>> 55% of voters reject independence in this historic referendum. david cameron promises change. the u.k. prime minister says regions will now get extra powers. the relief rally. european stocks rise to the highest level in more than six years. good morning and welcome. you are watching "the pulse." we are here in london. i am guy johnson. lots of things to talk about

today including alibaba's big debut. shares begin trading on the new york stock exchange today. is that investment worth the risk? that is the big story, not our biggest story because our biggest story is what is happening in scotland. this morning, prime minister david cameron is promising sweeping changes on how the uk's government -- the u.k. is governed after scotland voted to stay as part of the united kingdom. -- cameron says he will deliver on devolution's. the u.k. must be able to vote on issues that affect them. >> i have long believed that a crucial part missing from this discussion is england. we have heard the voice of scotland and now the voices of england must also be heard. >> we are covering all the angles on this vote. anna edwards is in edinburgh. jonathan ferro on the trading floor.

caroline hyde here in the studio. anna, let's start with you in edinburgh. >> thanks very much. you heard david cameron talking about hearing the english voice. let's hear the scottish voice first. we started to see the first results of this referendum come through. gradually, one by 1, 32 of the county areas reported their areas. around 6:00 this morning, the results seemed obvious. it seemed the no caps on was going to win. the final tally is, no votes 55.3%, yes votes 44.7%. at: salmond conceded defeat 20 this morning. he wanted to congratulate the people of glascow. they got a substantial yes vote about thed he talked 1.6 million people out of the total here, 44.7% who voted for

yes. he said that those people's voices had to be heard. >> in terms of what this means for the wider u.k., in terms of what this means for scotland and its relationship with the u.k., david cameron quick to make it clear that what the scots get, everybody else will get as well. this will change the relationship significantly. >> absolutely. will the united kingdom ever be the same again after the 18th of september? david cameron certainly counting on their not being a number referendum. he said this has been settled for a generation. we will see if there is any comment from the s&p on that. if there was a fear about another referendum, a discount might be applied to u.k. assets. is that something that is going to hang over us? in terms of the power and the way it is distributed across the

u.k., a big figure in the liberal democrats talking about federal powers being devolved out into the regions. certainly what was marked in david cameron's speech was not the amount of time he spent talking about scotland and promising to follow through on commitments they made around devolution, but really talking about how this had to be a settlement for all. to thes to be fair people in northern ireland, england and wales as well. he said the english were a missing voice in this conversation. this is going to dominate u.k. politics for many months to come. >> very interesting political commentary coming from cameron this morning. anna, thank you very much indeed. the scots had their say yesterday. interesting. the money spoke before that. you saw the market reaction in

the pound happen earlier than the vote count. stocks are trading up a little higher today. let's go to jon ferro at the trading floor. talk me through the reaction overnight. talk us through what has been happening. it has been a busy morning, but actually a busy couple days. >> for the guys on the floor, it is a quiet morning. overnight it was very busy. a daze volume in just two hours. the fx market declared the result of this yesterday. it was a firm no for sterling. equities, a little bit of nervousness from the likes of rbs with that exposure to scotland. going forward, the debate is the hangover from this. is there any more uncertainty? is that margin of no big enough to put this to bed? you and i have talked about this a lot. the referendum for the u.k. and the eu and the u.k.'s membership in the eu, if you thought the

last month was disrupted, imagine what 2017 is going to be like. in terms of what we are starting to price in stateside as well, a lot of things to think about when it comes to what is happening with this dollar rally. what are the futures telling us? >> i have been talking to the guys behind me overnight. the move in the fx market was square and short in sterling. everybody i talked to this morning were talking about the dollar and dollar-yen. that is going to be the dominant theme. what happens with the u.s. central bank? janet yellen didn't take any situation that a rate hike might come higher. dollar-yen and the strength of the dollar dominating the conversation right now. you know how a market operates. we move onto the next thing. scotland is yesterday's news. everybody is talking about the u.s. and the strength of the

dollar again. >> thank you very much indeed, jon ferro on the trading floor. business, we are seeing stocks rally. let's talk about the relief rally happening. caroline hyde joins us now. some businesses will be concerned that this has gone this way. of sense was that the bulk business in scotland was backing a no vote. >> precisely. makethough they try not to allegiances, they did have to highlight that there were risks and that it would cost them. -- already saying, if business as usual, no need to move our headquarters. lloyds banking group and rbs have to shift their headquarters down to england, what would that cost them? would that cost them one billion pounds each? at the moment, rbs is saying, this ongoingough

uncertainty isn't completely off the table, alex salmond saying for now, in canada, there has been a precedent set. many of the banks in québec do shift into the mainland. >> it was a slightly slower timescale. >> it is. many feeling that seems to be off the agenda. we don't see them needing to move anytime soon. clearly, the fact that we haven't got the currency uncertainty, many worried about the bank of england being a regulator, the last lender of resort, all of that is now off the agenda. we are seeing share prices rally. a sigh of relief when it comes to the bank of england. >> in terms of the boosters, let's talk about the big spellers. scotland famous for many things, one of which is obviously it spirits. what does it mean for them?

i expect they will be looking at what happens in the wider u.k. and edinburgh as well. >> suddenly, we have cameron putting on a timetable. by november, we will be agreeing what powers we will be done evolving to scotland. taxation powers, spending hours, by january. this is fast tracking. we had matthew beasley saying this is good, that we are getting the clarity faster. a word of warning coming from diageo. this sector will remain bright, provided there is no further regulation or taxation on the industry. hint hint, nudge nudge, wink wink. -- please don't crushed us out of the market. diageo with 3 billion pounds worth of sales. they don't want to see that hit in any way.

they were worried about where it would go if the yes campaign had won. other companies coming forward with respect to insurance. bracing, we are ourselves for change even though the yes campaign has lost. it is very likely that it will be interesting to see how this goes in january. >> thank you very much indeed. keepg up, we are going to the spotlight on scotland and take a closer look at the market reaction. did voting no help sterling avoid a dangerous september? we are talking to the chief currency strategist of bank of new york mellon. ♪

