tv On the Move Bloomberg February 3, 2016 2:30am-4:01am EST
>> welcome to on the move and we're counting down to the european open. i'm guy johnson alongside jonathan ferro. busy morning. jonathan: busy morning. the wti back below $38 a barrel. the first downgrade since the depression. guy: other big headlines coming up. talking about the service data. data out of japan and china. italy. get spain and 8:59. story,n: the other big syngenta, chemchina.
the story there, the biggest acquisition by a chinese company. the technology grab as well. they are talking about gm products. let's get more on these stories. let's go to caroline hyde. caroline: chemchina has offered to buy syngenta for more than $43 billion. the plan to take over the swiss seed maker comes as the company extends its shopping spree. the all-cash-- offer would be the biggest yet by a chinese firm. $30 crude is trading below a barrel again. japanese shares plunged more than 3% in less than two weeks. biggest two-day drop in almost seven years. u.s. industry data shows crude stockpiles increased. analysts are predicting oil prices will climb by around 50% by the end of the year.
crude will reach $46 a barrel $48 --t will trade at $48 a barrel. guy, back to you. guy: thank you very much. less than half an hour ago until european market opens here it -- opens. take a look at where we think that's telling us it is likely to be half percent lower on the ftse 100. .8%.ax lower by jonathan: japanese equities about to erase all of the post doj gains. we'll get to the other asset classes. treasury yield continuing to climb lower. 1.85%. the yield on the u.s. 10 year, a lot to talk about with the federal reserve. are they going to make a move? yen, 119.79. the japanese have to spend a 10
year auction for japanese bonds. the last time they did this, two-year option, the brokerage fees will be more than the interest you will receive. -- >> we are going to continue to see volatility in the market. the oil supply side will settle. by the second half, we are probably going to see improvement. that is due to the impact we see
in the industry. -- did you agree with what the london seo had to say, volatility for months and months to come. issomething we can guarantee jumping prices. we saw that last week with the -- opec suggesting coming back and saying no we are not. russians coming back and saying we might be. you can see that in the oil price. every car it can get his hands on. sosa crash in the future? we are getting these mixed signals. from 110 toe move from $110 to $30.
does it have anything to do the fundamentals? >> it is purely driven by momentum. investments are driving the price. if you look at the fundamental picture, some of the stories have been going for a while. we had an increased supply on the back of the shale revolution. what is happening right now is sentiment is negative. you are continuing to see decline. you mentioned earlier about the forecast for oil. a lot of that is driven by fundamentals. the same forecast last year that expected prices to rise. yet the price continues to decline. it is driven by momentum rather than fundamentals. guy: you talk about the russian story. it does seem that cranks in certain areas of the market, they are getting nervous. russians are to get the supply output they are generating.
