>> chinese manufacturing expands at the fastest pace in five months and expands in asia to a half year high. >> live with global aviation leaders. afterief executive says the flight disappearance all plane trafficking -- tracking must be improved. >> we have to make sure it can be tracked. we will be coming with u proposals on how to do that. could german tech startup sell shares.

the ipo could value the company at $4 billion. welcome to countdown. to the secondome hour of the program. truell be talking to the phone ceo as his company launches a service they say they want to put an end to roaming charges. that is coming up this hour. >> the airline ceos are in qatar for the annual meeting of the global association of world airlines. what is hanging over the events is missing flight 370. i talked about the technological issues. >> it is feasible to track aircraft in real time. there are solutions available

today that will do that. ofestablished a task force producers of satellite services and the number of representatives. sure weorking to make are doing it in a way they can afford because we cannot to let this happen again. we have to make sure aircraft can be tracked all the time. we will be coming forward with proposals on how to do that. >> let's bring in elliott gotkine. >> good morning. >> good morning. >> i think elliott can hear us. i am not sure if elliott can hear us. >> i can hear you. >> fantastic. >> you have been taking the mood on the ground.

tell us how the executives of the aviation industry are feeling right now. ceo isn tell you the at thely speaking opening session. they are really pulling out all the stops from the mind-boggling airport which has just opened. rising to 50 million next year. two last night with a waterfall tumbling down from the ceiling. close to chance to get movers and shakers in the aviation industry. they are celebrating 100 years of civil aviation. a lot of them have let their guard down in the last few hours. i have been chatting with the freshfaced ceo.

he was telling me about his recent encounter with barack obama. everyone was here. the industry seems to be in pretty good shape. delivery ofpecting the superjumbo very soon. delayed as they fine tune certain issues. the fact he had a minor car crash before this event as well. not everything is going completely to plan. the missing malaysia airline are also hanging over this conference. >> you mentioned some of the celebrity appearances that have been made. have you been taking some selfies? >> i am very hard-working. i eventually found myself there

with the celebrity guest as well. down with a lot of executives dancing. she was doing whitney houston and coldplay as well. i managed to introduce myself so i could show my wife i was working very hard. >> the evidence is there for all to see. you look like you might have been singing. tesla in very many people's minds this morning for different reasons. newspapers of renewed allegations of alleged corruption surrounding the world cup. what are you hearing on the ground? >> it's not something executives want to talk about.

latin america's largest airline is gearing up for the brazil world cup. there is not any suggestion of them propriety or bribing to win the right to host the world cup, but this follows reports of allegations of mistreatment of he.ers, a death and that the head recently said it was a the world award them cup. they focus on the positives. it's not every year they get to talk about their industry when it is in good shape. >> thank you very much. >> asian stocks getting a boost. better than expected manufacturing data from china. boost.ets are getting a we have asia-pacific up the

highest in months. when you look at government data we see it 50 point eight better than analysts were expecting. they do ss 3000 companies. it looks like they are doing both. if you look at the hsbc they analyze the company. many people feel this is a truer estimate. it seems to be the medium-size businesses faring the best. the smallest businesses are showing contraction. this is what the chinese government is worried about. they want to grow the smaller businesses. they have been trying to boost business. they are trying to spend their

money that much quicker. they may cut the reserve equipment -- reserve. >> where does this take us in terms of the government target for this year? >> still missing it. we saw gdp of 7.4%. the projection is still 7.3%. that's the general consensus. since 1990. that is going to be on the communist party's mind. they need to try to hit that target. the employment gauge still seems to be following. there is no way we can be relaxed about china in general, but the many stimulus does seem to be working out. may is the month we start to see turnaround. >> rocket internet, the berlin

is filing an ipo on the stock exchange. our international correspondent is there. it sounds like it is a good copycat company. >> that would be a fair point. i say, are you just a copycat. the answer is always the same. being a copycat or being a clone here is whatcult. they do. it is run by three brothers who are famously quarrelsome, interesting characters. they invest and offer their own advice in companies.

likebig names, companies groupon. that got turned into city deal. b&b, eharmony. here are the numbers we are talking about. range for theuro valuation. we don't know how many shares or how much. it's interesting for so many reasons. tech ipo.irst berlin they sell it back to the original founders. they did that with ebay. they did that with groupon. this marks a move going out into public market and said of going back to the original. it will be interesting to see what this goes -- what this does . will there be real organic

companies that are able to profit somehow through the ecosystem? russia and ukraine are due to resume talks in brussels today on a deal that would keep natural gas flowing between the countries. conflict over separatists in eastern ukraine trying to break away from the government. ukraine announced it repelled an attack on its border in which soldiers were winded. -- wounded. ryan has the details. >> free parties. you have the russians, ukrainians, and european union mediating. this is the third round. we are 23 hours away from the deadline. the russians say if the ukrainians haven't paid off we will cut off their gas. far the ukrainians have paid $786 million. why such an odd number? they paid for february and

march. that was when their gas was right that $286. now they are asked to pay 80% more. we won't pay that. they want to negotiate that price down. they want a lower price for the future, whereas the russians are saying, that was the price then. will there be a deal? we don't know. considering a six of western europe's gas goes through ukraine. it would be bad for ukraine but also western europe because twice before.s >> if you are a follower of geopolitical events, this week is about as good as it gets. >> it's very exciting. you have president obama flying to warsaw. thes going to meet president-elect of ukraine. he is going to meet the leader of almost every eastern european country.

