>> the cost of a bad bank and the lenders hit by charges. cashing in on surging suv sales in the united states. we will bring you earnings from toyota and bmsw. israel and the palestinians suggest i-72 our cease-fire as they try to and a month of fighting. welcome to countdown. i am mark barton. france'searnings from

third bank by market value as we speak. profits falling by 98% in the second quarter. that is because of charges tied to its stake in portugal. eurospped to 17 million for almost 700 million a year earlier which is below estimates. agricole booked millions of euros in costs related to its almost 50% holding in banko is beautiful santo -- espiratue santo. the bank of portugal unveiled is almost 5 billion euro bailout which led to the shareholders and junior bondholders with losses. just breaking down the charges, and a 502 million euro charge to reflect share of losses in the

quarter and 206 million euro write-down to cut the value of its holding 20. twoo zero. and otherthe banks one-time financial costs, second-quarter profit actually rose to one billion euros. risky loans deckline. ratio also going up as well. they say in a statement -- >> the sales as well. the background is the second worst sales -- just under one billion. just under 3.7 5 billion. overall, it is the tale. everything -- they would most exposed. they were most exposed to russia. now we understand, the french banks are significantly posed to

the portuguese. yesterday, despite the news, shares rose by 2%. they announced the decline of profit because of charges tied to its stake in bts. israel and the palestinians of the read -- agreed to a 72 hour cease-fire. the cease-fire started just a few minutes ago. american, palestinian, and egyptian convoy will be meeting in cairo. the previous cease-fire broke down last week within hours. israel completed the disruption and decommissioning of 32 tunnels in gaza so says an israeli army spokesman in the briefing with journalists just under one hour ago. is spokesman said the army redeploying troops in defensive positions outside of gaza after the goal of destroying tunnels was accomplished.

now, not one, but two major car companies today -- >> i am being greedy. bmw, the world's biggest luxury car company, is coming out with its numbers. this is a company that is trying to drive forward its earnings. 10% earning increase is what the market is expecting. really suv's, sport utility vehicles, flying off the shelves. the x5, almost 50% in terms of sales in the second quarter. sedanive series is is doing. they're looking to introduce a 16 refresh models over the next year but we also have toyota coming out. this is the world's biggest carmaker. expecting first-quarter net income to fall 11%.

the japanese company was hitting them. it is signing out, cashing in on the suv's. the toyota highlander, the lexu s. u.s. is where it is after toyota. japan is not so strong. is the u.s. enough to affect this market? so buts do not think they really had an outpacing over u.s. demand with the suv's really helping. u.s. sales up 12%. on the sudden uptick in the u.s. economy. >> china is big for both companies. i was looking through and we will not bore the viewers. just10, china represented 14% of sales and now it is 21%. bmw -- it is the world's

biggest car market. sales rose to 225,000 cars, just behind audi which delivered 268,000 cars. it is boosting capacity. i love this race to be the number one in all markets. bmw is number one across the globe in luxury. with audi and mercedes wanting to be number one by 2017. thatey have broken mysterious, psychological level of one million cars in the first half. there is a whole variety of cars. hybrid often. and thisking at the i3 is where tesla -- everybody is trying to come up with a proposition and the electric car space. i3 being the basic model. i think what is interesting is

bmw have done this deal on giving you a charger in which you can buy. you can charge 80% level of your battery within a half-hour. it used to take six hours. that is progressive. that makes it interesting for normal people like me that say we want something for the city. will i consider that? >> would you consider a hybrid or electric car? >> i saw the i3. it looks funky. nissan leaf is not my style at the moment. >> the price has affected how we are going to do it. it is iconic hybrid of toyota. it hasn't been redesigned.. they need to. they promised by next year but we all seem a bit of a sales environment for the prius.

will they update it? what will that do for the competition? >> the refresh -- that is picking up themselves. >> let us move on because militant islamic state in iran captured kurdish oilfields this week. there is a battle raging for control of the main dam in mo sul, instability with oil shares. we have the details. there is a man that we all know and talk about in the past. >> tony hayward cannot get a break. this is as complicated as the gulf of mexico. shares fell, the biggest producer in kurdish. they were not the only ones. kurdistan, then north iraq, had trouble yesterday. the first oil producer in kurdistan after the fall of

saddam hussein fell as much as 11% yesterday. the issue is the fighting between the islamic states and the kurdish areas. it has to bow concerned that there might be a threat to the security of these oil producers in the north of the country. >> we saw the very initial reaction. the other issues -- we have the headline of isis. we have seen the past that boiling point over is that a fair assessment? >> the islamic state has taken two oilfields in the last week that account for 30,000 barrels of oil per day. that is not a lot. that is not 1/5 of 1% of the world's production annually. it is a very small amount, 1%. than if you are movement and be able to sell it at discounted price, that is still have to billion dollars which is not bad. it is useful to them. it is not a material to the old

producers we are production -- we are talking about. the concern is what is next because the islamic state has not taken on it that much. they have been focused on the federal government in baghdad. this is people wondering -- do they have the strength to focus on two fronts? some people think maybe they do. willny hayward of the bp be coming out with earnings later today. what are the other issues at stake? will it be bought out by someone else? >> i think there are two issues aside from the security. one is simply how does production go? this is early days in the north of iraq. we had an update from june so we will find out what happened in july. >> 84,000 barrels a day. >> it has been ticking along. the second issue is not just security of the fields, but security of their ability to get

