tv Street Signs CNBC August 3, 2016 4:00am-5:01am EDT
counter productive merger are growing. numbers beat after the numbers below more optimistic forecast. speaking to the cfo in 30 minutes time. a pop as the company's bottom line is boosted by stamp prices and parcels. cfo tells us changes have to be made to offset the impact of brexit. >> some of those steps may been operating steps in terms of cost management and revenue management to address the weaker pound. a warm welcome once again to you, "street signs." we've got some data out for you this morning. euro zone services pmi coming in at 52.9.
it was foreclose at 52.7. so a touch better than expected. in june we got 52.8. very much in line with the numbers we got back in july. expected to be a touch weaker actually given the results we had with the brexit vote. so holding in very steady and that's inline with what we've seen as well. that was a touch softer than expected just a 54.4 coming in. expectations of 54.6. not much to write home about. a touch softer than expected. other countries are managing to keep the euro zone pmi holding in. let me give you a look at the heat map. we're down on the stocks 600 here in europe. let me give you a look at the market to give you a sense how the markets are performing today. tilted to the downside in the
ftse 100 withn.10 lower. keeping a focus on the oil and gas sector in particular. four month lows now for oil prices. we'll be talking about that later in the show. the bank sector is up 1.5%. we are seeing a pounce in the italian stocks after the selloff we saw yesterday. we have had some results this morning. socgen. than sif is in paris and has been speaking to the cfo. i look at the numbers, the return on equity for the first half of the year, and compare them to the first half of the year last year. three percentage point drop. these profits are getting hard to come by. >> reporter: that's right. in an environment that is increasingly challenging you might say. yesterday saying we h in ing we
continue to control costs, but yes in the environment the results are rather resilient. that's the reason you're seeing the stock push higher today. that was well ahead of consensus forecast. also beating when you look at revenue, which, yes, it did come in steady over the year prior almost flat, but in this environment slow and steady is winning the race. i just want the point out something you talk about with the roe targets when you sprip out the benefits of the quarter. however the ceo did tell me they were still confident on profitability for the full year. so far as they can see, no chajs in the dividend policy either. that should be reassuring news. nevertheless when you take a step back, shares have traded lower by about 30%. that's in line with the broader move stock bank index. yes they're fairing better than symptom of their peers, but i
did ask the ceo whether he was surprised and here's what he had to say. >> when i compare our share with the rest, i don't see any particular situation under control. i think we are doing better than our large european. there's nothing specific regarding -- there's this overall move. the fear again in particular with the brexit might be lower activity. lower rates for longer. things like this and i think the markets today is not in a position to that is to discriminate the business model. there's too much uncertainty. the offer is to pursue the transformation. deliver results quarter after quarter. >> reporter: an abundance of risks still facing european lenders. negative rates we know is taking a toll on the domestic retail
side. they are less exposed to the negative interest rate environment any euro zone. it's the volatility problem. brexit. concerns the invest tofrs will be in a wait and see mode thachlt is just one of the political concerns, but brexit really is the big known unknown considering we are still some years out frl actual negotiations the other factor the bank is looking at are the political risk factors not just here in france but the u.s. as well. they are bracing for potential volatility. then bringing it home here in france,ive had the chance to speak to the ceo and asked just how concerned he was about some of the antiimmigration in the wake of the brexit outcome. >> generally speaking the democracy is three elements which are important particularly. first of all the economy and the capacity to find solutions to
reduce the unemployment. the issue of security. we've unfortunately these terrible terrorists actions and the relationship with immigration. there's a need to find solutions: i think that it will only good answer is a european one, and i remain very convince thad beyond the elections, there will be additional steps of europe and euro zone to make further progress in the building of a strong europe. >> reporter: so julia, there you have it, no shortage of risks facing european listeneders. stock general is not immune to those risks. >> did you talk to him about the u.s. election? did he make a comment on his thoughts there? >> reporter: it's funny. i did mention the u.s. election. ive asked whether or not there
was a candidate that he would prefer as a sbanking exec tich which one would be more favorable, he did not give an answer. he said neither candidate would have a major impact on the business there, but they are watching. >> that's more like it. i was going to be shocked if he admitted something on that front. nancy, thank you. 26% rise in the second quarter. strength in the french banks insurance and asset management business offset the declining investment banking. crediting ary coal also said it would book a 1.25 gain. now profits at hsbc have tumbled 29% year year on year. while revenues and profits fell short of expectations the lender
