down a field about 10. Bidders include the rising and a Consortium Led by bain capital. Sony shares have slumped after announcing it will delay the release of its annual forecast. This was something that was due on thursday. The company says the suspension of a facility due to the recent earthquake they have an impact on its operating profit. Its that it will release they vote in may release the information in may instead. The carmaker is mulling a delay in earning reports due on wednesday, according to a person familiar with all this. The company says it needs more time to measure the effect and extent of fines, compensation, and other things relating to the falsified data. Thanks very much. Lets continue the auto theme. Carmakers gathering for the beijing motor show under the dark cloud of the omission cheating and fuel efficiency scandal that have engulfed volkswagen and mitsubishi. They warned of the tougher Regulatory Environments that the industry now faces. Our china correspondent is there at the events. Live human talking to who have you been talking to . I have been talking to a range of ceos. Were up 50 last year. Electric vehicles moving in. The tesla affect is what they have been calling it. The emissions scandal has been causing a shadow. Have also spoken to the ceo afford. I said, are you completely confident that your company is above the board on all of this, and what you expect in the Regulatory Environment Going Forward . , when you look at emissions we meet all applicable emissions requirements. We do not employ socalled defeat devices. Our approach is to make sure we meet the letter of the law. Here in china, the legislation or the rulemaking that is being proposed right now is probably the most strict over the next five years in terms of reduction, in the world. Whatever that is, we will work to meet that. That was the ceo afford, mark fields. I also spoke to be bulldozed ceo. Ceo. E volvo we heard from the ceo of daimler saying that there needs to be more transparency from the industry on this issue. Anna what about demand for cars . Away from the emissions scandal, what about the underlying demand for cars in china . There is a lot of hype around suvs, i think, this year. It shouldnt detract from the fact that this is still the Worlds Largest car market, with 7 growth in 2015. It is slowing. We have seen in the First Quarter that sales are up about 14 . I asked before and ceo about this. They benefited from a tax cut. That tax cut could and that the end of this year. He expects sales to be pretty good. Was it into for the ceo mark fields. We have not been surprised that the market has held up. Part of that has been a consumption tax reduction put into place in the Third Quarter last year. That is helped support the effects from our new products that we introduced at the end of last year. When you look at the total industry last year, the industry came in at about 23. 5 million units. Our projection this year is between 23. 5 and 25. 5. By our estimates, the First Quarter was up about 8 to 9 . Ford had introduced their raptor, that they are using to gain more of the demand in china for big vehicles. You have the electric vehicles, then the demand for suvs and big trucks. A bit of a dichotomy there. Much more to come from the auto show here in beijing. Ceoill be speaking to the in just over an hour or so. Anna thank you. Tom mackenzie from the auto show. Lets talk about the global bond market. 0 , now 7. 8s than trillion u. S. Dollars, despite the fact that the bond market grows. What are the risks . Theolas we will set from we will see from the fed this week that they will likely keep rates on hold. Negative deposit rates around the rest of the world. As the percentage of negative yield bonds grows and grows, the question is, where is the value . Anna what is that ballooning in the negative rates environment telling you . Nicholas it is telling you really that the animus of a global bond investor arent there. Growth and inflation. You look at levels of growth around the world and inflation, they are really at pinnacle at pitiful levels. Anna i have a chart with Inflation Expectations into the medium term for the u. S. Do you see any move higher that is meaningful in Inflation Expectation . When you look from february, a very impressive increase. s 1. 6 . Were talking about the u. S. Economy. That is the fiveyear inflation rate. 1. 6 . That is really very low. It should be close to double that. Anna thank you very much. Up next on the program. President obama praises angola merkel for her refugee policy. Plenty of talk about trade and the prospects for a deal between the eu and the United States on trade. Well be back. [ soft music ] e. T. Phone home. When you find something you love, you can never get enough of it. Change the way you experience tv with xfinity x1. Shoshow me more like this. E. Show me previously watched. Whats recommended for me. X1 makes it easy to find what you love. Call or go online and switch to x1. Only with xfinity. Anna welcome back. This is countdown. 