the oil out of iraq and the north. that is a big issue, not so much in terms of threat from fighting, but capacity issues. there is one pipeline that has been online and other than that it has been trucked out for a couple of months now. it goes to a storage facility in turkey. the problem is the iraqi government doesn't want the kurds to sell their oil directly so any time that tanker looks like it will offload, the government preemptively sues whoever -- sprouts legal action to try to prevent the sale of the oil and the offloading of it. you have all these kurdish tank is moving around the world. the storage facility in turkey as a result is full. how is this going, this actual monetization of what is obviously a lot of oil wealth in kurdistan? that is something that we want to hear from a word -- hayword. >> thanks. coming up, no slowing down for

the u.s. what is driving the acceleration? we will talk about fx coming up next. ♪

a after today's company news, danish company is being bought for upfront cash payment of up to $450 million. roche will keep the operations and denmark. emirates is the only airline scrapping the west african root in response to the deadly ebola outbreak. among carriers with the greatest exposure to the region, air france. they are continuing flights departing customers. mcdonald's has said its meat supply problem in china is hurting its result in asia. it is working to resume beef and chicken sales of this week after a supply was accused of repackaging old meat. business makes up about 10%

of revenue. >> the u.s. currency rose stronger than most other currencies. we will talk a little bit about growth. the global head of fx strategy joins us. before we get into the big discussion of about the dollar. we had breaking overnight -- the private services number from china. how concerned are you -- the lowest rating by market since 2005. this ties up with the imf report that warns growth is not that achievable. >> the imf has said they need to rebalance. what you have so far is whichncing on the surplus is 10% of gdp which is now less than 2%. the external rebalancing has

taken place but it is only taken place because they decided to put a lot of investment into infrastructure and housing. that seems to be a problem. the imf report suggests it should include upstream and downstream and direct effects. that is about 30% of gdp so housing is a very important part of the game. the service sector -- it is a measure of domestic demand. when the housing market cools down and needs to adjust, this is the consequence of that. the imf report pointed out a scenario. instead of what should be done like in china. where is the risk? the risk is the internal rebalancing, the movement away the investment and saving, internal rebalancing if that doesn't take place, the imf is predicting in a few years, you will have a higher economic price to pay. the choices a higher economic

and thatyou adjust now means you sacrifice economic control now. >> we have seen the amount of china which has been declining over the past three years. with these kind of services numbers, declining stimulus, what does that do for the global growth story in the global rate story which ultimately drives your division which is fx. >> china is the second-biggest economy and has a significant impact on markets. number two, as the rebalancing is taking place, it will be creating a mirror. at that time, increasing savings, coming out of china. that has a significant dampening effect on bonds. that seems to be going into is doing thishina internal rebalancing. when youon this is -- look into the first quarter in chinese currency results growing

at a record pace, the exchange to 624, then up the increase of the currency reserves have created dollar cash loss required that went into developing markets. bond yields declined. and that provided an incentive for the dollar. the u.s. dollar was weak at that point and emerging-market currency rebounded. what is going to happen to the u.s. bond market? u to the reserves as part of the global savings? we are seeing significant changes taking place. even outside, it looks like the tobal savings -- you have push bond yields to the upside. that has effects on the fx market.

there are two driving forces -- one is the u.s. market. the prospect of that policy. are they going to apply it? what is happening to the long markets? that drives the dollar against developed markets like the euro, likely a trillion dollar, like canada. you look into the emerging market, it is much more driven by other states. you need to get a very clear idea what is happening to the sector in the states yield wise and you have the emerging-market currency rise as well. >> we saw this this time last year. could we see another bout of volatility in the emerging markets? theake no mistake, emerging-market outlook has stayed the same.

it has been created because of very strong liquidity situations, very low yields. it does not mean anything on the emerging markets fundamental outlook. >> there is a better place to put it. >> bond yields are going up. it will be higher volatility. may be later on, more than that. i think we are at the starting point of normalization of volatility. >> the bank of australia has rates on hold today. the bank of england meets this week. lots to discuss. hans stabler from morgan stanley. ♪

>> welcome back. time in london is 6:24 a.m. it is stated for the 12th consecutive month. glenn stevens is trying to talk down the us trillion dollar. the remakes -- the rates remain high particular given the prices. he is offering less assistance. the aussie has been around since april. is job owning going to work or not? can try to talk the currency down but if you're not willing to take the east

monetary conditions, it does very little. on the experience in new zealand in 2007. they were saying it is like to hike rates, you cannot do that. that is counterproductive. you have to show the monetary policy. if you try to talk it down, does not work. we are seeing outsourced out of japan and some of this from japan is volatility driven. that means the japanese investors believe all necessary information is condensed into one number which is volatility. relative to yield. that means they do their analysis and they find australia looks effective. that means it will be very rda to taker the the sting trades to the lower level if you have those working against you. you have to make the currency less attractive.

>> you expect more easing from the bank of japan. just looking at the data from japan, it supports that. the imf was making a very interesting point concerning potential outflows coming out of japan. they are estimating that the amount out of japan's portfolios could be 260 billion. that is a weakening factor for the japanese yen but the point 2012,making is in autumn ton we predicted the dollar go to significantly higher trend.vels, that was the what we have now is a back-and-forth symptom. they may start to provide an easing language. you will have to deal with higher risk aversion in the market with japanese yen. >> we have to leave it there. thank you so much.