>> this referendum has been hard-fought. it has stirred strong passions. it has electrified politics in scotland and caught the imagination of people across our united kingdom. it will be remembered as a powerful demonstration of the strength and vitality of our ancient democracy. >> the british prime minister speaking after scotland votes no. the united kingdom remains. he promised change on how the u.k. is run, including more power to the regions. european stocks have risen to

their highest levels in six years after this vote. sterling having a more mixed morning. the foreign exchange markets did a lot of this overnight and yesterday. let's talk about what happens next. bank of melons -- bank of new york mellon's chief currency strategist joins us now. additional uncertainty has been created. there is a lot to think about when it comes to the united kingdom. >> i think so. there are different elements in this. let's start with the political story. we have taken a huge element out of the game overnight with the no vote. are now moving onto thinking what happens in 2015. we don't know the political fallout for both sides of the house in westminster. outon't know how that plays towards any you referendum -- a eub -- an eu referendum.

we had a recovery in cable. we came back to 1.65. still didn't quite make it back to where we were before that you gov poll came out. if you want to really measure the political weight of this uncertainty, that probably is what it is. >> does that little gap get bigger? the political uncertainty, the discounted supplies? >> it could. there is no question that investors will start to focus. if you look at previous general elections, you always get a rise in volatility. i think the other thing to stop focusingever on the monetary policy issue. still a lot of optimism out there about when the boe is going to start hiking rates. considering what we have learned over the last month and a half,

there is still pressure on wages, still things like food prices continuing to decline. the pressure on the bank to make a rapid move on rates is declining all the time. in the circumstances, politically huge event coming on, it is possible the bank may decide to wait until after the may election before it makes its move. -- on that basis, ngould you really be givi sterling a premium over the dollar? probably not. >> in terms of the rate trajectory, how miss priced do you think the market can be right now? do you think we are going to get the first rate hike in 2015? if you look at the data, the data are telling us there is a the inflationary pressure isn't there.

>> i do think there is still space for that to start to go back to june rather than february or march. itself, therling currency price. let's take that simple idea, over the course of the last couple years, the last five years really, sterling-dollar has been a 1.5-1.7 range. most people would think the right price is roughly in the middle of that. you have not got a huge gap. why should it be anywhere other than 1.60? why we arenow is starting to see sterling stocks go off. you are already starting to see people move. monetary policy is going to be the most immediate issue on people's horizon. further on towards may, the

political story gets more important. >> i am going to be speaking to nigel from politico later on. , talking told be business leaders and other constituents, that this has changed thinking these of a that referendum on the eu membership. maybe it becomes harder. maybe business fights stronger for continuity. do you think the discount that may or may not be applied to the u.k. will start to narrow a bit? >> the key here is how close that gap is going to be between labour and conservatives. there has been about a two percentage point gap. narrow, andts to becomes a really tight race, the natural instinct will be for the conservative party to move towards a populist policy. a populist policy could well be the eu referendum. >> do you think that is less

popular as a result of what we have seen? >> suddenly if you look at the polls that have come out over the last two years, the idea of the eu referendum has become less popular. the results are about 50-50 in the way people would vote. i don't know how the evidence of the last month might play out in terms of people's idea of having a referendum for the u.k. overall. again, we are talking about uncertainty. i don't know how that plays out. it has been a key story and it could be a tight election next year. >> that could also be affected by the idea that scottish mps shouldn't be able to vote in english affairs was that power has been devolved back to edinburgh. could get messy to understand how any government is going to be able to exercise power over what could be a dice for it --

disparate nation. >> i have been scratching my head about that. i don't know how that plays out. the fact that this debate is taking place, seemingly in public from the way the story has moved over the last 12 hours, suggests that investors are going to look at that and go, we don't know how this plays out. maybe from that perspective, there is a drag on u.k. investments generally. therefore, does it all tend to act as a drag on monetary policy? gote, it still says we have little downside here for sterling. i am not saying this is going to be anything that could potentially emerge, but for me, sterling is no longer that shining example of a safe haven. >> simon, always a pleasure. chieff new york mellon currency strategist, simon

derrick. still to come, more reaction of scotland's decision. the yes campaign was driven by a dislike of david cameron and the english. plus, the view from europe. the finance minister of greece. ♪

>> good morning, welcome back. let me bring you up to speed with the company news. alibaba will trade for the first time on the new york stock exchange today. that is after raising $21.8 billion. the company sold shares at $68 apiece, giving the company a than $167of more billion. vivendi is selling its brazilian broadband unit to telefonica for more than 4.8 billion euros and around 3 billion euros in stock. the deal comes after three weeks of exclusive talks for this company. sap is buying concur technologies in a deal valued $7.4 billion. those are the headlines in terms of corporate news. the headlines are being dominated by what is happening in scotland. you are looking at live pictures ofdinburgh a fergus

attention. alastair darling, the leader of the better together campaign, whating there, addressing happens now, i suspect. looking forward, not backwards. playing a big role, i suspect, in the last few days. it will be interesting to see how history remembers how big a role gordon brown played. these gentlemen playing a different -- a pivotal role in securing scotland's place within the union. alistair darling speaking. let's go now to berlin. from theols joins us german capital. what do we know from europe? i suspect many politicians are breathing a sigh of relief this morning. >> officially we haven't heard a whole lot. in the next couple hours, we will likely hear from merkel's government. we will also probably hear something from spain. in some ways, these comments

won't be all that revealing. perhaps the most revealing thing will be to what extent they affirm country's right to self-determination. you look at the president-setting aspect of what happened in scotland. this quickly becomes a spanish story. in about an hour, the regional parliament in catalonia will start voting on a law that will declare one way or another whether catalonia has a right to declare independence. what leaders have said is that once this law is passed, they will make a decision on whether to call a referendum vote. i would focus on barcelona as much as edinburgh. >> certainly, thanks very much indeed. ed miller band there, the labor leader speaking at this event as alistair darling. hans talking about the eu reaction. we are getting that shortly. we will be joined by the greek

finance minister. he seems to give the impression that there will be a lot of relieved politicians around europe. nigel farage will be joining us later in the program as well. ♪

