>> 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. i am manus cranny. , lots up, lights, camera

and lots of action. what does it take to make a stunt performer? we take you behind the scenes. plus, putting the best faces forward. the new facial recognition software. turkey's prime minister has won the country's first direct presidential election. the former mayor of istanbul extends his leadership through 2019 as he seems to build a new turkey. our international correspondent, hans nichols, has been in istanbul. this is everything that erdogan wanted, isn't it? >> it is everything he wanted. the question is, how does he consolidate the power? how does he transform a veryonial office into a

powerful and authoritative one? this morning, the leading business group has called on erdogan to stop polarizing the country. they say it is holding back economic growth. this is very controversial, what he is doing. he is taking a parliamentary democracy and turning it more into a presidential style system. it is a reward for economic growth. average over 5% over the last 10, 11 years. at the same time, growth may be slowing. 4% is the government outlook for this year. there is also concern about inflation and also, the independence of the central bank. inflation is at i'm percent. the central keep bank free and independent and allow them to increase rates? he wants to see growth continue. he wants to be the 10th biggest economy. just overnight, we had some

changes with the lira. initially, the lira appreciated. it has reversed those gains and it is down 0.1%. that could be a sign that investors are concerned about the economy here. >> have we had any indication on who he might appoint as prime minister? this is part of the great debate. whether that new prime minister would be supportive and bow down to erdogan. >> no hints yet. we know that his party has a meeting in an hour where they will start to hash it out. the question there is abdullah gould. will he potential he become the party chairman and prime minister and could he hacked -- act as a check on erdogan's power? no indication yet that he wants that but that seems to be the preference of the investor and business community. install gould as prime minister

and have him keep a check on erdogan. >> we will leave it there. see you later on. hans nichols in turkey. gary greenberg joined me on emerging markets. that is from hermes in a short while. let's turn our attention from iraq. has deployedister troops and tanks onto the streets of baghdad. this comes as the u.s. urges iraqi leaders to form a new and inclusive government. ryan, this is something which you and i talked about. all of the headlines are that things are improving but here we are, maliki almost into faience of what obama wants to achieve. >> we have two very different issues in iraq. in baghdad, you have the issue of nouri al-maliki in some ways defying sunnis and shia is in his own country by making it clear that he intends to stay on as prime minister. we had a surprise speech last

night, his first speech since the bombing of the north of the country began where he accused the president of being unconstitutional by extending the parliament's period where it can effectively replace mr. maliki. mr. maliki once that process wrapped up. he wants to remain as the prime minister. he is saying that any moves to extend the voting would be unconstitutional. in addition to that, we had the claimant of not just troops, but also some of the more loyal shia militias. this is kind of a new concern. we heard secretary of state john kerry saying, look, we sure hope that the iraqi prime minister doesn't stir the waters of division in baghdad. throwing his support behind the iraqi president, saying that the

president of iraq is the guarantor of constitution and this issue should be resolved not with troops but in using diplomacy. that is the one issue. the other is, the u.s. airstrikes in the north of the country. when it comes to the oil market, oil traders seem to think that those airstrikes are going to be successful in protecting kurdish oil in the north of the country. the more prevalent oil in the south of the country is not at risk anyway. >> is that a complacency? for the moment, those air attacks are something which obama has said, they don't know how long they are going to last. they don't know where the escalation will go to. are the markets too complacent? brent was at a nine-month low. >> i am not going to argue with traders but there are a couple things going on. first off, these developments

that we have in baghdad began late last night. this is a new problem. in the sense of this idea that the e rocky prime minister -- iraqi prime minister appears to have brought troops out to protect himself. this is a brand-new sort of dynamic in the internal political struggles. to a a long ways from that civil war. that is one thing. the markets aren't too concerned about that. the other thing is, the shale oil revolution in the united states, while it might be passé, continues to surprise. there is an awful lot of shale oil in the u.s. it is not directly represent brent -- replacing brent, but it is supplying american markets quite well. that means that foreign oil is more than enough for the markets. that is what we appear to be

