collects, putin, bash abe mettaputin, world's leaders. and just in time for christmas i sat with's ceo to talk about the policies.digital we will bring you that exclusive interview. welcome to "the pulse."

european bloomberg's headquarters in london, i am francine lacqua. we are getting pictures of u.s. president barack obama speaking at aipac. president obama saying the u.s. is committed to the asia-pacific region. he is talking to a crowd of ceos about the u.s. economy saying that it is primed for sustained growth. he was also talking about these and visa arrangements. he is talking about what we heard from the chinese president. we will have more from that apec summit throughout the morning. escalating risk from russia. the former soviet leader warned that the ukraine-russia crisis could threaten world peace. is on the brink of a new cold war. some people are even saying that it has already begun. warning comes as ukraine accuses russia of supplying rebels with weapons

and supplies. many as 200d as fighters killed in recent fighting. great to have you on the program. thank you for coming in. in terms of where we are in this power-play that continues, it seems that concerns over ukraine are dying down a bit. you say this is still a very crucial, difficult point. >> what we are seeing right now is increased movement of the separatist military. it is on the boundaries which they consider very important to the territory. these would be major highway crossroads that lead into luhansk and donetsk. ,lso, the very strategic port which will likely be the most important flashpoint in the coming weeks. >> why are we not talking about -- >> there are many things that

are coming up on the international stage. it is fatigue with the ongoing conflict which has been there pretty much since march. other things such as the isis threat, the ebola threat, that pushes ukraine a little bit into the background. we also seem to interpret the fact that vladimir putin is signing gas agreements with china as a political move. >> indeed. there is a shift in russian foreign policy. it is an adjustment to the fact to behey do not want overexposed and over dependent on the western markets due to the sanctions for them. they are looking obviously towards china, which they have a very long boundary with. they are looking at growth in china and possibly cutting into that market in terms of energy and finance as well. >> we are hearing from president

obama in beijing. how has he handled the crisis so he dod what can better? >> how involved is the u.s. want to be? one of the problems in the crisis is that it is being treated on the russian side as the u.s., nato and the eu challenging the russian federation in the region. a more active role of the u.s. in this conflict might be counterproductive in the relationship with russia. >> thank you so much. for more, we have president obama speaking. on the sidelines, china's president met his japanese counterpart in the first meeting between the two countries in over two years. andrew davis joins us now from hong kong with the latest. what is the significance of the summit? >> relations have deteriorated between the two countries. there was concern even about military conflict. they tail each other around these disputed islands in the east china sea.

they have planes and boats out there and anything could happen. abe has been pushing for some pushingthaw with china, for a meeting on aipac. the chinese gave it to him, seemingly reluctantly. it really emphasizes this was all coming from abe but last week they had an agreement to take steps to improve relations. if you are looking at the photos and videos from the handshake after the meeting, it didn't look like the two were pleased to be standing next to each other. they both look very grim but the meeting did happen. it is inspiring some kind of optimism that this might be a turning point. things in asia have really been tense over the east china sea dispute between japan and korea for some similar reasons as they are with china, which is the lingering resentment over japan's occupation before and during world war ii. at least abe is making an

attempt to get things back on a solid footing. >> tensions between china and japan have been extremely high in recent weeks and indeed in recent months. how do you see this playing out in the longer-term future? again, i think there is hope that at least they are talking to each other, which is better than just trading barbs, which is what has been going on for months. a lot of this has to do with japan acquiring a few of these islands from a private owner. japan had been administering the islands, both sides didn't like to talk about them too much, but once japan bought these islands to prevent a nationalist governor in japan from buying to send japanese out there, raise the flag, which really would have provoked the chinese. the government stepped in to meet the status quo. things have really soured since then.

andrew, what might the u.s. get from participating in a meeting of asian countries? how will president obama deal with putin? >> that is going to be interesting to see. obviously, u.s.-russian relations are very tense right now. .be of japan did meet putin their relations have suffered because japan supported the sanctions. putin signed an agreement for more energy for china. for obama, it is a chance to reassert asia -- i mean, the u.s.'s pivot to asia which has come into question. he is also pushing to make on the transpacific partnership, a trade agreement that involves some of the apec and he is using this as an opportunity to meet some of them

safe -- face to face. >> andrew, thank you so much. andrew davis with the latest on this crucial summit. speaking of putin, later we have an exclusive interview with one of russia's richest men. worth an estimated $13 billion. ryan chilcote will be speaking to him. ryan, it is extraordinary that he has seen his wealth grow this year despite sanctions against russia. why he hashe reasons seen his wealth grow so much is because he derives most of his which from the company of he is ceo and has an 80% stake. its share price has gone up about 60% so far this year. 100% since may when he told me that he was thinking about selling his u.s. assets. something that he subsequently did. he is not the subject of

sanctions. nonetheless, he is concerned about the russian economy. that is where the company now sells most of its steel. we heard the bank of russia this morning cutting its baseline scenario for the russian economy for next year, saying they now expect growth to be at 0%, pushing back there inflation to 2017 and saying they expect sanctions to remain in place until 2017. i am going to ask him about the sanctions and about the russian economy. francine. >> we heard president putin talk about the continued decline of the ruble. >> this is a big concern. 170ruble, out of the currencies that bloomberg tracks, is the second worst-performing only after ukraine's currency. about 30% year-to-date, almost 45% since its peak back

