Skip to main content

tv   Countdown  Bloomberg  March 23, 2015 2:00am-4:01am EDT

2:00 am
>> meeting merkel. the minister visits the chancellor ahead of the decisive week. we will go live to berlin. >> paying tribute to the founding father. we take a look at the life of the man who dealt the economy. >> a takeover. we bring you the details of the speculation. mark: local elections check the political polarizing extremist parties.
2:01 am
we bring you the results. welcome to countdown. i am mark orton. -- mark barton. we bring you the conversation you will not want to miss. caroline: it is a decisive week for greece and the greek minister begins with a visit to merkel. it is the second meeting in five days between the leaders. they failed to reach a deal last week at the european leader summit. 4 mark: we will go to berlin shortly. the big story is taking place and there is a week of national mourning.
2:02 am
five decades guiding the city. tell us a bit about the the reaction to the mood. >> the news of his death is difficult to process for many. he was in critical condition for several days. the government kept the nation updated and was preparing for
2:03 am
the eventuality. until last night, young and old showed affection for the founding father. many gathered at the hospital. social media had an outpouring of condolences and tributes came from around the world. they knowledge the huge loss. the minister called him one of the greatest leaders in modern times. mark: what we see is the result of these policies. she is not without controversy. >> you are right. he transformed singapore to a first world economy and him made it his priority. it would attract businesses and foreign investments. democracy can be suspended from time to time, if needed. he maintains he knew bed -- new best.
2:04 am
so, a visionary man and authoritarian. >> thank you. let's head to berlin now. hans nichols is there for the details in the meeting. good morning. what do you expect today? >> she dampened expectations and said the meetings could take place outside of the pressures of direct negotiation. greek media is reporting they expect a little bit of compromise and that is a thing that could end up being discussed. german officials say that merkel is willing to go a long way and
2:05 am
that is a lot to be optimistic about. here is why you should be pessimistic. heading into brussels, he was asking for disbursement of funds without showing reform efforts. that was projected and things got heated. mario draghi criticized how officials are being treated in greece and, another reason for pessimism is, heading into the meeting, the financial times reports merkel wrote a letter saying they could not meet the immediate debt obligations without the infusion of cash. the local newspaper reported that april 7 if the date greece will run out of money without a short-term infusion from
2:06 am
creditors. the line from berlin and other european capitals is that there will not be funds until there are steps by the government to implement reforms that were agreed to by the old government. mark: how are the banks holding up? >> according to a person familiar with the matter, 450 million euros on friday. the previous three days will .1 billion euros. clearly, the banks are hemorrhaging crash and liquidity was about half of what they had asked for. they are pushing close to the limit and, a final note, they reported the expectation of a
2:07 am
greek exit. the german government's said the german position has not changed and companies have asked for more reparations from germany defense countries. we will sort that out later. mark: hans nichols in berlin. this is the chinese company offering euros. let's dig into the deal. >> it is complicated and we understand a deal has been struck. it is being valued at 15 billion euros a share. the national chemical corporation is going to get 61%
2:08 am
of the shares currently held. we have the euro bid and the number one shareholder buying a 26% stake. as china takes 26%, it will look for the rest of the shares. it could come back and reinvest in the company. they will hold a majority of it and the other 50% up for grabs could be held by the owner who is the ceo and chairman. he wants to remain chief executive and it looks like the
2:09 am
two companies could take them private. it is being said that we could see a real listing of them in italy. the thing that sent the stock price higher is the speculation on the deal done by the number one shareholder. we want to know about why they are doing this and why they want to get the investment. it is making tires and together, they have scale. it can double the volume of the business. this is crucial. it is competition at home. think of a company that is a heavyweight in europe. they have made acquisitions and have expanded. it is notable and and looks like
2:10 am
a chinese company. they're looking to take a majority stake and take it private. also, this is notable and, think about what this stands for. it was founded by giovanni caroli and it is all about where this takes china and italy. it is interesting that china is upping the game and the chinese companies have invested about 3.5 billion last year in assets in italy. only $3.5 billion. compare that to this deal and it is one of the biggest ever chinese investments. the company gets its grips and suddenly, it is eyeing italy.
2:11 am
the assets are well valued. it is a bit of a seminal moment. mark: top story on bloomberg. rebels take over the airport and set up checkpoints throughout the city. leader is calling for more support and he is accusing the president of working with militants from al qaeda and the islamic state to evacuate the rest of the personnel in the country. the national front leader cast her ballot in the local elections. sarkozy got the most votes. the national front took 26.4% and another party 1 --
2:12 am
national front is running neck and neck. hosting a regional election over the weekend. the socialist president got 47 seats in the parliament, short of the 55 needed for the majority. the anti-austerity party is allied with greece. in the united states, the cruise confirm that he is running on twitter and asking followers for support. the senator is the first republican to kickoff the presidential campaign. caroline: join in the conversation and let us know what you think of the show. i am at caroline hyde.
2:13 am
bringing you some exclusive interviews. mark: still to come, we bring you the exclusive interview and it is a conversation you will not want to miss. we are back in a few.
2:14 am
2:15 am
mark: welcome back.
2:16 am
they week for greece. the talks continue to work towards a deal on future financing. let's bring in the head of strategy. good morning. there have been decisive weeks and months and years. to quote a regular guest, this could be the endgame with banks bleeding money and the nation needing money. >> absolutely. that is the sense you get from the way people talk about it in the markets. the -- there was no sense this could go wrong. people still think there will be a deal and a solution.
