Skip to main content

tv   Countdown  Bloomberg  January 13, 2014 2:00am-4:01am EST

2:00 am
>> a bloomberg excuses. sergio ermotti says ubs won't its investment bank. he says the current model is working. >> i think investment bank is very good for us. we have been making a lot of changes for our strategy. our strategy is working. [indiscernible] we have very defined assets and capital that we want to work through the investment bank. for us toa necessity
2:01 am
make changes. >> is a spin off one of the options you are considering? >> no. we are not considering that option. >> operation shutdown. protesters begin a blockade in bangkok. major roads and disrupting traffic in an effort to oust their prime minister. >> two of europe's biggest -- numbers from metro. competing for a bigger slice of the emerging market. >> the wealth snags the golden globe -- wolf snags the golden globe. we are live in los angeles. >> good morning. welcome to "countdown." >> it is 7:00 here in london this monday morning. bloomberg reporters are standing by across the world ready to deliver the stories that will
2:02 am
drive your day. ryan chilcote is focused on ubs. comments from the ceo of the bank. hans nichols is in berlin looking at metro and carrefoure. >> where is best place to put your money this year? manus cranny has exclusive sachs inom goldman london. caroline hyde is watching the latest trends in men's fashion week moving from london to milan. >> a bloomberg exclusive. sergio ermotti says ubs won't spin off its investment bank. issays the current model working. ryan chilcote joins us now for more. >> we already knew that sergio ermotti was reorganizing the business for wealth management. we knew that he was going to cut 10,000 jobs, that he had already closed most of the debt trading businesses. last week, medio backus said they are considering getting rid of investment banking altogether. in an exclusive
2:03 am
interview with sergio ermotti in shanghai and he said that isn't the case. >> i think the investment bank is very strategic for us. we have been making a lot of changes to our strategy. the strategy is working. it is one that is focused on supporting our clients. very defined assets and capital that we want to put at work in the investment bank. therefore there is no necessity for us to make changes. >> is a spin off one of the options you're considering? >> no. >> the whole issue is, they want to boost returns, get return on equity. that is the measure of returns for investors, up to above 15% by the end of next year. in october they said that wasn't going to work out. regulators asked them to hold
2:04 am
onto more money. they have all these litigation costs. they keep getting sued over mortgage backed securities and everything else. the thinking was that perhaps this is one of the ways they were going to achieve that. it turns out that is not the case. >> the swiss are tougher when they come to banking regulation. they have a role which is basically at the s percentage of assets which is probably going to be tougher than the global rule. this is another reason why many are suggesting they need to spin off this. >> ubs had two major strikes. first, the government bailout about four or five years ago and then we had just two years ago, they thought they were through it. that was a $2.3 billion hit when they were done unwinding the unauthorized trades. they have a lot of pressure on them including specifically on proprietary trading, investment banking.
2:05 am
last october we heard from the finance minister saying maybe some of switzerland's thanks will have to get rid of their security -- banks will have to get rid of their securities. is he a little bit of pushback. >> they are cutting jobs and focusing on wealth management. >> he says it is working. it is worthwhile. >> ryan, thank you very much. >> metro reporting revenue in line with estimates. the store facing up with its cap part in france, carrefoure. us fromhols joins berlin. what did we learn from metro's earnings? >> we learned that the german consumer did not in fact save christmas through a massive amount of spending. you see german sales down almost 2%. overall this is the story, the challenge of european companies trying to expand abroad into emerging markets with a strong
2:06 am
euro. you have seen some of their gains being eroded in the fx markets. overall, in line with estimates but the numbers are a little disappointing. here is what the ceo had to say in the report. he tried to put a brave face on it. our new financial year got off to a solid start in spite of the still challenging economic backdrop. soft christmas sales resented -- prevented better development. reported sales declined by 3.3%. this is basically due to negative currency fluctuation. quarter of last year, down 2% in part because the market here is more competitive. from facing challenges discounters and that is really their overall challenge. >> thanks. hans nichols live in berlin. >> showtime for the developed market recovery. that is the view of goldman sachs. what does that mean for where you put your money?
2:07 am
manus cranny is at the goldman sachs global strategy conference in london where bloomberg has exclusive access. good morning. anna, we have a great day ahead of us here at goldman sachs. over 1000 institutional investors coming in here. we have bankers and researchers. it is a feast. we have peter oppenheimer. he is going to happen at 10 past seven. he is the chief strategist. well togot access as the hole japan story. mehy matsui is going to join in terms of abenomics. what goldman's view is in terms of abenomics, what foreign ownership -- you thought they were buying in size in 2013. we will get a statistic out of
2:08 am
kathy matsui in terms of the size of foreign investors that could come. we then move on to an american focus. david is going to take us through his view for american equities. it is all about dividends and buybacks. also, interesting view on technology. we are going to drill into strategy with david at 9:40. then of course, it is all about the economic outlook for the u.s. the chief u.s. economist joins me at 10:00 -- 10:30 london time. i have those jobs numbers friday. any change or just a blip in the sand? all of that through the morning. it is going to be a cracking day. back to you. >> what a way to start monday morning. nana, thank you. , thank you. >> china is the battleground for the world's biggest car market. volkswagen outsold general
2:09 am
motors there for the first time in nine years. it regained the top spot. they're making inroads into the luxury market. it treated in berlin. we are talking about a market with massive potential. >> you always hear about how big that market is in china. it has just become 20 million vehicles. the really key thing about china is that those 20 million vehicles are around 6% of the population. in the u.s., the, the vehicles sold every year is about 80% of the population. that gives you an idea of the massive potential in china. is so important for it just outsold gm for the first time in nine years to become the biggest carmaker in the chinese market. vw is trying to become the world's biggest carmaker by 2018. it has been helped by audi. audi is the biggest seller of luxury cars in the chinese market. they have been doing extremely
2:10 am
.ell because of the a3 compact also, porsche doing well with sedans selling well. the question is going to be just in well their new suv sales the chinese market in 2014. they have a lot on that one as well. >> things, david. >> coming up, men's fashion week goes to milan. caroline hyde has the scoop. caroline. >> we are speaking to many a chief executive over there. now it is all about the autumn and winter for 2014 in milan. firm, asto montclair, well. -- ferragamo as well. ia, a men's suits company. that company saying, the chinese buyer still isn't spending as
2:11 am
much. they are concerned about their sales for the first half of the year. we are also talking about share sales. we know that montclair came to the market selling shares last year. for such a still looking -- versace still looking to sell its stake. >> coming up, we have more from our exclusive coverage of the goldman sachs strategy conference in london with an interview with chief strategist peter oppenheimer. that is next. ♪
2:12 am
2:13 am
2:14 am
>> time for today's company news. alcatel lucent in talks to sell its enterprise business according to people familiar with the matter. the unit cell telecommunications equipment and services. it has attracted interest from potential buyers including siemens and a chinese investor. general can outsold motors in china -- volkswagen outsold general motors in china. this gives them a lead among foreign art a makers in the world's a guest car market. mercedes-benz is adding touchpad technology pioneered by the ipad to see class sedans.
