tv On the Move Bloomberg June 20, 2014 3:00am-4:01am EDT
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we are waiting for eurozone confidence to come through a little later. it is expected to be the highest since 2007. if you want to see european recovery take a weekend away. travel in europe is phenomenal. the view fromat the ecb is. some companies -- we mentioned in initial public offerings. we will wait for those prices to come through. the valuation at 1.3 billion pounds. a little less. devin nims is a big retail stock. hams is anumbs -- deben
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they have improved the cash component of their bid by one point 2 billion euros. i talked to union leaders. the reactions were quite mixed. some are saying the new numbers on the jobs front were reassuring. >> new job guarantees are stronger. it's still about creating 1000 jobs in the next three years. jeffrey a melt is ready to pay penalties if after three years an independent agency was to say not there.
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>> they will be meeting today. we already got a few reactions this morning from different officials. the energy minister saying it remains to be seen which bit is bid is the best and the french minister saying ers continue to improve but it's up to the company to decide . >> thank you very much. for more on top market themes, let's bring in mark thomas a global cio at ubs wealth management. mark, a warm welcome. start by asking some of the m&a activity we have seen. we are outlining the latest tussle for ahlstrom.
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are you investing around this theme of m&a? indicative. there is so much cash on corporate balance sheets in the united states. we have been overweight in anticipation that if confidence comes back equities are going to rise. m&a shows corporate confidence is returning. at the numberrmed of governments getting involved? governmentserned around the world have so much to say when it comes to m&a right now? >> it makes things complicated, but i think we all realize being able to regulate new regulatory environments is just part of the landscape we have now. >> doesn't matter to you what drives the m&a? if it's driven by a search for growth or by trying to avoid paying too much tax? does that matter to you as an investor? >> those are companies at an
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level.ual company the fact is none of this him in a is going to happen unless they seek better future prospects. last time you were talking about having a positive view on global equities because company earnings continue to rise. anything you have seen that makes you change that view? >> in some ways the market has gone up so we have to watch that. we are somewhat more positive after this weekend janet yellen. janet yellen told us the fix was still in. she is going to look through stronger growth. she is going to look through higher inflation and stay on a higher path. >> mark stays with us. here is what is coming up. tsb names of price. they sell 35% of shares after seeing significant demand.
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let's show you what is happening with shire pharmaceuticals. of by 14%. has been manufacturer the center of bid speculation for some time now. in the last 24 hours we heard from one business that said they had made three offers. the latest has been rejected by anothernt. will we see offer come to the table? share prices up on that news. president barack obama is deploying military advisors and reconnaissance planes to help iraq be back a sunni insurgency ear thereatens to t country apart. elliott gotkine follows it. the u.s. is getting more involved but only in a specific way. one ofs not forget that
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obama's big achievements since he became president was troops, getting them out of the middle eastern misadventure of george w. bush, and certainly according to the president there is no way america is going back to the way things were. >> american forces will not be returning to combat in iraq, but we will help iraq he says they to terrorists who threaten the region and american interests as well. >> no boots on the ground. no airstrikes yet. that's something the iraqi prime minister had been hoping for. what there will be is up to 300 vessel operations personnel to avoid into the navy field army ranges and the like, but they would be analyzing intelligence. there would also be reconnaissance flights, which would gather intelligence on the insurgents.
