>> france is not finish. londonme minister hits to counter that in the french are hopeless and downbeat. the comeback of the century, -- the second place forcing a runoff with the president. hp had's for a breakout. the tech giant is said to split into two. good morning. you are watching "the pulse."

we are right here in a london. i am guy johnson. what have we got coming up? you have to check this car out. a concept car. we will check it out later in the program. cashing in on golden week. how won a london restaurant is rolling in the chinese tourism. first, to our top story. to top stories and of this story. the french prime minister is in london and he is here to defend france and his government economic strategy. call it a charm offensive after one british executive called friends catastrophic and downbeat and. -- france caps off and downbeat and. i said that there are 2 big stores. francine lacqua is here to cover it. she is a back. i am not sure which is the

bigger. good morning. >> a good morning. i was about to save not only am i back but the prime minister is in town. it is like christmas. to do today ise listen to the french prime minister and his calming after after frenching bashing. one executive said france was hopeless. when go back to 2012 hollande was elected, david cameron announced that the u.k. was rolling the red carpet to embrace the basis that wanted to close my hair after france -- --e here after friends france. france has said that the u.k. for the pasting

few years. they said is the favorite national sport. what to the prime minister plans to do is to say, stop, guys. where making the reforms. -- two we are making developer forms. has been going on at longer. it is hard to overturn these type of use. the british economy is growing seven times as fast. maybe they have a point. >> they do. , the prime minister, has been in charge since april and wilson a lot of comments saying that there is a turning point. france is not had the election but friends is expected to grow. -- france is expected to grow.

target. lacking of the that investors thinks mean business. he is brash. french spoke to the business community, he was very clear and he said, well do crazy wealth of before distributing. he is a socialist but he wants to give a little back to the business community in france to make it more business friendly. he said was the only way to grow. he wants today 50 billion euros in spending cuts from the government to push a back for businesses. how popular is this guy at home? i remember when he came, the popularity polls looked ok. what is the story now? look, it to say if you

is not too difficult to outshine him. the president of france is 13%. valls when he came into office was around 45% but his window it short. parliamentary 2 votes. this is the correct. valls once to be centerleft. a lot of people in france, a lot of socialist, want to be very left wing and less business friendly. this will be aut very important day for him to prove to the international community he is tough and means business. >> tougher means business. a good way of looking at it. francine, you are back. london.

what a perfect start. we will good morning the story. we'll be joined by pimco cio and director of sovereign risk. looking forward to that conversation, go shortly. let's turn our attention to some the company news. hewlett-packard is said to them the verge of splitting into two. part of an effort to redevelop. stepwith more on this huge is caroline hyde. meg whitman said i am not doing this and here we are. >> a deja vu. back to the future. she came on board and sellable cannot split the company into two. -- gave an interview was

saying no one understands pcs like a down. crate anotheru division, you will have to crate the whole thing. she says too difficult. another division, you will have to create the whole thing. chairwoman of that particular unit. the future, side is the enterprise, the cloud, the parts they have been investing in. what they used to do. thatill be the ceo of units, the overall technology units which brings in about $56 billion per year in terms of sales. it is resurrecting the idea they had in 2011 that things did not go smoothly as a meg whitman wanted. she was brought on board to change the outlook of the company. aty lost their number one maker, lenovo is number one.

they have but, where that they've missed of the boat in terms of a digital and mobile and you and i not want to do betrothed at our desks. trapped at our desks. they missed that particular change as well. >> staying with the french theme. a split. >> indeed. how many companie are trying this paht -- path. ebay saying they will split off paypal. the likes of microsoft and dell and ibm have we to regenerate and revolutionize. private.dell becoming they sold their low end server unit to china. is winning?

apple. they are crating out. hells of on the microsof. services is why you have started sly airbnb. they will give you the ability to website host and the business software. having tothe guards think new and fresh. doing the same so we could hear her from today. chris thank you vermont indeed. rule out more on that store. onhris key lies very -- >> ou very much indeed. -- or we will have more on that story. ut their money to work. a great panel coming up.

