You are watching the pulse. I am guy johnson. Eat, sleep, pray. The brandnew way to start your day. A great story. Harris. We would check out the first european outpost. Paris. The most expensive suites. Let us stay in paris and our top story. Agricole said its profits were nearly wiped out in the second portugalsd to bailout. The details. We knew it will be bad and the number is a bit. Is exposed tole portugal. They own a 14 per they own a stake. It is the wiped down to zero. They took a charge in the Second Quarter. An extra 200 Million Euros for keptalue that has been down to zero. In todays debate to the 19 dates of backanto to the 1980s. Santo familyhe regain control of the company. That relationship has gone bad. One person said the bank had the family. By lets talk about one stock that is up. Investors are looking at the capital ratios and the bottom line. Talk about the figures ok. Expected andely priced in. Better than expected capital ratio and the corporate and itent profit is up is low in italy which is one of their key markets and we saw it decline in the Second Quarter. They had a net income of nearly one billion euros. In the Second Quarter and the other big news on agricole is they had a submitted their internal review transactions with countries affected by u. S. Sanctions. ,he bill on the Conference Call they declined to say how much they are planning to set aside for this wanted they did say the transaction was significantly lower than peers. Had doneay, agricole better on the market than its peers. More than 10 of their shares since the beginning of the year since a decline of 10 . Guy . Thank you very much. The latest from agricole. Telefonica is offering to buy a r 9ilian internet fo billion. Matt campbell joins us to talk us through the deal. On this deals seems to be the sense. You have people at the moment. This asset is clearly in play. The question is, who will buy it . They put out a short release saying they have not been soliciting buyers. Everybody relies vivendi has been moving into telecommunications. It was only when and what is the number . The response was measured to say the least. They have pretty punchy expectations of the value for this company which has grown very rapidly along with a brazilian middle class. This story has a little bit longer to run. What is about the structure of this deal they do not like . Is is the price or other aspects . Going on. Ngs first the number, 6. 7 billion euros. Last year, vivendi terminated a sales process because it wanted more like 8 billion euros. That has attracted directv from the u. S. Billion as the benchmark, we are a long way from that and most of it will be in the shares. Shares particularly in telefonicas brazilian unit. Vivendi still indigo with a foot tall in brazil if they take it. Still ending up with a foothold in brazil if they take it. Lighting up the phones as we speak to solicit interest and get competitive. You think there will be others . There will be at t who have been long speculated to go into latin america. We have local players. American mobile. Conceivably make an offer. Theres a lot of players that can come around should not beicas bid accepted. Matt campbell, the latest on the telecommunications story. Hotels, profit dropped 8 . We caught up with sco and his first ceo in his first interview. Look, there are some situations around the world that are political or social or fighting going on in certain markets. Clearly, we have to protect our guests and employees. None are that critical in terms of our scare. Love to take a very longterm view. We see markets like russia and china and the middle east words a lot of longterm opportunity. We have to take a very longterm view. The majority of our profits cant from a u. S. And europe. We will take a longterm view until it can be buffered. Until we are confirmed. The momentum of the business and what we are looking at over the next three years seem strong. Hiss that was the ceo, first interview of the day. You will hear more from later in the day. Talk about gears and autos. Cars. Beat estimates on suv sales. Big cars selling. Bmw first. They were expected to deliver a profit . Almost 5 higher in profits. A record profit for tell you. They are successful in the united states. A record profit for toyota. It is the suv. Their highlander. It is off the chart. We are seeing the margin, the profitability they are making it is rising as well. Srom the highlander and lexu and rav 4 has been doing well. Ota is the biggest carmela carmaker in the world. It is 30 higher than a volkswagen. Les were more in terms of volumes. If you put it all together, toyotas profit is bigger than gm plus four plus nissan. This is a huge company. A really surprised turnout. In sales taxhikie has not been offset by the dominant united states. Sens w is a classic lassic. Is a c almost 50 increase in sales. They keep on increasing and bringing in new models. 16 new models is what they promised. Termshey are dominated in of their margin. In terms of profitability stopped beating the likes of audi and mercedes which both want to rip away the crowd of the luxury carmaker. 11 of sales is their profit. Than mercedesre and almost double mercedes and audi makes about 9 of its sales into profit. It is far beating the competition. X5 is whipping the competition. 6,y said series 3, 5, and all dominate. Chris they are making gay f as they are making a fourw heel car. Wheel, you push it and let the steering do is nothing. Can they make it work . Caroline hyde on bmw. Well talk more about it later and in the x7. We will take a break. Oil. Latest violence into context. That is all coming up on the pulse. Good morning. Welcome back. You are watching the pulse. Fighting in iraq sent oil prices tumbling. Is feeling the heat. Tony hayward, the ceo, is sticking to his forecast. We have to wait 15 minutes. He wouldve a Conference Call. We will learn about his personal view. Cfo said of their operations are safe and secure. Plans to remove verse and no. The big concern yesterday that 6. 