Skip to main content

tv   Countdown  Bloomberg  May 4, 2016 1:00am-2:31am EDT

1:00 am
and the ceo of france's second-largest bank said it was not an easy quarter. economy and the oil price on china, that environment is very special. i think our government is pretty strong. nominationd trump's is all but certain after his competitor exit the race, following a crushing defeat in the indiana primary. he tony blair on brexit, tells bloomberg that he think voters will do the sensible
1:01 am
thing, voting to stay in the eu. ♪ a very warm welcome to countdown. i am anna edwards. manus: i am manus cranny in dubai. fall, and themes estimate was for a drop of 3/10 of 1%. this is the volume of drinks sold by ab inbev, they are trying to do that deal to get the sab miller closed. the estimate was 9.6 billion. this company has now lost out, and tweaking a miss on the organic volumes, miss on the revenue -- $9.4 billion. the estimate was $9.96 billion. and in terms of adjusted
1:02 am
earnings per share, this is a 87.iderable mess, versus what we really want to know as these details drop a little more, what has come through in terms of the geographic spread around the world? brazil was a tough time, the u.s. should have boosted the numbers. ab inbev sees the completion of sab miller in the second half of this year. those of the top lines we had. you have something, i believe. anna: when we see that deal taking place? let us get to germany and siemens, the part of the business we always look at, 2.1 billion euros, nicely ahead of the estimate of 1.9 2 billion. a few positives coming through in the report them you go through it. they are raising the cost savings target for 2016. they talk about 2016 orders "materially exceeding revenue. " the markets remain challenging
1:03 am
in 2016. positive words coming out here, confirming the financial forecast, talking about materially exceeding revenues on order. by the same time, and the cost-saving targets talking about remaining challenging, in terms of the market condition. we get the sense that this business, the ceo really changing the business portfolio to really focus on portfolio, cutting more than 15,000 jobs in the process. this is a builder of wind turbines, and they previously said back in january that they would have four-year earnings per share between six euros and 40.euros said they had a lot to reach those goals, an update coming through, they have been coming through since august of 2013. so interesting to get their take, changing the focus of the business, buying oil and gas equipment, and part of the
1:04 am
rolls-royce business as well. let us talk about those numbers, they broke during your dubai show. i surprise beat coming through for the net income line. let's get to caroline in paris, she is standing by. once again, sing the french business boosting things. caroline: that is right. two things to look at this morning. the retail side, both french and international on the retail side, they had less provisions for bad loans. and they climbed 18% in the first quarter on international retail, the earnings doubled, despite another loss in russia of 18 million euros in the first quarter. the second thing to look at is this new round of cost-cutting that they are announcing at the investment bank. euros for20 million their business, of course they
1:05 am
bank, pay, just like any tougher regulations, volatile markets. that is especially true for the decision, they are the world's number one in equities, and they suffered a lot in the first quarter on their structured rocks. of genr ith the ceo erale, we are asking about the prospects of the future, and what we could expect in terms of profitability? the start of the year was very low because of the economy, on the oil price in china, in that environment, which was very special, i think our performance is pretty strong. the increase of capital markets year, 13%, a progressive communicating to me that we have a more resolute model. in particular, if we see a drop
1:06 am
on the equities, and the other business had better revenue. so, perfect for 2016? we remain in a pretty volatile environment. what i mean by this, the end of the first quarter was better. and we think about the brexit referendum, there might be nervousness. for whatever reason, they are negative. we can expect something a bit volatile. but that will not prevent us to carry on developing our model, transforming our model. and commercial success. caroline: are you concerned about the lesser earnings, on 7.1%argets, the roe is at for this quarter. the 10% target in the short-term? >> the end of last year, what we said, with the kind of environment, we expect that with the russian business, again, reducing losses, but not going
1:07 am
what we're expecting to do. and of course, we have the cost ratio. aboveis, actually, given 11%. this year, we cannot guarantee, but we keep this kind of objective in mind going forward. we think we can achieve that by further transforming our business model. caroline: what is that target? >> let me say we need first to have clarity on the regulatory market. 2015 was a very important year in this perspective. we should have a final decision, we should have clarity from europe, the eopean commission. basis, we will put in place our new strategy plan 20. on these targets. caroline: it is too early to say
1:08 am
if these targets will be reached. that is what the ceo told me. last quarter, there was concern that the targets made 13% in one day. we will see this morning the reaction of investors. for now, the ceo is focused on reducing the cost of risk. anna: caroline, thank you very much. a bit of an outperform or yesterday, for the french banking sector. let us see if they can keep up this morning. caroline in paris with the latest there. let us check out the risk radar. we have a number of currencies on here for you, the yen not high, against the dollar. we have more hawkish comments coming through on the fed overnight, moving things around his little bit. we have the dollar on the other side bouncing from one-year lows. the fed speakers talking about what could happen in june, and trying to take on the market expectations around interest
1:09 am
rates and the fed. nymex is up 1/10 of a percent. trading just below that $44 a barrel. crude data out of little later today. a bit of a fall in the moment, we will talk about that later. and gold, we will talk more about that during the show. down by 6/10 of 1%, down for a third day. you see the dollar rebound on the fed comments about jim, changing the dynamic around the gold price and the commodity as a whole. thanks for that. we can toss it around a little bit later in terms of the price of gold. in the meantime, the bloomberg first word news. rishaad salamat is here. trump now thed presumptive president nominee, after ted cruz quit the race following the primary. it means he can secure the delegates before the convention, after denigrating his opponent.
