Transcripts For BLOOMBERG Countdown 20140513

Welcome to countdown. Im anna edwards. Just pass 6 00. Bloomberg reporters are standing by across the world, ready to deliver the stories. Hans nichols is covering pfizers bid for astor zeneca. David tweed is in berlin covering airbus and earnings are breaking now for that business. Big with countdown for interviews. First, an exclusive interview live from the Goldman Sachs india idea summit. Who would hear from the head of International Asset management division, coming up later. Ceo, we will speak with the peter long, right after those earnings break at the top of the next hour. We will also get numbers from easyjet as well as insight into those numbers from the ceo of the lowcost airline. Be releaseds will in about 58 minutes. Sweetens planning to its bid for astor zeneca as the ceos of both Companies Face their first joint trial and the u. K. , testimony. Hans nichols has the details from westminster. Hans . Anna, good morning to you. We will find out after this hearing potentially about a sweetened bid from pfizer, increasing it, but they will not make a decision to go hostile until they see how the Committee Hearing goes. We will get a sense of how hostile or friendly this committee will be with the first round of appearances. We will get a sense of whether ian read, when he appears at 1 00, still has any potential allies on this panel or if he will be filleted. He is the head of the committee, adrian bailey, a labour mp, and that gives an indication it could potentially be hostile. Thisine of questioning, is about potential new products or taxed benefits of relocating here in the u. K. . When you look at the different tax profiles of pfizer and astor zeneca, you get a sense of why it would make sense to come here. The effective tax rate of pfizer 27 , astrazeneca 21 . He claims those are legally binding, and that is what we will be at issue. Foralks about no job cuts five years, keeping 20 of the workforce here in the u. K. New Research Facilities in cambridge, talking about investment, call it talking about keeping jobs in the u. K. , but when you look at the number of jobs in the u. K. From astrazeneca, it is about 5600. Globally, they are above 50,000, so just a fraction of their employment profile is in the u. K. They are planning on a massive investment in cambridge, 350 Million Pounds, and that is the issue, will the jobs be in the u. K. For the future or is this a threat overall the r d industry here in the United Kingdom . Anna . Perspective on this. We will have a lot of Politics Around the story articulated today. A lot of this will come down to a lot of focus on the sheer size of this takeover in relation to other takeovers we have seen in u. K. History, so give us some perspective. Other way to put it other than to say this potential takeover dwarfs all the other takeovers we have seen in the u. K. It has been a remarkable year in the pharma space. Rustling pointt, for some any takeover laws, was 12. 8 billion. We are talking about the previous prices. This could be a 60 billion pound deal. If he gets raised, we could get north of that and truly into uncharted territory. Anna . Thank you very much, hans nichols reporting from westminster on that takeover battle which is going to grab a lot of headlines. Goldman sachs management is holding its first idea summit. Event, speaking with chief executives and Global Policy makers. Manus janssen, was on everybodys mind today . Anna, before they even have lunch in this building, they will have touched on the big issues of demographics, energy, europe poised to perform as one of the top lines. It is a demographics that sort of catches my eye. We will catch up with katie koch. We will find out what the ceo of the g summit and fixed income is going to talk about. We will touch about the realms of technology. We have a main speaker here. I will catch up and have the opportunity to speak to nicolas enstrom. He did it once, he did it twice. He sold skype, he bought it act, and he sold it again. Back, and heit sold it again. When it comes to the sheer scale done, inennstrom has terms of disruption of technology, there is no better man to talk about the technology stage. We will also have an opportunity to speak with bills and neck , currently the chairman of Goldman Sachs international. We will focus on china, focus on gees comments about being prepared for a new normal. What does that mean for the region and the world. I think there are some beefy topics to get into. Of course, we have a roster of ceos here at Goldman Sachs. , andw wilson will join us sheila will join us with the short straw for the first interview. We will talk about asia, japan, economic scum is it working, and katie koch. The question is not so much whether they are ready, its whether im ready to get into it with detailed questioning. Anna, back to you. Im sure you will be, manus cranny, joining us from the Goldman Sachs summit. Breaking news from airbus. The aviation giant reporting numbers this morning for the first time. 700 Million Euros against an million, so658 comfortably beating estimates when you strip out even the oneoff items. They say they see fullyear delivery at about the same level as in 2013, and that is one of the things that investors are looking for here. Q1revenues up five percent, with theup, but down previous year. But get some details about this particular business, the one that changed its name to airbus. David tweed is following the story from berlin. David . Anna, a couple of things to look at. One, as you mentioned, they kept their guidance. They will have a similar deliveries as last year. No change. One area i have been looking at very carefully is the delivery of the a350. They say they are on track to deliver the a350 by the end of the year, the first one going to qatar airways. They have ordered 80 of these. The reason people are looking carefully to make sure there is no hiccup in the delivery of the a350 is because they had a problem, they would have had to pay a fee for not being able to deliver on time. That is an important area. Another area where there is not a lot of news in the program in the statement is on the restructure that is going on with the defense industry. The only thing ive got here says the strong focus this year will remain on Program Execution and the implementation of the various improvements and restructuring plans. Sees toll, everything be going in line for airbus at the moment. Ontime, guidance has been confirmed, and they are continuing with their restructuring plans. Anna . David tweed joining us from berlin. Some developments we are getting from the french banks. The us is frances secondlargest bank, saying this will bethat they seeking to increase their return on equity, the measure of their profitability, more than 10 by 2016. That is helped by lending in russia and africa. This is a business that has already told us how they were performing and how their business was exposed to the geopolitical events in russia a week or so ago. Forwarden is coming with the new target, returning equity, 10 by 2016. Just ahead, calling for unity as exit polls indicate he will become the next Prime Minister of india. We will see how Indian Markets are reacting. First. Bloomberg. Time for todays company news. The ceo of italys largest bank told bloomberg a diplomatic solution to the crisis in ukraine is urgently needed to protect their business in europe. I hope at the end of the day common sense will prevail on. Oth sides in ukraine we need to find a solution. , ite dont find a solution will affect all European Business including in europe and russia. Unicredit is the secondbiggest bank in russia and one of the biggest in ukraine. At t is looking at purchasing directv, giving them a National Satellite tv provider to combine with their broadband and internet tv services. Increasingly watching video online. The combination would allow the bundling of directv into a competitive internet package. Broadcast something from silvio berlusconi. The Italian Company which owns 22 stake has an option to match the bid of any purchaser, according to one of the people. 