maybe that is behind why they are saying we would like some talks please. involuntarythis output cut story is going to creep into the market? >> if you talk to the analysts and you are right, they have it spectacularly wrong. having said that, they are smart people. they're looking at the market in saying -- it's is why they are talking about a second-half rally. the kind of prices they are talking about our prices we had three months ago. we are not going back to $100. guy: it is only $15 a barrel. standdown -- bp stands down on. talking to me, the destruction the fundamentals
to future supply and when that kicks in. x think about it in two ways. >> think about it in two ways. the supply has come off. that will not come back anytime soon. we came up with a term last year fracking. waiting.ting there and when the price is right, it will come back up. you got to think about it into slightly different ways. jonathan: you look at the sector. bob dudley yesterday prepared to carry on backing up the debt to carry on dividends. from a stocks the civic point of view, is that the right approach? >> the earnings for the energy sector have not been revised as far as down, given the drop in oil price. we have seen the oil price dropped by 75%. yet earnings have not reflected that. if you look at valuation's within the energy sector, even
has comeergy market down considerably, they do not reflect the scenario we are looking at with the oil price. i'm not sure the ceos are going to look to readjust their business model. that is a natural reaction to the drop in the oil price. they have some serious challenges ahead. guy: looking forward to the competition we're going to have with you could still -- stuart, thank you. up next, we're going to talk figures from japan. u.k. figures due out this morning. the bank of england will be closely watching those numbers. that is the next discussion here on on the move. ♪
. caroline: jonathan, thank you. 2015 earnings that missed analyst earned -- analyst estimates. 70%.ting profit declined -- declined 17%. -- aia have watches slumped in hong kong. sources said it china may place resections on the buying of overseas insurance. authorities are stepping up measures to slow capital outflows. bloomberg intelligence reached $1 trillion last year. for -- recurrent operations advanced 16%. that was a fashion and leather goods sales exceeded expectations in the final quarter. yahoo! fell in extended trading after saying it is considering strategic options and cutting
15% of its staff. the company will rate -- will -- mercer myers is resisting calls to step down -- marissa mayer's is resisting calls to step down. to you.k guy: caroline, we get services pmi data from across the globe. beating japan's 19 month high. just north of 15. china hitting a six-month high. france and germany today. we get the u.k. number we've also got spain. we get a eurozone number later on today. let's welcome back the chief -- what is theer market not paying more attention to services data which looks ok right now. >> good point. it is driven by psychology.
everyone is choosing to look at the bad data. the manufacturing data has been poor and deteriorating especially in major economies like china. in essence, the psychology right now that is driving markets is to the downside and looking at the negative stories. spending a lot of times discussing the risks. there are opportunities and glimmers of hope. people are choosing to ignore the service sector. uncle is it a case of being ignorant? -- jonathan: is it a case of being ignorant? the hungers for commodities in china. the feeding from the miners keep expanding. isn't that the story? manufacturing the pmi is what is driving everything? >> the strong market whether it is an equities.
it is a strong market. that is absolutely right. marketsdriving now is -- was driving markets right now is recognition. a credit bubble that impacts all asset classes. that is what people are recognizing, the huge amount of debt that has acute related is coming back to bite. guy: the fed tapered and then hiked. can we read across from the fed, it is the credit markets. overnight, we have gone to less than a 50-50 chance that we are going to see under the hike this year from the fed. >> there is a high probability that there will be a policy error. the fed is quite exposed to that. down to raiseare
four times this year. the market does not believe them. there is a strong possibility that they may not do that. it would not be the first central bank to make a hike and then reverses it. the ecb did that in 2011. they are pulling -- they are pushing. to on the easing program. policymakers are likely to reverse course this year. jonathan: where come to the end of the current credit cycle. i wonder if the central banks can put off the in focus. the fed could cut rates again, maybe. .he ecb clearly done more the bank of japan going into negative territory, set to do even more. can they continue to do desk can they continue to kick the can just downoad guy: >> the road? >> they can continue to do so.
we are talking about negative rates. this is the new trend that is emerging increasingly. one that doesn't get talked about much is currencies. in a globalized economy, currency can be a major force. who havehe chinese been pretty of right in terms of what they're trying to do with currency. but currency is a talk. the risk of a currency war is not to be overlooked either. year,y don't cut this there is the possibility that treasuries can come under a lot of pressure did this is an asset -- because itple is overvalued. if they do not make a move, you can see a lot of volatility because the pressure -- because the question will be why are they not cutting? that will cause a lot of volatility.
jonathan: 10 year yield on the screen. what are we guy: what -- what are we? >> from that perspective, you could argue it is relative to the economic conditions. the challenges of an over invested economy and corporate sector. there is still some value in this asset class. if you profit in terms of profit -- in terms of value -- guy: let's take a look at the long-term chart. jean-claude trichet market screaming no to the federal reserve. thank you very much. coming up on this program, and head of the open, we will look at the corporate moves including .yngenta our subject, the biggest chinese takeover ever. 12 minutes away from the open. futures down a little bit lower.