reported a slight improvement in the equity buffer. appropriate to remove a timetable for reaching the return on equity target in excess of 10%. let's give you a look at the european banks this morning. i did mention it will italian banks. a bit of a pickup this morning. not much given the selloff we've seen in the past few days. a bit of strength in the irish names. the uk banks still on the downside and banco popular in spain as well. let's talk banks. portfolio manager and partner joins us now. great to have you on the show. let's talk about hsbc. you made an interesting point in the note saying whatever happens here, expectations are just too low. >> that's right. you're seeing that whether you beat on an adjusted number or they underperformed on a head
line number. doesn't matter. profit are down. this bank is too big. this bank had three very good world class banks. uk and hong kong and a commercial bank with a strong focus towards asia. all of which if tin dependent would be worth a lot more than it is as a whole. as a whole it has to reduce the balance sheet. that i have have a massive risk asset. reduce it back to 130 billion and that's very expensive. profits are going down. >> what you're saying because of these three banks are effectively all in one they have to hold greater capital than they might have to. they have greater cost risk focus as well. how bad is that compared to the other banks. they have to hold 31% equity. if they're listed independently they have to hoeltd 10 and 12% depending what you're looking at. on the cost front, they have 700
million dollar as quarter of risk management cost whether it's compliance or regulatory costs. if they were listed independently, they would be, you know, probably about half. >> so your saying the hsbc should break up. >> yes, absolutely. >> how much shareholder value would be created by that. >> probably about 50% at least so rather than be four pounds it would be six pounds which is where it was in the past. it was higher than that and the reason is the regulatory environment has changed and hector sanchez bernie sanders has to adapt. it has to adapt by shrinking the profit profits some of the parts would be back to where it where it was three or four years ago. >> you hear from all big execs is the balance sheet. they just don't want to take on the risk. therapy afraid of regulatory
backlash. we've kind of impinged all the banks. >> we have. there is an issue that the regulation too strong. if we focus on hsbc there, it is one of two banks. them and j.p. morgan are in the highest bucket. there was no one in the top bucket. it doesn't make sense to say that. >> what are we seeing in the banks here. is this a capitulation? we continue to see losses for these banks. a significant lack of confidence in the european banking sector. >> inni i think that's right. italy has a problem. and it has to tackle it. the problem is it's dragging down the rest of european banking sector with it. if you look at the rest of europe, pmis are better than expected. if it wasn't for the ecb's
varying conventional rate policy, you would see profits that are actually much higher than they have been for the past five years. unfortunately profits have been dragged down. >> prime minster renzi would never forgive me if i didn't mention the point he said actually italian banks are dragging it down. we need to look elsewhere and look at the derivative positions and some of the skeletons in closets that haven't been found. >> he's right, but the problem is from a sentiment perspective. he has a point. italy has been treated much more harshly than other countries like germany. >> great to chat with you. portfolio manager and partners. ing group has posted a 27% jump in second quarter underlying profit, but warns maintaining groelt weight will be challenging. speaking to cnbc earlier the dutch bank also highlighted the dangers of low rates.
>> low rates is not stimulating demand and could well become counter-productive and the p signs of that emerging as a counter-productive measure are growing. >> will come in below expectations on the back of rising claims. the insurer received a boost from real estate sales, but was hit by naturaldy sast terse including floods and storms in belgium and germany. >> coming up on the show, deeper and deeper as group rises and hits lows. we discuss the market with energy aspects. we're back in a few minutes. continental shares driven lower this morning. obviously speaking to the german tie maker. that's at 10:30 cet. don't want to miss it.
the bank of japan. show uncertainty over policy being pursued by the central bank. two members questioned the measures in place specifically raising questions about the boj bond buying plan. the minutes also show concerns of policymakers over the risks arising from the brexit vote in the uk. obviously got the announcement to further stimulus from the government yesterday. you can see the nikkei 225 overnight falling. dollar yen there 101 the figure or just above. investors concerned about what impact that stimulus is going to have and where it's going to be allocated. japan has also joined south korea and the white house in strongly condemning the latest missile you lounch from north korea. traveled over 1,000 kilometers and landed near japanese waters for the first time. shinzo abe called the action a grave threat to security.