>> we're just moments away from the latest results of bmw. we will give you the figures. >> we're live in hong kong were largest producer has just gone public. ♪

>> welcome back. let's take a look at the fx check. there is one currency worth focusing on -- the australian dollar. the bank kept its key interest rate at a record low. it is a record it repeatedly expects borrowing costs amid the below trend growth. it was kept at two and a half percent for the 12th consecutive month. to trytevens continuing to talk the australian dollar

down. he says the exchange rate remains high, particularly given the drop in commodity prices. he says they are offering less assistance that it might in achieving balance growth. little changed today -- one australian dollar is $.93. getting some breaking news -- some industry news. >> it looks like they have offloaded their brazilian asset, euros.r 6.7 billion saying, this is concurrent with the after sale strategy having offloaded. in terms of high telephonic, a unit and that 11.9 be 6.7 billion euros, . much, this is very concurrent with the reshaping

vivendi. >> tv and music to my that is the plan. billion euros to shareholders through dividends. that is the big news. bmw? >> big week if you're looking at earnings. that left 25%. keep a close eye on bmw this morning because clearly up on the profit side of things. they are improving in the previous year on year number. this is a company that with its new lineup that was driving with x5 suv's, there really flew off the shelves at 37% in terms of sales in the second quarter. the five series sedan doing very well. germany, the biggest luxury automaker in the world. mercedesing audi and

to the post. they will have 60 new and refreshed models, big and suv's. big in electric cars. they still see auto units earnings with a margin of about 8% to 10%. they still say the pretax number, profit will rise significantly. they're sticking to the forecast. they are spending a lot in terms of their new model and people think that might feed into some of the numbers. >> record delivery is in the first half. audi had record deliveries as well, as well as mercedes. loyalty. show my china started saying they will be using the bmw seven series as well as alexis -- a lexus ls. using thekyo will be

lexus. they are staying with high-end cars which is looking out from the new disruptor on the taxi funder. this is a company that continues. we want to see of russia will be involved at all because we understand all these car companies have been saying about a 10% slowdown in the market in russia. other negatives affecting the high-end luxury carmakers -- china, maybe a slowdown. brazil has been a bit of a worry as well. how much is the euro remaining resolutely high compared to emerging-market currencies? >> china sales were strong in the first half just behind the audi. will have to see by 2020, the race is on. audi and mercedes have said by 2020, we will be number one. bmw is definitely clinging on.

>> mercedes was about 100,000. it depends on the incentive programs they have invoked. bmw had incentives that shifted. that is going to dissipate. theet us focus on india, bank of india just releasing its interest rate decision. no change, as was the case in australia. interest rates unchanged. the new prime minister modi releasing food stocks of the risk of high prices from the weak monsoon. it is a key determinant of the movement of inflation in india. he kept the rates at 8%. all but three economists predicted no change today. >> we would hear how the chung changes -- the tone changes. many analysts say they be good for him to talk about easing as

inflation eases. you have cpi at 7%. is there any more room for interest rate cuts? 8% is a stark contrast that where emerging markets are at. >> still the second fastest among the indian -- the asian economists. >> not much relenting. it is move this morning but you still see the threat. these emerging markets had last year. although, some nations have did more so than others. turkey, on the other hand, would be one that would be against that. that is it on the indian rates. let's turn our attention to pork. the largest pork producer debuted and bake on -- in hong kong making $2 billion for its piggy bank.

david is in hong kong. it was a bit of a corker. >> yes, pigs can fly. in mind, you mentioned this is the biggest pork producer. this is the same company that try to go to the market back in april. -- itllback last minute fullback last minute -- it pulled the back last-minute. it started trading today, 7%, not bad. the ipo was priced at 6.20 hong kong dollars. it is going to repay that portion of 4 billion that they took out to fund the deal last year. of course, the reception has been better this time around. they pulled the ipo back in april.

orders from the institutional portion staying at 95% subscribed which is double. it has been good so far -- 7%. >> what may look at this it comes at a time when the food in china is under increased scrutiny. we have had a lot of issues in 2013 and this year as well. >> absolutely. you said it spot on. it is a meat supplier. we were talking about mcdonald's, kfc. the big story we were talking about all morning here in asia is mcdonald's actually coming out and basically saying our sales have been hit bad. it is hard to estimate at this point what sort of impact this would have on for year earnings. what they do a mcdonald's is looking to offer a full menu, bring it back to china and japan. in hong kong, the announced the big mac is back to its original

build meaning there is let tuce. there are problems with food the diet in, but china is changing as incomes are rising. we are seeing more protein in the diet. this,er capita basis, get the chinese eat more pork than the americans -- in fact. fact.ble, in in some way, you do see the symptoms. there are symptoms that the underlying supply has not caught up with the demand and that is why there is a big reception for this ipo so far. last year, notny so much to reach out to the u.s. consumer, but to ensure that they have the quality, the supply chain in place to service the huge domestic market this side of the world. >> david, i will leave you to go have those.

