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tv   Bloomberg Markets European Open  Bloomberg  November 19, 2018 2:30am-4:00am EST

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nejra: good morning, welcome to bloomberg markets. we are live from our european headquarters. alongside anna edwards at the cbi conference. anna: good morning. i am here in central london where theresa may will try to sell her brexit deal to business leaders as she finds almost insurmountable opposition in parliament and a possible leadership challenge. the cash open is less than 30 minutes away. nejra: may's business pitch.
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the u.k. prime minister asks businesses to back her brexit deal. asia advances. u.s.s trade higher despite vice president pence's attacks on china. turnarounds at telecom italia. new ceo in a victory for activist investors. but have a look at how markets are trading globally. we have seen gains in the asian session. a little more muted given the concern around trade. no joint communique coming out of aipac for the first time in many years. saudi arabia and stocks are bouncing back after significant losses yesterday. reflect apretty much lot of the benchmarks across asia. we have seen gains in japan and
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south korea as well. in the fx space we saw the dollar weaker on friday, down 0.5%. it bounces back today. that is why you are seeing emerging-market currencies weakening against the dollar. here in london we are focused on the cable trade. that is flat after some very muted gains on friday. let's take a look at what is happening elsewhere with fixed income. it is very much a focus on the ten-year treasury yield and two-year. we saw the two-year and 10 year yields drop on friday following comments from fed vice chair richard clarida talking about the neutral rate but also the global economy. we are seeing repricing around those 2019 fed hikes. not even to hikes priced in right now. bond yields do seem to be moving lower across a lot of the asian space. we are keeping an eye on italy as well. taking lithic look at commodities, it is oil in focus. wti crude jumping after this week of losses for oil.
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let's talk more about the markets. asian stocks kicking off the we can fashion after u.s.-china trade tensions show no signs of improvement. the dollar studying, rebounding slightly. treasury study as well. -- treasuries steady as well. between chinese president xi jinping and u.s. vice president mike pence quashed optimism that relations would improve at g20 meeting starting next week. joining us from singapore is mark cudmore, bloomberg mliv strategist. great to have you with us. we are talking about trade tensions, the risks around brexit. italy also in focus. what does the risk picture look like in markets today? >> the risk picture is still very quiet. the main thing for the european session is the dynamics around weather may will receive that kind of no-confidence -- enough letters to trigger a vote.
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europe is moving -- italy is moving back to the radar. slightly out of focus at the moment. it may come back wednesday if the eu brings forward there overall,about italy. the reason why we have a slightly positive session in asia despite the negative comments on trade is that trade expectations are already very low. it's only going to be a negative if we actually say we are going to escalate the trade situation by increasing the number of goods that are taxed. currently they are very low expectations. not that much optimism -- optimism for trump and xi. chinese stocks bottomed the month ago when the government made clear they're going to show unwavering support further companies. since then the market is up nearly 10%. when you add in the fact the dollar is weaker, that is good for many risk classes around the world even if not for u.s.
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stocks. anna: good morning to you. let me ask you about the global view of u.k. assets. we saw weakness in the pound. no deal brexit loomed large last week. what is the expectation for u.k. assets? i ask this because we have previously seen an inverse relationship between the pound and the ftse 100. last week we started to see the ftse 100 dropping with pound. >> what we have gone through all the u.k. is a little bit of fascination with brexit a long time ago. many investors who did not have to trade want to avoid that. asia, unless they saw a massive opportunity, it was very hard to get involved. it is very hard to see where those opportunities life. it is hard to build a narrative about what kind of product or
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assets are mispriced. it has come back into focus very suddenly. it looks like we are reaching the endgame in terms of, we're going to get a parliament vote in a couple of weeks. whether mabel go before then and if she doesn't survive, whether parliament will pass, and if it fails, what will happen. people feel we are likely to get clarity on what the endgame is. even if the endgame just means a massively extended transition period. that is why it has come back into focus. people are starting to realize, it does not look like this deal will pass and that is why you are seeing u.k. assets at the same time you're getting sterling. you are no longer playing that inversion correlation. nejra: let's talk about another risk that has come back into focus. arguably the biggest global risk. it is to do with the fed and the comments from richard clarida on
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friday. today the question on mliv you are asking is, what does the fed repricing signal for assets across the sector? you can reach out to was on the mliv team on your bloomberg. what is your take? the implications are massive across many assets. the combination of dollar weakness and u.s. yield weakness is supporting some kind of em assets. we have asian currencies have done well recently and they could continue to trade ok. that is the first thing to bear in mind. you have got to wonder, is this a permanent shift or are we going to be pricing back these rate hikes? the fed has been confident they want to keep hiking. this probably does imply this volatility is here to stay. this is not a turning point in rates. we are going to be wavering back and forth as the economic outlook is staying on certain.