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help in thelso event the u.s. decides to carry out airstrikes in the future. .> no new iraq war it has been suggesting some changes to the way the country is governed. >> very much so. there is not much loss. what they have been discretely during his encouraging other to perhaps try to shove nouri al-maliki aside to form a new government that would be more inclusive and would not be exacerbating sectarian tensions in iraq. the operation the u.s. announced is designed to last several weeks to give iraq enough space to form a new government that would hopefully
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be more inclusive and would help calm tensions somewhat in the country. >> thank you very much. still with us with more of his views is mark, the chief investment officer at ubs wealth management. let's pick up on this wealth back drop. it was a big scene for investors. fairlyem to be optimistic. we have seen prices jump and haven't come down since then. ?ow nervous are you >> the first thing we look at is the oil price. when things happen in ukraine or iraq among oil prices up one and a half percent. for us if it gets up 10 or 15% and stays up for a time, we are going to get worried about the global growth story. a sidel then it remains
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issue. >> until then it's not something that is going to de-rail the larger story. >> gold has been reacting. is that about trying to find an alternative to low yielding bogs ? >> i think with gold despite a little bit because people were so bullish on what janet yellen had to say that she was kind of dovish. gold is a very volatile asset class, and i wouldn't pay too much attention. if demand weakens in china gold could still fall. >> those commodities aside, many asset classes have seen a distinct lack of volatility this week. earlier this week the vix volatility index touching numbers it hadn't seen in the number of years. who is to blame for this?
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>> the fixes in with the central banks. have probably contributed to a lot of reduction in volatility. we know that will reverse at some time. that is why we try to focus on a longer-term view. >> do you think the ecb and the fed are to blame for this or are investors being too complacent? >> they have contributed. we can talk about draghi and yellen. >> you talked about china. we had her merely in europe this week. theree a solemn pledge would be no hard landing for the chinese economy. in relation to their economy that the chinese have different tools. despite the cooling of the property markets, are you confident about chinese growth? >> we are concerned about the property market and the impact in china and the region, but we don't think the slowdown is something that is going to
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derail the global growth story. >> is that because there is a lot of urbanization that can take place in china? some of the longer-term drivers are still in place? is that why you are not so worried? >> one of the reasons is we have seen as the government applies targeted stimulus is they seem to still have an effect. with the government support we think they will be able to manage a slowdown and the ultimate transition of the consumerconomy to a driven economy. >> we have seen a lot of news around central banks. are you rethinking whether we might see rate rises coming in from the fed, the ecb central bank -- very topical right now. a number of places bringing forward their rate expectation. >> it's a fascinating time because we have got central directions in all
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now. that makes it a challenging environment. the u.k. looks like it will be the first central bank to raise in 2015. good for the u.k. they won the world cup in foreign policy. they started early with stimulus measures. they cut government employment. they lowered corporate taxes. now we are seeing the benefits. >> despite that the u.k. in the beginning of june was one of your lease referred markets because you didn't see earnings living up to the broader macro picture. >> that's the paradox. where we would play the u.k. was in the pound. as the pound strengthens that can hurt the earnings of ftse 100 companies because they get a lot of earnings from abroad. good to see you in our studio. we had to break we leave you
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>> welcome back. let's bring you up to speed with some companies on the move this morning. leaders of the advertising and caneting world are at the lions conference. we will talk about the future of mobile. >> what people are interested in is making sure there are returns. by moving money from classic television to tablets or i ever think id would watch the world cup or madman or house of cards or breaking bad -- did i ever think i was going to watch it on a smart phone? no. >> shyer is the biggest mover on the stoxx 600. has for the drugmaker ended. shyer rejected three acquisition offers. five ohst it was 46 for
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you bowlers. in just $46.5 billion. another stock on the move this tsb shares are higher. for more on this ipo and what it means for lloyd's, let's bring in christopher wheeler. what we heard from lloyd's, did it matter with your expectations or was it different? >> i think it might have matched four or five months ago. as it turned out there has been talk that only 25% would be i think it is a pretty good result. >> what do you make of the strategy? i know you think it is quite
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challenging because they want to grow by 50% in five years. 90% of that comes from mortgages. how are they going to generate growth? >> it's challenging. they want to be seen as someone customers go to because they have superior products, no legacy issues. growing your balance sheet by 50% in five years is something most banks would not want to do. this is a really unusual strategy. to be quite difficult for them to execute. i can see what they are trying to achieve. >> if investors are tempted to look at this because they think it is a safe traditional retail otherithout any of the city bits attached to it, it's a bit more complicated than that because they are going for a
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more aggressive growth forecast. >> to try to boost profitability in the short term they have which lloyd'ses will take back. >> how separate are these businesses? will be basically they run off the lloyd's platform for some time to come. in that way they are closely linked. they have service agreement to try to keep us at arms length. bottom line they are still going to be dependent on the pound for some time to come. >> we have a big overhang. a lot of stocks that have got to so is that depressing the price a little bit? >> it certainly will be difficult. the good news is by selling more and most of it to institutions means getting other deals will be easier, but the problem is overhang.