2:17 am
you have gone from a zero probability to a small probability that the accident could happen and it is bound to be worrying. caroline: is this a view that contamination is less and it will contain the crisis if it unravels? do people not believe there is real unraveling? >> it is hard to untangle and it drives asset price moves. i think it is a very miniscule probability at this point in time and it is difficult for the markets to price. the difference is that people are talking about it and they always do. now, people alike, may be they
2:18 am
are right. that is the thing. it is not really being processed because of the probability. >> the most important game is being played out. has the dollar will run ended? the news conference last week had nine months of dollar gains. is it coming to an end? >> i do not think so. i think we are coming off of the back of a strong trend and it takes valuations a long way in a short span of time. the factors behind it are not changing and the fed will raise rates in june, september or next january. it does not matter. they are closer to growing
2:19 am
stronger. as long as they do not get a negative development of its where, we do not get a shock or response from the housing market. it remains surprisingly weak and it is an issue. we have low oil prices as in them positive and there is a commodity cycle that will keep oil week and the dollar strong. caroline: bloomberg puts the negative yield vortex wonderfully. a lot of bonds are in negative territory ahead of the strategies. what do we do and where do we put the money? >> the reaction was to take out the credit risk and you are either in the per a free or you
2:20 am
have the assets. the question you ask is what someone like mr. draghi wants us to ask. they want the investment and want to see investors borrowing. you had a story that tells you that equities are cheap. that is the endgame they are trying to get. get into the real economy and the financial assets and market pricing. i do not think that is a chance for success. mark: thank you for joining me. caroline: we will have a look at the life of a founding father of
2:21 am
singapore.
2:22 am
2:23 am
caroline: the death of the founding father. we have the special report from singapore. >> often called the founding father. he was the first prime minister living through political and
2:24 am
financial uncertainty in malaysia to independence in 1965. during his rule he became one of the successes with a guiding philosophy. >> i want to commend confidence and confidence brings in investment and talent. with investment and talents, we will prosper. >> a lawyer who emphasize pro-business policies. he moved the population and molded them into a well-educated workforce. they became a regional business hub and one of the largest foreign exchange and wealth management centers. >> it overtook malaysia's
2:25 am
economy. it is tremendous, not only for the size. the idea is that it will come back to malaysia on their terms. >> despite the rapid development, they were always acutely aware of the vulnerabilities. she>> the new leaders and populations do not realize the base on which this is adult. it will go down quickly. >> the economy opens and control titans from family planning to freedom of speech. the people have governed singapore for more than five
2:26 am
decades. they were likened to another key figure. they did not see eye to eye. >> he was a critic and i went up there to say "what do you think of this guy/" and he caused and i looked at him. he said, he is one of the outstanding political thinkers of our time. he was a pragmatist and authoritarian. visionary. mark: -- caroline: reporting from singapore. mark: we will take a look at a u.k. startup that is making the
2:27 am
housing market more accessible for the funding.
2:28 am
2:29 am
just because i'm away from my desk doesn't mean i'm not working. comcast business understands that. their wifi isn't just fast near the router. it's fast in the break room. fast in the conference room. fast in tom's office. fast in other tom's office. fast in the foyer [pronounced foy-yer] or is it foyer [pronounced foy-yay]?
2:30 am
fast in the hallway. i feel like i've been here before. switch now and get the fastest wifi everywhere. comcast business. built for business. mark: you are watching countdown. look at the bloomberg indexes. the gain against the dollar's and it is falling for the second day. last week was the worst week since 2011. the federal reserve cut the projections for growth and it
2:31 am
has led to a currency surge with hedge funds trimming bullish dollar positions to the least since december. a couple of fed officials are speaking. listen for john williams. he is scheduled to speak today. as is the cleveland fed president will be interviewed i manus cranny later. listen to what she has to say. this is the bloomberg dollar spot index over the last five days. the dollar index is up and it is still on track for a consecutive monthly gain since january of 2005. it is 2.3% below the record reached on march 13.
2:32 am
that is what is happening to the bloomberg dollar index today. the top story on bloomberg is the chairman of the vivendi facing a strategy challenge from investors. according to the financial times asset management is preparing to improve share prices. investors questioned what they intend to do with the cash and the maker is planning to merge to a new entity. that is according to people familiar with the matter. the executive vice president is the candidate. china is considering changes to the security industry that would allow foreign banks to control local joint ventures, according
2:33 am
to people familiar with the measure. they have given permission to expand in areas beyond stock and bond underwriting. making final preparations for the first asian real estate investment. it is singapore and tokyo pushing to build a wealth fund. caroline: real estate is hot in the u.k., as well. it is described as a stock exchange and the company has raised funding, including index investors. ed is here to talk about the new venture and the outlook for technology investment here. you are a serial investor and
2:34 am
are taking the active role. what does the company do? >> it makes it straightforward for you to buy investment properties. you want to get involved and you have to manage a whole property. now, you can buy a small part and get benefits. caroline: what could the initial investment be? mark: a few hundred pounds. caroline: this is almost crowdfunding. who is doing the picking? mark: we have a team of people who have been hired and are looking at the staff and the properties marketed by a established estates. the buying side is straightforward. caroline: i can buy and sell the
2:35 am
investment. >> you buy the units and get a percentage of the rental yields and there is a secondary market. if you decide you want to trade you can. caroline: the investment goes into a particular property. do i have control of the asset being ought? >> that is the beauty. you can choose. if you like the play and want properties that benefit from crossrail, you can choose specific properties and leave one that is not exciting for you. caroline: this is gathering momentum and why do you think that is? why is there the opportunity here? what makes this a hub? >> london is a global leader.
