Good morning, everybody. This is the pulse. We are live from bloombergs european headquarters. It is going to be a busy week. Lets get to one of the main stories. Our top story, Prime Minister David Cameron is back in scotland for the second time this week. He is there to warn the scots that a vote for independence could mean, would mean a permanent break from the u. K. The latest polls show contradictory findings for the upcoming referendum. Too close to call. Lets get the latest. Anna edwards is tracking it. Businesses talking about this a lot. A lot of voices coming out and making it clear that their businesses would rather the union remain. Lets start with where we are with the polls. Too close to call, that is exactly the message that we hear from many places. There are a few people starting to put their neck on the line now and give one side the upper hand. We spoke to john curtis earlier on today. He was saying that the no Campaign Holds a slight advantage i had of the vote. Jpmorgan also saying the no vote has a small lead. We had four holes over the weekend. Three of those put the ahead. The range of the leads was fairly wide. Down to 1. 2 points points. There was a poll which put the yes camp i had. A guru on the polling scene tells us that he is getting a bit of a warning on that one because of the small size of the sample. Yougov had been talking about how this is all about the economy. He thinks there will be something similar to what we saw in quebec. They get fearful about the economy and pull back from the edge. John curtis says he is not sure whether that will happen. The choice is not between change in the status quo. It is between change and change. He wonders if that is one of the dynamics we have to work in here. Lets talk about business. Telegraphthe sunday with a poll that said nearly 80 of them would see a significant effect on the u. K. Autonomy of scotland voted for a yes. There is all this talk about what rbs might have to do with its pension. There was a Credit Suisse report. They found that 5. 6 billion pounds pension blackhole as they call it to do with regulatory changes that might hit the bank. Capital spreads saying two thirds of city managers expect the cottage the scottish economy to weaken if there is a yes vote. Societe generale pointing out companies that you might not have exposure to have the yes vote. , theve some of those names list of companies we talked about many times. They are exposed to scotland. A lot of bs. I think i had them alphabetically. There are also french companies. Wo businesses in totally different fields who have exposure. Also, offshore oil. It is going to be an interesting week. A lot more to talk about. Thanks, anna edwards on scotland. We are going to be speaking to the leader of the Better Together campaign, alistair darling. He will be joining us in the second hour. Plenty of questions for him to answer as we head towards thursday. Lets talk about another story we are watching carefully. Renewed clashes in ukraine follow sanctions against russia from the eu and United States last week. More retaliation coming through from moscow. Ryan chilcote joins us now. The big story of the morning, not what is happening on the ground but what is happening on the Foreign Exchange market. The ruble weakening this morning against the dollar, down as much as 0. 8 this morning, hitting 38 rubles to the dollar. That is a record low for the exchange. The ruble is down against the euro, against the pound as well. This is something we have been seeing for a while. It is really that russian ruble versus dollar race that russians themselves watch and will be a big concern to them. Also an interesting note from moodys this morning. The most recent sanctions introduced by the west on friday are a credit negative for russia , saying it is not going to just hurt the ruble but also will increase capital outflows, put pressure on inflation and perhaps put into question some of the increased oil output that russia would like to see in the coming decades and threatens russias longterm Growth Prospects and fiscal position. It is russias very strong fiscal position at the moment that has always been a credit positive. This is the first time that moodys has highlighted the growth concerns and the idea that even russias fiscal strength is in question as we go forward. One of the reasons why the ruble is doing what it is doing this morning is surrounding the ceasefire and the action on the ground. Lets focus on that. What is the latest with regards to the ceasefire . The ceasefire is very tenuous. I just got back from ukraine. We will talk about that more later in the week. It is definitely an issue. There are three things that the ukrainian president told me he needs to see. Is a prisoner transfer. That is a positive that we did separatistsrussian and Ukrainian Military exchanging 73 p. O. W. s. There remain two issues which are not solved. The ukrainians say the russians have yet to seal their border to prevent weapons and fighters from crossing into ukraine. Ukraine still accuses russia of much as 3500 troops in ukraine. Until we get a political solution to the war in eastern ukraine, markets are going to be concerned. Thank you very much indeed. Interesting conversation. The former vp boss coming out and talking about longterm ramifications and could be a big negative for europe in terms of access to oil. Ryan chilcote on the latest on ukraine. Lets talk about beer. We are watching the brewers this morning. Heineken has rejected a takeover bid by sab miller. European more from our business correspondent, caroline heidi. The heineken family that controls the business saying no. We won independence. They control about 50. 