to hotels now. >> an easy transition. >> we do things so beautiful on this show. we're talking about intercontinental hotels. china is a pretty important part of that. we are going to get to talk to the ceo just after 7:00. some great facts. the u.s. has 5 million hotel rooms, that are 35% of the world hotel rooms and they are very present in the u.s. when it comes to china, that is the fastest-growing market. 12% of the hotel rooms in the world are in china. into cannot -- intercontinental hotels and doing very something unique in china. they are starting their own brand. 22 sites in china, they have their own brand. how is that doing? it is all about the chinese

traveling internationally. 112 million chinese will travel out of china this year. >> we know them from holiday inn. >> it is a completely different concept. in terms of they are their own brand. we have spoken with ihg and part of their argument is making their own brand. we will see where the numbers are. >> i want to know about brazil as well because china, russia, india -- emerging markets are the theme. they lost their main unit, their only location three years ago back in brazil. they were not there for futbol but they want to get in before the olympics. >> on brazil, that was the big boon for the others. that was the revenue per available room for some of their main competitors. just looking at it, that was a

big boon. it certainly would be something to see. >> the big news was in may when it was reported ihg, into cannot mental -- intercontinental rejected a suit or. or. it was over $10 billion -- $10 million. we spoke with richard solomon who we are speaking to win 20 minutes time, he would not comment on that. he said the company can grow on it own without a takeover or merger. he says it's an billion-dollar market value which has returned a ton on market value to shareholders. rumors are it was either star word hotels which owns the meridien chain or a specialist investment fund like starwood capital. --will it be >> if it is a u.s. company, it

benefits from domicile in itself. we will leave it there. bloomberg's middle-class untapped resources and poor infrastructure and corruption. we look at the risks and rewards of doing business in africa after the break. ♪

summit is.-africa underway in washington with the goal of increasing trade and investment in the continent. the u.s. has announced it will ghana half $1 billion in to improve their electricity infrastructure. itsral electric revealed workforce in africa and will spend a next or $2 billion there in the next four years. for more on the rewards and risks of investing there, we are joined by the chief investment officer. thank you for joining us. what is the investment of putting money into africa goes when you look at the imf's projections for growth, subs a horror and africa will grow 5.4% this year. developed economies will grow 8.1%. it looks like a good opportunity on that metric alone. top 10ou look at of the

that is growing economies, seven are in africa. you have big institutional changes over the last 15 years. if you're to go to back to 1994 at a time when south africa of thea majority rule, 54 countries in africa, only seven had any form of regular elections. do not have regular elections. you have seen a massive change. you were to go back to the 1980's, government spending was around 65%. today that has come down to around 41%. the private sector has grown significantly and that makes the economy is far more flexible, for more nimble, and the returns are there. if you look at long-term equity returns in africa, and the last 15 years, if you invested it would be around 8% earnings.

if you are looking in the seven countries, you would be doing 1.5% and you are not doing it for higher risk. it is no different from investing in any emerging market. >> he did say foreign exchange is probably one of the biggest risks. it gives a whole new meaning to the word. >> they do. you have to look at in terms of the currency is the way we invest in africa, it is always a portfolio. when one currency is doing badly, you find other currencies are doing well. across our own poor for leo, we would estimate on average in one year, we are probably going to lose 2.5%. the perception is higher than reality. >> talk to me about perception because we suddenly have a lot ebola that three nationstates are in a state of

emergency -- guinea, sierra leone, and wide-area. -- and liberia. this etiquette hurt economically but does anyone get furiously concerned when we should not be? >> i think it is a lot more about perception. it could be serious. liberia, guinea, and sierra leone, what they were present -- less than 5% of the region gdp. i thinkissue of health, if you look at the amount of people who die from the big 3 -- tuberculosis, aids, and malaria, ebola is less than 1000 people. whereas hundreds of thousands of people get killed by those three diseases. we have had outbreaks of ebola before in uganda and had no impact on these economies. it creates what i recognized as pooronomic students as the neighborhood crisis whereby something happening in sierra

creates heightened risk for botswana which is almost five hours flying time away. it heightens africa risk in a way which is undeserving because it is actually not one country, it is 54 countries. >> lack of knowledge on the side of the world. >> one of the reasons why we have you here is president obama is initiating the african summit. he wantsay people say, his legacy, his relationship in africa to mean something. bush gave over $1 billion per malaria. what is it with the u.s. and the relationship of africa -- what will he be going forward? we have had really -- regulation in the past 10 years. what do you envision this summit brings to africa? >> one of the startling things that happened in the african trade relations with the u.s. is gas energy.he shale

the u.s. trade with africa has declined significantly. from total imports in africa say in the beginning of 2000, 80 billion -- it is half. that is energy-related and oil imports. it is not diversified. nigeria and south africa. once this conference could -- what this conference is due -- what africa needs is more trade better than eight. image access to markets. you look at the specter of the -- diversification of gdp, it is around 40%. it cannot compete in global markets because of subsidies. subsidizedthe u.s. and that creates an unfair playing field for africa. access to those markets, removal of discriminatory, those of the kinds of things that the u.s.

could do to encourage african imports. >> thank you for joining us today. do come back and tell us more on where we should be investing in africa. the chief investment officer at math -- asset management. >> the trendy london restaurant that is a favorite among celebrities. there is one important group. i will tell you why in the newspaper segment coming up next. ♪

>> welcome back to countdown. it is that time again -- it is newspaper time. i have been to chiltern just wants but apparently it is not good for my health. >> i cannot comment. >> it was planned. the chiltern firehouse is the host of celebrities. that., nevermind -- one out of five. >> i think that is chiltern. there we go. one out of five for health and safety. ironing boards, dirty services. food served below say

temperatures. maybe that's why she had a sore. four yields to seal an exterior door to her been any rodents. -- to prevent any rodents. >> you have three gorgeous little girls who are identical. they are so identical they actually cannot tell them apart. they cannot tell them apart. what they decided to do is they painted their toenails a specific color matching their names. fiona has fuchsia and page has purple. it has saved their lives. they wouldn't know who was who. >> they can have a lot of fun as they grow up. >> they are tv stars already. >> this is very briefly about -- they crowd funded. they are an amazing choir from south africa and they were performing last night.