2:36 am
there is a long financial heritage and a hot startup sector. you put them together and you have a fabulously well located place. it is the package that london is benefiting from. caroline: what about regulation? i can see people saying, i can put real estate in london. why is this happening? does regulation protect those who are wary of this? >> technology opens up the opportunity. it is regulated in a way that all investment business is. you have technology allowing you to transact. caroline: property will go up and down. how do you protect yourself, when it comes to threats of
2:37 am
regional investors who are not as educated as to the downside of what they could see. are you ready for what will happen? >> some will go down and some will go up. we provide information on local areas and we will obviously make sure to encourage people to have a diverse range of investments. you have a diverse range and you are more protective. caroline: this takes a leaf out of the united states. >> we have the real estate do best -- real estate investment trust that allows individual properties rather than a group you do not control. technology takes the established investment medium and moves it forward. caroline: you are a serial
2:38 am
investor and take a look at financial technology. what about sunday and the valuation they are looking for. can you confirm that is the case? >> wonders are leading the way and we see banks focusing activities elsewhere, turning to finance and $1 billion here. it is a business where technology is making the best of the old business model. caroline: it is disrupting banks and funds parts of the economy banks are not willing to lend to. what is the new business? what is property partners
2:39 am
disrupting? >> i think that it is adding and that people have been investing in good investment categories. you have to do it and somebody else is doing that for you. you have it adding to the range of investments. caroline: we have plants and funding circles worth more than one billion. what about others? is this a worry? >> you have to see what they are delivering. i would be worried about valuations. here in the u.s., it is doing something and, if you apply the valuations, it it does not look extraordinary.
2:40 am
it is incredibly exciting. in particular, we will see more of these. caroline: you are one of the first guys to see this. thank you very much. that was the founding partner and serial investor looking at operative partners. mark: thanks. tell us what you think of the show and the stories you want to hear more about. trending topics are singapore and transforming singapore from a colonial trading center to a prosperous nation during 30 years as the prime minister. he died at 91. caroline is there. no manus. he is in france. i am mark barton. coming up, talks on the nuclear
2:41 am
program. we will be live.
2:42 am
2:43 am
caroline: let's have a look at the top stories. the scottish national party supports labor. an interview on the bbc.
2:44 am
he ruled out a deal with the conservative. >> other options are available. the labour party ruled out a supply arrangement. caroline: also speaking was nigel, talking about a scandal that made them suspend atkinson. >> will figure out what the link is. >> is she knows about it, should she stand down? >> you have to lose this person and that person. i have been ruthless as the leader with people who have stepped over the line, whether financial mismanagement or saying things that go towards racism. i am ruthless.
2:45 am
caroline: announcing a wireless service this week. that is according to a person familiar with the matter. the monopoly is pushing to expand. mark: a decisive week for iran. leaders decide on the nuclear program. negotiations in switzerland entered the final week. the issues under discussion include sanctions on oil exports. bloomberg is in tehran. how are iranians looking at this? >> i think, obviously they have reached a critical phase and, this week, when the talks resume, the focus will be on trying to reach that fame work -- framework and deciding on a
2:46 am
framework. mark: it seems like -- >> of the talks this week. i have been hearing lots of messages and prayer from negotiators. mark: how hopeful are people? >> i think, because the talks -- the feeling is, the sense is you know, the talks have been going on and people haven't hoping that the agreement would be reached and sanctions would be lifted so lives could be easier. earlier, i detected a sense of pessimism and resignation for the economic situation here.
2:47 am
we get nearer to the deadline and people are hopeful. they want to bring the deal home, as it were. >> what has the supreme leader said about negotiations? >> he gave his annual speech marking the persian new year here from a city. he had interesting and important things to say. his main point was about -- [no audio] immediately, as soon as it was reached, it would not be acceptable to him. that was a message from the iranian people and there is a real kind of -- [no audio]
2:48 am
mark: ok. we obviously have slight problems with the line to golna r we approach -- golnar. we approach critical talks. caroline: we look at our favorite stories and evaluations by unconventional sources.
2:49 am
2:50 am
2:51 am
caroline: welcome back. launching a robot clock. complete with a mechanical brain and red eyes. talking to bloomberg about pushing the boundaries of clock making. >> i was a lonely child and had the imaginary friend. >> i created my own robot.
2:52 am
the creator of the robot that looks like a mechanical watch. five errol's give you power reserve. from that, the energy comes to a system under the dome and it is the brain of the robot that will send information down and you will have a jumping our disk and a sweeping minute hand. if you look at the eyes, this is a warrior. of course, it has to be something you can play around with. the important factor is that clock's always have a key to wind them up. unhinge this and, you wind the movement.