guy: 7:50 one in london. let's catch up to speed with what you need to know ahead of the open. caroline hyde stocks to watch. caroline: syngenta deal we have been talking about is going to be a big mover. why? it is a 20% premium. we are going to see these shares spike about 10%. it is not going to encroach on the entire premium until this deal is set in stone. send center desk chemchina, biggest ever -- chemchina, biggest ever splash of cash. watch that share price rocket on the open. this is where we saw the volatility crated by the -- we are likely to see this shares spike again. we're likely to see swatch on the move.
another swiss company. you'd -- you know it's got the luxury side. it was a miss overall. hong kong was week you'd they are still making -- hong kong was week. they are still making market share gain. europe, japan, less positive. hong kong is where the weaknesses, despite that one billion swiss franc, it is not enough to offset the weakness we will likely see in the shares. lvmh, they cannot last night, biggest luxury company in the world. very, louis vuitton, ball -- burberry offsetting the weakness we are seeing in cognac in china. they are managing to offset that chinese weakness. sales up 5%.
back to you guys. tim cook thank you very much. seven minnesota -- jonathan: thank you very much, caroline hyde. .esterday we had the story syngenta would expect to trade even if you did not know the price. for just 70 swiss franc's share. we deny get anywhere near it. pop.e expecting a 19% guy: there was a down day yesterday in equities. thising i read suggest should be an easy deal to transact. it is always a factor when it comes to a chinese company making big acquisitions elsewhere. that increases the rate latorre risks. that is what the -- that increases the regulatory risks. that is what the market is pricing in. if you not interested
in crop size, maybe the story is the biggest ever chinese takeover. what is the story there for you? >> the chinese is looking to diversify. it has been a strong going market. they made a lot of money domestically. to look abroad. move to ax me as a certain sector economy. -- it strikes me as a move to a certain sector economy. there's going to be more technology to drive the yields. this is our impartial -- this is part and parcel. jonathan: doing it with big money on the table. open, four and five minutes away. futures lower it that futures up by 38 points. the u.s. 10 year, the lowest in
jonathan: hello and welcome back to "on the move." i am jonathan ferro, alongside guy johnson. guy has the morning brief. guy: chemchina offers $43 billion to sygenta in what would be the largest ever chinese takeover. wti hold losses near $30 a barrel. inecasters see a 50% surge the price by the fourth quarter. that would be only $50 a barrel. global manufacturing slides into a recession. we will get numbers across europe this morning. jonathan: 20 seconds away from the open.
guy, this is a frustrating market for many people. futurs were lower. brent crude is higher. 9/10 of 1%. up by let's get to caroline hyde. caroline: we had a poor day in asia trading. what do we have set up for ourselves in europe? oil is starting to pick itself up from the worst two-day selloff in several years. we are still opening lower, with the ftse 100 up a little bit. the cac 40 is up by 3/10 of 1%. yesterday.spiked more than 200 billion euros have been wiped from the stoxx 600 in
the past couple days. we are taking more value off the table. we are watching oil overall. all of that data expects continued growth from the u.k. and the eurozone. a pickup and oil at $30 a barrel of the moment. that is up the thames of 1%. /10 of 1%. up 8 brent is trading at $32.91. we have got the oil market being the tail that wags the rest of the market that is the dog. dosaw aussi bonds particularly well and the u.s. in.sury saw money flow yields have risen in spain, but fell in france. gold is lower today.