2:15 am
new features include an ipad- like display, a 360 degree camera and sensors to enhance systems. the carmaker unveiled the overhaul of its bestseller at the international auto show in detroit. welcome to "countdown." >> it is 7:15 here in london. for the developed market recovery according to goldman sachs. being hosted by goldman sachs this morning at their global strategy conference in london. bloomberg has exclusive access. manus, over to you. >> thank you. let's get right to peter oppenheimer. before he goes into meet and greet the investors. right to have you with us this morning. the world has moved. you are with us about a month ago and we are in taper mode. the ecb sounded pretty supportive the other day. has your thinking changed?
2:16 am
you're broadly bullish on equities even though we are in taper mode. >> the fact that we are in taper mode and that uncertainty surrounding the issue in some ways is helpful. is that the central banks are still very accommodative in their language. we think they will be in their actions. that should become mind with a cyclical recovery in the global economy. should be pretty positive for risky assets and equities where our major overweight are. >> its talk about friday's report. everything i read over the weekend is that it is an anomaly. what would it take to set the fed a little more alarmist mode and backtrack on this taper mode? >> i think a lot of it really revolves around the parameters that they said. of course the unemployment number has come down again and is getting closer to the
2:17 am
threshold. recovery, a stronger and unemployment came to more quickly, it could be that investors started to question the ability to keep rates on hold. >> a lot of strategies still predicate around that. out of 2016 in terms of rates being low. i love the peace. it is a long goodbye. we are now into the growth phase of this. define that for me. tell me what can i achieve as an equity investor around here in the u.k.? what can i achieve this year relative to last year? >> the longer by argument was predicated initially on the fact that risk premiums were so high in equities and so low in fixed income that you were being rewarded for taking risks a couple of years ago. valuations have moved a lot. valuation as a driver of returns is much less likely.
2:18 am
our view is that we are transitioning from a typical hoped raven valuation phase which weekend to get at the beginning of a bull market into ofore sustainable phase fundamental profit and dividend growth. that is what should drive the returns. they may be a little lower this year but still positive. >> i like the piece on dividends. elated out that we had the banks join back. we were held back on that side versus the u.s.. or is a little bit of a shift in thinking. tell me the industries that could benefit this area -- benefit from this. >> it is worth mentioning that u.s. dividends have gone up by about 55% since 2010 and have been flat in europe he cause of problems in banks, you telecoms and utilities. we think the dividend pressures are total -- bottoming out. we should get reasonable growth
2:19 am
across most sectors. our focus is on the companies that have strong enough balance sheets and cash flow to generate higher dividends. we think investors will be rewarded there. >> that punch through a few of these. call, overweight versus neutral. you can't buy every european in terms of that. >> last year was really two halves of the banks. the banks had outperformed a little bit. most of it was driven by the periphery as risk premium came down and the previously on intestinal was seen as an opportunity. vestable became an opportunity. be less focused purely on the periphery. >> i have to get to your underweight. cyclicals, chemicals and industrials. you question the validity of china. they have their.
2:20 am
they have done their spending. perhaps we should review where we are. >> i think it is worth emphasizing that we generally like cyclical companies. that is true not just in europe but in other regions as well. we think investors have undervalued cyclical earnings growth because uncertainty has been high. the exceptions for us are industrial companies and commodity related companies where we think and markets are flowing in a secular way. although we are positive encyclicals, less so on industrials and commodity related companies. >> great to have you with me this morning. though face the whites of the eyes of your institutional clients. i hope you have a great day. see you later on. peter oppenheimer, chief global strategist here. we have a cracking day for you at goldman's hq. up next, japan and kathy matsui. what is her view on women in the abenomics?
2:21 am
back to you in the studio. >> thank you very much. up, what was this lantern doing in singapore? we will find out after the break. ♪
2:22 am
2:23 am
." welcome back to "countdown i am anna edwards. it is time for "hotshots."
2:24 am
it takes guts to drive off of acapulco's most famous cliff. it may take even more guts to climb them. they spent hours scaling the 35 meter cliff, picking up rubbish and by tourists. that sounds like risky business. purple grapes and luscious vine leaves are in abundance here. these grapes are growing in israel. hasdding wine group developed here. a 10 meter horse shaped lantern was paraded through singapore's chinatown. the celebration included colorful displays and was part of the official opening ceremony for the upcoming chinese new year which commences the year of the horse on january 31. mark, back to you.
2:25 am
>> last night's golden globe awards proved a big night for american dramas. from the amc tv series breaking the two films like american hustle and 12 years a slave. our news correspondent joins us on the phone from los angeles. good morning to you. i suppose the awards were fairly balanced. it was evenly split. you probably have to say that "american hustle" came out the big winner of the night. >> definitely. "american hustle" upon the most awards when it comes to the golden globes. it is thanks to the leading ladies. you have jennifer lawrence who has won back-to-back golden globes now. won an award for best actress. of course, it won best picture. the other big winner and i know you are a huge fan is "breaking bad." it has never won a golden globe
2:26 am
for the television series or for bryan cranston. the lead actor took home his first golden globe as playing walter white. the series won best tv series drama. it was a big night for "breaking bad." >> it has left a massive hole in my life. how did tina fey and amy poehler do? i know they were popular last year. >> they were very popular last year and so far the reviews are coming in that they did a fantastic job again. that wee some times have seen ricky german ace host and we -- some felt he was too harsh on hollywood. tina fey and amy poehler still ran jokes making fun of hollywood's leading man. my favorite joke is when tina wasmentioned that "gravity" nominated and she said it is a story about how george clooney would rather float in space and die than spend one more moment
2:27 am
with a woman off his own age. that got the biggest laugh of the night. these ladies know how to make fun of their peers but also keep it clean. >> ♪
2:28 am
2:29 am
2:30 am
>> i am mark barton in london. these are the bloomberg top headlines. blocking major roads in bangkok, adding pressure on prime minister yingluck shinawatra to resign. -- theonstrators government says it will deploy 20,000 soldiers and police to combat his blockades. sayshief executive of ubs it won't spin off its investment bank. sergio ermotti does the current model is working. ifspoke to stephen engle and -- in an exclusive interview in shanghai. >> we have assets and capital that we want to put at work in the investment bank.
