>> more unrest in ukraine. rogue russian rebel attack to coast guard rebels -- two coast guard. >> china cools. many factors slows, adding pressure to step up on stimulus. ,> -- manufacturing slows adding pressure to step up on stimulus. will iliad beat again? the company is said to be in talks to make an offer for t-mobile u.s.

>> welcome to "countdown." back to our top story. eu leaders have given the european commission a week to draft a new round of sanctions against russia as the conflict deteriorates. worried the situation could get worse. >> i think we are close to the point of no return. the point of no return is full-scale war. >> let's get more of this. ryan chilcote has been reporting on russia for 20 years. that's a long time. >> it is. are getting really busy. we heard the ukrainian president. we also heard from the russian president yesterday in what i think was a very meaningful sayingew he gave

affectively there should be talks for state had four eastern ukraine. you pointed out earlier a spokesman said this is not the russian president saying eastern ukraine should be independent. it will certainly unnerve kiev, and it certainly has a lot of people concerned putin's aim is to create a land bridge from russia proper to crimea to another state. >> it is putting pressure on kiev. >> exactly, to have this wedge between russia and nato should ukraine think of joining nato, which is one thing ukraine is suggesting it should do right now. that is interesting. he also dismissed the idea of a cease-fire yesterday. medicine that we have heard from the russian foreign minister this morning cap -- that is

something we have heard from the russian foreign minister this morning. saying he hoped the talks focused on the cease-fire, but at the same time he said it would be unrealistic for the rebels to put down their weapons. >> how do we read the latest againston in violence the comments you got from the european union over the weekend that that if things get worse than the sanctions environment would get worse? >> the european union threat came on the back of russia saying they have well over 1000 troops in ukraine. nato said that at the end of last week before the eu leaders gathered. saying if the situation worsens we had pro-russian rebels firing on ukrainian coast guard vessels. is definitely an

escalation. that definitely moves us closer to sanctions. >> they are working out where the sanctions could fall. >> that is right. where we are right now is the sanctions -- the most meaty sanctions are against companies in energy and finance really, and restrict their access to capital markets, and the idea is we could see more of that. what the eu leaders have done is said to the european commission dropped the new sanctions -- we understand they are working with the united states on trying to make the european union sanctions as tough as our closer to the toughness of the american sanctions, but there is a way to go there. >> a busy week. >> absolutely. we have president obama going to estonia. he will be the second president to go there. president bush went there in 2006. don't even think about touching the baltic -- >> you are allowed to say it.

.ou should be going to ukraine >> absolutely. i don't think he should necessarily be going to ukraine. i don't have a personal view on this. on the russian side of things if the conflict is in ukraine and he is going to a different country thomas it would be more powerful if he was to go to ukraine -- to a different country, it would be more powerful if he was going to ukraine and saying, don't touch ukraine. you are getting a lot of calls within the congress and in general the united states for president obama to show more resolve. -- >> to have a proactive start. >> yes, and a bunch of senators were in ukraine yesterday. yesterday andiev said the u.s. should start giving arms to the ukrainian government to fight the rebels. merkelsomething angela doesn't want to see happen. >> and that is something we

discussed saturday. she said, if we give them weapons, the way to solve this conflict is through military means. that's the message we don't want them to send. she doesn't think this should happen. as you know, it is something i am sure they are going to discuss. in addition to, we understand obama is pushing for european countries to spend more on defense. this is a big theme. they want countries and the european union, nato countries, -- pend 12% of their gdp >> to share the burden. >> within the european states the only ones are ukraine -- are the u.k. and france. it may drop to two percent in the not-too-distant huger ominous but the fact that cameron is calling -- not-too-distant future, despite the fact that cameron is calling for them to do this. the ruble was negligibly down.

i think the ruble is an interesting story. i am not sure where we are. the ruble had a terrible week. >> dirty 7.11. >> it strengthened just a tad. 37.11. last week.e closed it was its worst week. it was down three percent. it was at a record low. it was down more than 10% this year. that's a big issue. that's a big issue for inflation. in addition to the food import bans. that is something the russian government has to be worried about. , theit comes to the market russian stock market, last week the russian stock market lost dust over three percent. most of the losses have been , those by the sanctions

having more trouble getting access to markets. it hasn't been the blood bath it would be given the rhetoric. >> thanks very much for the latest on ukraine. china has released its latest health check on the manufacturing sector. david is standing by in hong kong with more. it seems the weakness in isufacturing number prompting some people to consider whether the government might do more to prop up the economy. >> exactly. that's why when the numbers came out a few hours back use of the markets quickly turned. it was basically flat hong kong and shanghai. it did see a big pot because of expectations in the numbers -- a big pop because of the expectation the numbers should show that. official pmi data. 51 point one. on the surface it looks ok.

it was a big drop from the previous month. if you look at the glass, it is half full. the largest listed companies are moving forward at a steady pace. hsbc,nal reading from which is a smaller survey, is -- 50.1.ove 50-50 the recovery and china is actually slowing. and merrillica lynch is saying we will see beijing announced stimulus measures. in what form we still do not know. >> you are in hong kong. over talk about tensions the democratic process, because we understand the protesters are vowed to start an era of civil disobedience. tell us more.

