There is bouygues up 2. 7 on the open. Lets talk to ryan. Royal dutch shell, these are the guys that started the profit war at the start of the year. They smashed expectations. For 5ts were looking billion. Investors very pleased. It will be interesting to hear what the boss has to say on his conference call. Everybody wants to hear about russia. A very sizable interest in russia. One reason why van burton was meeting with putin, kissing the ring if i might say. We heard president putin yesterday warning that there could be retaliatory moves against western interests if they ratchet up their sanctions. He said he may have to look at western energy deals in russia. We can see Royal Dutch Shell up over 3 . Alstom we are waiting. I am getting excited about alstom. It was called up 20 . Lets have a look at another stock, barclays. Everybody is doing it. It is a bad bank. The commodities business, the fixed income business, some u. S. Mortgage assets and european lending books in spain and italy. 54 billion euros worth of risk weighted assets. Alstom up 11. 8 . We called it 20 , it was up 12 . Pretty good. Lets have a look at heritage oil. We have another deal on the table. We are keeping that in focus. Qatars al miqrab agrees to buy heritage oil for 1. 5 billion. 224 Million Pounds if you prefer. Enough enter out of me. Lets talk to johnnie. Cpi on the way. Are you bothered at all about u. S. Gdp . I am bothered about the fed. There is this big logistical problem where we still havent got those two governors concerned by the senate. Jeremy stein steps down at the end of may. By june, we may just have three governors. Just going to give you the gdp for spain. We have gdp rising by 0. 4 for spain. Retail sales coming in at 0. 6 . You are fully armed. I am excited for the euro. I will give it a go. Ftse 100 closing close to a twomonth high yesterday. We are expecting a pullback this morning. Cac 40, 0. 2 . The dax opening in frankfurt almost 0. 1 . Let me show you a little bit of dollar yen. Coming down by 0. 2 . You see that again gaining by 0. 2, the dollar falling by 0. 2. On the forecast, they trimmed their forecast for growth this year. The forecast for inflation completely unchanged. The central bank really isnt giving anything away. Elsewhere, this will be the talk of the town. Euro dollar coming back around 1. 38. The ecb has done everything necessary. The euro pushing a bit higher. Yesterday german inflation came back a bit weaker than expected. Today is the big one. It is the headline number. We are expecting it to go to 0. 8 . Some people think it may undercut that. Does that pile on the pressure at the ecb . He doesnt look like a man who is going to have any action in an eminent fashion. Comings are that qe is but that really is a big bet against mario draghi. Back to you. Thanks. One company that we mentioned during the opening was alstom. Shares had been suspended since last friday after bloomberg broke the story that ge would pursue a takeover of the french company. Now we know that alstom is and has approved official talks with ge. Siemens prepares perhaps a full counteroffer. Editor, david tweed is standing by in berlin. Offering 17 billion for this Energy Business. What do we have so far . First of all, ge is offering 17 billion for the Energy Business. , thenteresting thing is Energy Business is the business of servicing those of equipment thater it has already installed. Apparently the margins on that are double ges general margins. Ge says this is going to be accretive to earnings immediately. There are other bits that stand out to me. General electric has also said growth would see net job in the business is that it buys. General electric is trying to overcome resistance from the french government, particularly from the industry minister who described the fact that General Electric went to alstom without consulting the french government as a breach of national ethics. It is going to be difficult for siemens to make the same sort of promise when it comes to the transport business and jobs guarantees. Ken siemens guarantee jobs for more than 10 years . Lets talk about the other option, that is siemens. There is a lot of play here. Siemens want access to information before they would make any kind of an offer. One can understand those kind of parameters. You can certainly understand why siemens wants to get information on the finances of one of its biggest competitors. Alstom has said it will provide that information to siemens. I think they are under pressure to do that. One of the things i think is interesting here is that siemens says it will take four weeks to evaluate that information before it goes ahead and takes a bit. Putom has said that it has a board of independent directors who will make a decision on june 2. Both of those take us well after the european elections. Certainly an interesting morning for m a. Stay with us. After the break, we are going to go deeper with ge. Am manus cranny in london and this is on the move streaming online, on your phone, on apple tv and the new amazon fire tv. Shell profit fell 3 on higher cost reduction. , letsse numbers and check in with Ryan Chilcote. Talk me through the numbers. The numbers were good despite that fall in profit year on year. The numbers came in well above expectations at 7. 