meanwhile, let's take a look at syngenta. it is not up as much as we expected. the premium is 20% higher than is being offered by chemchina. this is the biggest splash of billion, being offered by chemchina to pick up sygenta. byanwhile, swatch is down 2.7%. this is a company being hurt by hong kong. the makers of the watches saw the first sales declined in six years. last year, a rosy picture when it comes to lvmh. they managed to pick up profits by 16%. back to you guys. jonathan: thank you, caroline. guy, regarding the syngenta deal
you wonder what the uncertainty is there. guy: at the moment, it has to be the china factor on the security front with the u.s. it does not count for a big enough slice of the market. that appears to be the only thing that stands out as being a potential risk. we have seen a number of these deals fall through. jonathan: the stock is up 5.8%. chemchina has agreed to buy $443 billion. it could be the biggest acquisition by a chinese firm. let's bring in njera. njera: it is interesting that you are questioning why we do not see the gain in the share price that is predicted by some analysts. part of this could be that this was a well telegraphed deal. we reported yesterday that we could see an offer of 470 francs
a share for syngenta from 10 china. it came -- for syngenta from chemchina. it came in as the biggest ever acquisition by a chinese firm. we got earnings from syngenta today. what this seems to be is chemchina pushing for this. we are talking about an all-cash offer here. this is a very highly leveraged company as well for chemchina. it could become the world's biggest supplier of pesticides and chemicals. lso, it is about china wanting to provide for its growing population and having control over those food sources. for syngenta of course, they get this deal. of 470'scted an offer francs a share last year.
they are fewer antitrust hurdles with a visit deal. this would be more appealing to them. if you are looking at this deal, that is the good news. the market clearly, is feeling something in terms of the prices versus the offer. what is it potentially doing to the market right now? what is causing the jitters. nejra: i think you pinpointed it there. it could land on the desks in the u.s. because their job is to look at deals that could affect the u.s. in terms of national security. syngenta is not a u.s. company, but it does have two business units in the u.s. we are talking about the food , but we are u.s. also looking to see if it will potentially pose any risks in terms of location. are they close to any sensitive
sites. we did not say this will be blocked by u.s. authorities, but that is a big question mark over this deal. meanshe balance is by no what we were looking for. i want to discuss the luxury sector. lvmh came out last night. listen toeresting to them talking up the numbers. they are currently up by 6%. what i think is interesting here is i was talking about the portfolio strategy working really well. they are not doing well in cognac, but are doing well in champaign. they are not doing well with watches, but are doing well with jewelry. some of those other stocks are not portfolio brands. burberry certainly isn't in the same way. the stock will see the ripple
effect work through this. youthan: i want to talk to mohammed choukeir, the chief investment officer at kleinwort benson bank. did you think would be easier with the chinese the choir getting through the regulatory issues, or is there something else happening elsewhere? >> the monetary issues will always be there. in light of what is happening with china -- and i don't want to call it a slowdown because china is still growing handsomely in some measures. atting eighth deal -- getting deal like this through is not just about the hurdles. any is the risk that acquirer faces in the current environment. jonathan: in some ways you can equate this to what the chinese
is doing with oil. they are buying as much as they can. the expectation is they are putting it in storage. they are going out and buying assets around the world strategically. you wonder therefore, how the governments will see this. maybe there is not a direct security length. never the less, this is a clear strategy by the chinese. this is a clear opportunity. in thechinese are savvy way they have been managing their economy. they have been diapers the fine i -- they have been diversifying for quite some time. they have diversified in foreign .oldings in foreign currencies they have the greatest reserve power in the world. this is part of an ongoing diapers of location story they have had for many years. jonathan: i know you can't talk stock specifics will stop i will ask this in a very
stealthy way. company x is taking over company y. company zed is a state hold owned enterprise. do you want to be owned by a state owned enterprise? >> i think state owned enterprises have their own challenges, but what we actually see in the current environment is it that it could be a positive move for the company that is being acquired. it really comes down to not just the nature of the company, but the price and nature of the deal. offer is the chemchina substantially higher than where the stock is trading this hour, up 6.5% this morning. reboundinguld be over the next few weeks. stay with us. that is next. ♪
biggest acquisition yet by a chinese firm. u.s. crude is trading below $30 a barrel again, triggering a fresh selloff in asian stock markets. japanese shares plunged 3%, with similar losses in hong kong. oil has seen its biggest two-day drop in seven years. crude stockpiles increased, exacerbating the global surplus. new york crude will reach $46 a barrel during the fourth quarter, well brent crude will trade at $48 during the same period. is said to be planning in dubai. 150 people according to a person with knowledge of the matter, the bank will close its offices and relocate its officers in dubai. ourre powered by
journalists in over 150 news bureaus around the world. guy? guy: thank you very much indeed. the bank of england will keep interest rates on hold until after the referendum. it is now looking to in august rate hike. not february, as previously predicted. hans nichols joins us now. hans, talk to us about the dela,y and the politics. hans: they are talking about the price of oil. what really what they are getting at is the monetary policy won't want to reverse itself. they could have a shock to the economy. there are some new graphics out, a new charge by bloomberg intelligence. haveof our economists crunched the numbers.