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people will be saying what is the next price going to be? you have touched on lloyd's. in addition we have the scottish referendum. outave about 185 branches of scotland. we are not sure what the implications will be if we have scottish bank assets to gdp will be 1250%. >> are investors going to get her vest i had -- get nervous ahead of the referendum? >> they should. it's 500% for the u.k. as a whole. 800%.ime it was there is going to have to be assets moving south of the border. this is going to be something the banks are going to have to deal with. >> eggs. christopher wheeler. -- thanks. coming up next both suitors
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>> welcome back to "on the move" . we are 30 minutes into the trading day. things looking slightly positive in europe. manus crannyditor is that the touch screen with three stocks he is watching this morning. look at one of the first share offerings on the board today. tse. cloris results forts -- glorious results for tsb. doing quite nicely, thank you very much. underneath that, we have got
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shire. abve that was sold off. they stepped away from. detroit to offer them 46 pounds. shire pharmaceuticals has pushed it back. could that be that alagran wants to get involved and perhaps make an offer. up 13.3%. is one of the nordic regions telecom operators. jim government, but i want to sell 50 billion kroner's worth of stakes -- the norwegian government wants to sell 50 billion kroner's worth of stakes. what might that mean for the likes of telenor? this company holds 33% of a company in russia and 10 eastern european telecom operators. that's one to watch. these are the top hotlines.
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barack obama is sending 300 military advisers to iraq. obama insisted that american forces will not be returning to combat. my direction secretary kerry will depart this weekend for meetings in the middle east and europe where he will be able to consult with our partners. qis'neighborsra must respect iraq's territorial integrity, all of the neighbors have a vital interest in iraq. eruptedighting has between ukrainian government troops and insurgents despite a cease-fire declared by kiev. nato is condemning russia for massing of troops at the border. and the imf is urging the
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european central bank to move to full scale quantitative easing if inflation remains low. speaking to reporters after the report, christine lagarde said inflations resistant to be ecb's measures would call for quantitative easing. earlier this month, the ecb became the first major bank to experiment with negative rates. let's get back to the continuing fight over the french company. led bide, the siemens has upped its offer by $1.6 billion. what is the latest? good morning. both sides have improved their offers. instead of just taking over, that will create a joint venture.
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an alliance and nuclear technology. ge will be willing to sell its well signaling business to alstom. this might mean the cash component of ge might be reduced by 30%. so as you were saying, siemens and mitsubishi responded with an improved offer. they are increasing the cash component of their deal by 1.2 billion euros. we had a conference call a few minutes ago with the ceo of siemens. he said alstrom both wanted a higher cash offer. lesslstrom asked for a complex offer. siemens responded by saying they
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will only create one joint venture between mitsubishi and alstrom. executives from both sides will be meeting with the french president hollande later today. the siemens ceo says his meeting 2:45hollande will be at french time. this afternoon, the ge meeting will be just before that. the alstom board has got until monday to decide on which bid is best. in the meantime, they said they would not communicate on the matter. >> thank you. never has the heavy machinery industry been so exciting. share pricesng its higher after confirmation of several takeover bids. all of which have been rejected. the company is best known for
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its add drugs. here to discuss is matt campbell. matt, good to see you. so what is so attractive about shirea? >> it is a perennial m&a rumor. the thing about the rumors, eventually something does happen. abve which was spun off from abbott labs has made three attempts to buy shire, all rejected but abve has gone public, which will have the effect of lighting a fire under shire's shareholders. now what is attractive are a couple things -- number one, the zip code. shire is an irish company. ireland has a rate of corporate tax of 13.5%. then it also makes some interesting drugs, notably adderall. what we have seen in the pharma these block buster
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drugs other ones getting interest. now you mentioned they have gone public. does that mean that they have given up on the board and now they are going to try to go direct to shareholders? way this is played out is actually not dissimilar to what happened with pfizer and astrazeneca. that was a bear hug approach where pfizer to go very public with exactly what it offered to astrazeneca's shareholders and that had the intention of getting shareholders to pressure management to come to the table. is adjusting strategy. -- it is an interesting strategy. it did not work. as a result, pfizer has gone away. we will have to see what happens over the next 28 days in which we can see with the result of the announcement is. >> there is a tax motivation.