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that makes sense of the end of the rate hiking cycle. the end may take a year. there are still a couple of hikes to go. we're approaching the neutral rate. therefore we are going to have a lot of volatility in markets because of this. anna: thank you very much for joining us. mark cudmore, markets life strategist. the mliv question of the day, reach out and get in touch. what do you think of the fed and the current debate? contact the mliv team using the function iv plus tv on your bloomberg. let's get a bloomberg first word news update. good morning. summit ended by failing to issue a joint communique for the first time since the event began in 1993. officials said china balked at the wording of a statement on trade and a pledge to fight all unfair trade practices. sharpresident mike pence
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and u.s. attacks on the world's second-largest economy. he called on nations to avoid loans to beijing. states offers a better option. we do not drown our partners in debt. we do not coerce, compromise your independence. the united states deals fairly. we do not offer a one-way road. when you partner with us. >> theresa may's uphill struggle continues as she tries to sell her brexit deal. will address british industry in london today trying to win the support of business leaders. as members of for cabinet are openly discussing rewriting the deal and to some of her own lawmakers are campaigning to get rid of her. the former brexit secretary dominic raab said he still supports the prime minister.
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>> i am not going to stand in the tory leadership contest. i am supporting the prime minister. i will not be supporting anyone who is sending letters. in a vote of no-confidence, i will support her. >> the trump administration will issue its report into the murder of jamal khashoggi on tuesday. this amid increasing indications the killing was ordered highest level. there are report the cia has concluded mohammad bin salman approved the murder. president trump says the review tells -- the real details may never be certain. global news, 24 hours a day on air and @tictoc on twitter powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. nejra: thank you so much. up next, telecom italia has appointed a new ceo. what is seen as a victory for
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activist investor elliott management. ♪
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anna: good morning, everybody. i am anna edwards at ecb i conference in london. we are 17 minutes away from the start of cash equity trading. up-to-date.
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money laundering whistleblower is committed to working with danish parliament. that is according to his lawyer. balticon led the banks operation from 2017 april 2014. he left after alerting management to suspicious amounts danskey flowing through bank's estonia unit and later spoke out through the media. gam is offering a retention bonus to fund managers. this is the latest move by the asset manager to contain a crisis that has seen investors pull money and shares plummet. nordea just dropped off the list of banks deemed too big to fail. that does not mean they can hold less regulatory capital. group was removed from a deemed systemically important.
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the decision takes place in 2020. finland's financial watchdog said it would continue to treat nordea as too big to fail. that is your bloomberg business flash. nejra: thank you so much. telecom italia has named luigi gubitosi as its new ceo. the former merrill lynch bankers appointment is another win for activist investor elliott management, which is pushing for a radical overhaul of the phone company. he succeeds the last ceo who was ousted for expanding the landline network. great to have you with us, rebecca. telecom italia shares down 20% year to date. the stock is called higher at today's open. we understand this outcome is good for elliott management. is it good for other shareholders? >> luigi gubitosi's job is going to be create certainty.
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been initalia has uncertainty because its largest shareholders have been fighting over and certainty area now what you are seeing is the second-largest shareholder has put in place its guide to do the job. certainly investors are expecting there's going to be alignment between the ceo and board. anna: good morning. how has the second-largest shareholder managed to exert so much influence over the largest shareholder at telecom italia? management came in in march calling for improved corporate governance and asset sales at telecom italia, which has been struggling under a huge debt pile. it is facing new competition. may, elliott managed to overthrow the board, led by the french media conglomerate. elliott managed to get the backing of other shareholders to put in place its own new board slate. the question is whether those
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other shareholders continue to support elliott or not. is the fifth ceo in five years. is there any risk his tenure could become a short? >> there is a huge risk. overnight, there has been a threat to call a shareholder meeting. the ousted ceo who still represented a vendee on the threats.ing those in the coming days we will have to see whether they do indeed make that college try to create another board slate here. anna: a fast-moving story. it seems to early to ask what will be the threat of the -- the fate of the landline business. that was the original falling out. >> that is right. the government is pushing for one landline network in italy. they want increased spending on fiber, which boosts internet speeds. i think the direction was
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heading in some kind of consolidation of the sector. whether that means telecom italia spins off a landline network or not remains to be seen. that depends on whether gubitosi and elliott remain in control. anna: another question it might be too early to ask. telecom italia, a takeover target? >> we had a professor make us ingestion because the stock is -- make of the assad gesture and stock is down stionch -- the sugge because the stock is down so much. theissue is whether government would allow someone to take over and asset of strategic national importance, which is the landline network. anna: thank you very much for the early heads-up on this story. bloomberg's had of telecoms -- head of telecoms. keeping us up-to-date on the shareholder tussle.
