goldman sachs. s&p missed estimates -- sap missed estimates. they struggle with growth in europe and asia. we speak with the c.e.o., alan clark. dax futures up about 1.55 this morning. we may get a higher open. >> thank you very much. good morning to you. in the past four weeks, the world is wealthier. approximately $3 trillion wealthier. why? because stimulus is here. stimulus is king and in the absence of any great conviction from the fed, don't worry, there is plenty of q.e. to come. will he go on december 14? we have nato. it looks as though the

geopolitics to this area are not playing out in terms of what people perceive is going to happen on the equity markets. you'll have the conversation with goldman sachs in terms of where we are. s it over? we'll see what's happening in london. bskyb. ownside you have they have lowered their profit. this is the gas networks in urope. stock down .3%. morgan stanley placed 3.5% at a price of 15.05 euros so they placed the stock just under this level in almost 1/3 of a billion

shares. sabmiller, beer, beer, bring me more beer. organic beer volume was -- organic sales rose 3%. 6 therket was looking for big issue is -- dollar is coming back a little bit lower. i think the much bigger conversation is about dollar-yen. because the trajectory, the overall movement is something that is utterly wrangling with markets. it is the momentum. look at that. you're bobbing along. it is the trajectory that is probably most in play. mark barton did a great bart chart. it goes back historically. there is another leg left in dollar/yen. at that point, intervention and the australians warned don't

think we're not beyond intervening either. currency wars. a whole new commedges for 2015. -- dimension for 2015. one of the big corporate stories of the day. growth at sabmiller missed analyst estimates this morning. the world's second biggest brewer is getting hit by slowing deand in asia and europe. joining us is sabmiller c.e.o. alan clark. i'm looking at some of the regional headwinds. europe, asia. talk to me about them. what's happening? >> i think that we are pleased with the performance we have shown jever all for the group in a more difficult trading environment. he markets were uncertain. europe, the european economy and the beer industry in europe overall under pressure.

our business managed to hold steady for the year. coming out with flat profits and good share gains in a number of key markets. so i am confident that we are prepared for the improvement in the economy to come out with an improved performance if europe. in asia/pacific, particularly australia, high levels of competition because of levels of economic pressure. competition at the brewer level and retail level. we needed to invest more substantially in trading terms. again to protect our market share, which we have managed to hold for the first six months. >> you serve as a major co-sponsor across africa. there were reports that sabmiller and coca-cola may get together and form a company in africa. is there anything to that? >> we unfortunately cannot comment on speculation.

are yes, a major brewer but we cannot comments on speculation and rumor. >> they person ised your initial approach. can you now say that -- they spurned your initial approach. can you say that deal is dead? >> i think the family as a result of a leak were quite clear in their response. we will regard those talks as closed. >> when you look at the initial acquisition, a lot of people turned around and said this is a defensive acquisition to ward off an approach by ab invest? what is your response to that? >> sabmiller has a long history of acquisitions. those have been very -- for shareholders at the time. our m&a is always assertive. it is always looking at what we want to achieve. would never in any way be

defensive in nature. >> do you look across europe and see brewers that you'll like to take on? is there anything in the pipeline? >> we would never comment on specifics. we have a long history of m&a. including in europe. so over time, of course, we would have an ongoing program looking at what opportunities may exist. we'll make an answer at appropriate times in the future rather than speculate on what may be possible in the future. >> i want to finish by talking about -- when i did my research, i saw an advertisement in those pages. talk to me about how important it is to attract a female drinker to your premium lagers and how that is progressing. >> it is important obviously given the economic contribution of a woman and of course the contribution of the population

and alcohol growth over time. beer has for decades been aimed principlely at men. we are seeing a slow shift in the category with brewers in general, ourselves included to it is amixed gender and fantastic example of that. it is positioned as a brand being styled to the world of beer. it is advertised very much at a mixed gender audience. for example, here, picking it up. he finds that the par tissspation significantly higher. -- it is part of our strategy. it is a very successful example of how we are executing that. >> thank you very much for joining thus morning. we have to leave it there. that was a first on bloomberg this morning. as we head to a break, here is a picture of the markets. we opened slightly higher in

london. up .1%. the dax is up .05% higher. we'll be back after the break and be back stuart richardson. stay with us for that. ♪