in 2011. the very fact that the russian president talked about the ruble today suggests to some that russia is very concerned about the decline of the ruble and bolsters the case that the bank of russia will now intervene, perhaps more than what we saw on friday. we saw a lot of strengthening on friday of the ruble. many people say because traders now anticipate the bank of russia to move in and probably ruble. maybe calling 50 rubles to the dollar the lowest level they want it to reach. that is another one we are going to talk about. most of his business is in russia. his costs are in rubles, his profit is in rubles. inetheless, he reports dollars. a lot of russian companies are feeling poor as the ruble weakens. >> ryan, thank you so much. looking forward to the interview. -- we talked ah

little bit about ukraine. talk to me about russia. we were hearing from ryan, talking about the ruble. vladimir putin is trying very hard to play this as everything ok back home. is there going to be rebellion? >> what we have been looking at is slowing growth in russia, increasing inflation, ruble that is weakening despite the best efforts of the central bank. several companies asking for state aid. this would in most countries lead to public discontent. however, right now in russia, is a return to the image of a superpower, the self-image of importance of russia in the world rather than economic pain. evolvesrisis in ukraine , most of this economic pain can

actually be blamed on an external enemy, the united are opposinge, who interests of russia and hurting the economic interest of russian federation. on blame is not reflecting the popularity of president putin or the government. continuesoil price going down, will it go back to be blamed on him? or it will continue the way you have just described? spin depends on how it is in russian media. russian media is very much influenced by the government. unlike information coming out where the government can be blamed, maybe that could have an effect. the prices on the world market, that is something that does not reflect on the government. what it does reflect on is the federal budget, which will experience some problems next year. >> thank you so much for staying

with us. is what else is on our radar. boeing, more than $8.5 billion order from smbc aviation capital. asian aircraftas companies bet on demand for new planes to me travel growth. maxorder is for 80 737 models. janice capital has attracted more than $1 billion in october after the group hired star bond manager bill gross. janice is betting on growth to build a pimco. -- says its market share in russia improved as the reported third-quarter profit that messed estimates -- met estimates. we will continue to talk brews with carlsberg. we will ask the ceo about the

challenges it faces in russia. that is coming up later in the show. first, after the break, my exclusive interview with the burberry ceo. hear how he is planning to make this christmas one to remember. ♪

>> welcome back to "the pulse." we are live on bloomberg tv and radio.

it is a big week for iconic british fashion house burberry who are set to announce third-quarter earnings on wednesday. also on the horizon, the all-important christmas shopping period. burberry has an ambitious strategy to attract customers over the next two months. i went to meet burberry's ceo, christopher bailey, to find out more. justristmas is bigger than the 25th of december. it is really the build up to christmas. it is really about celebrating and storytelling. we have created -- we have worked with romeo back in, who is a world superstar. different pieces of content across all the different platforms. some of the windows, you can interact with. the dots try to join

with the storytelling. you might see a great outdoor advertising image and that will lead back to the windows and burberry.com. >> you are the first british brand to take over a window in paris. how do they see the british taking on the fashion capital? to be workingng in paris with such an iconic store. london being the fashion capital of the world. [laughter] >> sure. , what also being in paris is wonderful is the creativity that we had as we worked on those windows. the puppet making is incredibly beautiful. the way that they go about doing that, that is something historic . >> is it a rivalry with the french? >> no rivalry. it is a treat to be in paris.

it is such a magnificent city. lots of our peers are there. >> burberry is at the forefront of the digital experience. the campaign is digital. a it is how we could combine physical experience with something that is online. so we worked with the incredible the at twitter to have capability of being able to shop directly through a tweet. again, it is not the fact that it is a commercial vehicle. it is the fact that if you can do that on different platforms, why shouldn't you? you are appealing to younger customers or actually the way we are going to spend in the future is on digital? >> i don't think that we think of it in terms of young and old evil. -- young and old people.

it is so integrated into the organization. it is really about engaging and storytelling. digital allows you to do that. with digital, i love the fact that things are instance. it is real and you can share share your experiences and create your experiences. that makes iting a creative brand. later in the program, we will be talking about other luxury brands that aren't so digitally savvy. coming up, the symbolic vote in spain. catalonia votes for independence in a ballot for the constitutional court. that constitutional court has been ruled illegal. what does it mean for the region's future and that of europe? ♪

>> welcome back to "the pulse." now let's turn to a symbolic vote in spain. has voted for independence in what the constitutional court has ruled

an illegal ballot. our european government editor has the story. he joins us on the phone from barcelona. what is the latest? whack's this -- morning, the spanish media are picking over the results of this vote. readout, 1.6 million votes in favor for independence. that is slightly in the half of the total electorate. depending on your political it suggests an overwhelming majority in favor of independence -- one thing is clear. if mariano rajoy were to take the david cameron option and allow the catalonian's to vote, spain would face an extra tough fight to win the argument to keep the country together. >> what happens next? will mariano rajoy -- has signaled that he is

ready to negotiate but he says he will only negotiate within the frame of the constitution. the constitution doesn't allow catalonian stove vote or leave spain. promise is relatively empty. on the they will focus catalan separatist camp. there are two main parties that have been pushing this independence vote. maintain annaged to at times uneasy alliance over the last few months up to this vote. form ae now trying to joint platform in the next regional election. that is going to be a difficult negotiation. >> thank you so much for the