>> >> translator: it is presumed it fell within japan's economic zone. it's an unforgivable act of violence to japan security. this is a clear violation of a u.n. resolution and we launched a firm protest against north korea ia. we'll stand firm in handling this. >> in tokyo joins us know. akiko, both these stories interesting to me in light of the cabinet reshuffle we saw today. no change of the central bank. no change of the finance ministry, but it seems a far more hawkish defense minister. what does he say about positions strategically in the region. >> reporter: that's exactly right. she becomes the second woman to become defense minister here. as you said very hawkish. in line with prime minster shinzo abe views on national security and his push to change the constitution here.
a move certainly angered the neighbors, korea, china, but it also shows the commitment that prime minster abe has to changing the constitution. a lot of questions about whether he's still committed to changing the economy. we did see moves on the economic front. the ministry of finance as well as the bank of japan meeting behind closed doors for a second day. the increased impression here. the two sides are coordinating their effort. especially on a day. the stimulus passage unveiled yesterday. 28 trillion yen. is the direct spending was so small. 7.5 trillion yen. the larger question is what will be the impact here in japan. the ruling party said it will lift gdp by 1.3%. there are a lot of skeptics who don't believe the number will be reached. we had to chance to speak with
japan macro adviser. he's saying with the monetary and fiscal policy reaching the limits, it's time for abe to go for the third arrow, boulder structural reforms, take a listen. >> spending government money, spending taxpayer money is so much easier than tackling more sensitive issues such as labor market regulation, cutting the corporate tax, where are they going to find the financing so i think for government they're actually going through the easiest way rather than tackling the long-term term issue of the economy. >> remember we heard from governor crow da on friday saying the central bank will undergo a thorough review of kwaun taftive easing policy. that could tighten the asset buying there. that's led to a big selloff in
the japanese bonds. you look at the yields rising to a five-month high in 40 year jgb's rising to a three and a half month high after the finance ministry came forward and said we'll likely print several billion dollars additionally of those government bonds so certainly julia, looking forward to the policy meeting in september. a lot of talk here about whether the bank of japan will also abandon that 2% inflation target within that time frame of two years and perhaps change the language to just say 2% inflation within the near future. >> akiko, great to chat with you. the british company said its sales could fall by 2.5%. a smaller slide than it previously expected. warned there are headwinds ahead as trading remains volatile on the back of weaker sterling.
come parry. post add weaker sale. apparel sales continue to drive growth, but the firm is working to boost other key brands too. it has apointed matthew mccann hay as directive creditive corrector. for gam mauve hit revenues. the italian designer suffered weakness in core markets in asia, but maintained full year guidance in insisting the targets are achievable. shares are down 28% in the last 12 months. moving on to deutsche post profits that rose sharply in the second quarter thanks to rising prices and higher parcel volumes. despite revenue being dented bid
currency swings. the cfo said changes will need to be made to offset the impact from brexit vote. >> we'll take further steps. some of those steps may be operating steps in terms of cost management and also revenue management to address the weaker pound. >> rio tinto has posted a weaker earning. despite profits falling to four-year lows the results beat forecast and has announced a higher than expected dividend. after a volatile year for mining stocks, only down 2% in the past 12 months. agrek co-shares have sunk to the bottom of the stock this morning. the power provider rorted a 30% drop.
aggreko. >> brent crude settled at the lowest level following its fifth negative session in a row. we're actually seeing a bit of a bounce this morning. you can see it higher by.4%. wti still sitting below $40. 39.70 the level there. joining us now, rita. thank you for joining us. >> good morning. >> back in bear market territory. i see managed money positions record high levels. sorry, i'm tired. why? >> i think it's been a combination of factors. the first one would be the phase we've gone through a lot of people didn't think infin tries were drawing and people were generally skeptical about the rebalancing and suddenly the sentiment changed and had a whole amount of hedge fund money flowing into the space.