725fonicas bit is worth million edwards. Welcome back to countdown. Im anna edwards. 6 00. Utes past optimism in india is rising. Exit polls saying that Narendra Modi will be the next Prime Minister. Official results are due friday. We bring in john from hong kong. The markets are reacting positively to the exit polls . Good morning. Modi looks like the man of the moment. So far, the votes are underway, the last phase of the election, 54 Million People voted for 4 seats, the last stage, the votes go again. Bjp party as the favorite. So far, the exit poll say the bjp wins. The majority that is required is 252 votes in the lower house of parliament to get the majority. That is the crucial area. So far, the markets pointing to a modi win, and the markets like that. The ruby at a four month high, and the key benchmark saturn alltime high rising as well. Are up 13 since last year. Is the name for the parliamentary candidates. Confirm, itpolls would seem, his position again as the new Prime Minister. John dawson, thank you so much, from hong kong. Since 1906 radio has filled the airwaves with news, traffic, talk, and music. The industry is facing its toughest challenge, competing with the digital and streaming options. Even with all of the options, radio has continued to be the cockroach of media. Radio has survived everything, from a track to itunes. So far, an onslaught of streaming music startups. The industry says 92 of americans tune in at least once a week, unchanged since 1970. We are the breakfast club, good morning Clear Channel owns 835 stations in the u. S. , and his edge comes from knowing the audience. Dumb you think we are so that we would pay hundreds of millions a dollar per year for Program Radio stations versus playing music if that worked . Why pay an announcer 10 million per year . Because its worth it. Do you ever look at yourself naked in the mirror . Nationally recognized personalities are not the only radio plan. The admin is doubling down on award shows and parties. Jockeysow hear the disc as a sponsor of a major event. Ucs integrated into that major event. Its a whole different way of selling and a whole new revenue stream for us. And the marketing opportunity for the advertisers involved. While the efforts may help radio hold on to listeners, ad revenue has yet to recover since the financial crisis. They almost have to abandon some of their National Advertisers and focus on the local markets, local programming, and local advertisers. That is the one area where the internet is less powerful. Large companies consolidated smaller positions in the early and mid 200s, replacing local djs and staff with programming for wider release. While it may be too late to revive the local voice, radio can do a better job at collecting and aligning data, says this adviser to advertisers. Itself,dio reinvents they have not yet come up with a measurement. Because all eyes are on digital, it is all most the new standard we have to come to. A new standard and reality, sharing ad dollars with a raft of competitors. Advertisers follow the consumers, and they are seeing movers consumers move there in droves. Bob pitman is not worried. There are 200 radio stations in new york and we have four of the top five. The Media Business and every business is littered with failures, and people go, i will just get in their business. Good luck. Coming up, we will dig into easyjets numbers. Earnings, which will break in about 40 minutes. That is still to come on countdown. Stay with us. Will come back to countdown. Im anna edwards. Easyjet is set to report firsthalf earnings this morning. The carriers loss is set to shrink. Here is Caroline Hyde. We are expecting a drop in expecting no come things to improve, sorry, at easyjet because of the Business Traveler . Its still a loss, but rough and ability is improving. The company has a well placed that on the Business Traveler. Seating two years ago, the focus on the real hubs, milan and rome, but also opening routes to moscow and the like, bringing Business Travelers, offering them a premium, and it is winning out. Though easter came later this year, that should weigh on the numbers, but they are better. Sales rose five percent. Not just talking about lowcost players, but you are talking about some of the incumbent airlines, some of the whetherriers revisiting they should be offering Lowcost Airlines as well. That was the trend, wasnt it . Looking atfrance shorthaul flights because of the bang for the buck, but many may be reassessing shorthaul flights as they see the likes of others and ryanair and and Norwegian Airlines managing to eat into this area and the Business Traveler looking for not dismiss travel, per se, not the elite modes of traveling, but certainly wanting to fly. There are concerns among analysts there is a competitive threat for the rest of the year. I know you have had one eye on technology, the way this company is using technology. Does this have anything to do with the drones . We picked this story up in the newspaper segment a couple weeks ago. Its a fascinating story. What would an airline need to do with a small flying object like a drone, but its fascinating. This is all about cutting costs for easyjet. Drones they want to use to really see, say, when lightning may strike an aircraft. It might mean that a aircraft would have to be assessing damage. If you have a drone to do that at the time were just assess damage, you can save an awful lot of money. Disruption,s and but also 3d glasses they will be using to help assess damage as well. All about less disruptive. More detail on all of the ceo of easyjet. As prorussian separatist celebrate referendums and majorities in the east, we will have more details on the European Unions delegation to russia. Welcome back. Im anna edwards. Lets talk about the dollar. We talk about the euro. And how the other banks react. The bank of england needs a stronger need not to accelerate differences. Tomorrow, their chance to do that. A report. May prove to be somewhat more cautious. Reducing sterling. How do you express that . U may see a correction thanks, john. Has hit p and dow record highs. 4. 