they say confidence, credit, and currency are what is important. take a look at the red bars. that has to do with the currency and that will go down. inflation is the green. interest rates stay in negative territory. so there, you see the kind of effect that some economists are projecting on the economy. of course, these are just projections. this idea that the monetary policy would not want to reverse itself until after the referendum, likely june 23. guy: thank you very much, hans. welcome michael. the market has pushed back expectations for the first rate hike into 2017. incredibly short with the pound as well. ms. priced?
>> we think so, th particularly in the short-term. we are hoping for some success for david cameron and for him to announce the date of the referendum. sterling has its shortest position since 2008. position is extreme. also, when we look at short-term fair value, the pound is looking relative toen to the move we saw in rates. just to back up a couple months. tooe people were just a bit on to sterling. the current account deficit in the u k, isn't this just a day of reckoning. >> what was interesting about
2015 is it was a year when the account deficit stood at 5% of gdp. .ut that's was more than offset that current account deficit was very heavily financed. i think this shows some of the risks going into the eu referendum. if we see a lot of uncertainty, ns if foreign investors start to lose their appetite for u.k. assets, the deficit can become a bit more of an issue. jonathan: we have been talking about this for the past couple weeks now, the euro-sterling trade pound trade versus the euro, because that is a
discussion developing at the moment. >> that is a very good point. not only do you have the "which is a better safe haven," but you have the reaction from the central banks. actually, in terms of playing the referendum, we actually think cable is a better bet. guy: walk me through the timeline of how this will ultimately work. the document that has been produced over the past four hours appears to have gaps in it. date, walk me through how sterling trades through that process. >> we think the initial reaction will be one of relief. sterling is looking oversold. guy: but you are sure of that
rally? >> we are. what cameron has achieved is not what he set out to do. those of us in financial markets know that when you are negotiating with the eu, you need to come to some sort of compromise. for the man on the street, people will be disappointed with what he delivered. we could see the polls move to an even more uncertain region. jonathan: wrap this all up for me. we have got this referendum risk. it does not matter which way it goes. it is still an uncertain referendum. and then you got the bank of england, which has no incentives regarding the pound. what is your favorite cross amongst all of those scenarios to play the sterling trade?