of course it's happening we also have a huge amount of inventory overhang that needs to be run down. we kind of swung from it's not going to happen to it's going to happen. a lot of people have been disappointed at the base of infin try draw down. this is where it gets tricky. we have a lot of oil floating on water. that doesn't get captured in the weekly statistics we see in the numbers. when oil is on land it makes the infin tries on land look bigger. the second part is to do with gasoline. it's been extremely oversupplied even the demand has been good. the weak summer months means crude is going to be weak as well. >> you mentioned there's lots of storage everywhere and that takes time to clear so what you're saying is the market overestimated how quickly that could clear and priced a rebalancing for quicker than
expected. >> absolutely. i've said this before as well. we are at the stock off the rebalancing we haven't finished it yet. the market almost priced in everything was done. now it's almost gone the other way. there's no rebalancing whatsoever where as it's very much in motion. we are dropping supplies like a stone. the supplies have fallen by a million barrels a day over the last three, four months. that's the first time since 2005. it takes time. that's the only difference. the market wants things very, very quickly. >> you said it's gone the other way. do you think risk reward is to be long oil at these levels. >> we would say so, yes. given momentum and given positioning and i would reiterate at the moment momentum is very negative. maybe we continue to drip a little bit lower, but purely based on fundamentals prices should be higher. at these price levels, the industry can't sustain itself. we've had all the earnings from the oil makers.
they've been hard with prices throughout this year and anything below 50, i would argue anything below 6 0 is just not sustainab sustainable. >> will if y. >> if you look at the dollar well, that's down from what we saw in july. that's lent some support to oil prices too. what's your call on the dollar here as well because that's going to play into the direction the oil takes from here. >> i mean, for us, the dollar is very much a short term impact on oil. it doesn't really change the overall direction of it. at the moment, i'll say, that oil is almost doing its own thing. if you look at risk assets, they've all rallied. the dollar has weakened, but somehow people have turned very negative on oil itself. much like q1 when there were concerns about china and everybody started selling oil. at the moment the correlation isn't really holding. generally speaking we do expect oil prices to recover irrespective of what the dollar does because of the supply
declines we are seeing, but it's much more end of year story than now. >> rebalancing the biggest story here. great to chat with you. we're going to take a quick break once again, but check out world markets live our blog which runs throughout the trading day. plenty more to come including the continental cfo after the break. stay with us. socgen.
the dangerous of low rates. >> i think low rates is not stimulating demand and could well become counter-prukive and i think the signs of that emerging of being a counter-productive measure are growing. continue nel number of v numbering beat. we'll be speaking to the germany maker first in a few moments time. profit on a post card. deutsche and d hl delivering a pop. boosted by stamp prices and parcels. cfo tells us changes will need to be made to offset the impact of the brexit vote. >> we'll take further steps and some of those steps may be operating steps in terms of cost management and also revenue management to address the weaker pound.
>> so we've had july services pmi data from the uk this morning coming in at 47.4 versus 52.3 in june. that's the lowest level since march of 2009. we've got the business expectations component coming at 57.6 versus 66.4, also the lowest level since february of 2009. so this all the feed through from the brexit vote. the monthly fall in the oil sector pmi, apparently the biggest drop in the data series since it began back in 1998. this is really raising the stakes, i think, for the bank of england when they get the updated inflation forecast. this is most certainly pointing in that direction. market who provide the number saying the weaker pmi coming in down 0.4% quarter on quarter if
this level is sustained. we could look at sterling. we're showing you that there. a touch higher this morning as you can see. since 7:00 a.m. this morning. plenty stimulus accounts for that move higher. moody says britain's vote to leave the eu will have a negative impact on the property market. expects real estate values to decline up to 10%. said central london offices are like lly to govern the biggest fall. >> the invest bank expects the bank to fall to 1.20 before rovering to 1.25 in 12 months. sees the euro strengthening to 90 pence per euro before easing for 08 pence in a year. now continental delivered better than expected earnings.