>> welcome back, you are watching "the pulse." we are live from london. you are looking at live pictures band speaking about scotland's decision to say in the united kingdom, saying you will tell your children and grandchildren you helped keep this country together. political developments as well. it looks like we are going to get devolution to scotland and the other nations within the united kingdom. let's listen in.

for every part of the united kingdom, every set of people within the united kingdom. there is a party that can do that for them. that is the labour party. that is our party. this is our responsibility in the months ahead. let us be able to tell our children, our grandchildren, that we did not just keep our country together, we changed our country together. that is our mission. that can be our achievement. thank you so much. let's show the people of the united kingdom how we intend to change our country. thank you very much. [applause] miliband speaking at the event in scotland, talking about changing the whole of the united kingdom. there is going to be a lot of uncertainty, a lot of calculation to figure out how this is going to change the

political landscape. will scottish mp's be able to vote on english matters? what will that mean for the labour party? you solve the question in westminster -- i don't know, a number of interesting factors will be coming out over the next few days. let's get back up to scotland now and talk with anna edwards covering the breakdown of what we have learned over the last few hours. the votes are in. the politics just the getting to warm up. >> absolutely. picking up on what you were saying, listening to ed miller band, there was a lot of pressure on the labour party to deliver this no vote. manas no accident that the in charge of delivering the better together campaign was from the labour party. of all the parties in westminster, it is labor that

has support in scotland. they are not in control in westminster but they are the ones who it was thought could sway things in scotland. in the end, they did. the better together campaign won. they will be asking questions now about how that campaign works. looking forward, about the way we tackle this problem. as david cameron was saying earlier, he wants to talk about it. he wants england's voice to be heard. there are a lot of complicated decisions to answer. it is not right that scottish mp's vote on issues that only impact england and wales -- you wonder whether david cameron, how much conversation he is having with the other parties about this. he said in that statement he hopes that other parties will contribute. it is were pointing out,

the labor party that has support in scotland. they come at this from a slightly different perspective compared to the conservatives who only have one seat up here in scotland. >> interesting political debates ahead. we were just listening to alistair darling speak at the event that ed miliband was speaking at. the leader of the better together campaign being credited with the victory overnight. what is the sense about the contribution of gordon brown? >> the contribution of gordon brown is interesting because it was very late in the day. he stepped away from the political limelight in the u.k. in 2010 when the conservatives and liberal democrats brought their coalition into office. seen on thesn't political stage in the u.k. or in scotland and then he came back to the party just a week or so ago. --nnounce and that

announcing that new devolution plan for scotland. it was him they a trusted to announce that. it was something conservatives, labor and liberal democrats were all signing up to. it was gordon brown they turned to to deliver that, to make that resonate with the scottish. i heard one person call that a barnstorming delivery. he clearly felt very passionate. he evoked imagery of make that. he was talking about when it is done, it is done. suppose.l be relief i they are congratulating each other i am sure. they have won this but they will be asking questions about how the campaign was conducted, why they left themselves so much work to do. . thank you very much indeed. let's get a european perspective on what we have seen overnight.

we are joined now by the greek finance minister, gikas hardouvelis good morning. there i suspect a lot of eu politicians that are watching what has happened overnight are breathing a huge sigh of relief. >> undoubtedly. we all were worried about this. politics plays a major role in europe. we went through a major crisis. the breakup of the euro area was a big worry to years ago. if the u.k. was broken up, it would send a very negative signal to the rest of europe. >> do you think it would have encouraged, do you think there is the possibility that it will encourage the fragmentation of the eu? unemployment remains high in many parts of the eu. political fringes are gaining traction. in your country and in many others.

do you think that the fact that this referendum had been held and was so close will encourage that kind of action? >> i don't think so. we went through the crisis. unemployment is very high in certain regions of europe, certain countries, but we see countries with no major issues like you have in the u.k. >> not even in catalonia? >> catalonia is doing better than the rest of spain. belgium -- these regions are doing fine. i don't think we experience the unemployment and the economic problem that was experienced in the north here. economicnd in terms of support is one of the better parts of the u.k. the economic story in scotland was actually quite good. that is what encouraged the fact

that they could go it alone. you can look at it from the other perspective, catalonia is doing great. >> why do we need these guys? i cannot speak for them obviously. i think the fact that the scottish people voted to stay within the u.k. is positive for the rest of europe and the project of european unification. this willthink encourage brussels, european capitals, to maybe provide more assistance to london in ensuring that the u.k. stays within the european union? >> now you are entering real fine politics. usually, europe works with inertia. things do not happen overnight. we will see. we have to wait and see. >> let's talk about what is happening closer to your home. cerise is ahead in the polls. we have presidential elections next year.

the political story is heating up to say the least. can i talk to you about that in more detail? do we need to have staff elections in greece next year? >> i don't think so. i think the fear of staff elections is not there, really. the population does not want another round of elections. as an economist, i know that frequent elections hurt economic growth. you don't want to have it. >> nevertheless, we have a party ahead in the polls that is still talking about writing down significant chunks of greek debt. is that viable? are takinghe germans a big view of this. is there an option for greece? >> i don't think it is an option. debt you write down, if it is held by private investors, about

70% of the greek debt is held either by the ecb or the other countries. you cannot write it down. you can do other things. you can extend maturities. you can fix part of the variable rate. but writing it down, it has to go through various parliaments. no one will accept that. >> we had private sector involvement. public-sector involvement will be a much harder story. you bring up the ecb. i am curious about your expectations of the trajectory of greece and its debt. the targetedday long-term financing operation designed to push liquidity into the finance system in europe. not quite according to plan, could have been bigger. people are talking about full-blown qe. is that your expectation? are you planning for that?