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we are minutes away from the start of the equity trade. we will take a look at the stocks we are watching, including danske bank. we heard the whistleblower is due to appear before danish lawmakers later today. how will the stock react? we will get that and the others as we are 12 minutes away from the start of equity trading in london and the rest of europe. ♪
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nejra: we are nine minutes away from the european equity market open. let's get your stocks to watch. bloomberg's copenhagen bureau chief is looking at danske bank. from our equities team, covering u.k. homebuilders. annmarie hordern is focusing on 80 be. let's start with you on danske bank first. talk of was a lower talking to u.s. authorities. is it likely to impact danske bank's stock at the open? no doubt stock performance is tied to this money laundering scandal. we have a lot of the main protagonists appearing in public. in the same venue, danish parliament. you have the whistleblower who started this whole thing. you have the danske bank interim ceo appearing. he's going to say he is sorry. this danish regulator has been under pressure for allowing this case to happen in the first
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place. it will be one to watch for danske bank investors today. nejra: let's talk about u.k. homebuilders. those stocks got punished last week when we had concerns around brexit. we also have housing data out. what are you looking at today? >> that's right. british homebuilders may be under pressure today after data released this morning showed asking prices fell in november for the first time in seven years. the property market is weakening for the first time in three decades as brexit is making buyers more cautious. propertiespensive led a november decline. maybe underlondon investor -- today. nejra: let's talk about abb. report citizen talk to sell its
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power grid unit. >> we had reports about this last week. the financial times as saying hitachi isng -- looking to buy. it could be worth 13 billion u.s. dollars. negotiations are at a fairly developed stage, they still have not secured. they declined to disclose the valuation being discussed. abb might retain a minority stake. hitachi already has a joint venture with abb to supply equipment for japan's energy grid. this would be another deal. called at some of the this morning, looks like abb might move higher on the news. nejra: thank you so much for joining us with the stocks to watch.
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you can get all the latest stock stories the going to first go on your bloomberg and via the mobile app. let's check on the markets as we head toward the open. look at the msci asia-pacific index. you could say equities have shrugged off trade tensions. you could say the gains are limited. futures pointing higher now after a muted start when that futures trade started getting going. u.s. futures bucking the trend, pointing lower after modest gains on friday. coming up, it is the market open. anna edwards is that the cbi conference. anna: absolutely. theresa may be speaking later this morning. they are pulling the set together, putting together the finishing touches ahead of the prime minister's address. she is going to be trying to push her brexit plan to business. this is a relatively friendly audience to the prime minister right now.
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this forleaders like the same reason brexiteers don't. we will continue counting down toward her speech and before that we will tell you down to the start of european equity trading in london and beyond. ♪
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minute fromthan a the open. let's take a look at the market. pacific asia index up .25 percentage points. you could say they have been shrugging off the trade tensions. strong gains in china. the csi 300 up 4.1%. the dollar and treasuries in focus after comments from richard claritin, the fed vice chair on friday. 114.12. trades at gains friday and popping a .02%. bit, up
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futures, wethe started muted earlier but now we are picking up when it comes to dax and cac 40 after three days of losses. ftse 100 futures struggling for direction. as we head to the open. here is the open. we're seeing the ftse get underway. we're unchanged. we'll see how that changed. just to give you some context, although we've seen gains in asia, we saw muted gains in the u.s., u.s. futures pointing lower for today's session. we might see thin trading in a holiday shortened week with thanksgiving. the ftse 100 picking up .2%. it's been fairly stable even though we've seen volatility in sterling. a lot of the action goes below the surface. by cac 40 opens higher, up .3%. ibex up .25 percentage points.