g7 meeting inthe brussels. you also have nato defense ministers meeting in brussels. on thursday you have this curious moment where a law and is going to be meeting with e isident -- where holland meeting with resident putin and then obama. he is going to have two separate meetings. >> will they cross in the core door on the way out -- in the core door -- corridor. >> then they will run into each other on thursday. it's d-day. will they meet on the shores of normandy and try to hash out defenses? it should be interesting. >> the first earnings we are covering since the credit crisis. our next guest sees green shoots and europe's economy. the question is will they survive the winter.

>> time for company news. they have set conditions for a in tale investment italia. the board will have to decide before they proceed.

ubs is being probed by belgian authorities over allegations of money laundering and crime. the magazine says ubs employees of code -- approached wealthy taxpayers and encouraged them to open accounts in switzerland. the report says the belgian arm helped organize the transferred to switzerland. to the maker of the super jumbo. for would be a major boost the program that struggle to gain customers. boeing/reduction -- production of the plane following lackluster sales. london is 17n minutes past 7:00. china's manufacturing expanded the fastest in five months.

we talked about how it is busy for geopolitics. the ecb and the bank of england will be meeting to discuss interest rates. that's put the weeks likely events in perspective with the cio alan hagans. thanks for coming in so early. , how do youou sit see the world? you are cautiously optimistic on .lobal growth >> there is global growth. there has been a huge rally in bonds. there has been a bonfire. >> is that telling us growth is not as strong as we thought it was? wax to a certain extent. in the eurozone the zero rate structure is going to be there for a long time. yes, growth isn't as strong. so many investors are caught on the wrong side of it.

end of last year the big consensus was you avoid bonds and be underweight. we have suffered by not having as much. we bought certain portfolios. bought hundred year mexico. those long dated bonds, long dated credit is probably underinvested in. a hedge against equities. >> 100 years. that is a lot of visibility or a long life expectancy. the i intend to wake up and see my bonds mature. >> of all the things you will think about when you go to sleep and wake up. >> i haven't seen that for many years. what is to tell us bonds won't outperform from here?

wax they have come a long way. map -- mathematically it becomes the capitallt. gains mean your future income is simply less. of bondsarting level it is less interesting. the head of the ecb is tempted to let some debt go. just thinking when i get back to the office a lot is priced here. we go back to draghi. i don't think it is going to be as dominant this time. it is going to be the rate cut everyone expects. i noticed 46 out of 58 economists expect that. it is very murky. there is no way they can buy asset backed securities from the market. it could disappoint a

bit. lowflationt mean tends to be a big problem? wax the big step to refuse to do is bank of japan style qe. they don't want to do that because they have to buy so many different bond markets weighted by gdp or huge amounts of italian bonds. i think that is what we will hear from draghi. >> more from alan hagans when we come back. it is 7:21. we will take a short rate. -- break. ♪

>> i am mark barton. 7:24. what is your biggest worry? >> good question. this bond rally has a deeper in the sense that what we saw turns out to be global. i think markets will come through that. it is so unusual. i have never seen that before.

the direct payout is higher than many corporate bond yields. if the deal went ahead five the --ld have issued a huge pfizer would have issued a huge bond deal. m&a dynamics and the long return investing on the string of income. this year it could be that bonds outperform equities. >> when do you see rates going up? >> u.k. or u.s.? just before would be controversial. we have been a low inflation house for some time.

bank lending is negative. we have never seen that before. we saw it in the u.s. see negative bank lending. for us that keeps inflation low. will dominate, and he is very dovish. we saw from the brick countries, bonds stocks and currency markets, all three have an rallied on a monthly basis since 2010. when it comes to emerging markets, they have had a good rebound, haven't they? stock?e time to take -- a neutralute , soile where we made money we stayed in the currency, and

we are in the bonds. that worked out ok. em equities are valued there. they are trying to understand that. >> inc. you very much. we will take a short break. -- thank you very much.

again he -- >> welcome back. .et's head to caroline >> i want to take a look at the australian dollar currently trading down 6/10 of a percent. we saw building approvals forpectedly fall 5.6% april. that came as a bit of a shock. we see the australian dollar theng its value against

u.s. dollar. house prices fell the most in almost five and a half years in australia. you have got spending cuts. you weighing onreases the consumer and not looking to snap up buildings. they are not being built. the avi dollar up 6/10 of a in london. 7:31 let's talk about airline to tell you a little bit about what is going on. qatar foros are in the annual meeting of the association of airlines. the ceo talked about the current economic climate. it is on an upward path. that is good but it is still very in. profit margins of two and a half percent are nothing to write home about. it is salvageable. have seen consolidation and

developments in the international market between assist in the movement upwards. it is very vulnerable to a number of shocks. the main one would be economic growth, but it is vulnerable to fuel price rises and any other thing that can affect the , whether it is subsidies or natural disasters. let's be optimistic about this. the industry see structure is improving to the extent airlines are generating slightly better returns. still below the cost of capital but heading in the right direction. the venezuelan government is locking $4 billion of airline funds from reaching the -- leaving the country and going to the country of airlines. this is the airlines money. we are calling on the venezuelan

government to release this money at the exchange rate in which it was generated and to do so quickly so we can resolve this. already to have stopped. areow many others considering this. to dotivity is vital business in today's world. if they need to keep delivering it a need to be paid. i call on the venezuelan government to do what they need to do and release the money. >> at these annual events the association produces their forecast for the year. they are cutting their profit world trade and developments in china. they are cutting it by a small amount. the net income will be 18 billion.