seeing. that is why you see brent at about $104. >> integral in that argument as well is, as far as iraq is concerned, they are not off-line. it is whether they can grow over the next two to three years. there was another amazing story on saturday, which was putin congratulating the relationship between exxon and rosneft. they are about to start this big exploration. what do you make of that? is this putin had his finest? >> i think so. it is a couple of things. first off, the well that they are drilling is not just any well. people are talking about this as the most important well to be drilled this year in the world. $700 million being spent on it for an exploratory well in the arctic. if they find oil, this is a big deal.

this could open the treasure trove of arctic resources. it is a big deal for the russians that are trying to expand production. it is a big deal for exxon. >> they need this. >> production is falling. bp also could use this. they are sort of passive painter in this process. also one of the most controversial wells because of this cooperation between russia and the united states. you mentioned putin. this is his way of saying, look, the sanctions -- this is his way of saying, we can hit back with our stick, the food import ban. we can also use carrots. let's be pragmatic, this is a good thing not just for us but also for rosneft. maybe we should have more of this. just sort of extending the olive branch if you will to u.s.

business in hopes that the obama administration will hear this and say, maybe we shouldn't be so tough. the other aspect to this is, how can this happen anyway? i thought we had the sanctions that are supposed to prevent deep-sea drilling. first off, the rig that they are using was hired just before the sanctions went into effect. it is not clear that these sanctions would have prevented this kind of drilling. the technology restrictions that the eu put on place against russia, banning some technology for shale oil exploration and deep-sea drilling, those began at much greater depths. this well is quite shallow. -- have to say to yourself when they came up with the sanctions, to what extent were they looking to make a rhetorical statement? it doesn't look like they were

really trying to strike out too hard just yet. >> ok, ryan. we are going to leave it there. let's give you a quick look at what else is on our radar. morgan plans to spend $44 million to buy out outside investors in its family companies. the deal ranks the second largest ever in the energy sector. by simplifying corporate lowerure, kinder hopes to borrowing costs and unify the company under a single stock. balfour beatty has rejected a revised merger proposal from carillion, saying there were a number of risks. carillion has said they approached the construction firm to revive merger talks. speaking of deals, the prime equity firm blackstone is said to be in advanced talks to buy shell's stake in a louisiana shale gas field. would be selling

the stake for $1.2 billion. it is part of a wider trend of oil companies shedding gas assets. up, will it be a new era for turkey? more on erdogan's big plans after winning the nation first presidential elections. ♪

>> welcome back to "the pulse." we are live on bloomberg tv and radio, also streaming on bloomberg.com. we are truly everywhere. that's get back to our big focus, the turkish elections. the prime minister has won the first direct presidential election. is the victory a win for the markets? joining me is gary greenberg, emerging markets fund manager. ray to have you with me this morning. his victory you say was very much priced in to the markets. what does a presidential victory mean for erdogan? how do you see it translating into reality? >> it depends what he does. the next step for him is to solidify his presidency with more power. in order to do that, he will need to have new elections in the parliament to get a two thirds majority so he can pass

legislation which allows him to be more of a russian president with real power than a figurehead. >> that russian style presidency would mean what economically? a lot of people are saying if it depends on who he brings in as prime minister, the architects were theonomy stalwarts of the economic policy. >> they are not likely to stay. there is a three term limit. it is very important who he brings in. it is clear that he is going to be working on big infrastructure projects. the real question is turkey's vulnerability. that is whether they can tackle inflation. in emerging markets today, the question is whether a country is on the supply side or following the old centrally planned type of thing like russia for example. if turkey gets inflation under control, it will become more

