n wins the erdoga country's first direct presidential election. he plans to transform the role into one that combines head of state with head of government. >> asia rebounds. stocks are up and low inflation may give china more room in monetary policy. >> another big win for rory mcelroy. can he become the next star?

>> welcome to "countdown." prime minister erdogan won turkey's first direct presidential election with nearly 52% of the vote. he will extend his leadership through 2019 as he treat -- seeks to transform turkey. hans nichols is live in istanbul. good morning. what happens next? >> good morning. later this morning, the justice and peace party will have a meeting and determine who is going to be there next prime minister. that is the position that erdogan is coming from. as he seeks to transform a ceremonial role, the office of the president, into one that has real authority. he has been very clear about his intentions. he wants the power to call cabinet meetings.

these are the moves he is making to consolidate power. turnout was only 75%. it was 90% in local elections. he did win 52%. he avoided a runoff but it is not a rousing mandate. one thing voters aren't happy with, the economy. average 5% growth over the last 10 years. 4% growth is expected for this year. maybe 2%. there is concern about inflation. it is at 9%. coupled with that concern, will erdogan keep the central bank independent? he wants to put turkey on a faster economic path. right now it is 17 and the world. it is never in the g-20. one final note on all this, the lira is appreciating ever so slightly overnight. investors aren't concerned. who might he appoint as prime minister?

is, will theon current president, will he make a move and try to become prime minister? if he is prime minister, he may have the authority within the party to challenge erdogan. that could mean a check on erdogan's party. there have to be a couple technical moves. he would have to find a parliamentary seat and become prime minister. that seems to be what some in the investor class are hoping for. you would have a check on erdogan as president from the current president who would then become prime minister. >> thanks a lot. hans nichols in istanbul. breaking news. >> we were talking about it earlier. said, no thanks. >> the news that we were running overnight, according to people familiar, carillion approached.

thisdeal fell apart over new york-based engineering consultant. potential he, bell for bt was in the process of selling that unit. ion wanted them to keep that union. they had re-approached about four. -- balfour. >> they are coming out with numbers again today. look, competitive sales are well advanced, subject to satisfying the interest of key stakeholders. the group will return up to 200 million pounds to shareholders. clearly, hopes of that shale might disappoint shareholders. balfour doesn't have a chief executive at the moment. has not been

benefiting from the sudden boom in construction that we have seen in the u.k. >> it has had cancellations to projects as well. a profit warning. over onrman has taken an interim basis. carillion has got this services division which is booming. it was thes if perfect fit. >> they say at the moment that confirmation with carillion that they were supportive, and in the evidence of a joint leak, announcements would be released. overall, they are saying carillion's request was predicated on balfour beatty's retaining the proceeds from the sale of parsons. clearly, they haven't been able to agree on the back of this.

what the equity split was going to be, 56.5% of the company would go to balfour beatty shareholders. 43.5% would go to carillion shareholders. be --ion does seem to >> there were a number of risks. they were mindful of the synergy that could be achieved. they lost confidence in the likely delivery of a successful pact. this isn't the only deal. yeard lafarge earlier this in a $40 billion merger. a couple years ago, we had the spanish builder. happening because of a decline in construction work. this was the rationale behind this construction merger which would have been the biggest construction company in the u.k.

>> they have to go it alone and show their shareholders it is wise to do so. balfour beatty says they are implementing cost efficiencies. they have had operational issues. whenlfour beatty shares the deal was called off in july are down by 6%. carillion down by 9%. investors were unhappy that the deal was called off. which is why we said carillion came back to the table. shares are down. investors want this deal. it seems that balfour beatty isn't quite agreeing. >> meanwhile, let's take a look at china. we did get the latest inflation data. zeb eckert is in hong kong with the details. inflation once again subdued. >> indeed. 2.3%, itued inflation,

is leading to a rally today. china investors are optimistic. we are seeing the shanghai composite extending gains right here in hong kong. beautiful day indeed. we are seeing financials rallying. the outlook is that the central bank in china as well as the government will extend fiscal and monetary stimulus. they may extend their existing stimulus programs. that, lifting the markets today. inflation, well within the government's range. the cpi estimates that the government hopes to keep consumer prices within 3.5% in a bid to meet that 7.5% full-year gdp target. we got the latest numbers on producer prices. that is the cost of goods at the factory gate. those prices fell 0.9%. the longest the klein since 1999. we are watching this closely. china's economic strength, a key focus among investors in hong

kong and shanghai. many wondering, will china's property market run into difficulties and will policymakers be able to maintain the appropriate level of stimulus to keep the economy going strong? at least today, that optimism in china continues. >> thank you very much. analysts thinking that new loans are going to keep on coming. a record high for july is predicted. >> coming up, why putin's european food ban is bad for russia but good for prisoner. politics and policy next. ♪

>> welcome back. this is "countdown." despite geopolitical turmoil, the dollar has been enjoying a strong summer. what are the ripple effects on emerging markets? thanks for joining us today. let's start with turkey. you are negative on turkey. wonably before mr. erdogan the first outright presidential election. why are you negative on turkey?

