Skip to main content

tv   On the Move  Bloomberg  March 1, 2016 2:30am-4:01am EST

2:30 am
spat with u.s. creditors. aires hass -- buenos signed an agreement in principle that would have argentina paint paying $4.6on -- billion. u.s. presidential hopefuls are gearing up for super tuesday. about half of the delegates needed for a republican candidate to win the nomination are at stake. roughly a dozen state races. donald trump and hillary clinton seem poised to win in a landslide victories. bill dudley says he is less confident on the inflation outlook in the united states. the president of the united risks -- hedownside
2:31 am
expects them to reach the 2% target in time. bailey's has revealed it is under investigation by the sec. the probe is separate from an existing investigation into the company. valeant is also facing questions about its ability to cut debt. the share price fell more than 18%. ,lobal news 24 hours a day powered by 2400 journalists. ♪ guy: busy morning. welcome to "on the move." we are counting you down to the european open. i am guy johnson alongside hans
2:32 am
nichols. barclays confirming it is selling its african business. jes staley telling bloomberg there was a difficult decision. we will break down whether he is making the right move. glencore posted a 69% slump in profit. afterl talk miners glencore reports that net loss. and the slowdown stevens. -- steepens. fresh figures from china. alan greenspan tells us that china's economy will slow even further. , once again, it is about the big banks. barclays, some comparisons with deutsche bank. hans: one thing he did say, the ceo, at the end of that interview, said there is value in being big. that is a different track in where deutsche bank is going. let's get anna's take on this.
2:33 am
interesting pick up on your point. i cannot believe we are still having the conversation about the merits of size. whether it is better to be a big, diversified player. back to the subject of africa. really fascinating to see what they can get out of this african business relative to how they are spending and what they think other people can get. they say that because of the way this is regulated, they have 100% of liabilities. that is why it does not make sense for them. it is difficult for them to hold that business. years to try to sell the business. they say they have had conversations. you could think of a number of people they might talk to. what did he say about the investment bank? they have four main divisions. , why not dostion is
2:34 am
the same thing with the investment banks? hans: summary -- anna: some research reports calling for really radical action. ipo's, investment bank, maybe selloff u.s. barclaycard business. give too much consideration for that piece of research, but said that they are going back to this transatlantic position. when you ask about the weakness in the investment bank, he points to the strength in the core franchise. he likes to put that part of the business in with the other parts of the business and say that they are keen to develop. they talked about how they have taken down risk-weighted assets. he says that some of the positives have not been factored toyet, like they made plans sell part of the business but have not been factored in. there have been calls for something extremely drastic and this is what they have delivered. this is a man who has already taken headcounts.
2:35 am
he has already delivered a bit here. the other thing happening in terms of reorganization of the company is ring fencing in the u.k. the u.k. decided it wanted to ring fence the domestic assets. in the united states, they ring fenced the foreign assets of some businesses. as a result, have split themselves into this structure where they have the u.k. barclays on one side and the national side of things. guy: why not just have a separate u.k. business? barclays trades at a price-to-book of .4 season -- of .46. lloyd's traits at 1.35. maybe there is something about them. thank you very much indeed. are 25 minutes away from the european equity open. where do we think that is going to take us? let me take you to the numbers. i think we will see a little bit of softness creeping into the
2:36 am
start of the european session. you can see it right here. go is the function. we are down by .3% pretty much across the board. london, it will be interesting to see how barclays opens. it will be interesting to see how glencore opens as well. the story of china shifted more towards the corporate's. take a look at the shanghai composite. up just a little bit. brent is also trading higher. japanese dollar yen looking at about 112. we have the 10-year bond continuing to get negative. down pretty low. i think .7% was below. low.s the they pay you to borrow money. that aswill talk about well. it will be interesting to see whether that affects the budget
2:37 am
deficit as well. and the german angle as well. hans will come back to kick around on that subject. we have some great guests lined up on the program. "on the move" as a fantastic lineup. we will be speaking to the chairman of asia -- peugeot. an exclusive conversation with ersle bank. what does he think about what is happening around europe at the moment. data, plenty of it as well. italian manufacturing data, french manufacturing, german unemployment. i know you are paying attention to that one. hans: we have some german data following the chinese factor gauge. it has fallen for a record straight seven months. a measure of services dropped to the weakest in seven years. it underscores the challenges
2:38 am
for policymakers. they need to cut overcapacity in manufacturing without derailing growth. in an exclusive interview with bloomberg, alan greenspan said he is not optimistic about the country's economic prospects. 7.5% annualk that rate of growth is unachievable. i think that what is happening is that as china's productivity inches closer to the level that exists in the united states, the gap closes and the ability to close the gap is more difficult, which means you are going to get a convergent between productivity in the united states and china. that means it is going to be a big slowdown in china. hans: let's get out to