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let's see what the ftse mid is going to trade. see aks like we could little bit of a positive open right now across these equity benchmarks. looking at the imaps to see how various industry groups are performing, we saw gains on the u.s., even though we saw retailers take a led lower on friday. europe, seeing green across the screen. most industry groups moving higher. not a lot of read their, so we are on a -- not a lot of red there, so we are on a positive footing. we can show you the mrr screen. telecom italia, elliott management winning out. we've got a new ceo. also on the upside, novo nordisk is up 3.6%. concern we could see pressure on the homebuilders with house
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price data out of the u.k. but also the ongoing political crisis over brexit. berkeley trading down 1.5%, but nothing too dramatic. performer, he worst arkema down 2.9%. anna? anna: that's the market open. that's how we position this morning. i'm at the confederation of british industry's annual conference, what theresa may will try to sell her brexit deal to businessman. a possible leadership challenge. joining us on set is stephen isaacs, chairman of the investment committee. you say in your notes of the eu is misunderstanding the entire brexit situation. what do you mean and where does
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that take us next? stephen: good morning. what i'm saying is we're commemorating the 100th anniversary of the first world war. and what came after that was the treaty of versailles. and the treaty of versailles was misconstrued right from day one in the sense that the victorious powers extracted a very tall against germany. and we know what happened not long afterward is that the treaty failed miserably. and i'm drawing it as an analogy in that yes, the eu have been able to negotiate a tough deal. they've seen a prime minister who's a weak negotiator with perhaps a poor hand. and they've come out fighting with an aggressive deal. there's a misunderstanding in the northern ireland process. there's a crazy dynamic where the deal is going to fail more quickly than the treaty of versailles. it's going to fail and parliament very quickly and lead
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the story back to the eu. what do you want? there was a misunderstanding, part of the referendum. i'm not trying to blame one side or the other, but there was a series of misunderstandings and over calculations by a number of eu players prior to the referendum, which led to an outcome they didn't expect. anna: is the market priced for the no deal that you expect? you get the sense looking at the market, and talking to people, any deal will do at this point? and they do expect a deal to happen eventually. stephen: i think the market's actually unsure. there's an enormous amount of confusion. this deal with chronology, first of all, is it going to be a leadership challenge to theresa may? it looked on thursday, when he supposedly commands a force of
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40 on mp's, publicly called for one. here we are on monday, where they are saying emphatically and making it clear they have integrity. they're not holding anything back. possibly a leadership election is fizzling out. why is that? does that show, and i think sterling's minor strength this morning, does that show challenge is fading generally? i was listening to michael howard on radio coming in the car, that what the brexiteers are concentrating fire on is this vote. a leadership issue is almost immaterial. the vote is what matters. it is the government's signature legislation. it's the prime minister's own work. two brexit secretaries that felt outmaneuvered tiger. the only thing -- by her. the only thing that matters is the vote. they can't bleed too much
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because the vote is a few weeks away. anna: stephen, when we saw the negative reaction and markets last week, was that the market pricing in what looks to be a no deal brexit? or is it pricing in the possibility of a jeremy corbyn number 10? which do you think grip to the market? -- gripped the market? stephen: i don't think it's focusing on a change of government. i think the market fails, and i would support this, because of the fixed term parliament act, which means you need two thirds of the majority to force an election, brought in during the coalition, the liberal democrats force a full term of government. the bar is much higher now. even if the dup abandoned the conservative party, which is not without risk, it's still quite difficult to force an election.
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you would need a significant number of mps to throw their hats into the ring for a general election. the market is correct in saying that's extremely unlikely. the market is focusing, as i'm focusing, on this vote. there isn't going to be a leadership challenge. it's really about the vote. let's make comments on that. if the vote is marginal, and i think it's going to fail. i think most people would agree now that the emphatic way that they opposition party, the labour party have come out and said they would not support the deal. even the scottish nationalists said they are not going to support the deal. the only way the prime minister would get this deal through was always to rely on some opposition members on the sort of arch remainders to say, well, we want to have some sort of agreement with europe. this deal is so botched that it
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provides opposition parties, who let's face it, like to oppose, a fairly easy pretext to say we're not going to support this deal. anna: you seem sure the deal is going to fail. what investment decisions are you making? it's an interesting place to make a rotation in the ftse 100. stephen: it depends on how it fails. if it's a marginal fail, 10 or 20 seat failure in the house of commons, the prime minister can live on into 2019 and there may be a possibility for the eu to say, this treaty of versailles, we need to give something here. we still want to get this through. we want britain to sign up because there's a lot of money at stake, 39 billion pounds of severance payment and 10 billion a year in the transition period.
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already --you budget eu budget already very stressed. in an environment where there is a marginal failure, there may be a chance of tinkering on the edge of a deal and it could come back and get through. if the margin of failure is much greater, 50 votes or maybe more, which in fact is my base scenario, than theresa may resigns. we have a leadership election and we see a big movement and sterling. -- big movement in sterling. the way to play this through is to do it with currency. anna: ok. stephen, thank you very much. joining us from outline capital management. he stays with us longer on the program. theng up, we speak with u.k. labour party leader jeremy corbyn, speaking to me here at the conference in london. you can hear that conversation after 5:30 p.m. london time.
