Transcripts For BLOOMBERG On The Move 20160525

Bayers choice. Bed. Nto rejects the rejects the bid. Where less than a half hour wait from the European Equity market we are less than a halfhour away from the European Equity market open. Your stocks up. We are pulled up another percent this morning. Equities overnight in asia doing very well. I was looking at the hang seng index in hong kong. It was up by 2. 5 standard deviations above the mean. Doing incredibly well. The dollar showing a little bit of weakness. The oil showing gain. That should give some more boost to todays market. Lets get to first word news amin. Aslinda haslinda italys biggest bank. That is after assets to improve capital lost the support of investors. He will depart once a successor has been named. He and the board agrees there was a need for a management change. Bayer says it is still optimistic that its pursuit of monsanto will succeed, despite the 62 billion bid being rejected. Offer syrizaare undervalues the company. Monsantos shares grows in new york. Bayers shares have fallen more than 7 . The deal would create the worlds biggest supplier of Farm Chemicals and seeds. Leaving the European Union could add tens of billions of pounds borrowing and force George Osborne to extend austerity into the next decade. Instead of returning to sublet 2020 fiscal year as planned, britain may face if it votes for a brexit next month. Donald trump has won the republican president ial primary in washington state. That puts the parties present of nominee on the cusp of crossing the threshold required to formally secure the nomination. At the same time, paul ryan has begun telling confidence that he wants to and his standoff with he wants to end his standoff with trump. Global news global news, 24 hours a day, powered by 2400 journalists in more than 150 news bureaus around the world. You can find more stores on the bloomberg at top. Megan thank you very much for that. Greeces creditors have reached an agreement that will allow. Elease of euros of aid there have taken steps to relieve the burden of debt. After a meeting of leaders in brussels, the International Monetary fund softened its stance it we are going to be joined by ian. What if you got from last nights meeting. What will be the political impact . There were three main headlines last night. There was a deal on the payout of 10. 3 billion euros to greece. There was also an agreement to look at that relief in the future. The details are still to come. Also, the imf gave a commitment that it would continue to participate in the greece in the greek rescue. That is important to germany, especially going into elections next year. The political impact in germany, some certainty for anglo merkel going into those elections. More than anything, some sense of calm now. The question on that relief has been pushed until 2018. Debt relief has been pushed until 2018. Guy im waiting for details on how this debt restructuring is going to work that keeps the imf on board it im looking for details and im struggling to find them. This bill all too reminiscent on where we have been before. Reminiscent of everything that we have seen in the greek saga over the last five or six years. His this agreement in principle to keep everybody this agreement in principle is to keep everybody happy but nobody is happen. Did thereis happy you is no concrete happy. There is no concrete measures. There are arguments down the road, i think. Guy cans kicked down the road. Ian, thank you very much indeed. That long session on greece. ,ets bring in our Guest International cio. Greece, off the radar screen for the summer. Looks like it. You summed it up right in terms of kicking the can down the road. From an expectation perspective, we knew there was going to be some final resolution. The big change that everyone is aware of is the immigrant crisis pivotable leverage pivotal leverage that greece now holds. The impact point in terms of people coming to europe. From a political perspective, there is more of a softening to make sure that greece felt softened and warmed up in terms of some of the financial agreements. Certainly the fundamentals have not changed. In terms of the overall european start toward the immigrant crisis, in terms of greeces pivotal role, i felt there was going to be some kind of yield as we went into the summer months. Megan we are not going to see matt we are not good to see surplus as 3. 5 greece has the mandate of them. Wayne if you look at the overall european monitoring of fiscal surplus and deficit, there are not that many countries within europe that are able to achieve. They have been ascribed through from greeces perspective, it is going to be one off maintaining the patients and patients in induced comas. To make sure it doesnt become a bigger problem. You can argue it is a small price to pay to kick the can down the road for another couple of quarters. Again, i think the ongoing monitoring will need to occur. Im pleased the imf has made a commitment that they are going to be involved, especially from germanys perspective. From all of these triparty negotiations, it is really important. Guy this is symptomatic surrounding the whole problem. The inability to deal with the backing story and find a way of getting growth going. The tough decisions, we are really struggling to make them. Italy, the classic case in point, has some important decisions to make. You look at the strikes taking this regard to the is just a microcosm. Wayne the micro the United States of europe is doing an