2:39 am
bloomberg's bureau chief in beijing. ask for joining us. how bad are the numbers for china? in seasonalto take effects given the chinese lunar new year holiday. that always does skew things for the latest pmi. however, that aside, the numbers are pretty bad. this is the seventh straight month of declines for the pmi in ,hina, the manufacturing pmi which is a record. when you drill down into some of these numbers, we have worsening unemployment and the suggestion that the services sector is not picking up the slack from the manufacturing sector. that narrative about the chinese transition moving from an economy based on output and investment to one that is born on the backs of its own consumers maybe not happening as quickly as people thought. certainly, several red flags in
2:40 am
these numbers. we will be looking to see what the government does next. guy: got to leave it there. short and sweet. thanks for the analysis. joining us now, michael metcalf. good morning. we have the capacity to do more and we get a triple are cut -- a rrr cut. the interesting thing, we panicked about china for much of this year isn't it interesting? is a bad number. the market reaction has been modest. that tells me that markets are beginning to regain some faith in policy because the lending numbers in china are much stronger. rrr cut yesterday. it is interesting that we are not reacting in the same way to
2:41 am
negative news. morningcame in monday and chinese markets were down heavily because they listen to what chinese authorities said over the weekend and thought we would get something. they did not announce it over the meat -- over the weekend and the market goes down. now we have got that and we are much more towards the economic story coming out of the pboc then the data coming out of the wider economy. yes.el: quite often, this is the case. the economy it's a soft patch and markets react until policymakers respond. we have reached that point where policymakers are clearly responding. the difficult wrangle that we was the006 -- 2015 doubt about whether policymakers can turn it around. perhaps we are beginning to get a little bit of belief that -- back. hans: we had a lot of data out
2:42 am
of china. one figure was out of macau. we saw gambling revenue creeping back up. is that an indication that the wealthier chinese are feeling a little bit more confident? i love that we can gauge the chinese economy on how much the wealthy are gambling. that is something i am going to run with three go ahead. -- run with. go ahead. michael: the chinese stock market has been so volatile, it has been a little bit like a casino. we are looking at how global stock markets are reacting. ,gain, first half of last year developed markets outside of china did not react. when the chinese market was at 60%, there was not a big through into the western markets. the second half of last year changed a lot. i think now, we are beginning to break away from that a little bit. reactions and policy that
2:43 am
are coming out of china seem to be a bit more positive. markets outside of china seem to be a bit more robust. the rest of the world is not automatically down. i think there are more positive signs at play. hans: so there is less of an apple fire effect like we saw in august. has anything fundamentally changed to give markets confidence that chinese policymakers know what they are doing? just seems to be what you they are saying -- what you are saying. that they are more confident and have their hands on the wheels. what has changed? michael: it is market view. you could probably argue that they have known what they are doing all along. markets occasionally get into a panic. we had a panic over china. there is no doubt about it. some of the renminbi policy moves, some of the stock market policies as well. the one thing i would say is it
2:44 am
is very difficult to dispel the argument that china, at some point, will have a hard landing. people look at the debt data and see it is unsustainable. at some point, it will be. the question is when. the longer you go without china absolutely collapsing and evidence of hard landing -- it is a lot harder to make the argument that it is going to happen now. the lending data at the start of the year in china has been really strong. they are trying to reinflate the economy and cushion the slowdown in growth. of course we are going to see a slowdown in china. we know that. it is about the pace of the slowdown. i think the lending data, in particular, is the most encouraging thing we are seeing. they are managing to perhaps cushion the slowdown that we are seeing. guy: let's talk about japan. the japanese selling 10-years at negative yields. a couple of questions.
2:45 am
is that just a massive buy signal? does it make fiscal policy more effective? japan and germany are at the point where they can effectively sell paper at negative yields. for germany, does that mean that we have a bit more fiscal room to spend a bit more money? michael: they are not saying it directly, but central bankers are saying there is so much focus on monetary policy and yet , with yields where they are, we are not seeing any real fiscal impetus. going back to japan, the concern for me, contrast to the view on abenomicsthorities, is fully in question. they had a surprise rate cut, the yen is lower. they are in deflation. guy: the market is saying very
2:46 am
clearly, we want more. on the other hand, what that to do is say you can spend more on the fiscal side. you look at schauble and maybe he can make the same market. michael: effectively, it is just monetizing debt. that is the way it will go. abandoning any thought that they need to raise the sales tax again. .hat may well be the next step for germany, that is a long way from what they are currently saying. -- ability for them to do so quite clearly, the market is saying that they could do that. guy: we will come back and chat a lot more. michael metcalf will stay with us. here is the business flash with caroline hyde. caroline: barclays says it will sell down the stake in its effort to business and reorganize the company into two divisions. profit at the company fell by more than a half.