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up next, we bring you the stocks on the move so far this morning, including abb, registering some talks toer there are buy all of the business. this is bloomberg. ♪
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anna: welcome back to the european open with 12 minutes
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into the trading day this morning. later on today, we'll be talking about politics. we'll be speaking to the former u.k. brexit secretary. you can see that at 9:00 a.m. london time. let's get to our top stocks stories. annmarie hordern has those movers for you. annmarie: let's kick it up with nordisk, up 4.5%, is biggest climb for the year, upgraded to overweight by jpmorgan. price target is 440 krona. the less closing price. abb also making gains this morning. this reports that hitachi has been in talks to buy all or parts of abb's power business. analysts estimate it's worth $13 billion. to the downside, dansk a bank, actually pretty positive. a lot of focus will be on the
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bank. as the whistleblowers appear in court as the interim ceo appears ahead of. lawmakers whistleblowers also in comment -- contact with the u.s. authority, so big focus on that bank. anna: trade tensions between washington and beijing show no sign of improvement over the weekend. vice president mark -- mike prince sharpened -- vice president mike fence sharpened -- stephen isaacs, chairman of investment community is still with us. if you look at the asia session, you could say gains have been cap because of trade tensions. you could also say we've seen gains because equities have shrugged off the lack of any real progress from those talks. how concerned are you about the outlook for the g20 and the impact on markets given what's
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happened over the weekend? stephen: u.s. politics is dominated by one man and we know who that is. , a littlepence does choreography around the meeting has altered the deal, keeps some pressure on. it's all down to the g20 and all down to trump. whether or not he wants to sue for peace or do what he did with nafta, which is to be surprisingly practical and come up with some reasonable changes where, at the end of the day, ended the war. that's the question. to me, it's about politics. trump has got a dilemma two years into the presidency, focusing on reelection. what he will be considering is the economy. has been ripping party through some of the tax changes because it was in an upswing anyway. will there be a question mark at
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the back of his mind, i have to be careful with my trade war if i see the economy roll over into 1920? that takes away at my most important trump card, if you excuse the pun, i think he will start to be thinking that way and i think there are early thatents on choreography some sort of trade compact, maybe deal is too strong a word, is in the offering in the first quarter of 2019. the chinese, likewise, they're hurting. there was always the this hurts you more than it hurts us. we'll see. difficult to forecast, but that's my view. nejra: difficult to forecast partly because we don't know the extent of the change the u.s. administration wants to see here. if it wasn't just about trade, perhaps the situation you described comes to the fore. but this comes -- goes beyond
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trade. that's what mike pence was talking about, the extent of belt and road and how china was trying to get other countries to be dependent on it. this goes much broader. you wonder, what is the endgame for the trump administration? and that's not entirely clear. t's an emerging power versus an entrenched power. are they destined to have a war? hopefully not a real war, but a trade war. and trumps nationalistic instincts are still with that view in mind. but electoral matters are still in line. it's possible trump will play it everything was done -- fine until the democrats got the house. there's a lot of politics year. i don't think the president's made up his mind yet. i don't think the summit is relative at all. nejra: and the question does become, what happens to the global economy and how does that feed into the fed?
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raphael bostic and neel kashkari talked about this, global economic risk. we did see repricing in treasuries and the dollar. this chart shows 2019 tightening, the market not pricing in two hikes in 2019 now. let me ask you the mliv question of the day, which is, what does the fed price repricing signal to assets across the spectrum? mark cudmore says all it will do is cause more volatility. what is your view? stephen: i think the fed is going to tighten at least twice in 2019. we've got to talk to the main man. the main man is mr. powell and powell's speech the week before was pretty emphatic. and what he's looking at is wage growth and unemployment. wage growth is ticking up. and the party is still raging in the economy, to use another famous pun. so i don't think we should read
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too much into last week's sensible commentary, which is yes, the global economy is slowing down, possibly more pronounced now in europe than we had thought. and sooner or later, that will impact on the u.s., but not as much as people think. u.s. is domestic economy, and the near-term is strongly with the bulls. is the fed going to steam ahead really aggressively tighten, some people say 4% fed funds rate something like that? i don't think that. i think the fed will cause for breath. one its tax cuts, the impact rolls off, the second half of 2019, we will see the economy settle down closer to 2%, which is trump's quandary, effectively. we'll see some equilibrium in funds rate. anna: thank you very much,
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stephen isaacs. nejra: we'll come back to that. he stays with us later on in the mac could -- market program. later today, we speak exclusively to david davis after 9:00 a.m. london time. what does he think about the vote movement -- looming in december? he could over checkers -- quit over checkers. what is the latest? this is bloomberg. ♪
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nejra: this is the european open. we are 22 minutes into the cash equity trading day. italy says it is ready to talk to the eu about the busting budget. demaio says the government is ready to make cuts to wasteful programs the plan reforms will stay. brussels is expected to reject that. stephen isaacs is still with us. what's a bigger risk for the markets, italy or brexit? stephen: that's a lovely question to answer. they're sort of manifestations of the same phenomenon, it's about populism. blocks intwo big
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politics at the moment. the nationalists versus the globalist. france andacron in populists in italy. it's an interesting battle between these two groups. macron faced a weekend of disruption, strikes, unfortunate problems there. macron's popularity dropped to a record low, 25%. and italy, we've got the budget talks. what's going to happen? nothing is going to happen until the reelections in may and both sides are relying on their own vote to galvanize their own positions. macro is picking fights. why is he doing this? he picked a fight, effectively, with trump. he's been picking an ongoing fight with the italians. he feels strongly enough that at the end of the day, the choice between him and the national
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front, the only opposition in france, the voters will have to support them. in -- sorry to break we've got some breaking news. anna: yes, indeed. arrested onto be trading law breach. availablethey are not to comment as they are checking the report. arrested on suspected financial law breach according to a saw he. shares -- asahi. shares falling as much as 5% right now. they can't immediately comment and it is checking on these reports. let's come to you on another subject that is important to you. this is ge. credit and more probably around ge, what is your glory about ge?