>> that's right. the stage is set, because what we had over the weekend was we have this proposal from beijing. electionsor the 2017 must be approved by a nominating panel, which opposition lawmakers have come out and said will likely be stacked with pro-beijing loyalists. so democracy legislators want -- suffrage,erage, that the general public nominate the candidate for the elections, something based on the proposal from beijing won't happen. side of the argument, which was brought up by the ao-beijing side, is that public nomination of candidates does not comply with hong kong. it is the mini constitution we

follow in hong kong. it is important to keep in mind the political system, which is one country into systems between hong kong and the rest of the chinese mainland. what is ahead? the occupy central movement has said it will be staging a mass occupation. they didn't say when. it is not a very big place, bybably 10 to 15 minutes walk. that would cause a lot of destruction. this is where you had a stock exchange. this is where you had major banks. it is something to watch closely. lawmakers have said they would block this proposal from beijing. beijing has said if the law doesn't go through we may actually just scrap the 2017 elections. it is a developing story and very big to follow. >> thank you very much. thisill to come, moscow's calculation. our next guest says vladimir putin has played a poor hand in

eastern ukraine and now needs to make the best of a bad job. the former british ambassador to russia joins us after the break. ♪

>> welcome back to "countdown." lifetime in london is 14 minutes past seven. more sanctions are coming. that is the word after nato employed troops to eastern ukraine. within a week the european commission will have drawn up new measures to impose on russia. u.k. prime minister david cameron says the kremlin's only choice is to listen to europe's demand. >> it is a difficult situation, and we have to show real resilience in demonstrating to thisa if she carries on in way the relationship between europe and russia, britain and russia, america and russia, will be radically different in the future. >> we are joined by the former reddish ambassador, sir andrew -- former british ambassador, sir andrew wood. i know you think putin had failed.

he is tryingn what to achieve. what do you think his objectives are? but they keep changing. his original objective was to make sure there was no democratic government in ukraine and that would lead directly to moscow. that failed. he miscalculated in interfering with eastern ukraine in that he suppose there would be a popular uprising in favor of his ideas and policies. that failed. he was on the verge of military donetsk.n each time he has doubled or quit . >> how difficult is it to combat somebody working in uch an ad hoc manner? >> it's very difficult. the important thing is for us to have a consistent view. our consistent view is it is not primarily a quarrel between the west and russia, which is the

secondly, the it. territorial integrity of ukraine is something essential to try to that is something primarily up to the ukrainians. i think those are two basic principles. >> you were this country's ambassador to russia. how good is the intelligence? i know you are not privy to it now, but it seems putin keeps surprising everybody and really has the initiative. does the united states know what putin is going to do tomorrow? >> i cannot answer. i think he doesn't know what he is going to do tomorrow either. this is the real danger of the present situation. it is very ad hoc. i don't think he would have wished to introduce his troops quite so blatantly, although he

has been supplying men and weapons for some time, and he has been forced into that because it was not working, and he thought he might lose those cities. that was an opportunity to declare victory and to get out. he proposed instead to open another front. >> was it a lower level of popularity at home? would that cause putin to think twice, and if so, what would drive that? would that be higher living costs, reduced standard of living for russians? was that the focus? the factiving costs, he has lied to his people, and the arrival of body bags. those are serious risk. over the long-term this is an economic disaster for russia. one must assume in the long-term his ratings will drop. the ratings are slightly illusory to the degree they are

ofnded on his presentation litany or chaos. chaos is what you have in ukraine. you wouldn't want that, would you? that is a perfectly good strategy, but not a long-term strategy. >> the ratings are 84%, even if you believe them. economic chaos or problems with ,he economy and people's lives we are not really there yet. those are distant raw specs, the idea the economy will get really bad and his -- distant prospects, the idea the economy will get really bad in his popularity will plummet. but they think it will happen. it doesn't matter what i think or what any of us think. it is what he feels. there are quite a lot of indications of nervousness on his part. he knows in russian history people have turned quite suddenly and from the point of view of the powers to be dangerously.

problems are -- i was going to say psychological because they are within him, but they are in people's apprehension of what is going on. he has expressed himself on that. >> what do you think of prospect military assistance? angela merkel over the weekend was pushing against that as an option. there is definitely a division within europe on whether europe should give assistance to kiev. to moscow. >> where are we headed on that regard? a it has become more of question. military assistance has a wide range of meanings. protectedtter equipment in a way as military assistance. helping with supply is a form of military assistance. supplying more competitive weapons for the ukrainian army

is a further step up. i don't think we are talking about ourselves producing troops to go there. .> one quick question on bp i know you advise and have advised russian companies that operate in russia. bp in the past. they have got a 20% stake in russia's largest oil company. closer to russia has not been a material issue. ir hasn't been -- so far the closeness to russia has not been a material issue. at what point is that change because sanctions keep getting ratcheted up? at what point does bp really start to suffer and british business as a result of the sanctions getting ratcheted up? how bad of a situation is bpn? -- is bp in?

>> this is not a comfortable situation for anyone. to some degree the future is takeedictable, but bp's s is determined to be long-term. they must suppose russia will in due course settle down and resume a path towards economic abandoned in was 2012 by putin. which you think will be their strategy. >> i think it has a degree of optimism, but if you invest in oil you have got to have some optimism. >> thank you for joining us. sir andrew wood, associate fellow. atcoming up we are looking reshuffled management. all the details later. ♪

>> welcome back. thehe chief executive of largest exotic eyewear company is in a printer -- a bitter row with the owner. andrew roberts joins us from paris. what is going on?

what do we expect to happen? >> good morning, mark. what is going on is there is a board meeting this morning. they are gathering top people to make a decision and to make a final call this evening. as to what is going to happen speculation has been mounting since july. supposedly there was a fallout between the man who has led and the owner and founder of the company. they supposedly had a falling out over strategy. it could have to do with the .oogle tie up in any case it looks like he is leaving the company and the most likely solution is the cfo will replace him, possibly with some

support on the operational and commercial side. to leave you now but hopefully we will get you back. buckets ofthrowing water comes into vogue on the internet, water week. we will discuss that next. ♪