5 and and p rallied led by tech shares. Former u. S. Treasury secretary treasurer says it is more safer and resilient. These stress tests covers his time during the 2008 crisis. Despite new laws, geithner says the days may not be over. We are absolutely vulnerable to the risk of major panic again. It is inherent. You cant eliminate it or ban it or prevent it. You can do a lot of things to reduce your vulnerabilities and the reforms we put in, there are powerful reforms. And rebels in ukraine have asked to join russia. Meanwhile, russia yeah is threatening to cut off gas supplies. Now sticking with that story, the European Union sanctioned companies and advanced plans for broad economic penalties should russia disrupt the president ial elections due to take place on may 25. Ongoing ore on the crisis, the head of the e. U. Moscow. On joins me from ambassador, thank you very much for joining us and take into account the increase in sanctions that we have seen from the e. U. Tell us how far we still have to go on sanctions and will we see more sanctions from the e. U. Or u. S. . It is very consistent from the very beginning that we will nexationgnize illegal an and will have political and legal conquenses. What you have seen yesterday is the issuance of additional list of those who those sanctions including the two companies. There are 61 on the sanction list, which entails the freezing of the assets and companies who have illegally taken over the assets of the Business Companies in ukraine. Es ca late the situation. Urge russia to Work Together in implementation of the geef joint statement which was issued by the u. S. Ambassador, i want to ask you to respond some comments from john boehner that says europe should be doing more and u. S. Should be pressuring europe to impose tougher sanctions on russia. What is your take on those thoughts . Well, European Union has been rather firm and very strong with its sanctions. For the first time we have applied the sanctions towards one of our closest trade partners which is russia. We do respect american views. However e. U. Relations with russia are more intimate in terms of trade. It is 10 times larger than that of United States and russia. May seem in United States that e. U. Is too slow, but our scope might be more limited but the effect of our sanctions are probably exceeding those of the United States but we all have to Work Together as a team and the goal is a stable, secure and prosperous ukraine which is not only in the interest of the United States and European Union but russian federation. Threatening to end gas supplies by june 3 unless they pay in advance for their gas. Do you expect things to escalate from here . From my point of view, it is a premature signal from the russian side. Just yesterday we had a very constructive and very usinesslike bilateral negotiations between the senior officials of russia, ukraine and 16th d ministers on the of may, the three ministers of energy will meet in greece. And any statements or threats would certainly would be counterproductive in order to help this. To whom how much and to move forward with not only paying the debt but also with respect to modernization of ukraine and the pipeline system. Ambassador, thank you very much for joining us today. Now ahead of tomorrows report, lets look at the u. K. Economy. My next guest has remped for social networking sites. He joins us now for a discussion on why he thinks small and Medium Companies will help it. And thank you very much for coming in to talk to us. Tell us about this business. We provide companies with content, editorial words, images and graphics. We have a Global Network of over 3,000 creators on the flaff platform and it allows us to produce the content on any thing and 5 languages. Startup businesses that have been sold to larger companies. There have been attempts to sell out to Foreign Companies rather than taking their brand aggressively abroad. What is your take . I think there is some truth in that, but it is also changing and certainly for us we can see ourselves taking a much longer view. We want to build a Global Pioneer and we have pushed any thought of that. Abley do you think you are o take that longer view . My sense is that Share Holders and investors simply want to cash in after five years of work and move onto the next thing. So that has been a pattern certainly in europe. Tell me about capital and access to capital for these types of startup businesses. Howeasy has it been for you easy or difficult has it been to secure the funding . Its always hard raising money and even if you have a track record. Its still a monday you mental amount of work. But i think one of the things that is changing has been the emergence of an ecosystem of entrepreneurs who are taking the proceeds having sold their businesses previously and investing it in quill. Founder of talk table who have invested in quill and investing in other businesses and that ecosystem is really maturing now. Does that mean it takes startups to understand . Yes. And that was what was lacking previously. When i get my 12 investors in the room, the impression i get is very great. It is emerging here. To some extent, the benefit of some of these entrepreneurs cashing in is that money is being recycled and build the next generation of businesses. There has not been a shortage of money in london investing. Maybe they dont have the understanding of businesses like yours and others can deliver . Unless you have been through the stresses and strains of building a startup from the ground up where cash flow is running out in 12 days, its very difficult to empathize what it is to build a business like this from scratch. When you surround yourselves from that type, but the extra value i get from investors being through the same journey i have is that much greater. What are the large tech players . Lot of small innovative businesses, startup businesses. And big businesses are doing their own innovations. How is that playing out for you . I think youre right. There is innovation across the board and we have talked to lots of companies that spoke to us in the last six months. For them it is harder. Harder to innovate within the constraints for larger more bureaucratic organizations. I think the future is around partnering. Can larger corporate partner with earlierstaged businesses like ours to create a winwin. That is the future and how we can benefit each other, because there are huge benefits to us working with large corments. Thank you for joining us, lets take a short break. Welcome back to countdown. Some of the world leading official policy makers are coming together in the Goldman Sachs summit. We are there with an exclusive. Goldman sachs, a c. E. O. s ering of the and managers. Great to have you with us this morning. You spend time with clients and today you are going to spend the time in between with clients, whats the sense from asian investors . The sentiment is quite positive and quite gaminged. I think one thing that is clear relief from the u. S. Recovery has solidified and has led investors in asia to perhaps be a bit more positive overall in the region with the sense that the big dog in the Global Economy is the u. S. And china notwithstanding. But the u. S. Is key. The you is key and our bloomberg poll saying that the u. S. Is going to be the number one. But go back to asia. Tell me the truth. That is the subset on key issues that came to the floor. What were they . In this survie was global insurers. Infrastructure. And that continues to be a driving force whether you are talking to global insurers or obal asset owners like pensioners. He time frame are up for debate. The european equity. That is a place where we have been focused but taken some time for investors to turn their heads. Lets talk about china impact. Hat has a huge what did you make about the comments over the weekend and fine for me what is 7. 