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what is your prognosis about the future? isphen: my worry about ge that there is a headwind on spreads. corporate spreads are widening. there's a sense that we are and cycle. the fed are tightening. they have more to go. the fed are uncomfortable. they want to stop while things are going on. where does that leave ge? if there was a beneficial environment, ge could muddle their way through and find a way, through device meant, bring their debt down. in today's world, things tighten, perhaps quickly in 2019, then i cge with a new management team, who don't know a legacy to the previous mistakes made, they could do something extraordinary anbang in a restructuring -- and bang in a new restructuring.
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there might be an intelligent way to deal with those problems. anna: stephen isaacs joining us. thank you for being with us this morning. more on brexit coming from the cbi conference here in london. this is bloomberg. ♪
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nejra: we are 30 minutes into the trading day. here are your headlines. may's business pitch. you can prime minister asks the business community to back her pitch. we are live in london. europe rallies. stocks in the region fall despite vice president pence's attack on china. and turnaround at telecom italia. they named luigi guba josie as the new ceo in another victory for elliott management. the stocks jumped. good morning. welcome to bloomberg markets. this is the european open. i'm anna edwards live at the
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conference tracking the political story -- political story, alongside nejra cehic at bloomberg headquarters in london. nejra: 30 minutes into the equity trading day in europe. let's see how things are shaping up in terms of individual movers. on the upside, best performance is intermedia capita group. semiconductors had a difficult week. one of the gainers up 4.9%. you mentioned telecom italia, new ceo, the favorite of elliott active shareholders, jumping up 3.4%, one of the best performers on the stoxx 600. let's take a look on the downside. we've had some news on renna, which has pushed of this stock down to the lowest in a year. carlos ghosn is going to be arrested on financial law breach. worst performer on the stoxx 600.
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swatch group is reacting to a downgrade to after the market close. that is down 2.6%. let's get the bloomberg first word news. does the humphrey has that in dubai. -- deathly humphries has that in dubai. desley: carlos ghosn's been arrested for law breach. the apec summit ended by failing to issue a joint communique for the first time since the events began in 1993. officials say china balked at a statement on trade, objecting to the use of language the applied to all unfair trade practices. at a summit, vice president mike pence sharpened u.s. attacks on the world's second-largest economy, calling on nations to avoid loans that would leave them indebted to beijing. vice president pence: know that
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the united states offers a better option. we don't drown our partners in a sea of debt. we don't commerce or compromise your independence. the united states deals openly, fairly. we do not operate constricting belt or one-way road. we partner with you and we all prosper. kokou: theresa may tries to sell her brexit deal. she tries to win the support of business leaders. this as members of her cabinet are openly discussing rewriting the deal and some of the lawmakers are campaigning to get rid of her. former brexit secretary dominic rob, who resigned thursday, said he still supports the prime minister. you are notob, going to stand in a leadership contest. do you agree with that statement? >> i support the prime minister.
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i will not be supporting anyone who is a sending letters to the 1922 committee. and i would support her. desley: global news, 24 hours a day on air and at tic-toc on twitter, powered by more than 2,700 journalists and analysts in more than 120 countries. this is bloomberg. much doesk you very the humphrey in dubai. --thly humphrey in dubai deathly humphrey in dubai the embattled prime minister will address the group as she fights insurmountable opposition in parliament and possible leadership challenge. ceo, ben. is the great to see you on the program. we talk a lot about what parliament will make of theresa may's deal or no deal. what do you think the british people make of it?