>> welcome back. let's go straight to the foreign exchange market to check on euro-dollar. at thelar is highest level in almost a year. going tot ukraine is have has been weighing on the euro. sort of boostme

to the dollar. we have talked about contrasting we are discussing in relation to the fed and the ecb, when talking about its strategy for monetary policy and the other one not talking about that. all of that comes into focus on thursday when we have that meeting at the european central bank. >> these are the top headlines. china's manufacturing expanded at a slower pace last month. it suggests the economy is losing momentum. china's official purchasing manufacturers index came in at 50.1 in august. at 50.2. in both dropped in july but remain above 50, which indicates expansion. staying in china, protesters have taken to the street, vowing to start an era of civil disobedience. that is after china ruled that populares of the

election must be screened. the ruling gives the beijing government an effective veto over anyone not viewed as friendly to the communist party. oppositionists say they will block the passage of the electoral bill. tosian rebels have attacked ukrainian coast guard rest -- vessels for the first time. just hours after that you government agreed to impose new sanctions on russia. if it worsens the sanctions may target energy and finance industry. welcome back to "countdown." >> the time in london is 7:32. world water week kicks off in stockholm. the conference aims to bring energy efficiency into focus. joining us is the head of thematic investment. thank you for coming in. let's talk about water. the facts weof need to know around water and the global megatrend, and we

will delve into investment ideas behind it. >> i think at the macro level there is not enough of it. if you look at all the water on the earth, only two and a half percent of that water is fresh water. it's in all the wrong places. you have 10 countries that control 60% of that water. you have close to 50 countries currently in a state of water stress or scarcity. of it.sing too much water use is booming around the world. goes tosage agriculture. seven percent is considered inefficient. and municipal as we start to adopt a lot of the bad habits we had in the west with regard to water use. >> where are we when it comes to management, wider technology use, greater government mechanisms -- those three headings? >> we have a long way to go. to put it in perspective, only two and a half percent of water around the world is recycled and actively reused.

it is just a drop in the bucket. we have to get up to the sorts of levels we have seen countries like israel, which are at 75 to 80%. we also have to have a significant move in terms of rising. water is not price at a level be --ncourages usage to users to be efficient in water use. the water has to hit home in the same way as energy. >> where water meets the energy or, we see interesting trends. a least of which the development increasing use of fracking technology. -- not least of which is the development of the increasing use of fracking technology. >> 90% of energy is what are dependent. the fastest-growing source in the u.s. is energy. for every bill the increasing use of fracking technology. >> 90% of energy is what are dependent. the fastest-growing source in the u.s. is energy. for every bill of shale gas produced you have one barrel of water. 50% to 60% of areas where they are officially classified as water stress.

>> how do we take advantage of this? you have got a great staff that shows the s&p global water index over 10 years. it has outperformed oil and gas, gold over one year. and 10 years.ars that is an incredible step. i shall use it until the end of time. >> i think there are a couple of ways. first is to focus on location. countries creating a positive enabling framework for the sector. i think china is a great example. close to half of their gdp is water stress problems. chinese have now become the biggest investor in water in the world. they are encouraging the private sector to get involved, and the tariffs are skyrocketing. our analyst like companies on the water supply side. companies like beijing enterprise supplies water as well as water and waste

treatment. i would say location. it's about being in the right part of the value chain. we talk about energy. companies that are actively involved in treating water in the oil and gas sector. rewards in all parts. where else are we seeing place, andta take in thek about big data water industry. >> we all talk about big data. tangible some opportunities. particularly when you look at ag in thehe u.s., -- u.s. and they are facing stress. companies are starting to propose precision i were cultural solutions. what is the optimal time to start planting.

>> do investors understand this? a sense of understanding about what we are ?acing >> two-putted in perspective we have 50 or 60% of corporations suffering from water related risks. 50% of corporations do not have a long-term solution in place. i think investors are increasingly trying to deal with this. >> what about peak water? what does that mean? >> we think we have probably arrived at peak water.

over the next 20 years water demand is going to exceed reliable supply by about 40%, making water would've the most precious natural resources we have. -- water one of the most russia's natural resources we have. food energy is absolutely pivotable. demand for the three is said to increase. they are all interlinked, and at a certain point, something is going to have to give. >> thank you for joining us. it will be good to have your thoughts. >> teaming up to take t mobile iliad's take on the dutch unit after the break. ♪

>> credit suisse held talks about a possible merger according to our report in a swiss newspaper. the bank has been under pressure to focus on wealth management and to reduce exposure to investment banking. alibaba is said to be postponing the start of invest in meetings according to a

person knowledgeable. this allows more time to ask questions by the securities and exchange commission. apple is said to be set to turn the next iphone into a mobile wallet. on agreement may be unveiled september 9. along with the next iphone. welcome back to "countdown." >> time in london is seven: 42. iliad is said to be in talks with several private equity firms to make a bid for t-mobile according to people familiar with the matter. we are joined by our field reporter. thank you very much for coming in. why is he putting his sights on the u.s.? >> iliad after being frenchccessful in the

market and they want to expand, and the u.s. market is probably the most exciting in the telecom sector. iliad is known for low-cost tariffs. their hope is they will be successful to transport that model into the u.s. >> what about price? deutsch, it seems has come up with a figure it would be satisfied if anyone approaches table.it on the where does iliad play into that? aboutalue that stake at $33 per share, and our story we reported that deutsche telekom executives will be able to discuss the potential offeror for at least $35 per share -- offer for at least $35 per share. the lead is trying to raise funds and team up with private .quity fund -- firms