they are saying the overall industry margins will be 2.4%. there is a lot of variation. they vary greatly. they are predicting net profits of 8 billion. improvements against last year driven by the u.s. air travel markets according to these numbers, but they are bringing down their forecast by a little bit from 18.7 billion to $18 billion u.s.. >> true phone is the mobile phone operator without country borders. the firstto become carrier to cut roaming and international calling charges in 66 countries. here is steve. good morning. tell us about true phone world. >> it is a package which

encompasses 66 countries, but it's not just about roaming. when we travel as business people it's also about service quality. when i am in the u.s. quite often i want to call somebody apart from the u.k. it means all your calls, all your data to between those 66 countries is included as well. >> how does this fit in with eu roaming regulations and changes due to be brought in in the future here in europe? a handfulope is only of these countries. pose a problem for you? >> not really. validates a way it it. we feel what we're doing is right. waitnths is a long time to

for businesses. a very important part is service. we see a huge growth in data. one thing about a way the product is delivered as we have a network that attaches to these countries. it means you get much better speed and much better voice quality. >> why are you just adding this to businesses? >> we want to focus on businesses. we are a relatively small business. are a small business you focus on the parts of the market where it is most appropriate. we don't want to compromise service. there are dangers in growing too quickly. >> how does your business model work? do you negotiate relationships and each of these countries? how does it work?

>> our business is based on the global network we have no. it's based on a british invention. we have a civic art that can hold many identities simultaneously. locale connect to networks through a series of partnerships. sometimes it's a direct partnership. sometimes it's through a third-party. that isan industry forever changing. how will you be swept up in that? >> it's one of the questions we are often asked. the thing we like to concentrate on is building our business. we feel we are building tremendous value. it's great to exploit a british invention globally. as long as we focus i think there are going to be lots of different opportunities in terms it'sit plans or ipos, but not really for today. >> are others trying to do what

you are doing? >> what if you have tried but not many have succeeded. unique. i remember i used to work with a scimitar. the problem is not knowing which number you are on. there are ways of addressing some of these issues. we think the way we deal with it is the most elegant and holistic. >> with one being able to text for free with the way the industry is evolving. will there be a time it will be so cheap it will be free to offer some of the services you offer? how will you have to change with the time? good point. i think the key is innovation. it's all in our dna. we look forward, and we have

lots of things we are going to be doing. withe going to integrate gsm. there are lots of exciting things you can do with ip technology. is ip.re your pbx we can integrate that with our mobile network. there are lots of exciting developments in the future. from you know your pbx your ip? you do now. >> i am getting the internal phone system. >> they are all together. it's all one thing now. promotion, you are not everywhere, are you? >> no. >> how do you even all? >> that's the not wait -- that's not the way we are going about it.

competeot trying to with the big guys. it's really about having a special product that is very relevant in the market. we think the market will take care of itself. >> thank you very much. the ceo of true phone. >> amazon workers in germany are striking today. we will tell you why and a couple of minutes.

>> welcome back. >> time in london, 7:43. germanyorkers in striking today. joining us from berlin is our international correspondent. this isn't the first time the german amazon workers have walked out, is it? >> we have been through a year of strikes. aty are demanding workers the distribution centers all from 9000many employees, they want to get the average retail wage which is north of 10 euros an hour.

amazon says people are doing logistics and should get paid like adjusted workers. they have reached a fever pitch. or is some threat packages would be delayed. amazon insisted they wouldn't. wills between of amazon, which has been hostile at union movements. they have been very good at inventing unionizing. this, amazonl of is building plants in eastern europe. whereember when i went to one of the facility centers is, the concern is about amazon's long-term plans for germany, they are going to move the shipping centers to eastern europe like: and the czech republic. they won't have any centers in germany. amazon denies that. they say they are expanding.

it's really an interesting story, a test of wills and how this american company adapts itself to what may be more continental work laws. some of take a look at the top corporate stories we need to be aware of. caroline hyde is here and has her eye on the mining sector. >> look at minors to rise half a percentage point. why? china got better than expected manufacturing data. if you get anything over 50 it shows expansion, and official government data showed it was in expansion. we have a figure of 50.8. if you look at hsbc and market data it doesn't show expensive and. -- expansion. it was the strongest in both areas.