they raise 1500 pounds by crowd funding for shoes. i would love to be able to watch them. >> ihg is up next and the ceo. do not miss it. ♪

>> takeover tuesday -- 6.7 billion euro offer for gbg units. bad bank -- to lend's profits falls 98% on charges tied to a bank. cashing in on surging suv sales in the u.s., bmw's profits beat estimates. as well as toyota. welcome to countdown. i am joined by caroline hyde.

europe's second-biggest publicly traded hotel operator intercontinental hotels group is out with their earnings or not. we are waiting for them to come out with earnings. >> they're expecting over 6%. toyota? toyota, theom world's biggest car manufacturer in the world, 588 billion yen. well ahead of estimates. we are seeing an improvement overall and the net income. we thought it would fall 11% but no. is a win across the board when you're looking at profitability. sales -- ¥6.39 trillion beating estimates. it was factored in against the euro. the yen has been weakening against the dollar, the euro but overall, this is a strong feat.

to jonah has been dining up on its suv. sport-utility vehicles are invoked. -- en vogue. the compact has been doing really well, a standout in the united states. we have seen the u.s. really pick up the slack. overall, it is win-win. we have seen toyota with profits and bmw. back to you. >> we have the numbers for revenue for the first half of 2014 for intercontinental -- $908 million, that is up 3%. operatingking at profits -- a $310 million. that is up about 8% in the first half. c would richard solomons has said. adjusted operating profit -- $310 million. that is versus an estimate of

$306 million so just about in the top line. we will talk about this more with him. a strong first-half performance and the brent performing strongly in the second quarter joined by an increase in the event -- and the dividend of .9%. we will talk to richard solomons a little later. rise.e looking for a 6% >> we will speak with richard solomons adjust the second -- in just a second. theld we get back to company headed by former bp ceo tony hayward. >> the biggest producer of oil in the kurdistan region of iraq. it is interesting because of the fighting. sales are up year on year, profit is down however. million.on versus $109

35% per-share basis, it was of earnings per share which is $.39. the most important thing is the guidance and they have just confirmed saying they do see output that summer between 60,000 to 70,000 barrels per day. betweennue at somewhere half $1 billion and $600 million. the bottom line is we solve the islamic state spook investors yesterday by seizing a couple of oil fields early in the week -- over the weekend. that got people concerned that genel energy assets could be a risk. they have much more exposure to kurdistan. they have about two thirds of their output from there. they saw their shares fall 10%. interesting company.

since the ipo in 2011, shares almost exactly where they started. down about 2% which was pretty much just his fault. -- yesterday's fault. a lot of analysts saying there might not be -- and there will be assets at risk as one might think. called nester --net income is missed estimates. analyst estimating 83 million. and that analyst expert dating 1.5 billion. and weis in the news will be asking the ceo all about that. the company has service stations in russia as well. this is a company that focuses on oil refining, oil retail, and renewable fuels as well. it is operating profit is likely

to be in the lower end of its guidance range. it is mild profit warning. we will speak to the ceo and get reactions to those results. we will talk to them 7:30 a.m. london time -- london time. intercontinental numbers. joining us for his first interview is the ceo, richard solomons. he joins us live. thank you very much for joining us this morning. just looking at the numbers -- and looks like it is just below are the analysts were looking for in terms of revenue per available room, 520%. the market was looking for 6%. talk me through these numbers. >> i think it is pretty close to 6%. have seen quarter, we good momentum, quite a lot of growth. the u.s. was slightly above 6%.

u.k. actually over 8% so good momentum. we signed a lot of new deals as well looking ahead. we signed more deals in the first half and we signed for about six years. we opened a lot of hotels. a lot going on. we continue to gain market share. we opened the first of our new brand. some good progress. >> talk to me -- you say you are making progress. we are in an upswing mood which is the general consensus. a lot of your basis -- business is fee-based. some say perhaps you will miss out on the upturn. do you think that is the place? where you miss out on not only more property and sticking to the fee-based model in the u.s.? >> not at all. be fee-based will franchising and managing hotels which is the first the push has become the accepted norm. it makes sense.

owning real estate about the best thing for public companies. having the fee-based model would allow us to grow much faster. we have 1100 hotels in our pipeline which we could not afford of lyons the mall. -- could not afford if we earned them -- if we owned them all. the growth, if you own real estate, we are much more stable. that is what investors are looking for. i think it shows that stability and that strength. >> china, 75,000 rooms, one ear biggest pipelines. talk to me about this brand. they say this is a very unique proposition you guys are delivering -- how is the brand doing? what is the momentum there? >> we have launched two new brands. china is really focused on the chinese customers

who want overlay and security inconsistency of an international brand. we don't open the first hotel until the end of the year but we have arty side 24 hotels. we have an incredible amount of interest from earners and potential customers. early days, we have not opened it but we see a lot of potential both in china and outside of china as we look at outbound travel grow. we will certainly be looking to take it outside of china once we've established that there. you wantingeal is to stay independent and speculation about shareholders pushing you to get. have you had any discussion with any of your major competitors? have you had any sitdown discussions at all in regards to a merger? >> there have been rumors but we never comment on market rumors. we are a public company. we are working for all of our shareholders and we of driven

good returns. we have returned significant amount of funds to shareholders -- over $10 billion. $1 billion in 2014 alone and we are growing our business. we are adding new brands, growing the business. >> if you have to share a hotel room, richard, which brand would you like to get into bed with? come on. this story has been running and running. >> it is a story. we have a long distraught -- a lot of strong competitors but we are one of the biggest hotel companies in the world. i think we are in a good position. there was a lot of organic growth -- 1100 hotels in the pipeline. we have a lot to do in our end. >> which is the biggest threat? sanctions, russia-ukraine, ebola, unrest in the middle east? you have to look at these risks. which are the highest review in terms of threat to the business