update. it is a story we will be following closely. bloomberg's ben sills in barcelona. thelet's check in on markets. jonathan ferro is here with the latest. >> equity markets in europe opened a little higher this morning. the ftse 100, 0.2% on the dax. politics dominating the debate. 25 years since the berlin wall fell and we are still talking about a divided europe. whether you look at spain or the u.k. where they will be debating the future. going look at sterling into wednesday, the inflation report, trading at 1.5891. we are not talking about politics just yet. we are talking about the growth story. of course, what that means for rate policy at the bank of england. targeting 1.49 by the second quarter next year. i think you know what is coming

up. >> i know what is coming up. it is going to worry a lot of investors until we have that referendum. jonathan ferro with the latest on the markets. coming up, russia's biggest brewer joins us. we will ask the ceo of carlsberg how he is doing in russia. ♪

>> welcome back to "the pulse." bloomberg's european headquarters in london, i am francine lacqua. president obama has arrived in beijing this morning to join other world leaders gathering for the aipac conference. chinese president xi jinping has had a busy first day hosting the summit. he met with japanese prime minister shinzo abe. they signed a new gas supply deal with russia. voters in the spanish region of catalonia have voted

overwhelmingly in favor of separation from spain. 81% of those who took part in the unofficial poll cast a ballot for independence. the vote was ruled illegal. ukraine is accusing russia of reinforcing rebels in the east of the country with weapons and supplies. the region so renewed violence over the weekend as heavy shelling destroyed holdings in the pro-russian stronghold of donetsk. manyne says it killed as as 200 insurgents in a battle for donetsk airport. the battle undermines a cease-fire between the two sides. let's stay with the conflict in ukraine. european companies with large exposure in the region could suffer. earlier today, carlsberg reported improvement in russia. still, the company is feeling the pain from a weakening wrubel and political turmoil. let's bring in the carlsberg ceo .

he joins us now from copenhagen in his first interview of the day. great to have you on the program. talk to me a little bit about russia. this is still a challenge, a burden for your company. you are saying it is not as bad as you were expecting it to be. >> i would say first of all, despite eastern europe and russia, still we were able to deliver 5% organic growth in operating profits. to your point, russia, ukraine, still a big challenge to do business in. the macro economy is not that strong and has a negative impact on consumers, food inflation being very high at the moment. consumers are under pressure and we can see that in the beer category. the beer category is developing negatively, basically in line with what we said three months ago. high single-digit decline.

7%, 8% year-to-date. it is still slightly up in value but in decline. it is a challenging market. >> what are you doing to counter that? you talk about innovation, marketing, for boosting sales in russia. can you give us a flavor of what new products or campaigns you have in the pipeline? >> despite the tough market, it is still a very important and profitable at the -- profitable business for carlsberg. we want to make sure the business stays strong. we are investing a lot in new products, a lot in more premium products, craft beer products. we are also investing in sponsorships. we are into football, we are into ice hockey.

some of the activities we are doing on our brands. ,part from all the investment in a tough market like russia and ukraine, you have to have a business model and cost. if the market is down 7%, 8% in volume and has been for some years, you need to adjust your operating model, your business model along the way all the time. that is what we keep doing as well in russia. >> it doesn't necessarily mean cheaper prices. youou are in russia, mentioned a little bit about adjusting your operations and adapting to the market. what is one thing that will make it easier for you? don't think there will be anything that will be very easy in the near term. it is going to be a challenging market to operate in for certainly the short-term and months to calm. maybe including the whole of

next year based on what is happening in russia and ukraine and the kind of issues between russia and the eu. i don't think it will be easy. it will be a tough environment. in a high inflation market, the wrubel declining as we have seen lately, of course we have to lower price. that does not help volume development. i don't think we can avoid pricing. still work on brands, still work on innovation to make the country excited about what we offer, and keep taking cost down as much as possible. >> should we expect any major acquisitions in emerging markets? to diversify your business away from russia? changed in terms of our overall strategy. what wes will be on

have. invest in europe, russia, ukraine and asia. based on what we have, that is our main focus. m&a is also part of our strategy. if we identify opportunities that create value for shareholders, that is part of carlsberg's plan. >> so how do you consider the m&a landscape at the moment in your industry? ripe for more consolidation? do you think that people will start to take a breather? think we will keep seeing conservation in the industry. we are in an industry where you need to invest quite a lot to set up a brewery. scale has a big impact in this business. to be number one means a big difference. i think you will see more consolidation certainly in different regions.

like asia, you will see more consolidation. on a global scale, i don't know. havee same time, we also trans for more growth in specialty beer and draft -- craft beer. we have a number of local craft beer blends that perform quite strongly. we are performing very strongly. a very goodus picture overall of where you see growth of your main concerns and a very good benchmark for what the world economy is doing. what do you see as your biggest problem if we keep russia to one side over the next 12 months? >> internally, if i look at our performance in the western european region, we have a lot of focus on execution.