1 of heineken and have been a difficult target. They are rebuffing. Sab miller, secondbiggest player in the world, trying to woo number three. They have taken on basically a bit of a difficult challenge in this. In the last two weeks, they did approach a company, immediately rebuffed. Clearly this has got investors overexcited. The time is ripe for consolidation in the market. Why is heineken attractive . It has presence in africa, central and eastern europe, emerging markets. The developed, markets, have been slow. Sab miller is now the target. That is what markets have been saying. Ab inbev seeing as being the predator and sab miller now the prey. Number one and number two. Admittedly they would have a lot of competition issues over these companies coming together. Spin off someer of its u. S. Unit . Could it become the prey . Many people expecting this. This is a 650 billion market. On an annualized basis, the growth has been slow over the last decade. Where is the growth . It is in consolidating and getting into the emerging markets which sab miller does have presence in. Ab inbev, the biggest in the eye it up,d want to last year, relatively quiet on the m a front. About 5 billion of deals done. 2008, 90 billion. A lot of them in asia and emerging markets. Exactly. Ok, caroline. Thank you very much indeed. Pilots at left anza will walk off the job for eight hours on tuesday. The Union Representing them. This will affect longhaul. Air france is facing its most distractive strike since 1988 today. Alibaba is set to raise its initial Public Offering price range and may announce the adjustments today. The ecommerce giant may target more than 70 a share versus the range it was pitching previously. We will have more on that later. Also coming up, using the power of investment as a force for good. How can 1 trillion in investments be used to benefit society . We will ask the father of british Venture Capital. He has reports on the matter that launches today at downing street. Good morning, everybody. Welcome back. A task force is out today to outline how 1 trillion in investment money could yield both financial and social returns. The report is titled Impact Investment. It launches at downing street later today. Here with us is the chairman of the social Impact Investment task force who is leading the initiative. Good morning. Talk to me about why impacting investment is different. Explain to those watching what actually it is. We are all aware of the importance of social issues and the difficulty we have in dealing with them effectively. Governments try to do their best. We have all tried to do what we can by giving money away. The proposition here is that we can do for somebody who wants to do good what we have done for business. Provide them with a key to the capital markets. You do this by linking the achievement of a social outcome to a financial return. Whether you are a notforprofit organization that can access these markets through social impact bonds, a very interesting new innovation that Links Financial return to the , or whether you are a business that espouses specific objectives in addition to profitmaking, there are investors who are interested in backing you. They have subscribed to the United Nations principles of investment. We have picked that figure. Some very big names that have already backed things like social impact bonds. The rockefellers, etc. You would have thought they would be able to do more with this. What is it that is stopping this process happening . What is it you want government to do . If you take foundations, in the United States there is 750 billion on foundation Balance Sheets including the rockefellers. Fiduciary duties are not clear. It is not obvious whether a trustee of a foundation is able to invest in something which is going to deliver a social return as well as financial return. We think there are many cases where you can deceive achieve marked rates of return. There are some cases where it is in the interest of the foundation to achieve social objectives that deliver a somewhat lower return than a market return. We need to have clarification on fiduciary duties. The same thing applies to pension funds. There are many investments that achieve social good. In the long term, improve returns to pension funds. It is not clear to trustees that they are able to do this. Help togovernments create an enabling framework for this. We are not asking government for money. We