>> minors will be among the laggards this year. the fourth worst performing industry group. >> that's hard to say on a monday. >> it has been an interesting month for stock markets, hasn't it? a good month. >> even though we had political tensions and concern about russia and ukraine that is going to dissuade people from pouring $64 trillion.t. that is the record value of stock markets around the world. that's a phenomenal figure. it just shows we are getting a conviction that economies are turning for the better. contraction for gdp. that's just a blip. it's going to be much stronger in the second quarter. we are likely to see even stronger for the second half of

the year. set to rise. >> the caveat is volumes are at multiyear lows. they have numbers of companies at a 52-week high. this market many doesn't have far to go. we will see. keep your eye on volumes. >> what is the function? v and v go. >> coming up is their value behind the recent run of ipos, or are we seeing a bubble? we will have more. ♪

>> this is countdown. is 7:50.me in london set. buick joins us on tell us a little bit. what are your thoughts on the ipo market? europeanue to focus on business and u.k. business in particular. how much appetite is there? >> we have had a real surge on what was pretty decent market sentiments. we are now suffering a little bit of indigestion.

i think it's only temporary. you can't keep coming to the well unless you offer something special. it's completely different. there is this element of evil being suspicious that they left town and i am being left to pick up the trash. you have to get away from that. to do that you have to offer value. there have been a number of online companies. >> they tell us this is a healthy development compared to what happened in the 1990's. >> this is positive. that he criticized would deny 100%. there was method in his madness. as we know we have lloyds banking group at the end of the year. copious tank rights issues almost certainly.

you can't give people the opportunity of saying that is value. going to be a question. >> it is interesting some of the ones who have been sold -- polled, they are not technology businesses. theymight sell online, but are not difficult to understand. this is a clothing retailer. >> stuart rose is a very market investor. he couldn't find that. they announced the retail that he doesn't care. he doesn't care what happens. ipo.illion we will hear details later this week. he is up and running.

have 75an ipo, they countries supporting it. they are confident. they're confident they can get it away. it is down to valuation. that.ve to do better than >> talk to me about the ecb. let's try to find an angle we haven't discussed. what would surprise you? what could they do to surprise you? >> after all this chatter mario draghi did nothing. you have manufacturing data. europe. iive about you can dobelieve

this. they have taken greases bond rate down. and others down from nine to two and change. have things improved that much? i don't think so. germany, they have given us growth rate of 2.3%. need to see something hugely positive. this threat of deflation, i think it is definitely there. if he either doesn't do a or something i would like to see -- don't just buy more bonds. be more specific. go in for corporate bonds. >> how will success be measured? no doubt people will want to on whether or not he has delivered. there could the a longer-term deal. it is about turning inflation around, isn't it? >> it is, but he has got to

create inflation. you have to give the stimulation that is going to want industry and commerce to reemploy people. unless they can see the demand thethe political will -- political will is much more important than anything else. they have turned to the right. >> 30 seconds on the bank of england. they are saying we need a hike sooner rather than later. >> interest rates will have to go up a little bit. still in the recovery

process. >> thank you for joining us. happy monday to you. >> it's the turn to maestro. >> more on after a short break.

>> good morning. welcome. from thements away start of the european trading session. optimisticre feeling after a pickup in trading. caroline, let's start with you. china posted its strongest manufacturing data of the year, sending asian stocks higher. first, over to you. >> russia and ukraine will sit down in brussels to see if they can cut the deal.

should they do that, russell says they will cut ukraine supplied this time next week. >> we will be looking at rocket. it is more of a. clone instead of.com. we will break down their numbers. >> thank you very much indeed. ofare waiting for the start the trading day. we are counting down the last few seconds. we are waiting to see what the read will be, but we had a strong session coming through from asia. we are waiting to see how europe is reacting. let's kick off with a little fx news. you couldn't kick off the sunday papers without everyone looking forward to what the ecb will do later in the week.

will mario draghi help incentivize lending to smaller busisses? rate negative?e the euro trading at oe dollar 3629. get more of an idea of where the euro is compared to the dollar. the aussie dollar currently trading lower. it is all about housing. have seen house prices also falling to the most in almost five and a half years. the aussie dollar is currently off. copper, it's about the chinese manufacturing data. 50.8, driving up metals. let's have a look at what it is

doing with european equities. they are likely to open higher. the last was $64 trillion. the global value of stocks was a record high last month. currently we are starting june in the green. imilar gains in the u.k. ireland still in the red. let's have a look at industry groups. i am thinking miners might be higher on the back of the manufacturing data. if we're going to be playing ball this morning. an update i am sure mining will still be up today. >> we will go to technology a little later. what islk about happening with russia and ukraine. talks continuing.

talks taking place in brussels. conflict between the countries very much continuing. brian is bringing it all together. talk about today. >> a big day. what is at stake is half of ukraine's gas supply. all of the gas to the european union comes through ukraine. the russians say that the todline has been pushed back this time next week. by then they want to see ukrainians paying the remainder and the number of the new price going forward. this is the fourth round of talks. these are trilateral talks. this week they are happening in brussels. so far on friday the ukrainians agreed to pay just under $800 million for february and march, basically paying off their tab

for the first quarter of the to payut they have yet for april and may. the russians say you have to pay for april and may or come this time next week we will require you prepay any gas going forward. hadl then they have effectively a running tab. the russian said they have to stop that. so far they just agreed to pay for the months where they were getting heavily discounted gas at $286. now the russians expect them to 480 six dollars. the ukrainians are balking at the bad idea, but they have another week to hash out their differences. >> it gets a lot busier to the back of the week. >> it gets incredibly busy. we have president obama going to pull out a lot of the action. he is going to meet with the

president of ukraine. he's going to meet with the leader of almost every country we havern europe. then the g7 meeting in brussels. we have nato defense ministers meeting in brussels. meetinghave hollande president putin in paris just meets president obama for dinner. he has to keep his appetite for the second meeting. will there be an attempt to get the u.s. and russia to sit down together? that conversation moves into friday, the 70th anniversary of d-day. president putin has been invited. president obama will be there. president poroshenko will be there. none of these are scheduled to meet together but that doesn't mean they couldn't have an informal sit down on the beaches of normandy. that is what we are going to have to watch this week. a huge week for geopolitics. --take you very much indeed.