competitive and have a real place in manufacturing. -- someve seen erdogan people say he is interfering with central-bank policy. is that the biggest risk economically? >> over the next 12 months, i think it is. the fed may be raising rates. turkey is number one in terms of vulnerability to that. inflation is close to 10%. the target was first 5%, now it is 7.6%. >> the economy is unraveling from the intonation you are giving me. you don't sound that a short of being invested there. >> at the beginning of the year, we thought it was very attractive. right now it is less attractive than it was. >> we have had a reprieve in the lira. the best-performing emerging market currency on the

year. does that position hold for you? >> it is vulnerable. >> talk to me about iraq. before we came back, you said one of the things is the relationship with iraq in terms of trading partnership. >> iraq is the second-largest trading partner for turkey. it needs the uncertainty and instability -- it really hurts the turkish economy. the turkish economy is growing relatively slowly. erdogan is very popular because of tremendous growth rates in the past. if this continues over the medium-term, the turkish economy will struggle. >> turning our attention to russia, a lot of the headlines that are being written are that, there are these moves by putin. what does it take for you to say, i am convinced there is a real de-escalation? -- we need some

consistent news that the troops were pulling away, that the donetsk leadership, the rebels are open to talks, that talks actually took place. those types of things would convince us that a real de-escalation was in process. it is certainly not clear today. >> as you look at that next this, russia, turkey, iraq, the an areaar east, is it that you are prepared -- i have seen various things, the worst is to come in russia, we are seeing btb and spur bank stay in the msci. how do you look at those three, that constellation of countries and risk? >> we are looking at them from a long-term perspective. we manage money for pensions. we are looking at 3, 5, 10 years.

it is a question of economic model. if economic model is inclusive, flexible, really puts the country in a position to be competitive globally, then we are very interested, especially if valuations are compelling. in russia, valuations are cheap but the economic model is not clear at all. they may go towards a state capitalism type model which would not improve competitiveness. we are looking to see what the long-term roadmap is for the country. discountingt isn't that, then we are quite interested. turkey is up in the air. exactly clear how autocratic it will be and how that will hurt business. it might. we are neutral turkey. also stands at a crossroads in terms of economic decisions. we are waiting to see what kind of decisions it makes. >> that leaves me a touch of

and withh reformation a new direction at the central bank and it leaves you with cliché ofthe original brazil, russia, india and china. what is your perspective? do they have the flexibility? you have changed within india. we just had modi. if you have to rank where you want to have your exposure, how does that ranking look? >> india and china both are really committed to reforms. china is implementing them, i'll be at it is slowing down economixcally. india has stated that it will implement them and indications are that he is starting that process. india and china represent real opportunities. brazil, not so much. rousseff, i think she is still likely to win.

she favors more of a state capitalism type model. as long as she is the front runner, brazil isn't really that attractive. >> we could talk much more at length. good to get your opinion on the biggest stories of the day. gary greenberg. now, are you ready for your close-up? you may have a choice. we will show you the new software that could make a face out of a $6 billion industry. ♪

>> stocks are up. is the correction over? jonathan ferro. >> manus cranny, we have had the correction in europe. the dax off by 20% off its 2014 hype your rig it cac 40 just short of that. is this your monday morning rebound, it looks like it. ftse 100 up by 0.63%. the dax up by over 1%. these are eight here are your three biggest gainers. where are your three biggest movers? they don't exist. every single equity on the dax is pushing higher. in russia, spur bank, btb pushing higher. institutional money, the

door stays ajar for them. elsewhere, we are talking about geopolitical risk. in iraq, the islamic states push on. snooze for oil. oil stays lower by 0.1% this morning. $104 a barrel on brent. what is going on here? a lot of people aren't concerned about what happens with iraqi oil. our spokesperson said this one is a slow burner. it is about what happens in the future. 3 million barrels a day right now. can it get to five? in the future, getting to 10, she says that is a pipe dream. >> we will have a conversation with bnp paribas a little bit later. here is your pulse number. $26 million. that is how much a jeweler paid for its rough diamond known as the blue moon.