>> what would regulators say about this? they like having operators. it seems strange iliad goes to the u.s. to do deals when regulators in europe have expressed an interest in allowing consolidation within europe, where there are so many telecoms operators, yet in the u.s. there are comparatively few, and yet that is where they choose to go? >> that is a good question. in europe for years and years, that debate for consolidation has been dragging on. there is no easy and specific solution on the table. a lot of executives are complaining about how consolidation in the industry is needed in order to continue to be profitable. in the u.s. everything is a lot smoother, and that is one of the reasons why billionaires -- the owner of iliad believes his

company will be successful in a bid for t-mobile. was is one reason it repurposed by t-mobile. >> there are other companies that might be interested? iliad might not have a straight t-mobileaking over u.s.? >> exactly. price for potential discussion is set, oil companies may join the party. we may see other companies potentially joining the game. >> the $33 per share did not include $10 billion in savings. bring thatthey can amount of savings out of combining the companies. >> exactly. iliad says the offer was higher than the $33 per share because

of the $10 billion synergy he believes will be created i .ombining iliad and t-mobile >> is that normal to quote a price. here is the amount of money i am going to give you an here is the amount i am going to save. that is not the normal way we talk about how much companies change hands for? is a tricky term. how you value those. down the road are you going to be able to achieve those? you need to continue investment. especially in the telecom industry. >> is there a sense that t-mobile deutsche telekom is desperate to get out of the united states? we had an analyst saying they are trying to get out of the united states for years. is that an impression you get? >> it has been the story for years. it is just a matter of when.

happening something soon. >> hopefully bloomberg will break it, and we will have you back on. >> thank you for joining us. higherties set to open across europe. after the break we will take a what will be dictating the first trading day of the week. ♪ the first trading day of the week. ♪

>> welcome back. this is "countdown." >> time for company news. iliad is talking to private investment firms about teaming up to make an improved offer for deutsche telekom's t-mobile unit. deutsche telekom said it is willing to negotiate those sales if the bid values the company at at least $35 a share. the previous offer was dirty three dollars a share. the bank has agreed to buy 800 million euros. barclays says the sale of the spanish businesses will decrease by about 8 billion pounds. to the chief bloomberg he spoke to

in an exclusive interview. >> as it stands now it will be it happens to run into a weekend that is sort of is a transfer it of systems. the most likely date is october 13. >> our next guest is following the main themes that will drive the market. one of them is how tensions are keeping investors on edge. a busy week. what is number one? is the most important event? what is at the top for you? >> obviously macro data side, i think it is what is happening in ukraine. there are no good outcomes. either ukraine backs down or

russia backs down. neither seems likely. the concern is we're going to see further escalations and that is going to turn into a negative geopolitical feedback loop. that is going to have an effect over the next few months. the eu is going to impose more sanctions on russia. >> they have said if we see an escalation there will be more sanctions. manufacturing get data from various parts of the eurozone. that is going to be the focus. >> we have manufacturing data from france and germany. meeting laterb this week. there has been speculation the ecb will do more. i doubt that. i still don't think they are going to do anything until they see the outcome. they are supposed to start on the 18th of september. until we see what type of effect that have, and i have my doubt as to whether they will have any

then i thinkfect, the ecb is going to sit on their hands. >> isn't it win-win for equity markets? it geopolitical tensions might impact the economy, which means central banks will be in the game for longer which means assets rises continue to rise? cycle we have seen, will that not continue to play out? >> i think there is an element to the argument. valuationsi think have to affect fundamentals. for me it is the law of diminishing returns. to ease offtarting the gas. i think everyone is speculating the ecb will step into the breach. just don't think even where bond yields are globally, how much further can interest rates go to fuel this ever-increasing cycle of growth?

>> you mentioned this program the ecb has to put money into the real economy by lending it to banks. in the markets interpret the data we get? one of our guests raised the prospect of what is the right money. do you want a lot are not very much? what is good and what is that as far as markets are concerned? >> to me you need to see a pickup in demand. it could behas said one or 2 million euros, but demand has to be there. numbers did suggest the money supply is starting to pick up. bigger number might be positive? >> i think so. if the bigger number is made available and the uptick is there i think that is positive going forward. businessttle concerned

confidence is now starting to decline. we saw that last week. .> the bank of england meets we had more dissenters or not? still remains very high. the cap is still very high. gap is it is highly -- still very high. i think it is highly unlikely until that gap narrows. we have manufacturing pmi and construction on a. they are starting to take lower. the manufacturing we saw last month was the lowest we saw for expectationsnths. at 55.1 will be the lowest for the year. >> there is added uncertainty. >> absolutely. i still don't take we know what the outcome is going to be, even if there is a no vote. we still have got to pick up the what we have seen. >> sterling doesn't seem

it is barely move. >> that is because u.k. agreed to underwrite all the debt. but thank you for starting your week with us. next. it isve is manus today. see you tomorrow. ♪

>> welcome to "on the move." i am manus cranny. moments away from the start of european trading. equity markets are indicating higher. we have a big week in terms of nato, the ecb. the u.s. jobs report as well. futures are indicated a little bit higher at the start of trade. chinese data is in focus as well. let's get to our reporters. and he now ryan chilcote is focused on russia. basket.in a currency the russian ruble at a record low after president putin mentioned talks with ukraine.

ukraine has just said it has killed more than 100 pro-russian rebels in the last 24 hours and been shelled by russia three times. that is what i am focused on this morning. >> what can we expect this week? the meeting with nato, is that going to be the key part of the agenda? >> there is a good chance this week could be as eventful as last week for the markets as well. we have got the nato meeting on thursday and friday. that is a very big gathering of the 28 member states. the heads of state will come to the u.k. for that. they are going to talk about ukraine. wednesday, president obama goes to estonia. that is the second time ever a u.s. president has gone there. don't mess with the baltics. we will invoke article five.