2:53 am
there you go. i create for myself. i never think of who is going to like this or want this. i am always amazed because people who i never expect come and purchase a piece. the beauty is that we create for ourselves. it is the important part. there you are. let's look at our favorite pictures from the world of bloomberg online. are you a fan of drama? the hunger games. i never got on. i know they are meant to be good. mark: you have not seen the diversion series. caroline: is that the rival?
2:54 am
mark: divergent insurgent is the second. the first was called divergent and it opened at the top of the box office. 54 million. this is the second in a series of four films. hunger games finishes this november. divergent was produced by lions gate. hunger games runs out and you need something to follow. the first film grossed $288 million. the last hunger games film grossed $750 million. divergent is on a path. it is 32% on run tomatoes. those who know about rotten tomatoes, that is not good. check out what a critic said.
2:55 am
tighter tougher, and as witless as the predecessor. it arrives with a yawn and ends in a bank. cinderella was at the top of the chart and in two weeks $122 million. good news for kenneth brent out. caroline: maybe they will see cinderella to. mark: i saw the first divergent and the hunger games is superior. get on the bandwagon. you are a young adult dystopian person. caroline: i will take your word for it. not a teenager anymore. i'm going to get on my bandwagon in tech and we have funding in the united kingdom and another
2:56 am
addition to the billion-dollar club. they are looking for more investment in excess of $1 billion. that is not the patch, when you look at the scale of valuation in the united states. you have mover worth more than $40 billion and interest worth $11 billion. you have bloomberg business talking about the dizzying technology evaluation because hedge funds and mutual funds are elbowing their way in to the deal. they quadruple the money and made a $3 billion profit. they are desperate to get involved because they want to be counted in the future. they are driving up the valuations. mark: a bubble that many are bringing up again.
2:57 am
caroline: it could lose the value. this is what sean weber says. mark: countdown continues. we are live to paris and menace will be there. ♪ .
2:58 am
2:59 am
3:00 am
caroline: meeting merkel. visiting the german chancellor with a decisive a week. we will go live to berlin. mark: singaporeans paying tribute to lee kuan yew who died at 91. caroline: takeover. a 7 billion euro offer. new details of the deal and the speculation that sent the stock higher. march bank -- mark: rise in extremist parties. we will bring you the results.
3:01 am
>> welcome to "countdown." i am mark barton. >> i am caroline hyde. mark: hanoi speaks to us. caroline: the decisive a week for greece. how many times have we said that? alexis tsipras begins at this week when it a visit to -- with a visit to angela merkel. it is the fifth meeting. let's head out to berlin. international correspondent homes and nichols for details. hence, what we expect for take number two? hans: there will be red carpet. that much we know. being rolled out by the germans.
3:02 am
merkel, at least last week, try to downplay and death and expectations saying -- dampen expectations and say the greek debt was the main point of the conversation. the greeks said, the second to get to know you will take place without the threat, the pressure of negotiations. privately, greek press are reporting that mr. tsipras plans to bring gulf the privatization plan and then the issue of how long greeks can remain. how much time do they actually have when are their payments going to start coming to do. there is a report in the financial times alexis tsipras wrote last week they cannot meet their debt obligations and that can potentially run out of money by the end of april and they will not make it until the end of april. we are talking about potentially if greece falls through
3:03 am
releasing the 7.2 billion euros per comment out of the meeting last week in brussels yes, they said everybody seems to be on the same page but there was an actual progress. a list of things for greece to do to access that money. there was quite a bit of acrimony. you had mario draghi, he was quite critical of greece saying they were not really being a husband ecb officials visiting in athens trying to look at the books. the same question of how long greece can last? in at the letter, mr. tsipras writing to angela merkel saying it is impossible for them make -- meeting third debt. the local german newspaper, april 9 is their date on when they think greece can survive without getting a new infusion. caroline: caroline: the capita group holland it a ticking time bomb. talk to us, that the hemorrhaging cash.
3:04 am
hans: hemorrhaging would be precisely the word i would use for 400 million. the previous three days, 1.1 billion euros. the backdrop is the great banks are going through the 08, emergency liquidity assistance. last week that was brought up another 400 million euros but they wanted 800 million euros. they are south of 70 billion of their total credit line. they will review it this week to see if they need to raise it to keep the banks healthy. we last friday had a lot of back-and-forth about the intention in the newspaper and he was saying he expects a greek exit. that was walked back up by shall or must -- sure both -- schau
3:05 am
bele's position. they are driving the conflict and they may put their leaders in a position difficult to back down from. caroline? caroline: thank you hans nichols. mark: singapore is beginning a week of national mourning over the death of their founder, lee kuan yew. he guided them until global success story. let's get one more from haslinda. did his influence go beyond singapore? haslinda bank for sure. he change singapore's fortunes and turned to one the richest cities in asia and he is known to be a visionary well respected by his peers elsewhere in the world. not a surprise hit influence goes well beyond singapore. china, for one, and economic model for china.