6 30 in london. Lifted to bluebirds first word news. Lets get to bloombergs first word news. Asian equity session having a tough time. Down the. 3 on the asiapacific. An update on the latest news. Right to the bank of japan becoming a top 10 shareholder in the nikkei 225 companies. Of japanese blue chips. Saying morech is than 3 trillion. Valuationsdistorting and undermining efforts to improve Corporate Governance. [indiscernible] 7. 5 5 through 2012 with from the previous decade. According to the International Monetary fund forecast. Government and private businesses would create 7 million jobs. That is still 3 million shy of the number expected to be needed. Officials will unveil the crown princes vision for saudi arabia. Come as aill developmental and other programs. Billionaire charles koch saying Hillary Clinton may make a better president than any of the republicans vying for the job. Following cooks comments, clinton tweeted not interested. Global news, 24 hours a day, powered by 2400 journalists in more than 150 news bureaus around the world. More of our top stories if you are terminal user on the bloomberg, at top. Lets check in on the market action. Asian stocks are lower ahead of policy decision from the fed and bank of japan later this week. Nejra cehic joins us. Nejra asian stocks set for the first backtoback declines in a month. We have seen losses of more than 4. 5 . I have tracked the msci asian index. He stoxx 600 in europe this is normalized to see what has happened year to date. After a turtle and start, the msci, that is the white lined, up north up 6 . A 2. 3 gain for the s p 500 including the stoxx 600 in europes and europe is really lagging. 4. 7 down on the year. Leading to the question is the equity rally stalling . We are seeing riskoff in the market today. I will show you what is happening in commodity markets. Up i crude wti crude we are seeing copper down. 7 . Though they have had a pretty good run. China because of the revival in the property market. More on the theme here of riskoff. We are seeing the yen rebounding from a threeweek low versus the dollar. The boj might be willing to lend commercial banks with negative Interest Rates. The feeling today is that recent decline a little bit excessive. The boj needs to do more of. A slim majority of analysts do expect more stimulus from the boj this week. Nothing from the fed though. The yen the bestperforming major currency against the dollar. I want to show you what is happening in the japanese bond market. The japanese 10 year yield is up today hitting its high level in more than two weeks here you can see the overall trend is not going that way. More than two weeks. You can see the overall trend is not going that way. Bonds haveds been driven below zero. The risk is if we do see rates rise at all, we could see big losses across of those markets. Anna. Anna nejra cehic with the latest moves in the market. Mario draghi signaled that the ecb will wait and see houston willis measures pan out and see how stimulus measures pan out. Guy johnson joins us with his chart of the hour. Good morning, guy. Guy draghi chivalrous to the last. Maybe has done a janet yellen a favor. Seamen not want the raise rates want to raise rates. The market thinks we are good to see some hike. Are going to see some hike. Is unlikely to be this week. The market is on board with that concept. If they do hike rates you are going to see the dollar go through the roof. This chart here the trade weighted euro, the spread has widened. What draghi has given to janet yellen is an opportunity to keep that going. Maybe there is room for the dollar to go up a little bit but still close that gap. Still not completely close it and therefore give her the run that she needs. Anna the fed has been worried about the strength of the dollar and maybe that is less of a worry. Nicholas the watchword is in reality is stability. Maybe the same for the fed. Currencies dont do a lot. We are in a bid for stability there. Chart according to the function of a rate hike from the fed. That sound about right . Nicholas maybe that is too high. It is if you take a step back and think about broader issues, there is an absence of growth anywhere. Fiveyear inflation at 1. 6, in fact have a target of 2 . They are still undershooting that. The risk is less and terms of rate hikes. Anna how many do you think we will have in terms of the fed . Maybe we get one in a years time. Anna nick, thank you very much. Guy johnson, back at 7 30 u. K. Time. Barack obama has praised angle merkels stats on bloomberg Angela Merkels stance with the refugees. What is happening in respect to her position on refugees in europe, she is on the right side of history. For her to take on some very tough politics in order to express not just a humanitarian concern but also a practical concern that in this globalized world, it is very difficult for us to build walls. She is getting voice giving voice to the kind of principles that bring people together rather than divide them. Anna the leaders talked