experiment. Germany is flawed from the outset in terms of the inability to have one fiscal policy that harmonizes everyone. We dont have that it we have many Different Countries with many different cultural traits. We dont have that. We have many Different Countries with many different cultural traits. Expectations from any significant periods of growth. Tend to get aou smoother Growth Profile but you are more protected on the downside. Europe is flawed but it doesnt mean it will break up or it will stop working. There is potential for growth. It is still a big area. Over 70 of its gdp is from domestic consumption. Guy the competition will carry on shortly. The conversation will carry on shortly. , he thinks the eurozone will break up. The Dollar Strengthens on the prospect of yours Interest Rate hikes. China has weekend its yuan. We will get has weakened its yuan. We will get the details next. Magical welcome to on the move. Go matt welcome to on the move to recover lets get the Bloomberg Business flash with haslinda amin. Reported spencer have profits that beat analyst estimates. It rose to 680 Million Pounds beating the 674 Million Pound the new ceo says he will refresh styles more often and boost staffing to revive the u. K. Retailers struggling clothing business. Tamara has cut pay for his executives by 18 nomura has cut pay for his test for its executives by 18 . Deferrednd remuneration for march. Apans eggs brokerage slumped apple plans to capitalize on indias growing market may have had a setback following tim cooks recent visit. The Promotion Board has told apple if it wants to opal open its own stores in india, it must commit to sourcing locally. Apple does not currently meet the criteria but a panels decision could still be overruled by the modi government. A down week for Deutsche Bank just got worse. The lender slipped to number four and a table of the worlds biggest traders. That, as it fell from being number two. Jpmorgan picked up at secondplace while citigroup kept all of the top spots for the third year. That is your Bloomberg Business flash. Magical thank you very matt matt a steady rate against the dollar combined with depreciation against other major currencies. Lets go to bloombergs justine na li. Go yone surprised that surprised . We did get a much stronger dollar overnight because of expectations that the fed could raise rates as soon as next month. I think for any onlookers that were expecting the pboc might want to keep things steady, this fixing did raise some eyebrows. We have to remember that under the current fixing mechanism, the dollar move against major currencies is playing a much bigger role. It makes sense that if you have a much summer dollar overnight against major currencies, the u. N. The yuan fixing should be guy how the mechanism actually works. We world on this year talk about the market playing a big role in this. Is the market playing a big role . Agree thatople would relative to before, it is playing a slightly bigger role, because if you remember what the pboc told us last august, the fixing depends on the previous days close as well as overnight moves. What happened is that with the dollar rising over most major currencies, the yuan fixing against the dollar has to be adjusted accordingly so that you take into account the basket of currencies. Indeed. Nk you very much justina lee joining us. Ayne bauer joining us he is the international cio. Wayne they are really caught and they have been for many months. What they would like is a weaker currency. They need that improvement in export competitiveness, especially as you saw weakness in the euro and the manufacturing perspective. Taking those contracts and away. Their concern about capital flight. They do want to ensure you are assets stayed. Theyre very concerned that the they go through a more communicative Public Policy to improve the export competitiveness, they encouraged some of the capital flight. You can see they are kind of torn. The most recent change we had in fed expectations which is improving dollar appreciation prospects for the next couple of weeks, will also give them a worried, because what they dont want to do is to be dragged up from a valuation perspective. They go into the next half year with a view that the fed is back on track to have a series of rate hikes which means you got the Dollar Strength coming in which forces you want up. It crystallizes some of that relaxation in terms of the fixing rate. Here at a looking spread between the onshore and offshore yuan. Heres a yeartodate look. The spread has been pretty darn tight all year. If you look last year to 12 months, we had a much bigger spread in 2015. It looks like china is playing and well, as far as traders market mechanism is concerned. I totally agree. Say ito obvious when he is controlled when you say it is control. To ensure that it has control in terms of currency fixing rates but also market access. It tries to control some that market volatility. They have been very poor in terms of market volatility. It is trying to make sure they hold control over the marketplace. Am a positive perspective, in positive from a perspective, and the last few weeks, we have seen some failures whether it is defaults or loans being unpaid. Why i say that is a positive is they have more confidence that they need to show the market that things can fail in china, that it is not all positive news. They are being supported by betterthanexpected economic numbers. M chinese governors Chinese Government perspective, it is to make sure they are