in the second half? >> there are some situations around the world whether it is political or social or fighting going on, clearly we have to protect our guests and our employees in those markets. none of them are that significant in terms of the scale of our business. what we do in the hotel business and will be doing particular is do what a very long-term view. we see markets like russia, china, like the middle east where there is lots of long-term opportunity. having said that, the majority of our profits come from u.s. and europe. i think we will take a long-term view. we are concerned about that but the momentum of the business and we're looking at seeing strong. >> when you see with the french have done, give me an update. how do you conjure that kind of move and are you worried we will see more of these kinds of taxes

placed on your business in europe? >> not particularly worried. i think there were some reactions in france and germany. higher than france and germany. we were trying to boost the uk's economy. i think the hospitality industry pays a lot in taxes. we are not looking for hikes. i am not sure we will see that. >> richard solomons, ceo of ihg. great to have you with us. >> up next, bmw beats estimates. toyota has as well. we have the latest figures from the world's biggest maker of luxury cars and the world's biggest maker of cars in general. ♪

>> welcome back to countdown. time for today's company news. alefonica said they made offer for an internet unit. announced more than

$30 billion of asset sales and begin a review about 10 years ago. profit fell 98% in the second quarter because of charges tied to its stake in portugal's bailed out bank. profits dropped to 17 million euros. buy a danish company for an upfront cash payment of up to $450 million. they targeted therapies for cheating cancer -- treating cancer and inflammatory diseases. it will keep operations in denmark. two car companies reported this morning -- bmw and toyota both beating analyst estimates. thes talk about bmw first, biggest luxury carmaker. we are winning whether it is the

three series, five series, six series or x5 which are all leading their particular segment so much so that we now see the volume of cars they are selling up above half a million. dollars up 5%. -- and that was up 5%. earnings leapt 26% and earning ofgins at 12%, well ahead audi or mercedes which are the two big rival luxury car companies all vying for number one spots. >> mercedes is that 7.9 audi is 9.9%. 5 suv is more popularly known. it five series, i remember got dog press. 15% and the target is 2 million in 2014. that is a big important issue. >> really impressive considering investing in more

models -- 16 new and refreshed models by the end of the year. holiday managing to keep up this overall earnings? overall profit margins? they say there is pretax profit, they are sticking to their goal which will significantly increase. they tap into their hot market -- it is all about suvs and electric vehicles as well. the rolls-royce doing pretty nicely as well. they say there is a lot of appetite for the new ghost series. >> the lead is just narrowing. they delivered 886,000 cars which is just 17,000 head of audi and 100,000 ahead of a -- of mercedes. they have this target to be the number one luxury car seller by 2020. figures, theyin have a target of 8% to 10%. the margin number you announced

this morning in the headline numbers -- 11.7%, that is a big issue. you mentioned the electric cars. the i3 are producing about 100 of these a day. about 5.5 thousand. the big issue is battery's. they are now going to deal with bosch. you take the battery. it.ve it is a bit like a stock market. when these to give you a fact of the day, write it down because they will use it again and again. >> let's here about back in the day. >> you can pick up the fact of the day on my twitter. in nots really inching only with its audi brand and bmw, but vw was hot on the heels

of toyota as well and is become the world's biggest car manufacturer. toyota clings on. standout numbers -- profit rises. we were expecting it to fall. , ¥588 billion. sales rose. even if they stick to the forecast and sales will be down on their fiscal full-year, probably has to do with the yen -- u.s.,, overall japan, asia, this is the area that is dominating in terms of sales. the u.s. is helping offset japan where they have a sales tax hike. these cars you see on your screen right now -- it is the suvs again. the toyota highlander, the lexus. you see china wrapping it up up 12%.

>> it is upsetting the prius which has not been redesigned since 2009. that is conjured into a decline in sales in japan after that sales tax hike. we will see the revamped. the prius is very important for china. the suv is all the niners. >> -- all that matters. >> it was up 56% in 2012. i think the key take away is all about the suv. and toyota are neck and neck. 5.1 million by toyota was sold. >> it is not much. energy sticks to its guidance as militant sees oil

fields in the region. we will have that story next. ♪

>> welcome back. it is 7:24 a.m. in london. militants from the islamic state in iraq captured kurdish oilfields this week. it was also a battle raging for the main dam in mosul it sent.

shares in will produces tumbling yesterday. genel energy is just releasing its earnings. ryan has the details. this is the company whose ceo used to be the ceo of bp. >> the problems now are not just in the sense of how he gets oil out of the region. tony hayward. genel energy is the biggest producer of oil in the iraqi region of kurdistan. the big concern has been the fighting that we of seen throughout the weekend and the seizure of a couple of oil fields in the north by the islamic state. the most important statement from genel energy this morning is where they confirmed that they expect to produce about 60,000 barrels of oil this year. it was concern among investors yesterday that the shares were down 3.5%.

maybe the islamic state will not stop where they are now, maybe they will keep going. we hear the company is saying, no, we are good. >> how threatened are these assets? we put up maps, etc. give us a sense of where this business is. >> the issue here is not so much the oil fields that were seized, they produce about 30,000 barrels a day which is about 1/5 of 1% of the world out with -- output. it is really peanuts. however, no one thought the islamic state was going to focus its attention on the north. it was focus pretty sold on the south and going after baghdad. have thee wondering intentions and ambitions of the islamic state just gotten larger? and, do they have the capability to actually take these oilfields. you saw a than zaidi yesterday amongst investors that perhaps they do. despite the fact that most analysts say, the assets are

really far away. >> we will bring you the chief executive. we are joined next to discuss of the old company's latest results. that is right after the break. ♪ . .