that is about innovation, how we manage our portfolio, pricing management. -- at the same time, we are completely changing the business model. investing in europe, centralizing supply chain. tools to build strong support our markets, to really be strong in this environment where the market would be flat and the plan would be to take share and be more efficient. also i think, quite exciting performance for carlsberg. we are gaining share in a lot of markets. we are investing in our international brands. india, china, being very good examples. i am excited by what i see in

terms of our performance in western europe and asia. ukraine we have russia, still being very challenging. fascinating because you say it is about execution. trying to rationalize some things that may not be working as well as you want them to. are there any external shocks that you are concerned about? is there a concern that growth will be falling quite significantly or that we find ourselves in a dis-inflationary environment? do scenario planning. assumption,ifferent if this happened, what then? as always, it is very hard to predict the macro economy. if i take western europe, i think we are still looking at a category being quite flat in terms of development. i don't see a risk for a steep

decline in volume in the beer category. if anything, i think there is some momentum building based on craft, based on more innovation coming from the different beer companies. also, i think we are getting better about communicating the benefits from having a beer or two beers or a glass of wine. in that sense, quite optimistic. we do scenario planning. pricing will not be easy in europe. but to keep it flat, i think we see that as a reasonable and likely scenario. if i talk about asia, china, we are seeing different dynamics. still, fairly healthy scenario in china. other markets, still pretty sound and healthy development. >> all right, very many thanks for talking to us today.

of carlsberg for his first interview of the day. coming up, crippling sanctions against russia haven't left a dent in the fortunes of the countries fourth richest man. we are speaking to the ceo of russia's second-biggest steel marker -- steelmaker. ♪

>> welcome back to "the pulse."

now a bloomberg exclusive. another bloomberg exclusive. 's business appears to be just as strong as steel. they posted a profit margin on levels lasting before the 2008 financial crisis. ryan chilcote joins us with the company's ceo. >> thanks, francine. we are joined by alexey mordashov, the ceo of severs tal for a number of years. thank you for doing this. i want to start by asking you about your strategy for severstal itself because you spent a decade and billions of dollars building up your presence in the united states. you build the plant from scratch, modernized another plant, now you have sold those assets. what is next? -- [indiscernible]

basically, the strategy is very simple. to be successful, we should be able to set a high price through and should be able to produce at low cost. assets, goodof operational practice. all this should be based on the culture. basically, the culture of our people is key. >> so what does that mean, you are done with international expansion? you are going to be a russian company now? >> yes. >> so the idea is to focus on what you have now. what changed? for a decade, you were always shouting, international expansion.

has compelled you to focus on russia alone? >> a very simple explanation, i believe we were seduced by the idea of great continuous growth of the world economy. of profit generated in the industry by people in the united states. even turkey could fly. everybody made a lot of money. assets which have closed down and begin i do states and which we bought before the crisis of 2008 -- after the turn around, they became negative and generated $900 million negative. it means it was a different paradigm. the paradigm has changed, shifted.

, growth went down, slowed down significantly. price is slowing down. [indiscernible] we have significant deterioration of the margin. years, we try to have the right model for a steel company. ,e came to a simple conclusion that the only way to generate good margin is to serve a fair price at low cost. to be able to do it, we should have good market, good access to the market. consolidationobal doesn't look very realistic anymore. you were talking about

spending a billion dollars a year, some of that because of the united states and modernizing your factories there, what can we expect severstal to spend next year? >> between $8 million and nine men win dollars. -- $9 million. just to pursue the strategy which i have mentioned. improve the product, upgrade our facilities, to supply customers better. >> one of the things we saw the united states do that wasn't explicitly part of the sanctions and was never attributed to the sanctions, was effectively the u.s. pushed russian producers out of the steel market. what do you think the probability that europe could do the same? that europe could effectively bar russian steel from coming into the market given the very poor political climate between russia and the european union? >> what happened in the united

states was specific. which is not the case in europe. i will not say that u.s. pushed out russian steel but the agreement was counseled, which makes difficult now for russian companies to penetrate u.s. market. i don't expect anything similar in europe because of specifics in the european market and free-market economies. of course, we have to pay attention to local conditions. declineas the ruble's affected your business? being an exporter, we benefit partially from this. but it is set off significantly by the dollar. our debt is very low.

[indiscernible] all in all, we always try to between inflow and outflow of currency. in this case, basically we don't benefit a lot, very little, from probably depreciation of ruble. neutral but is not sustainable energy practices. >> we have seen the ruble strengthen a little bit today. how concerned are you about the ruble? >> to be frank, i am not concerned about ruble if you think about the specific today. course,ia, of unbalanced ruble depreciation could bring the risk of inflation undermining the power of our people and slow down national economic growth, which

could have significant impact. returning to sanctions, i know you are not sanctioned. severstal has not been sanctioned. you are partnered up with two other business ventures. what has that meant for you as a businessman? has that created problems? >> not at all. general, we have this continuing geopolitical situation in ukraine. the eu set to expand sanctions. have the sanctions been effective? how concerned are you about them continuing? for short-term situation, i don't see significant impact of sanctions. sanctions are designed mainly against -- which is not critical for national economy. only two sectors are affected by sanctions, banking which is very important, and oil and gas companies.

anyin all, i don't see immediate impact of sanctions. on the long term, sanctions are worrying. because sanctions undermine trust. they undermine trust of local investors and foreign investors. the slowdownead to of national economy because of the slowdown of investment growth and so on. today fromseen that the bank of russia reducing their expectations for growth next year. we have to leave it there. alexey mordashov, thank you for your time. talt was the ceo of severs telling us that for now, the sanctions have not been too effective in damaging the russian economy but he is concerned about the long-term.