think investors will put the money up. Pension funds, foundations, crowd funding. About changing the rules to do this. What struck me was that the language could have been tougher. Politicians arent terrified at the moment about the political fringes. Here in the u. K. , maybe we have a manifestation of that, scotland. In other countries, you can see it becoming a bigger problem. Byf of that is driven inequality. Part of the rise of the fringes is the spread that is opening up. Did you feel that you could have been that there was an opportunity to be tougher . This is going to help deal with this problem that is so vexing you right now. Here is one of the partial solutions. We can make it work better. We have turned up the analysis to prepare a persuasive and compelling document. We have turned down the rhetoric. The reason is that this task force was established by the g8. We have a whizzing set of governments. What we have tried to do is in the report and in the accompanying reports, there are five, one on allocating for impact which will interest a lot of people looking at this. We have tried to show why this is a real field, what it stands innd that in the new this century, in the new world we live in, we have got to add impact to risk and return when making investment decisions. In the 20th century, we looked at risk and return. We now look at risk return and impact. I think if you begin to take that mindset and governments 22,000 that it costs pounds to the by youth in prison, only 7000 pounds for an organization to get that person into a productive job and prevent them from reoffending, governments will begin to tweak. If they Commission Social services on the basis of outcomes rather than inputs, they could begin to open the door to innovation. I think this feels very much like Venture Capital did when i started. I think this is the door to a major new market. Are you pushing against an open door . Yes, we are. Which is why we dont feel that we have to turn up the rhetoric. Only a couple of minutes left. It would be remiss not to ask about how you perceive the world right now. The backdrop you are talking about is one that there is need for change. For this country, is a significant risk. How do you perceive it . You are a man that has seen businesses come and go. You understand the dynamics of what makes the u. K. Of good place to invest. How big a risk are we running this week . You are referring to scotland. I think people who feel left behind, i am not referring just to the feelings of the scots, people who are left behind, many people are left behind. They face major challenges today. I am not talking about scotland grounded inre disadvantage because you are born into the wrong family, it is difficult to escape that. We cant continue as we are, as you say. We are getting reactions that frighten society. We look at the sky this situation. It doesnt sound like a very intelligent solution. You motions run high. It is a decision for scots to make. I hope that in the end, common sense will prevail. How worried should we be about the rise of political fringes . I think we should be very concerned. I have been talking about it. I have been making speeches about it. For more than a decade. There is a feeling of inequity. If equality of opportunity is just an empty phrase, then people are going to lash out against the system. What Impact Investing does is, it begins to give the tools to an entrepreneurial millennial generation to do something more significant than just make money. They dont want to just make money. They want to do something that improves the lives of others, improves the planet. That something as momentous as Venture Capital defines Impact Investing. I believe it will also influence businesses that are owned necessarily espouse social objectives in the way you need to do to be an impact investor. Is big companies, unilever one, nestle is another, will begin to set specific social objectives alongside financial objectives. The 21st century will begin to integrate impact as the third dimension alongside risk and return in investment decisionmaking. That is what i believe. Thank you very much indeed. Ronald cohen. We are going to take a break. Welcome back to the pulse lets get a quick check on the markets. We are trading lower. Ftse 100 down by about 0. 1 . Point 3 . N by zero i guess it all spells out risk. , the federaland reserve meet on wednesday. Rates might rise. What does that mean for the markets . Aussie dollar getting a slap this morning. 