5 at onedown by point and it is an issue, people are concerned the Islamic State were able to take the oil fields in the north of the country and their capacity is 30,000 barrels a day which is not much but the issue is if they can take that, that the taymor in the north and maybe threaten to get energy assets. Werefo said these feels taken by the Islamic State and they are outside of the kurdistan region. Was grabbed land when isil moving on baghdad. Nothing he said to be concerned kurdistan. Thats not the only issue we need to hear from tony hayward when we here at 9 30 a. M. Even if they prepop the oil and the fields themselves, what energy andstan and getting it to market . Basically, they have the pipeline up to turkey and the coast up and running but the Storage Facility is in there and it is full. The reason is they are pumping it onto tankers. Those tankers are looking to bring it to market. Theyre having trouble offloading the oil. This big argument between the andral government of iraq kurdistan where the federal government believe the kurds do not have the independent right to sell the oil. Every time you try to offload, iraq at a minimum threatens a lawsuit on the wouldbe buyer. Some of the tankers have been able to offload but far from the full operation. That is what people want to hear from tony hayward. Will he be to monetize all of the oil they got . Insight fromore richard. You cannot actually sell the stuff. You can invest in facilities and the pipeline and storage until you can sell it, it is a really viable. I do not want to play down the events, a security question, it is a issue about the lack of export route that is the biggest problem for producers operating in the region or the company has concessions. Are we starting to see a little bit of a chink . The u. S. Is more concerned that baghdad is effectively not living up and not providing revenuesharing with the Kurdish North and as a result, may be a case to say that shipping to sell. . The u. S. Official position will be on getting over the kurdish capital and baghdad to talk to each other and reach a compromise. That is to keep them united rather than fragmenting and tackling the threat. Part of that, some kind of compromise would be about oil exports. It is secondary to the outside partners. Work if you are a company trying to get oil out of the country and to market . What does the future hold for you . A lot of uncertainty. That has been the case for the past few years. A breakdown and wouldve had exports that happened and then they stopped. If you do not have the pipeline open and steady route to market, you are looking at local sells. Well below market rate and volume that is not that much capacity. You cannot raise your production even if the ceo is ready. You are stuck until the pop line opens pipeline opens. What about the Big Companies . The fact you have axon axon holding concessions exxon holdin concessions. Prospects are very exciting for them. If it becomes a fully opened place within export route and they will wait and see. The little guys, keystone, afron, they are generating some revenue. Get a bigrying to part of their portfolio. They cannot afford to walk away. In terms of the fighting, the end markets, a major concern. Any sense from people you are talking to, the situation is kurdsibly fluid and the have lost ground. That is significant as ryan said in the piece, it is more than kurdish territory. The area they have moved into because of the iraq he army has abandoned them. Not as same as the territory that been holding for years. What today are focused on at the moment is the Strategic Asset is one of the main routes of supplies to baghdad. Strategice, this withdraw and they were willing to lose and a because it was not part of the core oil infrastructure. I do not think the main fields are at the same level of threat. Not being beaten back. There is not a major offensive by the iraqi government. To be a concern to the market. When you look at the oil price at the moment, theres a sense of the relationship between iraq and the price. The moment, it is fine. How much risk is there within the current price of things deteriorating or improving . We see Oil Prices Rise to have come down to 105. That could take a while longer to clear. Perhaps the Geopolitical Uncertainty is providing some support with the stock prices falling further. Andout a major escalation there is some way to go before prices may stop taking the. You have gasoline market and the a lot of west african cargo back into the atlantic basin. I do not think it will send the price higher unless we see something dramatic. It is a concern, a longterm concern because of the potential future of iraq which is looking poorer and poorer. We will leave it there. Thank you. We will take a break. Number. E 34,000. Thats how much a suite will cost you per night. It is the most expensive room. Of the newe a tour hotel for the indus peninsulas first outpost in europe. Tomorrow, bloomberg speaks to the mayor of london. She will join us on the pulse. Forward to that conversation. We will see you in a moment. Good morning. Welcome back. You are watching the pulse. Jonathan ferro has more. Asia, losses across the board. Pmi at a record low. What does it mean for european equities . Not a lot. 600 coming down over 5 from the 2014 highs. We have gains. 0. 8 . X is up by euro dollar is 134. With that in the pmi. We were expecting 54. 168. 49. One is will we get the 1 . Guest said you may well get that. On august 13, the Inflation Report. Another in five minutes time. Services pmi from the u. K. Of thisaround 3 4 economy and it matters. Watch out for that one. 7. 