2:47 am
the bank will sell down its 62% stake in barclays africa group. at the same time, it posted adjusted pretax profit missing analyst estimates. volkswagen says talks with u.s. regulators may take months. negotiations are continuing and the company may have to buy back 600,000 cars. the chief executive would not say whether vw would reach the march 24 deadline but said progress has been made. >> discussions are going on. we will see what happens during the next few months. aroline: apple has won crucial victory. a new york court ruled it does
2:48 am
not have to help unlock a drug dealer's phone. the judge called the government demands impractical. later today, apple is on capitol hill. it is not known if ceo tim cook will be there. glencore reported a 69% drop in profits. shares in the mining group are a most this year's best european performers as investors hope that the worst is over. executive editor for energy and commodities joins us now. stewart, glencore still beat profit estimates. where is the profit actually coming from? >> almost all of it is coming from the marketing division. they lost money on the industrial side of his. the years worth of marketing, , antrading operation
2:49 am
example where it was all from the trading. they hit the top end of the estimates for trading, which was good for investors. they did a good turnaround in the second half of the year and came around ahead of expectations. guy: the marketing arm is meant to be a counterweight, if we get into the bad times, to the mining operations. it is the business at glencore functioning as originally intended? of thatit is early days because we know that they are having a re-think. we know they will be selling down there stake in the agricultural unit. they are talking about copper mines and streaming deals. again, in line with expectations. it will look different by the end of the process. many millions of dollars of debt ridden down as a consequence of that. that changes the nature of the company. guy: give me your take on the
2:50 am
commodities. you are looking at these numbers and what is happening in the world right now. how would you advise him? michael: exactly the same comment around china. there was a panic at the start of the year. it looks like it is overdone. commodities is the poster child for that panic. areas like the u.s. consumer are looking pretty solid. yes, we are going to have slower growth in china, but a lot of commodities are undervalued. i think you say you have to stick with the core business model. guy: make it work. thank you very much indeed. is going toalfe stay with us. up next, a look at some of the potential corporate movers, including glencore. we will also obviously watch barclays. that is next on "on the move." ♪
2:51 am
2:52 am
2:53 am
2:54 am
hans: welcome back to "on the move." ftse futures down a court of it in berlin, also down a little bit. let's get the stocks to watch with caroline hyde. caroline: all eyes on the banking sector and all eyes on barclays. indications are we should see a slight selloff in the stock. they had to cut the dividend. but what an overhaul we are seeing from jes staley. a relatively new chief executive is ring fencing the u.k. retail bank, managing to focus on two key units, separating investment banking from the retail unit in the united kingdom, looking to boost capital over the next two-three years. we are looking to see the downward trajectory continue as we digest the dividend cut coming over the next two years. glencore beating expectations.
2:55 am
it is a poor beat. still a 69% slump in overall profits. a commodities trader and a minor. miner. in its share price. nevertheless, such a selloff over the course of 12 months for glencore. nevertheless, annual profits better than expected. priced even worse because of the metal slump. the chief executive saying commodities have bottomed. lastly, keep an eye on lsc. there could be a counter bid coming from a u.s. rival, intercontinentalexchange. could they be eyeing lsc? thank you very much indeed. if you want to track let cord or orclays, -- glencore
2:56 am
barclays, here is what you want to do. european futures are negative this morning. barclays, glencore in focus. the open is next here on "on the move." ♪
2:57 am
2:58 am
2:59 am
hans: -- guy: i am guy johnson right here in the city of london alongside hans nichols. he is over in berlin. moments away from the start of the european trading session. here is your morning brief. barclays confirms it is selling its after is this. -- africa business. we will break down whether he is making the right move. glencore closes 69%. oh metals and oils humbled. numbers were better than expected. slowdown. fresh figures from china
3:00 am
painting a picture for the world's second-largest economy. alan greenspan tells us china's economy will slow further. that is showing up in the futures. i am taking your lead. i'm putting the bmi into the numbers. click that futures box. we have negative. let's get over to caroline hyde at the touchscreen for the market open. caroline: let's see if we cannot show off that negativity. asia did. asia stocks picked up. the reserve requirements and the banks. pboc trying to feel stimulus. we so once again lows when it comes to manufacturing contraption. slowing in the expansion as well in china. pressure self toward the manufacturing data coming out of the eurozone. ftse 100throws -- opens down .2%. digging into those numbers.