an awful lot to look at. the sanctionsay, that the european union is threatening against russia. they say those sanctions could be announced as early as this week at the situation in ukraine worsens. >> ryan, thanks for that. let's see how these markets are shaping up. slightly higher opening. guy johnson joins us at the touchscreen. >> back to school this week. if you are missing your cocktails, let me give you one. we have the ecb this week, plus geopolitical tensions. those stories working side-by-side. how do the markets figure out what to do? how do you make a trade off it? the ecb is going to be fascinating. , broadlyequities expected to the positive. we have weak chinese data. fairly good news. that could mean more stimulus.

that's show you what is happening in the markets. it is labor day in the united states. ironically, that means nobody is going to be working. something wrong with that. anyway, the u.s. is out. , weerms of the german bund are down a little bit in the yields. you a finally just show little bit about what is happening in the currency market. euro-dollar, fairly fascinating but not as fascinating as -- i am going to talk about the british currency. we had manufacturing data out of sweden and it was a little below estimates. what make a read across to is happening in germany? the dollar is welded on the back of that. the swedish krona under a little bit of pressure. euro-dollar is going to be interesting. it will trade at

fairly high rates. what tone will draghi deliver? people have been whispering in his ear. the french and german governments giving draghi a little bit of a hint about the direction of travel. that is going to be an interesting one. see how he deals with the political story. a lot going on. if you are missing your cocktails, there is plenty to deal with in the world this week. we have geopolitical tension. and the ecb. manus, back to you. >> thanks for that roundup. china is in focus. manufacturing slowed more than estimated last month. it is yet another sign suggesting that the economy is losing momentum. for more, let's go to beijing. bloomberg's china economist is standing by. take me behind the headline numbers. there is something quite telling in terms of the small and medium-sized enterprises as well.

that didn't bode well, did it? >> that is right. there was a mess for the official pmi. hsbc market pmi, which is believed to have a better coverage of small and medium-sized enterprises also came down, falling from july. if you drill down into the details, exports were weaker, new orders were weaker, production was down, inventories were up and backlogs of work were down. fairly dismal data set from the two china pmi theories published today. other earlythe signs coming out of the china economy? abouthas been a concern lending, shadow banking, the amount of credit. there has been a number of key indicators. coming into the third

quarter of the year, there was a lot of optimism about china's growth. a lot of that evaporated in july, when we had extremely weak lending figures. the lowest figures for new lending since october, 2008. coming into august, the signs are that that week lending is starting to weigh on the real economy. i talked about the pmi data. have also had export data out of korea. korea's exports, very well aligned. the korea export numbers were disappointing. we had a contraction in korean exports in august. that is a bad sign for china's factory sector. and we had more signs of trouble from the real estate sector. the real estate sector is the main contributor to chinese domestic demand. they say that in china's top 100 cities, house prices fell month

on month for a fourth consecutive month in august. pmi data, export data out of korea, early signs on real estate, all week in august. >> we are going to leave it there. thank you so much. for more, let's bring in a member of the investment committee. right to have you with us this morning. we just heard from the china data, there are concerns. the fed potentially going on rate hikes. we have the ecb getting backed into a corner. what is the dominant thing when you look at markets? >> i think the dominant thing for the markets for the last quarter will be the focus on what the ecb is going to do and what we are doing in terms of both the normalization of the monetary policy in the u.s. but also the kind of decoupling that we see with more support from

the ecb on this side of the atlantic in europe. >> we just got that report from china. a lot of people look towards .hina is the growth target real or a fantasy? to yourrtant is china overall investment? >> china is really a key holding in our global investment strategy. the real issue for china is the process which is happening right now. the kind of pickup that we see from one quarter to the other, that is not what we should be focused on. the key issue for us is whether china is actually attacking some of the imbalances. the weakening of the growth of credit in china is actually quite a positive element with regards to this global rebalancing issue. >> we are going to pick up on

that theme when we come back. jean medecin stays with us. here is a look at what else is coming up. more sanctions yet again. the eu is set to impose new penalties on russia. that may target its energy and finance sector. will that stop the conflict?

>> i am manus cranny in london. this is "on the move." leaders have given the

european commission a week to draft a new round of sanctions against russia as the conflict in ukraine worsens. for more, we are joined by ryan chilcote who has been working on russia for the past 20 years. no better man to read the tea leaves. we have had a lot of threats of more sanctions coming from the europeans. we had news over the weekend about rhetoric from putin. are getting closer to sanctions of some nature. we got that threat from the european union on saturday. they said if the situation in ukraine worsens, there will be more sanctions within a week. this week, they could be announced. if you look at what has taken place since that threat, things are worsening. you heard president putin yesterday in an interview with russian state broadcaster ort say that he thinks talks in ukraine ought to focus on statehood for eastern ukraine.

his spokesman came out and said the russian president is not calling for eastern ukraine to become an independent state. it was a very provocative thing for the ukrainians to hear from the russian president. it has a lot of people concerned that what the kremlin may want is a state buffer zone between ukraine and russia, between nato and russia. that is one big issue. the other issue is just hours after the european union made that threat, we saw tax on two -- attacks on two coast guard of ars just off the coast very important staging area for the ukrainian government's offensive against the city of donetsk. vesselsack on those definitely qualifies as an

escalation. i think we are moving closer toward sanctions. this week is one where we are going to hear from the west responding to what is going on in ukraine. >> what is on the agenda this week? what can we expect? >> we have president obama in estonia on wednesday. that is the second time a u.s. president has visited estonia in the entire ready of estonia's history. just going there sends a message defended by will be the united states and nato should russia ever seek to launch an invasion into estonia. that will be very symbolic. course, we have the nato summit itself on thursday and friday. this is a massive summit. 28 heads of state. all the member states of nato gathering. it is a meeting that happens