great interview. thank you so much, ryan chilcote and alexey mordashov. we are back in just a couple minutes. ♪

>> welcome back. it is time for today's new energy top headlines. windfarms in the u.k. have been paid 43 million pounds to stand idle this year. the constraint payments were made to suppliers because

national grid's weren't able to use their power. its largestuild paddock complex. the french contractor wanted a 285 million euro contract. the power plants are expected to generate more than 350 gigawatt hours of electricity per year. investment in green energy products in australia has -- in the last year. the group says that investors are choosing to put their cash into other countries because the australian government has no clear renewable energy policy. for those listening on bloomberg radio, the first word is up next. for our viewers, a second hour of "the pulse" is coming up. mywho will have more from exclusive interview with the burberry ceo. we will be talking to the news capital founder about the luxury firmsand why are a lot of

have decided to stay away from the space where burberry was leading the charge for years ago. ofn we talked to the ceo portugal's postal service. that and much more coming up. ♪

will most powerful leaders meet in facing. mostorld's powerful leaders meet in beijing. good morning to our viewers in europe. welcome to those waking up in the united states.

this is "the pulse." live from london. a power-play in asia. president barack obama arrived in beijing. has the russian president vladimir putin as well. -- meetingsnings have broken news. andrew davis joins us from hong kong with more. what is the significance of the summit? meeting between shi and abe is important because the relationship between the two countries has been extremely strained for the better part of two years and even before that.

countries of been sending ships to tail each other in the east china sea. abe has been pushing for this meeting. he has been taking the initiative in trying to ratchet down the tensions. the chinese have been pretty dismissive. the japanese pressure seems to have paid off in this meeting. neither of them looks happy to be there, no smiles. but at least the leaders are talking. this could be the first step to improving bilateral ties. i was going to ask you more about that. tensions have been extremely high in recent years. all eyes were on the first summit meeting between these two leaders. what do we know about what was discussed?

>> very little. that the summit came about because negotiators from both sides last week, high-level negotiators, reach an agreement where both sides said they would work to overcome political obstacles. they set up a crisis mechanism to oversee the east china sea. towardook a step technology that china has claims to these territories as well. disagree over to what was going on, which seemed to be a step toward the chinese position, if a small one. they did put out a joint statement that allowed this meeting to take place. people are hoping this is a beginning of a process, rather than a culmination. >> what might the u.s. get from culminating in meetings with asian countries? how will barack obama deal with it? meeting.an apec

the u.s. is participating. australia is here. the russians are here. the g 20 meeting is later this week in australia. they are bouncing from here to australia. to obama, it is a chance reaffirm a commitment to asia, step up the presence here, become it into the asian economies, both economically and militarily. alot of people see that as way to offset china's growing influence. it gives the chinese leader a chance to assess obama face to face. is weakened after the midterm elections, but he is driving foreign policy. much.nk you so

andrew davis from bloomberg news and hong kong. -- in hong kong. endedn sanctions have not the company. but concerns about the russian economy. erstal ceo.o the sev what were the main takeaways? on the sanctions, i think what was interesting was that he said that the effect of the sanctions has been very limited. it has focused on the banking 'ector and russian companies ability to raise funds abroad. his bigger concern is in the long-term. the lack or erosion of trust between russia and the west and what it might mean for the russian economy. he thinks that this might bear

very poorly on the russian economy in the long term. we saw that from the bank of russia today. expectations to 0% next year for the russian economy and pushing back their inflation target for 2017. these are the bigger concerns. severalsta -- severstal has not been sanctioned. but he said one of the biggest problem with the sanctions is their uncertainty. he never got any reassurance that he would not be sanctioned or the company. he does not think that will be happened, but that is what makes it so difficult to operate in this environment. withimply don't know treasury in the united states, europe making decisions, what is going to come next. >> you also asked him about the future of the company and he sees it as remaining a very russian company.

interesting because he has spent billions of dollars and a good decade building up his presence in the united .tates the fifth the united states until this year when he surprised everyone with a decision to sell off assets there. that was greeted and applauded by the market. mayes up about 100% since when he first said he might sell the assets. said, i was seduced by global growth when i was building international portfolio , now i am more concerned about overcapacity. he clearly thinks it makes most sense going forward to focus on the assets where he is most profitable and that is in russia , irrespective of any concerns going forward because of sanctions and the falling price of oil, about the russian economy. >> thank you so much.