3:01 am
lsc is trading higher. we could see a rival bid for the company. taxes down. down. keep an eye across the board of negativity when it comes to equity. risk aversion and europe. -- aversion in europe. we are seeing once again stock markets and oil, that correlation breaking down. oil up .9%. the concerns about the china slowdown playing into metals. copper.terms of money going into gold. 1240. money going into u.s. debt, italian that. -- italian debt. $20 billion worth of debt that came in negative. you are paying japan the
3:02 am
privilege from holding your money. let's have a look at the stock market. let's see where that market is moving. they are shaking up -- africa unit. that is going to be helping drive the capital of the barclays higher. so says the ceo over the next two to three years. they are dividing up the bank in line with the need to separate retail from investment banking. ring fencing moves that the united kingdom wanted. it is going to be a strain when their profit is missing expectations for the fourth quarter. glencore down as well. beaten in terms of profitability number. commodities are at the bottom. we see glencore on the downside. they missed their target two/debt -- their target to slas
3:03 am
. debt they're going to be a loading $4 million worth of assets. lse could come in murky up the deal. could they offer up a premium? could the shareholders like that more? guy: we will take a look later performer.the best materials are not doing that bad. barclays that is battling -- that is battering the financials down .6%. that is what the markets look like. hans? hans: we have a lot of things coming up. covering barclays and earnings and the conference call. that coverage is ongoing. glencore's earnings, that coverage begin at 7:00 a.m.
3:04 am
going to be watching the presidential primaries. we'll get those results later 11:45 p.m. london time, guy, i know you will be up there. guy: it is kind of a big day. let's get back to those barclays numbers. the bank said it will sell down its 60% stake in its africa group. jes staley spoke to bloomberg about the decision. >> we will over time of two to three years slowly reduce our non-consolidated and barclays africa. it is a great bank. clearly interested in barclays africa. we think there will be significant interest over the next couple of years as we moved -- as we move. by michaele joined
3:05 am
metcalfe. why so this one? >> analysts have wondered why this folio and the synergies with the bank. does it make sense? people were wanting a lot more which explains why the stock is down. disappointment there. wondering is that connection with the group? let's wait and see. there are a lot of words out there from the ceo saying it is want to take time and it will be difficult. how long it will take to get the guy: barclays trades on .26. i struggle to explain the difference. barclays is way too complex. the investment bank is the big question mark. it also, if you look at other
3:06 am
banks, jpmorgan warning about trading losses, even barclays is saying oil and gas more losses -- more losses down the back -- down the pike. hans: i'm going to pretend to be smarter than i am by quoting from one of her columns where you took a look at how different banks look at this negative interest rate environment a little more differently. who is the most exposed? is theeutsche bank? who best capitalized if we are going to get something from the ecb that we are going to go for the negative? lilo: -- lionel: people are worried about the german banks. i think the negative rates really becomes an issue for ceos . what kind of business model do you want. it is going to push banks to focus on the income to try and push up fees.
3:07 am
the deeper we go into negative rates the harder it becomes for banks. guy: what does draghi have to deliver? maybeative rates but jacking up the -- what you're saying if you give us this money back, we were want to wash as much money into the system as we can. --nel: right now the east ecb --: right now the the third one is new. the third one is financial. -- financial stress. there is a liquidity this. firstmember when they exposed those long-term -- it came back. her member how much they expanded the balance sheet echo that was their big zika. it may be -- it was their big
3:08 am
bazooka. it may be time to restart that bazooka. everyone is focusing on the negative rates. everyone talks on asset purchases, but not really that side of it. we see it in the banks. guy: we'll wrap it up there. lionel laura. michael metcalfe, think you very much. we are going to talk negative rates. we're going to carry on that conversation about what is happening in that region. what the ecb should do next. undressed treichl coming up shortly. we are going to sit years back to geneva. we are going to speak first to the ceo of europe's second-biggest that's second-biggest -- ♪
3:09 am
3:10 am
3:11 am
guy: welcome back. you're watching "on the move." a quick look at barclays and glencore. those are down this morning. nearly 6% right now. hans: that is the story of the morning. kind of expected after those numbers but quite -- but not quite so low it let's move on to geneva. the geneva motor show. more than 120 global and european premieres.