2:31 am
for us too necessity make changes. >> is a spin off one of the options you are considering? >> no. we are not considering that option. >> the female stars of "american hustle" take awards at the golden globes. jennifer lawrence won for best supporting actress. amy adams was voted best actress and a film comedy. they thanked the director for creating strong female roles. hello, welcome to "countdown." if you have ever seen an outfit on the street and wondered where someone purchased it, you are in luck. you ever have that problem? >> never. have, i assure you. if you can snap a picture, you can buy it in just seconds using a new app. we are joined by its cofounder.
2:32 am
both are in town from dublin. >> that doesn't mean i am not interested. i am. >> welcome to the program. thank you for coming in. mark, i think you are the technology brings. but have a look at how this works. you produced a shoe. >> i have. >> it is every high-heeled. simply, if you see something that you like you can snap a picture and it will search through over 4000 brands to find a match. we use image recognition technology. >> you snap photos and once you have found it, you can then show it. >> it is almost instantaneous. once you take a picture, the system will search through
2:33 am
hundreds of u.k. retailers and try to find it. you can filter by price so there is something to suit everybody's price. >> will you find the exact shoe were things that look like it? >> occasionally you will find the exact shoe. >> how long does this technology tech -- take to develop? >> we have been developing the technology for about six years. we are based in a university in ireland and i did a phd. , i have worked in the image recognition space. we were looking for ways and this seemed like a great opportunity. bobby, youas well, are the retail side of the equation. how are you going to commercialize this? >> there are lots of different ways. as far as retailers, it is a highly valuable field because it solves a huge problem for retailers. , for these people
2:34 am
who are digitally native, the way that they are shopping is fundamentally different than ever before. that is a big problem for retailers. we solve that problem for them. the way that shopping is actually changing is the mobile phone. our technology is quite exciting and novel. it is something that millenial kids will engage with. we see this with the technology. we can push that forward. >> so everybody has a shop in their pocket. >> that is exactly what it is. whether you're reading a magazine or out on the street, we turn that setting into a shopping experience. i like her dress or i like her shoes -- you just snap the thing and we bring back a range of products. >> what is the etiquette surrounding this? do you ask the person first if you can take a photo because you like their clothes and you would
2:35 am
like to find out where they bought them? i guess we will find out. what kind of reception have you got from the investment community? just the last one, we had tens of thousands of downloads. we had interest from not only retailers but from end-users as well. we are looking to bring this to the next level. we are working with investors to scale this. >> what are investors telling you? we have spoken to one in particular. what is so unique about your product compared to the competition? >> our product, we are quite confident of the technology itself. it is state-of-the-art. we are very confident. we have been developing it for snow long and testing it and we are confident that the technology is superior than anything else that is out there. >> out of the business model work?
2:36 am
who pays the money? >> the most important point is the app is free for downloading. this can be downloaded on the apple and ios store. we generate a revenue from the retailers themselves. for end-users, it is completely free. very often we get discounts directly from retailers. >> what is your long-term ambition? how big you want to get/ how do you want to roll this out overseas? >> we're looking at the u.k. but we are also looking at the u.s. we would hope to the global. an image of the full item, don't you? i asked if you could take a photo of my dress but because i am sitting down, less possible. >> there are limitations. it helps to be relatively well photographed. if there are things in the way
2:37 am
or the light is poor -- >> can you move this beyond fashion? >> oh definitely. there is a whole host of different applications. fashion is just an incredibly exciting one. we have met fantastic people. kate moss, as a matter of fact. there is a whole host of different applications to bring this technology too. >> gentlemen, thank you very much. edwardsou have met anna now. year in full new swing, some have made resolutions to focus more on their careers. it even last some of the biggest names in business, how they got ahead. jpmorgan's jimmy lee is known as the trillion dollar deal maker of wall street. >> number one, you have to work hard. there is just no getting away from that. to prepare you have
2:38 am
like crazy. you have to be organized, you have to make lists. you have to be super a pair. i am a huge believer in preparation for performance. lastly, this probably sounds counterintuitive to the first and maybe the second, your family has to come first. whenever i give speeches on this topic, people say how can your family come first if you have to work all the time? if you are highly organized, you can actually do it. just put the kids' school play on the calendar. the soccer schedule. whatever it turns out to be. treat those sessions like it was a meeting. one of the things about dealmaking is preparation. going into that meeting with the ceo really knowing your stuff cold is critical. what would i tell my 25-year-old self?
2:39 am
grow a few more inches, gain a few more pounds and try to make it in the nfl. the fashion spotlight moves from london to milan with men's fashion week. we caught up with some of the top italian luxury companies to discuss the trends in male clothes and luxury investment. here with more is caroline hyde. the slowdown in china, the role of the asian shopper in europe, all of that very much topical. >> still front and center. last year we saw the slowest luxury sales across the entire industry. to bain andording co.. a large part of that concern has been about chinese consumption. we are speaking to some of the big players in italy. which is a maker of men's suits, they are worried about the chinese buyer. they say they are still not spending. , we don'tclair saying
2:40 am
see the need to push too much. i want to give you a clip of what the chief executive of ferragamo told us. they are focused on shoes and bags. he is saying, italy is still a beacon of style for the chinese. the asians are really now [indiscernible] it will be an opportunity. still feeling pretty confident and it is going to be the smaller chinese where you start to see the ramp-up in demand coming. >> and monday was a big theme in italy last year. makersalian the jury value their independence. >> they do. the likes ofsaw with huge juggernauts and the luxury space buying up
2:41 am
smaller independent brands. in italy, many of them want to stay independent. we have got the likes of montclair listing they sold shares in december. they're looking to expand but they want to expand independently. ferragamo too valuing its independence. they say they are able to outperform by remaining independent. those companies did sell shares. i have got shareholders. they have a wider base. doesn't want zegna to be swallowed up by a big luxury players. >> no, no, no ipo. we want to stay independent. we want to stay private. we believe in organic growth. feelseresting that he that to remain truly independent, they can't even have outside shareholders. update --felt an versace wants to expand and sell
2:42 am
a stake. givendders haven't yet the final binding officers says the chief executive over at versace. they plan to get a quarter billion euros and start expanding. then they will go to the market and sell shares in an ipo. very different tactics being played at the moment. some feeling that selling shares -- >> you are confused by some of the sessions aren't you? >> a lot of planning going on. plaid going on. >> are they pajamas? >> you have to risk a little in life. maybe, maybe not. no, no, no ipo. that is my quote of the day. >> coming up, retailers may be looking to expand beyond europe.