thank you very much indeed. let's get back to china. this is the story that may be moving markets more than anything else. the data is strongest in five months. could this be a sign that china's efforts to counter the economic slowdown are gathering traction? expansion. this is the purchasing manufacturers index. the best we have seen in five months. hsbc's number does show slight contraction. we are getting very close to expansion territory. if you look at government figures 50.8, better than many were expecting. it seems to be medium enterprises that are doing the are. those businesses showing growth. >> you break it down. i see export regions doing much better than those less dependent

on exports. it is also interesting. you see what is happening to the korea want. six-year highs. the chinese have been lowering their currency. having aee the state pretty big impact. >> it certainly is. it's all about this mini stimulus. they don't want to have the same problem where they create a bubble like in the equity market. this is tentative stimulus, saying they may cut reserve requirements in certain lenders. they need to get money into smaller businesses in particular. people from the bank of china same he may set up a real ending facility. they are still set to miss their target of seven and a half percent growth. it still may be a little bit needed to drive the economy forward.

they're really pent-up in terms of the credit they can get a hold of. >> thank you very much. we are going to take a break. someone from fidelity investments will be here. plus we go to doha off. see you in a moment. ♪

need to bethink we too concerned about a hard landing. i think the government will manage its way through current

issues. landing meanhard something little different. that was chief executive tony tyler addressing concerns about china. ceos are allne gathered. elliott gotkine will be bringing the latest from that meeting. the talk of the town is what is happening with the foot all football world cup. we will talk about that. ubs is being investigated by belgian authorities over allegations of money laundering. they say ubs employees approached wealthy taxpayers and encourage them to open accounts in switzerland. tiger air fell the most in four months after they said they are considering a plan. they're grounding planes,

canceling orders, and reviewing an investment in indonesia. in southeast asia has pushed fares down recently. they are paying attention a great deal. samsung has unveiled the tizenry's first smartphone. .t comes with a super hd screen it is an operating system. you probably have android. this is a new system. samsung is getting involved. it is the german investor credited with putting germany's tech scene on the map as well as giving it a reputation as the copycat capital. now they could be nearing an ipo valued at $4 billion. let's find out more. hans nichols joins us now.

>> it's really fitting the first is one ofrom berlin these copycats. when i go to a berlin startup. you always throw this charge a them. what are you doing that is new and innovative? it's very you're saying we are a copycat, but it's also unfair because it's hard to take these models and translate them into local markets. wherever they are doing it. 75 investments they have made. they bring in staff. they help bring everybody up to speed. they did the german version of ebay. then they did groupon. it is big in asia, also singapore.

story on fascinating so many levels. their oldreaking with model, which is selling their company back to the people who came up with the original idea. they will get a sense for how much appetite there is for --sumer facing benefit businesses starting here in berlin and elsewhere. they are pretty elusive. they are quarrelsome, but they are going to get a big payday if this does go to market. start a lemonade stand in london, and i start the same m ionade stand in berlin, a a copycat or starting my own business model? >> i don't know the answer, but it's clearly lucrative and pretty successful in this environment. i know people who have started a business by going to the states.

it translates on this side of the atlantic very well. i guess the model can't be completely dismissed. tommy what this says about the ipo story. one thing london is grappling with is getting these tech ipos to market. what does it say about germany? >> this will be the first big ipo here. exit's, buteen there hasn't been an ipo north of billion dollars. because this is more of a holding company you cannot say this is going to start other., ipos or startup ipos. the other thing -- the interesting thing is they are in so many places. is one ipo away

from taking off. you have money and capital and rich entrepreneurs. the problem is this is just going to make a couple of brothers very wealthy. it is unclear if it will have derivative influence like everyone hopes it will. >> that is what they want to achieve here. we will catch up a little later. thanks for that. we are going to take a break. theng up, will could target boot? we are going to look at the corruption allegations that could cost the country the world cup? details in a moment.