3 billion profit for the First Quarter. Analysts were looking for 5 billion. That is why the stock is up. Much better than what the street was looking for. You mentioned russia, shell has big interests in russia. That is one reason then then meetingas in russia with president putin, telling him how important russia is to shell. Shell has a plant in the far east. It is a venture that they are rom on and with gazp it is very important to them. They want to up the capacity by 50 to give the asian markets all the gas that they want. When he was there, he won president putins endorsement of that project. We heard president putin yesterday saying if sanctions against wretch a against russia keep getting ratcheted up, he may have to take a look again at those contract with western energy companies. Talk to me about shells position in ukraine. They dont have a whole lot better now but they are looking. In particular for gas in the east of the country. They agreed with the Central Government that they will look for it there. Unfortunately that is exactly where the separatist are active right now. We saw that with those prorussian militia yesterday seizing that government building in lujan scott. Sk. In luhan one of the places they want to look is a city called slovyan sk where those observers are being held by the separatists right now. Shell looking not only at ukraine, but for the moment there is not a whole lot they can do. Obviously all these oil companies, they are used to geopolitical risk. I dont think anyone saw this kind of risk in this particular part of the world. Thanks for those roundups, Ryan Chilcote with an insight into shell. To put this news flow in perspective, head of investments who oversees 4. 2 billion. Thank you for joining us. I like what you said to me when you sat down. These markets are like hotel california. Explain. You have seen the s p surge between 1840 and 1890. You are not seeing a real breakout on either side. There is enough Bank Capacity and you will have the gdp number coming in this afternoon you dont expect the number to be very good because it is 21 which is impacted by weather. Does that hold the market back . Earnings in the u. S. Are ahead. 10 to 12 higher than europe. Maybe america is pacing ahead. Number. Aw the q4 gdp the q1 number is probably going to be around 1. 1 . If you look at the data, we are seeing a very positive momentum. We will have the adp number which i think is more important. Pmi and the friday jobs report become very important. Talk to me a little bit about a in europe. T m there is deal after deal. We have got pharma deals, industrial deals. Is this the beginning of a bigger cycle . M a cycle iss, the catching up. The pharma sector is focused as we have seen. Has a very good run and you see a correction. You are talking about pharma comingstocks which are into new age drugs. People who suffered from leukemia a few years back had a survival rate of one third. Now it is 90 . You are talking about new age. Rugs you will see a lot of these things happening. Manager,investment maybe you have some exposure to glaxo, whatever. Do you begin to eat say to yourself, if i havent got exposure in these other names, i should begin to add that into the portfolio . We have investments in novartis. A balance between biotech and old name for a companies. That is how i manage portfolios. M a in europe is also going to catch up. You are going to see not very strong gdp growth or a lack of growth that we have seen. You will see companies merging together to increase their profitability, to hit their return on equity target. There could be more deals in europe. Yourself . You position is it a shorterterm perspective . Industries, do i begin to cherry pick Industry Groups where i think the value is . You pick stocks, you still pick good businesses. You position yourself with the cycle. Financials, tech, industrials, these are still the names i would like to hold. Europe this year has not done very well. The second half is where we are going to see some performance. You had a lot of earnings this week. We will have more next week. Review the asset quality and setting up targets to see the banks fail the target or come through the target. There are various things happening in europe. Are all the generic issues that we are very well aware of. How do i position myself for 2014 if qe comes in the later part of the year . If there are rate cuts here in europe . Where do i want to be exposed to take advantage of that . Do i buy banks, do i buy cyclicals, do i buy retail . Where am i going to get that value . Financials is my big bet. Even though they have not done aty well, i would look pharmaceuticals like novartis. Not a huge amount of industrial names. Energy didnt do very well last year. We just had shell numbers this morning. Youf i go back to u. S. , have all the Energy Stocks which have done extremely well. Energy stocks are doing extremely well. It is the rotation. It is not like money leaving. It is rotating from one sector to the other. Were going to have to leave it there. Great to get your opinion. Manish singh, great to have you with us. , top shop once again. The latest collection hits stores today. Caroline hyde gives us a sneak peak. Again, the british powerhouse of retail has teamed up with a british style icon, kate moss. [no audio] i will be back with how the Business Model is going at top shop. Welcome back to on the move. I am manus cranny in london. Here are some companies that are on the move. Dyer is said to be proposing a deal for mercks consumer business. Dyer is trying to beat an allcash bid. A heated contest between the bidders means that mark may fetch more than 14 billion in a sale of the unit, well over early estimates. Barclays is said to be moving its Commodities Division into bad bank of unwanted assets. The unit will be overseen by eric bommensath, cohead of the corporate and investment banking. Those familiar with the deal say bommensath will oversee the business that the firm has designated part of its exit quadrant. Bnp paribas beat estimate analysts. The chief Financial Officer