controlling this slowdown. Guy are they being reactive or proactive . This is on the back of what we expect the fed to do. Nevertheless, they look like they are behind the curve. Wayne where they have been struggling is the communication policy. They tended to be seen as being behind the curve. They tend to be seen as being behind the curve. They have control but their communication policy seems to be always be test seems to always be slightly delayed and confused seems to be always slightly delayed and confused. There are worried that giving the market too much information ahead of time. They know what they are doing. It is just their ability and confidence to make sure they are in front of the market which we have not seen. Guy when bauer joining us. Wayne bauer joining us. We are nine minutes away from the european open. It looks like we are going to see a strong move. Banking sector is focused. Unicredit ceo is stepping down here to deutsche is in focus. Stepping down. Deutsche is in focus. The market is opening eight minutes away. Guy 7 53, london. It looks like it is going to be a positive start here as we are going to see elsewhere on the continents. Five minutes until the markets open. Lets talk about some of the stocks. We are going to have a new boss at unicredit, italys systemic bank. Are we going to have to see a capital raising. Marks spencer, number beat. That is the top line. More significantly is the is this is a business that wants to compete with primark. Matt i have heard of by mark. I dont know as much heard of primark. I dont know as much as you. Let me take a look at Deutsche Bank. I spent a lot of time with Deutsche Bank since ive been here over the last couple of weeks. This chart shows you charts shows you which a banks performance against its peers. Deutsche bank in blue, its peers in white. It is far underperformed its european peers. The continued lawsuits that are brought up, it seems almost daily. Now we have seen that they have slipped down to fourth place as far as global currency traders. More than 5 trillion a day market. Deutsche bank has less than 8 market share. This time last year they had more than 14 market share. It has been a rough week for deutsche. Primark, what do i say about it . How do we think this market is . Oing to open that is the story from yesterday, a massive rally from the stoxx 600. This morning, we are going to add to it. The market open, next. Guy good morning. Welcome to on the move. I am alongside matt miller. He is in berlin. Where moments away from the start of european trading. Matt has your morning brief. Matt thanks guy. Greece gets its money. Germany and the imf released 10 Million Euros 10 billion euros of aid and restructure athens debt. With critical with critical details yet to be agreed, has the canned been kicked down the road again . Quick scan the bank now avoid another Capital Raise . Plus buyers choice, while monsanto might have rejected the 62 million 62 billion offer, the tone was positive. Markets are just about to open. Guy lets take a look at where we think we will trade today. European markets are going to open on that front as well. There are huge numbers from yesterday being carried on or at least maintained. A little bit of traction now. It will be interesting to see where the end of the day takes us. The front end of the day. A bold move for european equities. Lets get the details of what is moving these markets. Stoxx 600 is up 3 10 of a percent. It is a broadbased rally. In asia, every Industry Group is gaining here now. It is the Energy Stocks leading. No surprise given we are seeing wti close to 50 a barrel. Your of commodity producers and materials following closely behind up almost 8 10 of a percent. Every Industry Group is on for the stoxx 600. The u. K. Gilt market is opening up as well. This is the yield year to date. This is one of the bestperforming or best developed bond markets so far this year. Its down 1. 48 on the 10 year. We are seeing that yield edge ever so slightly so higher here. U. K. Bonds did have their longest winning run on record just earlier this month. Thats where we are on the u. K. I shown you the stoxx 600, lets move on to some of the stocks were watching this morning, starting with unicredit, the ceo has agreed to step down after almost six years at the helm. It looks like the stock is gaining on that for unit credit. They will depart once a successor has been named. Were still waiting for buyer to move and what we got yesterday was monsanto rejecting its 62 billion takeover bid but it seems like there is a conciliatory tone between these companies because bayer looks forward to more talks with monsanto and it is positive that it can overcome their concerns. There opening up higher. 2. 7 on that. But i wanted to look at mns because it reported profits that beat analyst estimates as the new ceo said he would refresh styles more often. Pretax profits rose 3. 