>> we think there is a host of issues. one is this issue of checks and balances being undermined. the politicization of monetary policy. the central bank has been in a big hurry to cut rates. we think that is premature. the markets have been rewarding turkey for politics having been better than they could have been. there could have been an ineffective opposition coming in. what we are concerned about is that the checks and balances are being undermined. short-term, maybe it is ok, but longer-term we have concerns that the economy is being run in a reckless fashion. >> how quickly should investors be exiting the doors of turkey? do we wait until we see who takes up the political post with in turkey? there are a few candidates to take over managing the economy. i think that is indeed going to be one of the triggers.

fed tightens and the dollar's rally strongly, that will be an issue. when it comes to turkey itself, as your earlier reports were raising the question, are there some internal checks and balances at this stage? we would guess not. >> how big and i kerley's he'll would you say he is to the current account? sayilles' heel would you he is to the current account? how big a worry is the current account? is the country doing enough to reduce the long-term risks? >> our sense is no. as you say, it is good news that turkey has had an important adjustment in the external deficit. but it is still quite large. it sticks out like a sore thumb in a world that is uncertain.

many other countries have done much more. the direction of travel in monetary policy and hopes for that in other countries are quite a lot that her. -- better. in india, there is a move towards installation. in brazil, it has gone the other way. that there will be a more orthodox economic shock in brazil. that will be good for brazil. at that point, turkey will need to do more. indonesia seems to be moving in the right direction. >> when you compare it to brazil and india, how vulnerable is it to the fed? in january, all the emerging markets were affected. where does turkey stand on the list of most at risk to flight of capital? >> our sense is that the fed is going to go relatively slowly. where there is a

strong surge in the dollar, all of them stick out like sore thumbs but turkey more than the others to rig it -- the others. the current account deficit is still 6%. they are in a rush to cut interest rates. the others are being much more circumspect. where there is a sticky inflation problem, there is much more -- >> so if you are and emerging-market investor, are you bracing? many feel that the dollar strengthening is coming whether you like it or not. whether we see a sudden spike or we assumeore gradual, it will be in terms of how they start to increase interest rates. do you get out of the emerging markets? our sense is that there is room to discriminate. if there is a sharp turn, the

initial knee-jerk reaction is going to be a sharp selloff in many places. we think there has been a lot of that already. i think right now, it is hard to disaggregate whether the fed or putin. the situation in russia seems to be calming down right now. that will probably help in the short term. our sense is that the u.s. economy, although it is recovering, it is not the recovery we generally have. it is not clear to me that we can have a strong u.s. recovery without a strong dollar. i suppose if we get a really strong dollar, which is not a risk aversion scenario, that is a signal that the u.s. really is pulling ahead. we are not so convinced it is ahead. relative to the

eurozone, relative to japan. relative to its own history, it is not doing that well. >> what if the dollar does spike and we see the u.s. economy slightly dented by this concern? is there some way to manage this affect? is this the only course? >> i think we have to distinguish between a strong dollar scenario that is risk off because of geopolitics -- that is one in which people will head for the exits in risky asset classes including emerging markets. >> again, but other benefits. >> the haven currencies all benefit and the dollar is clearly still going to be one. what ise other hand, driving this is a stronger than expected turn in monetary policy, i think that it is a little bit more complicated.

the fed will probably try to slow that down. if you have a sharp surge in the dollar, you get a hit in that trade, there is this concern that monetary policy between the u.s. and the eurozone is diverging significantly. that will cause other kinds of dislocations in asset markets inside the u.s. as well. if it is really about monetary policy, it is going to be comforting rather than concerning. >> at what point do russian assets begin to look enticing? as europe ratchets up the sanctions and russia retaliates, at what point do russian assets begin to look attractive? >> our sense is that one has to see a significant turn in the attraction between russia and ukraine, and russia and western europe and even the united states on the other hand. there has to be a serious, credible, sustained signal that russia is ready to come to the

table. that is still not clear. the facts until friday have been about more escalation. right now, there is probably a little bit of calling going on. arebaijan and armenia distracting the focus right now. our take is, they really have to come to the table and put the process back on track. >> will they? relationshipole have fundamentally changed? >> that is certainly the risk. we don't think it is beyond the point of no return but it is heading in that direction. we treat any relief rally with some skepticism. >> we will leave it there. thanks for joining us today. up, how does an escalated byce war against a publisher

publishing the chief executive's e-mail? authors and e-books next. ♪

>> welcome back to "countdown." i am caroline hyde. let's talk e-book economics. in a strongly worded letter, amazon argued e-books should be cheaper. hatchet on the other hand is

holding out for higher prices. what is the right price? it is a fascinating battle that is going on. it is not just books. it is also films. disney now getting embroiled. 900are looking at --natories who basically had they are taking to not just the airwaves, but to media. they have signed a letter to the new york times yesterday saying, look, they are concerned about amazon's tactics of delaying getting your hands on certain bestsellers. if you want to pre-order certain books, you have to wait five to six weeks rather than two to three days. if you are under the publishing house of hatchet. we know that jk rolling has been owling is having her new

work affected. amazon, says, let us cut -- >> and you will sell more books as a result. >> 74% more books, it says. they say, we don't mind taking a 30% cut. amazon takes a 30% cut under contract. the rest goes to the publishing house. the publishing house wants to be able to keep the prices higher. there is a war of words going on in the press. you have amazon itself leaking the chief executive's own e-mails. if you have a view, you should e-mail him. meanwhile, they are saying, tell amazon chief executives what you think about the price of digital books. meanwhile, disney getting broiled in. want themerica, if you

dvd, you can't pre-order it. >> but you can stream it. they did this earlier this year with warner bros. and various of their films. it has happened before. these films, they really need dvd success. often, films aren't profitable from their theater runs. >> captain america, the number one grossing film of 2014. that top spot has to be hard in terms of revenue. when you are trying to get your money back, you need to be able amazon once again making things a little bit difficult. in fact, a lot more book publishers are about to start renegotiating with amazon. but amazon needs the money. >> israel and gaza. they are abiding by another

truce. will it give the negotiators time to craft a lasting accord? we will have more from tel aviv next. ♪