>> welcome back. airline ceos are in qatar for the annual meeting of the global association of world airlines. elliott gotkine is in doha with more. is following another big story which is problems surrounding the world cup. i guess this is what everybody is talking about. the talk of the town has got to be the world cup. >> very much so. they are looking to chat about anyqataris are denying

suggestion of impropriety, although this does follow a pattern we have seen from the legend treatment of workers. they were talking about it being qatarake to award it to in the first phase. the ceo of latin america's largest airline. football world cup in brazil isn't going to do much for them either. >> we will have traffic in one direction. ofare going to have a lot flights to one city where we move people to a-game. >> i should say the mood among airline executives they are celebrating 100 years of

aviation. it's very buoyant. everybody is talking about is being profitable. globale talking of profit of $18 billion. they are talking about dealing with 3 billion customers billions to the economy. they are doing much better. ,hey're doing unbelievably well in part to the detriment of other airlines in europe. ceos just talking to the about how they are looking at ,otential he big investments and if the opportunity comes around they would be in the market for potential acquisitions as well. whether this is a chance to get right up close to the movers and

shakers in the industry they are feeling optimistic. the host feels optimistic. it was announced yesterday it was going to be delayed. nursing a slaying. -- sling. all the guy who set this up, what did he have to say? >> there are three main challenges to the airline industry. to be safe and to be secure. he says there are other challenges. venezuela was mentioned as one of the big issues. they owe quite a large amount of money to various airlines, a couple of which have stopped flying there because they are owed money from venezuela.

they are expecting draft proposals on how to avoid a similar scenario in the future. a shot at air passenger duty. anything that can impair their profitability doesn't make them too happy. overall this is pretty good news. >> things for wrapping it up. let's carry on the conversation. we are joined by john strickland. good morning. this is what i think represents the legacy long-haul carriers. it doesn't represent low-cost carriers. they are feeling buoyant at the moment. is it a sweet spot? >> it's worth mentioning. it i say mrs. a

profit margin of two and a half percent. it's the right time in the cycle. things are moving upward. it does vary by region. the middle east is leading the world. aher areas are still going at slower pace. he was in a car accident. we were sorry to hear that. him, i know it has not been taken away, but the mood music it's more negative. if you are taking on a new airline is there a possible positive spin you could put on this? it, andybody could do listening to him talk before the proud.oke, he is very qatar airways continues to be successful.

on thate model is based model. what the world cup would do if it still takes place as planned in doha off would be to bring traffic into the country. that was to be canceled for any reason he would simply go back to his normal model of selling through the hub linking different parts of the world through an international airport. doha or qatar airways continues to deliver. i think they would continue to deliver. aboutk to me a little what happens next. ways a benigny environment from the input story. the demand is ok. the input story is well-managed. -- jet fuel prices are

fairly benign. they are fairly stable. what are they looking for? wax i think more broadly they are looking at government. in some parts of the world there is a more positive approach recognizing the role aviation plays. i saw a tweet saying here is the part of the world that gets aviation. we have shortages of infrastructure, problems. >> if europe overregulated in your mind? >> i think it is. a given.safety is it has to be maximum regulation. they are shackled in paperwork and bureaucracy. being shackled on things they .ould do

>> thank you for joining us. we are going to take a short break. after that we will be back. we will see you in a few moments. ♪ . .

>> welcome back. you're watching "on the move." the markets open around 30 minutes. when it comes to equities, how are things shaping up? let me step out of the way and you will see. probably positive. asia very positive. they european markets coming up nicely and some of the same things running through what drove asia and what is running europe. let's find out the details. let's talk to caroline hyde. >> thank you very much indeed. let's check out what is moving. the key movers today, at the top of the charts is a ryan. this is a finnish drugs company.

it struck a deal with bayer. it is now up 15%. treatment.veloping a they raised their profit forecast for 2014. they will get 50 million euros up front and are eligible for royalties. rio tinto also higher. the miners are outperforming this morning. chinese manufacturing data coming in stronger than anticipated. we saw expansion if you are looking at the government figures. 50.8. it is the biggest demand area for the likes of copper, metals. so miners going higher, up 1.5%. on the downside, alcatel lucent. they are selling debt that converts into stock. if you have more stock on the area, the share price is going to go down. off by 1.5%. but it is a positive story.

they are taking out their convertible debt to repay loans. >> thank you very much indeed. that may bring you some of the others. chinese manufacturing expanding out the fastest paced in five months. the purchasing managers index rose to 50.8 from 50.4. the data could be a sign of efforts to counter economic slowdown are gaining traction. the export sector did very well. the billionaire investor carl icahn says he knows of no investigation into possible insider trading. at the new york times and wall street journal have reported that icahn was the subject of a federal probe involving him. ahn calls the journalist reporting inflammatory and speculative. is qatar 2022 world cup bid cooperating with an

investigation over its selection. the sunday times reporting qatar paymentsid following to fee for officials. let's get back to the markets. china and big theme this morning. let's talk to trevor, the head of asset allocation at fidelity investments. he helps oversee billions of assets. good morning to you. china starts to improve from here. how important is that? >> it is definitely a positive. i think what we are seeing is stabilization rather than big stimulus policy. the big issue for china is a lot of the increase in capital spending to gdp ratio, the building of residential units and houses. they built so many houses, they basically built a new house for everybody in china since 1998. that is not going to carry on. we are going to see this gradual slowdown.