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>> good morning. you're watching "the pulse." the french prime minister valls is in england. he is making his case for why investors should not give up on france. can he convince? andre joined by pimco's cio

the director of sovereign risk at his. good morning to you both. himself and the opportunity he presents. the brits love bashing the france. with valls, we should be more pragmatic for site he sounds a business friendly and lack is going to make changes. the question is will he be making that enough? >> i think he has the right thinking and the right to reforms in mind. they issue is can he implemented them or not? we have now along -- colon and e's presidency has been week. and what he is offering and what he is trying to deliver since the beginning of his presidency has been truly [indiscernible] valls has asaid,

very hard job. at the economy is in a difficult position. 55% of gdp spent on public spending. taxes have gone up to 46% of a revenue. this is really an issue. the worst the situation gets, the war room he has to potential implemented the reforms. what we really need for him dont hollande to let what needs to be happen and that might be difficult. 1978-inter of discontent, phase that britain wanted through. countries can make changes. >> we have all been through the malays. germany, 10 years ago. and built a consensus

implemented at that. that might be a problem for france. merkel.o berlin, angela , when younderstands get this in germany 10 years ago, you had supportive mitigation, that's reform inevitably took place and came across. that's what to the french have been arguing. unsettling upheaval and we may have a winter of discontent. we want those who can afford fiscal spending to do so. we want to go say mitigation and support when we undertake. merkel is not a listening on this one. >> what is the story? >> that is the key point. the growth environment -- it >> external growth? the current >> of course. we are missing the target.

and inflation is a so weak. i would say it is absolutely true. there are other things that could be done. unfortunately, all of the taxes and structures are making it so difficult to come out of gdp. wants to do is only shipped by making structures lighter and easier for companies.

+++ twice as many as 50. that is because when you get to 50, the burden that you have is so high. that is the kind of thing that should be absolutely removed to let companies a growth. it is very dynamic. you need to give them grow and an environment that is very tough. i think that is the key part of the we should not underestimate the challenges that they will get into brussels given the revision, 4.4% a deficit versus the target is quite a difference. i think they will need to be prepared and they will have to be to make some concessions and terms of reform and push it forward. >> will be end up with a cathartic a moment? is that one needs to happen? to get everyone on board? willoughby -- willow we -- or up with a battle with the brussels? >> is a leader to do all of the above. structural reforms tailored. -- >> is a need to do all of the above.

essay -- they need to do all ov the above. do i internally is much more important. cause.blems it can moment, at least they are talking about it. [indiscernible] stimulus, structural reform, and dollars necessary. they do not quite trust each other. if france can demonstrate it is serious about the reforms and it needs the support in berlin. >> let's talk about the investment story surrounding friends. are -- i do not know

how many basis points over where we stand with the germany. france, a great case. the market is not pushing. you come into london and say france is an investment case. people are investing. people making changes. on the other hand, are we can be level into companies, businesses that employ people. this difficult situation and no one is investing. the fact they are investing and there is no reason to change. >> for the bond market, your technical issue where two years ago, we got to switzerland and downgrading of other areas. they benefited. , ii talked by equities figure out to deese associate for global companies that happened to be listed in france

and done well in industrials or staples and other companies. for them, they key is the ability to navigate and have more flexibility in how they run their company. what did they will hear from government or bring in reforms to early is [indiscernible] if theal factors government goes too fast, that will give hand to what is a bad. we need to be able to hear the entrepreneurs and companies and people want to make investments. to commitment and the vision actually put in place what is on ad in order to invest 5-10 year basis. if you look at the stock market, it has done quite well. greatcause you have the global companies, from a year,

we would be commitment to the reforms. you talk about cathartic moment. prospect of making more headway. that might really shot in berlin and frankfurt and paris and they might be the moment. to be honest, they are becoming synonymous in my mind to the italy and france together as a force in europe and how much power can they exercise? governmentsf these need reforms -- old of these governments need reforms. of theseh -- both companies need reform. renzi has mentionedit. he has said to hold to the budget rules.

its owns gone throught reform. france is open in terms of allies. terms of opportunity, time is quite important. has too many fingers everywhere in the economy. >> do we need to mass privatization? -- do we need mass privatization? it iszi found out appealing because he is not on structural reform. held back. he wants to privatize. you only get a good price we have something valuable to sell and that requires stock to perform. >> i think the other factor when

you fast-forward and look at the next 12 months and that could positive,ight be a given the level of growth is that we are seeing potentially qe coming out of europe will help. if we had a minimum of reform in an environment that is neutral, rates required and some qe in reform well targeted you aes could give it pretty bit opportunity if people get to disappoint them between now and then. by pretty attractive companies. >> we will leave it in there. thank you very much. we will take a break. back in a couple of minutes. ♪

>> welcome back. we saw we have a new head of the central-bank down in south africa. he is the new person that will head it up after dollar previous -- after the previous holder had enough and was moving on. disappoint is of the line i can see.

the price of focus is not enough for stability. he will have an interesting 12 months. dollar strengthening, the job is going to be very difficult over the next 12 months. analysis when we come back. ♪

>> good morning. welcome back. you are watching "the pulse." these are the bloomberg's top headlines. central-bank -- a south african central-bank governor has been named. the former is stepping down after her term expired in november. he was one of the two front governoro but, the new

he is 48 and he joined the reserve bank in 2011. he will have a very tough 12 months i would suspect. deficit in south africa, a significant problem. we'll watch at the very carefully. orders plungey the most since 2009. that was far worse than the prediction. forighlights the need additional revenue. the elections for brazil is in. neves edge out. forcing a runoff vote and we knew it will be a runoff. the third candidate many believed. look, therodrigo,

surprise is the second showing that will see in and the election. the second-place. this is loss -- business loves neves, how was electric convinced this was the way to go? >> that is a tricky question because no one saw it hearing not to lose with these numbers filter for most of the election, rousseff had to be average. -- had the edge. television debate seemed to be what did it. of the are the chances numbers closing even more?

