tv On the Move Bloomberg September 28, 2015 3:00am-4:01am EDT
ftse down by 25 points. move to thee a downside at the open print your market open with caroline hyde print, bank risk aversion and the top. strong rally in europe. still ended the week lower by 1.5% per it was i we're continuing to that theme. -- it looks like we are continuing that theme. over from asia, august industrial profit plunging 8.8%. the worst, the worst contraction since 2011. center worries front and about thesis of the economy and china. risk aversion playing out. ftse 100 up by 0.6%. cac, risk aversion in terms of the yen. yen rally today and a euro lower versus the dollar. the u.s. dollar, this japanese
yen strengthening verses of the dollar. money moving into the haven that is the yen. oil, concerns about a slow down in asia. down 1%. metals not faring so badly. weatherown by 0.1% for to better than oil. -- weathered better than oil. to yound money going to as data this morning. yelleds down ever so slightly -- yields down ever so slightly. political risk brewing and spring. basis points. despite the concern about barcelona. managing to win a majority. i want to get into some of those huge stock stories we have today. deal is on and deal is off. ramifications.
vodafone is off. since june, talks ongoing with liberty global to combine the mobile giant with a cable-tv giant. talks terminated. all about shell. they stop digging in alaska and spent, the item at $3 billion. that's a bit of a knock. to have the risk and higher costs. sbc miller, the deal is closer. issab miller, the deal closer. we could see the deal today. drinks company is up almost 4%. back to you. jonathan: caroline hyde, thank you. not really lifting the ftse 100 up. what if all moved. waiting on the ftse. the toll on the benchmark any europe. over to asia, hong kong was the asian market a wrap.
good morning. juliette: good morning. we have had another volatile session in china and the last 40 minutes and the shanghai composite closing higher at 0.3%. profit numbers as caroline was talking about down year-over-year, the biggest fall in four months. we had earlier seen quite a bit of industrial companies in the region. in the last 40 minutes, we start to see buying through in china and the shanghai market has percent.gher by 0.3 a pretty quiet today. hong kong markets closed and korea and taiwan. in singapore, a big fall. weighing on the overall benchmark. at its lowest level in over three years since june 2012. wickedness and indonesia, malaysia, india, and thailand. in japan, a number of stocks.
1000 stocks listed on the topics index and 168 out of 225 on the nikkei and that is why the index closed lower. australia's asx supported. telco in europe. a lot of telco deals in asia as well. i mentioned sintel. telecommunications in austria doing incredibly well today supporting the overall assets 200 -- asx 200. it has been a mixed session. in asia andestors will be weighing the manufacturing data out of china and all eyes, global investors on the u.s. jobs number and the fed. fed officials begin this week. a mixed picture in asia and china closing higher in the last 10 minutes or so. jonathan: thank you very much.