it is 29.6 carats. it took six months to cut. it is one of the rarest gems ever. simply stunning. ♪

"> welcome back to "the pulse live from bloomberg's european headquarters in london. i am manus cranny. asian stocks traded higher after china's consumer inflation came in below the government's goal in july. inflation also persisted. data suggests that the communist party leaders still heavily weighed to rule out more stimulus measures for the economy. is ukrainian government rejecting a cease-fire offer from pro-russian rebels. the military is demanding that

the rebels surrender. ukrainian lawmakers vote tomorrow on a bill that would block russian oil and gas shipments from coming through ukraine to europe. balfour beatty has rejected a revised merger proposal from carillion. balfour said a merger of the u.k. builders would undermine the sale process of its new york-based unit specializing in engineering. carillion has approached the rival company to revive talks that collapsed in july. for more on this story, i am joined by matt campbell. matt, here we go. has balfour rejected this? >> this is coming back to the same sticking point we had before. parsons brinkerhoff, new york-based engineering consultancy, the people you hire when you have some megaproject. balfour beatty wants to sell parsons. carillion wants parsons to be an

integral part of the combined company. this appears to be a somewhat intractable disagreement. that's is the stated rationale. >> balfour are saying, if we do manage to sell the consulting business, there is traction, 200 million pounds possibly for payback to investors. is that enough? you were saying they had a pretty rough run. i was looking at the top line on our story. how many profit warnings? four profit warnings. they have lost their chief executive. ais is not a country -- company that can convince the shareholders easily. company.s a troubled interestingly, shares are up slightly today. normally, failed talks, you expect target shares to go down quite sharply. they have succeeded in diffusing some of that investor angst, at

least for today. long-term, this is a troubled situation. >> do you think this is the end of the story or will it revive and have their radius forms? >> i suspect there is more to come on this one. balfour was careful to say they are open to value-creating strategic opportunities, which is just city speak for, we could still reopen this one if we get terms that we can agree with. >> what does it take to reopen this? where is the value? one has been battered. they have a consulting business that delivers in the hard times. and then you have a beast of construction. would it be a good fit? >> the strategic rationale is fairly obvious. you saw among analysts and investors, a very receptive atmosphere to this he'll.

the idea is, carillion is very strong in services. they do maintenance and that sort of thing for military bases, railway facilities, telecommunications. balfour is more heavily oriented toward traditional construction. the idea is that combining these services makes a lot of sense. the strategic rationale is there but the companies aren't seeing eye to eye. >> you speak about deals all the time. you have a real sense of what is going on. if in version is on the cusp of the climate in the u.k.? are there deals bubbling going into the second half? what is the feeling on m&a? >> i think the feeling on m&a is fairly buoyant. we do have this trend of u.s. companies trying to invert into europe because the political atmosphere in the u.s. may or may not continue. we have a strongly recovering

u.k. economy. we have perhaps the housing sector also in strong recovery. all cylinders of this country's economy seem to be firing. traditionally, that correlates with deals. corporated is confidence and that appears to be coming. >> things for that roundup on the balfour beatty story. let's cross to south africa's central bank. a rescue plan for african bank investments. the company has to raise more than $900 million in capital and break off a so-called bad bank with bad loans. here for more on the news is remy. how quickly did this whole debacle come to light? week, wednesday, that we first saw a trading update from african bank.

that sent stocks into freefall. they said they would need at least 8.5 billion to keep them capitalize. the market it and seem to believe that was possible. >> where are we on bondholders? the big issue when we see these issues happen is, who is going to take the pain? equity holders? as the central bank said, the shareholders unfortunately will be taking the main hit. >> what are we left with? ,frican bank, it will survive but in what form will it survive? became three it different parts. is nowniture retail unit protected from creditors and maybe will come back to life, but it will take a retailer buying that.

african bank's bad loan book has been bought at the central bank here for 7 billion rand. they are going to try and collect all the cash they can on that book. i don't know if they will be able to sell it. african bank itself, the so-called good bank, that is insecure readership. over $900 million being raised to recapitalize its. back on the you had a start stock exchange once it has been saved from financial woes. >> thanks for the update, in johannesburg. let's turn to attack. crime,d to better fight one british police force is testing their own facial recognition system. that is by analyzing records against local crooks. apart from the coming a police tactic, does the application hold a greater role? tom gibson reports.