5 . There just waiting for mns to open. With that i will send it back to you guys. Guy were just getting numbers coming through from spare bank out of russia. The estimate was 102 billion and it looks like spare bank is a little bit ahead on those estimates. They step down after six years at the helm. After having lost the support of investors and to be honest quite a lot of share prices. Bloomberg intelligence ceo joins us now. Also with us is wayne bowers. Do they have to raise money . They certainly need more capital. One of the issues they face is when you are trading at four times, if you try to raise capital it is effective. Pioneer, its a very Good Business edits up and they can do their. You think this is what they will do . I dont think they need to pile in. They need to raise capital, per se. They took restore credibility, demonstrate that they will do the right thing. In the november update it was disappointing. More aggressive on provisioning, spin off the assets and relieve some of the pressure. Bear in mind it second only to sent in their. Ofhas 40 billion unprovisioned nonperforming. Its a big issue. Isnt this the beauty of bringing in a new ceo, he can say the mistakes made whether previous of ministration art much worse than i expected. I will write down everything including the kitchen sink and we have to have a Capital Increase that will be bigger than you may have thought. You have to bear in mind the role that union credit and the government want union credit to play. Its all very well to say the coverage ratio isnt enough but what is that mean for the rest of the sector. To every other bank and the Smaller Banks are in the same position etc. Settling the pressure will be on them. Its not softly softly catchy monkey but certainly the restructuring unwinding the acquisition spree, they have written off 15 billion euros in the last six years. The states are refocusing, getting credibility back, beginning to address the provisioning credibly. Guy European Bank stocks are being marked down aggressively. 0. 4 , deutsche around the same levels. Theyve been marked down so hard. Investors are looking at them saying at some point of have to put my hand my pocket. Do they want to do that . Is that the right trade . They just said your trading on this level of book value and it is so dilutive. Johnson had a few really good points that sometimes the underlying strategy is perhaps either so confused within these its difficult for very big financial organizations to keep up and adapt. And thirdly to consider what to do next. We have not seen a significant amount of flipflop on the strategy. Its been very much reactive to the legislation which is an increasing burden. In terms of that proposition Going Forward, we talk about on one side there is a positive but when it comes to Financial Services it could be seen as a headwind. But a greater opportunity is the introduction of more technology and how that disrupts the provision of Financial Services. Of at the process they have invested in, there is a massive amount of money and Capital Expenditure which support their business models. Also the process that sits from a Banking System perspective. We are seeing major Central Banks get involved quite aggressively. In terms of changing to move to frictionless society. Perspective ceos for trying to reset the Strategic Direction that will. Ake many years we have a lot to do. You guys are talking about the price to book values of these banks. From a u. S. Standpoint these are shockingly low numbers. Here we have a chart that you can all use on the bloomberg. In blue i have European Banks, in purple, unicredit and in white, Deutsche Bank. Its amazing that unicredit was hovering closer to it european peers and further away from the underperforming german bank. But now come down to deutsches level here. Where should European Banks be trading relative to book value . Are they destined to stay below one for much longer . For the next several quarters, expectation should be set at these levels. I cannot see anything looking forward that will change or improve the situation. From an investor perspective need to understand the underlying corporate structure. Also the underlying Business Environment in the Business Environment is tough. Even noticing improvement in increases, it hasnt necessarily flown through into the bottom line. Earningther big potential for banks but in very difficult to achieve a negative Interest Rate environment. Some of the underlying fundamental drivers of what drives banking stocks has been very difficult for banks to capitalize and monetize. The prospects Going Forward dont look significantly change from where they have been in the last few quarters. When is a valley trap not a valley trap . The issue is that these banks return single digits. If you look at the implied cost of equity it is 10 12 . Its the biggest restructuring story. Reflectingons are fundamentals. In the fundamentals dont bother changing anytime soon. The fact is that the market still values these things in the same way. Sadly their largely fairly valued. Jonathan i went to thank you, jonathan joining us there from northern trust. When bowers is going to stay on with us. Owing seek to secure a successful deal. Bid hasllion monsanto been rejected. As near as said there is a conciliatory tone for monsanto. How high will the german firm have to go with the next round of bidding and what investors in bayer even back a higher offer. He will discuss next. Guy welcome back 30 minutes into the market day, a cracking view of equities, today turning out to be not too bad. Yesterday we started negative territory and when sharply positive today we started in positive territory. What happens next question mark will wait and we will watch. A broadbased rally puts you the same amount. The banks up 0. 