3:06 am
he experienced to help open the chinese economy and the early days. leak one you and -- li and two pink were close friends -- li an d xinping were close friends. market? mark: a key question, how will singapore be without lee kuan yew? haslinda: that is what singaporeans are grappling with. most of us only know singapore led by lee kuan yew and as much as a country is looking for change, no one really knows how exactly to get there. a promise by the son of lee kuan yew he acknowledged singapore is at an inflection point. the ruling party which has been in power since loong won by the
3:07 am
slimmest of margins ever is criticized with being out of touch with the people who are no longer politically apathetic you their expectations it may lose more votes. if it fails to listen to the wishes and needs of the people. that next phase of singapore's history begins. mark? mark: haslinda in singapore. the world's finest tire maker, pirelli, this to be taken private. a chinese company offered 15 euros a share. let's look into the deal. caroline, it seems located in the values pirelli at 70 billion euros? caroline: speculation on friday and we saw it up 5% after the end of the week to meet the 15 euro per share valuation. a lot of money still. 7 billion euros coming from chemchina they are going for the
3:08 am
26% held by the number one stockholder camfin in italy. once they have their clutches of the 26%, they will tender for the rest at the same value. clearly, they want to get in their hands on the majority of the company. camfin probably going to keep skin in the game because the owner, one of the key owners c ofamfin is of the current chairman of pirelli group. that is marco. he is going to want to promote -- remain ceo. that has already been agreed. he will remain chief executive. he wants to keep a big state. we might see at least a majority , 51.1% held by chemchina and up to 49.9% held by camfin. it could close by the summer.
3:09 am
and they could relist. why do they want to look for china's help? it is all about scale. looking at chemchina's unit that is a list tires. it would double the body on truck tires are being made overall by that part of the business. the competition at home, think of michelin and continental tires. those companies had been beefing up with acquisitions and looking to asia to scale up. it gives pirelli a way of tackling the competition by getting in with the chinese and build up their scale. some getting china the italian market and assets. it is the biggest ever in investment. by entrance company in an attired company. 7 billion euros. before that, 3.5 billion dollars
3:10 am
worth of chinese copies buying into italy. it is a whole new scale in terms of investment. pirelli really changing itself, history in the making. milan it was found in 1872. suddenly, a chinese company but, the majority holder. take at least 50.1% of pirelli. at the moment, they are going for the biggest shareholder, 26% from camfin and they are looking to take a private for mark: on the day sippers and merkel meet the industry comes together in paris for the conference. manus cranny is there. he will bring live interviews throughout the morning including the bank offers a governor hanoi. manus is there now.
3:11 am
what is on the agenda today? manus: i think it is going to be a really fun discussion and it kicks off in about one hour's time post crisis in europe. the cleveland said and mr. hanoi will open the gic. talking about post crisis, where we are. post fmo see, opportunities first on bloomberg to discuss with a federal reserve president -- what does the world need beyond patience? there issue -- sharing mr. draghi -- i was looking for the right word. oh close optimism -- "optimism?" chinese markets over 7% rate u.k. storming the way at highs. global stock markets added 2.4
3:12 am
trillion -- $2.4 trillion of value and emerging markets not the biggest. two reasons -- central bank policy, the fed and not necessarily in a hurry to raise rates. as a european central bank buying 60 billion euros of paper every month. we have a feast for you. we have to kick off the chinese story. we have a guest that will be with me and he is the chair of the gic. thanks to gic for giving us this unique access on days like this. fairly important. went to dinner last night. when get 40 or 50 great minds greater mind than i talking about the world and where would be with central banks and they wealth will be in the world. the chair of the gic coming up
3:13 am
in the 10:00 hour on "the pulse.” i will have missed loretto master, the cleveland said -- loretta master, the cleveland fed. one of the big banks and the united states of america, wells fargo ceo joins me. she was in time for normalization. it will be a facet of the conversation and the u.s. housing market. we have a full roster. they gave me an easier day. i will not be talking about japanese quantitative easing to you. [laughter] mark: i remember that. thank you. the cleveland fed president and that is later. caroline: our top stories on bloomberg. shiite rebels seized yemen's third-largest city, taking over the airport and a checkpoint throughout the city. the leader is calling for more
3:14 am
support in escalating violence and pushing the country toy cell phone more. he has accused the president of working with militants from al qaeda. the u.s. has evacuated the rest of its personnel in the country. a national front leader cast her ballot in the french elections yesterday. it was the policy of the former french president sarkozy that one of the most votes. twitter nyquist 7% of the votes why the national front took 26.4%. and the socialist party won 20.9%. election polls showed the national running neck and neck. hosting regional elections as well. the president 147%. short of the 55 needed. -- won 47 percent short of the 55 needed. it is allied with greece.
3:15 am
over and the u.s., texas senator ted cruz announced his candidacy for president in the 2016 election. he confirmed he is running on twitter asking for support for you he is the first republican to kick off the presidential campaign. mark: you can join the conversation on twitter and let us know what you think in the stories you want to hear more about. ted cruz is trending as well as singapore as lee kuan yew the founding father of singapore, who died within the last 24 hours. @markbartontv. caroline: european stocks are at in the highest since the year 2000 following the fed meeting. after the break, what else the meeting is doing. stay with "countdown." ♪
3:16 am
3:17 am
3:18 am
mark: european stocks climbed to their highest level since 2000 last week following statements from the fed which is not in a rush to raise interest rates. lesson get to richard -- let's get to richard. have you changed your view on when their fed will move on rates halloween last week's meeting? richard: listen to what the fed
3:19 am
is saying to us and what it is saying is it does not feeling it necessarily have to move this year even though that's probably the likely timing. caroline: we have a huge effect on the dollar and huge mers -- most in terms of u.s. tragedy -- treasuries. where with the u.s. dollar go? richard jeffrey: it will probably depreciate but not as fast over the past three or four months. the most successful currency is usually attached to the most successful, strongest economies. that is what is driving the dollar at the moment. i would expect the u.s. economy to pick up a little bit of momentum in the second and third quarters is interest rates are rising. that is every reason to keep a buying to the dollar. behind that, people will show uncertainty about what is going on in the eurozone. mark: how will the dollar's strength play out when it comes
3:20 am
to hitting corporate profits in the united states? how is it affecting your take on the u.s. stocks right now? richard jeffrey: it will have an impact is the answer. companies have international exposure are bound to feel some effect even if it is translation effects. vacancy effects. -- they could see that. focusing on the u.s., we are looking more at companies that are exposed to the internal economic cycle rather than the external cycle. with an exact, we are focused perhaps -- caroline: time to get into european exporters or have we missed that particular race into carmakers, for example? near record highs for much of the benchmarks. richard jeffrey: maybe not totally have missed it but that has been at the move. we lie european exporters.