>> as i said, no one saw neves doing so well. it will be risky to say he keeps growing. a lot of people think rousseff is close to the maximum. that may be a key factor that will help her. may keep cashves rent. she said she may support -- and that the be a game changer. >> how is business are responding? we were talking about the adr's on the scenario you were talking about. >> yes. business has indicated, investors have indicated they would be very happy if -- loss. anytime is showed that the grip on the reelection was a dwindling, the reality

strengthened -- real strengthened. business seems to be keen on a change. he has already said he would like to name the former president and that would be something most investors would probably like. >> watching this space is to it a look site it will get more interesting from here. thank you very much. watch at this space because it looks like it will get more interesting from here. the game has really changed or potentially could turn into brazil. let's told of a hong kong. protesters and government officials are beginning. -- let's talk about hong kong. injury davis. talk to me about where we are now. -- andrew davis. people are back to work in some

of the government buildings. what is happening? after we saw the violence over the weekend. things have really can't down and the government and students did hold their talks for the first time that seems to help ratchet things down. they issued an ultimatum for the students to clear out around this office to allow the civil possiblen or face police clearance. tensions were running high. students have opened up some paths, so the workers can get through. there are many fewer protesters today. hundreds rather than the thousands stuck every day, we see the numbers grow in the afternoon but they are thin. they seem to be scaling back. >> are we expecting major roads to reopen? where is the tipping point?

>> in yeah, that is what we are waiting to see. a lot of the barricades are not to anymore. the police have not moved in. it seems to be may be some agreement between the sides that in that will not remove any of the barricades until there's more progress on talks to set up a schedule for formal talks. last night was the introductory session. i think both sides, even the students, want to see this phase of the protests come to an end and come off the street. a lot a push back for regular people whose lives have been inconvenienced by this. a lot the stills are sensitive. they do not want to lose the battle of public opinion. -- a lot of the students are sensitive to invest. they are trying to get other negotiations out of the government incentive change in

the 2000 election -- 2017 election is run. >> the numbers keep going down and the momentum is lost and we at a long-term stasis, the government could handle a lot better. is that the case? >> i think so. i think the souza want to bring this to a close. their numbers are dwindling for it is hard. if we have tens of thousand people out there for days and it's hard to stand. there were two public holidays that made things easier and then a weekend but now people are back to work and the students went on a strike the week before the protest started so the university students have been out of school for more than two weeks and is near midterms or whatever that will be having in the middle of this term. i think people want to return to their normal lives system is not comfortable sleeping on the

sidewalk. there are not a lot of tents set up. hot here even at night. it's incredibly uncomfortable. i think both sides want to figure how to get the streets and back open and it hong kong back to normal. >> andrew, thank you. to as davis joining also a result, chartist for groups have been banned from visiting hong kong. us.oining -- as a result, chinese tourist groups have been banned from visiting hong kong. a business profiting from the chinese vacation. ♪ delicate dim sum. it is goldense, week. that means a chance to really treat your self.

>> first, i will like to introduce peeking duck from the reserve. restaurant has been working to cater to chinese and cash. close to half $1 billion will leave home to make -- half $1 half $1 billion to make room. >> i said to the price and 88 pounds per person. we believe it is a lucky number. equally important is service must be authentic, too. >> we have chinese taking stuff. is their feel it second home. >> acted the end of the meal,

you get to this, a macaroon. not any macklemore and but a golden one with champagne. but a golden one with champagne. >> you thought she was going to eat it, didn't you? i wonder how much it cost. for a break gulf. will it improve his chances of taking on the competition? break up.s for a ♪