>> let's have a look at the yen against the dollar today. the yen is following against major currencies. we did have reports that russia's warplanes ended trails and the nation is seeking to mediate between kiev and pro-russian forces. on humanitarian grounds

ukraine's military dismissed as lacking in substance. they pushed ahead with the campaign to put down the uprising in the east, but the yen is falling. it's down against the dollar. the dollar is holding onto its gains. bullish betsg to on the dollar. retail sales lifting the dollar. against theising yen today. >> these are the top headlines. turkey's prime minister has won his country's first direct presidential election. he will extend his leadership. it from aansform ceremonial role. israel and gaza militants have

begun a new truce. they accepted egypt's proposal as negotiators worked out a more permanent accord. renewed rocket fire. the ukrainian government is rejecting a cease-fire from pro-russian rebels. the government will vote on a bill that would block oil and gas shipments traveling through ukraine to europe. >> militants have agreed to a new truce. aviv following the story. happen following these talks so violence does not restart? >> the good news is that both sides have agreed to end the violence for another three days. is there is no clear end to this. there is no clear way to get a

longer, more enduring stop to the violence right now. israel and hamas remain set on what they want to get this to be over. each side wants something that completely conflict with what the other side is asking for. hamas wants a blockade to be ended and for there to be movement of goods through israel. israel wants the war to end in a way where hamas cannot claim major achievements, because if they were, that would encourage another round of fighting in the future. now they are very far apart. the main compromise that could come out of this would be for the more moderate palestinian authority in the west bank to come into gaza and oversee the movement of goods and the easing of the blockades. that would allow israel to say

hamas did not come out the victor. >> even before the cease-fire fighting hashe changed in intensity after israel pulled out troops. how come? >> even before the truce was announced and went into effect at midnight, the fighting has eased up. it is no longer the kind of -- the kind of fighting we saw before israel pulled out its ground troops. that is because israel has pulled out troops and said, we are done with the tunnels. hamas essentially is saying, we are going to keep firing rockets until we get something out of this. hamas is pledging to continue fighting, but it doesn't want to fight at the same intensity because it doesn't want to see the kind of destruction that may eventually turn gazans against

thomas. -- against hamas. >> thanks for joining us. >> the iraqi prime minister deployed troops on the streets of baghdad yesterday. he resists president barack obama's post for more inclusive iraqi government. to -- malikilekeok up to? >> he surprised everyone by saying that the iraqi president is out of line, acting unconstitutional, and basically needs to allow maliki to remain prime minister. there is a bit of a power struggle with the prime minister insisting on remaining. he is in a caretaker capacity. sunnis, the kurds, according to the constitution, that's the

way it has to be. even many she is said that is the way it is supposed to go -- many shia say that is the way it is supposed to go. a lot of all editions would like out.e melekeok -- maliki that is one reason most analysts inc. there is an increased presence of troops in baghdad itself. >> yet oil is little changed. fraction.own a >> with oil it is pretty straightforward. market thinks these airstrikes are going to protect kurdish oilfields, so that is a positive for the supply of oil. oil is down. the market also think there is a lot of shale oil out there. >> it remains ready am flummoxed by these rising tensions. quite often the oilfields aren't anywhere near where the fighting tends to be.

it tends to not react so much. is a topic we have discussed before. it is part of the reason. it continues to surprise everyone in meeting demand. that is one reason we saw a nine-month low. i will say there was a little uptick in the price of oil earlier this morning. perhaps part of the reason is people are saying, if we have a between the prime that is and parliament, getting into more of a sectarian conflict that could be nationwide. are pretty much unconcerned. >> airstrikes have begun in the north of the country. what are the fears? he said ground troops would be sent in. i suppose there must he concerns

we could be going back to the past. >> it is very interesting to watch this debate. if you listen to the secretary of defense, the airstrikes are being very successful. true the kurdish fighters on the ground have taken back a couple of towns. it's also true they lost another town. i think it's difficult to say what direction they have pushed things. it is difficult to really strike out at militants from above. as the republicans have been saying over the weekend, what is the point of telling them we're not going to send troops? that is not leadership. that is just telling the other side how to win. we will see. thing is the kurdish oil filled itself and the humanitarian concerns protecting these people. it's pretty obvious the u.s. is only prepared to go so far along

with its coalition partners. >> coming up, why turkish inflation should be setting off alarm bells for the central bank. foreignbe talking about currency and a little >> welcome back.

time for today's company news. lions gate entertainment won a court order to block websites from distributing and allegedly stolen copy of expendables three. the movie has been seen by nearly 2 million people before it was released. a single digital file was stolen in uploaded to websites july. pg capital offered 3.2 billion dollars to australian winemaker treasure wind a states. this patch is a takeover bid by roman capital. this is the second largest listed winemaker. .lackstone group is in talks t 1.2 billionould pay dollars for shell cost 50% stake