3:21 am
we look for companies with in europe exposed to the external cycle rather than the in kernel cycle which is looking -- internal cycle which is looking dad. -- looking dad. -- looking dead. mark: has the low hanging fruit been picked with the european stock market gaining 80% year to date for the stoxx 600? could we? richard jeffrey: i doubt it is the answer. it is probably priced into the market. this is reminiscent of what has happened in say the u.k. market a couple of years ago. in other words, the market moving in anticipation of growth as the stimulus comes through. a lot of it is in the market and evaluations and looking at less attractive than they were. the market looks more attractive.
3:22 am
caroline: interesting. that is being held back at the moment by the elections? richard jeffrey: there is election uncertainty. the international market, on the u.k. worry list quite near the top is the election. what is the outcome of going to mean for the financial markets? what is it going to mean for the general economy? some of the conclusions could be counterintuitive. mark: why doesn't the u.k. market, richard, why is it attractive on evaluation base past 7000, ftse record highs? richard jeffrey: the ftse 100 is just pass at the record high. the ftse oil share which is more representative completely representative of what is going on in the stock market, said a new price a while that. cyclically adjusted and still
3:23 am
relatively modest. not desperately cheap particularly when compared to the united states. caroline: what is your view, your outcome, what are you suggesting will happen in the election? richard jeffrey: we look at in the opinion of holes and -- opinion polls and you see conflicting messages when you look at the odds. odds in favor of mr. cameron remaining prime minister. on the other hand and the odds are saying it's too close to call. even if you add the number of seats against labor plus the scottish nationalists and they are running neck and neck. mark: is there an outcome necessarily bad for the stock market? some suggesting status quo, a minority government wouldn't be
3:24 am
a bad thing? richard jeffrey: data might be right. a continuation over the past five years may be the most satisfactory outcome. if you look at the extremes, if were to have an outright the labor victory at people would be quite concerned about the implications of that and the finances and longer-term stability of the economy. in the short-term, labor might follow a progressive agenda which is not necessarily damaging for the stock market street short versus longer-term. on the other end of the spectrum, people would be thinking, two years of uncertainty as we go through renegotiations with the european union and potentially a referendum more likely after that. will that create a hiatus and would be damaging to grow and the short-term? whereas renegotiating realignment could be positive.
3:25 am
it does not necessarily a unified view that comes out how we see election outcomes. caroline: at the moment you are look at the vast array of asset you could get into. u.k. elections in french and spanish going to the polls. at the moment, what i love negative yields at the moment. is it driving too many investors to riskier assets? norway going to nigeria and is in pushing us too much to risk friendly outcome? richard jeffrey: the distinction of central-bank policy around the world to encourage people to take risk. that is what did they are trying to do. taking risk is investing in real assets and cutting growth. it is a risky process print central banks do not want to see you investing in government bonds they are too safe and
3:26 am
doesn't generate any growth per what central-bank have done in pursuing that policy is caused ms. pricing of key assets i -- mispricing in key assets. mark: where is it taking you? where are you searching for yield in places that may be two or three years ago you would be surprised looking back you are searching such places now? richard jeffrey: equities and that is where people are getting yields now, equity markets. you go back. [laughter] it would seem extraordinary. you always bought bonds as safe and looking for growth. an fact, equity markets are providing you with income and bond markets quite safe. caroline: richard jeffrey chief
3:27 am
investment officer. mark: 7:26. we will bring you an exclusive interview manus cranny live in paris. stay tuned. ♪
3:28 am
3:29 am
3:30 am
mark: you are watching countdown. look at the dollar spot index. it measures the dollar against tenant of its major trading partners. this is a one-week chart free if you have been following the dollar's fortunes, it has been trading lower. that includes monday. it is falling for the second today. it is fun for the fifth day. last week, it dropped. -- it is falling for the fifth day. after the u.s. federal reserve
3:31 am
cut projections on interest rates and inflation. it is leading some banks including hsbc to say the currency surge since august is coming to an end and hedge funds have trimmed their bullish dollar future position to the least sense december. a couple of fed speakers. san francisco fed president and he votes on policy and is scheduled to speak later and so is the cleveland fed president, loretta master. she will speak to manus cranny later. the dollar is still on track for the ninth consecutive monthly gain, largest winning run since the series that in january 2005. it is 2.3% below the record reached on a march 13th.