posting earnings of 1.3 billion euros. the german auto maker said sales were boosted. continental also raised full year guidance saying it now expects an adjusted operating margin of more than 11%. the cfo joins us now. good morning. thank you so much for joining us. a solid quarter seemingly beating on the bottom line, you must be pleased. >> yes. second quarter was a good quarter for us. we continued this nice run, which we had in our entire business again was high volume growth. more than the markets were growing. gaining market share. and as well in our out motive division. we were back to the growth rates. we ourselves expect for the
business and profitability in two of the three out motive divisions. >> you adjusted higher your operating margin above 11%. you also adjusted it higher last month. if i look at the share price today, investors are a bit disappointed. i wonder whether you're being too cautious here and your outlook for the rest of the year is more positive than you're letting on. >> well, you know, two things. i did look at the share price in the last 15 minutes, but all i saw before was our share price development was in line with the sector which had some well more or less not sole good news from the u.s. reduction for the last or expectation for july. for the rest, i think we are a little bit cautious on the market developments overall for the next half of the year. this is included in our guidance if people are more optimistic on
automotive markets and the development, they can do their own assumption on our guides. >> you made a great point there about what we saw from some of the sales in the july u.s. auto markets. you expect the u.s. to be stable, but looking at those numbers, yes they're managing to make consume erts pay record prices. i assume that's finance related as well, but the incentives they're offering are also sky high too. are you more cautious on the outlook of the u.s. as a result or still confident. >> we are cautious of the outlook for the u.s. and we will always live with more cautious and other market agencies have been and our expectations for the second half of the year is that production is a little bit below the first half of the year, which is still on a very high level, but it's gross rate definitely will not be there forever as we have seen them in the last quarters and half years
in the u.s. this is included in our guidance. >> so you last quarter you were talking to us about china and the fact you were building greater relationships with the car producers there. that was helping. you were also seeing benefits in the brazil business as well and you were looking at potential expansion opportunities in brazil. have you identified any. >> yeah. we are starting some debottle necking as we call it. it is a capacity extension in our brazilian facilities as we had good sales in brazil and not only the last quarter, the last four, five quarters. replacement tire markets were developing berts than the overall economy and in addition imports from china due to the weak brazilian have very much reduced in the past and had this left more room for the local
producers. >> you also work in a very fascinating area for me which is the autonomous and semimy autonomous vehicle. i wonder if you feel any resistance or pushback when faced with disrupters like uber and the kind of technology we're talking about that it will shake up so dramatically the existing business model for these guys. do you hear that? is there caution? >> well, i mean thrks is now a long discussion which we could start. overall, we see that our existing customers are very much embracing these technologies. they are cautious in introducing products which are not yet safe and right, but they are as well going for autonomous functions for the automatic driving. they are moving into the direction of the electric car, the other big trend which we are seeing. this takes still time until the technology is there, but
everybody is very intensively working on it. not only our existing and traditional customer sgls just in terms of proportion it represents of your business, where is it today and where do you see it, let's say, in five years. >> well, the autonomous driving functionalties, what we called once driver assistance systems, will clearly be above 1 billion this year in sales already for our company and five years ago this didn't exist at all. 1.2 billion is what we expect gross rate in the first half of the year was around 50% on a unit basis and we expect this business to further grow and in two years from now, the number will be again much much higher than it is now. clearly above 1.5 billion in sales for us. >> wow, that's exciting. thank you so much for talking to us this morning. wolfgang shaffer.
let's move on. speaking to cnbc in an exclusive interview on the heels of stronger than expected spending data, atlanta fed said rate increase is still on the table for the fed at the next meeting. >> at this point, i don't rule out a rate increase at the next meeting or later in the year. we just have to wait and see how the data come in. the situation is maybe a little bit ambiguous, but i think i can imagine conditions in which we can have a rate hike. >> when asked about how brexit is changed the outlook, he warned of risks in the medium terrible l term. >> overall near term not a big affect, but there are risks associated with a medium return and we have to see how those things play out and they could influence the u.s. economy. >> u.s. president barack obama is challenging republican leaders to break with party and
repudiate donald trump. obama warned trump was not fit for the presidency. >> republican nominee is unfit to serve as president. ive said so last week. and he keeps on proving it. >> meanwhile, hewlett-packard has endorsed hillary clinton. in an interview with "new york times," whitman denounced trump saying it was time to put country first. said she was give substantially to the clinton campaign. >> tracie potts nbc news is with us. i want to back to what obama said about trump here. i see a number of analysts saying this is unprecedented. a sitting president has never denounced a potential candidate saying he's unfit for office. do you think is voters will be able to.