spoke to bloomberg about the impact of rising tensions in russia and ukraine. We took a collective position for the uncertainty. I do not think there is a Snowball Effect but we will have to keep monitoring the situation. Another company we are watching is daimler. Ofis the thirdlargest maker luxury vehicles that reported a 95 surge in firstquarter profits. Demand, models such as mercedesbenz cla. Hans nichols, a man who knows a thing or two about luxury, cars, german cars. 95 , that is a cracking First Quarter lift, isnt it . It has that new car smell which i know you know. You always go to show rims and try out all these cars. You never drive off the lot with one but i know you like your cars. Is important that because the margins are so high on that s class. Great numbers, a 15 surge in deliveries. You compare that with their competitors. Lets do the geeky numbers. 1. 79 billion. Estimates were for 1. 71 billion. About 80 Million Euros higher. Revenue up to almost 30 billion euros on the quarter 30 Million Euros on the quarter. The goal is 10 . When you look at their growth in china, you see why some of these numbers are so strong. Because of sales, because of demand in china. Look at the number of dealerships they want to own. 100 new dealerships in china. They already have 400 outlets. A lot of this growth is suvdriven. In china, that is the big vehicle they want. In 2013 in 2009, 37 and 40 in 2019. I was going to pose this question to francine. Are you an suv man or a convertible man . I was in a bmw showroom the ,ther day and strangely enough this would be a shock to everybody, it wasnt an suv. It was a twoseater sports car for me. Closed roof or open roof . Open all the way. I am not in the new car market. I cant afford it. You will have to sell one of your Country Estates but then you wont have anywhere to drive to. [laughter] we will see you in a short while. Coming up, talks are official between ge and alstom. The french train maker is keeping its options open. Follow me on twitter. Welcome back to on the move. I am manus cranny at bloombergs European Headquarters in london. We are 30 minutes into the trading day. Equity markets despite all the news flowing through this morning, equity markets coming out of little bit lower. We are waiting for the european cpi data to come a little bit later today. 0. 8 , that is going to be that of signing issue for the European Central bank. We are also waiting on chinese purchasing managers data. And the bank of japan didnt have any news. There is a couple of Things Holding the markets back. We are ready for gdp numbers in the amended states as well. Ok, those are markets. Lets give you some of the top headlines. The bank of japan refrained from adding extra stimulus. It sees the pace of inflation picking up over the next two years. Consumer prices will rise 2. 1 in the fiscal year starting april 26. Up from 1. 3 in the current year. To overtakesed the u. S. As the Worlds Largest economy according to calculations that take Exchange Rates into account. India bumped japan out of the thirdplace spot. The collaboration of groups between the u. N. And imf issued the report. The ecb Vice President says that lenders are preemptively boosting capital ratios to reduce the risk of failing a Balance Sheet review. He told bloomberg that some of the measures have been spectacular. We estimate based only on Public Information that the banks since july of last year have strengthened their Balance Sheets through several measures to an amount of 104 billion euros. It is official. Ge has bid 17 billion for alstoms energy assets. It is a story we have been following closely since Matt Campbell broke the story last week. He joins me now for the latest. Stage moving into a new of this whole story. It is official, ge have laid the price at the door and they are preparing to negotiate. But there is still a little asterix next to this deal which is siemens putting together an alternative bid that seemed to be getting support from the french government. There is a fourweek negotiation period between ge and alstom basically as a compromise and to demonstrate to the government and shareholders that alstom is considering this alternative. Siemens will still be able to bid in that period. This is not necessarily a done deal for jeffrey immelt. Politically he knows his way around france. He has been at the negotiating table before. Of doing business in france is incredibly important to this deal. This was a very close run thing in the end. The story came out a little earlier than ge and alstom were intending thanks to journalists of course. The french government made some very negative noises about this basically saying this is not acceptable. That was quite rapidly walked back come monday morning with the presidency saying, actually we are neutral. We just want to make sure jobs are protected. Au have got a little bit of window in the space of just a couple of days into the competing agendas and views within the ruling socialist party. When you see the news this morning from ge talking about what they are prepared to do and offer. Do you think this is the beginning of a major month of justification in the public arena . They have to go and sell this. This is obviously a deal with big pr angles. Alstom is one of these brands that everyone in france knows. It is something that is very familiar and a real icon of french technology. That part is staying behind. Ge is separating energy, which is about 70 to 80 of alstoms revenues and creating a new company, alstom transport which will be the rump Energy Business. This does take some selling. This is both a financial offensive, but there also has to be a continuing political and