5 growth . I want your interpretation on it . First of all in any other country, 7 growth is fabulous. So i think there is an adjustment that investors are making towards china. What i find fast naturing, spending time in china myself is e change in sentiment from ontheground investors. When i was in beijing and shanghai, those clients were concerned and concerned about the direction was taking and concerned what we see out of the plenary sessions. There has been social reform. Economically balancing, where will we end up . When you fast forward to today, more investors feel more has happened than we appreciate it. See pressure coming from the u. S. , pressure on the currency, pressure on the u. S. To say move these aforms ahead faster. Nothing in china is faster. Its a fiveyear plan. It taste time. And you see that translating into the activities of chinese companies. Branching out more and turning their eyes to more activities elsewhere. What is the perspective, for me, you are an active manager, where are the opportunities that you told me . And more longterm than today, tomorrow, three months. Definitely more longterm. And when they look at the allocation to china, to expect you know exactly how these markets will perform and what you get out of them in three months. Everybody does their best. But are called emerging markets. And the key and the focus we have, from a longterm investing perspective, look at the longterm plans being put in china. Some of the actions that have en taken in reforming in programs, the slow access that is being affixed, all of those are positive. We look to the overall space. What does that mean . What does that mean for the development of regional economies. You see the impact of that in china and other places. It will be a focus in australia. That will be a topic of much debate as well and see a lot of interest in australian interests. 7 would be ok. Have a great day at the summit and thanks very much. We will hand it back to you. Just a little taste of what weve got here at the agenda. Thanks very much. Thanks for the team. Coming up, more than just Public Officials by jumping to the aid f a woman in need. Welcome back. 6 54 here in london. Lets look at the newspapers. John, lets start with you. You have something thoughtprovoking. Inflation report tomorrow, many people think it will be a big debate and push back the telegraph is going with enough is enough. Higher Interest Rates now. A lot of people with savings over the last five years with absolutely nothing in return. When you put up Interest Rates, a tax on the poor, those with the higher margins are going to get hit pretty hard by an Interest Rate hike. Big divide here. Eventually the savers are doing the right thing. We will be revisiting this story many times tomorrow. Caroline. I never thought i would say this. This is also from the telegraph. Headlights. Who knew. Ems to be rice in west yorkshire. And the police have been set up sell to owbars and other owners who need new parts and speed up the growth of marijuana. Who knew . You have to have your lights locked down as well as a fuel tank. This story made me chuckle. This is a story in the times. Have a photo of the mayor of london and the Prime Minister. While they were driving in the Prime Ministers car, both men jumped to the rescue of this woman. She made sure she was ok and conflicting reports as to whether the Prime Minister held her hand until he was sure she was all right. Some say it is not true. The thought was there. Thank you very much. We will get earnings from travel companies in europe and we will speak to the c. E. O. And well hear fl easyjet as well. Pfizer considers sweetening its bid for astrazeneca. They both get ready to face u. K. Lawmakers. Socgen looking for russia and africa to pursue its goal of a double digit return on equity. Breaking earnings from easyjet next. E talk this hour to the c. E. O. And getting set for indias elections. Welcome to countdown. Im anna edwards. It is 7 00 in london. We have interviews coming your way on the program. Ell be speaking to the c. E. O. F t. U. Travel. And then well speak with arolyn mccall. And Andrew Wilson will be joining us a little bit later on in programming. Lets get back to our top story. Pfizer is set to sweeten its bid for astrazeneca. Our International Correspondent hans nichols has details from westminster. Hans . Anna, good morning. Here is what we know about a potential sweetened deal from pfizer. It would be a slight increase on the 50 pounds per share. It is already out there. It would likely come after everyone sees how todays parliamentary discussion takes place. One thing well be looking at when this panel starts at 9 30 is how friendly or hostile inquiz or thes will be on to the two labor members who are going to be speaking. The question is will he have any allies out there or be entirely hostile. This committee is chaired by adrian bailey. He is a labor member. Labor will be much more hostile in general to any argument he will be putting forward. The question is is pfizer doing this for tax reason or do they like to product line from astrazeneca. 27 is what pfizer is making the the states. 21 is what astrazeneca pays in the u. K. They have made assurances they will not cut jobs. That will be at least for five years. Talking about new investment in the cambridge facility. When you look at the number of jobs astrazeneca has here in the u. K. , it is just north of 6,000 out of a Global Workforce of 51,000. Of course there is an investment story here as well. 350 Million Pound investment and of course the future ready in the u. K. R demnch the u. K. Anna . Pfizer continuing to defend itself saying that the offer it made may 2 offers astrazeneca shareholders significant opportunity. That is another update and reiteration of the stance coming through from pfizer this yorning. Just this morning. Their argument is this is a good deal for astrazeneca to go forward in terms of the this dwaffers all the other ones we are talking about. If we look at the current officer that would put you at 60 billion pounds, the other ones are in the 1215 to 18 billion range. You look at kraft cadbury, that came in eventually after came in 12 billion pounds. This dwarfs that. That is one of the reasons there is going to be so much discussion here. What it means for jobs and investment. Anna . Thank you so much. Hans nichols joining us there from westminster. Easyjet, europes second largest discount airline, Caroline Hyde joins me on the set to break through the details. There are loss is smaller than it was last year. Not quite where analysts expected it to be. A pretax loss. It is still an improvement from 2013. They say this is largely because of digital and Revenue Management initiatives. This is a Company Using fascinating tactics like drones and 3d glasses, embracing technology to save money. They are cutting the amount of paper manuals because it will save them half a Million