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what do you think they will make of the deal she has come back with? >> they are not particularly enthusiastic but what are there alternatives? if you ask do they like it? very few people say yes, under 20%. but if it's a choice between that and no deal, 60% choose it and that might be the position of the house of commons. we just don't know. if it is known and that all bets are off because opinion has gradually shifted but it is still all up in the air. shifting, whats does that mean about second referendum? ben: if you give people a straight choice, people want one but in terms of sentiment, we've got slightly more people saying the last two years opinions can
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change during a campaign. nothing has shifted enough for either side to note what the outcome might be. personally, my anxiety would be that we have it. the country still is as divided as ever and the next campaign begins the next day. i'm going to be speaking to german corbyn later today. how is he doing in the polls? many have made the point that given the turmoil the government is easy in regards to brexit, perhaps the labour party should be pulling higher. ben: i think that's not an unfair presumption. ed miliband leading the party at the time was 12 points ahead. currently after the latest debacle inside the conservative party, labor is only two or three points ahead in the latest
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polls, not enough to guarantee they would win a majority in the general election. personaly corbyn's recommendations remain eight points behind her in terms of who would be the best prime minister. nejra: does polling tell you about what exactly is about this deal people don't like? ben: it pleases neither side, of course. you've got a bad version of the european union if you're a remain her. there are all sorts of compromise is and a loss of control. if you're a lead voter, you're still in the european union and customs union and paying money. neither side is giving what they want. the only question is who would get what they want, one country against 27. anna: can you set a course that takes us to a second referendum? order you very much listen to
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theresa may and germany corbyn, who suggest they want to leave on and the people have decided and there's no validity into running this again? ben: but neither leader is as enthusiastic about it or they would have come out and said there are plenty of other people shouting from one. it will be the house of commons votes down the current deal and are unable to reach a quick arrangement that the house of commons would support. at that point, potentially they have a second referendum. labor will be trying for a general election. completely uncertain, but if the deal is voted down, but it may be probably the cbi will come out as business says they are in favor. there are many people close to theresa may in her government who believe ultimately this is the best deal we're going to get and they will somehow get it over the line. but quite frankly, british politics at the moment, anything could happen.
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but will theresa may survive a leadership challenge? ben: i have no idea the innerworkings of the 300 plus conservatives minds. i think the brexiteers have so far failed to come out. if we do, we're going to hear today. start listening. it happens in the next day or two. they have to put up or shut up. we're going to know fairly sure. nejra: thank you so much for joining us. go for anna. anna: thank you for joining us. exclusively tong the u.k. leader jeremy corbyn later. you can hear the conversation just after 5:30 p.m. london time. i was just going to mention i wonder what difference it makes if business backs of this deal. where will that noise the loudest? in the make a difference
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mp's you were considering checking out theresa may or will it get into voters? ewe'll get to that later. we also have an interview with david davis. he resigned over the checkers proposal. that's at 9:00 a.m. london time. nejra: a little bit too eager to jump in with the stock of the hour. it's something we've been watching. it hiis runrenha. is poised toirman be erected in tokyo on a suspected breach of financial trading law. the newspaper said he's planning to be arrested by prosecutors without saying where it got information. is failing to declare compensation truthfully. he didn't have an immediate comment. renault is also in france.
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a spokesman could not be reached for comment. we have seen shares fall as much as 5.2%, the lowest in a year, worst-performing stock on the stoxx 600 in this session. this is a developing story. we will bring you the latest as we get it. but as far as we understand, ghosn voluntarily went with prosecutors and they are set to arrest him according to asahi. up next, we bring you some of the stock movers including renault. the ceo is suspected to be arrested on a law breach. this is bloomberg. ♪
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nejra: this is the european open, 44 minutes into the equity trading day in europe. let's turn to the deals report. chronicle philip is in a close deal.ks to sell its gas ruth david from our deals team is joining me now. good to see you. talk us through the rationale behind this. it's seen as reckless group is not listed. he has been known to be a dealmaker. he got some of the money from bp and they bought some ashland recently.
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so the crisis kind of stopped him for a bit but now he's coming back. and u.s. majors, whether that's chevron or chronicle phillips, is looking to go ahead and focus more on companies that are looking at mexico or latin america. like we've heard they are looking at buying and never, for instance -- and ever, for -- endeavor, for instance. because they are not listed, they also have more flexibly and what they can pay and how they can build it out. anna: this story involves some u.k. assets. take it wider for us. what is the brexit drama having on m&a? volumes and prices holding up? boards just waiting and seeing and watching what happens before making decisions? what's been the effect? ruth: i was looking at the numbers this morning, and u.k.
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m&a is at levels close to where it was in 2014. 2015 was the mega year. i think the sense seems to be, if you're a ftse 100 company and you have global operations, maybe the time -- now may be the time to consider. it's still seen as risky, but in terms of companies appeal, especially in the u.k., if your global, it almost doesn't matter. the ipo market has a suffered more just because investors don't want to put money in one they don't know what's coming next. but it'll be interesting to wait and see whether we get big bang m&a in the coming months that puts this to play. nejra: and meanwhile, the eu could agree as early as this week to screen foreign direct investment. this is about something other than brexit, isn't it? ruth: absolutely. this is about china. we have been talking about how the u.s. is pretty much topping
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investments into the u.s. from china, and china is turning its sights on europe. i now it seems as though europe is saying hang on a minute, we want to be more careful about where we're getting foreign direct investment from. there's a sense in europe, it's coming from what is seen as the european jewels. there's a list of national security assets, were defense and infrastructure and oil come in. now they are saying we want to be careful about water and food security, which they haven't said before. eu members might have more powers to talk about deals in member states to weigh on them. it could be interesting to see where china goes after this. anna: chinese money certainly under scrutiny, in other jurisdictions as well. i remember a story recently around australian assets and a decision there against the chinese.