michael: at the moment, it is playing cable. we'll probably get there with the relief rally. however, uncertainty over the months ahead will be pushing cable below 1.40. and then, we will be looking for an opportunity to buy sterling. u.k. fundamentals are strong. great to have you with us on the program. we are 10 minutes away from that all-important pmi data. jonathan: guy is excited about super thursday. we break down the numbers for you, next. 20 minutes into the session. of ftse 100 is down by 6/10 1% and the dax is up by over 100 points. ♪
businesses. they missed slightly on one of the growth drivers. that is one of the newer versions of drugs treating diabetes. that is not a surprise because there is a lot of competition. i think people are just a bit unhappy with that front. the 2016 guidance looks a little lighter. if you take currency out, they are talking 4%-8%. that is a bit light. i think this market is about what is happening near term. in reality, you look for guidance in the longer-term. if you keep operating profits flat, that means growth in sales too. consensus is six percent-a percent. %-8%. 6
jonathan: how competitive is this area getting? >> it is very competitive. there are a lot of people who want to bring new drugs. i will say these guys have been able to develop drugs that seem to be as good as the best out there. the next generation has shown really robust growth. the next generation insulin just reported last week that it beat the standard drug. as long as they keep bringing are going toey be in a decent place to grab a share of a big volume growth market. also at the same time, resist price pressure. virus is the zika capturing all the headlines right now. we know nothing about this. how quickly can the global pharmaceutical industry get up
to speed? >> this is their bread and butter. there are four big sexy manufacturers. these guys have facilities to grow these challenging viruses. this is am is, disease that is spread by mosquitoes, with some evidence it can be spread bisexual by sexual spread contact. that will take time. they regulating authorities suspend the usual requirements for vaccine development, this will take several years. guy: years? >> years, yes. the best action here will be containment and treatment. to get rid of mosquitoes. you know, they have resisted a millennia of attacks by all kinds of environmental factors.
jonathan: welcome back. this is "on the move." we are 13 minutes into the trading day. the ftse 100 is up by one third of 1%. dax is down by almost 70 points. we have a lot of stocks to talk about. 10 year treasury yield is a little bit higher. 2%. is will below the treasury market is a screaming "no fed hike anytime soon." $30.08 a moment.
stock movers, as i say. let's cross over to caroline hyde. caroline: the leader of the pack on the stoxx 600 is syngenta, the swiss agricultural company rising 6.6%. why not more? chemchinam offer from does not seem to be lighting up the investors right now. it would be the biggest cash payment from a chinese company. this is the best day for lvmh by sixn over a year, up point 2%. it managed to show off strong profit, despite the weakness in china. they managed a 16% uptake and profit with a 5% of take in sales.
all are doing very well on the fashion front and the u.s. this managed to offset the side,ss for the booze when cognac is not doing so well. umoy is downfort 8.5%. day sinceeir worst 2009 for the power company in finland. overall, fourth-quarter sales and operating profits are not where they were expected to be. guy: let's get back to the pharmaceutical sector. fourth-quarter profit earnings missed estimates. welcome the company's ceo. stoppedet trade just
aggressively this morning. was that an overreaction? >> the market decides what the market wants to do. i have seen a big focus on fourth-quarter numbers, but you should not reacd much into quarterly numbers. the projection is right on track. it is merely a rebate adjustment. jonathan: just in terms of the , which isn drug expected to be a $2 billion blockbuster by 2020, where are you with that? >> we are having better and better access in the european countries and the united states, where the product is just being launched. we are launching the product with a premium. fromve gotten good access the start and we are very optimistic about being able to deliver on our own reached own projections.
guy: do you think you can convince regulators that this drug needs to have fewer side effects attached to the piece of paper that ultimately it's delivered to the user. how convinced are you that you can achieve that? youell, i saw the data alluded to last week, which isfirmed that receiv the produt significantly better for patients with type two day diabetes. we have an opportunity to amend the label and get a stronger label in the united states. jonathan: lars, we talked about the regulatory issues in china. you said yourself that there was significant price competition in china from local manufacturers. the kicker is regulations in
china have increased competition with local manufacturers. why are you so focused and confident about china? lars: in china, there are unfortunately over 100 million people with diabetes and less illion people who have been adequately treated. this will change the structure of the pharmaceutical industry, but there are long-term opportunities in china. guy: you sound like a very optimistic man. the markets this morning might be having a quick look at your long-term projections, which are about 10%. in forket has 7% priced the long term growth story. why that gap? lars: we have become a large is a veryd 10% growth ambitious target.