. >> we're going to turn to rapidly accelerating inflation. my next guest says it is a major warning sign, especially as neo-political turmoil as skill eight. best geopolitical turmoil escalates. we have seen what has happened to the lira in january when the dollar rose to a record high against the lira. could we see a repeat of that in the near term? >> it's possible. one concern is inflation in turkey might rise in coming months and into next year. you have a central bank under pressure locally to reduce rates. that does create a policy concern. reason we are slightly less

traumatized is the current beount does seem to improving. they have curtailed domestic demand. that has helped. that was one of the big banana skins. around 5.9%. downside risk but probably not as exposed as earlier this year. >> there is another area we are looking at in terms of excessive inflation. to be russia as well. give me a sense of what you are ing in terms of russia. where will we see the ruble trade? >> for me it seems straightforward because there are underlying risks. also what is happening in terms of capital flow.

irrespective, there is money leaving the country in excess of the current surface russia was able to generate through energy. now you have an overlay of geopolitical risks. that compounds those frailties. on a day to day trading, how great that pressure is is determined by headlines flow. those have been slightly more favorable from a geopolitical perspective. the big picture is economic weakness. almostdollar index, it's no one near hyde. is it finally gaining traction? are we seeing the liftoff of the dollar finally? .t has been called many times >> we put out a piece talking about dollar liftoff. it does feel that way. what we have seen in new zealand

when we began the interest rate tightening profile, it still gave an additional lift. we have seen that process as well. it feels like the dollar is next in line. we are going to have the end of qe and out over. they are going to move on. when are they going to make that first move. the fed chair is speaking in a short while in sweden. it is interesting to see what he is saying. when we talk about rate hikes, the very fact we are having that conversation is bullish dollar. >> we are talking dollar bullish. what about other in emerging market currencies? are they all at risk? are we cautious across the board if we see a focus on interest rate rises in the united states? >> i think the answer hinges upon what you believe interest rate rises -- short-term interest rate rises, what you believe that might mean. if you believe treasuries are

going to be flying higher, a number of market currencies will be vulnerable. our view is u.s. yields will still remain relatively low at the long and. contagion from that tightening process may be more modest than it would suggest. to get muchoing more differentiated. they are going to look for the relative rather than what we have seen in the last few months, which is you buy everything irrespective of the fundamentals. i don't think you are going to have that luxury in the days ahead. >> you said we get more picky. where would you be safer to remain relatively bullish? relativee north asia haveme of the others which outperformed. we like the mexican peso. we just put out a piece on

energy reform. we like turkey rather than the south african rand on the median term view. it is that picking and choosing investors are going to become more accomplished at over the next six months. >> the inflationary record for the bank of england. it's tricky because unemployment is at a five and a half year low. wages are rising at the lowest rate since records began. the is the message from bank of england on wednesday, and what does it mean for the first rate hike? >> i think it's a head scratcher. i think arnie will reflect that. there is this -- which number should we be looking at? i think we're likely to get modest outdoor provisions and a slight narrowing of the estimates of slack.

what it means for the market is we would be left wondering. for me and makes it highly unlikely they will have enough evidence to decide on a rate hike before the end of this year. for february of next. on that basis it should be neutral sterling. they narrow that slack more than we are anticipating, sterling could get a boost. if they give a lot of emphasis to the lack of wage growth and that means there is a lot of slack in the economy, sterling moves the other way. it is a head scratcher. >> on the dollar sterling, which one has the up hand? which one is in the up trend now? both of them are centered on when is the next rate hike going to be. has theels the dollar upper hand.

it had a fantastic july. it sustained those gains from august. i think the market has recognized we have a lot priced in. i think that needs to be evaluated by the data where it has not been, sterling is vulnerable. >> takes. we will see you soon. up, finland sanctions fall out as european sanctions begin to hit not only the but the eu --y, particularly finland. we look at how the ukraine conflict continues to unfold in the market.

>> welcome back. at the futures in europe, it looks like stocks are going to open high. there is a sense geopolitical tensions have eased, but when you look at the ground in ukraine, when you look at what is happening in iraq, the evidence says no. >> we have air strikes in northern iraq, but it is seen almost as a non-issue because the air strikes to some extent stop the surge in the south.

on the oil side i think we're going to have a difficult conversation. one i called in june when this escalated, the first ring she had concerns about was iraq cost future production. any hope of getting it to five or 10 over the next 10 years, you could almost forget those. it has big implications for futures. for the markets themselves we have had so much discussion. closed friday, 10% off its highs for 2014. we had one. a lot of evil talked about complacency. the correction. what next? the dax has taken the pain. there is a reason. it's about exposure and proximity to what is happening in the ukraine and russia. when we talk about escalating political wrists, i said this

morning -- political risks, i said this morning, that is being seen as a sign of de-escalation. he said, i don't know about it. >> they removed troops from the border. >> it's a humanitarian mission. boots on the ground from the russian military in ukraine. that would be potentially very significant. thatoes the west see that they consider it an invasion? escalation off the cards? that is not that clear. sentiment is they have de-escalated. i think it warrants conversation. >> off the table again. last week was higher. they come knocking again. -- wehink those companies have a very different kind of merger this time.

what are these discussions with house builders? maybe. >> on the move with jonathan ferro is next. aboutl go back and forth renewed merger talks with karelian.