>> welcome back. i am mark barton. let's take a look at your fx check today. the rba kept its reserve interest rate at a record low. it also expects a period of steady borrowing costs amid below trend growth. the overnight cash rate held at 2.5% for a 12% -- a 12th consecutive month. all the economists addicted no ctedge -- related -- predi

no change today. they are trying to rebalance towards residential construction as the mining investment boom wanes. confidence is being hit by the government spending cuts announced in may. that is weighing against rising house prices and faster inflation. cents.sie dollar, .93 once again, was mentioned by governor glenn stevens in the meeting and of course, he is eager to talk it down. these are the bloomberg top headlines today. the palestinians have agreed on a three-day cease-fire in gaza. the truth started a short time ago. under the of fighting egyptian-brokered accord. the world bank and the african development bank have wedged $216 million to emergency funding to help fight the ebola outbreak in south africa.

the money will be used to treat the infected and stop the virus from spreading. it also limits economic impact. the news comes after eight organizations are the size the global response to the outbreak. nearly 50 african leaders have gathered in washington for a major trade summit. it is the largest ever gathering of african leaders in the u.s. capitol. the somali president told bloomberg security is his priority. building from the inside so they can take over in some ollie. -- in somalia. this is what is very important and the focus is on that now. >> we will be live from the event later on bloomberg. sales that beat estimates. joining us live is the chief

executive of nest oil. good morning, sir. thank you for joining us today. >> good morning. >> as i said in my introduction, net income and free tax profit fit came-- pretax pro in below estimates. what is going on? evidentnk it is very that the challenging markets in it is probably lower than our estimate for the rate. >> ryan chilcote here. i wanted to ask you about russia. i know you are a big buyer of urals blend. how example -- how exactly are the sanctions in place against russia affecting your business, if at all? that thet, we all hope

situation in ukraine will relief and, in fact, coming to our business, there is no impact to our business and things going as normally. alwaysse, we have carefully looked at what is happening there. the moment, things are going as normal. >> what percentage of oil do you get from russia and what would it take in terms of the sanctions to make a difference to your business? 65% coming from russia. we could turn that to the other sources if needed. the impact we have not calculated, but logistics costs are higher.

at the moment, we are not speculating with that. let's see what is going to happen. not so that europe can make the big sanctions like gas and crude because it is needed in europe. >> what would cause the sanctions -- what would cause danger to your business? would it be russia deciding not to export oil or could it be something else? >> europe said that they could not use russian crude, there is some price tag for that. things that if they do not export, there are a lot of other things that could develop. we have option now the -- we have optionality. we are not related to russia.

because -- russia >> who is buying your fuel? which regions of the world? which countries are the biggest buyers of your fuel right now. countries, finland, sweden. and then it is the rest of europe. >> i want to ask one final question about your renewable products. you just said that the market for renewable fuels have improved slightly. ?hat is the outlook we are talking about the united states here. we are talking about epa rules. we do not know what they are going to be. what is your outlook for what the epa is going to do? rumor is that they could

forease the mandate renewables because there is enough production. and then a tax break is coming later on in the year. lookll, i think that if we at renewables, we have a reasonable good result in this challenging market situation showing that it has really established business out here. are doing a positive result each quarter, so it is good. it is a new business, a global business. think that it is great. it is a great thing. >> brent crude has come down now $115 in june to $105 despite geopolitical risks.

what is your outlook for the price of oil going forward? , the u.s. dollar is strengthened. that is one reason also for crude coming down. a careful situation. i think there are much better people who can say. $110, is going to be $100, if there are no big political risks. only oil refinery. after the break -- we are going to do it right now. myself.ahead of >> that is good. >> shall we talk -- >> telefonica? they have announced to buy vivendi's gvt business. 6.7 billion euros.

vivendi is open to these suggestions. they said they will look at a deal. >> they want to be a media company again, don't they? >> yes. >> they has -- they have been exiting the comp businesses. telecom ministers. >> they want to return 5 billion euros by 2015. telefonica is saying they will fund the deal, 60% in cash. the rest they will have to raise in terms of capital. of focusing on scaling up their position in brazil. the gvt business in brazil is owned by vivendi. be initial response seems to a bad idea. >> a high-growth business. it is interesting, isn't it? >> shares also lower for

telefonica, unsurprisingly. vivendi, of course. another stock to watch out for is a german building company, rebranding itself as a service company. could fall as much as 5%. why? its chief executive is stepping down after a second profit warning. a second half it warning in -- a second profit warning in less than a year now. they are starting to lose their providence as a company. his is why the chief executive is having to depart. he was previously a politician himself. he will be moving on. the old chief executive will be taking the helm until may of next year. this is a opening that initially promised to increase profits. now they are saying we will see a drop in profits linked to their pipeline unit. executive after

the break. the company reported pretax profit that doubled in the first half. ♪

>> i am manus cranny. time for a bit of company news. lincoln has agreed to pay him one $6 million in unpaid wages and damages to current and former employees. pay for all hours in a workweek, including employees, the9 u.s. labor department found. smartphone shipments in china, the top smartphone company in the world's largest market. it displaced samsung for the top spot. four years after it was founded. the company shipped 50 million devices in the second quarter, giving it a 14% share of the chinese market. juventushairman of football club has been speaking to bloomberg. they renewed their long-running deal with carmaker fiat. he says the team is on top. >> all of these guys add onto a

team that can easily be placed among the top eight of europe and we will have to see where it gets from there. >> pendragon just releasing results. sales and services of both new and used vehicles, pretax profits more than doubled. joining us now for an exclusive interview is their ceo. what are we buying, the brits? what do we love? >> across-the-board, people are importing new cars. the car market is running at near record levels. a lot of that is across the water, from ford to for ari -- to ferrari. >> is there an age group? what are the young buying versus the old like me? [laughter] you have got to sell me a car, trevor.