>> i think what will work for whereies like greece liquidity is needed but the collateral is not there is the asset backed securities that the ecb just announced. you can securitize loans and then you have the ecb buying securities. liquidity's are targeted exactly where it is needed. >> how does greece take better advantage of that? the market is pretty small. >> it has to be developed. never occurredit until now is exactly because you need to fix it. the moment the ecb targets it, i think it will happen. supply will be generated. >> you need the rules to be changed. structural elements need to be factored in to make that happen. it is not quite as easy as flipping a switch. >> we have seen asset backed securities for ages now,

especially in the u.s. we know how to do it. supervision of your economy has been part of your life for the last few years. there is very clear talk coming out of athens that a third bailout is not going to be required. could greece exit earlier? is it possible that you would first take the money still on the table for exiting the umbrella that would provide? >> all possibilities are up for grabs in the following sense, the european program ends at the end of this year. the imf program ends in the first quarter of 2016. there is a gap between the two programs. side of the lender, they both feel uncomfortable about 2015. the imf doesn't want to lend alone, the europeans feel itchy about having the imf loan but

themselves staying out. we need a solution to that. >> your expectation for what that solution would look like? >> something that is under discussion. this very difficult at point to say anything about it. there will be a solution. >> mario draghi talks about structural reform, deregulating industries and provide some sort of a demand impetus for the european economy. we had a whole series of ceos in the show. is,eems like the sense things still move slowly in greece. we need to get things moving more quickly. we still haven't got to the point where we can develop it. we haven't got many things in place that we need. the oecd look at

indicators as to who is doing better in reforms, greece is number one. across the world. >> could you be doing better? >> there is always better. but we are number one. we are moving fast. you talk about privatization. privatization now is speeding up. finally, people are willing to invest in greece. the economy has stabilized. they only see upside, there is no downside risk. they are lining up to buy assets. >> let's flip the conversation. the politicalhat polling, the possibility of upcoming elections next year could put politics back on the table and that will deter investors? >> investors think long-term. do not not think -- they have a horizon of three or four months. lookingile, they were

-- remember, greece, the gdp dropped 26% over six years. no one was sure where this would end. now we finally stabilized. they can see the upside. investors are willing to bet. the presidential election is a minor nuisance for the long-term. >> nice to see you, thank you very much indeed. the greek finance minister, gikas hardouvelis joining us. still to come, we are going to bring the present back to scotland. ofwill speak to the leader the u.k. independence party, nigel farage. ♪

>> welcome back. you're watching "the pulse." i am guy johnson. late me take you through the headlines. stocks have risen to the highest level in more than six years after scotland votes to remain a part of the united kingdom. voters supported the no campaign. the outcome of the vote is a huge setback for scotland's first minister alex salmond. he spoke earlier. >> on behalf of the scottish government, i pledge to work constructively for scotland and the rest of the united kingdom.

>> u.k. prime minister david cameron is promising changes on how the united kingdom is government. will deliver on devolution to scotland in the next parliament. he also says that england, wales and northern ireland must be able to vote on issues that affect them. >> let us also remember why it was right to ask the definitive question, yes or no. now, the debate has been settled for a generation. as alex salmond has said, perhaps for a lifetime. business reacting to all of this. caroline hyde has been tracking the action. rathersinesses seem to come out and firmly say they favor the no vote. a huge sigh of relief for them. >> the share prices are reflecting that. there were so many questions

about a potential independent scotland. most within the banking sector. you have royal bank of scotland, lloyds banking group, there were questions of what would be their regulator. would the bank of england still be a lender of last resort? , thead currency questions euro are the pound, currency weakness, monetary policy going in the wrong direction, taxes, credit ratings, a few questions still remain. that is the interesting part. we are going to see a devolution of power. david cameron saying there is going to be more power over taxation. will that hurt rbs and lloyds? at the moment, share prices are rising. they kind of came up with a number by looking at how much it cost for lloyds. it was going to cause a lot of

complexity, compliance issues. that is a big sigh of relief. in the meantime, whether we might start to see scottish elements of their business -- many people aboard might say, i want some parity. i want to know that this isn't going to be a canada situation where maybe someone in a québec-based bank moving into the mainland. >> there are big industrial companies north of the border. i suspect that foreign exchange story is going to be a big factor for them. having to deal with a different currency is something of a headache. all these companies, how are they viewing it? >> with relief, i'm sure. we're group, more than 13,000 employees. their share price is rising. even transport companies, these have big government contracts. they supply the buses, the trains, they have headquarters

in scotland. keep a close eye on babcock as well. these are public services companies that are interacting with the government. what is interesting is still the question of where next. hinted, please play nice. if you are going to give more freedom to the scots, don't start racking up regulations and taxation. as they say, the future is bright unless you do that. generally, shares are trending higher. >> caroline, thank you very much indeed. a bright future for scottish whiskey. maybe liquid gold will soon be getting a little bit greener as renewable and investment helps distilleries. we will take a look at how scotland's new energy future reckons. ♪

>> welcome back. we are focusing on scotland for today's new energy top headlines. atlantis has completed fundraising to start building scotland's largest ever tidal stream power plant. the $83 million funding package is being used to finance the installation of four turbines. the project is expected to deliver its first power to the grid in 2016. researchers in glascow have discovered a new way to produce

hydrogen and store green energy. the new method to produce hydrogen is apparently 30 times quicker than it was before. the future of scottish whiskey is looking brighter. the u.k. government and the green energy investment bank plan to invest 7.4 million pounds into a scottish renewable plant which will power a well-known whiskey distillery. the plan will be powered by biomass and will power more than 20,000 homes in the highlands. for those listening on bloomberg radio, the first word is up next. for our viewers, a second hour of "the pulse." we are going to continue the conversation surrounding scotland. tom hunter is going to be back. we will talk about what this means for scottish business. nigel farage is also with us. storyoes the devolution mean for his political prospects? we will be talking about the pound with socgen.

plus we will be talking to the confederation of british industry's. it is going to be a packed our. make sure you join in. ♪

swac -- >> scotland stays. voters reject independence in a historic referendum. david cameron promises to change the u.k.. the prime minister says the regions, not just scotland, will also get extra powers. and a relief rally. european stocks rise to the highest level in more than six years. good morning to our viewers in europe. good evening to those in asia.