i would say a gradual slowdown in china is positive. you don't want to see china booming at the moment. a gradual slowdown means, the prices stay low. it is good for stocks. >> good for stocks, good for consumers as well in certain ways. technically you are or cautious right now. >> we are more neutral. we are lots of underweight stocks but we have the smallest degree of extra money put into stock market at the moment. we had this very big run-up in stock markets. we see indicators for global growth looking soft. housing in the u.s. in particular hasn't really recovered properly from the taper tantrum last summer. we would like to see signs of housing going up again in the u.s. and a bit more stimulus. take a look at the curves, the market has priced

out the amount of rate hikes coming through from the fed over the next 12 to 18 months. we have now got the ecb potentially cutting the deposit rate. all of this based on the things you have been talking about. thexactly, it is just like 1990's. it is based on this environment where growth is good but inflation is on the downside. pictureis your policy looking like right now? some ofets have drawn the tightening we have seen from the fed. what are you basing your models on right now? >> i think we will see a gradual tightening of monetary conditions in the u.s. >> how gradual? >> i think they will carry on tapering at the current pace. they've decided that printing money isn't the way they work anymore. ofy are working in terms expectations management about when the first rate hikes might come.

a very big shift in communications policy and away from money printing. as one of those people who were short government bonds anyway, i just don't see a lot of sense having a big position in government bonds when you know zero interest rates make no sense. >> it has been a hard rate to make. >> yes, it has been a little bit painful. manager, beinget underweight government is fine as your overweight stocks. we like u.s. equities best of all and we are underweight commodities. >> what is the dollar story in your mind? investor, a nondollar how do i factor that in? >> i think the dollar will be strong. all the other strong currencies, it is not looking too bad. entirely a joke because if you look at the euro and sterling,

they have been the surprise success stories of the last 12 months. the euro because it hasn't blown up and the sterling because there has been this tremendous housing boom in the last year or so. if you ignore the european currencies, the dollar is actually fairly strong. >> you think they are going to peter out? you can make quite a strong case for it beginning to run out of steam. >> i prefer sterling still. i like dollar and sterling. i think they u.k. will need to raise interest rates. i reject the idea that we are in the early qualifying stages of the world cup. i think rate rises should come earlier so they can be more gradual. sterling looks good, the dollar looks good. i was underweight the swiss franc in my currency positions. i think the swiss may have to follow. ir excess banking

reserves are 50% of gdp. they are huge. >> talk to me about the other sectors you like and why. h at thee neutral-is moment. we still like the technology sector. we like as a structural sector play. we are underweight energy and materials because of his continued chinese slowdown. we are also underweight utilities because we expect yields on vonleh its to go up. basically underweight the commodity and bond-sensitive sectors. >> how broad -- how big is the spread? >> it is fairly wide. we are in an environment where you don't get big moves in sectors. multiples generally creep higher. not must this version going on. >> one final question on europe. how difficult is it now?

.> it is more difficult depends exactly where you look. we are neutral to underweight european markets. the value doesn't look great. in the 1990's, this inflationary the.com ended up with valuations. >> nice to see you as ever. thank you very much indeed for taking the time to come and see us. we have been talking about airlines throughout the morning. let's take our focus back that way now. leaders are meeting in doha. the last thing on your mind one getting from london to new york is probably your seat. i am not sure i agree with that. thousands of hours have gone into making you comfortable. angus bennett takes a peek inside the secretive london design studio where airline seats are being made. >> a team of designers pour over 3-d models and intricate plans.

they are working on the next generation of airline seating and it is top-secret. >> can show you that, i am afraid. pa designpark shed up j years ago when we were all flying in the equivalent of dentist chairs. his firm helps change that, designing seats that fully reclined. >> our challenge is to make something that is aesthetically pleasing, that is functional, and that satisfies all these requirements. it is quite demanding. level,00 feet above sea in below freezing temperatures, this is a hostile environment for luxury. seats can't just feel nice, they have to be safe. >> safety is king. tested,are rigorously made to endure a process called de-legalization.

halization.t product isshed unbelievably expensive. a single economy class seat toss the airline as much as a small car. a first-class seat, try your house. >> we have worked on a number of products which have been award-winning, which have gone on to sell great numbers. therefore the yearly cost comes down but they are nonetheless expensive. >> something worth thinking about next time you spill a drink. angus bennett, bloomberg. >> nice story. we are going to take a break. as we leave you, we leave you with this. sergio marchionne now has a decade leading fiat. it is the right hand side of that chart that tells the story.

we are going to break down his accomplishments and look ahead to his ambitions. ryan chilcote will be joining me. see you in a moment. ♪

>> welcome back. you are watching "on the move." you are looking at live pictures speech i former british prime minister tony blair. people are beginning to

question europe's ability. it is going to be a controversial crusade for him. tony blair certainly wants to take on the mantle. we will get any headlines -- if we get any headlines, we will come back. let us move on, change gears. sergio marchionne has marked his 10th anniversary in the driver seat. the year he joined the company, it lost 1.6 billion euros. turnaround, the aggressive plan for the company's future, let's find out what is going on. ryan chilcote is here. it has been a bobby ryan. >> he comes into 2004, wearing a suit with a black tie, talking about saving the company from the brink of bankruptcy. not only did he lose 1.6 billion, but in the preceding