2:43 am
best company has the chance of success in those markets? we have that story next. ♪
2:44 am
2:45 am
>> time for today's company
2:46 am
news. hasketchup maker heinz named a new president of its north american division. this is the third north america had in seven months. the shakeup is the second one since berkshire hathaway took over the company. i luxury brand expects to repeat last year's increase of about 50% sales volume in china. it is the carmaker's second- biggest market. the second-biggest technology consulting company will take over construction of debuted with crippling computer problems in october. the u.s. government awarded the company a one-year contract with an initial payment of $45 million. welcome back to "countdown."
2:47 am
we are 14 minutes away from the start of european equity trading. >> we are. "on the move" starts at the top of the hour. francine lacqua joins us for a preview. that morning. -- good morning. what are we expecting? >> futures are gaining. this is after last week we had the first week of full trading in january and we saw gains. a debt limit plan for banks. look at a lot of banking stocks that may be active. they met over the weekend and were talking about capital requirements. lower than we were expecting. that is sending futures higher as well. we have stephen engle's interview with the boss of ups. we will focus on that during the show. >> watch out for ubs shares. they may move after sergio ermotti denied they will spin off their investment banking service. that is a story we are bringing
2:48 am
you last week. today we have a great exclusive interview. watch out for the share prices not only because of what we are seeing in terms of capital requirements but because of what he said. talking oven investment banking, a lot of bankers have been talking about whether we will or won't see a boom in mergers and acquisitions activity this year. some news this morning. >> a lot of banks hoping that there will be a boom. amex today agreed to by the engineering company foster wheeler for $3.2 billion. they said that amex will see -- we will look at this deal in particular and look at whether the stock is moving. we are expecting them both to be higher. we will print it out and see whether there is more potential for m&a in 2014. >> thank you. francine lacqua will be back at the top of the hour. >> germany's biggest retailer, metro, reported revenue that was in line with estimates. the store is facing off with its counterpart in france, carrefour
2:49 am
for a bigger presence in brick countries. hans nichols joins us from berlin. what did we learn? >> if you're going to go for bric countries you have to make sure your currency is weak. currency fluctuation really hurt their bottom line and also, the german consumer did not save christmas. it was a lot of talk among german retailers heading into this christmas season that the germans would spend more. from these figures, there is an indication that they didn't. in line with estimates, overall down 3.3%. , puttingare want to do a brave face on. offnew financial year got to a solid start in spite of this challenging economic backdrop. soft christmas sales prevented a better development. revenue down 1.9%. germany, downin 2.2%.
2:50 am
that is what jumps out at me here. the german figures were down. the cash for kerry business was up a little bit if you don't have strong growth in germany which is 40% of metro's revenues, expanding abroad with a strong euro is a dicey proposition. we may see something similar when we get carrefour's numbers litter in the week. there has been speculation ahead of these numbers about whether investors are putting pressure on the business to sell assets. is that something you can update us on today? >> last time there was a report on this, the sales jumped almost 3%. the stock jumped almost 3%. as is indicated down anywhere from one percent to 1.2%. it does appear that the market wants to see metro broken up into component pieces. >> thank you very much. tocoming up, we are going
2:51 am
bring you our top corporate story for the trading day. stay with us. ♪
2:52 am
2:53 am
>> welcome back to "countdown." >> a bloomberg exclusive now. chief executive sergio ermotti says ubs won't spin off its investment bank. he says the current model is working. stephen engle spoke to him in shanghai.
2:54 am
i think the investment bank is very strategic for us. we have been making a lot of changes to our strategy. our strategy is working. it is one that is focused on supporting our clients and wealth management. have very fine assets and capital that we want to put at work in the investment bank. us tois no necessity for make changes. >> is a spin off one of the options you're considering? >> no. we are not considering that option. >> what would be next for you? of you happy with the pace asset reductions right now or is something else in the pipeline? >> we are at a forward target that we announced two years ago. a year ago, we announced an acceleration of that strategy.
2:55 am
us tois no necessity for revise our targets. >> are there other potential assets? is there something else that would be a possibility at this time? have a veryhat we well-defined business model right now. i don't think that we -- some of -- they arere in coming off as expected. we are today the best capitalized bank among our peer groups. we have almost reached our target. a 13% ratio by the end of this year. we are on track. >> are you on track for that? there was talk that perhaps that target is going to be pushed back another year. >> no, we are on track. we will achieve our targets by the end of this year. >> ermotti of ubs there.
2:56 am
enjoy your monday. >> "on the move" is next. see you tomorrow. ♪ . .
2:57 am
2:58 am
2:59 am
>> welcome to "on the move." francine locke lab bloomberg european headquarters in london. we are moments away from the start of european trading and our markets team has everything covered, from companies to currencies. there with me now is caroline hyde, manus cranny, and hans nichols. futures are looking to a higher start. >> bad news being good news. far fewer in terms of payroll being added, just of the 4000. -- 74,000.
3:00 am
unemployment is tapering. many feared it would be more than $10 billion coming off the bond purchases per month. that figure easing some concerns that we will not be going too fast, too quickly. >> the markets are expected to open in a couple of seconds. ryan, you are looking at ubs. >> we had an exclusive interview with the ceo this morning and he says at we are not going to spin off our banking business. that is after a report that they were considering doing so. that is not the case at all. is issue at the heart of it the leverage ratios. the finance minister talk about them needing to go to 6%. right now. 3% it is really a struggle. >> ubs, we are expecting an opening call. watch out for banks after global regulators diluted the debt limit plan for banks.