>> welcome to "on the move." we are just moments away from the start of this week's equity trades. we have got futures higher. dax closed friday down 10% from the 2014 hi. we are going to get that rebound at the open. let's start with you. what have you got? he is becoming the first-ever democratically elected president in turkey. it's a vote of confidence from its people on the economy.

the question is can he keep it going? we will talk with a tech entrepreneur later to get a sense if the tech economy is going to continue to boost growth. >> i have got my eye on oil. you have got talk of geopolitical risks. showdown with russia since the cold war. the oil market doesn't seem to care. oil is at a nine-month low, but will it remain. >> geopolitical risk ruled this market at the end of last week. futures look like we will get a significant rebound. >> if you look at equity markets, they are saying there is less rusher. -- less pressure. you reminded people the dax is down 11% or it wasn't the close

of this mess on friday. the paris market was down by 10%. you have had a correction in european markets relative to the american. that's a different story. the american market has not had the same kind of pummeling the european counterpart has. construction along with travel has been the main losers throughout the month. china, is there room for more stimulus? russia, are they de-escalating? they are not being kicked out of the msci. is quite important. we are waiting for the dax to open. it is about gdp. will you see an emergence between the north of europe and the south of europe.

contraction is expected. u.k. you see the bank of england come out with their new target and reports. what will that say? survey.done a 67% say there is sufficient slack in the economy. they agree the bank of england should keep their rates unchanged. the breaking story is having batted away the calls to continue -- consider a merger. prudential is up a half a percent. this company could deliver the weakest results since 2007. this is ironic. they had a pretty tough day. was captured my imagination bankthey are saying this

may have a difficult time getting through the quality review. overall equities have got that nice relief. there is dollar ruble if you want a little bit of perspective, which is dollar falling, ruble rising, so some reprieve for the ruble. 37 would be the near-term target. you are seeing money going in. traders are adding to the dollar position. expectedles this week to rise at 2/10 of one percent. the overall position is the market is getting longer and longer in terms of momentum behind the dollar. >> that is a much higher open. monday we had gains of one percent. managesstment director more than $4 billion of assets.

welcome to the show. a look at the equity markets. what we're seeing is both trade lower. a significant diversion in how far they have gotten lower. off three orust four percent from their highs. what is that telling you? >> on the economic front, the u.s. is doing much better. datau look at the latest coming out of germany, france, and so on, it's quite soft. it's a much weaker state of economic growth and very close political issues related to russia and so on, much closer to germany in terms of attentional disruption down the line. you have this experience. more importantly the fact is ,nflationary pressures continue which means the trajectory is extremely weak.

themare requiring to get back very quickly followed by qe . >> are they going to? i listen to mario draghi, and he said, they are intensifying efforts, but he talked about hiring consultants. it does not look like they are anywhere near. >> the politics is very complicated with the german position being very reluctant to come to the eu. i think inflationary pressures continue to abate. they will be forced to do that because no one wants to see inflation embedded just in europe to see what happens. >> in the start of june i asked people were they would be long, they would tap overweight. it has been crushed since then. if i asked you in june, would the answer be any different from

then and now? >> i think slightly different in that big investors were very underweight in europe. key to when the pendulum sinks is when qe becomes very near. that is going to support the risk markets significantly. think the next 12 months the prospects are improving. i think the main concern is going to be with the soft evening economic output the corporate earnings projection is down. about entry points here in europe. they do not discriminate. are there any sectors you look at and think, yes leaves? >> i think we're at the stage where until the tragic or he

bottoms out you need to remain fairly defensive in the way you construct your stocks. you do not want to many cyclical stocks. what you need is big cash with big rising distributions. when the qe comes in that is when you might want to say, can we put more volatility into the selection? >> china, inflation sticks and then these talks start. are we going to get more stimulus out of china? >> the fact it is already , this meansritory they have flexibility to be more reflective. i think we will find over the coming months all of those avenues being used to ensure the growth rate is not fall below

seven and a half percent, which is their target short-term. >> here is a look at what else is coming up. the lira strengthened as the new president of turkey promises a new nation.

>> welcome back. this is "on the move." we are on everything.

spare bank is over three percent this morning. there was concern this russian bank could get kicked out of the index. a lot of money tracking that index. we now know they will maintain russia's largest lender in the gauge. there you see a little bit of a kickback. perspective, the investment director at london capital. the buzz word i heard friday was de-escalate. has the escalated. in your mind has the situation in ukraine the escalated? >> i think it is going to drag on for months to come. and away there is this uncertainty. until there is a significant impact or in some way

disruptions to supply, i think the market will continue to look through it. it is going to get irritated either way. >> talk about investor complacency. in the bondseen any market. .erman bonds rallying we haven't seen in a run like that for german bonds since 2012. oft was a severe period market stress. what are they telling you? >> it continues to be difficult. it is a way to give relief to the economy when ecb has been locked in to come to the rest of the company. they have a corporate on yield as well. then it comes back into the equity market as well.

are doing the heavy lifting rather than the ecb. >> when you see spanish yields records as near th well, that does yield political complacency. is that what we are seeing in europe? of alls a lot of talk the reforms he would deliver. now there is talk is going to break that deficit level. are you concerned? >> considering we have already , thathem go to recession means the outlook is much worse than anticipated. temporarily they may be bridging the budget deficit. the recession is not to be. the underlying problem is one of inflationary pressures.

you look at underlying real interest rates they are almost the highest in developed countries. that means you are still restrictive in terms of the way the outlook is. recoveries,lk about a lot of people would say to me, there is a recovery in spain. i look at unemployment around 25%. i look at your notes, and you normal.t would be is that something we have to get used to? >> i think we have to look at high levels until proper restructuring is done and a lot of structural moves have been .ade on hiring and firing a lot of restrictions that operate in all the mediterranean countries. they are not going to come down because they require a new spending cycle.