pr offensive. In between you coming ,ownstairs and sitting down alstom is ambitious for energy and transport, again, we are in for a month of quite retracted negotiation, arent we . We are. Something i think is interesting about this is, the socialist party in france has always had a bit of a business wing. There are socialist party bankers and chief executives and board members. What we are seeing is the business wing saying, maybe if we are going to get a Huge Investment from ge, we shouldnt say no. Then you have the left of the socialist party saying, actually we would like to put this together at the governmental level. I have no doubt that you are going to be a busy man. Well done. We will probably see you on a daily basis. Our twitters birds flying the coop . The stock gets slammed at the close of trade. The big question is about the followers. Where are they . Stay with me. I am manus cranny in london and this is on the move. One stock we will be watching today is twitter. The investors punished the stock in extended trading last night. We fell by over 11 . That stock price is the lowest level since its ipo. Hans nichols is following the story with the details and he is going to bring us up to speed. This is all to do with user growth. It is user growth. It is clearly growing but not fast enough. Facebook has always been a popularity contest arian contest. When you stall out, it had 25 yearoveryear growth down from 30 . Investors punished it. It is pretty basic. Numbers, 185 million, now it is 255 million, revenues did increase. They tweaked the product. There is more photo sharing and video sharing. The ceo recognizes that they need to tweak it. Here is what he said. What we are in the process of doing is working to increase the value of the logged in experience. One bright spot for twitter, 80 of their revenue came from mobile. Facebook, only 59 . I will leave it with a question to you. What percent of your twitter activity is done on mobile . The am a throwback to 1980s. I am desktop. You are in the 20 . We are going to leave it there. Joining me now to discuss the whole issue of twitter and technology is hussein kanji. You have a model. You and i were just chatting. It is based on Revenue Growth. You are now quite perturbed by this dropoff in users. Talk me through it. You explained it so clearly to me in terms of the dramatic impact of the tail off in user growth. Abouttters growth is 10 , 11 on the user side. We expected this would continue. This has basically flattened out. Just pull up the twitter user growth that we have their when we were talking to hans. That shows that momentum we have had to rig it that is the basis of your model. This user growth is what drives the revenue. The problem is most of the growth in the stock is priced over the next decade. Yeared 50 to 100 growth on year in order to justify the valuation. And this flattening is just going to quash that. Exactly. If you flatten out the user side and people stop using the product, it is going to be very difficult to achieve 50 to 100 Revenue Growth. This collapse in the stock is mostly a function of the fact that people are saying, this year is good and their expectations are ahead but the next five to 10 years which is where the growth is priced in, is probably not going to be as healthy. There is no real assurance from the twitter folks that this is going to deliver. You are not giving me a real sense that i want to hold. Linkedin, twitter, the whole thing, is it beginning to untangle . It has been untangling for the last two or three months. Maybe that is a baby step. Are we ready for a bigger on wrapping up is going on . The question is how bullish you are about this underlying growth. Linkedin has the same problem. User growth is flattening out and the Price Expectations have to be there to deliver on the revenue side. Profit is not high and the stock has been crushed. They are buying revenue, they are gaining Revenue Growth but the question is, what do you put as a price target for these companies . In the case of twitter, it is even more fundamental. It is still a very early stage business. If you take a look at facebook, facebook into the market with the same concerns. User growth is not flattening out as much. Facebook figured out how to turn on mobile advertising. They almost figured out a brandnew business and over delivered on this quarter after quarter. Why cant twitter do the same . I dont think people use twitter nearly as much as they use facebook. Out thecould figure user problem, they could figure out the revenue problem. When you and i had conversations about this, kids were dropping off facebook, there was a move away from facebook, they switched on mobile advertising, they got it right. We dont talk about that anymore. Because the mobile advertising business that no one had priced into the stock all of a sudden materialized. Yearsr it is not this Revenue Growth, it is the next 10 years. All of that is priced into todays price. We are going to have to leave it there. One huge question for your portfolio, will you believe in the forward revenue story . Great to have you with us this morning. Hiatus,r a fouryear british style icon kate moss is teaming up with top shop to unveil an exclusive range of clothes and accessories. Here to tell us more about the business, style icon in her own right, caroline hyde. Manus, you are too kind. Behind me now, the doors are open on top shops flagship store. Many people rushing to work. Dont see many rushing into the store right now. M after it is the cal the storm. Last night, the crowds were gathering outside top shop. They had a dj there for the unveiling of kate mosss collection. She teams up with top shop