>> it's a good question. what the president has done is made a distinction between donald trump and his two predecessors. john mccain and mitt romney. the president said i never said that mitt romney and john mccain could not cothe job we just disagreed on how to do the job. when it comes to donald trump, he's putting him in all completely different category. it is a good question to ask. we don't know the answer yet. particularly those undecided voters in the middle. are they going to look at this as partisan politics are look at this as wait a minute this is a different sort of thing versus we just disagree on how to do the job. the president is putting the pressure on republicans because when he also said in that news conference was if you are a republican and you've endorsed donald trump, but you're repeatedly having to walk back things he sasz, why are you still backing him?
now the pressure goes on people like paul ryan and mitch mcconnell who are not getting support from donald trump questioning whether or not they should continue to support him. we've had one republican leader here unendorse donald trump, but no one of prominence like a mitch mcconnell or a paul ryan and on top of that you mentioned megaw meg whitman. she was a fundraising chair for chris christie. she's raised a lot of money for republicans now saying not only is she going to vote for hillary clinton, but she's going to put her money bhiebd that and urge other republicans to do so. we'll see what effect if at all this has on the campaign. by the way, it was hillary clinton who called her about a month ago and asked for that support. >> she got hillary $63 million for the campaign in july, i believe. so she is pulling the money in. i do want to ask about trump again. i know you want to put him in a box so you ask me to each time i
talk to you about this, but i saw an interview he did with "the washington post" yesterday and he suggested he could lose the election because it will be rigged against him. i just wonder whether he's kind of positioning here whether he gets a sense this could be a real struggle, particularly given we've seen hillary pick up in the polls as a result of the dnc. >> right. we expected that bump after the dnc, but whether or not it's going that's say through the end of september, through the debate, we don't know, but to your question, is he starting to lay the groundwork for an unfair election argument if he loses, it's certainly possible. obviously he still wants to bin, but we are starting to see him increasingly talk about the system being rigged. what effect is that going to have on the overall electorate. a lot of people on both sides say this is really not good for american politics for our political system if people think is system, whoever you like on
whatever side, but if people think the system is not fair and the system doesn't work, that's not good for politics on either side. >> tray cey, great to chat with you. tracie potts, nbc. fitbit posted heelt resu ed results. we've got the latest right after this. stay with us. [child speaking indistinctly] announcer: are your children in the right car seat for their age and size? it may be too late to check when you're on the road. [blaring car horn and skidding] fortunately, you're on the couch. p?p?h it's my decision to make beauty last. fix. roc retinol started visibly reducing
all of these things, but they are quite key. when you think about the amount we're doing on mobile phones nowadays. some of these systems become very important and the second point here it's samsung flexing the muscles a bit saying look at what we can do. we can bring the latest and greatest to your smartphone just like that. >> does it work? >> it works very well actually. i've had a chance to try it. i've tried a few smartphones that have the iris scanning technology in it. it opened and my eyes weren't even that aligned. it's very accurate. >> do you wear contact lens. >> it works with glasses and contact lens. >> have is this an opportunity for samsung to get the edge over apple because we're waiting for iphone seven and there's noise
saying what else can they achieve here? thai not going to increase the level of technology. is it ant opportunity. >> it definitely is. the large screen segment of the smartphone market is an area of growth amid an overall slow down in the smartphone market globally. u bernie sanders ca ubk came out saying 2 murks million are yet to upgrade. that's a big opportunity if they're able to get the marketing on this device right. you've got users sitting there saying look, not too sure this could be potentially underwell mg device. largest screen so it could potentially hone in on some of the users yet to upgrade. >> i've forgotten the real important question. rice. how much does it cost. >> at the moment they're still rolling out the release dates on the device and the prices. they haven't put a fixed price.
you can imagine this to be north of $600. >> i saw one say $850. >> that's at the higher end of the scale to be honest. it's not going be a cheap device. this is a premium smartphone here. >> i'm being told to shut up now. i worry if it can challenge apple at that price. we'll see. great to talk with you. electronic arts is beating forecast. the gaming company known for its star warz game attributed to sales. meantime profit share fell in the same period last year. shares fell 2.5% after hours on investor disappointment. the company failed to raise its guidance. fitbit is comfortably surpassed expectations in the second quarter thanks for sales in new accessories. let's take a look at other tech stocks to watch.
great to have you on, alex. let's talk tom tom. >> absolutely. tom symptom a wonder stock. most people think of it as being quite a dull business, you put the device in your car, you might wear a funky watch on your hand, but the reality is this is a wonderful play on the car of the future. you'll hear loads of the future car from tesla, amazon, google. if you need to get from a to be you have to have an app. tom tom is one of three companies in the world that has a dedicated gloelk mapping data base. has 40 million clam terre kilo if i'm in the car, you need a map to take you there. >> as a girl, i shouldn't be sexist about this, but that would suit me. down 20% since the brexit vote and i look at some of the details, 13% of the sales in the uk.