welcome to those waking up in the united states. this is "the pulse." we are talking about scotland but we are also talking about alibaba. shares begin trading on the new york stock exchange this morning. is the investment worth the risk? we will talk about that. the big stories dominating headlines around the world is what is coming out of scotland. david cameron is touting sweeping changes on how the usa will be governed following the referendum after scotland voted to stay. oneron says he will deliver devolution to the scots in the next parliament. he also says the rest of the u.k. must vote on issues that affect them. a i have long believed that crucial part missing from this national discussion is england. we have heard the voice of scotland and now the millions of voices of england must also be heard. >> interesting.

this changes not only scotland but the whole of the u.k. anna edwards is in and humberto. -- in edinburgh. we thought we were talking about the scots. the political implications go beyond that. samee u.k. ever be the again after the 18th of september? the scots have their say. they wanted to stay in the united kingdom. what will the united kingdom look like? that is a big question. david cameron was talking about what this will mean for england. further devolved powers for scotland have been the driver of this. many english politicians including conservatives have somesaying, pointing to inconsistencies that have existed for many years. they have been exacerbated by the devolution process that took off in earnest in the late 90's. that inconsistency is that we are abletish mp's who to vote on matters not just that

affect the whole of britain but matters that don't affect scotland. they are able to vote on education and justice and all kinds of other policy issues --t are handled here in an that are voted on in westminster. david cameron was really tackling that head on in announcing an aggressive timetable around not just further devolution of powers to scotland, but devolution in england as well. >> what is scottish business making of all of this? what is the reaction from the business constituency this morning? >> we spoke to a business earlier on today that distributes film and video content and they were giving us a very interesting summary of their thoughts and the thoughts of small and medium business perspective. they say what they want is to move on. it has been 2.5 years in the making.

it was pledged a long time ago. an agreement between alex salmond and david cameron, and as a result it has been quite a distraction for business in scotland. now they feel they will be able to get on with business. david cameron talking about this as not something that is going to be repeated. might this be something that hangs over scotland? we talked to a number of international businesses about whether they feel confident enough to expand. some people have been asking, even if we get this know in the referendum this time around, is that a no or a no, not yet? some research overnight was talking about that as a real act. thending on which side of fence a particular business is on, you might get a different reaction. in general, the business community has this attitude that they want to move on and start

working out what this devolved power looks like. >> thank you very much indeed. we will leave it there. we were hoping to speak to tom hunter. apparently the connection has been lost, which is alarming. we will get to tom hunter. we will get his perspective on where scotland's business goes next. in the meantime, let's find out how the markets are reacting to all this. let's go to jon ferro on the trading floor. walk us through a busy night and a busy morning. >> for a lot of people in london right now, it is bed time. the busyness happened last night. this place did a daily volume in about two hours. i think we always knew this was politically complex.

the big mood right now is the mood in spain. spanish bond yields down by about seven basis points. perhaps that scottish no gets them off the hook a little bit with catalonia and their push for independence. spanish assets are taking the headlines today. >> interesting, the table. spread. 10-point maybe significant enough to take it off the table for the spanish government as well. trading u.s. futures -- what are we pointing to? dataquiet day, no u.s. will be the relief in the u.s. the u.s. are looking at europe and wondering how this independence issue spreads. to and i have spoken trillions of dollars worth of assets under management about the u.k. question and the

scotland question. i think we have to think about the hangover. how do people look at u.k. assets? when it comes down to is 27 dean. vote onpect of a u.k. european membership in the european union. what do you think 2017 is going to be like? that could be messy. >> we have the general election in the meantime. a lot of politics. thank you very much indeed. i promised you that we would talk to tom hunter. we have regained the connection to scotland's first ever billionaire. he joins us on the phone from glasgow. the best outcome for scottish business? >> i think what is great for scotland is that we can get back to business. this has been time-consuming,

the uncertainties. i think all business people can get back on and start building their businesses once again. >> uncertainty, the issue. do you think there is going to be a degree of uncertainty continuing? we are going to see devolution to edinburgh. do you think we have enough clarity on how that is going to work? how much uncertainty will that create, do you think? >> i think there are still lots of questions unanswered, but from a business point of view i am pleased that we are still using the pound this morning. that takes a lot of the uncertainty away from business from my perspective. >> you are very firmly on the fence. you weren't going to commit either way in public. just listening to what you have to say, i am getting a sense of relief from you, rather than a

sense of disappointment. said i wouldn't say how i was voting and i am not going to break it now. the people of scotland have decided and i have listened to alex salmond and alistair darling this morning accept the result with humility. tohink it is now time for us get back together, show everybody the people of scotland can respect the differences we may have, but get on and make scotland flourish. in terms of uncertainty, let us return to that theme if we might. we heard from alex salmond this thisng, talking about taking the issue of a referendum off the table for a generation. i think there was some ambiguity there. we are not going to end up in a situation like québec with this neverendum story hanging over

the scottish economy. do you think we are taking this off the table at least? >> i think we have. the only thing that would bring vow thatn is if the the three parties from westminster said doesn't come through. it would be another argument at that point. i think the referendum and separation question is off the table now for at least my lifetime. the fear that business will drift away because of that uncertainty, you think probably isn't that present? >> all i would say to anybody listening this morning is that scotland is a great late -- a great place to do business. come to scotland, enjoy our brilliant workforce and let's build scotland and let it flourish. >> one final question. was this a vote -- it obviously

wasn't a clear vote, but tacitly was this a vote to remain part of the eu? >> i don't really hear that talked about so much. i think this was really about scotland's place within the union. i didn't hear europe talked about. it was talked about in some quarters but i think this was primarily about the union, the united kingdom. >> tom hunter, always a pleasure. thank you very much indeed for your time this morning. still ahead, we are going to keep the spotlight on scotland and take a closer look at the market reaction. we will talk to kit juckes when we come back. ♪