1:10 am
clinton,im at hillary instead. mr. trump: we are going after hillary clinton. she will not be a great president. she will not be a good president. she will be a poor president. sanders slowsnie hillary clinton's progress, but does little to narrow the lead in the delegate count. come funds have once again under attack from a high profile name in finance. steve,he billionaire thatg there is a standard is blown away by the lack of talent. meanwhile, the cofounder of the hedge fund says he is very worried that machines could cause large swathes of job loss. that the bulkid of people are not involved in super high-value jobs.
1:11 am
they're doing routine work. and it is concisely that computers will be doing better. former british prime minister tony blair is beating a global congress, telling bloomberg that voting totain leave the eu would be a great risk today. powered by 2400 journalists around the world, you can also get more stories if you're a bloomberg user at top . anna: thank you very much. there in hongt kong. let us check in on hong kong, juliette as the day for us. juliette: absolutely, not a great session at all. sixth session of losses on the regional index, excluding japan. they will not reopen until friday. but you can see them apart from a pickup in malaysia, widespread
1:12 am
selling across-the-board, giving back a lot of what again yesterday, coming off of those highs that we saw, -- the highest since august of last year since the surprise rate cut decision. weakness across southeast asia, down eight tenths of 1%. we have seen government that rise, along with u.s. treasury. in a little bit of a switch out in shanghai, the hang seng index down by 1.1%. that is now at a three-week low. significantg selling across the region, basically following on from those losses we saw on wall street. i want to show you some of these mining players. that is where we are seeing the most weakness. the world's largest is down, facing a $44 billion suit from brazilian prosecutors over that mine disaster last year. south32, a spinoff, actually but weng a stronger cap,
1:13 am
are seeing weakness from that stock, too. really giving you an indication of the oil players in the region. over in korea, steelmakers coming under pressure. the shipbuilding company coming under pressure. and the only real bright spot, as i mentioned, some of those malaysian stocks. it has been given an upgrade today, sending share prices up by about 5%. comingaysian ringgit under pressure, really a story of the u.s. dollar strength. we have those comments coming from the atlanta fed chief, it indicating a potential rate hike. we have seen a lot of the emerging market currencies coming under pressure. manus: thank you for the roundup. let us talk about u.s. treasury. jack lew saying they are relying too much. at theg to bloomberg
1:14 am
conference in los angeles, he added that japan had other tools it can work with. japan needs to do is use all of the policy levers, not relying excessively on one lever, which is monetary policy. they need fiscal policy to work, structural reform that works, and they have had aggressive monetary policy. anna: speaking to our colleagues in the united states, let us get more expert on this. jane foley, senior fx strategist. mapping out the challenges for the abe administration, does that count as g 10 or g-20 pressure on the japanese, not to do anything with the currency? or is that just pointing out obvious structural reforms. jane: this is quite interesting. we know that u.s. treasury are in course in charge of dollars on at the fed. akin february, there has been all sorts of rumors that the
1:15 am
u.s. authorities have been pushing against currency. and a document on friday, this is a document from the u.s. treasury that was going to be passed into law. along japan on a list, with four other economies, germany is another one. and the u.s. treasury says they are watching these economies, china, taiwan, korea also. and they could take remedial outon, if they do not sort some conditions. now these conditions the u.s. is watching, including whether they have a trade surplus with the u.s.. the current account position, and whether that has been intervening in the market. none of these countries have breached those conditions yet. they are watching them. and they are pushing back against the currency. what the u.s. is saying is that we want to hike interest rates, but the u.s. treasury is saying we do not want dollar strength managing that. manus: good morning, two questions.
1:16 am
what action to the u.s. take? part to go with the voices coming from japan over the weekend, more or less staying to decide what is happening on our currency on our watch. jane: if these countries do breach these rules, first of all, there would be more ballot talks to a high level. and that these countries did not take more action, then they would take immediate action. now i do not know what remedial action would be. but the indication would be something to do with trade. but reading between the lines, it seems that the u.s. are seen currency wars as a sensitive trade war, protectionism. they will be prepared to act against that. it is interesting. with germany specifically, they are saying this is a country with a lot of certainties. they need to do something to do the surplus with the demand. and therefore, that would erode some of the surplus. that is something that has been thrown at germany quite a long time, not from the u.s., but
1:17 am
perhaps smaller countries in the eurozone. but it is interesting that the u.s. is really playing hardball now. and they really do not want the dollar to react like it did in the second half of 2014, if the fed does go ahead and hike interest rates later this year. anna: hold that thought. we are just getting breaking news on air france. the airline of course trimming third-quarter losses by 35%, as passenger count rises. traffic increase in all regions, except asia. they will reduce costs. though they caution that overcapacity in some markets would put pressure on ticket prices, in a highly uncertain environment. the operating loss then decreasing to 99 million euros. successive cost-cutting plans by the ceo, seemingly bearing fruit. but there is a big but. they have escaped management so far, but they will be the outside of the new ceo -- will
1:18 am
he have better luck? alexander, and in terms of the outlook for the business, they expect to forecast savings to be significant layoffs set by unit revenue pressure. jane, putting that aside, is a very quick one. i have a very good chart here on the bloomberg next may, saying that the u.s. treasury can say what they like about what is happening to the yen, but against the dollar, it is fed policy. that is the point being made here. we have the odds of a 2016 fed hike in the white. the dollar yen in the blue. it seems to be moving in sync. jane: we can put this back to 2014. if we look back, that was an interesting year for currency wars. weakening, and from 2014, the ecb joined in and cut interest rates and negative
1:19 am
territory in june of that year. and the latter half of the year, the dollar rally high on the negative interest rate differential. this is perhaps a problem the treasury is trying to manage now. again, we have this position where the japanese could ease more, and the fed wants to hike interest rates without the dollar moving too high, too fast. anna: jane foley, thank you very much. she stays with us. it is 6:19 in london. let us get the bloomberg business flash. ishaad: reporting a surprise increase in third-quarter profits, france's second-biggest bank being 765 million euro estimate. this, as the performance is helped by consumer banking and announced plans to deepen cost cuts in the investment bank.