>> this is neo-face, a high-tech solution to an old police problem, getting a positive id. of the u.k. forces is running a trial to see how it holds up. >> we have footage from a shop where somebody was caught shoplifting, for example. if we can get an image from that of good enough quality, the operators will download that and run it. within two seconds, it will give any potential matches. >> the human operator is still needed to check the matches. identify, it has .rought back 200 potentials it doesn't discriminate between age, gender or ethnicity. it is purely looking at facial features. all it is doing is giving me a

potential person. >> if the person isn't in the database, the system doesn't work. overallal run has an success rate of just 44%. however, they see other applications for neo-face that don't have the same limitation. allows employers to monitor staff movements in real time, replacing id cards. this is already in operation in ac offices. the company claims it improves security. they say neo-face could become a key tool for improving sales. it recognizes returning customers, allowing staff to target certain products by looking at spending habits. according to one firm, facial recognition technology could turn your face into a commodity worth around $6.5 billion. following recent scandals in mass surveillance, how the

public reacts may change how the technology affects our lives in the future. tom gibson, bloomberg. >> just when you really thought that advertising couldn't get you any more. it is coming to get you. coming up, rory mcilroy. well done. he wins the pga championship. it is his second major in a row. golf'sslow the slide of global appeal? is he the next tiger woods? we will discuss that. here is a snapshot of the financial markets. ♪

"> welcome back to "the pulse live from bloomberg's european headquarters in london. rory mcilroy won his second pga championship yesterday. he is the first golfer in six years to win successive major league titles. is he the next tiger woods? our next guest says golf is struggling and will continue to do so until they find the holy grail. nigel kerry. is he the next tiger woods? >> he may well be. he is a real shot in the arm for golf. but you can't underestimate just how huge tiger woods was. he was the golf and her straight

for about a decade -- industry for about a decade. replacing him is a pretty tough call. >> yet people say that rory signed up with nike last year for a quarter of a billion dollars. it would trump what tiger did. he is a young man in terms of his career with this sport. to maintain this momentum. >> he has. he has started to do that. back-to-back majors. that is really what golf needs. it needs someone to start taking the sport by the scruff of the neck and winning regularly. we had a period where it was just different individuals winning the majors. nobody won more than one in a. -- in a period of about three years. was just looking through some of the articles.

golfciety moves on and as moves on, he does represent a new generation. golf is competing with is like ironman. does mcilroy, is he inspirational, has he got a social media footprint? doubt, he has, along at the right time. he is a breath of fresh air. he appeals to the younger market. he really appeals to the american market as well. >> what is it about him? >> there is the irish thing which helps. i think they connect with him and relate to him and like the way he plays. that is important. >> we have seen recently in some of the results, some of the big golf suppliers are having a tough time. talk to me about brands. he came out of emirates and that whole sponsorship with them. they found him early. they found him first, which was great for them. but they lost him.