3:32 am
the dollar spot index is down. caroline: looking at your top stories. the chairman facing a strategy challenge from investors. according to reports he is preparing resolutions for next month which urges the company to take action to increase the share prices. investors questioned what he intends to do with 15 billion euros of cash gained by selling assets. the french cement maker has identified 2 potential people to lead. the cfo and executive vice president are the suggested candidates. china is considering changing to a security that would allow foreign backed to -- according
3:33 am
to people familiar with the matter. regulators plan to give permission to expand into areas beyond stock and bonds underwriting. norway's wealth fund is making final preparations for the first asian real estate investment and a nap research to singapore and tokyo. -- and narrow to singapore and tokyo. mark: asian stocks extending a six-month high, global equities rallying. for more, let's get back to paris and a conference on global independence. manus cranny joins us. good morning. manus: mark, a very good morning. you are right. equity markets. china, what will happen next? michael druery the goc chair.
3:34 am
let's kick off the conversation on china. great to have you. last year, you were more bearish on china and here we are, you said we should be more optimistic -- and the stock market would agree with you that a lot of antagonism would say it will not hit 7% growth level. michael: we think there growth was a slow as 3%. anything better is great. there are three tailwinds. one is cheaper oil, one of the biggest importers on the planet. lower interest rates. heavily indebted to lower interest rates would help. and cheaper. we are coming out of a global recession so everybody wants to buy less expensive. even with other countries, china was cheaper. manus: you said they would
3:35 am
tolerate a higher yuan. talk about getting the yuan into a special drawing which was set up, why would they tolerate a higher value currency when there trying to rebalance the currency? michael: they are trying to be the next reserve currency of the year and you cannot do that by devaluing. the chinese are the only in the world and they are not the devaluing. they are taking the hard road of taking currency to force them into more productivity and reforms. manus: with had another of interest rate cuts and that is something based on the growth rate in china around 3%. 70% was the target. -- 7% was at the target. we had somebody say it is unnecessary.
3:36 am
we paid the price for it. what to do inc. as the elite are trying to tell us and markets in the west? michael drury: 7% and a state a number and that is what they came out with. they won't tolerate number softer than that. in shanghai, they said do not say a race. they are more interested in stability of the public and some growth. they are more interested in the long run. manus: when we talk about china and growth in the world, the debate about where we are with oil. we'll get to general commodities in a moment. oil, where are we? were having a coffee, oil market, we have passed phase one and tell me what you mean by that is where pricing takes us. manus:: first down in price -- christian noyer: first down in -- michael drury: first down in
3:37 am
price and where people store it? now we have field of the storage around the world. -- fille dup the storage around the world. manus: if you look at the fed and at some of the baker report in terms we are seeing dramatic cut in rigs. technology has moved so fast forward. help me with this conundrum. it must be some juncture. michael drury: about 1/3 of th e rigs. about 1000 rigs they are the most marginal. small impact on output. when rigs went up, it's a long time before it affected production. the next 500 rigs the ones you
3:38 am
are watching. it has been vertical rigs so you are not a knocking out fracking is what people thought would go first. manus: when you knock it out? 30 bucks? michael drury: i would not be surprised at 30 something. we will find marginal cost, a variable cost producer. ultimately, price has to go back to $65 or $70. manus: finally, where are we with the broader commodity-based? we look at copper. i caught up with a ceo and said the chinese are going to run out. howling over some of these -- stockpiling over some of these. where is your thinking? michael drury: most commodities hit at their peaks around the japanese tsunami.
3:39 am
oil was the exception because you knocked out the nukes. most commodities have gone it down the 50% drop. the bottom can be for a very long time. we talk about 70 years of famine -- seven years of famine in the commodities world. it could be a while. manus: michael, thank you for inviting us here today. enjoy. it is massive. a great 2 days. looking forward to speaking with some of your guests. we cover everything not just the ecb. back to you. mark: thank you. manus cranny in paris. caroline: if you want to give your reaction let us know what you think of the show. and what you want to hear about. many things trending on twitter.
3:40 am
ted cruz and lee kuan yew, the death of the founding father of singapore. join us at -- get in touch with manus cranny. mark: time for the bar to chart. the chart on greece you need to watch. -- time for the bart chart. ♪
3:41 am
3:42 am
mark: time for bart chart.