1:20 am
awkwardly steered on the economy, the oil price in china. and it was very special. i think -- prosecutorszilian have filed a civil suit, joining am rupture that cause severe environmental damage. stocks plunged on the news. assets, thebt private equity firm being sold. 170 companies globally. the transaction results in an and for charge of about $100 million for credit suisse, first quarter results are due on the 10th of may. citigroup said it is to be the first major bank in aged to avoid recognition for customers, at least a million users in a year. it will do away with passwords,
1:21 am
speeding up transactions such as money transfers and bill payments. they will use voice recognition for credit card customers, last year. that is your bloomberg business flash. manus? salamat there with the latest headlines. donald trump has become the presumptive presidential nominee. this is the race for the white house. his top challenger, ted cruz, has dropped out, after a crushing loss in the indiana primary. i wouldcruz: i said continue on as long as there was a viable path to victory. itight, i am sorry to say, appears that path has been foreclosed. together, we left it all on the field in vienna. indiana. we gave it everything we got.
1:22 am
but the voters chose another path. manus: let's get more now with our washington correspondent, who joins us on the phone from d.c. out?id cruz decide to drop is that a shocker? >> it is a bit of a shock that he dropped out tonight. but it is not a shock that his path to the nomination, as he accurately pointed out, closed tonight. donald trump has many ways of getting to the magic number of 1237 delegates that he needs to win the nomination. after indiana, it was kind of a fatal blow. cruz needed a miracle after this. it was not 100% closed. he could've stayed in and lim ped along. he saw the writing on the wall, and he just decided that it was not worth sticking around. and if trump --
1:23 am
manus: is he the presumptive nominee? >> he is. right now, his only challenger still in the race is john kasich, who is so far behind, he has only won one state. trump has won several dozen. the official campaign committee of the party has announced that trump is the presumptive nominee. for all intents and purposes, people should assume that donald trump will be the nominee. are donald trump and harry clinton looking towards a general election that hillary clinton looking towards a general election? >> that is correct. they both absolutely are. they have been trying to do this for a few weeks now. and with varying degrees of success, because they both still technically have challengers, who have had mathematical
1:24 am
possibilities, at least before tonight. beating them, but now this becomes more significant, it becomes more real and powerful for donald trump and clinton. because they're both closer than they are both closer than have ever been to winning the respective nominations after tonight. hillary clinton for different reasons. hillary starts off with an advantage, and the democrats have an advantage in the electoral college, this weird and quirky system. but donald trump is determined to do this for him, it is simply about closing the busiest deal of his life. anna: thank you for joining us. jane foley is still with us. is it too early for you to factor in the election to the dollar? or does it rise above the election in some way? doesn't seem to have a bearing on your world right now? jane: it is certainly creeping up there. political risk is always an
1:25 am
interest in currency market. i think at the moment, the way the opinion polls are suggesting, clinton will get him. she is more the commodity then trump. as long as the opinion polls suggest she will be back in november, political risk is perhaps a lesssen. but if that changes, we could see volatility in the dollar. manus: one of the conversation we're having here in dubai this morning with our political at wargaming. governments are doing it, traders are doing it. if you had to bet money on a single fx option trade, if you had to buy some fx option trade that could cover this period of time, would you look at yen, euro, the emerging market? where do you think the prism of volatility will pop the most?
1:26 am
you did not put sterling -- jane: that one is perhaps the closest, that is next month. and certainly, the options market, certainly the customers relating to euro sterling has been looking at that. there is al, i think long way to go in terms of political uncertainty with respect to brazil. i think you'd be fairly brave to get involved in that market. with respect to the yen, that is of course certainly a very significant liquid instrument. and i think the yen -- jane, just very briefly, looking at june as an option -- just a 12% option for a rate hike. jane: we have seen that morning from many fed members. anna: jane foley stays with us. mmanus? manus: up next, thirsty work.