let's stay in russia. their profits meant estimates. affected byhas been a weakening wrubel and political turmoil. and political turmoil. >> russia, ukraine, still a big challenge to do business in. the macro economy is not that strong and has a negative impact on the consumers. food inflation being very high. consumers are under pressure. we can see that in the beer category. it is being hit quite negatively. high single-digit decline. client.ear to date the -- decline. volume, but value

decline. >> what are you doing to counter that? you've talked a little bit about innovation. you've talked about marketing. give us a flavor of what new products or campaigns or marketing ideas you have in the pipeline? yeah, despite its tough market, it is still a very important and profitable business for carlsberg, russia, and ukraine. lot in newsting a products, a lot and more premium products, craft beer products. we are investing in sponsorships. hockey, that kind of sports, some of the activities we are doing on our brands. apart from all the investment in

the top line, and a tough market in russia and ukraine, you have to look at your business model. if the market is down 8% in volume and has been for some , you a declining market need to adjust your operating level, your business model along the way all the time and that is what we keep doing as well in russia. >> it does not necessarily mean cheaper prices. , youu are in russia mentioned a little bit about adjusting your operations and adapting to the market, what is one thing that will make it easier for you? ido think there will be anything that will be very easy in the near term. certainly the short-term and months to come and the whole of next year maybe, based on what is happening in russia and the , and the kind of issues

between russia and the eu, i don't think it will be easy. >> coming up my exclusive interview with the burberry ceo. how he is planning to make this christmas one to remember for the british fashion giant. you are looking at live pictures of david cameron speaking at the cbi. he wants spain to say united. anything to do with secession is very important in this climate. if he stays into power next year , he would call the referendum on whether the u.k. would want to remain in the eu for 2017. we are back in a couple of minutes. ♪

>> welcome to "the pulse." live from london. let's check in on the currency markets. we have been talking a lot about the wrubel, a lot about russia -- the rubel, a lot about russia. we have seen quite a pop. days, itlast couple of is on the same path. this is after we heard from the russian central bank governor. limit localto

currency funding toward speculation. she will take steps to repel speculators. big week for iconic british fashion house burberry. also on the horizon, the all-important christmas shopping period. they have a digital strategy to attract customers. i would to meet the ceo and creative director christopher bailey to find out more in this exclusive interview. is bigger than just 25th of the secretariat -- december. it is really about celebrating a storytelling -- and storytelling again. we have assigned to pieces of

content --designed different because of content. we try to join the dots with the spirit. you might see a great then young image and can go on to burberry.com. >> you are the first to british brand to take over the window to take over the fashion capital of the world. >> it is amazing to be working in paris with such an iconic store, london being the fashion capital of the world. [laughter] and also being in paris. what is wonderful is the creativity we have as we worked on the windows and the experiences.

the puppet making is incredibly beautiful and the way they do that is historic. rivalry with the french? >> no rivalry. it is a treat to be in paris. such a beautiful city. is really at the forefront of the digital experience and the campaign is digital. >> how we can combine a physical experience with something that is online. we have worked with the incredible team to have the capability of being able to shop directly. vehicle, butrcial it is the fact that you can do it on different platforms in a physical location. you are appealing to younger customers or the way we are

going to spend in the future is on digital? of iton't think we think in terms of young and old people. it is just so integrated into the fabric of the organization engagingreally about and storytelling and digital allows you to do that. that things are instant. it is real time. you can share stories. experiencese your and create your experiences and that is something that is a creative man and a creative organization, it is great to see taking place. >> we also spoke with the ceo of what wasand he echoed said. >> we find that our global customer is very consistent.

us. is very exciting for >> for more on burberry and the companies,y retail great to have you in the studio. it was interesting to speak to burberry. they were spearheading the digital movement when so many are still behind because they are just not engaged with customers online. >> they have hit the nail very early. you get to a different audience, a younger shopper, with digital. wealthier customers are among the most tech 70 customers. they may not want to buy online -- tech savvy customers. they may not want to buy online, but they will definitely shop. aspirational.ery beauty at an affordable life -- price point.

one day work up to buying a handbag. >> we have an interesting piece in "bloomberg businessweek." not present now in digital, it is going to be tough to continue that conversation going forward. is that true? >> absolutely. ,hat you are seeing with luxury particularly with handbags, etc. and brands who do not have as as they usedgacy to, for many brands, you have to remember that china is becoming of the business. you will be surprised how much things like social media influence things for the consumer. her taste is becoming increasingly fickle. if you are not popular in social

media, if you don't have a social media strategy, it can kill your product or your brand lifecycle. if you are not engaged in that her.of the debate with >> how much does she spend? >> in the west, it is pretty much her. he is becoming a bigger part of the debate. nearly 50-50 or at least 40-60. clearly, the female customer is important, but for all of the luxury brands, the biggest , a male in growth customer is a fast-growing piece of the pie. >> we have figures coming out on wednesday. the main concern will be growth in china? going to bet is

big. you have had the hong kong disruptions. they have added to some of the concerns about the slowdown in china. we have had a smattering of reports already. i don't think many of the trends have changed. the market is slowing a little bit. keeping exclusivity is the consumer. it is the middle ground. they are still struggling. people don't find them as exclusive anymore. >> personalization is what they are aiming for. there is a story to it. is this the new luxury? when you feel it has been made for you? >> i think that is an element of it. it is interesting that burberry has taken it to a new league. creating excitement around a product centered on me.

that is key to luxury. it is all about something that is exclusive. personalization started out in luxury, but you are seeing it in other elements. it is not just limited to luxury , but clearly important. >> thank you so much. we are back in just a couple of minutes. ♪

>> time for the new energy headlines. the nation's energy minister is considering slowing the process of shutting power stations. u.k. have beenhe paid a record 43 million pounds to stand idle this year. the restraint payments were made because the national grid was not able to use their power. too many windfarms are popping up across the country without enough infrastructure to carry what is produced. products inn energy australia have slumped 70% in the last year. to the privateng counsel. investors are putting cash and other countries because the us trillion government has no clear energy policy -- the australian government has no clear energy policy.