3:43 am
the chart on greece you need to watch. this chart shows greek bank deposits, how much money on the positive? from the beginning of 2009 and very clearly shows the scale of the run of greek banks at the end of last year. look at the red circle. that was the end of 2014. at the end of 2015, greek deposits stood 148 billion euros after a 7.7% plunge or flight and the more -- in the month of january. the lowest level since 2005. if you combine in december and january, combine 16 billion euros was removed from the greek banks system and those two months. no official data yet from the bank of greece covering the period since the end of january,
3:44 am
deposit outflows continued into february at least until ministers extended the bailout program. that was on the 24th of february and was extended until june. greek finance minister varoufakis said in an interview on february 25 that more than 700 billion euros could return since the agreement. a lot has changed since the interceding month. the predicament hasbro, ever more perilous a yet tell spell economic measures in plan to undertake -- even more perilous and yet has spelled out economic measures in plan to undertake. we are about 400 million euros and that is on top of the 1.1 billion euros which inflated greek banks in the previous three days according to a
3:45 am
person familiar with the matter. if greek deposits fully, banks rely on emergency funding to prompt them of last week. the ecb raised the emergency liquidity assistance lifeline i just 400 million euros which is less than half of what the greek central bank has requested. the ceiling will be reviewed once again at this week. a final world -- word from everything knows, a world economist. -- eric nilsson, a world economist for he said i hope there will be a u-turn on policy in advance. if not, the greek economy will collapse and they will flip out of the eurozone. he said, the greek government ought to recognize this is and game some --end-game sum. it will continue to reflect how
3:46 am
close greece is to the end-game that erica nilsson cited. caroline: halting the events of the opposite party. let's what does it tell us? charles: these results tell us that they have held onto power. a big region and the south of spain and they have held power for 30 years, it is a fortress for the socialist party. they have resisted, the rise of the on -- anti-austerity party and has made significant advances. the big loser really has been the pepe, the ruling party
3:47 am
which is in a drop. everybody will see these elections and the context of the rise of the protest parts in spain. we have podemos. and one could have a big say in the running because it seems to be the natural coalition partner. caroline: the socialist party remaining top dog but we are seeing the rise of the more extremist parties. what can we extrapolate if anything about national elections? charles penty: we have to make the point that it is somewhat different, it is a socialist strong cold. it doesn't have the same level of power in the country. what it does show is we have seen the emergence of these 2 protest parties or parties that have emerged as part of this
3:48 am
rejection of the existing political structure here in spain. one is podemos' far left, anti-extremist and the other is centrist which is emerging as a serious contender. and that is what everybody will be watching this year to see how these support for these 2 emerging parts develop and what it means for the outcome of the general elections. everybody is talking here in spain about the decline of the 2-party system we have had for 30 or 40 years. and the results do reflected that. caroline: protest parties, charles penty, thank you giving us for the insight. mark: a live shot of london. equities set to open in 12 minutes time. the ftse 100 closed above 7000
3:49 am
on friday for the first time ever. and the rest of the day? wait and see. ♪
3:50 am
3:51 am
caroline: back to paris and the conference on global interdependence. manus cranny joins us and you have a special guest. manus: i have indeed.
3:52 am
i have one of the gentlemen that carried on the tradition from 90's have this takes when volker put together -- from the 1970's when volker put together. we will talk markets. we have got the fed here and that ecd canada party continue? guest: this party has not even begun yet. the power of the negative interest rates and the pricing of assets is not well understood. if you take zero and you use it to discount of the price of the comes infinity. we are not going to go to infinity but we have extraordinary monetary policy throughout the world, throughout the world. it will continue and probably
3:53 am
for a while because the ecb has committed itself to a year-and-a-half and sweden has now followed and others are following. it is extraordinary. manus: i look at a bloomberg story this morning from norway nigeria, assets at what point do you draw the line? david kotok: you don't try the line. investors do not know what to do. when the interest rate is negative, you have to search continuously and that will go on until it stops which could be years from now. it is extraordinary. manus: the ecb is stepping in and they are doubling the amount of bonds issued around europe and that is more than what did he said has ever done in a relative sense. the fed potentially going off of patient.
3:54 am
could they tighten, shouldn't they tighten? david kotok: they have to get away from zero. zero distorts so much and the fed knows that. how to get away from zero when the rest of the world is on the other side and going deeper? it is unbelievable policymaking in each of the policy makers is focusing locally domestic thomas centric. they may talk to each other but they have to answer to the constituencies at home. and the fed has to move away from zero because of the distortions and the banking system. we have $3 trillion access and the united states that are held by the american subsidiaries of foreign banks because all of the fdic pricing on the assets. this is bizarre. the fed have to be the first to bring us away from zero. it is doing it would europe is
3:55 am
going below zero. manus: is it counterbalance? david kotok: i think there will be huge volatility, shocks and will scare investors and go up after each time by the dips. manus: this is what i have been reading. what kind of a draw in u.s. equities when they go for the first time? david kotok: get a correction because of the exchange rate is enormous and enormous in terms of the foreign exchange markets. they are corrections and ongoing will market. the bull market will continue as long as these interest rates are around zero. manus: long live the bul markets. l david kotok with us. much more to come. back to yo.
3:56 am
caroline: manus cranny. mark: "on the move" is it next. we will see tomorrow, nice and early. caroline: record stocks. ♪
3:57 am
3:58 am
3:59 am
jonathan: good morning. welcome to "on the move." i am jonathan ferro. we are moments away from the start of the european trading session. the dax coming off a 10 week winning streak. the ftse 100 starting off above 7000 points for the first time ever. berlin showdown. the greek prime minister takes to berlin to meet with angela merkel and the greek government is running out of time and money. former french sarkozy wins the first round of local elections.
4:00 am
and a whisper from an all-time high, stoxx 600, starts 0.4% from a record high. three of the things we are watching this morning. i am excited for the market open. i know someone else, caroline hyde. caroline: just a few moments, are we complacent? that's what people are talking about. a ticking time bomb in greece is what a capita group is saying. eric nilsson calling it ended game stop. they could slip out of the eurozone into chaos if they do not make a u-turn. meanwhile, stocks opening pretty much flat. ftse pretty much flat, 0.25%. last week, we close at values that take the global equities to highs. $68.4 trillion is the value of global stock

22 Views

info Stream Only

Uploaded by TV Archive on