about trade. Also about syria. Today they will meet with the leaders of italy, france and the u. K. And hanover. For more lets go out to berlin where tony jessica is standing were tony jessica tony absolutely. I have not seen merkel smile in public that often for quite a while. She was almost basking in obamas praise. She is a bit of a rough patch at home. Europe wide with that refugee policy. In the knowledge that he is about to leave office next year, but nonetheless, gave her a total stamp of approval. That can only be good for her. She has been in power for 10 years. This is a difficult time for her. Anna obama is in germany to promote the plan transatlantic deal. Plan the transatlantic deal. Tony there was a fairly large protests over the a fairly large protest over the weekend. It has been a hard sell for a while. There is a number of obstacles. The big corporations in germany that Everybody Knows about, that are very strong, they are in favor. Some of the small and midsize companies, the ones that make up the back bone of the German Economy which do not have these large resources, they are more wary of it. That is been part of merkels problem. The other problem is right now she does not have a lot of Political Capital to expand. They both again made a push for the tip in theres in their news conference, basically saying time is running out. You. Tony, thank president obamas prediction that it may take as long as a decade for the u. S. To agree a new trade deal with the u. K. If britain votes to leave the eu is realistic. Saysnote to clients eric that seems a reasonable if not optimistic estimate when you recall that it took seven years for the eu to get a trade agreement with canada. The pound has risen to a onemonth high after president obama sort to deter voters from leaving the eu. The president says exit would lead u. K. At the back of the queue for trade deals with the United States. View really interesting from the bank of englands mervyn king last week. He was saying maybe the effects of a brexit would be were being exaggerated by those on both sides of the debate. Is that the danger . Nicholas markets love exaggerating. When you look at the u. K. And take a step back, at the moment it is slowing. That is not to do with political noise. It is where we are and the cycle. You look at levels of unemployment. You look at levels of economic growth. It suggests a slowing in the u. K. That will be the key driver when you look at sterling, bond deals Going Forward. That suggests weaker sterling, lower bond deals and maybe it suggests the bank of england and play. In play. Anna economists predicted everything could be done by the bank of england. Test bank of england if we voted for brexit. Bank of england if we voted for brexit. Nicholas it is how you respond to a slowing economy. The bank could do a lot. Other Central Banks have been limited. It would like it is likely they would work to reduce Interest Rates and do more in the way of qe. The bank has space to do both of those. Qe has been at this level for many years now. Anna lets talk about some of the strategies. A number of ideas in your notes this morning. European financials is one of them. The concern in some quarters about use of codes and whether than might be less keen they were in the immediate aftermath of the financial crisis. Where do you stand on those . Nicholas when you look at what is going on in your, youve got an economy growing. You got banks that are still deleveraging. A bit of capital. Youve got at a macro level, a situation that is much more favorable for the debt holder. Bonds. Er subordinated when you look at yields, youre looking pretty healthy. 5 to 7. 5 yields. Anna you are focusing on retail oriented banks. Is that because of the funding mold . In anys when you look type of corporate bond, selectivity is the watchword. Differentiation will be critical given that growth is weak around the world. With financials, yes, you want them focused on domestic economies. You want them focused with Retail Business models. Anna nick, thank you very much. Nick gartside, cio of International Fixed income at jpmorgan. Bloomberg will be hosting a debate on the indications of brexit. We will be for we will be joined by former politicians. , friday, at 8 30 a. M. April 29. Frans van houten. There this is up next. Anna welcome back. A live shot of new york early. In8 in the morning here london. A little bit sluggish when you get to the start of u. S. Trading today. That is what the futures suggest at this early hour. Right now in the business world. Thank you for that. First business for yahoo they could find out if they are through to the next date. Yahoos advises say they spent the weekend narrowing down 10 initial office for its core unit ranging from 4 billion to 8 billion. Is ission on when it thought to be a month away. They were due out this thursday. The company saying the suspension of its kumamoto facility may have an adverse impact on its operating results. They release the forecast and may instead. Overhi shares