i think we can deliver based on, amongst other things, the number of people who need better treatment. i am indeed, very optimistic long-term. we have had a few headwinds coming in. we are losing a product in the women's health care business. we are having increased competition in the hemophilia area, but long-term, diabetes business will grow. jonathan: you took us to the size of your business. you mentioned the hemophilia business. it is an option to divest the non-core areas of your business? lars: no, we do have the ambition of remaining a leader in the hemophilia business. we have a very strong pipeline we hope will prevail. we actually, have been slimming down our focus over the last 15 years. so, i do not see any need for
slimming business any further. we will not expand it either. the only area we are trying to is inp is obesity, which rampant growth everywhere in the world and one of the risk factors for diabetes. affected inhis be terms of the process we go through for drug approval in terms of brexit? not expecting any significant impact on our business. the impact is likely to be in direct to the extent that it impacts the market conditions in the u.k., which are challenging due to health care containment reforms, due to price reforms in the u.k.. i do not anticipate such an exit from the euro will have an impact on us. jonathan: i want to ask one final political question.
how do you think drug pricing will develop under a hillary clinton presidency in the united states? lars: one thing, the debates leading up to the elections, we have seen this many places. once politicians get into the seat, things are slightly more complex. i would imagine the current pricing environment we see in the u.s. will remain the same in the future. we are no longer going to see the price increases that we have seen historically, but i still think there is a possibility of launching the premium new and improved drugs. jonathan: thank you very much for joining us this morning, the ceo of novo norisk. we talk about the competition in china, and i asked earlier, why would you want to be with a state owned enterprise with china, going back to the syngenta deal. you want to be there because you
want access. we talk about the local manufacturers, the competition there as well. are inside the fence, and that is what you are doing. you are already in and have the advantage. we will talk about what is happening with the china angle width of this story. the company says it me be open to sales. we will discuss this next. ♪
jonathan: welcome back and welcome to the city of london. two tech news now. marissa mayer has long argued that she can put the struggling web business back on the path to growth, but could she be out of options? she has considered putting yahoo! assets of for sale. i have never believed more in this company, and the people, products, and inherent value in what we do. to be clear, this is a strong and bold plan, and when we are embarking on with the support of the board. jonathan: caroline hyde joins us now. dramatic changes are coming. caroline: they certainly are when you consider they are getting rid of 15% of the workforce. they will be shutting down more offices in mexico and dubai. it will be cutting costs by war
hundred million dollars this year, but all of this was expected. by cuttingts by -- costs by $400 million this year, but all of this was expected. tumblr, but that is down in terms of its values. the bet she made has not paid off. the wonder she is now fighting for her career. the call is, "get out, we want a change in leadership." jonathan: we have this really weird situation where the market cap for yahoo! is worth the same as a stake in alibaba. everything at yahoo! absolutely worthless. this has been a debate on wall street for a long time. what is this company really
worth? but, was that it worth? >> analysts, if you drill into it do think revenues will pick up by 2017 or 2018, which is what she has said. there is still inherent value with the businesses. they still have news and sports. there are billions of people who go there. guy: respectively, you are getting all of that for free. the problems they have at the moment is the transaction is impossible the cousin of the tax implications of dealing with the stock and getting rid of it. she needs to employ more accountants, not more tech people >> she does. only 1% of the stock has been called for. managed to be hit to a
certain extent. they try to avoid it with the first alibaba selloff. i think you are right. this is where we are starting to wonder what the value is. there are buyers. so, they are looking at this. it would be interesting to see what verizon would be interested in paying for this. you are right. i have not yet seen a number assigned to what this could go for. jonathan: if you want to hear more about this story, stay with bloomberg. we will be speaking to melissa meyer. that is on bloomberg later today. 45 minutes into the session and ftse 100, where are we? it is up by 4/10 of 1% this morning. let's get you up to speed with the bloomberg business flash. nejra: chemchina has offered to buy syngenta for $43 billion.