what is happening in markets in asia. and as morning's show. first off, china's slow down, industrial profit plunges the most in four years and the world's second-largest economy. oil offion on ice for the shore of alaska. mandate short of majority. the roads are maybe -- -- the real loser maybe -- profits to the chinese fall of the most since the government began releasing monthly data in 2011. ms. morgan's is standing by with -- nick wardens is standing by. less about the economy? nick: you're seeing a confluence of factors. one is the stock market sliding the head a lot of companies. the other is the yuan
devaluation coming home to roost. a lot have loans in u.s. dollars. they really got hit with the government devalued the yuan in august and head to the bottom line. also a lot of companies struggling with overcapacity and really having a lot of trouble finding buyers for their goods. a whole bunch of factors coming home to roost and is one data set. to gauge whattry is happening in the chinese economy. we had a set of earnings last week. some people said it was ok and some terrible. do the numbers tell me about china and not new china? to show ams: it seems lot other growth drivers of the old chinese model, infrastructure led investment growth seem to be waning. what is clear, it is more bad news for the chinese economy. it seems they will pressure the
government to act. they have a lot they can do with a easing a easing and interest rates are high compared to the u.s.. and europe a lot of they could do to unlock money being held by banks. since the data will only added pressure on the government to take some of the actions to get to the economy moving again. just the bank nick wadhams, here -- jonathan: nick wadhams, 21 for joining us. let's bring in guy johnson. guy, the negative headlines after negative headline. positive this morning. the financial index. things are starting to improve a little bit. do the numbers tell me back china -- old china that a new china good? guy: though story is more forward-looking indicator and act as a precursor to things picking up and maybe this data, nick talking about is laying out
some of the reason behind what is happening and the stock market creek reevaluation of the currency. maybe rearview mirror stuff. i am not saying things will turn around anytime soon but you need to put these things into context. jonathan: it probably meant more now.ars ago than it does the shift from old china to new china. and of corporate numbers last week and outlook. struggle.illars do you expect that to continue? guy: it is interesting to see how china will respond. the next element to policy response we will see. and maybe aimed at infrastructure. maybe the old china stuff we have been talking about. maybe we start to see a little bit of a better position as a result. the only thing i would put onto this is saying about globally. the overcapacity and china at
the moment. export some ofn that and what it will mean for conditions elsewhere around the world. i spoke to a guy and it worked to -- and they are watching the chinese very carefully. think about the capacity in industrial and china. jonathan: the pessimistic view of china so prevalent in europe. we talk about panic, panic. the narrative field by the stock market for if you look from the pboc, things have been quite a neutral. as they have been cutting but not a pboc in emergency mode, is it? maybeou could argue that the policy response has been clumsy. it does not feel panicked. maybe not as nuanced as it could have been a but not panicked. maybe some feel it could have been enacted in a slightly better way.
to be acting and that way. politically, beijing on the fiscal side, a slightly bigger picture in terms of not just looking at the economy directly but the invitation, etc. the political story is probably more interesting for authorities. jonathan: we talked about the caterpillars of the world and of struggle. since thisown morning. things are not pretty at glencore. guy johnson, thank you. shell gets cold feet. decide to abandon offshore alaska exploration. details after the short break. ♪
jonathan: good morning and welcome back to bloomberg tv. i am jonathan ferro. about 13 minutes into your trading day. where stocks are trading. the ftse 100 is it down. fun weighing on this index print talks ending with liberty global. -- vodafone weighing on this index, talks ending with liberty global. dax is down. the worst quarter since september. so many movers and so much corporate news. let's kick off with the company that will abandon further activity in offshore alaska citing high costs and challenging regulations. ryan has the story. what are the details? about 0.5%. down
not a huge move. ride not a huge move. shell is doing three things. saying that they were looking for oil and gas and the arctic off the coast of alaska and effectively exasperation well was a dud. they found some but not enough to justify continuing exploration in the region. tow, -- two, they are saying high cost of the project. to finally, their decision abandon a for oil and gas reflects what they called an unpredictable and challenging regulatory environment. main thing is they was looking for oil and gas and did not find it and it was rather expensive. environmentalists will take delight in this. it was a bit exploration project in the arctic of 2015. projectt year, the big was in the -- also in the arctic
just above russia. an excellent project. they said they found oil but sanctions preventing at sun from getting to that in the future. what it does is pushes back the ability or time when arctic oil moore -- pushes and the timeline of back. now exxon, sorry, shall, as it -- shel exiting the search. jonathan: fredrik nerbrand joins us. the had partye will be greenpeace. is it it now? i think for a long time. been $7 billion to find it nothing. they had huge holes and spend
years trying to do it for after the end, it was a dud. there will be many years before they go back. will it make hard to make the project viable a you wonder what it means for the supply side story and a decade to come? fredrik nerbrand: you can see this in pretty much all of the trying to be done in the oil and gas sector for a while now. as far as concern, a positive development in terms of the fact it will boost consumers and spending ability. the trillion dollar question is -- does it mean esters spending and other things or say that? and the evidence with seen so far is coming down to savings. there will ben spending all other things or save that? jonathan: at the corporate balance sheet, cutting book of
-- cap x because they have no choice for it no longer makes sense. you wonder where the growth will come unless oil bounces back. where does it come from? : the challenges that face the biggest oil and gas companies. developing cute oil platform and at the moment, it does not make any sense. people say what shell does long-term at $70 a barrel and you wonder words that new from.cts are going to come pulling billions from asset managers and trying to balance the book. as the story progresses, do you look as the stocks fall lower lower the mining sector as well. people will see -- essay glencore, a penny stock. when does it become a buy?