90 u. S. Cents. Chinese data disappoints. China, the biggest customer of australia. The aussie dollar gets a slap. Look at this move higher for the brewers. Sab miller and heineken. Sab miller want a piece of heineken. Heineken says no. Sab miller up over 5 . This could trigger the interest of ab inbev. The talk is that sab miller one heineken. Because they tried to make the deal, it goes to show a deal might happen. Still with me . We will be back in two. Welcome back. You are watching the pulse. We are live from bloombergs european headquarters. These are the Bloomberg Top headlines. Alibaba maybe planning to increase the size of its initial Public Offering. The Chinese Company is on the second week of its global tour to meet with investors in asia and europe. It is trying to convince people to buy into what could be the largest ipo ever. Prime minister David Cameron returns to scotland today for the second time in a week to warn scots to vote for independence would mean a permanent break from the united kingdom. Contradictoryowed findings that gave both parties reason to believe they are going to win. Later, we are live with alistair darling, the leader of the Better Together campaign. Secretary of state john kerry is meeting with foreign leaders from around the world in paris. The french president is hosting the International Conference on iraq. He says france will play its part in the military efforts. Lets get more on this story. Greg joins us on the phone. What has been the focus thus far . Just tonk the focus is coordinate the response to the Islamic State. All whole bunch of countries have done quite a bit. The u. S. Has been involved in airstrikes. The french are likely to join them. Dozen countries providing arms to the kurds or Iraqi Government. There is a sense that you have to coordinate all this a little bit more. There have been some meetings earlier this month, 10 nato countries plus australia. They met to talk about what they wanted to do about confronting the Islamic State. You had a meeting last week which was mostly countries from the middle east. They are talking about bringing together the middle eastern wing and the western wing of this alliance. What do we think the outcome is going to be . Ofprobably not a huge amount specific news today. All this is kind of tactical stuff that has to be worked out between countries. Aboutf off the conference better coordinating the military aid they can give. I dont think the conference itself is really going to provide much news beyond statements that everyone thinks, obviously the Islamic State is a terrible threat, the Iraqi Government needs to be backed up. No big news but it is all very incremental. Weret all these countries caught offguard by the rapid advance of the Islamic State. The response has been uncoordinated, very ad hoc. Manyis just one step in steps of making sure that response is better coordinated. Thanks for the update, greg joining us from paris. We are going to stay in paris for our next story. Air france bracing for the worst walkout in more than 50 years as pilots begin a weeklong strike. Kari lundgren joins us now. Of theve us a sense scale of what we are looking at. It is going to be a rough day for air france. 60 of their pilots are expected to go on strike. This is going to mean over half of their flights are going to be canceled. Generally, when an Airline Tries to do in this situation is protect their longhaul and dump shorthaul. Air france has said you cant move pilots around. It sounds like it is going to be across the board, quite a few cancellations. They are telling passengers to fly another day if they can. 20 Million Euros a day is the cost of this. It is going to potentially go to monday next week. Remind us what it is about. Thehe issue here is about discount unit that air france is trying to develop. They are trying to expand that so it can compete with the likes of ryanair and easyjet. This unit has 41 planes. They want to grow to 100. They want all the pilots to be paid a little bit less. Air france pilots dont want this. They want everybody to be paid the same amount. That is the issue. Are there issues for lufthansa. We have another strike at that airline as well. It seems like a rough week for longhaul travelers. There it is Retirement Benefits that are the issue. It is a slight embarrassment for lufthansa. The ceo was going to be coming to the pilots, to the crew, with a revised offer. Before he gets to say anything, they are on strike tomorrow. This is their longhaul unit out of frankfurt. 380s the the a flagship operation. They have yet to come out with a precise outline of what flights are going to be canceled. They are going to try to get volunteers. The ceo is actually a pilot and can fly. 380 but he cann a fly a320s. Rough day if you are an airline ceo. Or a passenger. Thank you very much indeed. We will continue to monitor events and bring you the latest. A rough week if you are a longhaul passenger. Lets go to the gulf. Properties seeking to raise more than 1. 