3:01 am
amex agreed to buy an engineering company in the u.s. for $3.2 billion in cash to expand its oil and gas engineering company and it will also try and list in the u.s. manus, you are at the goldman sachs global strategy conference in london. >> i am indeed. we are going to have a great day down here. it is all about japan. that is in 20 minutes. -- we are going to get into u.s. investing just after 9:30. american economics, he is in town at 9:40. petere already had oppenheimer, a fairly bullish call on equities. more on that in a while. inlet's get over to hans
3:02 am
berlin. you are watching metro. >> called at the open, just down a little bit. we are checking to see how it is reacting. sales were down 3.3%. overall, they have a problem in terms of currency fluctuate -- fluctuations. did not savensumer christmas. we will dig deeper into their quarterly numbers in 20 minutes. >> thank you so much. we have a little bit of retailers, a lot of cars. we are watching banks and ubs. terror line, we are watching men's fashion. >> the spotlight has been in london. now it is moving to milan. we are speaking to the chairman of montclair. of course,and versace, an update on ready industry is going. to keepaly wanting their independence for the likes of ferragamo. they sold shares, but they do not want to be snapped up i a bigger conglomerate. >> a lot of them have been
3:03 am
snapped up. there is a resurgence of fighting back. we have to watch out for carmakers. he and w posted record sales, but they are saying there is a lot of headwinds in the market. sales, buted record they are saying there are headwinds in the market. , analysts saying that one figure does not make a trend. the fact that we only got 74,000 added in terms of payrolls, that was the lowest since january of 2011. maybe we should not be too worried about the u.s. data. certainly, it has given a little bit of these to the equity markets. we just go into the industry groups that are moving higher. expectations are that the stoxx 600, just again, the tapering, the leaning back of stimulus will not happen too quickly in the united states. keep an eye on financial today. .7% this morning. the reason, the global
3:04 am
regulators making concessions to the banks on debt limit rules. you are not going to be hit too much. they want to see banks continuing to lend. the basel committee on banking supervision scaling back that debt limit, that is giving back to boost today, the best performer on the stoxx 600. let's look at currencies. interesting move, the fact that the jobs figure came in much worse than anticipated. that really affected the dollar against the yen. look at that move. yen really strengthening against the dollar. bas say the damage to the dollar will be limited going forward. let's have a look at what is going on with the euro. basically flat. merrill lynch saying expect weakening in the euro to continue as the u.s. economy will be growing much faster, whereas europe will only grow by 1% in the euro region this year.
3:05 am
we are going to head towards parity at the moment. a long way to go down if that is the case. let's have a look at how bond yields are doing this morning. movement,en a bit of yields down ever so slightly for germany, but not across the bond market this -- as we speak. i want to get to some of the stock movers. &a.could see a whiff of m u.k. oil company, is buying foster wheeler. it is expanding its oil and gas engineering business and they want to get scale in the growth regions. foster wheeler does have exposure, particularly in the middle east. some $3.2be spending billion. keep an eye on evidence -- deben hams.
3:06 am
a profit warning and they have lost their cfo. now sports direct is taking a chunk in it. ofy are taking a 4.6% stake 56 million shares. it will be a supportive shareholder. we could see exploration of opportunities. sportsms higher and direct is also up on the back of that. >> our next guest favors technology in health care sectors. the cross bridge capital chief strategist and head of investment. tank you so much for coming in today and happy 2014. will 2014 bring in terms of industry groups? you mentioned you like tech. >> tech and health care and financials. financials have been the story of 2014 so far. especially in europe. >> we will talk about ubs and basel.
3:07 am
what would you be buying in technology? >> amazon and google are two of my favorite stocks that i have been recommending for some time. i think the upturn is not going to go away. a trend does not make and gdp growth is still in line. a questioning to be of how strong this year can be. >> do you like amazon? are you thing we will shop online a lot more? why not go for someone who provides the software because they can get much vigor in terms of logistics? that.annot comment on amazon is something i have been long the last two or three years. it is a very strong story in terms of where the market is moving. they are building a big warehouse and the earnings are going to come through. >> thank you so much for now. the chief strategist and head of investment at cross bridge
3:08 am
capital. we will be talking about the banks. says thef executive company will not spin off its executive bank. ask its investment bank. and we will go through metro's sales, that are slowing in germany. ♪
3:09 am
3:10 am
>> i am francine lacqua in london. ons is "on the move" bloomberg television, radio, streaming on your phone, your
3:11 am
tablet, and sergio ermotti says ubs will not spin off its investment bank. he says the current model is working. ryan chilcote joins us with the latest on this exclusive interview that bloomberg news had. tell us exactly what he said. >> let me give you some background first. sergio ermotti has been focused on reorganizing ubs to focus on wealth management. part of that reorganization has been cutting jobs. ubs cutting about 10,000 of them. sergio ermotti also cut some of the debt trading businesses back. that happened in 2012. to further advance that goal, banca --k that media banca said it might make sense for them to get rid of the investment bank. today, we asked sergio ermotti and he said it was not the case. speculation.been
3:12 am
i think the investment bank is very strategic to us. we are making a lot of changes to our strategy. the strategy is working. we are supporting our clients in wealth management. defined assets and capital that we want to put to work in the investment bank and the business model works. no necessityere is for us to make changes. >> is a spinoff one of the options we are considering? >> we are not considering that option. >> i just got off the phone with chris wheeler and i asked him, how is it that they got this wrong? sergio ermotti saying they will not spin off the investment banking unit. sayingekend, media banca that this might be the case. he says this is sergio ermotti politicking. the background here is leverage ratios. the leverage ratio for ubs is around 3%. the rules of the game require
3:13 am
ubs to raise its leverage ratio to about 4%. the finance minister has also talked about the need to perhaps raise it as much as 6%-10%. isfar as media banca concerned, the one way to do that is to get rid of the investment banking business. there is another way and that is something that sergio ermotti hinted at in this conversation, which is to deal with the problems in the lending units, specifically in terms of mortgage lending and corporate lending within switzerland. if they were to change or scale back that, then they could perhaps meet these ambitious goals that the finance minister alluded to. having said that, wheeler says it is not pragmatic politically speaking for ubs to scale back lending within switzerland. really, he is talking about something that is not going to happen here.