fredrik nerbrand: if you look at non-energy, miners, the question about china. it be what they will do with the national gridcomes and try to achieve year on your target. 20% plus. what they have done so far. a question where inventories are. i'm quite happy to play the china story. throughit -- i do it the copper and a zinc market and high-yield market rather than going directly into china. that is what it is going to boil down to whether china will be able to stabilize their economic situation they have ongoing. jonathan: would you rather play high-yield? fredrik nerbrand: every day and twice on sunday. listen, you have in high-yield sector, you have with 40%
recovery values and something like 11% default rates. you currently have to get. with the s&p, consists is 8.5% growth. the likelihood of getting 8.5% earnings growth and 10% default is fairly unlikely. from a relative expectation point of view, that's where you play it. jonathan: it does not deter you? o, it haserbrand: n opened up for a valuation gap. a lot of other sectors and i would rather play that story. with copper and zinc and high-yields. jonathan: fredrik nerbrand, you will stay with us. will kennedy, thank you for joining us. claimed aow, tsipras majority of seats. the parties suffer the worst defeat in 20 years.
where does it leave the independence campaign and is a short of 2% of it mattering? tom: yeah, the pro-independence wanted to win on 2 fronts. they want a majority of seas and a majority of the popular vote. they have won majority of seats. the pro-independence party led by -- they have to team up with cup, anti-capitalist party. the negotiations then are going to be key. aey will work to bring government together that will work in the office behind me before going to negotiate with the madrid and they said brussels. is madrid the party on the prime minister? know got a drop in this election. they say they got to the mandate
and momentum and a number of the big hurdles ahead of them. page plan before the vote, drawing up plans to set up a central bank and diplomatic service and tax authority. the central government is going to go to the constitutional court to try to slow the process down. they do not have a great deal with the world but not as strong -- wiggle room but not as strong. jonathan: tom mackenzie. more from fredrik nerbrand at hsbc. rik, politically the eurozone is very fragile. we know that. what we've learned over the last year is that has meant a little for financial markets with maybe the exception of greece. what would you say to anybody who said imd is is a ties to the fragility -- who said i am
desensitized to the fragility? fredrik nerbrand: it matters from an ecb perspective. it is fragmented and getting more fragmented and we have other issues. haveou referendum and you issues like this. -- the you referendum and you have issues like this. in italy, all calling for whatever end to the euro and the eurozone. concerned,as i am what does it matter? eu markets have been trailed the view that interest rates are going to be low. , greeceof this my value is much higher and i can afford to pay more. to some extent i believe it is wrong. assuming and that environment is you have same level of growth.
and to a large extent in the eurozone but also the likelihood of getting that level growth is pretty low. , the results will be relatively highly volatile. your risk premium these to be much higher. what you can see over the last few trading sessions since the flaps,ed, despite dovish the market will go i do not believe it. it boils down to no longer have the same police the low interest -- believe that low interest rates will give you the same low equity. jonathan: we saw it since the last quarter. would you load up on european equities at q3 ends? fredrik nerbrand: if you on equity, it should be fairly good value. beauty to have,
jonathan: good morning and welcome back to bloomberg tv. right up to speed with what equity markets are doing. dax is down by 0.7%. and china profits plunging. falling back a little bit in europe. the dax is down 68 points. glencore,t loser, down by 4.8%. glencore cannot get a break. 93 pence a share this morning. a couple of deals watching this morning. for said the deal that will not be. vodafone said it and it talks with liberty global about a possible asset swap.