9 is what we are looking for. We will bring you the number after the break. What else have we got . The ceo of intercontinental to find out where the operator plans to expand next. And a couple of things. Boris johnson, the mayor of london, is giving a major speech tomorrow, it is about though future of the eu and in europe. He will talk to us the pulse, i am looking forward to that conversation. I hope you are as well. We will take a break. We will see you in a moment. Welcome back. You are watching the pulse. Very strong data coming out of the british economy. The july reading came in at 50, the dividing line between expansion and contraction. A threeday truce in the gaza strip are now in effect. Truce. As accepted this said it completed its mission of destroying tunnels in gaza. Agreeutors say they would to be offered to pay 100 million to end the corruption case. The billionaire has been on trial over bribery charges. Intercontinental hotel shares down a little bit this morning. Declined 8 . We spoke to the ceo. It was a first on bloomberg. We asked about the numbers. We have seen good momentum and a lot of growth. 6 . U. S. Was above about the u. K. Was over 8 . We signed a lot of new deals as well. We signed more deals in the first half family have for about six years. Lot going on we opened the first of our new branding of hotels. Some good progress. Talk to me, we are in an upswing mood. That is the general consensus in the u. S. A lot of your business is seabased. Do you think that is the case . Will you miss by not owning more property . Not at all. Has become the accepted norm. Earning reale estate is not in the zillow the best thing for public companies. Is not necessarily the best thing for public companies. , which we00 hotels could not afford to do if we owned them all. It is not a stable income stream. You get big downturns, but big growth. We are much more stable. Weve announced a nine and a 9 increase in the dividend. Rooms, one of00 your biggest pipelines. The people ive spoken to say it is a unique opposition that you guys are delivering. How is the brand doing . What can we expect . Ask we have launched we have launched two new brands. It is focused on chinese customers who want the overlay and the security of an international brand. We have already signed 24 hotels to come into the system and we have had an credible about of interest from owners and potential customers. Potential both in china and outside of china. We will be looking to take it outside of china once we have established it. A greatgreat deal deal has been made of you wanting to stay independent. Shareholders pushing you to get into bed, pardon the pond, with somebody. Have you had any sitdown discussions in regards to a merger . There have been rumors, but we never count on market rumors. We are working for all of our shareholders. A billion dollars in 2014 allowed and were growing our business. That is what we are focused on doing. If you had to share a hotel room, richard, which brand would you like to get into bed with . Come on. Who is your preferred option . We have a lot of strong competitors out there. We are one of the Biggest Hotel companies in the world. A lot of organic growth. 1100 hotels not pipeline. In the pipeline. Ceo richardinental solomon. People are saying the reason why it is an attractive Mergers Acquisitions story is because it is an inversion story. Correct. The debate is this, you have rewardingnental shareholders by selling big time assets. From a keyt would be institution of shareholders, toge fund theyve employed review the business. What is the best way forward . Heard of that discussion was by china part of that discussion was by china. China is the most important part of this story Going Forward. If they do not do a deal, what is the most important of this story Going Forward . It is china. 15 of the revenue comes from their. Do they own assets there . They have developed the individual they will open those by december of next year. Why i focus on that clue that is the fastestgrowing market in the world. In the u. S. , where they also have a big presence. They have two assets in china. Err 20 other offers for people to own there are 20 other offers for people to own the hotels and they would manage them. 10 . Will loan 10 own yes. Do they have to get the model going . Lets it is a unique it is a unique proposition. Thee if they will be one argument would be this in regards to ihg. Revenuethe fees and even when times are tough. My question to richard was, we are coming out of that. Be,of the arguments would as a company, you are not well positioned to take advantage of prime real estate. Youre not in the position of ownership Going Forward. You cannot grow as quickly. It is a servicebased business, therefore, richard defending his business model. You can see the argument on both sides. Q a very much. Thank you very much. It features the citys most expensive suites. A few steps away, they guard the entrance to the new peninsula paris. The hong kong and Shanghai Hotel spent more than 1 billion to acquire and restore the building. We took this venerable building and maintained it while digging underneath the structure. You will find crystal leaves down the lobby. Six restaurants and highend chinese cuisine. An indoor swimming pull and 200 rooms, and ipad2 control everything in the room. Prices start at 900 a night, up to 35,000. Paris enjoys very high room rates. We want to be at the top of the paris market. The competition will be fierce. There are more than 50 Luxury Five Star Hotels in paris, some undergoing refurbishment. 200 million to renovate the ritz. The saudi royal family. New offers, will prices fall . I do not think prices will go down. The company says it wants the peninsula to be a new landmark for paris. But it will not be short of competition. Nice. Very nice. Let me bring you up to speed. The u. K. Data not very good. Had risen. This is the Service Sector, the bulk of the british economy. If that further pressure on the bank of england. We are not expecting a rate hike just yet . We might find out if one member of the Monetary Policy may decided to say, now is the time. The Inflation Report is also coming out. African leaders are gathering in olahington as the deadly ebp virus cast a shadow at home. Welcome back. You are watching the pulse. West africas fight against ebola is threatening to overshadow a big white house summit. They are in washington discussing the economy. The outbreak will likely take center stage. The director of the Nigerian London Business Forum joins me on the phone fr