dipped the few the fuel efficiency scandal there. The Earnings Report is due out on wednesday. The Company Needs more time to measure the effects and other your related that is Bloomberg Business flash. Anna in the last few minutes, philip said an initial offering will come more likely as First Quarter estimates rose. Joining us now is the philips ceo, frans van houten. Right to have you on the program. Great to have you on the program. Things have been leading toward an ipo. What would stop you from choosing an ipo over other routes. Other routes . Frans we are in a careful process of evaluation. Were looking at private bids as well as an ipo. We have no stake in the final decision could what we flagged is with equity markets improving an ipo is a more likely scenario. The decision needs to be taken which we expect in the second quarter. Maybe back to the results, the revenuearter showed 3 increase for philips which was driven by two things. First of all, we saw 27 increase in led lighting. That gives us rate confidence and the lighting was able to improve profitability. On the health side, we saw 5 revenue increase across the entire portfolio. That is going very well. It gives me confidence that our strategy to separate the looks and have one part of philips focused on the Health Opportunity in the world and another part focused on the energyefficient lighting opportunity is in fact playing out. It bodes well for the future. Anna we will talk more about the results. When will you be able to confirm your chosen path . Can you give us any idea about timing . We think we can take a position shortly. We have always planned to go in the second quarter. Here we are in the second quarter. There with me. Bear with me. Anna we will bear. You chose some book runners inc. Issue the simon down the ipo route. Youre open to other suggestions. What could derail an ipo . Are you tentative wait until the brexit vote is out of the way . Is that factoring in . That could cause market volatility, i guess. Frans i think you are right. Volatility is concerning. Improved. He index has it created a better climate. Fact, id remains in think it is next to the selfhelp that phillips represents. We are able to grow the Company Despite an uncertain world with a lot of turmoil, especially with regard to emerging markets, middle east, russia and so on. Anna lets talk about the rest of the business in france. The lighting business, youre going to that is not going to be a part of the phillips story. On health technology, how are you doing with longterm supply and maintenance with hospitals echo how are you managing to turn that into better margins hospitals . How are you managing to turn that into better margins for your business . Frans that is a great question. The world needs more to more innovation do coke with its health challenges. Innovation aging has the answer. Technology is not always easy to apply. Our health care customers, hospital systems, they are asking for help in the application of technology for driving Better Outcomes and lower costs. In the strategy of the lips is we team up with large hospitals. In the First Quarter we were able to sign a 50 Year Contract with mirren hospitals in San Francisco bay area. It is a good example of a hospital saying please help us with Consistent Technology application strategy, driving Better Outcomes for patients. , weur partnering, in fact often embed a subscription kind of Business Model where customers pay as if they go. Go. Ay as they output orientated model. Anna how profitable is this compared to how you are doing it before . Frans it gives a steady revenue stream. Moreover, it gets you to collaborate in a different way, increasingly we provide consultancy to health systems. It means next to revenue opportunity for philips. Overall we expect to be able to improve profitability and phillips on the health tech side. There is still a lot of opportunities to improve profitability for philips. Anna the process of selling lumina met with some hurdles and there was the can you tell us who you are talking to now . Unfortunate that we had to stop the process a couple of months ago. Since then we have been able to restart and engage in a dialogue which engage in a dialogue with potential buyers. It will texas toward the second half it will take us toward the second half of this year. So there i have to disappoint you. I cannot give you more details. The peoplece you can talk to their here it talked to there. Regulator american to a objections to selling consortium of chinese buyers. Obviously we are looking in other directions of the world to find a new home for the numinous. I am optimistic that it is possible. It is a strong company. Anna ok frans a lot of products. A vast improvement in my view. Anna thank you so much for joining us. Good to have you on the program. Of next, we will talk more about saudi soil plan. Oil plans oil download bit. Anna asian markets make their first bank to back backtoback declines. The imf wants about the middle east affect. Saudi progress