the plan comes as the company extends its shopping spree. the all-cash offer would be the biggest acquisition by a chinese firm. swatch has reported 2015 earnings that missed analyst estimates and sales declined for the first time in six years. climbed 17%.fits they said they were hurt by a slump in demand in hong kong. kongave slumped in hong after bloomberg said china may place restrictions on the buying of overseas insurance. authorities are stepping up measures to slow capital outflow that bloomberg estimates reached on $1 trillion last year. toual profit advanced 16% 6.16 aliebillion eurs.
that is your bloomberg business flash. the italian number is through and it looks a little softer than the market anticipated. of forecast was for a number 54, what it was 53.6. guy: it is now 55 minutes past the hour. at 30 minutes past the next hour, the uk's services pmi is looking for a reading of 55.4. that are not dreadful numbers, but the equity market is not pretty. is now back to00 levels we haven't seen since december. we round trip. -- we round tripped. it is interesting to see what
the move." 1/10 of 100 is down by 1%. the dax is off by 4/10 of 1%. the big deal this morning is syngenta and chemchina. the stock that refuses to bump up on the offer price with syngenta. guy: the obvious reason you would not do this is not a market share issue. they seem pretty up on the deal. is this logical thing is a security threat potentially coming out of the united states. that is why they are not bumping up against that price. jonathan: we will see figures for the eurozone at 9:00 a.m. and the u.k. at 9:30. later on, we get earnings from
2:00 p.m. u.k.h time. >> i think it is important. although, i would say given what is going on in the broader context, it is less important than it has been on previous occasions. ever since the bank of japan acted on friday, we have started to price in some interest rate cuts into the short end of the u.k. curb. it is a 20%-20 5% chance of a 25 basis point cut. investors are saying, whatever is happening domestically in the u.k., the global backdrop is more important. to knowwe get tomorrow? >> you are controversially
putting me on the spot, that i say there is a possibility of it. it is a small possibility that there will be a cvote for a cut. live that chart on the screen because it is important for reference. that is not an incomplete chart, that is just a flatline from 2009. is that drop down really possible? >> it is nobody's best case, and it is not mine. if i told you that the market would start pricing and six weeks later, you would have looked at me like i am crazy. and yes, it is happening. at the end of the day, it has not been a decent guide
for where bank of england policy is actually going. with euro sterling, is there any reason for him to push back against that tomorrow? isn't this what he wanted, 75.76. certain,s absolutely 100% on. they are more comfortable with euro sterling at this number that they were six or eight months ago. if they take a hawkish tone, they risk undoing all of that good work they did last year. guy: when you look at how this will get taken through this year, politics will play a big part with this. we note in a position where, with of the debate that is happening with brexit, that carney can effectively sit there for six months? >> even the more hawkish commentators are saying that
realistically, there is probably no chance of a rate rise until august, at the earliest. those of the more hawkish commentators. i think you are right. i think we have a bit of a moratorium on bank of england action for about six months or so. jonathan: let's bring you that breaking headlines from germany. the freighting has come out at 55.0, just below the initial reading survey. the composite is coming in at 54.5. around the 55 mark, i mean it is not dreadful data coming out of europe right now if you are looking at the pmi. >> no, but their concern is inflation. that will always trump the p mpi data and any other data because they have a mandate. service sector in
europe is delivering right now. there are parts of the economy that are doing ok. if you look at europe, maybe that is the wrong number to look at. >> i think if you ask a german whether they look at the fact that manufacturing is important to him, i think you will find that yes, it is. guy: it is a big part of the german economy now. >> it is not as big as it is but it is the u.s., certainly becoming important. pulse" is upe next. firmer, up 8/10 of 1%. 1% withown by 1/10 of the ftse 100. guy: you can follow the conversation online. we will be back for more
francine: global markets run red. asian stocks lower. oil trades around 30. u.s. 10-year yield is close to a record low. markets but the odds of a fed rate rise at less than 50%. chem china offers $43 billion for syngenta. the country looks for way too feed the world's biggest population. so, welcome to "the pulse