Pounds a year in fuel bills just by cutting out those weighty manuals. Apparently each kilo they cut out of a plane is more people that they can carry. Yes. You wonder when they will start charging for heavier people. They say look, the capacity environment is not as good as it was last year. Remember, they got a lot of competition from ryanair, Norwegian Airlines. They are saying their ongoing focus on low cost, on offerings to the Business Traveler is paying off. There was far less disruption because the weather was better than last year. 12 million carried in the last 12 months. Caroline, thank you very much. More on that easyjet story later on during the program when we will be speaking to the c. E. O. Of that business. Lets stick with travel and break down numbers from tui travel. We have quarterly numbers coming through from them. They see continued momentum in unique holidays being booked increasingly online. They also talked about how they are pleased with summer 2014. Peter as long the c. E. O. Of tui travel and joins us now from the london stock exchange. Peter, great to have you on the program as always. You say you pleased with 2014 trading so far. Give us an idea how strong the bookings are coming through and where the strength in the business is coming from. I think were seeing a very Strong Demand for all increwsive holidays. Our volumes are slightly down compared with very last year. Overall, im very pleased. We sold 60 of the program and i think were going to have a strong summer. Of course your business takes people from what are called Source Markets and takes them on hopefully very sunny holidays or exciting holidays in other places. Two of those Source Markets piqued by interests today when i was looking through the long list of them. Russia and ukraine, peter. Can you give us some details on your exposure to those markets. Im sure they were markets youre hoping to grow. I think the great strength that we have is a portfolio of Source Markets right across europe and then including russia and ukraine and yes, we are being impacted in terms of the overall demand for russians and ukrainians going on holiday at the moment. It is a very small portion of our program. That is a great strength we have in terms of this widespread of Source Markets that we operate and take customers from. Can you give us any clues as to just what level of retrenchments and businesses such as yours might be seeing in this area as russians reevaluate what they can afford to do with their currency . I think the great strength that we have got is that were eible to flex our capacity and go to this backdrop, we reduced the number of holidays on sale from these markets probably in the order of 20 from russia and at the moment a bigger reduction in ukraine in terms of all the issues there. Probably double that number, more like 40 of reduction but were able to do that in that flexibility that we have within our business model. Lets talk about where you are doing better. Lst time we spoke you were very upbeat on the u. K. You are upbeat on germany, it seems and the u. K. Story does still remain strong. You described it as excellent. Give us some insight into the strengths this morning. I think when we look at the u. K. Markets, our losses were flat yearonyear when we the impact of and the background against winter losses by the year before. We are very happy. Obviously now we have everything to play for when we go on to the summer month where is were seeing huge strength and Strong Demand. So the u. K. Business continues to remain a very strong part of the portfolio. As you say, in germany, were on a journey to improve the performance of our business. Were very much focused on offering more unique holidays, selling them online and that is starting to get traction. Were seeing significant instructions in our losses, in our german business. Some 60 million improvement yearonyear which im very pleased with. Peter, can can we talk about this trend towards booking increasingly online. Talk about how quickly this is gaining momentum. What kind of proportions are booked online against other chams and how quick sli that channels and how quickly is that changing for you . It is going at a very fast rate. 1 3 of our holidays are booked online. The u. K. Business is over 50 . Another interesting statistic is that sales booked both on tablet and smart phone are up some 80 . This is a hugely important channel for us. Were investing heavily in terms of improving our website, making it much more customerfriendly and that is giving us significant benefits. Peter, great to talk to you as always. Tui travel chief executive peter long. For more on the outlook for the travel industry, stay with bloomberg. Were going to be talking to the c. E. O. Of thomas cook, harriet greern. Green. Coming up, no deal for pfizer in its bid for astrazeneca. That is the prediction of my next guest who has downgraded his outlook for astrazeneca on the proposed deal not being accepted. Stay with us for that conversation. Welcome back to countdown. Im anna edwards. 7 14 in london. Goldman sachs is holding its first idea summit here in london. Manus cranny is at the event speaking with chief executives and Global Policy makers. Manus . Thanks. Im joined by Andrew Wilson. The head of the rates business. Great to have you with us. Tell me about this summit. It is the first time that you have done this kind of thing but it brings the clients into the building and gives you guys an opportunity for some things on this agenda. I think it is a great opportunity. We have over 30 external experts and over 300 clients signed up. Were looking at things like whats happening in emerging markets. They were going through a transition driving growth. With they going to provide the same growth Going Forward . Demographics and of course geo politics. There is a lot going on around the world. All of these things talk about your longterm investment idea. That is what this is about. Taking a step back looking at your longterm investment ideas. Does it give the opportunity to think about the big ideas . Where we are now with central bank policy, it is like herding cats. Were going in different directions. The fed on paper. Bank of japan. More stimulus to come. Where are with this diverge answer . Central banks are providing a lot of liquidity. We have not come to the point where things are starting to improve. Are likely ce rates to be higher than they are now. You have the bank of japan trying to provide more liquidity. Draghi was relatively explicit last week talking about the need for further stimulus so that divergence provides a Good Opportunity for markets and equities. That is a good thing for us. One of the things is poised for growth. Lets focus on europe first of all. Because there is a trolley of things that he can do in terms of rates. In terms of liquidity. This terms of negative rates. What is he thinking about the most powerful med of avoiding deflation for the e. C. B. . I think they are going to this is going to be a stepwide process. They are going to move along that path you talked about. Go to negative rates at the next meeting. Provide more liquidity. Of course the ultimate for draghi is quantitative easing. That is not going to be just straightforward here. It has to be an