, they have lost 8 billion. fast-forward to the end of that tenure. fiat has acquired chrysler. fiat is profitable. marchionne has tripled revenue and he has tripled the share price. clearly it wasn't the smoothest of rides for the share price, really nosediving into thousand nine. his new plan introduced in may to bring them to 7 million cars a year, punchy. 60% more than what they are doing right now. spending a lot of money to try to pull it off. that is where people are now skeptical. >> when did he lose the suit? [laughter] wearing jumpers isn't it? he never wears a suit. >> he is an italian that spent almost his entire life outside italy. he comes back, he thinks he needs to look formal.

but when he turns a profit he is like, going back. >> he has got a lot of work to do. people say this is aggressive. he pulled the two companies together. he now believes he can leverage both of their advantages in europe. is,hat the skeptics say clearly you are a good turnaround guy. he has demonstrated that. but you need to show us that you can sell cars. they have done very well with the fiat 500. he brought it back into thousand seven. his master plan now is to take the jeep, sell it in europe and romeo and sell it in the united states. >> the problem with all of that is, does he have the money? the company is so up to here with that, does he have the money to make it work? >> that is exactly the problem. the plan calls for him to spend 55 billion euros between now and

2018. stretch the balance sheet to as much as $11 billion. thate the affects of all capital expenditure really kick in and he starts selling cars. according to him, the debt level goes down to one billion. after he gave his big presentation, five analysts left the room and changed their recommendations from buy to sell. the share price has gone down 10%. the critics are out there and he says he just has to work and deliver. the sweater is back on. he worked yesterday which was his 10 year anniversary. he does fly in by helicopter to his office. i don't want to say he is and all work guy but he is party much and all work guy. >> ryan, we will leave it there. " is coming uplse next. olivia sterns joins us with a look at what we have got. >> first of all, i would like to say that i do think marchionne's

lacked jumpers are pretty chic. we are going to have a great show. we are going to speak to ryan chilcote again but he is going to be talking about the ukrainian gas talks. tos morning russia agreed give ukraine an extra week to pay in advance for gas. is that some kind of meaningful step towards a bigger deal or is it some kind of temporary twist? we will put that question to one of our guests. plus we are going to be talking about tech. in san francisco apple is going to have a developers conference. all of the buzz is about this push into smart homes. we will be talking about what devices are next in your home to be wired up and what this potential $3 billion acquisition of beats could mean for wearable devices. finally, we are talking about planes. we are going back out to qatar. bloomberg spoke to the ceo of the industry-leading group. he says he is going to see a 70% surge in profits but that masks

a bigger issue. a lot more coming up on "the pulse." >> i think olivia just called me a plane spotter. we will see you in a minute. thanks very much indeed. what other companies are on the move? of the swiss drugmaker's expansion into gene sequencing. roche says the business will reduce the price of sequencing while increasing speed and sensitivity. -- oil will sell its norway unit to the norwegian company det norske. the deal is expected to close in the fourth quarter and will be subject to the necessary approval. "maleficent" had a surprise opening weekend. the live action twist on sleeping beauty pushed 21st

en"tury fox's latest "x-m film down to second place. as we head into break, the countdown is on for the biggest sporting event on earth. we are 10 days away from the start of the world cup and ahead of the games, check out bloomberg's 2014 predictions. to create their own bracket addiction. you will find that website at bloomberg.com. see you in a moment. ♪

>> welcome back. you are watching "on the move." let's show you one of the stock rionrs this morning, o is working on what is described as a novel prostate cancer therapy. doing so with bayer. the stock is up 12.63% on the back of this. it is an oral treatment. obviously this is a huge field. a lot of people paying a great deal of attention to it at the moment. up 12.7%. what else are we watching? caroline hyde is back with me.

the chinese data having a huge impact. >> miners are the star performers. china's manufacturing beat, the strongest in five months. the official government number shows this stimulus starting to work. >> trevor had a different take on this. he was saying this is a system with stabilization and china. we are slowing down, but we are stabilizing. it is not falling off a cliff. while that may be positive in the short term, he is saying in the medium term it will keep downward pressure on commodity prices. >> certainly because growth is not going to be hitting targets. 7.3% is what everyone is expecting. the government target is 7.5%. saw medium-size enterprises really starting to grow in the numbers. that is really where the government swallowed. they are trying to loosen up

lending from the banks, trying to get them to stimulate growth in small businesses. >> big data coming out of the europe and states. >> the state is going to be key. manufacturing date of there as well set to be the biggest so far. it really does make the chinese number pale in comparison. china got 50.8. the u.s., 55.5 is what we are expecting. certainly going to paint a picture that first-quarter gdp was a blip. we are going to see strong growth in the second quarter. maybe markets priced out a little bit when it comes to the fed's tightening story. we have seen the german data flashing up on the screen as caroline was talking. this is the final pmi reading. a little bit disappointing versus the expectation. this is the final manufacturing data coming through for the last period of may. still growth, still north of 50.

52.3 versus 52.9 estimate. >> it is all going to be on the back of the ecb. will we see money going to the businesses in europe? >> on that note, we will leave it there. we are going to take a break. after that, "the pulse." ♪

>> will qatar get the boot? to rerun acalls world cup vote amidst allegations overshadowing a major airline meeting in doha. >> preparing for left off, and value a techd startup at $4 billion. >> china manufacturing expands its fastest pace in five months. good morning. welcome. you are watching "the pulse."