to unveil this. This time, really quite expensive. One dress coming in at 600 pounds. One of her Leather Jacket is on ebay for 350 pounds. They are trying to embrace once again the iconic style of kate moss to really just drive forward sales. This collaboration, it does work. It is a proven relationship. It is a proven relationship. You can go on ebay right now and see some of the older kate moss collections retailing for far more than they were initially sold for. Some original dresses up 150 pounds or so. The reason they have come back together again is that philip green of top shop has some competition on his hands. He is expanding internationally, particularly in the united states. Inis not the only u. K. Shop on the idea of british style and cool britannia. You have others going over the atlantic. You have an online retailer doing the same. He wants to be distinct. He wants this to be a social media frenzy as well. By getting kate moss, a brand in her own right who is known throughout the world, who has been the face of chanel and dior and calvin klein. She has teamed up with other labels in the past. She is a tried and tested method of getting people into the top shop stores. We are going to have to leave it there. Have you seen the product . Would you spend 600 pounds in that store behind you . I have got my eye on a couple things. I dont know if i will be going all out for a 600 pound dress. Naomi campbell was also modeling. I think the competition is a bit campbell havemi been wearing them. I might have a look in afterwards. I will be with philip green at 10 00 a. M. And in time. You cant beat a bit of glamour. Caroline hyde outside top shop on the kate moss collection. The pulse is coming up in just under 10 minutes. Guy johnson is having a conversation. We just heard from caroline, mr. Philip green is going to be on your show. We look forward to that conversation. Get his take on what is happening in the broader retail story. Is looking to take on some of the grocers too. One of the worlds most recognizable Hedge Fund Managers , we will get his take on what is happening in the banking sector. Fascinating,both yields in italy, what does he make of that . What is writing that story . We will talk tech as well. The twitter story, we will get his views on what is happening. Plus, a bit of m a. The ge story with alstom. That has probably implications in terms of french policymaking. What does it tell us about the state of the market . And a day dominates. M a dominates. How long will it last . Looking forward to it. With bring you up to speed some companies that are on the move. Air france narrowed its firstquarter loss. The operating loss shrunk to 445 Million Euros from 532 Million Euros a year ago. The carrier has cut more than 7500 jobs in three years to compete with the likes of lufthansa, British Airways and emirates. Rollsroyce confirms that it is in talks to sell power ratin powergenerating assets to siemens. The news comes as siemens works on a bid for alstoms assets as europes Largest Engineering Companies reshape. The u. K. Clothing Retailer Next raised a sales and profit forecast after posting First Quarter results that beat estimates. 5. 5 sees sales rising from to 9 . Coming up, bloomberg takes you inside fendi. Francine lacqua shows us how the luxury bag maker perfected its craft and plans to edge out the business. All this at its London Flagship store. You dont want to miss that special with francine. You are welcome back to on the move. I am manus cranny and london. One stock dominating the headlines is alstom. Bloomberg broke the story that ge would pursue a takeover. Alstom has approved official talks with ge. Jeff immelt is having political discussions. Openm has left the door for siemens to make a bid. Siemens wants access to the data. It is an hour into the trading day. Equity markets are a little bit lower despite all the news that we have on deals. Playing a little bit more attention to the market is jon ferro who joins me now. Equities are lower. Generally. Supposeall down to i waiting for these critical market events . We have got cpi, euro zone inflation, they fed a little bit later. People will be watching. I think china pmi overnight is one of the big ones. That could be the big precursor to the jobs number that we get on friday. Are you going to become caring and contrasting . Edit the only thing we can do. Think many people are expecting a change. A lot of people are talking about the hedge fund manager. This is an article in the journal where he says the fed has lost any semblance, any wispy remnant of humility, introspection, caution and historical perspective. It is all cameras and applause. Sounds like us. Failing a political vacuum without the accountability. You have all this pressure on the ecb to do more. The fed has done more. He is basically saying the fed has taken the place of politics. The u. S. Government is not doing enough. We have the opposite problem in europe. Put the pressure on the politicians and a lot of people say they are doing just that. Lets see what that cpi data says. That could be another trigger or layer of discussion for mario draghi. Thanks for that roundup. Stay with bloomberg television. Theohnson is back with pulse in the next hour. We will hear from philip green. He has a new Business Venture with kate. Kate moss, the model. Not the duchess. We are not exclusive. Approves talks with ge but leaves the door open for a rival offer from siemens. The shares are surging this morning. Tumbles to the lowest since its ipo. And crazy for kate. The supermodel at top shop topshop. We are live with its billionaire founder philip green. Good morning, everybody. You are watching the pulse