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is dealmaking by the chinese just going to become increasingly more difficult outside their own borders? ruth: it seems like that. it's interesting because we keep still hearing about chinese companies looking at steel, whether evp in georgia now, or whether food companies and all that. so we need to see how much the regulations are going to affect them. they've always thought europe was the friendlier of the places, but we saw what germany did with some deals this year. there could be a slowdown, for sure. maybe they will need an m&a to report on after this. anna: quiet time for you, ruth. i remember around robotics, in particular. thank you so much, ruth david from our deals team. if you're a terminal subscriber, you can get a check on the newest m&a news at m&a go.
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movers.ke a look at the i'm sure there's a carmaker or two in their. annmarie hordern has the details. annmarie: we have to keep it -- kick it off with renault, down 5.22%. japanese news agency reported nissan chairman carlos ghosn to be arrested on financial law breach, representing nissan didn't have an immediate comment. these two companies have been an alliance over the years and each of them on a stake in each other, respectively. telecom italia to the upside, up 5%. new boss at the helm. this is another victory for activist shareholders. he's pushed for overhaul of the phone company. to the downside, 2.21% first watch. on thursday, it was downgraded and cut. weakerey are citing
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demand from chinese buyers. thank you very much. we'll keep the focus on that story. they have reacted sharply on reports that carlos ghosn is to be arrested on a suspected financial law breach, reports coming out of japan. that's where the suspected activity is allegedly taking place. we will get the details coming up next. this is bloomberg. ♪ his is bloomberg. ♪
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anna: this is bloomberg, the european market open. we are 52 minutes into the market open for european equities. later today, i'll be speaking to the u.k. labour party leader, jeremy corbyn, from the conference here in london. given hear the conversation after 5:30 p.m. london time. and before that, within the next half hour, we'll be speaking with the former brexit secretary david davis. that is just after 9:00 a.m. london time. a lot more to come on the subject of brexit. theresa may will be putting her pitch to brexit to a business audience. she'll be here at the cbi amongst all the chaos, will there won't there be a challenge to her leadership? she'll be here. this could be a friendly audience, relatively speaking.
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there will be many who don't like her plan, but there will be some who do, especially compared to a no deal brexit, which could be the choice in front of mps in december. nejra: making the pitch to business before she heads to brussels to do the negotiating herself. let's talk about a stock falling sharply this morning. that is renault after asahi reported carlos is suspected to be arrested on a financial reach of trading law. he's thought to failed to declare compensation truthfully. our automobile reporter joins us from munich. elizabeth, we're seeing the stock lowest since 2015. has this come as a complete surprise to the market? i guess share prices tell you this is a complete surprise. nissan deposits receipts in
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germany are down quite sharply, too. it really shows how this event is growing uncertainty around these two companies. she's a towering presence there, he's a chairman and ceo of the alliance and the architect of those two, aswell. and with his future now possibly in doubt as a result of this arrest, it's clearly an uncomfortable time of these companies. anna: talk it through what we actually knows of our or what is being reported in japan. elizabeth: there's not much known at this point in time and what we do know and what i think is important is that he apparently went into the authorities voluntarily to report that he would be underreporting his own income. that's what the newspaper reported, and has been potentially or allegedly
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manipulating financial findings. and the authorities are preparing to arrest him formally. that's what we know so far. nejra: so you've told us what we know so far. what else will you be watching for in the days to come? elisabeth: the next step by the authorities. what this arrest would mean for his ability to carry out his duties as chairman and ceo of the alliance, of course. what kind of succession planning or other candidates could be stepping up to lead these companies? these will be the developments we're watching. it's of course a huge distraction for a company, like everybody else in this sector, going to really big changes with the switch to electric cars and really a time they do need the management attention that got. anna: big structural changes coming to the industry.
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european auto reporters joining us with the latest. that's it for the european open. i'm here at the confederation of british industry conference. we'll be hearing from theresa may shortly in london. this is bloomberg. ♪
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theresa may once business to back her brexit plans as markets brace for a possible no-confidence vote. will they be more receptive than her own cabinet? was in disarray. and, pressing out the comments from the vice chair richard clarendon on the dollar. is a market reading too much? ♪ francine: this is bloomberg surveillance, good morning everyone. good

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