every two years. front and center, the conversation will take place on ukraine. haven't is if we already gotten more sanctions from the european union and the united states, which is working with the yuan ratcheting sanctions, we will get them at that summit. >> we are seeing big moves on the ruble this morning. this is where the pressure really begins to come home on putin in terms of economics. >> i have been calling it to hell in a currency basket. the russian ruble at a record low. it has really declined. about 3.5% last week. as much as 0.7% today. not something that we are seeing reflected on the russian stock market, which this morning is up. the ruble, perhaps on the back

of capital sliding, is one place we have seen russia suffer. a lot of people are going to be watching the ruble today. the more the ruble declines, the greater the problems when it comes to inflation. that is perhaps president putin's big is problem in russia, trying to stem inflation which is under pressure as a toult of a declining ruble keep the people at home happy. very interesting development for the ruble. beginning last week, but picking up pace already this week. >> we will leave it there. we will keep an eye on dollar-ruble. 37.33. still with me is jean medecin, a member of the investment committee. looking at the news flow with russia, this escalation, this political jockeying coming from putin, the ruble is under pressure.

germany has huge trading relationships. do you stand back and go, i want to reduce my exposure? one of your key lines is, we will not hesitate to reduce the overall level of equity rates in our portfolio if it transpires any further. growth will be a big theme. how does it play out for you? >> i think we are very aware that growth is -- as far as russia is concerned, it is still a minor trading partner. it is less than 5% of germany's exports. we are not having something which can for leader rael the prospects. -- fully derail the prospects. scares in the market are creating some opportunities for investors if you are able to identify companies which are not victims of the sanctions in russia.

>> have you seen some opportunities of late? you have had time to digest where you want to try and avoid sanctions. >> absolutely. ,here is a company we hold which is a russian google, which we think is a fantastic company. growth in the second quarter of this year. middle ofeady in the these sanctions. crimea started much earlier. this is a kind of company where thisan have growth during it him. >> we have the ecb coming to this this week. the view is it is going to be more rhetoric than action. are you assuming quantitative easing? are you assuming asset-backed security action? what is your model? >> i think definitely we have a

central bank under the leadership of mario draghi which has been much more pragmatic but more reactive than proactive. as april this year, our chairman implemented some part of quantitative easing, actually asking for 50,000 per month. of course, we don't believe that we will have an announcement on qe in the very short-term, especially as we are still waiting for the results of the aqr and the ltro. going forward, if you take the broader perspective, it is clear that the ecb will have to do something. and iis horribly cliché am always loath to use it, but do you think these equity markets can continue on a qe theme?

the american economy growth at over 4%. the chinese may need to do more stimulus. do you see equities continuing to travel higher? >> it is true that liquidity support is very strong for equity markets. you have some kind of disconnection between gdp growth , you mentioned the latest figures in the u.s. we had weak numbers in the first quarter of this year. we have this moderate growth. the development for this moderate growth is that central banks remain very accommodative and have a very gradual normalization of monetary policy. what is critical for investors is to be very selective. company, not every stock is offering you the kind

of earnings growth which is justified by the current valuation. >> we have had some news flow on novartis this morning. reading, it is suggested this could be one of those blockbuster moments. you like this stock. >> absolutely. this new drug has the potential to be a blockbuster. i think that when you are buying companies like novartis, you are t andg it for the deb strengths. more importantly, you are buying it for the kind of pricing power and strong balance sheet and cash flow generation. we are environment where seeing a greater deflationary pressure in europe, you want to pick companies which have a capacity to weaken such pressures. >> we then flip into the u.s.

we have a demand for technology. everything that happens. we want facebook, we want apple products, we want more technology. in the u.s., do you still believe in the u.s. technology industry? the valuations, i suppose. >> i think we need to be more specific than overall buying in the u.s. technology sector. , the kinde, facebook of earnings growth you have got, 61% revenue growth, 9% operating margin improvement, this is the kind of growth with is supporting the valuation of facebook. google, google used to be in the mid-20's. 25% revenue growth. valuation is important. it is critical to understand that the point is not to buy the

cheapest stocks, but the software earnings growth is commensurate with the multiple. companies like google and facebook have attractive valuations. at banks, weok have the asset quality review coming up in europe, you like bank bonds -- what is attractive? surely there is still risk associated in bank debt, isn't there? >> it is a multi-year story of regulation of the banking sector. basically, what we like is banks cooperating more. we are heading in the right direction in terms of having a safer banking sector. we still have some spread in the financial sector, much more attractive than what you find in the high yield segment. great to get around the

world with you. thank you so much for joining us this morning, jean medecin. , a bloomberg exclusive. we will bring you our interview with the havas ceo. ♪

>> welcome back to "on the move ."

let's bring you up to speed with a few companies that are on the move. apple plans to turn its next iphone into a mobile wallet. the tech giant is said to be planning a partnership with visa, mastercard and american express. that is according to a person familiar with the situation who says the agreement will be unveiled on september 9 along with the next iphone. alibaba is said to be posed owning the start of investor meetings by a week. it now expects meetings to begin a week of september the eighth. this buys the company more time to answer questions posed by u.s. securities exchange commission. its some group will merge shipbuilding and engineering units in a deal valued at 2.5 billion companies -- $2.5 billion. the company's billionaire chairman has been hospitalized since may. after the break, teaming up to take t-mobile.

we take a look at iliad, the possible offer from deutsche telekom, desperate to sell. you can always follow me on twitter. there is a huge call from goldman sachs on the euro-dollar. ♪