>> good morning. welcome back. you are watching "the pulse." let's check on the currency markets and show you what is happening with the pound overnight. the rally in sterling came before the results were out. the market pre-ran this. subsequently, the pound has been selling off. 1.6391 is where we are trading. -- we down on the session are flat on the session, really. nevertheless, the focus beginning to shift the dollar

strength. sterling may be yesterday's story? socgen's global strategist kit juckes joins us now. is the fun now to be had in the dollar? >> certainly looks as if the fed meeting this week was the big event. this could have been the big event if it had been a yes. if you look at cable, we had a broughten mark carney the idea of a rate hike onto the table, a spike back down when he pushed them back off the table. another fall when this vote happened. >> political uncertainty in the u.k. is going to remain despite this vote. we now have the possibility of devolution to scotland and to the rest of the united kingdom as well. on the 2015 election, we don't know what is going to mean in 2017 for the eu.

i think we still need some kind of discount for the idea that we might leave the eu. i suspect an opinion poll out on that. aren't terribly clean on it. it.ren't terribly keen on we will see at the same kind of logic that cap scotland in the u.k. will come to bear. we need some kind of discount. it is also worth saying that we have priced in a lot of rate hikes in the u.k. we know they are coming. this economic cycle for the u.k. is 90% certain. it is only going to slow from here. >> do you think we are mispricing -- if you take take's decision, if you what the data are telling us, have we miss priced the

trajectory of rate hikes in the united kingdom? >> i think it is right that we go before the u.s. in terms of the first rise. and that we peaked lower than the u.s. it is the second one of those that interests me from a foreign exchange market perspective. we are more likely to get a modest rise in february. >> when do you think that lower peak will come? is the duration risk attached to this changing? >> i think you will see our economy more sensitive to rate rises in terms of the mortgage market generally. we are still more honorable to what is happening in europe than the u.s. markets are pricing a low peak in rates everywhere. i am more comfortable with the willthat the u.k. people be close to three than i am in the case of the united states.

risethe fomc put a rate coming in with the dots under 4% in the long-term. i don't think you will get that in the u.k. given the amount of debt that we have in the household sector. i don't think the market is badly mispricing. i just think now that we have got this behind us, the debate will shift from being all about the timing of the first hike here to the timing of the first hike in the u.s., and then about how high rates will eventually go. i think both of those are over the medium-term, negative to certain. >> what is the better trade? do i take the dollar trade to sterling or look at europe? where am i going to get the biggest eye and for my buck or pound? >> they are all slightly different in terms of where they are. the market is very bearish on the euro. the position looks very short in the euro. they are not liking the euro.

the in short it is a familiar position. we have no kind of a short covering rally in the last couple weeks in euro. torling is back up from 1.60 1.65. euro-dollar went back up. the positions are quite stretched. the ltro was disappointing. >> you just came from paris, were they disappointed? what is the sense of what is happening in paris about this story? does this provide more ammunition for a further push toward qe? >> yes. they have to do more is the sentiment. french businesses all want a weaker euro. >> what does it mean to them? >> that french government did quite well when the euro was around 1.10. if you talk to the joe -- peugeot, the french multinationals, you get a sense that this is really hurting. at this point, mario draghi is

not able to use liquidity to get bank lending to pick up. the only thing he can do is believe government's infrastructural reform. easier to do? >> it is easier to do the latter now that the fed is marching toward -- >> nice to see you, thank you very much for your time. kit juckes. up next, a sigh of relief. scotland's decision could help spain stay united. we will talk about that in a moment. ♪

>> welcome back. you are watching "the pulse." news from france this morning. the french confirming within the last few minutes that french jets have hit targets in iraq. logistics sites have been hit according to the french government. french president hollande issuing a statement laying out the details. also an indication that further targets in iraq are possible and they will carry out further strikes in the country. that is according to the statement we have at the moment. it was hinted at yesterday that

we have confirmation of those tracks -- those strikes taking place. hans nichols joins us now from berlin on this breaking news. we knew the french were likely to be taking part in targeting i.s. in iraq. now we have confirmation and the possibility of further strikes. >> the question is, are these strikes north of baghdad or south of baghdad? it was a big deal when u.s. planes attacked south of baghdad earlier this week. the idea of the french fully onboard with this mission will get some support from president barack obama as he seeks to build this international coalition to go after these islamist extremists in iraq or in syria. that is the other thing we need to look at. when will there be air attacks in syria. hinted,een telegraphed, but that still seems like another threshold matter to be decided. we will see when we get there. one other note on this, germany

has begun to deliver arms to the kurds in northern iraq. there seems to be more international consensus building on combating this group. >> we are just starting to get commentary from the eu, from brussels on the scottish referendum. rob roy saying he welcomes the results. barroso as well. a big sigh of relief. >> a massive sigh of relief. what you will see in the next 24 hours, you will see all sides see the scottish vote as a precedent for what they want. you heard mr. rob roy in spain. he spoke earlier, talking about how this shows the scottish voters understood the grave consequences of the vote. normally, grave means war. you are seeing both sides try to

seize upon this for their own purposes. let's take a look at what barroso had to say. i welcome the decision of the scottish people to maintain the unity of the united kingdom. what you are seeing from the pan-european side is that effort to take this scottish vote and turn it into an argument for why the u.k. should stay in the eu. >> a lot of people are jumping on that one. thank you very much indeed. just to reiterate, the french confirming that airstrikes have .s. logisticsn i itinerary. let me bring you today's pulse number. 1.1 million pounds. that is how much a british man won after he placed the largest ever bet on a political event. he gambled 900,000 pounds on the

staying in the u.k.. still to come, we are talking about the tech ipo. ken alibaba avoided? find out later. ♪