1:27 am
the world's largest brewer, ab inbev, reveals first-quarter sales missed estimates. why? it is all about brazil. ♪
1:28 am
1:29 am
1:30 am
♪ is 6:30 in london. 9:30 in dubai. welcome back. this is countdown. we are waiting for a couple of big blockbuster numbers to come in on the terminal. one of europe's largest carmakers, what will the numbers be? posted numbers last friday, will they stick to those? that is what we are waiting for an waiting for adidas to come out. let's get straight to anna. anna: we are waiting for the numbers, but we had this detail on the gold story. while we are waiting on that, adidas in talks to sell part of
1:31 am
the unit. we knew they were reviewing options here. they were entering concrete parks with interested parties. they are considering divesting the golf unit. they will make a final decision, subject to supervisory board decision. as i speak and we are getting numbers coming through. third quarter numbers declining to 10.3%. we are getting the net borrowing figures coming through this morning. they raised four-year profit forecast for the second time in less than three months, after the first quarter results be their own expectations. and consumers it seems snapping up sports apparel ahead of the 2016 soccer tournament. we heard about that at the end of april. to that extent, we are already for thisf you like, business. 6.9% rise during the day. income continuing, a setback at
1:32 am
the end of april, that it would rise by 18%. there is a new ceo coming in to this business. from henkel,join in august, right before the olympics. he will drive up the markets in sportswear. that is what the business will be hoping for. todas will be speaking bloomberg surveillance at 11:35 u.k. time here on bloomberg. manus? manus: anna, thanks very much. i'm still waiting for continental numbers. as it is we get them, we will break them. rishaad salamat is here with us. rishaad: donald trump now the presumptive presidential nominee after ted cruz quit the race following the indiana primary, not being in to secure enough votes. trump called him
1:33 am
brave for suspending the campaign, and took shots at hillary clinton. mr. trump: we are going after hillary clinton. she will not be a good president. she would not be a great president. rishaad: bernie sanders' winning gives his campaign a much-needed boost. but it does little to narrow his er lead in the delegate count. coming under fire, the n says here steve cohe is astounded by people in the business. institute was blown away by the lack of talent. manager says fund he is very worried that machines could cut large swathes of workforce jobs. he says most people in the ball
1:34 am
of the job market are not involved in super high valued jobs. and they are precisely these jobs that they will be doing better in the future. former british prime minister tony blair is speaking at the global conference, telling bloomberg that great britain voting to leave the eu will be a full at risk to take. tony: the think about it, the country will do the sensible thing and stay in the european union. because if we were to leave, it will put a level of economic risk and insecurity into the ordinary family households, that i think most people would be a forest risk to take. rishaad: global news 24 hours a day powered by 115 news bureaus. just go to the bloomberg and the function top . manus: rishaad salamat in hong kong. anna: anxiety over the health of
1:35 am
the global economy on investors, that is the subject of our chart on the hour. guy johnson is in the studio. jane foley is still with us. guy, good morning to you. line is thete economic data, the calculation falling as of late. global stocks, which as you can see, are fairly well correlated to this. they have yet to do so in the same meaningful way. but we have yet to really see the downdraft. what i think is interesting, if you tie this up with a story that we had out overnight relating to these two fed members, is william i am really focusing on. he is very close to janet yellen. san francisco the obvious link between the two. he is talking about june being the meeting. the economic data softening up a bit in the u.s. fed members still
1:36 am
talking about a rate hike in june, causing more risk. i think the stocks are in a difficult position right now. the economic data is softening. but the fed is still talking a fairly hawkish line, kind of how do you deal with that discrepancy? i think that is the interesting story over the next few days. manus: guy, this all comes back to credibility. it was a flashback from telling us we would have four hikes to two. to a certain extent, this is about credit ability. it is about 12%, i think and i can check on that. it is trying to get the medication credible. : i think it is, as they say, date-dependent. it is softening up. why are we therefore getting williams talking about it, in the way that he is. the language is quite clear from them. he is making a very strong statement that june is the meeting. the market has completely discounted this. the market, i suspect, is
1:37 am
looking at the data and say it is softening up. therefore, we should back out. this idea we are going to get a june meeting. maybe the fed is thinking about something else behind the curve because it looks at the rest of the world, and from a domestic point of you, you saw the last data where he focused on the domestic story committed a field and has a chance to catch up. but william, people that know about these things more than i do, tell me you should listen to william, only because he is so close to janet yellen. anna: jane, let us bring you into the conversation. we talked on the last segment, the rate hike in june, in your perspective, you see things, 12% is such a low number. but how would the markets respond to something like that, in the sense that it could be a sign of strength in the global economy, or a sign of weakness? looking live a long shot at the moment. jane: it is about communication.
1:38 am
although futures are stressing there is a very good chance, if you look at the economists survey, they are saying there is a much higher chance of an interest rate hike. this is because economists are looking at perhaps some of the fed things going on the only one to come out with statements. really, it is a live meeting. economists are thinking there is a good move. the data may be softening, but we still have a fair amount of weeks to go. and we could see strengthen the labor market. and i think, the 12% chance? i think it is possible that the market has already done that. i think there is a higher risk to that extent. anna: ok. manus: guy, thank you very much. let us get a gauge of that dollar potential, the rebounding from the lowest level in a two-year period. for a market nejra update.
1:39 am
nejra: yes, i have tracked the dollar here against treasury yields. of course concerns over growth, the guy was just talking about the that was moving the treasury. r that is the blue line here. in the dollar has been decoupling from that. using the dollar rebounding here from the lowest level over the past two days, some of that has been driven by some hawkish comments from fed officials about a june rate rise. to follow theu bloomberg, there is no end in t.te for the dollar rou seeing the rebound year, if we continue to see what, in general, a weaker dollar has been doing, it has been strengthening the ye. n. yesterday, it is the worst performing currency.
1:40 am
the worst is actually the korean currency. i have seen that drop, charted them both. the korean currency weakening. japan and korea of course compete for global trade. always interesting to watch these two currencies together. finally, just looking at what is happening in oil, holding the losses. we are seeing debbie dei at -- wti at 43. this is about growing u.s. crude stockpiles releasing the rebound hit the wall. the question is, will we have a fourth day of the klein? anna: let us return to the earnings picture here. ab inbev missed forecasts, heard by weakness in brazil. the world's largest brewer expecting almost double that figure. profits in that period also fell short. joining us now is duncan fox from bloomberg intelligence.