>> welcome back to "on the move ." i am manus cranny. equity markets are 30 minutes into the trading day. it is labor day in the united states, so there might be a few long, languid lunches. with that in mind, we are up nearly to ask -- 2% on the stoxx 54. this week it is about the bank of england. in between all of that, we have a huge amount of geopolitical risk. pressure on the ecb to deliver rhetoric. the three stocks to watch, it is ryan chilcote. as, onee stocks, hav

of the biggest gainers on the stoxx 600. that is after we spoke exclusively with the ceo of that company. the french advertising company, the company that beat earnings after the market close on friday. investors delighted with that news. focus, almostll 2% on speculation that liberty global may sweeten its bid for the company or launch a takeover. finally, iliad. an interesting french telecoms company. down this morning because of speculation they may sweeten their offer, spend more money to get their hands on t-mobile. >> ryan, thanks for that. let's get more on iliad. we are joined by our bloomberg deals reporter. great to have you with us this morning. this is one of those eve allington tales. the billionaire chasing

t-mobile. fairly determined move by iliad. that is what fascinates me. to get the extra funding in place. >> exactly. thank you for having me here. byis a great move billionaire head xavier niel. a lot of people are asking, why do you want to get into the u.s.? it is a very challenging market but it is probably the best and most exciting market to be in. iner being very successful france, he wants to export the same business model to the u.s. >> that is probably one of the views here. there is a distance to travel between $33 a share, the last lowball offer they made, and $35. to make up that gap, give me some sense of how difficult that

is to achieve. >> it is difficult. $33 per share was a bit of a stretch. >> $15 billion. >> exactly. it is a big deal. it is a bit of a stretch, they were saying. investors seemed to not like the news the day that much. it will be a lot of money on the table. >> the proposition is, it is not just the dollar price tag. it is also these synergies. $10 billion worth of synergies. does that make sense to you? >> we need to keep in mind that capexms is very intensive. he will need to keep up investment over the years. even though investment and synergies is always a tricky question when it comes to a deal. >> this is why they promise the market so much.

every quarter, we try to read the tea leaves. what is the biggest obstacle here, the regulators? they do not want to see a compression down to three key players. >> exactly. that is one of the reasons why sprint withdrew its bid for t-mobile last month. because regulators were really concerned about downsizing the market. that is why iliad may have a match this time. the biggest question, is it going to be able to raise enough funds? andake sure you come back tell us when that story drops. manual, deals reporter at bloomberg news. thank you so much. time for bloomberg's top headlines. the french prime minister, manuel valls, calls for more action from the ecb to lower the value of the euro amid concerns the region might be headed towards deflation. this comes as germany's

chancellor, angela merkel, called mario draghi after he backed public investment programs to spare the euro area economy. that is according to german news. pro-russian rebels have attacked two ukrainian coast guard vessels for the first time. this occurred just hours after the eu government agreed to impose new sanctions on russia if the conflict worsens. sanctions may target the nation's capital yeah and finance industries. fighting inside east ukraine continued yesterday. protesters in hong kong have taken to the streets to start an era of civil disobedience after china ruled the candidates of the city's first planned popular election must be screened. the ruling gives the beijing government an effective veto of anyone not viewed as friendly to the communist party. lawmakers in hong kong say they will block the passage of the electoral fed. londonng kong back to

and back to britain. the developments for a single airport. the confederation of british industry, that is their call. the business lobby claims the move will ensure long-term economic growth in the u.k. we are joined by our bloomberg aviation reporter. it is ironic, isn't it? when you fly in to the new super hub in hong kong, it is a completely different experience to the one where you fly in over the skyscrapers. that is what london needs? >> very much the point of this report is looking at the issue of a hub airport versus point-to-point. this is a big debate in london. you have gallic saying, we could be the airport for london. you have heathrow saying the same thing. this report is coming down on the side of the hub airport in terms of emerging markets. they are saying, if you want to connect the u.k. to the biggest

emerging markets, then hobbes offer three times the destinations as point-to-point airports. if you want to offer that growth, you need to be like frankfurt, amsterdam, the hubs in the middle east. you have transfer passengers. this makes sense. you not only have the pool of passengers in london to draw from, but the rest of the u.k. and europe in most cases. thesei is calling passengers the catalyst for trade. they say, once you have a route established for trade, that creates a virtuous cycle. all of a sudden, it boosts trade. that result in having another route. all of a sudden, you have tourists. that doesn't happen at point-to-point airports. they are seeing more tourist destinations. in terms of new emerging markets, new destinations, you need a hub. >> this cbi report, where is it

in terms of coalition thinking? how soon do they want to see action? as long as i have lived in london, they have debated what to do with heathrow. was in the airline business in the 1970's. he was saying they were talking about a new runway back then. this report, it is going back to the howard davies report. there is an airport commission looking into this issue. they are due to come out this week or next with their decision on boris island. , for ourisland is viewers who aren't familiar with london, this is way out to the east, out in the estuary. it is a platform-style solution in the sea. >> a sort of concept idea. we were talking about hong kong. this is the grandiose vision. why bother with heathrow? you might have a third runway

but you are going to start arguing about a fourth. why not start from scratch? later.llions of pounds ,t is sort of this question of should you start from scratch? could that maybe be a better jump forward? howard davies is offering his opinion on that concept. once he has done that, -- >> we get that off the agenda and focus on whether to expand heathrow, or there have been calls for north of london as well. >> the ones that are shortlisted are gatwick and heathrow. thathing that they said is , he is backing a hub. you have to wonder if the thames estuary is off the table. then you have both the cbi, the mayor of london backing heathrow.