>> good morning. welcome back. you are watching "the pulse." the big breakup in silicon valley. hp will announce plans to break into 2 this is. let's start with hp. does it make sense? this isn't the right thing to do? >> as has been a lot of excitement about upgrading the -- there has been a lot of excitement about upgrading price targets. it it does not really change the cash flow. i am struggling to see what the 2 business can do that and they

cannot do as a single business and i am struggling to see how it materially changes things and perhaps suggest investors were not valuing the visit as appropriately and it will help them somehow add more clarity on what the 2 our work. chris investors are beginning -- >> investors are beginning or will begin to be more discerning about how to invest in the businesses. if you are looking at the opportunities for the pcs and printer businesses, i struggled to see the long term upside and what they are doing right now. it is cheap, it needs to be seriously cheap. much. that, i cannot see i largely agree. with pc's turn of events just a this year driven by the microsoft end of xp support, a

big upgrade of pc's and all pc related names doing much better than people would have thought at the beginning of the year for some that are riding a little bit of a high which makes things a better and valuations. and printers,c's will they be a long-term business again? >> probably not. we are in the upgrade cycle. quarter.ly by this fourth-quarter. >> is a need to get it done pretty quickly. that is a negative story. -- >> they needed to get it done pretty quickly. should not be that different. the stock has been around $35, $36. it does not change it materially. if you see issued a $45, you

might have a case. toif you see it shoot up $45, you might have a case. talk about some song. how bad will it be? there have been negative for rulers around the handset business. hugely significant system i cannot remember samsung made a loss. they are facing very tough competition and a new breed of competitors and nokia and elegy. lg. these are new private copies that have very rich and governments from their home aomitries in particular xi and they are pricing samsung out. >> subsidies rolling out of china. >> it as pressure overall. for appleh pressure

to go up with a screen sized story going to affect? >> i do not think it makes a huge deal. out for had been there with samsung competing. up kind ofing catches up a bit. samsung thehelp does not materially shift. not anybody posing a serious threat to them. i do not see things changing much. it is all the low end. the chinesewhere are making $100 handsets but have high-end chips. the same compresses the going to the falls -- they goes into the fault of the developed markets are making. i do not think they can do it. >> we will leave it. nice to see you. .ech specialist, james gautrey

knifeafter the swiss army maker has been stagnating. the company is revamping itself. hans nichols visited its factory to see how the business and plans to cut through its problems. an iconic red knife with a tool for almost contingency. as they prepare for the 130th anniversary, they deal will promise that may dull it. >> [indiscernible] sales dropped by almost 30%. because of the difficult situation at the airport, many people do not take a knife with is down. through 3000 tons of steel and the sheets gets stamped into blades. this is the different process and blades get plenty in here

with stones to make them dull, so you can handle them and pick them all. the increased visibility and they are opening flagship stores on zurich's pricey area to fashion line. they are looking beyond to export a swiss rite of passage. >> would you give the first swiss army knife to a boy, you see the light in his eyes. samee will get the [indiscernible] >> the blacksmiths here just do not want to catch a boy's imagination and a little girl's are additionally customers. new markets and customers that hold the future and is knowy clear, these women how to handle a blade. hans nichols, switzerland.

the ones thatof almost everything on it. corkscrew, obviously. the cause of clean energy. that in a couple of minutes. see you after the break. ♪

>> welcome back. clean energy innovation is on the rise. can new companies expanded their business and keep costs down? one of the key things is storage. particularly things like going and how do we solve the problem? kitchen.k to nick good morning to you. you guys are in the energy storage business. energy storage batteries have been around for quite some time. etc., etc. a mores have done it for basic point of view. explain the chemistry of what you are doing and will work our way from a there. crooks the marketplace has been driven by the automotive market. like,things need to be

very mobile. it does not go anywhere. cost is verye, the low in the life is long. elements andn materials and that sort of thing. a different set of characteristics compared to the likes of lithium. because of the characteristics and the chemistry available, we are able to offer a lower-cost solution. what are the grid needs. >> you are using copper and zinc? >> yes. been around for literally 200 years and single use batteries, we put the membrane in the battery to make a rechargeable. that's what we patented. >> i was quite surprised that you're been around for 200 years and has been quite forward. stupid, it simple,

that's what we do. >> they are being acted going to be wide, open spaces. into thed it can go wide, open spaces. our storageinking, and of the cloud, cumulu, name of the cloud. that is where the names come from. >> level of interest, how to get started. >> we race to financial angels and we are developing a a lot of interest because big companies or investors. use for government supports are downstream, will only support from large businesses, lobo players to act as our partners for the it is a global business -- partners.

-- it is a global business. >> nick, nice to see. nick kitchin. for our viewers, the second hour of "the pulse." offensive. talking about what the french prime minister has to sell in lo ndon. the country apparently not finished. the comeback. brazil's elections are fascinating now. forward to that conversation. business loves the guy on the right. well. it can he do better in the second around? we will find out. on twitter.ow me francine lacqua is a back. valls chasing manuel

around london. we will take a break. we will see you back. ♪

>> france is not finished. the prime minister hits london. come back of the century. business leader leaps into second place. hp heading for a breakup. it may be splitting off its pc and printer arms. good morning to our viewers in europe.