3:12 am
ryan chilcote is standing by with our next -- i know you are a peugeot guy. the small compact peugeot guy. take it away. hands, there is nothing compact and small about their debut. take a look, it is a nine cedar. -- it is a nine cedar. tour.called the space i think it is a french word. he is the boss that tsa. the business model for a giant car isn't about my family. who is your customer? >> we have a large family. you see with this in peavy we can meet a large range of expectations. --ing from transportation people were outdoor oriented and they wanted to enjoy it.
3:13 am
-- you hads excellent results a week and a half ago. i want to talk about a ford an alliance with another carmaker. laid out for us. who would make a good partner for you? that can give you the kind of scale? cargo last week we completed -- called call last week we completed that we are going to present our next profitable goal on april 5. with this plan we are going to show the direction that we are taking for the company. we intend to make an in -- and organic growth plan. the opportunity is out there. where open and focused. we have huge strengthen our company. we can grow. ryan: who would be a good fit?
3:14 am
have you had any chats with mr. marchione at chrysler? we have not had any chats. this is a possibility. this is not our focus. our focus is to implement our profitability plan. mightwhat other focuses -- carlos: whatever happens, if you want to grab an opportunity, you're in good shape. our focus has been [indiscernible] we have been profitable last year. we are going to move forward. the opportunity, whatever the company be, to be implemented
3:15 am
will be there this is not our focus. ryan: mr. marchionne shows appear. are you going to meet in the future echo carlos: we can meet anytime because we have some business. we can discuss those matters at any point in time. i have an excellent relationship. we can meet but not only him, we can meet other people. ryan: you're considering partnerships with silicon valley companies. who have you talked to? carlos: we have made a few agreements did we are open to the fact that if somebody was to partner, someone who knows a lot about cars and technology, and quality. tsa may be one of their opportunities. our focus is push our next
3:16 am
profitable goal plan. time to dispose of its stake you go you can say this might be a good moment. what kind of estimate what they make echo -- they make? carlos: i think they're very committed to support the company. the shareholders are pleased. i think they are supporting the company and making sure that we keep a stable environment for the company to continue to grow. ryan: we wish you all the best for the turnaround and your plans going forward. that, of course, was the boss of peugeot. guy, back to you. guy: ryan, thank you very much indeed. let's take you to breaking news that we have coming from the equity markets. europe's stoxx 600 bottoming out. we are up 10% from those lows.
3:17 am
let's take you to the bloomberg. since climbed back, we have not taken back all of the ground we have lost, but nevertheless, equity markets raised 10% here in europe. investor's start maybe to reconsider whether the news is as completely as negative. the fear would not hike rates. the fear that the chinese would control. all of that maybe overdone. hans: we talked about not anything specific happening for markets to glean new confidence. they come up with the idea that maybe people in power know what they are doing. in a lot of ways, this seems that every thing is sorted out and everyone has taken a deep breath did that is not to say the underlying data is healthy, people are just sober.
3:18 am
guy: maybe it is not just is clear. as with all things, the pendulum swings aggressively and goes too far. maybe it is one of those cases. hans, we will take our next guest. by one ofoined europe's biggest banks. we are going to be talking about what is happening in banking. mr. treichl is coming up next. ♪
3:19 am
3:20 am
3:21 am
guy: 20 minutes past the hour. let me update you on a couple of key stocks. barclays and going for -- and glencore turning positive. commodities he thinks have bottomed out. glencore turning around on that story. 134. peter go-round who is our chairman also sits on the board glencore. barclays going in the opposite direction. park -- markets not impressed with what jes staley has said this morning. the stock continues to drop. it is the leader loser on the ftse 100 this morning it let's carry on talking about what is happening within the banking sector. 17% year tog down date. what is it like, a business and the banking sector with negative
3:22 am
rates? threatening to -- andreas treichl joins us now for an exclusive conversation. very nice to see you. andreas: i love it. it is the worst. us, because we are a retail bank. we have 16 million clients. relatively low income receivers. ity are badly hurt here it is bad for our customers and it is bad for us. guy: you pass some of it on? how does it factor into your you know? andreas: we don't pay interest. it stays at 0%. us is ifstion for rates will go more negative, it
3:23 am
will be very difficult for us to pass it on to our clients. to give an example, we have about 30% of the deposit of the czech republic. it took about low income people, half of the population have their savings with us. if we pass on negative rates, it is not doable. it is a real issue here it -- issue. bit: you spoke a little about the ecb's motivation for low interest rates, bringing down here they say it is to get more lending, more corporate lending out. do you think that is a dishonest opposition? businesses are making decisions on how one or two basis points or 10 basis points so they can borrow it on a 10 year window? andreas: a central bank is never dishonest. ratescuse that negative
3:24 am
are necessary to foster lending is probably true in some cases. definitely not with our clients. our clients do not borrow because rates are low, the rates are as low as ever. loanu can get a 10 year for 2%, and then the ecb lowers the rates by another 20 basis points, many can borrow for 10 years fixed rate at 1.8% did -- 1.8%. if you don't borrow at 2%, you don't borrow at 1.8%, and you don't borrow because the rates are not low enough. you don't borrow money because you do not believe in the future. you don't have hope that by borrowing money you will generate profits. .t is a political story the ecb cannot help that.