5 billion. This would be the biggest ipo for the United Arab Emirates since 2007. Now, the details from dubai. Emaar announced a price range. How did the markets take it . The price range was announced yesterday and there were different opinions on that. Some people say the upper end of the range would give the company a price to earnings ratio of around 30 times 2014 earnings, which is very expansive. Others said the price is really good and is in line with expectations. One thing everybody agrees on, basically this will be one of one of the analysts told me he wouldnt be surprised if the company was fully subscribed in a couple days. In terms of not only emaar but also dubai, how significant is this . This is a very big ipo. We havent seen ipos of this magnitude come to the market. This is a best case for dubai. Everybody expects this ipo will have a lot of demand. This is one of the most stable businesses for emaar, the cash cow of the company, the one unit that was able to shield the company from the financial crisis. Throughoutt manage 2008 through 2010 without needing a government bailout. Ok, we will watch with interest. Thank you very much indeed. Lets stay in the middle east. Israels socialist farming communities lead the world in a number of industries. Amazing what you can get. Or have their most surprising claim to fame, robotic Swimming Pool cleaners. You heard me right. You are going to learn more about it now. Elliott gotkine reports. Caging dolphins is usually considered cruel. Not if they are made of plastic and eat dirt. Made inbot cleaners northern israel are the world number one by some length. The biggest and baddest is this yellow one over here. It can clean an olympic size Swimming Pool in six hours. If you decide to take the plunge, it will set you back around 11,000. Among private pool owners, they already have a near 40 market share. Sales are soaring and shares have risen almost threefold over two years. The ceo says there is still plenty of room for growth. We estimate the overall pool business is about 21 million pools worldwide. Million, there are 2 million to 3 million pools cleaned with robots today. The potential is huge. Brazil offers particular potential. Almost all of its 2 million or so pools are cleaned by humans. He plans to boost the share of sales generated by pool covers and alarm systems which can alert lifeguards when someone gets into trouble. It is high tech stuff but that is not to say there arent any challenges. Toabout 30 exposed construction, new construction. Any downturn in the u. S. Or european Housing Market would have an adverse affect. Secondly, whether. Any delay or prolonged winter in the u. S. Or europe, actually delays all distributors and could have a negative impact on the business. For now, there seems to be no stopping the march of the dolphins. The company is aiming to triple revenues by 2022. Elliott gotkine, bloomberg, israel. Back with our are middle east editor, elliott gotkine. He will talk about Cyber Security, a big issue for every business right now. Welcome back. We all know data breaches are bad for business. If you are a Cyber Security company, breaches are pretty good for business. Elliott gotkine has more. Good morning. I am now joined by the president of israels biggest Cyber Security company, checkpoint. Great to have you with us. Publicized data breaches of late. Apple, home depot, target. When these things happen, how does that impact your business. Is there an Immediate Impact . I dont think things happen like a phone call. Clearly, the message is change. Awareness. You see what happened with target. The cio and coo understand that you have to go up the chain. Ask more questions, make more awareness. I think security is more of an administrative task. People want to know what they need to do in order to be more secure. Have you shifted your business in any way to take advantage of these breaches so that you are ready to deal with those problems that these companies are facing . It is more about being the right architecture. Saleis case, the point of which is mostly retail around the world, and we have significant retail customers. Go out there and discuss not just the specific breach, but the architecture that will help them perform those kind of problems. There are things they can do. Once we analyze specific problems, we come up with something much broader than that. We discuss with those customers about those specific environment and protect them. There is a big cyber conference in israel. President Prime Minister start upssaying that have raise around 170 million this year. You as a more Legacy Network Security Company keep up with all these startups . There is plenty of innovation. If you see how many new products and technologies we try to work with the startups by nature, the overall fact that there is more investment and more knowledge is great for everybody. Way, many came from checkpoint as well. Some of them go back. I think it is a growing industry. I can tell you that the way checkpoint is working is like a startup. Still, it is a startup by our nature and by dna. When you identify new opportunities, do you try to invest in those areas yourself or do you highlight acquisitions and go for them . We continue to do both. There are places where we think there is great knowledge that we want to incorporate into our products. We prefer to buy them. In other cases, we come up with our own ideas. We will develop those things before the market is there. We have enough resources to invest. This is a growing area of investment for corporate. That can only be good for a company like yours. What kind of growth do you andct among these corporate demand for your kind of services . Stock was mostly on firewire 20 years ago. Check point, we invented that. What you call access control, the basic things, they continue to grow. The markets now, the next evolution is all the technology of Threat Prevention, how to find, detect and prevent malware to go inside your network. We see a lot of things like malicious malware. We have seen attacks like in target. Many others. A significant amount of Threat Prevention protections in the same environment. We took all of those Threat Preventions and incorporated them into the same infrastructure. We manage from the same management. We see that growing very nicely. We continue to grow. Are adding more Threat Prevention technologies. That is one aspect. The second innovation that we brought to the market was where you want to do this Threat Prevention, you have to have very robust intelligence. We produced significant amount of intelligence. Marketplaces for everybody who has intelligence. We see this translated into protection and put through the same environment as the enterprise. It is not just technology. It is taking intelligence of malware and malicious actors around the internet and protecting in realtime. Ok, thanks so much for joining us today. Another Israeli Cyber Company listing. For now, back to you. Interesting stuff, thank you very much indeed. Up next, the spy scandal continues. Telecom executives face a grilling by german lawmakers. We are going to go to berlin for the details. Good morning. You are watching the pulse. We are on the radio, streaming on your tablet, on your phone and bloomberg. Com. Let me talk you about new energy headlines. Shares in sinopec slumping after it is selling a 17. 5 billion stake in its retail business. Investors will buy the stake and gain access to sinopec s huge network of fuel stations. Some analysts had been expecting a higher valuation. Nigeria is considering offers of more than one he billion dollars 20 billion. The government will focus on developing Renewable Energy projects to diverse affiant supply of electricity. On improvements to combustion engines as well as hybrids according to meet eu emissions targets. European infrastructure is insufficient yet for Pure Electric cars. The car manufacturer is working to develop stretch versions of its basic models. Very futuristic. Lets stay in germany. The National Parliament wants answers after reports of nsa and dchq listening in on german conversations. The Committee Plans to ask executives from Deutsche Telekom if they knew that the nsa had gained access to their networks. Lets figure this out. Hans nichols joins us now from berlin. This is pretty interesting. The germans are getting quite serious about this. The u. S. Is going to have to pay attention. Germanyhave already has already asked the cia had to leave in response to revelations about two months ago. This greatest latest revelation is that there was direct access between the nsa q into servers, routers, networks, that they tapped in in a similar way that they have done in the u. K. And the states. The question becomes, did Deutsche Telekom know about it . If they did, what sort of culpability is there . If they didnt, it becomes a clear violation not only of german law but also of german sovereignty. That is what this committee is going to try to get to the bottom of. They are still seeking the cooperation of edward snowden. There was some talk about him coming here. He would have to have ironclad asylum assurance. Public, the german continues to be outraged. Of the details of this, how different is this from what happens in the United States in terms of tapping into the network . Is this different . Here is the difference as far as i can tell. This is based on documents. The u. S. , in some cases the nsa used the law to compel at t, verizon, to give them access to their networks, to tap into the portals. Similar story appears to be the case with the gqhq in the u. K. Here it appears the companies didnt know about it. That is that there was a forced entry into these servers and that seems to be the main difference. If they didnt have the cooperation as far as we know of the german government. Thank you very much indeed. For those listening on bloomberg radio, bloomberg the first word is up next. For our viewers, it is a second hour of the pulse. The subject of the week, the battle for scotland. We will get a number of angles, figure out where we stand. Only a few days to go until polling. M a to talk about as well. Tui and its german parents are combining. This merger has long been touted but we are speaking to both ceos to figure out how they can convince analysts this is a good deal. That is all coming up as well. We will focus on ukraine too. I will see you in a moment. David cameron back in scotland as campaigning enters the final days. Currency left out in the cold. The ruble hits record lows as russia cost foreign minister russias foreign minister meets john kerry. A failed takeover bid for heineken. This, as the market makes sab the new target. Good evening
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