>> if you are one of the top players in sports like golf or tennis, you are a target for the big global brands. golf reaches every corner of the planet. everybody knows who the top players are. if you are one of the top players in that sport, you are a target for the biggest global brands. emirates latched onto mcilroy, nike of course. that name gets recognizable all over the world because they are associating with a face that is recognizable. >> i was looking at some of the adverts he has done. one, acting is not his forte. alice, the omega ad, it is brilliant. the music is fantastic as well. it is a very grown-up add.

has he got to be careful with who he hitches up to? guys are good at sport. not all of them are good at acting. he admitted on social media that acting wasn't his thing. he had a laugh at himself about it. it wasn't perhaps the greatest it of acting. but that doesn't matter. it is all about being associated with those brands. as long as he is doing well on the golf course, they will be pleased. >> i was looking at golf and thinking, i have been to a lot of cricket, a lot of rugby, a huge number of sporting events. cricket evolved to get people through the door fast and furious. what can golf do? what can mcilroy do? can he bring the game forward? the duration of some of these competitions? >> what it needs is more personalities like mcilroy. great sport thrives on great

competition. if you think of any of the great tennis arrows or golf arrows or boxing, it thrives on great competition between two or three individuals at the top of their game at the same time. golf hasn't got that at the moment. it will come along. all competing. frazier.ing, ali and you need that competition. golf needs that. >> in terms of sponsorship dollars, tennis is just coming back to a new cycle. rory could be leading the pack in terms of golf. formula one is its own unique creation. where do the advertising brand dollars go for the younger

generation? where is the best return on your marketing advertising sponsorship dollars? >> for the younger generation, there is always new brands and new coming along. is youngike mcilroy enough to appeal to the younger market. at his age, he is appealing to the older generation that like golf, the younger generation who are coming along. that is why he is so appealing at this stage. he can really bring them along with him. >> brands have entire divisions that search for the next new talent. -- how difficult is that for the big brands to do? do they constantly search out? >> they are looking all the time at who is coming through. they are signing people up as young as 12, footballers, golfers, tennis players. they all get signed up very

early. it is the same for all of them. it is a guessing game. >> who is the most transformational sports person or brand? what is the best pairing you have ever seen? >> in terms of brands, tiger woods and nike. no doubt about that. >> tell me something else that inspires you. >> after that, i think -- >> it is ironic, isn't it? it is tiger woods. >> that was so synonymous, the two of them. he was on screen 70% of most of the golf tournaments. that branding was seen the whole time. if you get it right, that is how impactful it can be. >> unless you make a mistake and even then, it doesn't seem to matter. >> you are still a big name. >> great to have you in this morning and congratulations to

rory mcilroy on his win. we are going to be back in a few minutes. it is 9:50 in london. equity markets are bouncing. ♪

biggestplay some of the roles in the movies, but we have never seen their faces until now. bloomberg takes you to meet the unsung heroes of hollywood

blockbuster films. ♪ ,> being the stunt performer you are maybe one of the coolest people. we get to play for a living. we do action sequences for films from beginning to end. fight scenes or action sequences and execute the filming of them in the actual movie. the performance that we have today are incredible acrobats, free running parkoue artists. -- parkour artists. you need people with extreme talent. >> i was a gymnast. i don't have a fight background. i literally threw my first punch

when i stepped foot in this gym. every job is different. "the hunger games" was more running and jumping. "x-men" was more fighting and flipping. >> it was sort of that passion for martial arts that led me to stunts and also built this company. there are actors that can do 90% of their stunts. they can do them better than the stunt performers. brad pitt 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 greens and elements. >> in action sequence or a fight scene, if you can see the face, it is usually a stunt double. most of the time, they are not hitting each other. there are accidents sometimes where people do get hit. i have definitely bruised up a lot. >> i have had knee reconstruction. i have broken my wrist in four places and a couple concussions. it is part of the job. you accept the risk. >> pretty cool. for those of you listening on bloomberg radio, the first word is up next. for our viewers here, it is a second hour of myself and the team. here is what we are talking about. turkey, the elections. we are live in istanbul with hans nichols. oil, iraq, russia.

geopolitics at play. bnp paribas' energy strategist joins me. that is all after the break. ♪

>> a new turkey, erdogan tightens his grip. we are live in istanbul. pushes back. the prime minister deploys troops on the streets of baghdad as he opposes a more inclusive government. rejected again. foul first burns attempts to revive merger talks. four spurns attempts to revive merger talks.