1:41 am
rate have you on the program with us. have they got enough to smooth the takeover of sab miller and get the deal done? away from the numbers themselves, that is a crucial thing. duncan: very much so. in the next three to six months, they can start integrating. and it looks like they should have done enough. they sold the contentious assets. it is very difficult to see where regulars may see a problem now. but it is a regulator, who knows? is all about, it brazil. we talked about that story politically, economically. dilma rousseff, etc. it is under pressure, isn't it? duncan: if you look at the one constant come the premium beer there, and actually grew very well. it is a slightly mixed picture. i think it is just the economy under pressure.
1:42 am
not particularly any problem with the brazilian beer business. anna: will this company still be looking to buy other assets once the sab miller deal is complete? duncan: well, they probably need to get it under their belt and working properly, given their great cash flow. and what they have in doing over there history, not looking at assets. but they have been buying craft beer businesses in the u.s. for instance. they will look at small assets, even straightaway, frankly. anna: duncan fox from bloomberg intelligence joining us to talk about one part of the european equity market. let us think up that theme with jane foley, the near as extra just still with us. how do you view the data from china? yesterday, a lot of people talking about debt levels in china. we have a graphic that shows the debt wall, a wall of payments
1:43 am
due in the short-term. will that be a lack of refinancing? that is a debate in china. where do you see china? jane: a lot of conversation about debt this year, and is is not just about debt pers e. se. the weather or not that debt has been used to productive capacity. although we have some sense of recovery in the hang seng market, a lot of the recovery has been used by debt authorities at debt capacity in the production space. that just is not providing jobs, etc. that is a big problem. because that means if there is some sort of collapse in that, it really could impact growth. i think we are quite right to be focusing on debt. i think some of the better data we are seeing, from february, lots of borrowing. i think we could see the brunt of the cost of that, because it
1:44 am
has not been the capacity. manus: i want to turn our attention to the numbers. duncan was saying there is nothing wrong with a beer. someone, hewith said he likes brazil. this is the function. you see the performance of the brazilian currency, up 20% on the year. he was bullish, within an inch of his life, in terms of impeachment money being priced in. where do you stand on terms of the brazilian currency? jane: we have seen an enormous recovery. this has been anticipating a change in the clinical climate. i would be a little bit cautious. because even though we could have impeachment, we have an awful lot of political uncertainty. we still have spiraling unemployment, still have it rating downgrades. there is an awful lot to work through with brazil, and totally see a return to economic growth.
1:45 am
i think once we see this initial rally, this relief rally over and done with, i think it is back to business. unfortunately, a lot of the fundamentals will be sour. anna: commodities still a key story in china, but it is key to both. i have a great chart here, jane. i think you'll like this one. it is about the chinese economy, and the returns, all puns intended, egg features, steel r ebar. making the serious point that we ever have seen a little bit less for equities compared to last year, more enthusiasm for commodities. i have heard some people joking in china that the regulators are playing whack a moele, having to not them back down again. jane: we have certainly seen the recovery. and the commodities get the attention. but we have seen there as well. and i think it benefits the
1:46 am
exporting countries. brazil is one. south africa, there are many. china is the largest absorber of that in the world. this is the benefit of many people. but there is a still huge amount of supply out there. in terms of the commodities, dairy is one that comes to mind. but with the supply story, the ability of these commodities to recover from here, it could be quite diminished. manus: jane foley, our fx strategist joining us for the past 45 minutes. always great to get your opinion. up next, and unpredictable state. that is what the former prime minister and united kingdom is calling the political landscape. his take on brexit, that is next . ♪
1:47 am
1:48 am
1:49 am
anna: welcome back.
1:50 am
6:49 here in london. in thesuggesting weaker starting of the day, a sunny start in london. that is at least two days in a row, sort of worry. rishaad salamat has the first word. d: reporting as a prize increase in first-quarter prices, the second against bank in france, 124 million euros, beating the estimate of analysts. the company also announced plans to deepen cost cuts at the investment bank. >> the start of the year was very awkward year on year. china, etc. in that environment, which was very special, i think we came out pretty strong. missed: ab inbev estimates here in brazil, the
1:51 am
world's biggest brewer saying the first-quarter revenues rose just 3.1%. analysts had estimated an advance of almost double that. lete thel compet takeover of rival sab miller, but the estimates were miss. units is selling the golf that is tailor-made, and brand has been dragging probability. they are saying they will keep the golf shoe, while seeking purchases for tailor-made, ada ms and the ashworth brand. we will be talking to the ceo bloomberg surveillance later. beating analysts estimates, profits from so-called 2.1 billion euros. this is after increase in demand for energy generating equipment. equipmentt european
1:52 am
maker there, did offset commodities. brazilian prosecutors filing a $44 billion civil suit, and a joint venture, over the dam rupture that killed 19 and caused severe environmental damage. stocks plunging on that news. credit suisse selling distressed includeand the reports two under 70 instruments related to about 170 copies globally. that results in an and recharge beabout $100 million, to reflected in first-quarter results, due out next week on the 10th of may. that is the bloomberg business flash. manus: rishaad salamat, thank you very much. former u.k. prime minister tony blair has been speaking that he believes british voters will do the sensible thing and vote to stay in the european union and next month's referendum.