7 with a little bit of underperformance coming in here. In terms of the Market Performance its gritty broadbased. That is fairly indicative of what markets are feeling now. Its not going to its happening at an index level rather than the sector level where the bulk of the price action has been as of late. Lets get you up to speed with Everything Else you need to know. The ceo of unicredit has agreed to step down after almost six years at the helm of italys biggest bank. Thats after efforts to improve capital and revive profit. Thatd the board agree there was a need for a management change. They are says they are still optimistic that he will succeed despite the 62 billion bid being rejected. He says the 122 per share offer significantly undervalued the company and does not address execution risks of the deal. The shares rose more than 3 in new york, buyer shares or falling more than 7 since the offer was first revealed. The deal would create the World Biggest supplier of chemicals and seeds. Leaving the European Union could at tens of billions of pounds to u. K. Government borrowing and forced the chancellor George Osborne to extend austerity into the next decade according to the institute of fiscal studies. Planned they face of budget deficit of as much as 30 billion pounds if it is a vote for a brexit next month. Theonald trump has won republican president ial primary in washington state. That puts the partys presumptive nominee on the cusp of crossing the delegate threshold required to formally secure the nomination. At the same time, House Speaker paul ryan has begun telling confidence that he would like to end his support of trump. They said paul ryans decision is due to the the split has sharpened divisions within the republican party. Global news 24 hours a day powered by 12 400 journalists in more than 150 bureaus around the world. You can find more stories on the bloomberg at top. Lets get back to one of our top stories now. Bayer says they are confident they can meet monsantos demands after the worlds biggest seed producer rejected a 62 billion takeover saying it was too low but struck a conciliatory tone. For more we are joined by bloombergs europe deals reporter ruth david. When bowers is still with us in london. Let me start with you and ask you, my thinking is buyer shareholders were already perturbed about the 122 per share offer. How they feel about 138 per share offer . Probably not so good and we heard one of the things theyre saying is that they can raise capital up to ut 35 of the market gap they can just go to the investors in do that. But one thing to keep in mind is everybody kind of knows your first offer is not going to be your final offer. You the story became public had analysts talking about the range between 120 and 150. Shares are still trading way below the first offer price. Investors are where that this could probably go higher. If bayer would like to do that there are a couple things they can do. He said that they will not sell assets but they can look at diverting assets. They can look at a different combination because right now its just an oil cash deal. They can look at the stock element. Bayer does have the firepower to raise the offer if they want to. It seems like they want to engage in talks and would probably be open to doing that. The tone was really interesting. Monsanto basically said you need to give us more money but we are up for it. We say its probably a good deal and the reason that we have say that is that we use the same logic only a little while ago. Are they opening the door to the stock elements . Is that what they are saying . Pay us more and we will take it in stock, we are confident about the combination of the deal happening and being positive so stock would not be that bad an idea . You have to rubber that monsanto has had its own fair share of trouble as well. They tried to inquire syngenta. They had trouble with some of the biggest Commodities Companies in the world. They had issues with india and inentina and last year argentina the same thing happened. They said no, give us more money than the finally got the deal. Nothing its exactly the same but it feels like it will stop people know your first offer is not going to be the one of the compasses lets do this. But theyre saying we want to talk with you. Certainly different in tone to sort the other deals. But certain felt a lot like this. Join us on the by monsanto story. I just want quickly show you this chart here. To give you a quick heads up with what is happening with Martin Spencer this morning. The numbers look good the strategy updated the important bit and what investors are reacting to is the idea that maybe what were going to see is this new strategy being put forward by the new boss that actually could cost a little bit of money and thats why were seeing what were seeing this morning. This is the stock over the next couple of days down 0 0. 2 . The miskicked bloomberg and show you what is happened over the last day. 7. 02 ,day we are down by the stock being pummeled. Joining us as a guest in london is way bowers. The international cio. Adapt, you have to move on, you have to be getting on board with what is happening in terms of technology. The Retail Sector is another classic case in point. You look at what is happening in retail and it is all about technology. It continues to be about technology. Its been incredibly slow but this is a business. Like the banks of got invest in technology. That will be expensive. Especially with the shareholders on board. Lso the strap line with guy i have struggled with that but they can change my mind. Imageuppose the mirror would be the supermarkets. Those supermarkets and were able to quickly adapt to what was happening from a Technology Perspective not just online delivery but the use of delivery mechanisms versus those that didnt and the share price and the detrimental