>> welcome back. you are watching "the pulse." i am guy johnson and these are the bloomberg top headlines. european stocks have risen to the highest level in more than six years after scotland voted to remain part of the united kingdom. 55% voted the a. 45% backed independence. of the vote is a huge setback for scotland's first minister, alex salmond. he spoke earlier to concede the feet. >> on behalf of the scottish

government, i accepted a result and pledge to work constructively for scotland and the rest of the united kingdom. >> prime minister david cameron promising to change how the u.k. is governed. he said he will deliver devolution to scotland in the next parliament. he also says that england, wales and northern ireland must be able to vote on issues that affect them. a i have long believed that crucial part missing from this national discussion is england. we have heard the voice of scotland and now the millions of voices of england must also be heard. >> british prime minister david cameron. how are scottish businesses feeling this morning? caroline hyde joins us. she has been taking the temperature, talking to distillers. she has been talking to all kinds of businesses. many drinke is

being enjoyed. the scottish whiskey association says they welcome the stability. again, they are hinting at this instability not coming to an end. we still have the devolution coming, hours being handed by david cameron to scotland. what does that mean? how will regulation be changed? the scottish whiskey association saying they are looking at these devolution closely. saying they would prefer no further regulation or taxation. they say, the sector is bright but if you are going to hand more power back, be careful in the way in which you do it. another huge player in scotland has said, look, they are going to continue with major investment. this is another thing we are

hearing from businesses. they can take the brakes off of investment. will be the future matched by a strong and committed workforce. beenisher group has similarly saying that. they will invest and grow within scotland. hear what want to sort of powers might be dissolved. this will impact how you do business in scotland. >> how are the big industrial companies seeing this morning? that have a strong pedigree, strong industrial base in scotland? i guess the currency story is the big one for them. >> 30,000 employees. the main issue was the currency instability.

scotlandoing to see pay to currency to the pound or euro? would they get themselves trapped in a policy that didn't fix their own economy? or would they have to make up their own currency and massively devalue? that was going to hit mortgages, housing. yes, i think there is massive relief. that is why we are seeing share prices rise. , they have big contracts over there. they have scottish development. there are all these countries rising, the best performance today overall, would group. the chairman was one of the major voices. oilooked at how the industry would be affected by the scottish referendum. he said there are highly inaccurate forecasts being used by the salmond's group,

ones who are voting yes to independence. he felt they were exaggerating how much oil there was, the financial buoyancy of the oil within the north sea. his group is on the up today because they are an oil engineer. suddenly, more security, the fact that it is going to be within the u.k. means more investment coming from bp and shell. they were set against any splitting apart. a sigh of relief for industrials. they haven't come out as much as the booze hounds. >> they would like to hear you calling them that. that is a whole different story. let's get some more reaction from the british energy sector. joining us now is now come web, ceo of oil and gas u.k. good morning to you. a sense of relief this morning? >> i am not sure relief is the right word. this has been a very impressive

referendum vote. it has been done in a very mature way. andow have a clear result there is a clear demographic mandate on the way for what everybody needs to do. get behind that and move on from here. everybody is taking a constructive view to that. clearere we are in waters today. buthis may be semantics, that sounds a little like relief. let's talk about whether this needs more investment in the north sea. is that the case? >> i think we have a series of challenges that we need to overcome before we will see that. we have a real need for regulatory reform. your previous correspondent was talking about it. that calls for significant regulatory reform. we need that. secondly, we need fiscal reform.

there is a major fiscal review going on at the moment. we expect delivery of that indie sambar. thirdly, the industry has a significant cost on its hands. need to deliver on all three things to secure a long-term future. >> we are going to see some more devolution to scotland. does that make any of those issues easier or harder to solve? >> i don't think so. devolution has not hurt our industry. i don't think there is any suggestion that production taxation is going to be a the overallter, nor regulation of the offshore areas either. i guess we are not touched by that. i would also say that devolution hasn't been a problem to date. that is the sort of process we can deal with. >> you mentioned the word,

reports. you mentioned what they have been talking about. do you get a sense that this was an argument that could be used this time around, that scotland has significant oil reserves, the ability to harness those reserves. people are talking about this issue being off for a generation. how different do you think the scottish economy will look and how much reliance will it plays on the oil and gas industry? >> that is a good question. i am of the view that in a generation we will still have a very strong oil and gas industry in the u.k. it will be changed. we concentrated on the production side but we have overlooked that we have a tremendous supply chain. magnificent engineering success story. you talked to some of the names earlier on. we are a mature oil province. the production side of the equation, that supply chain side

is going to increase in importance. will still be producing significant quantities of oil and gas in a generation's time. i think the supply chain side could be much more important at that time. it is both of those. both sides of the industry that we need to play into here. >> in terms of the new political landscape, how is that best served? engineers services, coming out of scottish universities and feeding into that. what do you think needs to happen? what should be the priorities? >> it is a very good point. part toot has a major play in supporting the growth and sustaining that supply chain success story. roughly 450,000 jobs are in that supply chain. maybe half of them are in scotland. tackling the skills issue is important for us.

making sure also that we have the infrastructure we need, particularly around our headquarters, aberdeen. social and transport infrastructure to grow this industry is going to be important as well. the u.k.ish and governments have both got a very important role to play in the future of this industry. we are looking forward to collaborating with them in that regard. >> thank you for your time, malcolm webb. still to come, alibaba's big debut. share start trading today. can the giant avoid the trouble of tech giants such as facebook? later today, bloomberg is speaking with the alibaba founder, jack mann. will be live at the new york stock exchange as the stock begins trading. i don't think he is actually pushing the bell. ♪

>> this referendum has been hard-fought. it has stirred strong passions. it has electrified politics in scotland and caught the imagination of people across the whole of our united kingdom. it will be remembered as a powerful demonstration of the strength and vitality of our ancient democracy. the british prime minister

speaking after scotland voted to remain within the united kingdom. he promised changes on how the u.k. is run and said he would deliver evolutions to the scots in the next parliament. he also talked about devolution to the rest of the united kingdom as well. let's talk about the implications of all this. john cridland joins us now. a positive data for business? >> hugely positive day. we have looked over a cliff edge and realized that we are stronger together. business is overwhelmingly of the view that the single market of the united kingdom is a huge part of our economic success. >> one thing that seemed to be demonstrated by this process was that business finds its voice eventually. i heard some criticism of business. do you think that is fair?