3:14 am
in thel solution for ubs future is to consider getting rid of the investment banking. becauseng on the banks, a lot of the stocks -- ubs has gained 2.8%. stocks, in general, for banks, are up-to-date. the basel committee is diluting their rules and they are becoming soft -- softer. >> it has to do with leverage ratios. at ubs, it is about 3.2%. in june, regulators suggested that the way that leverage ratios are calculated good youeen -- could be tweaked, could make it more stretched. media banco estimated it could cause as much a 13 basis points, meaning that the ratio at ubs would be around 3%. of an about-le bit
3:15 am
face. regulators are saying, actually, we are not going to change the way that those leverage ratios are correlated. so things are going to stay as they were. the risk has been removed from the outlook for banks in terms of how they make money. >> thank you so much, ryan chilcote. you can see the stoxx 600 banking index gaining 1.2%. we are back with the cross bridge chief investment strategist. thank you for sticking around. financials are one of your favorites. they have been outperforming. we still do not know the outcome of the asset quality review. there are still a lot of unknowns. >> in the peripheral bond market, one thing which is helping the angst a lot -- teh been the rally in spanish and italian banks. banks as a whole will benefit. is notong as there
3:16 am
another crisis. >> of course. and as long as the ecb follows up on what it has been saying. if you see how the economy is we had the jobs report, which people are not pleased about. tapering is still going on. benefits are going to from borrowing short and lending longer. , would say that retail banks they are going to benefit. we are talking about the u.k. 1.25%, as some of the newspapers have reported. >> a lot of people are awesome it -- optimistic on the markets. this is assuming we do not have any headwinds. >> this is important. in thistill operating limit we are talking about. that is something we have to take into account. tapering,e fed starts
3:17 am
that is an indication about nervousness on what the markets are due. >> i do expect that there will be some type of correction or downside move. year, if youof the have made only five percent by the end of the year, you can make 10% if you pick up the downtrends as well. overall, i am very positive for the markets. >> what do you like apart from financials? stocks typically have not done very well previously. this is down to the demographic change. roche has at least seven different medicines in states of approval. they have a very strong product pipeline. that is one stock i like very much. from the u.s. health-care stocks , they're not going to bring a
3:18 am
lot of change and obama is still the president. >> do you prefer some of the health-care stocks to a teva hermeneutical's? >> i prefer the health-care stocks and biotech stocks. amgen, gilliard. >> and they are some of the best performers. >> it is getting expensive, but given the kind of work they are doing, i am very positive on those stocks. >> how much does it have to do with the pipeline and how much does it have to do with mna quest -- with m&a? both,is a combination of but it is more of a pipeline story. >> if we look traditionally, when stocks go up, m&a closely follows. there was not this correlation because markets were pumped. >> if you believe that the economic growth has caught up and you give incentive to ceo's
3:19 am
to make acquisitions, it all comes down to positivity in the market and sentiment. >> anything in currencies? >> i like the dollar. the euro-dollar, the ecb weakened its forward guidance and we had a dad jobs report on friday and the euro rallied. it might be that the euro-dollar will stay in the range of 1.36, 1.34. i do not see a huge downside. if anything, i see downside to the euro and not the dollar. people are looking at the cpa number closely. the cpi is dropping. if inflation is dropping, that is a very positive sign. i think people are looking at growth ahead and that is a very positive outlook. >> thank you so much for all of that. , it is germany's
3:20 am
biggest retailer and sales are slowing down. we will dig into metros numbers next. and as we head into break, let's hear from the u.s. vice president, joe biden. at ariel sharon's official memorial service in jerusalem. our reporter on the ground is listening in and we will bring any breaking news after this break he -- after this break. >> they have all played out on the campus, the state of israel's historic trajectory. ♪
3:21 am
3:22 am
3:23 am
>> welcome back to "on the move ." here are some companies on the move. catel-il lucent -- al lucent is said to be in talks to sell its enterprise unit. a sale would allow them to focus on more profitable network contracts. it would also bring the ceo closer to their goal of eurosting one billion from acid disposals by 2015. heinz has named a new president of its north american division. he is the third in seven months. the second management shakeup by berkshire hathaway. outsold general motors in china for the first
3:24 am
time in nine years. largestes europe's carmaker the lead among foreign automakers in the world's largest car market. germany's biggest retailer, metro, reported revenue this morning. hans nichols is all over the numbers from berlin. a little bit of a disappointment today. >> a little bit of a disappointment in metro. these numbers are so interesting. it is the fourth largest retailer in the world. it gives a better sense of consumers both in europe and outside of europe. ae numbers are, we had disappointing christmas. that was true in germany and elsewhere. they were buffeted by a strong euro that hurt sales in eastern europe. overall, revenue is down 3.3%. the stock is moving on the back of those numbers, down just about 1% last time i checked. the ceo tried to put a brave face on the numbers. here is what he said. the an answer year
3:25 am
has gotten off to a solid start in spite of the still challenging background." inenue was down almost 2% local currency. it was down in germany elsewhere. one bright spot was that sales were up slightly in their cash and carry business. third of theirone- revenues. a lot of talk before christmas about how the german retailer would save christmas. does not look like it happened. these numbers look more like the tesco and marks & spencer numbers in the u.k., pretty soft overall. >> what about the pressure to break up metro? would it be more valuable broken up? >> the market certainly think so. there is a report late last week that one of the main investors in metro wanted to break up the company and sell part of its divisions. the stock soared, up almost 3%
3:26 am
the report was denied by the various parties. there was a clear sense that if metro were broken up, maybe sell off its russian division, it would be worth more, that its market cap would improve. no hand in these numbers that they have any plans to spin off some of their businesses. clearly, there seems to be some agitation for that. >> thank you so much. hans nichols with the latest on metro. coming up, we will go live to the goldman sachs global strategy conference. goldmanspeak to matsui, chief equity strategist for japan. a lot of the indices are flat. bank stocks are active after the basel committee on banking capitalion's announced
3:27 am
requirements. watch out for ubs. this stock is on the move after the ceo denied that they will spin off their investment banking business to meet regulator demands. ♪
3:28 am
3:29 am
3:30 am
>> welcome back to "on the move ." i am francine lacqua at bloomberg european headquarters in london. these are the bloomberg top headlines. he will testify today before european parliament lawmakers. she is said to join the board of the ecb from her current edition is vice president of bundesbank. at the expense of its monetary policy clout. will curtail its nuke activities under a deal with world powers. in return, iran will benefit
3:31 am
from some sanctions relief and the start of a 6-12 month timetable to reach a permanent accord. the deal still faces skepticism in u.s. congress. lawmakers are still pushing for more sanctions. thai protesters began blocking major roads in bangkok. offnstrators also cut access to a complex last night. the government says it will deploy 20,000 soldiers and police to combat the blockade. the fashion spotlight moved from london to malan -- to milan. we caught up with some of the top italian luxury companies to discuss trends in luxury investment. here with more is caroline hyde. what did they have to say? themes hummingme out from italian men's fashion week. montclair, down coats
3:32 am
that saw them sell shares at the end of last year. another company that makes men in suits and accessories. remember, there is much focus on china and asia. that has been a key concern. 2013 was the slowest growth in luxury market. many pointing the finger at the chinese slowdown. many of the heads of these companies are pointing to the concern there, most notably the chief executive of xenia. say, look, the chinese buyer, they are still not spending. >> we were used to increased double-digit. carefulave to be more and we are getting to single digits. everything is relative. it is probably a healthy slowdown. slightly concerned about the first half of this year.