valuations that we saw. They were able to get ahead of technology. Fashion is being utilized by a very successful change at the moment. They were able to do a replication model that will cost an explicit some. Are they going to try to create blue sky which how much does that cost . What does it look like . Will it work . Guy i final question for you, equity markets on the front foot, do you go with this rally, do you believe it has sustainability. Looking at the markets we can say that equities are rallying. We have been Holding Steady and even through First Quarter volatility we have enjoyed the definite improvement in valuations that we have seen as we go through the second quarter. Steady. To again hold there is a lot of volatility in the Market Driven by the populist politic its one Way Investors need to hold steady and maintain this profile. Guy thank you for sharing your time with us. French stocks in focus. They have fallen hard this year but could they be about to bounce back . Our chart for the hour is next. This is on the move. Lets get to your chart of the hour, lets bring in nejra cehic. Nejra the cac 40 is down about 4 year to date. More than two thirds of the stocks on frances benchmark have fallen this year. The positive in this is valuation. If you look at the chart, french stocks are at their cheapest in three years relative to the stoxx 600. Trades at about 14 times the estimated earnings of its members. The question is, are we at an Inflection Point . The question among Fund Managers looks like it is warming. France is now the second most favored in europe. This is according to a Merrill Lynch survey. Last month it was one of the least popular. It was perhaps time for a turnaround and this chart is showing valuation at the cheapest in three years. Oil cfoing up, the stat will be joining us here on bloomberg. We will talk about m a and offshore drilling. Next here on on the move or co on the move. We have breaking news on greek debt after the agreement yesterday we see greek debt soaring, pushing the 10 year yield down below 7 for the First Time Since november. You actually see a lot more action at the front of the curve if you look at the gm and function, you can see moves byoss Asset Classes ranked their standard deviations away from the mean. Here you can see the greek twoyear is the most severe move of any bond being traded right now as far as the major markets we are following. A massive move, the kind you would expect after that agreement that we had yesterday. Thank you very much indeed. Lets talk but whats happening in the market. Markets are very much on the front foot once again. A big move yesterday followed up septic only by decent moves today. Interesting to see some of the italian banks this morning. We have a fairly interesting bunch at the bottom of the story. Martin spencer is certainly one to focus on. Lets get some details on exactly which stocks are moving. With pen in group performer so far. 2015ard today that it is 2016 results were in line with forecasts. It pushed the stock up the most since november. The waste and sewage regulators saying it back to new one point billion 1. 1 billion pound a couple things pushing the stock higher today. I wanted to highlight one of these italian banks. Banco popolare, we have seen them gaining today the lesson again on this. This is on the unicredit decision to replace the ceo, he has stepped down. And finally i wanted to look at marks spencer. The headline number we got in earnings was a beat but the stocks seem to be moving lower. They expect a shortterm hit to profit. What the ceo has done is under rejuvenate basically the clothing business by narrowing ranges, cutting prices and booting in stores. Its causing a little bit of a concern for investors for now. The stock is one of the worst performers on the stoxx 600. The better forget about 140 per barrel. Thats the message from norways oil minister. Onwe are very dependent storm growth or exports, including oil and gas. Very high oil prices. Oil prices were hitting hundred 40 per barrel. That does not contribute to a strong global economic. Im not hoping for it. Guy lets forget about 140 per barrel. The cfo stat Oil Gas Producer the largest member of the stock exchange. Probably a good view on whats happening right now. Good morning ernesto cia. Hundred 40 is gone but looks like its stunning to get a little bit back into balance. Is that your view as well . The you think were starting to balance out supply and demand . I think we are seeing some signs of recovery but there is still a lot of uncertainty out there obviously. Side,g at the production and saudi arabia, iraq and russia are producing a lot. At the same time there are predicted growing demand. Theres been historically high storage levels. Who would probably have a tough year. Guy so what will you do with your . Analysts expecting Capital Expenditure to be even less than 13 billion that we have seen guided by you. What is the story . What kind of respected billy have you got whats the picture going to be like first of all we continue with less than world class projects. Our major project. Having said that, we have cut back on the to maintain flexibility. Tos 6und 4 billion billion in the coming years. To delayuld continue projects. If we decide to. This asople talk about a saudi strategy to gain market u. S. Shalehut down production, they happen very successful at that. Do you see market share gains as well . Can you write on the coattails of saudi strategy . All, we have to be prepared for a potentially longer period of volatility than we see. Improve onwe need to the project and concentrate on. Hat we can do about that you can be prepared. You are a very wealthy company and you have a lot of leverage still to use if you like. Can you gain market share . Can you hold out and see a lot of shale production shutting down . Is it paying off for stat oil as well . We are involved in our own is this as you know and we have reduced the production. With dominance on the norwegian sector in our portfolio, we can provide energy that competitive levels and maintain those shares. That is ok. Guy what is your investment in London Petroleum . Is it a financial investment, is it a strategic investment . What is it . 