this wason, we thought a referendum campaign for politicians, not necessarily for business. would business even be listened to? we didn't want to give any impression we were telling people what to do but we did find our voice towards the end. i think we spoke to the scottish citizen about the issues they are concerned about. standards,g progression, earnings, getting on a life area -- getting on in life. >> do you think that is what tipped the balance? was this an emotional debate in which economics played a smaller part than we all thought, or do debate, thatt jobs currency debate was critical? >> i think it came into its own at the 11th hour. we stopped talking about billions and started talking about towns. too much of the economic debate was quite dry.

when you started talking about living standards of families, i think people began to understand the implications. and then make their own decision. livingre going to be with this for a while in the united kingdom. we heard the prime minister talk about his promises on devolution to scotland and what that means for scotland. he also talked about england and wales and northern ireland. the politicalt process and the changes we are going to see in those regions. business must be watching this saying, glad i got that one out of the way. we still have significant under certain -- significant uncertainty as well. >> we have to understand what yes voters were saying. there appears to have been strong correlation between yes voters and high unemployment. they were saying what ever the system is got is, it isn't working for us. that is true in england, wales

and northern ireland as well. we have to make sure that the economic recovery works for everybody, reaches the families in east kent as well as west g lasgow. we have to give people at a local level control over the levers of funding and power that can make their lives better. that is not about structures. tois about finding ways facilitate economic regeneration and local growth. that comes from good local authority leaders working with good local business entrepreneurs and finding a way to make communities more successful. >> you don't worry that we end up with a hodgepodge of revenue raising structures that lead to a more confusing picture and you end up with arbitrage and tensions existing between different regions and that ends up being something that could be difficult for business to navigate?

or is that a positive? mpetition andh co opportunity. >> business does not want fragmentation of the single market. there is no point winning the referendum and forgetting the essential lesson that we are stronger together. that means tax rates for business, employment law, those things need to be common across the united kingdom. lots ofstill devolve local funding, decision-making. i would urge politicians to focus on the outcome they are trying to achieve, liberating local economic growth. do not get obsessed with structures. structures facilitate outcomes, they are not an outcome in their own right. we are not short of governance. >> that is a fair point. looking ahead to 2017, your takeaway of how we should treat the referendum? do you think it makes it more

likely that business will play a bigger role? >> i do. i think business found its voice on scotland. having found its voice, i think it has got a better understanding of how we can contribute to a national debate on britain's place in europe. without telling the voter how to vote, but putting cards on the table that relate to their everyday life. >> lesson learned. john cridland. let me walk you through some of the company news we have this morning. sap is buying concur technologies. sap is saying a roughly 20% premium for the company which gives it a dividend boost in cloud computing. the event he is selling its brazilian broadband unit for cash and stock. the deal comes after the companies ended exclusive talks for the company that now leaves telefonica in a better position. pharmaceutical giant

glaxosmithkline has been convicted of bribery and fined 500 million dollars by a chinese court. reported aency also former china glaxo boss has been sentenced to three years in prison. ipo broke alibaba's records but will its trading debut live up to the hype? we will look at the chinese e-commerce giant when we come back. later, we will be speaking to its founder, jack ma from the new york stock exchange. ♪

>> welcome back. you are watching "the pulse." the pound, the pound. we started seeing the pound get positive momentum before the final result was announced in scotland. since then, we have seen a little bit of a selloff. most of the currency specialists i have been talking to see more momentum in the dollar now. whether we get the first rate hike out of the bank of england before the fed, mixed opinion on that. have seen thewe pound giving background today. we are flat at 1.6397. let's move on. let's go to edinburgh. anna edwards joins us from there

. in a moment, we will be joined by ryan chilcote. with therds has dealt rain, the mist, the fog. clarity this morning. scotland remains in the union. >> we can't see much of edinburgh and the fog but clarity in the polls. no to split up the u.k., no for scottish independence. 45% voting yes. the news here is a little bit flat. there is not much of an air of celebration but i get that was to be expected. the of the two options was least change compared to the status quo. we have heard more about that today. as the day goes on, we will hear more and more about the government's plans to devolve power. the scottish to national party and the overall decision-making process to

edinburgh. or whether that is talking about devolving power within the rest of the u.k. we have heard from david cameron on that subject today. we will hear more about that in the weeks to come. they hope to have some draft agreements in november, legislation early next year. >> great work, thank you very much indeed. anna will be heading south of the border. it is sunny down here. something to look forward to. will the sunshine on alibaba? >> we will find out in 3.5 hours. that is what jack mine and all the investors are hoping. didn'tcebook, shares start trading until 11:35. that is why he has chosen nyse. he won't be there to ring the bell. eight customers will be. a cherry farmer from washington, a chinese olympian turned bracelet vendor that uses alibaba, kind of a masterstroke

actually. if the whole thing goes south, then he is not up there with his face plastered all over it like mark zuckerberg. what we understand is yesterday in the pricing double coverage and's -- pricing deliberations, alibaba management clear that if they want to leave some money on the table, they want to keep the price down. $68, still the upper end of the range. >> if the brokers pick up more, we could see this being global. >> that is right. $21.8 billion now which makes it the biggest tech ipo ever. $22 billion, the agricultural thatof china, i believe, is the current record for worldwide ipos. if they did exercise that allotment option, this could go as high as $25 billion. >> ryan chilcote, thank you very

much indeed. we will be speaking live to jack ma at the new york stock exchange. that is a conversation i cannot wait for. emily chang will be talking to him later here on bloomberg. "surveillance" is next. ♪

majority far greater than expected, scotland rejects independence. the prime minister says, our country, his four nations --

where will alibaba open? get me out, scarlet fu says. and a policy that could derail the great old market. good morning everyone. this is "bloomberg surveillance." it is friday, september 19. i am tom keene. with me, scarlet fu and adam johnson. what do we have this morning? >> we have a ton. overnight, the household wealth in japan rose. here at home, there is only one data point. the conference board leading index. and apple, introducing the iphone 6. >> it goes on sale today, right? >> there are world headquarters, it is just extraordinary. stephanie ruhle said it is like a zillion blocks. 13 a side of the big city block.