75% of the revenue from europe. do you think it's been unfairly penalized in the light of the brexit vote. >> i think it probably has. the context bear in mind the stock was up over 7 last year. our contention is its highly under valued. if you think about here one of the other mapping databases sold to a german car maker last year that was sold for 2.8 billion euros. if you look at tom tom total value today, 1.8 billion euros. >> so it's a potential buyout option. >> that's one scenario, but i think the core value of their underlying assets is not being fully appreciated by investors today. >> if we look on an fx basis, they are going to get margin pressure as a result. to what extent has that accounted for. >> i think it's very much
reflected a reflected and bear in mind the company released second quarter results in july. those numbers were solid and very much in line t. guidance they gave back in february for the full year, they're still there will and still very achievable. >> let's move on. robots in health care. >> we're big fans of robots. we've talked on this show about robots making cars. this is the next stage. robots in helt care. it's basically a doctor controlling a robot. this is for very basic operations, things like hernia's, urinary issues, gynecological issues. it's all about precision and accuracy. we said this many times before, a robot can do things much better than a human can. robots don't get hill, don't get hire tired. that's the advantage. >> where are they generating their profits here? is this a u.s. specifically
driven performance because i looked at the last quarters results and it was all about the benefits of the u.s. and adoption of the technology there in particular. >> the company is based in the u.s. and head quarter instead california. the u.s. regulatory environment has been much more proactive in terms of favoring robots. they are selling outside. they talked on their last set of results about the success they're having in china. u.s. heavy and increasing the international. >> amazon.com we just had their results. they are triading at record hig. >> the business doesn't need any explanation. we all use and love their services every day. i'll just give you one statistic that makes me continue to be highly impressed with this company. this is a business doing $130 billion of revenue. that's huge. that's the forecast for this year and still going at 30% a year. the price that you're paying for that sort of growth, we think is
very, very reasonable. just tell you two other things why people i think don't fully appreciate this business. number one, take the cloud business, if this were a stand alone company, it would have been the faster ever in the it world to have reached $10 billion of revenue. if you move from the on premise server to the cloud u you're saving about 75%. they've got huge stacale and pricing advantages. >> everybody is jumping on the cloud band wagon here. is that not a reason for caution. i'm trying to find the black clouds here. >> you make a fair point. amazon if you look at the numbers is six times bigger than the closest competitor and in this industry it's all about having scale really. i would say the amazon summit in london last month. you had the ceo talking and he's talking about invasion and not standing still. they've added 400 new certifies to their cloud based platform this year. probably going to add another 300 before the year end.
that makes it exciting. makes it a better option. >> you own all of these stocks. >> we have all of them. >> there's a listen why you're saying they're good. >> absolutely. >> yes. >> great to chat with you, fund manager at heptagon capital. >> lets bring you up to speed. uk economy contracting at fastest pace since 2008 crisis according to markets pmi report. business activity has been hit by the vote to leave the eu. call first half profits at hsbc have tumbled 29% year on year led by slowing economic growth in the bank's key market of britain and hong kong. the lender reported a slight improvement in its equity buffer. >> socgen has reported a rise.
>> and ing group reports a jump of 27%. let me give you a quick look at the european markets this morning. we're still tilted to the downside for the uk. the french and the german markets still higher here. looking at the ftse mib. the banks seeing a bit of a recovery after losses we saw yesterday. have to watch and see how that progresses. the u.s. investors getting a quick look at u.s. futures this morning as the final cross the line for the end of the show. tilting to the downside. plenty of time for that. and that's it for today's show. i'm julia chatterley. don't move because "world wide exchange" is up next. a
>>good morning. markets now, the dow on a seven-day losing streak, but could today be a game changer. >> and focus on financial shares of hsbc socgen trading higher following results overnight. we're going to hear from the companies. that's straight head. >> plus, your money, your vote. hillary clinton gets a big backing from a business leader. whitman. trouble today within donald trump's campaign. we'll bring you all the details. it is wednesday, august 3, 2016. and "world wide exchange" begins