you have to wonder, will that create the political impetus? >> to get something done. maybe there is a new terminal too. a completely different experience. it is so easy. you arrive and walk straight in. thank you so much. now, a bloomberg exclusive. first-half revenue that beat estimates. the company is one of the biggest movers this morning. we caught up with the chief executive, yannick bollore, and asked him about the impact on europe's economy. >> the first one is true, that we have strong growth in the u.k. that is due to mainly new business. the u.k. ander europe, we had a good europe

despite a european environment which was flat. we managed to find some growth within our existing clients portfolio. havas is over performing the european market. that the strong euro had a negative exchange rate impact of 26 million euros on your results in the first half. we have had the french prime minister, manuel valls, calling for more action from the european central bank to weaken the euro. inyou support mr. valls calling for the ecb to do more to weaken the euro? think the euro is a good question. [indiscernible]

weeks have shown that the euro is slightly going down. maybe we will have a good surprise in the coming have. impacte, we have had an on every other european-based group. >> our exclusive interview between mark barton and the ceo .f havas up next, a sunglass ceo whose future might not be so rose-colored. we will break down after the break. ♪

" lives is "on the move from bloomberg's european headquarters in london. the ceo of the world's largest luxottica.company, a bit of a row. it could spell trouble. looks like a structuring -- a restructuring. andrew roberts joins us from paris. andrew, the board meets today. sts thatng down sugge we could be up for a shuffle. sameare not exactly on the page. >> that is right, manus. they seem to have had a falling out. the company said there were disagreements between the pair.

they have been debating the situation strategy. a who haslike guerr spent 10 years at the company will be leaving. he is going to be difficult to replace. he has presided over a crippling of the company's shareprice. in terms of sales, he has doubled them. he has done a tremendous job. the board will meet today to sort of go through the finer details before discussing it with analysts and investors later tonight on what their plans are. co, thes like enri current cfo will be stepping up to the ceo role. that is the noise coming out of italy. he may be supported on the commercial operation side by other managers. echhio may be taking a closer step to involvement in the company. we will find out after markets close later on. >> as you say, those are the

names in the frame. excuse the pun. guerra came in, right place, right time. our desire for luxury in the last 10 years was the nominal. bans, oak leaves, it was a real zeitgeist moment in terms of hardware in luxury. what does the market think of that area now? >> the fundamentals are still pretty good. on a demand point of view, people still need i wear. -- eyewear. if you look at the emerging market economies, there is an opportunity as well to sell both sets of frames, both prescription and sunglasses. particularly the latter, it has become a fashion item. people tend to change their eyewear more than they did in

the past. if we look at luxottica overall, it is complex. there are about 27 brands, some of them owned by luxottica, some licensed from third parties. luxottica operates more than 7000 retail chains such as sunglass hut. it also has this a reason with holes -- distribution with wholesale. they turn out 77 million frames last year. it is a very complex business with a lot of people around the world. investors will be looking for a permanent solution and the idea that there is going to be a triumvirate, that sounds like potential for a temporary solution. analysts i have spoken to have expressed concern. until we have the details of the new arrangement, it is still up in the air. >> andrew, going to the a late night for you. hopefully you will give us some of your time tomorrow morning.

andrew roberts, bloomberg luxury reporter. back for more on the story of luxottica, we bring in luco from mel on. he is the head of global luxury goods. thank you so much for joining us this morning. you say there is a disagreement andeen del vecchio guerrera. what is the rub of it? >> i think nothing lasts forever. the tightnd that relationship between the ceo and majority shareholder can get tense at times. with time passing by and guerrera having more opportunities in other areas, we all know he is very close to prime minister matteo renzi, it

could be that the will to compromise and find common ground is different than in the past. andrea has ad, very good track record of creating value at luxottica. in a way, both del vecchio and guerrera could be ready to turn the page. somest referring back to of those stats, 27 brands, 7000 retail shops, a lot of moving parts. when you look at luxottica, what do you want to see from a new management team? let's work on the assumption that guerrera is gone. what do you want to see from luxottica? >> well, i think that it is

going to be very important to have a safe pair of hands on board that knows the company inside out. this is a very complex machine. many different things to manage at the same time. many things that have to go right. as a consequence, a complete outsider could need quite a significant position period to get familiar with the business. i think the market is going to look for some element of continuity. i think potentially that is the ico steppingo enr up as ceo. having said that, i think it is very important for luxottica to maintain a proactive role in the market from a commercial viewpoint. emerging markets development for example has been lacking and luxury goods companies getting into china or asian markets. it is going to be important for

luxottica to show the market that they also have the commercial ability and the commercial skills on board to drive the business forward. >> tell me this, one of the things i read was christopher bailey cashed in 5 million pounds worth of stock options over at burberry. givene are, deltek io had -- del vecchio, are the higher echelons within luxury, these that begin to tempt talent away, is that an issue when you look at the various brand names in luxury? >> i think in most cases, if you look at this industry, you find that the ceo's of these companies, especially the european side of the industry, are also very significantly involved in the ownership of the

companies themselves. swatch,ook at lvmh or kering and so on, the ceos coincide with majority shareholders. i don't see that there is too much of a risk with that. but it could also be a point, andrea having a very good success track record and being remunerated for that, this could be one of the reasons he may want to step up something of his own. --i am going to give you a running through time here. you talk about the japanese and your concern about the japanese and the slowdown. myself forposition 2015 in luxury? on my wrist or the earrings or on the leather goods as you go through 2015? >> it is a very good question.

i think that growth in this market has been very high in the past few years. what we are looking forward to in 2014 and 2015 is a very significant moderation in growth. more dispersion and more divergence within the group. >> we are going to have to leave it there. solca, great to have your input this morning. we are back in two minutes. ♪

>> "the pulse" is coming up. you are going to get much more of that havas interview. follow me on twitter. see what the goldman sachs call is. parity on euro-dollar. ♪

>> near the point of no return. ukraine's president warns of all-out war as russia braces for tougher sanctions. draghi. the german chancellor, the french prime minister, both take the ecb chief to task. this ahead of mr. draghi's talks today with president hollande. a bloomberg exclusive. speakas shares jump, we to the advertising giant's ceo. good morning, everybody.