assetbacked program. Where and how do they nabt a form of q. E. . Nabt a form of q. E. . What form . It is one of the challenges in europe. So. Markets are still relatively smile. Of course buying government bonds has a lot of political issues with it. The issue of quantitative easing is very complex. Not a done deal. If we dont see enough improvement in growth and particularly a turnaround in inflation, i think the e. C. B. Will be left with no other alternative. That is a 2015 story for us. Not a 2014 story. If we turn to the u. K. , they have a different story. Mark carney has a different set f issues to deal with. Sterlingeuro at a 16ip month high. The rates market is beginning to get nervous. Is that a fair assumption . How concerned are you . Going back to the divergent theme. U. K. Growth is likely to be 3 this year. That is not an environment where you need lower Interest Rates. We see them raising rates in the first half of 2015. The twergence plays out in terms of rate opportunities. Rates moving higher. We have low, low inflation. Growth at 3 is something that george couldnt dream about 18 months ago. Where are there bubbles . If you look at the divergent themes. There must be certain Asset Classes that youre wary of. Not just in the u. K. But on a global perspective. I think the amount of liquidity in the system tells you this is a potential for bubbles. I dont think we look around the world in a concern that there are bubbles. Uity will produce high digit single digit returns and maybe low double digit returns. The transition from very easy Monetary Policy to some tighter, still not tight but tighter than it has been having that transition play out in terms of rate markets and credit markets. That transition. We have seen one or two testing moments in that. It is not going to be an easy journey. Do you envision an emerging market, giving a little bit of space at the moment to put their house in order. That is my interpretation of it subjectively. Will they go through another period of adjustment as we go to higher rates in the states and in the u. K. . Yeah. As you point out, the first comment around tapering, from ben bernanke a big selloff in emerging markets. A lot of that money is now washed out. I think were in a more sustainable position for emerging markets. Importantly, though, you need to distinguish between those who are going to do well and those who have to still put their house in order because they have deficits that require funding. Those companies that require liquidity are going to be under more pressure than those that have good solid growth trajectory. We look at latin america, mexico, is poised to do very well. Enjoy your day. Next time you come back in the studio, well hopefully have some movement on those markets. Back to you, anna, in the studio. See you in a short time. Manus cranny joining us from Goldman Sachs Asset Management conference. Coming up, no deal, the business for astrazeneca. Based on the fear that the offer from pfizer might not be accepted in the end. Stay with us. Well have discussion. Welcome back to countdown. Im anna edwards. Lets talk about the job sector. If it goes ahead, it could be the largest takeover in u. K. History. My next guest says it may not go ahead. He joins us now from stockholm. This news of yours is based around the fact that you dont see the industrial logic behind this offer . Thats correct. Implementation of industrialink in any it al to bring such is in my view more or less insane. I hope that the deal does not come through. Of course, a lot of what happens today around this story is going to be political with the appearance over the coast. What do you think pfizers intentions will be if they get hold of astrazeneca . Do you think they will keep it as one entity or break it up in the future because their influences their ability to make commitments to the u. K. Government. Doesnt it . Sure. I think one number that has been of wn around has been 20 the future r danched jobs kept in the u. K. Obviously the absolute number involved in r d is not going to be the same as prior to the deal. What hasnt been brought up so much is the swedish perspective that given the focus on the u. K. And most likely the u. S. Shortly as well i think there is a devastating potential for the swedish part of this. Do you think that a sweetened offer from pfizer would change things if there was more of a cash element . Most likely they will use the two days of hearings to get feedback from politicians in the u. K. And towards the end of the week a sweetened offer would make sense. The problem for astrazeneca is it is going to continue to be on pfizers stock. The cash sporgs most likely oing to be high. Matthew, thank you for joining us. Well take a short break. Coming up on the program, well get details on those easyjet earnings as we speak o to the. E. O. Of the low cost airline. Thats carolyn mccall. Stay with countdown. Welcome back. Edwards. Lets head to Jonathan Ferro for the asset check. Lets talk about sweden. Are talking about swedish deflation. That has been the subject of some debate. Another reading tonight at 8 30 u. K. Time. Bnp paribas are looking for a snapback. If you see this one rally against the norwegian sir currency, they say the case for the rate cut will remain. Looking for 1. 15. If you are interested, we catch up with the swedish finance a. M. U. K. Round it 00 time. These are the Bloomberg Top headlines this hour. The s p 500 and dow industrial indices have hit record highs as tech stocks recovered from their recent selloff. The nasdaq also jumping the most since january. The s p rallied 4. 5 from a low a month ago. It was led by tech shares, which have recurring recovered as worries about the Global Economy fade. Timothy geithner says the u. S. Banking system is now safer and more resilient than in the months leading up to the financial crisis read his new book, called stress test, comments on the time during the crisis when he served as the chair of the federal bank of new york. That theharlie rose days of financial panic may not be over. We are absolutely vulnerable. There is the risk of a major panic again. It is inherent in the financial systems. You cannot limit it. You cannot ban it. You cannot prevent it. You can do a lot of things to reduce your vulnerability to it and the reforms that we put in place in dodd frank, they are very powerful reforms. Rebels in Eastern Ukraine have asked to join russia after saying a referendum showed support for independence. Meanwhile, gazprom is threatening to cut off gas supplies to ukraine unless kiev pays for its gas by june 2. Back to the company news stories this morning. We have had earnings from airbus. They reported earnings that beat expectations of analysts. Though they were still lower than last year. David tweed has been following the story for us. Why did the earnings drop . Is probably a reflection of what we have seen in some Asian Airlines and that is that these Asian Airlines put in a lot of orders for planes and now they are deferring some of them because they just cannot take them. There are infrastructure problems for some asian airports. Malaysia is building a Discount Center airport, but it is two years behind time. We see it in the numbers. 