3:25 am
hans: why is that? is it just politics? if it is not to spur lending on the carpet sector, why is the ecb doing it? andreas: the ecb is doing it because it is helping states with high debt and low ratings to get cheap financing. it is also useful for corporate's in the southern european states. i'm not saying it is useless. it might help some companies. it definitely helps indebted states to get cheap financing. clients saying is for on the deposit side and a borrowing clients in our region, it is useless. guy: let's assume the ecb is going to go further down this road, what can it do on the other side of the ledger to make life easier? do we need more liquidity?
3:26 am
and buyneed to go out corporate debt? talk to me about what happens to make light easier for you? andreas: you can play around with minimum reserves. you can help the banking system of england. the mass of our clients who live off their savings, who do not have enough money to invest in stocks. would raising rates have a more positive effect on the economy? .ndreas: yes, most likely guy: we are going to come back and explore that more. andreas treichl is going to stay with us. we are going to continue the conversation. we're going to talk about some of the risks that mark carney was highlighting. doing.gulation is what should regulation -- regulators be looking at when
3:27 am
they consider it europe's banks. the ftse 100 has turned pol -- has turned positive. glencore has turned into the green. good morning. ♪
3:28 am
3:29 am
3:30 am
guy: welcome back to "on the move." i am hans nichols. let's take a quick look at the equities. futures were negative did 30 minutes into the trading day, looks like they have reversed. let's see how things are shaping up. let's get to caroline hyde at the touchscreen. caroline: i want to focus in on one of the biggest movers, the london stock exchange. equities are trading today. lsd up 7%. up -- the trying to shake up what is meant to be a combining to make the biggest european exchange operation did meant to be merging with the lsd. it looks like into not -- intercontinentalexchange group
3:31 am
is looking at a counter bid. .e are seeing a reaction where up 7.5%. this company has been bundling so far this year. rate acrossonline europe. we have been speaking to the chief executive on bloomberg radio today. the company looks to be beating expectations. their 2015 revenue coming in. that beat the expectation for 2015. the forecast looking versus the estimates. strong trading they expect to start paying dividends in the future. hitting a little bit of a lift. the worst performer is barclays. keep an eye on barclays. 7%.e to this is the worst day to close this low since 2000 low test
3:32 am
since 2012. -- since 2012. their profit also below estimates. big steps taken by jes staley. the african unity be sold off. that is going to pump up their profits. they're looking to diet -- looking to divide up their units. regulation is asking them to, but overall it looks like it hasn't really improved investment sentiment. we go down once again dragging the industry group lower. guy? guy: caroline finishing on barclays. let's get back to you our conversation with chairman and ceo of ester group bank. barclays is an interesting group that's interesting case in point. a number of rifts in the banking industry. we have talked about negative rates, regulation was one that mark carney highlighted in the
3:33 am
g-20 enormous impact as well which he now sees as maybe one he needs to consider. do you agree with him? doesn't keep you up at night? andreas: not at all. of course it is a threat. they are definitely fancier. we've got to go digital anyway. we built a syntax and our own bank. scared ofeed to be digital channels because if we don't manage to go digital, we are gone anyway. we have to prove three things in the future. regulation -- we sell asset management, transactions and you can do digitally. we have to prove that having these things under one roof
3:34 am
actually creates value for the client. if we cannot do that, we will be gone. story as thecentex necessary channel to change the banking industry. hopefully it will. some hopefully will pass away. the competitive environment will get better for us. we need to survive anyway. if we can't beat a single channel digital companies, we should not exist anyway. guy: is maybe some of the valuation supply today -- we were talking at the break about extending this conversation. not just whether that whether or not the changes. negative rates and financial thenology takes his toward block chain. you wonder how that is going to affect the banking. is that an opportunity for you? is that an opportunity for then tech?
3:35 am
client is a big challenge to the banking. it is a challenge to central banks and the whole system. you can't catch a block chain from a big client. if you do that well, it could be incredibly fantastic for the whole financial services industry. it could create incredible efficiencies. accelerating. andreas: that will change the business completely. very exciting. hans: i was intrigued by you saying the exposure you have in the czech republic. you look at what is happening with their currency strengthening against the euro. when you look of these currencies, czech koruna is strengthening. how does that affect your bottom line? or is it going both ways?