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we'venot the first time talked about irish businesses being bought for this reason. do we think that governments in europe will get active over their businesses being bought off with this as a motivation? >> i think governments in europe actually tend to benefit from these decisions. so we saw around pfizer-astrazeneca george r spun saying this was a wonderful validation of british tax policy. in thelitical risk is u.s. where understandably a lot of politicians are not so thrilled about these big pharmaceutical companies looking to pay taxes to someone else rather than to washington. so there has been legislation introduced in washington that would make it harder for american companies to invert. the question is, does this get to congress? that is never a sure thing on any subject, particularly on a contentious subject. so some of the pressure on these
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mergers lately seems to be on companies to get them done before the rules change. >> matt campbell from bloomberg news. london tech we comes to an end today. jimmy wales and asked him if he thinks london to create the next google or facebook. >> there are a lot of really great small startups. a lot of things have improved in terms of the amount of capital funding. immigration policy, things like this are better. it is hard to say. i caution against this idea that we should be aiming for the next facebook or google. these are extraordinary companies. it is more realistic to think about, yeah, that would be fine if it happens, but really, the industry is always bigger than just a handful of superstars. 500 a broad, how many million pound companies can we create? that is a more important metric.
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a tech week has given us chance to span the industry's news from robotics to the internet of things. i asked him what concept excites him the most. >> driverless cars are coming much faster. realized. it is an astonishing technology that is well along the way towards being a products. >> coming up, more on technology. we will take a look at big data. we wrap up our coverage of london tech week with a look at its many application with one of london's most active investors. stay with "on the move." ♪
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>> we use to lose a lot of money on phones. now we are getting there. we will beappens, in the phone business for a long time. it is the first gateway of encryption, the gateway of security. was the blackberry chief executive with a confident outlook on the future of his company. shares surged the most in six months after the company posted a narrower loss than
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estimated. let's get to caroline. you very much, indeed. i am joined by rory sterling, talking all things tech. we have been talking about the technology week. wee me a sense of whether have overdosed on data. whether these companies we have seen start up have managed to take data f healtho carer? >> want to talk about big data, you have to find out what it actually is. data is all around us. the volume of data we have access to is growing every day. it is driven by technology. everyone carries a mobile phone. ist mobile has sensors that
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collecting data about our environment and behaviors. big data is a generic term used to talk about data set results so large that we could not previously worked with those sets. so we think there are a number of challenges around big data. those could be in collection of data, storage, analyzing or initializing the data. thes amazing some of statistics. only five percent of the companies were looking to analyze the data. that must've excellenscalated. are companies aware of how much they need to be embracing this? market's probably split in two. where we are seeing a lot of consumption is big enterprise companies which have huge data sets. and every single company we invest in today is realizing the
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value of the data they are producing but they are not necessarily big data companies. >> let's talk about some of the companies you are investing in in. million pounds0 under management. what are the key companies knocking on your door looking for start up money to start building their products in london? on technology week is an amazing initiative because there are so many exciting things going on. we are one of the most active investors in the u.k. so a couple of examples. a a company called masabi which has mobile train ticketing software. if you buy a train ticket on your mobile, is likely to be to their software. >> you do not have to print the ticket. i can show it to the conductor. ond comprehension that in five years time we will be carrying around paper tickets. those guys who just won the
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contract in boston where they deployed last year. that is london businesses showing world-class products. >> how does london stack up in terms of the growth -- how we are rivaling silicon valley? is there anything more you want to see done by the government to coax this growth forward? >> really positive about the government's support of technology and investing in not endorse. preneurs.re you had forced johnson on the -- yo uhu had boris johnson on the program. as an ecosystem we are behind the u.s., but the reason i work in london is because i think that has real opportunities. >> you said to me before you have not been accompanied in your portfolio that is analyzing begin yet.