11. 3 becauseat we thought it was a good exposure to the major teams in the world. Us asking for oil contributions. It started off as a financial investment. Where quite happy where we are. 20 and then we can do equity accounting. We can book our share of the reserves. As far as your production is concerned, when do you expect to bring some of that online . For prices make it possible you to go back to fuller capacity . , we are on all journey with the u. S. Business. It used to be breakeven around 90 barrels which for us is significantly higher than the prices you have seen lately so were bringing it down. We are on a journey on these lines. What is the government view of where you think the Energy Sector in your part of the world is going . What is your take on where they see the big picture going . This is an economy that is heavily reliant on this picture and you are a big heart of the ross us. Its very important to norway and as the major player on the norwegian shelf, the government would like to see continuous investments in Industrial Projects that keep the activity levels on the ncs. They have recently provided new licenses in the 23rd round. Its the First Time Since 1994 that they opened we have been awarded four operator shifts in the barents sea. Is at the disputed russian border so it is quite exciting for us. Guy thank you very much indeed. Next, greece gets the green light for the 10. 3 billion euro paid out. How much more needs to be done to fix the economy . That is next. Guy welcome back you are watching on the move. Russia has returned to the International Bond Market Selling 1. 5 billion of euro bonds. The state run bank was the sole organizer of the sale. Isn chilcote joins us now he an exclusive interview and quite a bit of insight into the story. Andre is on the phone with us now. I want to ask you for starters, what is going on with euro clear. We understand that russia met with them yesterday and they decided to make the bond euro clear rubble. What is the problem . Theres a great deal of discretion america and europe come a made by the state department we dont understand that because the issuance of sovereign bonds is not subject to sanctions. But there are questions about what if. Sectors a very negative on the Financial Institution and particularly. We understand that russia will meet with euro clear the finance ministry again today. Is that going to lead to some kind of resolution whereby they would expect the bonds for the secondary market . I mean the protection is done without them at the moment. It will be handling the federation. The minister of finance greece is the paying agent, plus we look continue our discussions with euro clear and maybe we can use them at a later stage. A later stage like when . I dont know. It depends on the negotiations. We are not focusing on this. Because the placement is in two places. With a huge operator. That there will be a good secondary market demand for tos which might allow us [indiscernible] the finance Ministry Says 70 of the bond buyers are those the place bids were international bids. What proportion of those were russian expats . 75 of the money came from countries like the United States, Great Britain and asia. Therom the very beginning mr. Of pilots put limits on us. Idea was to attract new investors. We formed these rules. Maybe its not very fair to russian investors because we have great demand. They rejected the substantial where did these investors come from . Would you care to share names . I would not mention the name but i mentioned the geography. 1. 75 russia has raised billion in the finance ministry has indicated they were prepared to raise 3 billion this year for the remaining one and a quarter billion, why not just do this on the Moscow Exchange question mark is it necessary to do this on a eurobond . Normal way not all orders are met. Thats the russian media. Insulated demand which is not correct. The either do not understand what they are writing about or they are using wrong information. That when yoution issue the monde the body are not defying the demand it will keep good markets for the paper because they dont need the money immediately we might use the opportunity to make another break or in this [indiscernible] thank you for your time this morning and speaking with bloomberg first. Thank you very much to ryan chilcote. Up next with a preview the day ahead including the german figures which will be out a little bit later on. That is next. Welcome back to on the move, i am matt miller in berlin. Greeces creditors have released reach an agreement that will allow 10 billion euros in aid. It also taken steps to relieve them of debt after an 11 hour meeting in brussels. The greek finance minister stressed the significance of the deal. Moment for important greece after so much time. We have an agreement