caroline hyde has the details. caroline: months of talks, june when we first heard. in talks. vodafone, the lowest in 10 months for share price on the back of this termination of talks with liberty global. let's dig in and of what was unable to bravery june is when we first heard about the swapping of access. would it be an exchange? what we dig in and first heard in june it would be assets.ping of we heard from john malone behind liberty global, he said it was a tennis match of ideas. lobbing ideas at each other. out ams they cannot work mutually successful structure for a deal and coupled to the
shareholders. in it would look and reports the u.k. precedence perhaps thesnag overlapping -- liberty global's tax plan. no real value. they felt value could be extracted but cannot see how the structures such a deal when companies have such different outlooks pretty liberty global does not pay dividends and vodafone does. jonathan: the prospect of it announced this morning and it could be a very big one. caroline: a world record. it has been brewing for several months. in miller combining with ab bev we could get as soon as today create have a whopping price tax of 70 billion pounds for sab miller. a 20% premium on what it was trading. it moved 20% when the deal was
announced september 16. ab inbev was interested. we know 3g capital is helping back of the finest. the brazilian equity company is a biggest -- a big contributor. what is driving it? what is negotiated the hind the scenes? banks need to be lined up for this kind of a deal. $50 billion willing to give in terms of loans. put an a row. sab miller has one powerful shareholder, 27% of the company, altria. they have to work out how altria kennedy has a. if you gave them the cash equivalent well that means they have a big caudal game tax tax exposure.big we will look at how they will
satisfy their number one in shareholder and the bond market is rubbing its hand in anticipation. it was the air record bond sale -- could we see a record bond sale? it would be bigger than verizon communications back in 2013 which set the precedent with $49 billion but many excited about a visit deal. -- jonathan:oline: caroline hyde, thank you. now despite only taking up at mull isrole on friday, pushing for a reorganizationer a ofkswagen to take them out the scandal. from berlin, chris, what is muller proposing? can you give us specifics? is aboute announcement
working go volkswagen structure. we know from the scandal one of the problems is it was very hierarchical and volkswagen was centralized. people were up for bring all problems. that is what miller is trying to address. it is pushing more responsibility to the brand and more to the regional level. and if the idea of delegating authority which was not the case before. jonathan: you cover them day in and day out and what does that mean for the diesel engine? it will being confirmed promote diesel cars in japan. is it a sign the scandal? is still a big question. it will remain to be seen how the consumers actually react in the coming weeks and months. we heard over the weekend that switzerland has stopped these volkswagenthe
engines for you volkswagen stock to sell in the u.s. and there's a lot of regulators looking very closely at diesel and it remains to be seen how consumers react where these vehicles are still for sale. that will play out in the next weeks and months. jonathan: mark boleat -- chris reiter in berlin. coming up -- the first face-to-face meeting in over a year. what is going to be on the agenda when president obama meets mr. putin. we will do that after the break. ♪
jonathan: good morning. to bloomberg's top stories. chinese industrial companies reported the biggest drop in profits in four years. they sale 8.8%. commodity sector the hardest hit. royal dutch shell. further oil and glance at the russian off the shore of alaska. the company cited high costs. shell said it expects financial charges from the decision. comcast will buy 51% stake in japan's usj. america's biggest cable company will pay $1.5 billion for the acquisition as it abroad -- grows abroad.