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yet.alyzing big data y is there one company you're interested in? >> that is a really good question. i will try not to give too much away. existingof our companies are in the software and consumer internet space. personally i'm excited around technology and financial services, because london is clearly a world-class ecosystem for financial services. i am pretty excited about education. education will change beyond recognition over the next 10 years. >> it has been wonderful speaking to. thank you for coming up. rory stirling. back to you. >> think you very much. -- thankm hy you very much. shire's stock is trading higher. they released a statement that the abbvie bid undervalued the
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company. shire said it rejected it because it undervalued the company. the stock is up by 47.7%. "the pulse is coming up. guy johnson joins us. good to see you. >> good morning. the shire story, we will keep analyzing that. it is up by four times over the last five years. big days for ipo's. we will be talking to the euro next boss about what is next for his business. how district intended to compete with some of the -- what heavens with high-frequency trading? we will do that story out of paris later on. >> geopolitics as well. s> the situation in iraq i fascinating and something that is difficult to understand.
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the state department and the british foreign office and summary governments are trying to figure out what to do next, particular with the incumbent prime minister in country. mr al-maliki, we will get the former iraqi foreign ministers take on whether we can get a government in place that will unite the shia and the sunni in country. >> here are some of the companies on the move this morning. fell afteres fourth-quarter earnings fell short of estimates. it is saying it is going to renew its deal to buy microsystems. maserati will double its dealership network to 500 by 2015. the italian carmaker plans to triple sales to 6 billion euros in four years.
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the tv circuit of describes the growing demand. -- the chief executive describes the growing demand. >> we sold 15,000 cars last year. at the end of this month, june, al14, we will be already equ to this month. so there is more to come. to break, as we had we leave you with a look at some of the stocks on the move. next began trading this morning. we will have more insight on the ipo market coming up after the break. tsb trading higher. your next on lower. ♪
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>> it has been a big day for ipos. groups banking began selling shares. manus cranny is back with us for more. a tale of two ipo's. have haveoyd's, they gone to the market. they priced it up. 260. the stock is up 30 pence. 30% ofail investor, their stocks have gone out to the retail investor. they were originally going to 700 millione at pounds.
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they made the right decision. it is one step forward. it is a big litmus test for the much bigger sale which is the government holding of lloyd's itself. >> a big overhang for the sector. >> euronext, i'm surprised. euronext is an exchange based in europe. a dip in that price this morning. we'll keep an eye on it. it is early days. >> it is amazing. we remember when both of these bids. we see them, part. we remember when euronext was bought by others. >> somebody once said to me all stocks eventually goes to zero. i could never understand what that meant. that is essentially all stock goes bust or gets bought. >> interesting trends this year. >> europe storming ahead. best stock year in seven years.
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$36 billion in europe. $22 billion in the u.s. >> there is a lot of european -- >> london, the united kingdom is taking 50% of that at $16 billion. it is retail. the big, brave, the bold. take your choice. it is the former tesco ceo and philip green. rose pulled his ipo. philip green had a rather tough time with mysale.com. he went right ahead with this company listing. >> manus, thank you very much. the ipo market. guy johnson is back with "the pulse" coming up next. do not miss his conversation
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