141 airbus planes delivered in the First Quarter compared with 144 a year earlier. That said, they still say they will be on track to deliver about the same number of planes as last year, 626 planes. That was a record last year and they hope to match that again this year. Other things to look at in these earnings, airbus just saying that its delivery of the a350 is on track. They are expected to deliver the first one to Qatar Airlines by the first of the year. That is good news because some people were worried that that could be delayed. If it was delayed, it would have been charges for airbus to pay a delay fee. Thirdly, the whole restructuring of the Space Business appears to be on track. No more information coming out from that apart from tom enders that the restructuring gains will be implemented this year. Thank you very much. David tweed reporting on airbus from berlin. Lets stick with aviation and go a little bit further down the aviation supply chain. Easyjet has just released its firstquarter earnings. Joining us to take a look is easyjets ceo. Good to have you on the program. Thank you for joining us. I am sure you are pleased that losses have narrowed in the first half compared to the same time last year. Can you tell us where it is performing strongly . Heust spoke to peter and described the u. K. Market as excellent. I wondered what your geographic experience was. Lex we have had very solid progress to have a 13 reduction in our loss year on year with easter moving. Move froma very big the first half to the second half. That is about 25 pounds of revenue. To decrease our loss in that period is good progress. The reason for that, we are catching more business passengers. We have hit the 12 million upestone, passenger numbers 4 on the halfyear. And our yield is stronger. Our revenue proceeds have gone up. It is one of the most popular things we have ever done for our passengers, business and leisure passengers alike. We are very focused on our easyjet program, which is all about how we manage our space. That keeps our fares very affordable. All of those things have been done in the first half. It is kind of building on all of the work we have been doing over the last four years. Tell me a little more about this attempt to get more Business Travelers onto the airline. I am just curious as to how you go about working out why people are traveling and whether they are a Business Traveler. I used to work in the aviation industry. It was all about surveys. A. B. Nothing has changed. Maybe that is still the case. How far can you take that story . How much more progress can you make in attracting business passengers . Thattually, they tell us they are Business Travelers and we validate that with our own. Ata about customers we have very sophisticated c. R. M. Tools now. We are confident that the Business Travelers with us are Business Travelers. That is now one in five of our passengers. Bedrock ofstill the what we do. 80 of our passengers are still leisure travelers. For both of those groups, one of the reasons we are so attracted to those is that we have a fantastic network. We tend to be number one or number two in all of the major airports in europe that we fly to. That is a very strong position and it means that we can do partnership deals. We can improve the passenger which,nce at airports, our passengers tell us, is extremely important. This bead with which things go through the airport. All of that matters. He are now available on all the Global Distribution suppliers. Whether your company is using a travel Management Company or whether you are a Small Business going direct to the web, we have products. You have an inclusive product. We have a flex he fair flexifare product where you can change your fair up to two hours before you five. We are comfortable understanding what are Business Travelers want. That is one of the reasons we are continuing to grow. Of course, it is a very big market. We are only scratching the surface at the moment. I say to the analysts, this is a long, steady road and we are making very steady progress with Business Travelers. It is a fascinating story. Can you tell me about your experience in russia at the moment . You do fly to moscow. I am sure you will tell me it is a small part of a large network, but i am interested in your experience there and how your business is being affected by the current geopolitical turmoil. Routes, butr 640 you are right. There is no question that u. K. To moscow, bookings have been suppressed because of the political situation. However, a very interesting fact. 56 originates from moscow, which is very high. Our Network Average is around 25 . Really flocked to us. They are so pleased with the value that we offer. We are still seeing quite a lot high number of originating passengers from moscow. It is a scarce capacity route despite the political situation. We just have to keep an eye on what is going to happen and we hope things settle down. Talk to me about the competitive environment you face. Andourse, there is ryanair norwegian and other Lowcost Airlines. There are also the local offerings being ramped up by some of the incumbent airlines. How are things shaping up for the moment competitively . I think this half coming will be a much less benign capacity environment. We are seeing 6. 7 capacity in. We are driving a lot of that because we see a lot of opportunity. So it is a bit more competitive, no question. Remember, norwegian, 70 of what they do is touching scandinavia. We do not compete with them headon in many areas. Same as ryanair. What we do is very distinctive. We fly to primary airports and focus very much on our customers and how we are doing with our customers, making it as easy as possible for them. Our focus is really on ourselves and how much more we can improve what we do, a very clear water between us and both of the legacies and the lowcost competition. Competetally, we still primarily with the legacy carriers in every Single Market we operate in. Debatee do you see the on another runway for the southeast of england heading . Atyou think it will be gatwick, an airport you have some experience at . I have no idea. We are all waiting very much for the commissions recommendations. My hope is that this is not political football, that there are some Bold Decisions taken and that it is actually about passengers, where the demand is, where the value is going to come from. Buildew is you do not very expensive Infrastructure Projects and expect passengers to pay when they do not value what you are going to put in. We are also saying that passengers should not pay for any Infrastructure Development unless it is delivered. The fundamental issue with all of this is it is going to be expensive wherever it goes and passengers have got to value it reads it has got to be in the place where there is the most crunch and it really matters. We need to fix the problem. This is a 3050 year decision. It should not be about Political Capital or political gain. It is going to be a Bold Decision and all of the parties will have to get behind it. Thank you very much for talking to us today. Rated to hear from you, the ceo of easyjet. We are going to continue to talk about the travel industry. We have already spoken to easyjet and to a and tui. Harriet green will be joining us. Coming up, more