i think the leakage of drain into the u.k. and so on, that is unlikely to stop in the short-term. >> two or three percent growth in europe. ?re we dreaming where the to iraq prime minister deployed tanks on the streets of baghdad as he .esist american pressure what is the latest on this? distinctivewo issues. sunnis and kurds and even she is in his own country signal that primeends to stay

minister. coming out with a speech, lashing out at the country's president, saying the president was acting unconstitutional by extending the time the parliament can consider replacing the prime minister. powertrying to hold onto perhaps at any cost, deploying troops in baghdad, and that has people concerned. the other story is the airstrikes in the north of the country. as far as the oil market is concerned, they are convinced there is no threat to kurdish oilfields. they were not very concerned in the south of the country to begin with. that is why you have rent and a nine-month low. there has been a little bit of an uptick in oil prices today. you have an awful lot of shale

oil that continues to surprise people, which seems to be able .o accommodate deficiencies >> if i look at the oil market maybe i shouldn't be concerned about sanctions because another begunory if they have drilling on a joint well in russia. sanctions. >> first, this is not just any well. many have been calling this the most important well of the year in the world. spendillion is a lot to on an exploratory well. this isn't the arctic. successful, this could lead to an awful lot of oil, which would be really helpful for the russians. they are working to develop these resources -- and also .retty helpful for bp

not only is it a most important, but because of these sanctions, it's the most controversial. how could this happen? drill wasey least to actually least of for sanctions took place, so there is no platform.ing that in addition to that, i think if you look at the fine print of the sanctions when it comes to restrictions from the european union on take elegy for oil drilling and deep-sea drilling, you will find the technology .ould be banned it concerns drilling deeper than 500 feet. what they are drilling is about 240, so about half that debt.

where oil is is pretty shallow. wonder if when these sanctions were devised if anyone really wanted them to be effective or if this is just rhetoric at this point. >> interesting. read the small print. the globaltinue market. she will tell us what she thinks president obama's mission in iraq means for oil prices. we will be back in two minutes. ♪

>> we are going to turn to the energy sector. crude is down by about a 10th of one percent after the u.s. carried out all double airstrikes in iraq. joining us is the chief oil analyst. we talked about the concern of islamist state movement and how quickly and with what fees they have taken over much of these cities in northern iraq. what is stopping them from going to the south? >> we have seen last time they went quite close to baghdad. ofs is a second round attacks we are seeing. there is nothing stopping them. we saw that about the kurds as

well. >> i remember calling you in june, and your concern was not about oil production and supply right now. it was in the future. .ou have iraq producing oil the possibility of getting your 5, 10, could we forget about ?hat a >> i think that is the issue. oil -- they iraq you iraqi oil. demand andmake sure supply is balanced. i would say five by 2020 is what we're thinking. in the pipeline. >> what happens? when do we start pricing this in? , you have further your december 16,

december 17 curve. used to be $90. >> can you tell me what an oil market looks like? if it went off-line completely what does the oil market look like? >> it depends on the circumstances. if you have the chinese demand backndian demand, you go to record supplies. an extremebe situation. >> i want to talk about russia. everybody talked about geopolitical risks. then you see drilling in the arctic. should i care about sanctions coming out of europe? >> i think what is a difficult thing is sanctions.

i think you are very right. there is a lot of concern. they were very cagey. i think it's fair to say there will be some impact. >> we talked about iraqi crude production in the future as the 10ential of ever getting to million. >> it's very little, particularly for russia. western siberian fields are declining very fast, double-digit rates. to make sure by 2020 it is flat.

that is difference between russia and iraq. what will be interesting is if there are genuine concerns, those russian production start falling? headline, boots on ground in iraq, what does that mean for the oil price? >> it just means the increase we few seen over the last months is probably going to fall. security concerns are there. the companies are going to pull out the stops. >> thank you for joining us. if you are concerned about oil being on news -- on snooze, it really is on snooze. up, israel and hamas. more geopolitical risk. rejectsinian government

one proposed by rebels. they go to the east -- we go to the east for those stories. you can follow me on twitter.

>> welcome back to "on the move ." i am jonathan ferro in london. 30 minutes into your trading day, this is what the equity market looks like. by 0.6%.up the dax up by over 1%. after three days of losses, you have got yourself a rebound. can this be sustained? we will talk about that through the next 30 minutes. at the touch screen three stocks to watch. flavor, af a building bit of an m&a flavor as well. balfour beatty bats off a new approach from carillion to build

the biggest builder in the united kingdom, 3 billion pounds would be their revenue stream. balfour beatty up 1.4%. once again, carillion coming a wooing is impressing the investor base. it is about a dispute over the parsons division, the u.s. unit that balfour beatty is trying to sell. with that money, if the sale goes through, 200 million pounds will be disbursed among shareholders. a little bit to get the appetite going for balfour beatty this morning. carillion up 1.3%. bilfinger, the german builder which is trying to become a services player, we had two profit warnings in two months. clearly any news is good news. their earnings weren't as bad as expected. executive is said to

be leaving as well. overall, this is a company that month to date, already off by some 12%. today, a bit of reprieve. we are seeing the german builder climbing some 4%. >> thanks very much, caroline. afterstocks are higher china's consumer inflation came in below the government goal in july. alsory inflation persisted. data suggested that communist party leaders still have leeway to roll out more stimulus measures. more happy talk. south africa's central bank stepped in with a rescue plan. investment. under the plan, the company has to raise $930 million in capital. ae emergency support ends week in which african banks lost most of their market value and came just days after the portuguese government stepped in. the ukrainian government is rejecting a cease-fire offer

from pro-russian rebels. the military said it is demanding that the rebels surrender. ukrainian lawmakers spoke on a bill that would block russian oil and gas shipments traveling through ukraine. for more on that story, ryan chilcote. on friday, i saw equities move higher in the u.s. a lot of people talk about the escalation. >> there is a lot of moving parts. optimismhe original was focused on comments from the security council in russia, who said that we would like to see de-escalation. also, some news that russian called.ad been there are other things, other moving parts in the puzzle. you look at risk and whether there is going to the escalation or de-escalation in ukraine.