>> you are buying something that is more fuel-efficient. certainlying people, economy-conscious. they are changing the way they are buying cars. a lot more people are buying on a payment. young and old. our ownership is turning into car use. >> the way we are buying them, you are big in terms of websites, online purchasing of cars. talk to me about the disruption of the car market. you are a big online player already. people now with car sharing. is this a risk? >> there is a lot of noise about car sharing. the reality of it is not in the u.k. most people him a perhaps from central london, need a car to go to work. there is a lot of noise around these things. fundamentally, there are 7 million used cars sold a year.

>> and you can buy more online via you. >> the online space has changed. most people go online, whether it is young or old. they will be going online, looking at cars, distilling the sentiment out there. we positioned ourselves and we have seen a lot of growth and a lot of activity on the website. >> talk to me about the phenomena. i cano the states and see pick up a bmw three series on lease. i come home and i say, how much? it is phenomenal. we are adopting leasing as a model. >> i think you have not bought a car for a while. if you go today, you will be hit with a proposition based on what you would describe as a lease. today, over 80% of the new fords that we sell will be sold on a

basis. >> so not actually taking ownership of it. you look after the whole package. >> we have some businesses in america for well over 10 years. when i first went to the states, i was amazed everyone was not because it was $400 a month. then you realize that you can buy a mercedes for a similar amount as well. there has been maybe a structural shift at the way people are looking at buying new cars. there have been some finance offers in the market which make it very attractive to take that finance. >> what about the major car manufacturers? how do you insulate yourselves from the different cycles of the major car manufacturers? >> we describe our business as an eight cylinder engine. always one piston rising in the engine and another one going

down. our head is our scale, really. you represent everything from ford and gm and the volume side to mercedes and bmw. we pretty much cover everyone. >> if you look at a lot the releases we have had from etc., it isgeot, the small, compact model. this has come through for a lot of the players. is that what you are seeing when people come in? what is the most important thing when they come in to purchase? >> how much a month. that is the most important thing. >> rice, price, price. >> four years ago, for every car -- youou would just would have just over four visits from a customer. today, it is 1.3.

>> they want more efficiency and the right price. >> continental carmakers have been slashing prices throughout the years. what is the price reality here in the u.k.? consumer, if you consider this is the only european market that is really on full mode. in other economies might be recovery mode. it is the second-largest in europe. it is a combination of a little bit of an uptick in confidence in sumer-wise and the market being receptive to moving towards payments. interestingly enough, even though we have had a couple of years in recovery mode, there are still more cars in use on brick roads than ever before. >> i have one of those. >> in terms of regions, are we seeing the house pricing bubble?

are we seeing the car bubble? >> i think it is evenly spread. enter london is a very stretched place. out there, it is evenly spread and there are no particular patterns with respect to product types. you mentioned it earlier. how do we had ourselves against the various rounds? news from bmw this morning, they are proliferating their engines. nobody is just a sports car manufacturer. >> your favorite car? >> personally, i have a jag. >> what would you have? >> i would be leasing, definitely. lex we are going to have to leave it there. thank you so much for joining us this morning. of theon is just one stocks we will be watching. jon ferro will join us after the break. we will talk about the big drivers, what will hit european

equities today. stay with us. ♪

>> you are very welcome back to "countdown." we were talking about whether i was going to lease a car, buy a car, or whether jon ferro would consider any of the above. laugh ahead of futures. and futures are --

>> rising. even though chinese pmi is at a record low. we should think about this carefully because we talk about the manufacturing side of this entry a lot. hsbc reading of services pmi is not really encouraging. today -- eurozone market eurozone, services pmi set to come in at 54.4. >> construction was strong yesterday. >> above 60. contracted,ly didn't it? a percentage of the gdp was negative. >> i will talk to kevin daly of goldman sachs later on. wages, growth is at a 2009 low. unemployment is at a 2009 low. how do you square that at the meeting and inflation report later this month? >> do we not care?

the bank of england underestimated. >> you will have to tune into "on the move" to find out. >> jon will be here. more on israel and hamas. we will see you nice and early tomorrow. ♪ .

>> welcome to "on the move." jonathan ferro. we are moments away from the start of trading. futures indicating higher. china and hit records. what does it mean for european trading? mark, let's start with you. >> profit last quarter down. do you know why? because of charges linked to san bailed out by bank of portugal over the weekend. they have written it down there value to nothing.

almost 15% in credit. it was the second biggest cole'solder and agri shares rose by 20% -- 2% yesterday. >> we spoke with sco and profit beats estimates. theng to sell off of assets. what his view is on russia and ebola. caroline hyde. cars, bmw and toyota have posted. i will be back with more on the car industry. >> asian stocks are lower and chinese pmi services coming at a record low and features nudging higher in europe. on the stoxx 600