to outline his plans. Overshadowed by scandal, where lies at the beijing auto show where are hanging over the proceedings. Anna welcome to countdown, everybody. I am and what edwards i am anna edwards. Lets talk about what is been happening in these markets what has been happening in these markets. We are an hour away the start of European Equity markets opening. Openings flat to positive, possibly a little mixed. Not getting much direction from futures at this stage on the trading day. An hour until we start. Positive. Little bit the session over in asia has been lackluster. A combination of weaker oil price and the yen on the rise. Typically enough to take nh off of asian trading. Lets take off lets check out the risk radar. Remember last week, we saw on friday the currency weakened a great deal. The japan ratesetting meeting later on. Which rabbits will they pull out the hat . We will hear from jpmorgan a little bit later on today. Percent. St down a its production since january. The pound in there for you. Just checking what president obamas dead or cable. President obama did for cable. If the u. K. Votes for a brexit. Lets get to bloombergs first word news. Anna. D morning, thanks the bank of japan has become a top 10 shareholder and about 90 of nikkei 225 companies. That is a court to estimates compiled from data. It is now a major owner. Groupock and the vanguard which oversees over three children dollars. 3 trillion. Undermining efforts to improve corporate trade here it president obamas prediction that a may take more than a decade for the u. S. To agree on a trade deal to leave the eu is realistic, so says chief global economist. He said that seems a reasonable. Not in optimistic estimate meanwhile, the pound has risen to a onemonth high after obama talked the president said brexit would leave the u. K. At the back of the queue for trading with the United States. Billionaire charles koch said Hillary Clinton would make a better president than any of the republicans vying r the job. Following his comments, clinton tweeted not interested in endorsements from people who deny science and try to make it harder for people to vote. Global news, 24 hours a day, powered by 2400 journalists in more than 150 news bureaus around the world. You can find more at top story on bloomberg at top. Anna david ingles in hong kong. Economic expansion in the middle east is set to slow between the 4 . To 4 between 3. 5 to saudi arabia officials will today unveiled a plan to reduce reliance on exports. Alaa shahine. Is how will Slower Growth affect middle eastern economies . A lot of concern about job creation. Alaa this report talks about middle east oil exporters. It says not only growth is said to growth is set to slow, this compares to 7. 5 from the previous decade. The main consequence at this stage, government and private businesses would be up to create 7 million jobs which is 3 million short of the number expected. This comes in a region where the that has one of the highest rates of unemployment. The message is it is not going to be a painless transition. Anna one country that is already looking to get ahead of that transition, layout plans for a postoil future, saudi arabia. Give us the latest details on how they plan to diversify the economy. Alaa saudi arabia which had the most this the most ambitious plans. What we dont know the details,. Hat we know is the plan the future of our ramin of our ramin an oil and gas company to at conglomerate. There is implanted create there is a plan to create the bit the worlds biggest fund. A plan that is similar to the u. S. Green card. These are details that we know from our interviews over the past three weeks. Anna great to have you on the program. Thanks for the update. Alaa shahine running us. Dominic bunning joining us. Relatedlk about oil. Ommodities that comes asian we were just having about a postoil world. Do. Postoil is a trading you see postoil as a trading theme . Dominic what is happened for a lot of the g 10 Oil Currencies is it they were not as currencyesque as before. Look at norway which is diverse. Reserve fundegians in effect, that generates a percent of gdp every year in income. Generates 8 of gdp every year in income. In our view, the krone should be able to do pretty well regardless of what is happening with oil prices. A lot is fixated on the move in oil price they did you opportunity. Anna showing the returns of the various currencies. The canadian dollar, the swedish quarter krone are doing quite well. Despite you said there is a little bit less oil. Do you think they still have their way to go . Norway has fantastic fundamentals. It did you positive carry with you normally have to take for risks. Theseok at currencies have rebounded the commodity. In no way, sound fundamentals. But somewhere like south africa, youre worried about the story of growth. If the currency market is boeing step for step, there will be opportunities market is following step for step, there will be opportunities. Anna weve got a big week for the Central