39 minutes into the session. where stocks are trading. lows down00 off the by 0.2%. vodafone, one of the biggest losers after they terminate talks with liberty global over possible asset swap and the dance moves lower by 0.3%. and the u.k. outside of marketing news, the labour party conference in full swing and brighton. out to anna edwards. anna: thank you very much for you if you believe the noise out of the vents, it could be indication for anybody up and trading. and broader implications for the city of london. we are joined by mark boleat from the city of london. great to see you. let's start with a question about the leadership of the
labour party. how able to work with these people do you feel right now? some of the leadership talked about capitalism. if it does not fit with the city of london corporation. mark boleat: we will talk the leaders of all political leaders because they have been democratically elected. we will happily talked with them. what is a might change over time. over the last couple of days from people who years ago were talking about fanatical ideas. very happy to talk at always open to talk with all political parties. anna: have you met with them? : as you know, i've met john mcdonald in a previous life. meetingsot had set up and with always had a good relation with the shadow chancellor. i'm sure he will want to beat city people and hear their views and what he is thinking. that he wants to
abandon city of london corporation. it.ve heard maybe not a priority for him. any thoughts on that? that was years ago when it there was a bill going through the i do not think it will be an issue. anna: you're talking about finding common ground. maybe things you heard so part you have -- mesa things you heard so far you are not sure about. things you heard so far you are not sure about. once adonald conversation. you might have misgivings. mark boleat: were happy to have a conversation and with been having it for several years. the parties including labour have come out against it. britain or even in the eu that this is would be lots per i am sure john mcdonald does not want
to see jobs being lost. isa: talking about europe, it something you will find common ground with the labour party? mark boleat: all of the work done and britain needs to be the european union. we are well labour has said. europe the biggest political issue for the next couple of years and the city will be very involved. we have done a great deal of research and more work to be done. we want europe that works more effectively. want it to be more competitive and less restrictive. anna: as the city of london united on that? : no, i do not think anybody is united. outside a european union eu will not get a unanimous view but a majority. anna: wanted we might hear from john mcdonald as a radical rethink of the institutions that run the british economy and maybe the bank of england
whether it should be independent. do you think woody need to stick with an independent bank of england? mark boleat: the view is the bank of england's independence will not be changed. they have to have debates. they have only been in place in their current form for a couple of years. andeed to see how they work may modest changes. on the whole, people believe they are working well. anna: have heard it about the bank of england not being independent? mark boleat: for what was heard from john mcdonald, he is not talking about independence but what the bank of england treatment may be. anna: do you see an argument in favor of changing it and about inflation? mark boleat: such as far has change agreement to some extent. perfectly proper print whatever agreement needs to be carefully thought through and
consistent and logical and doable. ad recognize government has role in taking some of the big decisions. anna: do think it is a leadership -- you said you met john mcdonald before. can it get it? mark boleat: we will find out. we're happy to engage. couple of meetings. i will have several more well i am here. we are more than happy to arrangements with any of the labor leadership to see them individually and tell them what our concerns are and what their issues are. and evidence to help a friend policy. john mcdonaldrom is a day we'll spend a lot of time having a debate about policies seeking views from every body. making sure is a work. if it happens. at of a thank you for joining us. -- anna: thank you for joining us. mark boleat. one of the subject that could be topical this week, the subject
of europe. you can catch a live on the bloomberg website, a debate i will be hosting an bloomberg policy network and the city of london corporation running that debate. remarkable be a panelist with me nna peter mandelson and umu and what does the labour party thinks later this evening at 6:00 on our website. jonathan: thank you very much for you much more from anna edwards after the labour party conference on bloomberg tv. in other political news, president vladimir putin and barack obama will meet on the fringes that united nations general assembly in new york. the first face-to-face meeting in more than a year and syria is likely to behind on the agenda. putin sat out his agenda in an interview. >> no other solution to the syrian than the effective government and redirect them
help in fighting terrorism. ining them to engage positive dialogue with a rational opposition and conducted before. herehan: ryan chilcote is with more. what can we expect from today's meeting? so many plots. if the subplot more important than the main event? widening i think so. putin wants to be heard and heard on syria. and he was to change the conversation from while where he is on the defensive on ukraine toward he potentially could be a leader on syria. september 11, 2013 vladimir putin wrote an editorial and said the united states should cooperate with russia on syria. he also said the same editorial discretion with president obama was marked by growing transferred that was already after edward snowden and before gay rights and the olympics and ukraine.