1:53 am
speaking to bloomberg at the milken institute global conference, he said leaving the eu would create economic uncertainty for households. all, europe has been good for britain. leavelarge amount to britain in the european union is profoundly important for our prosperity. manus: jane foley is the senior fx strategist and a friend of countdown. amidst theerday, loss of them i want to bring you win and have a look at volatility. that is what we have been dealing with. what we have, and we know this, this is a three-month volatility. it is dropping off pacifica sleep. there is the scottish referendum. spiking higher, coming lower. we undid all of those losses, but euro sterling still under pressure. are we turning a corner in the brexit debate? anna if that is the case,
1:54 am
as a chart of the opinion polls. a week ago, it did seem that the main campaign was in the lead. but that will react to sterling. and the fact that appears to be diminishing is getting sterling some support. we are seeing some of that relief value coming early. if you look again now, and look yesterday, they were net and neck. thatt is very interesting tony blair made the point that he did, assuming that people would eventually go for it remain though. but opinion polls say the same thing. but some of them suggest say that irrespective of what camp themselves in, the remain vote would win. and actually, the opinion polls neck, voters are still more complacent. that gives a little more to the leave though. there is a still huge volatility other. ina: the interesting thing
1:55 am
see, dennis lockhart of the fed, saying how the brexit vote will go. he said definitely on my radar screen. event went on to say we have to take it into account for the global context raising interesting ideas about the fed in june. we have a host of global organizations talking about this being a real factor to them, some in that could cause volatility in june markets. eue: indeed, this is about coherence. there would be some sort of economic impact on the euro zone economy, too. but if we look to the politics in the eu, for instance we see hungary becoming more nationalistic. poland becoming more nationalistic, too. and it is possible if there were a brexit it could factor into the coherence of the eu. despite what global volatility and u.s. politicians are more globally wary about, as opposed
1:56 am
to its own. manus: we have written quite a bit about it. each time you come in, we look at central europe, to try to identify where the other major brexit concerns are. has your concern shifted? we had this headline on the bloomberg, polish just a memory. do you think that is brexit risk rising in that trade? toe: i think there is more that. we have seen of course the general election last year, and a lot of criticism levied at poland for being more nationalistic. there is a concern about the policies of the new government. but that is, i think the primary thatn we have seen underperform. but certainly, if there were a brexit, that would give rise to perhaps more nationalistic tendencies and more expectations that we could see other countries look to leave the eu.
1:57 am
anna: jane, thank you so much for spending the last hour with us. senior strategist. manus and i will be back, talking to mark bristow. and we will have shale numbers for you. ♪
1:58 am
1:59 am
2:00 am
surprise profit beat for socgen. not tell bloomberg it was an easy quarter. the economy, the oil price, china, etc. i think our performance is pretty strong. donald trump republican nomination is all but certain after his competitor exits the race following a crushing defeat in the indiana primary. .lur on brexit the former u.k. prime minister
2:01 am
tells bloomberg he believes voters will do "the sensible thing," voting to stay in the eu. shell reports its first quarterly earnings since acquiring bg group. what can we expect from europe's biggest oil company? ♪ you are welcome to "countdown." i am manus cranny. anna: and i am and edwards. edwards. -- anna let's get straight to the shell numbers. the estimate was only $1.18 billion. this is another oil major that seems to be beating estimates. we will look at the details to see where the analysts were wrongfooted this season. earnings attributable to holders
2:02 am
dollars.lion u.s. figureactual production just ahead of the estimates, but not by an incredibly wide margin. their ceo has been building this business through the purchase of bg group, now banking on those assets, helping shell right out what has been a terrible downturn in the oil price if you are an oil business. they want to try to take on the competition. how much of the refining part of the business and trading part of the business, how much were they able to offset the oil price? that is one of the key questions in the sector. been trimmingave spending, renegotiating contracts, eliminating thousands of jobs, improving efficiency. we are looking for an update on their debt levels as well. dividend per share, $.47 per
2:03 am
share. that is what we have in terms of shell numbers. we will look at more details as they drop and go to you with some more breaking news. manus: i know that we have mark bristow sitting right beside you from randgold resources. profit drops less than estimated. that is as they take a different view. was $211 last quarter compared to $1.54 billion. net income, $211 million last quarter. the medianly beat estimate of $38 million. while the conditions remain challenging, we continue our cost-based reduction. all of these companies are going towards cost-based reduction. a quick line on randgold.
2:04 am
first-quarter profit up 25% and production down. gold sales, $345.8 million. take it away. anna: numbers breaking from the u.k. number two grocer. line.y in full-year eps at 23.9 pence. business hasis been trying to tackle falling profits, which have become something of a norm in the u.k. grocery industry. discounters forcing bigger chains to slash prices. we have seen sainsbury's trying to take on those discounters. pounds for.4 billion
2:05 am
their online presence. we will speak to john rogers, the cfo, about those things. that will be in about 10 minutes time. manus: let's go back into a slightly fuller roundup on the randgold numbers. always good to give you the full breakdown. first-quarter profits for randgold rise 19% quarter on quarter. production,s to production is down 11% quarter on quarter. we have a little bit of a drop in production overall. first-quarter gold sales come in at $345.8 million. so we have got this breaking in thed we have the man chair beside you. first, we will discuss the numbers with our bristow -- mark bristow. run us through these numbers.