another bloomberg exclusive, we will be speaking to the ceo of the portugal postal service. follow us on twitter. ♪

>> welcome back to "the pulse." live from london. here are the top headlines. russia of accusing sending further weapons and supplies to rebels in the east of the country. the accusations came amid a weekend of violence. ukraine says it killed as many as 200 insurgents in the battle for donetsk airport. russia cut its 2015

economic forecast to expect and no growth in the next year. this is assuming sanctions remain in place and oil adjust $95 per barrel. ruble has lost against the dollar this year. million catalans are independents. independence. for the 2 million people dayicipated in this catalonia. more than 2 million people voted in harsh conditions, difficult conditions. in my opinion, the turnout has been

, outstanding. david cameron hopes spain remains united. let's check in on the markets. this is the state of play for equity markets in europe. ibex.of 0.3% on the strong gains in london. all of this despite some pretty ugly macro data out of italy and out of greece this morning. the greek cpi is down by 1.8%. that is deflationary year on year. gdp week in europe. the energy producers, the minres

are playing this morning. that is the general theme. stocks up, oil up as well. market,irmly in a bear raising some losses. you have oil up and you have dollar down. rhis is the norwegian krone against the dollar. it is stronger off the back of cpi data coming in this morning, better than estimated. my desk, the dollar was down against every single major currency. that is the theme today going forward. people are telling you the dollar rally is still on. up.ar-euro is the euro bear party is cutting their three-month forecast. for $1.15ooking

against the euro by the end of next year. >> in 25 minutes, it is "surveillance" with tom keene. it will be really interesting. i was really thunderstruck by the news out of greece and italy . very challenging economic data. we will talk to steve miller. we need to speak to a businessman who has real abilities on the international industrial front, that would be steve miller. he is now the nonexecutive chairman at aig. is nice to get them off the golf courses in california. looking forward to speaking about the golf game and we might

also speak of the boom in technology. the kit how well facebook is doing, as well. that will be the start to monday. >> golf and tech. i did not know those two went hand-in-hand. >> we will see. we will try to make it work. >> "surveillance" 25 minutes from now. we are looking at the theme of risk in our economy. today we are focusing on the u.k. the overwhelming majority, 80%, think we should stay within a reformed european union. clearly, the prime minister has announced a referendum and at the end of the day, it is a political matter. we believe strongly when the facts are on the table that the british people will stay in the british european union and vote for it. we want to see completion of the market.

we want to see opening of the digital marketplace, which is extremely important. all of these areas will make a big difference. we want to see less rulemaking from brussels on areas. visual the make rules on the european level that ari central -- they should only make rules on the european level that are essential. these kind of reforms are necessary. the 20% youth employment in the eurozone, for that, it is important that the reforms be made. >> are lenders in the u.k. doing enough for british growth in terms of the economy? >> all the banks. there are a lot of people not yet investing.

people have not yet chosen to invest. it is beginning to happen. we are beginning to see more trade investment. clearly with the capital requirements, the banks have to be careful. thing,ou could ask one what key policy do you think would help? i think encouraging research and development, doing something to help development. that would really help us more. investment, and courage research and development, particularly on the development side. >> cash cow for delivery. e-commerce could be the gift that keeps on giving for

european postal companies. i talked with the portugal postal service. ♪

>> welcome back to "the pulse." live from london on bloomberg tv. uber is in fund-raising mode again. they are in early talks to bring in one billion dollars to finance the rapid international expansion.

the talks are in such an early stage that it is too early to indicate evaluations. to a deal thatse would value the company between $10 billion and $12 billion. the self-destructing messaging act is in talks with yahoo! and buyers. the latter is a venture capital form backed by google. turns down a $3 billion cash offer by facebook earlier this year. loss for lonmin of $188 million. the cut their forecast from $400 million previously. let's talk delivery. goldman sachs says european postal companies are becoming cash cows as e-commerce boosts

parcel demand. for more on the digital drive, let's bring in the ceo of postal service. give me a sense of the potential for e-commerce. e-commerce in the u.k. is much more danced. -- advanced. more and e-commerce more, deliveries will be used more. >> that is true. that is where we see the potential for growth in our business. it is one of the levers. it is the part that is driving e-commerce. e-commerce in spain and other southern countries, it is behind what we see in the u.k. or the northern countries. that is also a way to show where we are going.

we are growing fast. we are already seeing double-digit growth in portugal and we believe we will continue to grow. >> what of the challenges to staying in the forefront? in the u.k., you have a lot of services rivaling royal mail. have companies seeing the opportunity and so they are disrupting service by offering cheaper prices. our price is your top priority? better deliveries? most believe we have the dense network and that we can operate at the lower cost. we have a better infrastructure that is already built on airmail delivery network and that is a competitive advantage. we are in a very competitive market. we'll may have about 30% of market share. -- we only have about 30% of market share. we have good weapons to fight the competition, good service.

we passed through all streets in portugal every day, as the incumbents usually do. >> this is the busiest time of the year for you. do you have to add extra staff? had you prepare for the holiday season? >> we have a fixed infrastructure, but we very through outsourcing. we use temporary workers. we plan well. christmas is a serious one in terms of staying connected with people buying gifts. in the summer, we have other sort of big -- of the reasons being that people go on holiday and send each other stuff more. >> you have to adjust. >> talk to me about the european prices.