3:36 am
andreas: it is not going both ways. the unfortunate thing that you see is the strong currency are those currencies where the savers actually suffer. the check crowd is fighting depreciation because it is an incredibly strong currency if the ecb lowers interest rates in march, i am convinced they will follow. then we are getting into a very difficult situation, that we cannot pounce on negative to about 5tes million retail clients in the country. hans: are there any bank's on the periphery that is not looking to the ecb as their signpost on what they will end up doing if the ecb goes 10 or
3:37 am
more basis points lower on their deposit rate? andreas: i think those countries with weaker currencies are not so much concerned with the action of the ecb. countries like romania are less dependent on basis points moves of the euro rate. those currencies that perform externally strong and basically the check around, dependent on very small moves of the ecb. guy: kinetic you towards what is happening more widely here in europe? brexit. that you thought it would have very little effect on your business. you can start to draw some lines here at what is your view on whether britain should go? or what affects it would have? what would be really interesting to see, the london
3:38 am
in the frank for stock exchange emerged. you have brexit. they decided the headquarters will be in london. guy: what happens then? andreas: it would be interesting to see. guy: do you think london with separate? andeas: europe would suffer london would suffer. brexit is a crazy idea because britain has the great deal of all members. they get what they want. they have all of the advantages. i don't see the value in brexit. is a very strong negotiator within the eu. it gets almost everything. the brexit is a little bit like the poland. it is just in order to be different and to have a chance to win elections.
3:39 am
guy: i know you may be alone in sharing that view. one final question, what represents the biggest threat to europe, the migration story? or the brexit story? the two are clearly linked that nevertheless, europe seems to be facing x essential crisis on a number of levels. andreas: it is to go to find a spot where europe does not have a crisis at the moment. -- it is difficult to find a spot where europe does not have a crisis at the moment. we are working in the banking unit -- union. every thing will be european wide. months ago, i wait at the border to get to germany. we are limiting the movement of people, goods. we're still working on the banking unit. do they talk to each other? it is diverging at this point in
3:40 am
time. it is a real danger. hans nichols here. i am glad you mentioned traveling from austria to germany. when you look at angela merkel's open-door policy, how much longer can she maintained this position? i think she can maintain this position as -- if she finds an ally. if she can prove that the migration can be solved professionally. it can. believeit is absurd to that a continent with 500 million people is not capable of managing the migration of one million people into the continent. i don't believe it. it is really bad management. if she has people and all european countries, and she can achieve a common policy and procedure within the european
3:41 am
union, she can succeed. i really hope she will. guy: andreas, it is been a pleasure. thank you very much indeed. sharing so much of your time. chairman and ceo of astra group. says commodities have bottomed. is the worst over for major miners echo our next guest think the could be. we will discuss that story next. ♪
3:42 am
3:43 am
3:44 am
hans: i am hans nichols. this is on the move to let get to the bloomberg business flash. here's nejra cehic. nejra: shares and barclays are trading lower after its fourth-quarter profits fell by more than half. profit of 247etax million pounds missing analysts estimates of 519 million pounds. target will sell down its 62% over the next two to three years. >> it is a very difficult decision. barclays has been -- for over 100 years. it has a terrific management team. we are across the continent. it is a difficult decision. nejra: intercontinentalexchange has confirmed it is considering making an offer for london stock exchange group. no approach has been made and no
3:45 am
decision has been made. shares and lse which are in merger talks are trading higher. apple has won a crucial victory with the u.s. government. in your court ruled it doesn't have to unlock a drug dealer's iphone. is on capitolpple hill to testify before the house judiciary committee. we do not know when tim cook loretta lynch -- an exclusive interview at nine clock p.m. u.k. time. that is bloomberg is is flash. hans? volkswagen ceo says regulation talks with the u.s. has intensified and will resume on thursday. company may have to buy back some $6,000 cars -- some 6000 cars. bloombergs ryan chilcote is having all the fun. he asked him
3:46 am
where the money will come from to cover the cost? company whichis a is able to handle the money and one of the most important things to set priorities with the things for the future. .ind of audit program immobility. progressive a issue. ryan is having all the fun. at least we have the data here. i want to bring you into this chart. this shows you the spread between volkswagen's voting shares and nonvoting shares. here is where the emission starts. they are trading even. remember those nonvoting shares spread widened, drops here after the scandal could volkswagen cuts in test cuts it investment
3:47 am