Banks. We have the bank of japan meeting. Lets talk about the fed and what we expect. There is an expectation they will move in terms of their Interest Rate. There is a lively debate going on on when theyre going to increase Interest Rates this year, next year perhaps. A chart that we talked about in the last hour which is the emergence from the trade weighted euro and dollar. That going to keep the fed give the fed more room . They have been worried, havent they . Cards. april is on the no one think that is the case. That is signaling for june. I dont think they want to box themselves into a corner. Givenstill room for inflation is still pretty low. The economy is picking up gradually. Pushwill probably try to the market toward june without being too explicit. Are too explicit about jim, the dollar could rise quite swiftly because the market really pushes back. Anna the talk we have heard, being quite dovish from the fed. How do they manage to turn that corner without the markets getting too carried away . Dominic it is one of the things we have seen in the last year. Interest rates and currencies interact with each other. People think precrisis carry with the big trade. The relationship now is a lot stronger. When you get a pickup and Interest Rate expectations, what you have seen the dollar rallied very quickly. That gives the fed Something Else to think about. Timing coming through is in the currency market. What we are seeing, and this is more globally, we are seeing the other such a banks not looking to ease as aggressively and not target their currencies as aggressively. Boj will ecb and message in terms of dizzy 20 terms of the g 20 and other currencies. We are live at the beijing auto show with the fallout from the emissions cheating and fuel efficiency scandal. How much has that been weighing on and detracting from the underlying sales picture . More on that. Anna welcome back. This is countdown. 14 minutes past 8 00 if youre watching in frankfurt. Getting a fairly flat start. For the five minutes time lets get to the berg business flash. Thanks anna. Bidders for the company could find out if there through to the next stage. Yahoo spent the weekend narrowing down the field of 10 an initial offers ranging from 4 million to 8 million. Thats 4 billion to 8 billion. 4 billion to 8 billion. Sony shares have plummeted after announcing it will be delaying the release of its annual forecast. The company says the suspension due to the recent earthquake may have an adverse impact on the result. Sony will release the forecast in may. Shares haveotors dipped again after losing more than 40 last week over its fuel efficiency scandal. The carmaker for your running reports. That is according to people familiar with the matter. They said they need more time to measure the effect. That is your Bloomberg Business flash. Anna. Kong. David ingles in hong carmakers are gathering for the beijing show under the dark cloud of the fuel efficiency scdals which have encompassed vw and mitsubishi. China correspondent Tom Mackenzie is there. Very good to see you. You have been talking to executives from the car industry this morning. Hi. High we have been talking to executives at daimler and volvo. They say they have checked the emissions standards. They are concerned where regulations go from here. An increasingly regulatory presence. It may have some impact. This is coming at an event where the focus was going to be on electric vehicles and suv sales and big cars rolling out here at the International Auto show. What were hearing from it may affect as many as 2 million vehicles. It is casting a shadow over things. The ceo of ford, i spoke to him about this and the Regulatory Environment. Heres what he had to say i asked if he was confident that he was sticking to the lesson of the law. Missions,u look at a we meet all applicable emissions requirements. We do not employ meet is toh is make sure we meet the letter of the law. Does the the letter legislation that is being district inthe most terms of the world. Whatever that is, we will work to meet that. Tom when i spoke to the ceo of volvo early this morning, he says there is a gap between the results you get in the lab and the real results when youre getting when youre driving your car. He said it is closing but more needs to be done. Company asking the department of justice to do its own investigation in the u. S. Nonetheless, there is lots going on with lots of new models, electric vehicles. Anna. Anna that is where the industry would like us to focus. What is being said about demand for chinese in china for cars . Tom absolutely, this is a desperate market. Overall the expectations for 6 rise in sales falling from a 7 rise last year. Up strongly ond the back of last year. They may factor into sales. There is a growing demand. Suv sales were up 50 last year. Big carmakers like ford have introduced the f1 50 which is a huge beast of a truck. The chinese like being higher up. You have seen some pretty smart concept cars. Online tv street year streaming media giant