there is a portuguese discount because of what we are seeing in the investors from around the world not bing that sophisticated, potentially selling off portugal as an index. have we put that behind us? >> i think so. ipo'e ourselves. when we started testing the market, we saw the portugal was not anymore an issue. i went to a lot of meetings with a lot of investors. we used the change, the turning tide in terms of that. as we are high dividend yield stock, we compare with the interest rates and that affects us, but now the interest is not so big as it used to be. >> talk to me about your plan to

start a postal bank. it caught a lot of investors by surprise. we are talking about a totally different reality. investors are not caught by surprise. we have been regularly talking about this. it was always on our speech, that we should analyze and make the decision later this year as we did. we believe that will be a bank built on our strength. with on our post offices the trust the population has an us. and yet, it is much for difficult to profitable in this area and regulatory concerns are increasing for any bank, but postal or not. what makes you believe that this

is the right formula that will get people interested? we have a strong financial services business. it is a must 30% our profitability now derives from financial services. looked for the post bank as an him that we have a case and opportunity. small are looking at acquisitions to grow the business. anything in particular? frontterms of the banking , we are looking to some very small planes in portugal to decrease the time to market, to be faster on the market, and to start already with a revenue stream and someone that is used to operating, not just from a piece of paper. we are working on our basic scenario, which is doing it from scratch.

it will be ready about a year from now. >> we will have to get you back on to see how it is going. thank you so much for joining us. asia afterobama in the midterm election. the president makes a foreign policy push. he is in beijing today. ♪

>> welcome back to "the pulse. live on bloomberg television. let's quickly check on the currency markets. we have been talking about russia and ukraine all day. the ruble jumping for a second day. the russian central bank said the currency line has slid too far and she has pledged to slim it -- limit local currency sliding. ont has had an impact dollar-ruble. the owners of london's canary has rebuffed an offer to buy the banking district.

explains.ett ♪ >> the gleaming towers of canary backup,ondon's banking headquarters of hsbc, barclays, and citi. it is privately owned, but for how long? authority investment and a u.s. commercial property firm have offered a takeover bid , $3.5 billion that would have what -- been one of the biggest property deals in the u.k. for yields. said itbird chairman undervalues songbird and does business- include the assets. commercial rents arising and wants to addr

another trophy to its assets. harrod's was bought in 2008 4 $2.4 billion. on to adds have gone more, including the chelsea barracks and the olympic village and recently the hsbc global the reportedly cost just over $1.7 billion. the qataris are already the biggest single shareholder of canary wharf. the other owners might just be holding out for a bit more. angus bennett, bloomberg. >> now for a look at what we are watching for the rest of the day, we're joined by hans nichols.

president obama is in beijing today. he wants to position himself among asian companies. vladimir putin is also there. when will they meet if they meet? >> there is a welcoming summit tonight at the aquatics center where george w. bush spent a lot of quality time during the 2008 olympics and it was during that moment that the russian incursion into georgia happened. u.s. leaders in china have to negotiate and deal with some of these issues with the russian counterpart. there was a big announcement on visas. you can now have a business visa for 10 years, not one. that is the beginning of closer economic cooperation between china and the u.s. >> former u.s. treasury secretary tim geithner at some interesting comments. who he was going to call if he needed to talk to the european union.

>> tim geithner essentially wrote a love sonnet to the finance minister here. he was in berlin giving a speech and he says it was him who you always call. he was the one that answered when you needed to talk to someone about europe. you get a sense of how things were and how tense they were after mario draghi said he would do whatever it takes to save the euro. there is a conversation that geithner said he had. it will be interesting to see how this relationship, if it continues now that tim geithner is now in the private sector, may be looking for deals and distressed assets across the globe. >> i really love this story. is it just as basic as germany has power in europe and that is the guy i want to speak to?

>> he is a noted economist. there was a clear recognition that if you needed to get europe to do something, you needed to bring the germans along and then worry about someone else. tight no recognizes him as an intensely smart man and likes dealing with him. is in many ways a politician, but also a technocrat. he is still fundamentally a politician. tim geithner has never run for office, he has only been appointed. we will see how this relationship develops with jack lew, the new treasury secretary. we will see if he can call the germans on demand and have a fruitful, productive conversation. >> yes, we will see. hans nichols with the latest. on bloomberg here tv. "surveillance" is up next live from new york.

you can follow me on twitter. have a great day. we will see you tomorrow at the same time. ♪

>> this is "bloomberg surveillance." >> the president lands in beijing with factories closing cars off the street and world leaders will meet with a new and more complex china.

miles tothe timing 500 the east when two americans are free but north korea. in this great bull market, will tech valuations come back? good morning, everyone, this is "bloomberg surveillance." it is monday, november 10 and i am tontine with scarlet fu and brendan greeley. let's get right to the news headlines -- >> we start with president obama planning to keep the heat on china over human rights. he arrived in beijing for the asia-pacific economic cooperation forum and he said the meas does the main u.s. concern is that both sides avoid violence. it's not realistic to expect china to follow the model in every instance and he is hoping to break a logjam over proposed long-term asian trade agreements. two americans are