2:06 am
gold had a nice rally. talk me through the production drop by 11%. what caused it? quarter 4 last year was a very good quarter. we moved some of the growth from 3 to quarterarter 4. up in production. the financials were very comforting. that was a benefit of the higher gold price and a very good from flagship complexes, which fared particularly well, and our cost plans. campaign on 100%
2:07 am
sulfide and had eight days down and one more with a failure. operation, we were commissioning the crushes as planned this quarter and it went on a little longer. anna: can i ask you about the gold price? your share price has been nicely tracking the gold price over the first quarter of this year. how sustainable is that? mark: the fundamentals for the gold industry are very strong. particularly because we have not ,pend enough on expiration where our future production from newly-mined gold is under pressure. we saw the last quarter of last year, new goldmine production dropped for the first time in many quarters. i think there is a big demand out there. the world is in a bit of a six.
2:08 am
-- fix. the blur not sure what is happening. people are trying to quantitative ease and others are trying to increase interest rate. .ll of that helps gold fundamentally, our industry is struggling to deliver the gold that is being demanded. anna: what does it do to the competitive environment? with the gold price going higher, we talked in the past when the gold price did not look to healthy, about when your competitors were going to fall to the wayside. what does it do to the industry when the gold price goes up? mark: the industry went into survival mode. shareholders are looking for that cash flow and continued discipline on the financial side. under-investedis on a capital base. it needs to invest in expiration
2:09 am
because the grades are just not there. reallyalways said $1500 helps the industry get back on its feet. manus: you said $1500 helps the industry get back on its feet. every time you said $1000 is where you were trying to take the business, i want to take your attention to this. it is the long-term trajectory of gold. yes, we are up 22% this year. look where we have come from. my question is this -- i am numbersat the maersk and they say that their breakeven's are changing. $1000, is that where you want to get the business in terms of benchmarking your future? mark: absolutely. we are the only company with -- they came out with our reserves calculated at $1000 an ounce for 2016.
2:10 am
and you have seen that. line,s why, on the profit we beat consensus. we got all the benefits of that higher gold price. manus: everyone is driving for efficiency. you are the ceo. to be ahead ofou the curve? mark: we have taken costs out. i have always said the only three costs that you can take out are the costs that should not be there in the first place, the costs that are given to you through the drop in commodity prices, and the most important one is efficiencies. randgold resources, efficiencies , particularly at one contracts, we moved more tons at a lower grade and a lower cost per hour, which is the right formula in mining, to get down to the low
2:11 am
cost without having to use grades to do that. anna: you talked about the industry facing the challenge of getting the volume the market wants. in terms of your plans, joint ventures, takeovers, is any of ?hat looking interesting to you or have we missed the boat for a lot of m&a in the gold sector? mark: we look to make it 20% return on the gold price. the easiest way to do that is to find your own buyers. this quarter, a lot of good expiration data coming out. we have not got visibility on the next month, but option alley .- optionality, we have and we are able to demonstrate that. anna: a quick look at the futures and what that is telling us about the start of the european equity trading day. it looks like we could be a little bit positive at the start of the trading day. .2%.tse 100 up
2:12 am
it was a gloomy hanover -- handover from asia, though. we will see how the comments from the fed officials can out -- pan out overnight. manus: the atlanta fed officials putting june back on the table. that's take a look at the risk radar. we have the dollar shifting around. it rises from a one-year low. the dollar-yen trade is what everyone is talking about. you can see the dollar rising by .5%. the dollar off of that one-year low. that is being driven by june being back on the table. take a look at your screen. nymex crude up .25%. briscoe -- mark bristow focused on $1000 being the bottom line for gold.
2:13 am
a little bit more data on inventory side of the trade today. in the meantime, let's see the asian markets. how did asia finish out? juliette saly is standing by. >> not a great need for you in europe. weakness coming through in asia today. china has turned positive heading into its last hour of trade. up by .2%. australia dragging the region lower and giving up the solid gains from yesterday. the asx 200 closing down 1.5%. that is the biggest fall in a month. regionally, excluding japan, because japan will remain closed until friday, was actually seeing the regional index fall for a sixth straight session. -- kospi the cost be
2:14 am
closing down .5%. all to do with the comments we had from the fed atlanta chief which has seen the u.s. dollar strengthen. that has put pressure on to a number of currencies in this region. you are talking about the japanese yen weakening. the korean won has had its biggest fall in four months. the korean won holding it 1154. 76 to the dollar. 1.3% today. the malaysian ringgit also coming under pressure. look at the aussie dollar. it has come back up from the big slump we saw in the tuesday session. it is holding just under 75 u.s. cents. equities, apart from the pickup that we have
2:15 am
seen in china in the last hour of its trade, not a great lead-in for europe. manus: thank you very much. julia sally wrapping -- juliette saly wrapping up the asian trading session. up next, we will speak to sainsbury's cfo. that is coming up next on "countdown." ♪
2:16 am
2:17 am
2:18 am
anna: welcome back. you are watching "countdown" live from london and dubai this morning. the sun rising over st. paul's cathedral. futures suggesting we will be up at the start of trading. the ftse 100 perhaps getting gains by as much as .1%. .4% at the dax up by
2:19 am
start of trading. still 42 minutes away from the start of the european trading day. sainsbury's has reported annual profits that beat estimates. it outperformed peers in a market blighted by deflation and discount competition. let's get to the management of the business joining us. it is the cfo, john rogers. great to see you. look at -- looking at these numbers, if analysts or others ,ere tempted to get excited what would you say to them? john: we are very pleased with the performance today. the profitability beat the consensus. that reflects the good execution of the strategy we outlined to shareholders about 1.5 years ago. we will continue to improve on product quality, service availability, and we are very
2:20 am
competitive on price. we are pleased with the performance. let's not kid ourselves, it is a tough retailing environment out there. it will continue to remain challenging going forward. we are confident of our ability to outperform. anna: it is going to remain challenging, you say. have the discounters grown as much as they are going to get? john: we are assuming that they will continue to grow for a wild to come. they are opening a lot of new space in the u.k. at the moment. i think it is fair to say we have started to see the underlying growth rate of some of the discounters drop off slightly. say that forr to some time to come, the discounters will continue to grow and we will face tough competition. as i said at the beginning, we have demonstrated our ability the last couple of years. it has been a tough environment, but we have been able to continue to outperform. the discounters compete very
2:21 am
much on price. we compete on the components of quality, service, availability in our stores. that has allowed us to outperform over the last year or so. manus: good morning. are saying that we have more money in our pockets because we are spending less on energy, that we have more disposable income. but there is this concern that the consumer is under pressure. you see us front and center at your till. talk to us about the british consumer. what are the trends? are we spending more? are we more reluctant? what are we doing in our baskets? john: i think the consumer has more money in their pockets than they did a year ago. on average, about 10 pounds more a month than they would have a year ago. i think all of the evidence points to them spending that money on some of the large ticket items.