budget. it close -- it is close back to parity. then it is been trending downward. almost down to the post crisis level. it gives you an indication that investors are not entirely convinced that volkswagen has enough road in front of them to get out of whatever sort of scandal they are in. and what their next move is going to be. guy? guy: investors paying a lot of attention. it is going to be interesting to see whether or not we see -- whether we see stories start to creep out. let's big deeper. glencore ceo striking an upbeat note when he commented on miners results. prices have now bottomed. sales in china are pretty good. we couldguest says indeed be over the worst. outdoes he think borrowing
3:48 am
is now happening? why does he think things are going to get better? >> through the whole of leicester, we saw manufacturers all over the world. they could field metal prices were going down. nobody was to be holding expensive metal for relatively small margins. they d stock as fast as they can. and we thinke ends it is ending now, prices that circular. we have already seen evidence of restocking in china. many not as fast as has happened in past cycles, but it is still happening. guy: miners have bounced. shares low. how much you think is in the tank for the upside? john: it is easy to sell the stuff too early. looking at the results today, glencore has done really well. it has managed this downturn exceptionally in my view. the energy products division has done pretty well here it we have
3:49 am
had this shift of money back into the commodity sector. the sky has not collapsed in on our heads -- on our heads. the world is still growing at a slightly slower pace you chinese growth is still there. the chinese are still stimulating. industrial activity, and for such projects. we see them pulling the levers left and right. it is not that bad. it is slightly different sort of growth. it is a little bit more consumer growth. it is still there. tycho can you trade his way out of this -- guy: can he trade his way out of this? the market is worried about. candesk can be marketed -- be marketing division do what it's supposed to do now? john: what is interesting is these results appear to be trading its way out. we had a soccer in the first half when oil trading was not good, they got caught on the
3:50 am
wrong side of copper and oil on the way down. the energy products division marketing has done well here it rest of the business has performed better than i would've expected. shall we say we have feared the worst and came up much better. that is pretty good going. hans: this is their manufacturing number coming less 50.2.stimates came in at you were giving an optimistic -- an optimistic and bullish view happening on the macroeconomy. do you think that is just an asian story? is their fundamental weakness in the european economy? mayor go there are clouds -- mayor go there are clouds. it is very slow growth. the european economy suffering more deflationary pressures that inflationary pressures. there is a green light for policymakers to extend qe.
3:51 am
to continue to stimulate the eurozone. is surelem is nobody how effective stimulus really is. growth so far has been anemic. france is doing ok but seems to be falling behind. there is a lot more to be gained from stimulating the eurozone. guy: thank you very much indeed for your time. john mayer covering the glencore story. i want to remind you peter graham is a senior independent nonexecutive director at glencore. make you aware of that. up next, unemployment out of your. economic power out. german data out after the break. ♪
3:52 am
3:53 am
3:54 am
guy: comeback. let's ring in which jones. -- richard jones. where waiting for german data -- we are waiting for german data. japan can now sell paper negative. a crazy world. what does that tell you what markets are looking like? richard: at the end of the day, there has been talk that monetary policy requires -- there are some strong voices in
3:55 am
the world saying we need to have this. guy: the market voice is saying that. we are willing to pay you to know out and borrow money? that is an amazing position to be in. richard: it really is. i think that borrowing at low rates is a good thing. guy: german data breaking, hans? hans: manufacturing pmi is falling to 5.5. the pulmonary is 5.2. risesi -- unemployment 6.7%.ersus a january, that is a slight fog. -- a slight fog go. reverse that deflation story. that is the key number we're looking at. guide? guy: interesting to see what draghi makes of all that. line, we areative
3:56 am
10 points above the germany bond. what are people saying about the overnight story with the euro-dollar? you got the european data fairly weak. give us the top down. richard: you got france unemployment. that is a problem for the ecb. we've got a dovish fed. it is up to mr. draghi next week to make their assessment and we will see what they do. euro-dollar is one of the things they will want to have lower. qe.s extend -- perhaps extend qe. guy: raising rates will have a positive effect. interesting point. someone said that to me about the u.s. as well. richard, thank you very much indeed. we are going to be talking to audi ceo live from the geneva
3:57 am
motor show. stay tuned. that is coming up next on the pulse. which today will not be with francine lacqua. it will be with me. i will see when a moment. ♪
3:58 am
3:59 am
4:00 am
guy: barclays confirms it is selling its african business. the share price down more than 5% this morning. glencore posts a 69% slump in profit. -- stock reverses its commodity prices have hit bottom. fresh figures from china paint a picture for the world's second-largest economy. alan greenspan tells us that china's economy will slow further.


info Stream Only

Uploaded by TV Archive on