data that suggests a slowdown. We will take a look at the numbers for this week when we come back. Here in london. Coming up in the next hour as pfizerafteres the zeneca merger mean for jobs in the u. K. . We will talk to the swedish finance minister. He dealt with job losses in the wake of the astra and zenecz merger 15 years ago. We will get his perspective. Stay with us. Time for todays company news. Germanys largest steel maker reported its First Quarterly profit in almost two years after selling assets and cutting costs as it focuses on its noncore business. The companys last reported profit was for the third fiscal quarter of 2012. Socgen says it will seek to increase return on equity to more than 10 by 2016, helped by lending in africa. They see consumer growth both in russia and africa rising by 7 annually on average over the next three years. That would be outpacing growth at its french princes french branches. Ae ceo of unicredit said diplomatic solution to the crisis in ukraine is needed to protect a business in europe. I hope that, at the end of the day, common sense will prevail on both sides. Russia, we need to find a solution. Solution, itfind a is going to impact European Business, including europe and russia. Lets welcome back to countdown. Minutes in london, 14 until the start of equity trading. Lets take a look at our top stories for the day. Tara line height is here. Plenty to choose from today. We have been through a lot of aviation and travelrelated stories. But there is more m a news to talk about. An eye on vodafone. Ramifications over the atlantic at the moment. At t might splash 50 billion on directv. This is at t, a mobile and landline provider in the u. S. , looking to buy a satellite divider. Many feel that they will be splashing 50 billion in the u. S. They will not be translating that way to vodafone. We could see it down almost two percent. Also keeping an eye on some of the retail stocks. April data for britain was really outperforming this morning. The data from the british retail in terms ofup 4. 2 like for like sales, well ahead of analyst expectations. Keep a close eye on the likes of kingfisher and some of the key retailers in the u. K. Could rise 2 on the back of this data. Caroline with some companies to watch in todays trading session. Jonathan ferro is here with a look at some of the top macro themes we are looking at. Lets talk about u. S. Retail sales. We will talk about it later because we did not get much of it yesterday. Ofig month for the month march. We are expecting it to come down a little bit. We are expecting growth for the month of april as well. Chinese numbers out as well. They were a missed. A miss. Most countries would like to see Something Like that, wouldnt they . Not a bad number in a global sense. In the u. K. , the focus will be on the inflation report. Inflation number that they published. It is often misconstrued, the title of it. Exactly. Unemployment, those kinds of things. Today, it is worth having a look at what the other Central Banks are going to do in response to the ecb. The ecb, they might act next month. Ubs, the bank of england tomorrow, that could be an interesting aspect. How do they push back towards what the ecb is doing and say, we are going to try to push rates back as far as we can. The other side is the bank of england. Interesting some developments here, not just from the ecb, but all of the Central Banks as well. Interesting to see the ecbs toes and what that does other Central Banks. Coming up on the program, city chapel posted an operating loss that beat estimates. We will get a closer look at those estimates. Welcome back to countdown. 7 52 in london. We have had earnings from tui travel coming in. Lets kick off our next discussion with that company. Joining me now is the head of trading at etx captial. Capital. Thank you for joining us. Tui describing the u. K. Market as excellent for them right now. I think they are a really decent set of figures. They have beaten expectations and really focused on the u. K. They areny and said really outperforming, increasing capacity. Online, innovation trying to differentiate themselves as the market leader. Interestingly, france is particularly weak and they are pulling back from that. In essence, this tells you the story of what is happening in the euro zone, how consumers are beginning to spend money. Really interesting story there. Lets talk about after zeneca, another fascinating story. The offer coming a week or so ago from pfizer. Familiar with the subject sources familiar with the situation telling bloomberg that pfizer is considering increasing the cash element. What do you see as potentially interesting in this story as we wait for the ceo to testify in london . It is becoming a politicized story. I think that is probably the wrong move. Look, we will pay a little bit more for astrazeneca, but we are going to be disciplined and try to discourage astras standalone policy. I think there is probably not much more room for an increased bid because of the way they are talking down. After zeneca, could result in them overpaying. Where are we on the overall markets at the moment . Levels decent compared to the past decade. Where are we heading here . I think we are definitely going to carry on higher. A lot of it is going to be what happens with the ecb where they actually follow through with action. I think they will probably be forced into doing some form of qe or stimulus and that will be positive for equity markets to offset what is happening over in the u. S. I think a decent set of fears that we are seeing should drive the equity markets higher. I do not think we should be selling in may and going away. I am still seeing opportunities to buy here. Rank you for joining us this morning. Have a good week. Joe randall joining us from his offices in london. On the move is next. What does the possible pfizerafter zeneca mean for jobs in britain . We will talk to the swedish finance minister and he tells me jobs in the wake of the merger 15 years ago, he has some insight to add to that story. Lots more to come. Hello. Welcome to on the move. I am mark barton at Bloomberg European headquarters in london. Just moments away from the start of european trading, our markets team has everything covered, from companies to currencies. Here with me is Caroline Hyde, Jonathan Ferro, hans nichols in westminster, and david tweed is in berlin. Jon, futures pointing to a higher start. U. S. ,ord highs in the almost touching decadeeyes on the ftse. We have been here before, but we have not pushed through with any conviction. A look at the data. U. S. Retail sales down. Data picks up today. Hans following pfizer and after zeneca ahead of key hearings today. More on that. We like the smell of a parliamentary hearing first thing in the morning. To convincebe able the public and this parliament that it is about jobs and research, not just taxes . In a few minutes, we have an important interview with a labor and the mp. We will get a sense on just how hostile it may be. And she hasis here her eye on the airline industry. Easyjet reported earlier. Rex it did. Bang in line with expectations is not good enough to send the share price higher. They said it could potentially decrease a little bit. Once again, read