2:22 am
holidays, for example, and cars. unfortunately, not much of that money has come into the food retailing space. i do think consumers real more confident. i think they are catching up to the spend that they underwent during the recession. i think they are catching up on some of the big ticket items. let's hope, in the future, some of that filters down into the food retailers. anna: will they be spending it on some of the other things that thewill get a hold of after acquisition? are you confident that you don't need some sort of in depth regulatory review? john: so far, so good. we have had an offer recommended by the board of hrg. we have to go through a number of regulatory steps to get to completion, but we are progressing on those nicely. if all goes to plan, we are anticipating closing that in the
2:23 am
third quarter of this year. it presents a tremendous opportunity for us as a business. if you look at the areas of growth, our clothing business growing 9%. our general motors business has grown just under 4%. these represent future opportunities to growth in our sector. the acquisition allows us to accelerate growth on that path. we are excited to integrate the businesses together and deliver value for shareholders and customers. deal very much about the things you are going to be selling away from food and more towards other types of retail or about how quickly you can get things to them, fast track delivery and the like? john: i think it is both. it is about the ability to be able to sell more products, to a broader customer base.
2:24 am
that is one of the attractions of the deal. one of the great action -- aspects of the business is the ability to move incredibly quickly. customers are telling us, we want that flexibility. we want to sit at lunchtime and ron oreed to order an i some clothing, i want to pick that up on the way home when i pop into my local sainsbury's. customers want those flexibilities and shorter time frames. we believe this will accelerate our ability to become a multichannel and multi product and service retailer. manus: let's talk to you about brexit. no ceo will escape the bloomberg brexit question. tony blair says he thinks he will do the right thing and stay. everybody is warning us if we vote for brexit, we will see rampant food price inflation. is that the truth? john: it is really difficult to
2:25 am
say what would happen in the event of brexit. from our position, we are a -- apolitical on it. trying to predict what would happen in that scenario is difficult. i would not say it would necessarily lead to food price inflation. manus: this is one of the big arguments in the marketplace, that this collapse in sterling would have an unprecedented impact on the businesses. what impact on sainsbury's would a dramatically lower sterling? how does it play down to your workforce? predict is difficult to . if the brexit were to lead to a collapse in sterling, clearly, we saw some of our products from outside the u.k. and that makes it more expensive. in theory, that could be passed on in the form of food price
2:26 am
inflation. we also source a great deal of product from the u.k. there are many implications in terms of the farming community in the u.k., for example. trying to predict what could happen is dangerous. i think it is difficult to say, at this stage, what would happen with regards to food price inflation. anna: thank you very much for joining us. great to have you on the program this morning. john rogers joining us with details. . range of subjects there the profitability of the business, the fight against the discounters. comments coming through on brexit, as you might expect. and the latest m&a. manus: looks like they are going to do that deal. it is a pleasure to be back with you. we are sunny in dubai. it will be a tough day for these equity markets on the open. i will leave that with you. anna: we have some sunshine here in london. at least two days in a row,
2:27 am
which is starting to feel unnerving. that is a live shot of london. futures could be fairly flat at the start of the trading day. we will be with you again tomorrow. that is it for "countdown." ♪
2:28 am
2:29 am
show me movies with romance. show me more like this. show me "previously watched." what's recommended for me. x1 makes it easy to find what you love. call or go online and switch to x1. only with xfinity. show show me more like this. s. show me "previously watched." what's recommended for me. x1 makes it easy to find what blows you away.
2:30 am
call or go online and switch to x1. only with xfinity. welcome to "on the move." 7:30 in london, 8:30 in paris. i am guy johnson. here is what we are watching. same story for socgen. the first quarter was "awkward." the cost-cutting is not over yet. is retail the neustar of global banking. atlanta's fed chief has said the central bank could raise rates next month. are the investors wrong to write off a june hike? and cruz


info Stream Only

Uploaded by TV Archive on