the most important thing to look at is the city of donetsk. these are cities that are surrounded by ukrainian troops. the ukrainian government has made it clear, it pulled up inside the cities. you have got separatists and the russian government has been saying that it is concerned about the humanitarian situation in these cities. they have been talking about sending their own humanitarian mission. that would be backed up with troops and tanks. we had a huge hoopla over the weekend with the ukrainians saying the russians looked like they were about to start doing that. wouldope and the u.s. call it an outright invasion. >> the u.s. says it doesn't matter what the russians call it. it would be considered an invasion. a very large escalation in this conflict. while we saw this optimistic signal from the head of the security council and from the end of these military exercises,

there is still quite a bit to be concerned about. what are the ukrainians going to do and how are the russians going to react? >> you saw a higher equity market in the u.s. friday. we are seeing that today as well. our russian banks on a move? >> if you look at the micex, it is up today. part of the reason for that is a little bit of them is him that ames will -- optimism that things will cool down when it comes to ukraine. the other reason for that is russian banks. there is an organization called the msci. they compile indexes. last week they said they would review two russian banks' eligibility for the main russian index, the msci russia. those banks are sberbank and vbt. they made the decision on saturday that they would not exclude those two banks. the reason why there was concern

that they may get excluded was because if those two banks issued new equity and you were or thosehat index shares, then maybe you would accidentally be in violation of eu sanctions, which specifically owning, europeans from buying newly issued equity in those things. basically the russian said, actually, we will warn the market if we are going to issue new equity. it looks like that is not going to happen. on saturday, the msci said, we are not going to exclude them. we had a relief rally. the second-biggest bank of 4.5%. up 3.6%. people really relieved. this is more of a reaction. again, when you look at russia's

story, there are so many different moving parts that could upset or relieve everyone. >> ryan, thank you very much. the other big story this morning and what we are watching is in gaza. militants haves begun another cease-fire broken by egypt. the latest truce gives negotiators more time to craft a lasting deal after a month of violence. david joins us from tel aviv with the latest. what needs to happen now before the cease-fire expires again? is it just back to normal? >> it is good that both sides were able to once again reach this truce and cease hostilities, but we are still far from -- it is not clear yet whether we have reached some kind of advance in the longer truce. both sides are very steadfast in holding onto their demands, which conflict with each other. , the blockadeza

in gaza to be eased. they want the passage of goods and people through the borders with egypt and israel. israel wants the exact opposite. israel wants hamas to not be able to claim a victory here. if it were to, it would essentially be israel saying, here,, scott something out of this fight. both sides are very much stuck on their ways. it is not clear they will be able to reach a more -- a better deal by the time the truce ends. >> before this current cease-fire, the violence had changed in intensity. we saw israel he troops pulling back. what was the reason for that? pulled troops out of gaza because it said the tunnels had been destroyed and the threat to israel as far as it could tell was wiped out.

so israel said, ok, we are moving troops out of the gaza strip. says, we are not done fighting you until the rockets -- i am sorry, until the blockade on the gaza strip is eased. are hamas is saying is, we going to keep shooting rockets. however, the intensity of the fighting has gone down because both sides are not interested right now in the kind of fighting that we saw just a few weeks ago that took a big hit on the gaza strip and brought a lot of the major areas in gaza to rubble, and for israel, brought a lot of condemnation. >> thank you very much for joining us this morning from tel aviv. coming up, rejected. balfour beatty turns down carillion's second attempt at a merger. we will bring you all the details. ♪

>> welcome back. this is "on the move." we are going to talk about turkey. prime minister erdogan has wion turkey's first direct presidential election. ready torime minister deliver a new turkey. let's get straight to istanbul for an inside perspective. should we call him president

erdogan now? >> he will be president later this month. that is the timeline for that. we are here to talk about the affect of erdogan going for the prime minister roll to the president office. ceo andned by the cofounder of parachute.com. it is a business management platform. thank you for joining us. it looks like erdogan isn't going to go anywhere. he has not exactly been open to the tech community. the investoro environment here in turkey? >> certainly, you need a lot of transparency and stability for start ups to take off. are looking atat this market, we are more focused on the bigger picture, the fact that the turkish population is very young. median age is 29. you have a great internet infrastructure. there is a lot of potential for

access. -- 47% of thet population has internet access. >> when you look at the reasons for investing, is it infrastructure, is it business culture? demographic, the overall trend, there is a lot of potential for various gaps in the ecosystem to be filled. if you look at technology, the to be technologies have not been explored yet. such is potential for b2c as internet commerce. the internet economy makes only about 1.7% of gdp. in europe, the average is about 4%. >> when you look at why it might not have taken off here, is it a hostile government? cruciallack of vc at stages? >> i think it just takes time.