imagine the state of the militia and they have not seen each other for more than a year. s putin.t obama abhor in a speech to, the united nations and conversation with barack obama will say i am ready to lead in syria. i am part of the solution you needed me. forget arming the rebels in syria. you need to back a saw it would be strikes -- assad and we need to strike. it seems like obama might take the bait. it is getting criticism from some the republican candidates as they can ready for the primaries. the military sort of talking to one of of -- john sat down with the four minister. russia's meeting with the iranians and syrians and iraqis. he might succeed in trying to change the conversation and russia's on the defensive that you need us. jonathan: these two guys, these
first doesn't go into a room and we will love to witness the private conversation. the following day, the headline -- what will it be? in russia, how putin told president obama russia is ready to coordinate and lead to the fight. in the united states, how president obama told president putin he has to back down. you will have different diabetic leopold. the press secretary will give their different analyses and spin. these guys have spent the last four days since they agree to meet arguing about who initiated the meeting. let alone what they will talk about. after the end of the day, we do not care. it does not matter. date for then a dates begins and we will find out after. it could be beginning of a shift in international relations.
jonathan: good morning and welcome back to "on the move." here's what you need to know for the rest of the trading week. president obama and vladimir putin due to meet at the united nations general assembly meeting, the first face-to-face talk and more than a year. tomorrow, central-bank watch. and in the policy meeting. predicting a quarter-point cut to rates which will be the r.b.i.'s fourth cut this year. speaking of central banks, fed watch. six fed officials including chair janet yellen on wednesday. all of that all over again. almost it for the show. "the pulse" is next in manus cranny joins us. where heols joyce's will talk to chancellor merkel's chief of staff will. hans, so many subplots.
hans: we have syria and refugee crisis and will be speaking to peter, merkel's chief of staff. important to get his take and another official government take not only at volkswagen but to the entire auto industry. the german auto industry. did they push too hard on diesel technology and beat a chance to go heavier on electric? what is the response to tesla? and musk was here and un the general assembly and what is happening in ukraine and syria. looking forward to it for hopefully everybody will be on time. it is germany after all. jonathan: manus cranny joining us. -- hansing hans nickel nichols, it will run on time. manus cranny, top line, macro story, industrial profits plunge
and the subplot. vodafone deal with liberty global that it will not be an wedding of an announcement of sab miller. manus: the year of gargantuan deals. talking about families and the guardians of capital in europe getting together in terms of transporting from auto industry into finance. that's a whole other theme. flip and unreliable girlfriend, a reliable boyfriend. janet yellen speaks again. what is the message? we know she is the leader of the pack. she wants hikes this year. the dollar's the strongest performing and this quarter. i ran functions. the dollar 0.9% for for this quarter. the s&p however down over 6.3%. it is the vanguard.
andy going into the yen dollar. the question is -- are we on the edge of the next growth imf? christine lagarde said she is ready to talk in the papers. we have "the pulse" and all eyes on brighton. 120 billion pounds of tax not collected in the u.k. tune in for that. the markets and perspective. our guest will talk about after mass and if he has a mandate. jonathan: the pulse after the short break. 56 minutes into the session. a tale of two deals. the deal that will not be with vodafone it and liberty global. sab miller waiting for a deal.
>> china slowdown. industrial firms deliver their worst in four years. a tumbling stock market. east meets west. obama and putin care for their first face-to-face talks and more than year. russia's president says he wants to cooperate. >> hanging up, vodafone says it has ended discussions with liberty global. the two companies were in talks for a possible asset swap. >> can they help regain credibility? ♪