not only on the review and the structural measures, but on debt. Into one. Re collided your member we agreed first to finish the review and then there debt be a discussion on but these things have collided and that we have the overall package. Joining me now to talk more about what this deal means for greece is the former greek minister for shipping and growth and the foreign european former european commissioner as well. Thank you for your time. Let me ask you about the euros and debt that they have taken steps toward dealing with. Have they really kicked the can down the road again . Agreement was a part of the development otherwise we would default and have again the nightmare of last summer. But i think the disagreement is something that everybody wanted because there were other problems and Everybody Knows it becauseeet its targets there are huge difficulties. Theagreement as far as advantages concerned is quite vague. That this era has swallowed the Prime Minister partys government in greece. Why there was always an agreement there always a problem with the implementation. Now the problem is the implementation and the government has issued a challenge. Is it even a possibility. Lets hope there is a possibility. We are into account that in this agreement there is a huge over taxation in all individuals and all enterprises. There is a problem for the people, for the workers if they can pay the taxes. There is a problem for the companies and particularly for investment. On of from a u. S. Point of view or a german point of view, people would say that you have to overtax them because they do not pay taxes to begin with so have to try to balance that out. I understand this argument and i could say two things. The first is that i think there is a need for the german politicians are american politicians to explain to their own people that almost 96 96 of the money given to greece has gone to the creditors and the banks. Not to the greek budget. On the other side this equity issue that in order to repay the debt because this is what the grexit will have to do. Recession, six years at least 25 of gdp and with huge unemployment, how can we find the money to repay the debt. We need the conditions in place to create this structures and the possibilities for growth. This means the europeans and Central Banks we need to come back to Public Investment. Let me ask you on that note, the economist has recently published an article pointing out that all of the wealthiest countries in europe, all of those countries that needed the least have got so much debt relief from the quantitative easing program. And greece has none of that because the ecb cannot or will not buy greek debt. Have you talked with any ecb members about the possibility of making that happen. If they can by 30 of portuguese that why can they buy none of greek debt. We all know that greece is the only country which does not participate in quantitative easing. There are some arguments but at the same time i think that this is one of the solutions. There are some arguments and i believe that after this agreement, things will be better and maybe mr. Draghi can play an important political role at the european level. Solution,rt of the quantitative easing for the greek debt and restructuring in the longterm. Needist on that, we cooperation and agreement with the European Investment bank. For Public Investment increase. Its a very complicated issue and it involves a lot more explaining a lot more understanding, it is a good thing you are doing it. Thank you so much for joining us. Guy, back to you. Guy great interview. Lets talk a little bit about what this means. Richard jones is joining us now. Greece is off the table. We dont have to worry about that for quite some time. Equity markets are on the front foot and rallying pretty hard. The world seems a complex place right now in the fed will raise rates. Next i think that todays equity price axis stands out because we really have not seen too much of it lately. It strikes in the equities have been going nowhere for quite a long time. If you see this kind of president price action continue beyond a couple of days than it becomes interesting because then you start to develop that narrative about maybe the investors are quite comfortable with what the fed will do. As it stands now i dont think it is rice enough for people to have a firm handle on it and we need to see what happens in the next weeks. A dont know that they will raise rates, i am speculating because thats what they are telling us. Concerned of the action we are seeing and you look at whats what happened. We are clearly in a wait and see mode aggressively. Waiting for yellen to speak, she pours cold water on this now it will be a big deal. I think it is going to be something that investors are kind of expecting in the back of their minds because even though we have seen probabilities climbed the have not fully priced anything. We are still waiting to hear from the chair. Think you very much indeed. The other risk that we are facing this summer is what is happening with the brexit referendum. This friday will start a special halfhour show from 8 30 to 9 00 and we will talk about all of the news that surrounds the debate. Francine china may press the u. S. On the timing of rate hikes. Its currency fixing to the lowest in ifvfive years. 10year yield dropped below 7 for the First Time Since summer. Unicredit replaces its ceo after losing confidence. It paves the way for a review of its capital strategy. So, welcome to the pulse, live here