the government has done a lot of initiatives for technology. the ban on social media doesn't help. social media being one of the most vital channels for marketing. there is a various number of things. there is somewhat of a financing gap. when companies reach beyond, it is very hard to find capital in turkey. human capital needs to develop as well. even though more people have access to universities, the talent pool isn't there yet. you are basically telling me that it is not a political problem here. investorstors, the community, is it concern about erdogan? >> of course there is concern. the big picture is there. if the government has the right policies in place, then turkey will take off. >> give me a sense of the timeline. fromar behind are they silicon valley or tel aviv or

berlin? >> i look at turkey as the u.s. was maybe in the late 1990's. e-commerce has gotten a start. a lot of venture capital financing is here. vc's are setting up shop. a lot of foreign internet companies are coming here. the actual internet culture here is very sophisticated. as sophisticated as anywhere in the world. it is just a matter of time before all these internet companies take off. >> we will come back and interview you when you have a big takeoff. after that, we are going to send it back to you. i heard more optimism from this tech entrepreneur. >> thanks for that, great work. we are going to turn to one of our top stories in the u.k.. balfour beatty reject a revised merger proposal by carillion. matt campbell joins me now. is this just a case of, we have got a unit to sell, let us sell

that and come back again? is it that simple? >> what is at issue here is this new york-based engineering arm. balfour beatty are trying to sell that. carillion very much wants parsons to be part of the company should a merger succeed. that is the key disagreement. a newion did make proposal but it basically was the same proposal. it included keeping parsons at art of the new company. it was rejected. there is some scope for this going. balfour said they are still open to strategic opportunities. i don't think the door is totally shut. >> it doesn't feel like the deal is dead. when you see a company reject another company, it feels like the one that is rejected is the big loser. it is not carillion though, it is balfour here, right? >> balfour is something of a troubled company.

it has had some serious weakness. it has lost its chief executive officer. it is trying basically to get back to health. for it to reject a deal that would allow it to ally with a stronger company, carillion, which has a more robust business around maintenance and services rather than actual housebuilding , is a bit surprising. clearly, balfour is determined to put up a fight to stay independent. >> if you are watching this, you are wondering why it is a u.k. houseboat are struggling right now? the housing business is doing wonderfully well. kete might say the mar is popping right now. >> it is a bit odd giving there is a housing rebound going on. this economy seems to be rebounding rather smartly at the moment. i think what some people point to is, balfour has not been able

to get into services. construction is very competitive. you have to keep cost down. all builders are under pressure to do so by their client. carillion, while they do some building, have gotten into these higher-margin service and maintenance contract. railways,ings like military bases, telecommunications infrastructure. that is where the money is. even the cement firms. lafarge trying to get into these more value added services. that perhaps is where some of balfour's problems live. >> thank you very much for joining us this morning. some more companies on the move, bilfinger did not meet expectations. the german industrial services company sees a positive second half. the company's chief executive of greed to step down after bilfinger issued a profit warning. sanofi is buying the rights to availables only

insulin in hell and. -- inhalant. access toives sanofi 65% of the drug's profits. lions gate entertainment wion a court order. 2 million people have reportedly seen the film before release on august 15. the company said a bit single digital file was stolen and uploaded in late july. up next, the company responsible for some of the most famous fight scenes on the screen. bruises, broken bones, all in a days work for stunt men. that is next. ♪

>> welcome back to "on the move ." i am jonathan ferro. if you ever wondered who choreographs the stunts and action movies and want to know more, bloomberg met a stunt team behind more than 100 productions. ♪ performer, a stunt you are maybe one of the coolest people out there. we get to play for a living.

we do action sequences for film from beginning to end. fighte do is choreograph scenes or action scenes and execute the filming of them in the actual movie. the performers that we have today are incredible acrobats, free running artists, some of them have a dance background. you need people with extreme talent. >> i was a gymnast. i don't have a fight background at all. my firstly threw punch when i stepped foot in this gym. every job is different. "the hunger games" was more running and jumping.

men" is more fighting and flipping. that led that passion me to get into stunts and build this company. there are actors that can do 90% of their stunts better than the stunt performers. brad and matt damon, hugh jackman is one of those freakish athletes. even then, the stunt double is essential. there are a lot of tricks to the trade. the stunt double is more prominent in the film then you realize. there are ways to disguise them. a lot of our stuff is rigging oriented. safety wires, photography that we apply to green screen elements that make us look like we are in a dangerous spot. or a action sequence fight scene, you can't see the face, usually it is a stunt double. most of the time, they are not hitting each other or making

contact. there are accidents sometimes where people to get hit. kneersonally, i have had reconstruction and i have broken my wrist in four places. it is part of the job. you accept the risk. >> coming up next, a man worthy of his own stunt double. it is manus cranny. he will continue to focus on turkey with gary greenberg. in particular, they will look at erdogan's relationship with the turkish central bank and how the markets are bracing for tightening from the fed. plus, manus cranny will be talking about rory mcelroy. manus sits down with a brand management export to see how the business is struggling. in the meantime, you can follow me on twitter. higher monday morning

if you are looking at equity markets. the dax pushing higher. we will be back in two minutes. stay tuned. ♪

>> a new turkey. erdogan tightens his grip on the nation after winning its first presidential elections. we are live in istanbul. iraq pushes back. the prime minister deploys troops on the streets of baghdad as he imposes a more inclusive government. plus, rejected again. balfour spurns carillion's attempts to revive merger talks. very warm welcome to "the pulse" live from london.