3:33 am
they think that second-half sales will start to pick up and that the slowdown in china is a healthy slowdown. not so much over at ferragamo. that italy isying still seen as the beacon of luxury for the chinese buyer. continues to dominate the italian luxury seen. -- scene. many still value their independence. buying theseple smaller, independent firms to add to their own list of brands. much of italy wants to remain independent. coming out from a lot of the heads over there. versace is looking to sell a stake to raise about a quarter of one billion euros. they are only getting investment in, not looking to sell themselves as able. montclair sold shares last year to try to expand. montclair telling us, we still
3:34 am
want to remain independent. it makes us more nimble. defined synergy. independent is something -- in the last 10 years, i think we make a good job. i think we will continue on this way. shares onir selling the first day of trading in early december. na, we heard from the chief executive a moment ago. they said that they did not want to be bought up by a luxury player nor did they want to sell shares. they said an ipo is not on the agenda. shareholders would remove some of their independence. strong words coming from the italian luxury sector. >> thank you so much. caroline hyde with the latest on luxury. manus cranny is standing by at the global sacks --the goldman sachs global strategy
3:35 am
conference. >> you have a european perspective. the one fascinating area is japan. joining me now is cap the matsui, the chief japan creditors. great to have you with us this morning. abenomics, as it stands right now, you say steady progress, reform is on the way. you are fairly upbeat. arrows ofk that the reform and growth have been launched. prime minister abe and his regime. we have only seen one year of this administration, what they can deliver. there is more on the agenda that needs to be executed. we think the direction is very positive and very clear. of the reform agenda will be accomplished and implemented in a timely fashion as the markets would like to see, but we think a direction is very clear. >> do you think that we, in the
3:36 am
west, expect so much from this third arrow that there is a reasonableness in terms of what can be delivered? inflation is 50% of the way there. when the you see it adding up to two percent? >> given the distortion that will be coming in and next few months from april 1, we will see 3% in thisse to current year. excluding the impact, it will take another year plus before we hit the core inflation level of 2%, the boj's target. scenario will be whether japanese wages grow or not. >> will they? >> a lot of investors were very skeptical about the prospect that wages would ever row up after they have been declining for seven straight years. if you think about the big picture, corporate japan is sitting on tons of cash, about $750 billion worth of cash.
3:37 am
at the same time, they are earning 60% more profits than one year ago. >> so they can afford these wages. lex i think it is a sheer lack of confidence that the future might be brighter than today or yesterday that is holding them back. we think that attitude will start to change. -- iu have got a great love this. this is not 1997. you say it is a very different scenario. why? >> in three respects. asia wasthe rest of discouraging a gut wrenching currency crisis. we do not have that right now. >> we could have taper. >> we think that will be very gradual. second, we do not have a financial system meltdown domestically. third and most importantly, we do not have deflation.
3:38 am
of japanesety shift people thinking, if i wait, it will get cheaper. way, it might get more expensive. that is driving the change in consumer sentiment. manageableat will be given that we expect wages will grow and the mentality of consumers will shift towards tomorrow will be a brighter day. >> into equity strategy. you say you will deliver better returns than the u.s. and europe. what is achievable in japan going into 2015? >> you think about who has been the main driver of this rally in japan today. it has been mainly the foreign investor community. aboutreign investors have $470 billion worth of japan. that is less than what they bought during entire rally between 2001-2006.
3:39 am
none of my domestic investors have participated in this rally at all. we expect retail investors -- japan will launch version of buttocks. -- of products. we will possibly get the world's largest pension scheme. assets.llion in domestic equities could be shifting as well. >> have a great day at that conference. is it for me here. you aboute will tell american equities. you heard it from kathy matsui, could be a good year for japan. >> thank you so much. manus cranny at the goldman sachs conference. sergio ermotti says ubs will not spin off its investment bank. he says the current model is working. stephen engle spoke to him in shanghai. take a listen.
3:40 am
>> it is a very small elephant and there is no speculation. the investment banking segment is very strategic to us. we have been making a lot of changes to our strategy. the strategy is working. we will focus on supporting our clients. assets andery fine capital that we want to put to work in the investment anchor and a business model that works. therefore, there is no necessity for estimate changes. >> is a spinoff one of the options you are considering? >> we are not considering that option. >> what would be next for you? are you happy with this pace of asset reductions right now? >> we are ahead of our targets that we announced two years ago. one year ago, we announced an acceleration of that strategy. i think that we are happy with the pace of what we are doing
3:41 am
and there is no necessity for us to revise our targets. are there other potential assets that we are not talking about? is there something else that would be a possibility at this time in 2014? >> i think that we have a very well-defined business model right now. some of our assets are in our non-core organizations and they are unaffected. we are the best. lightbank among our peer groups -- best- capitalized bank among our peer groups. we have almost reached our target. we are on track. >> there was also talk that perhaps that target would be pushed back another year and that would affect the payouts as well. >> we are on track. we will achieve our targets at the end of this year as announced two years ago.