here in china. On the stage using their at technology. It is going to be all electric vehicles. Tesla is playing into things. A lot of chinese Online Companies hoping to get in on the act. Possibly apple, possibly google. Anna Tom Mackenzie joining us from the beijing auto show. Japan is working for a shareholder unlike any other. That is the nations central bank. The boj has made it a top 10 shareholder in about 90 of the nikkei 225. You get this information, how did you get it . What does it mean that the boj is such a big part of the market . The information is all public we have to look at various sources to paste them altogether. The reason we did it is this week our investors are expected to boj will increase to give you some perspective, the boj has been buying etfs for five years. They hope that doing so will lead to higher inflation. Decided to look at what does it really moving really mean. The etf managers whether it is blackrock, they go out and buy shares on the market. The boj is indirectly buying stocks. For one, it is boosting share prices. Market demand that is an that is always there. The boj is always buying so that boosts per share prices. The finer point is Corporate Governance at what does it mean when you can print money and invest money . You have unlimited you him. He wantsister has corporate officials to be better. Etfs, indexes you to guess index etfs are pretty lowcost. They dont they already have that much money. What are the companies being run properly . They dont have the analysts. Etfs, there more getting more power to investors that cannot scrutinize Corporate Governance as much as the Prime Minister wants them to. , about halfg ahead of analysts surveyed by bloomberg expect the boj tube ps etf buying this week whatever role they have, it could be bigger soon. If they do triple their involvement . Is therell a limit is there a limit . Buying about 30 billion a year. Goldman sachs says they are going to double that. Others such as hsbc are expecting higher. Limit, or not there is a by our calculations, if they do double the amount they buy, by the end of next year, they will be the number one shareholder in the nikkei 225. Whether or not that is appropriate from a political standpoint, as well as what other investors think about that, that will be up for debate. Well find out thursday when the boj announces that. I dont think anything like this has ever really happened on the scale. A sigil bank that could create its own a you him. Anna thank you so much for bringing us the story. Japanese stocks reporting. Lets get another thought on it. Dominic bunning is still with us. Eugene was talking about the forecast. Are they limits conceptually to the amount of money to boj can print and etf buying they can do . Dominic there are limits in terms of what the effect is to be the central bank and have. You talk about negative rates, the same kind of things apply. In theory know real limit. We have seen that into pines Monetary Policy in japans Monetary Policy. They have cut rates into negative territory. All of those things have had some impact. Anna weve got a chart that shows that. Going back to 2012. It did weaken the yen. As it did weaken the yen, but not recently. Certainly negative rates, we know what a summary yen is weakening the end is weakening the yen still the purpose . Dominic weakening the yen was still a key part of the strategy. Youve also got some pick up in the stock market. Now when the yen is weaken that much, the currency looks undervalued. To get more currency which is increasingly difficult, youre facing that respect and the International Community as well. That is trickier. Expectation that the boj is running out of ammo. We need to see more from the third arrow, the fiscal arrow. Anna weve got a great story on the bloomberg this morning. Officials at the boj increasingly want government to expansion. Spur this according to people familiar with conversations at the boj. Dominic it is what we would like to see globally. We need to see more reform to boost productivity in these markets. In that environment where growth is slow, germany speaking structural changes. I can take something off of headline growth. They can take something off of headline growth. It would be a positive story for the Global Economy if we saw more reform. Whether we get it in the nearterm would be more of a challenge. Anna dominic bunning, a busy week ahead with the fed in boj on the radar. Equity markets opening. Looking a little bit sluggish. Futures looking flat at the start of trading today. Still a halfhour hour to go until the start of trading in europe. That is it for countdown. I will leave you with guy johnson. Guy welcome two on the move. It is 7 30 in london. Welcome to the new week. Where counting you down to the european open. Im guy johnson alongside hans nichols did this is what we are watching. A brave new world. Saudi arabia is set to unveil a fresh vision of the future. Is it the end of the oil era . Is the Auto Industry ready . Ask in a fewto minutes time