3:42 am
benzoming up, mercedes- takes a page out of the apple playbook. bmwedes hopes to overtake using technology. ♪
3:43 am
3:44 am
3:45 am
>> i am francine latoya london. this is "on the move" on bloomberg television and streaming live on your bloomberg -- on, your tablet, your phone, and any windows phone as well. i'm joined by guy johnson. , theancois hollande question is, will his private life affect wallace he? -- policy? he would deliver a major press conference tomorrow, outlining his plans to revise the economy. it will be watched around the world. we are going to learn whether or not the left-leaning french president will actually talk about cuts. that press conference potentially overtaken by problems in his private life. interacting atly the moment. some would say it is very french. i certainly would not say that,
3:46 am
but it is an economic story as well as a front-page story. what else are we watching? airbus, we will cover that too. init going to fly higher 2014? back to you. >> guy johnson coming up with "the pulse" in about 15 minutes from now. here are some companies "on the move." accenture has won a contract with the u.s. government. it will take over the obamacare enrollment website. it has been granted a one-year contract with an additional payment of $45 million. it takes over from cti group. and a bloomberg exclusive for you. that ubs wasi says not spin off its investment bank. >> we have a very defined assets and capital that we want to put to work in the investment bank and the business model works. therefore, there is no necessity for us to make changes.
3:47 am
>> is a spinoff one of the options you are considering? >> we are not considering that option. >> stephen engle spoke to ermotti in shanghai in an exclusive interview. adding asys is touchpad to the mercedes. radaraders include six sensors to enhance safety. the german carmaker unveiled the overhaul of its bestseller at the north american international auto show in detroit. for more on that story, let's get to hans nichols, who is standing by in berlin with the very latest. her sadie's betting -- mercedes betting on tech. >> tech, touch. these cars could be so easy to drive that even you could take them out for a spin. the s-class, first update in seven years.
3:48 am
the are unveiling this at detroit auto show. matt miller, when he goes out there, is he going to figure out a way to crash the software or crash the car? of course, this is the battle between mercedes, bmw, and audi over who will be number one globally. bmw is number one globally, but s was the top selling brand in the u.s. of course, they are competing globally as well. is anothera battleground for carmakers. volkswagen regaining the top spot from gm or the first time in nine years. >> here is all you need to know about china. and thatn sales outpaces both the u.s. and europe. that is just six percent saturation of the chinese market. if they get 50%, what matters there is market share. all the auto companies are making big plays there.
3:49 am
some have joint ventures. they are in for the saturation. it is a growth area and they see a lot of opportunities or big markets, both in the luxury and more downmarket cars. >> thank you so much. hans nichols with the very latest. bloomberg views will be live at the detroit auto show later. our guest includes the daimler chief executive. world statesmen have been paying tribute to ariel sharon at a memorial service for the former prime minister. he will be buried later today at his desert ranch. let's go to elliott gotkine. quite a lot of people in attendance. tony blair, joe biden some of them. >> that is right. has have already spoken, as president shimon peres, prime minister netanyahu. right now, a friend of ariel sharon talking to the audience. peres, his voice
3:50 am
was trembling with emotion. joe biden described him as a man with command presence to fill the room when he entered it. he was indomitable, he said. sharon had a northstar that guided him and sharon's northstar was the survival of the state of israel. it was echoed by tony blair as well. he talked about the different person that he encountered in unofficial meetings and described him carrying his maps around to show the british prime minister exactly what israel wase was and how fragile it given it has been surrounded throughout its existence by enemies. right now, i can tell you that this is what is going on. we also spoke with a biographer of ariel sharon, who was commenting on if he had
3:51 am
likelyd, it was very that we would have a peace with the palestinians. >> what else is planned for the rest of the day? >> after the ceremonies finished, there is going to be thehe procession will go to armed core memorial, a site where sharon was shot in the abdomen and had to be rescued by his men. from there, they will go south to the ranch that was sharon's refuge for all of his ears, the sycamore ranch. he is due to be buried there at around 2:00 local time. that will bring to a close these three days of official mourning that we have had.
3:52 am
he is lying in state at the israeli parliament. he remained there on sunday after dying on saturday. that will bring to a conclusion the tribute to ariel sharon, who will receive a full military funeral at his beloved ranch, where he will be buried. much.nk you so elliott gotkine in tel aviv. we are back in just a couple of minutes. "on the move" continues after this. ♪
3:53 am
3:54 am
3:55 am
>> the australian tennis open begins in melbourne today. it is the first grand slam of the year. we will get some of the facts and figures behind the tournament. >> the world's best players have gathered in melbourne for the midsummer australian tennis open. over half a million spectators will attend. 350 million people watching at home. the competition will be hot. as if that was not enough, players will have to compete with temperatures that regularly reach over 40 degrees celsius. this week will be no exception. heat,bat the blistering medical staff are kept on standby to offer intravenous drips. the tournament even has an extreme heat policy, the only one to have this sort of measure. umpires can suspend play if they believe it is getting dangerously hot.
3:56 am
the ball boys and girls, there are over 300 of them. they will be wearing special gel neck coolers. the temperatures are hot enough to shrink the tennis ball themselves. over 48,000 will be used, while a whopping 3600 raxckets -- rackets with the restrung. players will go through an estimated 30,000 towels. an estimated 35,000 bottles of water. with the prize pool boosted to 31 million dollars, it will be lucrative for the singles champion. the city of melbourne is also a winner. the state government estimates $214 million will be pumped into the economy. go, let's have a very quick look at what the markets are doing. we are over one hour to the trading session. this is the picture for the footsie, the cac, and the dax.
3:57 am
aanks to the upside after debt limit plan for banks. guy johnson and i are back with "the pulse" next. ♪ . .
3:58 am
3:59 am
4:00 am
>> a bloomberg exclusive. the chief executive of ubs says he won't spin off its investment bank. bankthink the investment is very strategic for us. francois hollande has his hands full but with a french president's private life get in the way of economic reform? >> airbus is set to announce record orders today. we will be live at its press conference. welcome. you're watching "the pulse


info Stream Only

Uploaded by TV Archive on