>> welcome back to "on the move." we just spoke with the sabmiller's c.e.o. merck raised its sales forecast

after its top selling drug posted higher revenue. joining us on the phone is merck's c.f.o., marcus. thank you very much for joining us this morning. as we came to this earnings report there was concern that your multiple sclerosis drug could -- concerns about slowing growth. no signs of that in the report. why the improvement? >> we are holding up pretty well actually. we are still benefiting from the price increases that we have done at the end of 2013. the positive impact from pricing, especially in north america is still compensating the declines in volume coming from more competitive activities, especially from the oral applications in that area. we were able also to increase prices further in october by

another approximately 7%. so that should give us some comfort. also in the future, it will be able to post growth in north america although we see the competitors' pressure rising. >> let's talk about some of the deals you have dreently. given the debt you took on for the deal, what kind of comfort does merck have right now to finance further acquisitions? can you roll out further --? sitions is >> we had agreement on september 22nd. that requires lot of financial debt in order to bring us in a position to pay the purchase price. other than that, on top of that, we do not plan at the moment to do any further acquisitions for,

let's say, at least the next 1 1/2 years. d we will have after the losure, after all regulatory approvals have been granted for middle of 2015, our main focus is clearly on deleveraging and reducing our net financial debt. >> you're a chief financial officer. what i want to gauge from you is how it is easies to raise debt now in europe and -- easy it is to raise debt in europe and take advantage of low rates. >> obviously the environment for raising debt is quite positive at the moment. so we see no issues in the markets at the moment, which let's say would prevent us from raising the g the debt that is necessary to finance

acquisition. it is a good environment at the moment. >> has the foreign exchange market been a good environment for you as well? back in may we were at $1.40. we have come down to $1.20 on the bottom line. what impact is that having on the bottom line at merck? >> we see it predominantly in the top line. the third quarter was actually only affected by negative currency. minus 0.5%. in terms of top line growth. one year earlier, 2013, we had a negative impact of around minus 7% which was translated in some 200 million euros we were losing from the translation defect. a low double digit impact. much more favorable environment at the moment. it does not fully translate down to the bottom line because we have some hedging activities in

place which helped us and there are times when the euro was strengthening and they are mitigating a little bit the effect on the bottom line. but still also here it gives us at least some tail wind. >> mash us, we have to -- marcus, thank you for joining us. coming up, tensions rise in ukraine as nato says that russian troops did cross the border. we have been speaking with the ukrainian foreign minister. we'll give you the details. stay with us after the break. ♪

>> welcome back to "on the move." a quick check on equities markets. a touch higher on the ftse. the dax 43 points higher. that's how markets are shaping up. we're joined by stuart richardson, the chief investments officer at r & g. you heard every word from the chief executive of sabmiller and the c.f.o. of merck. what struck me there in the merck interview is this is a company that should be taking advantage of the weaker euro and stronger dollar. it doesn't fit r through to the bottom line. when people say buy companies

with exposure to the u.s. and get the benefit. is that really the case? >> in that particular example, clearly not. we're expecting companies to be hedging policies. in has been a change in the euro in the last six months. the immediate currency move is really washed through in terms of the account. if the euro continues lower and they choose not to put future hedges on that would be the time to see the benefit. >> on the funding environment here in europe, the funding environment is easy, easy, easy. low rates for issuing corporate bonds. some at record low interest rates. what are you seeing now? >> if you're a large european, especially german corporate, it is a great generation of opportunity to be locking in low

rates. if you're a household, not so good. e still have this divergeance. >> and the divergeance for what they would want to use the money from, if you're a big german corp, it is easy to raise the debt. what is going to happen here? how is this going to play out over the next few months? >> essentially, we heard from sabmiller and a number of companies during the recent result season. growth in asia and europe is slowing down. you get the cash from the bond sales. opportunities are thin on the ground. european corporate profit margins, the results don't look good at the moment. are there opportunities to buy back shares? of course there are. >> when i look elsewhere and further east, i look at some of the dataout china this morning,

miss for factory production and industrial production the slowdown there. a lot of people will be talking about that. someone coming on the show who is euphoric about where they will be or they are very skeptical. is it hard to understand where china is at now? >> you have the official dats. you have to take it at face value. we have nothing else to work on. the official estimates. that's why you see this divergeance 2010 pessimism and ptimism. yes, the central bank's targeted liquidity is probably helping their balance sheet. bad loans are worse than they are willing to admit. china has a strong currency at the moment.

their trading partners are in ing down and it is mixed trade. they are bound to slow down unless they can get their domestic economy going. it continues to slow down property market, which is key. it looks like a slow down situation where the authorities are trying to balance between domestic and overseas consumption. it is just not exciting. >> they are targeting a lower g.d.p. target next year possibly 7%. >> even the chinese economy is a managed economy. they will tell us what they wanted to be. they will post a number in line with that. we guess what we really think it is. >> and they tell us where they are. >> exactly. the trend is down. that is the main thing to think about in termors china. they have a >> strong -- they have a strong

headwind. it is a very difficult picture to say yes, this is a good opportunity or a bad opportunity. the slowdown is well entrenched. people need to get used to that. >> stay with us. i want to talk about russia. nato's top military commander said russia is sending troops and equipment to ukraine. later sanctions will be at the top of the agenda at a meeting in brussels. ryan, more sanctions on the way. tell me what is the definition of insanity? >> it would appear more sanctions are on the way. you have the american and european diplomats deliberating what the sanctions should be in brussels. the foreign ministers meet on monday. they have three options. one to expand the so-called personal sanctions. the list of individuals. expand the list of russian

companies facing restrictions like access to western capital markets and finally restrict what western companies and investors can do in the russian market. it looked like it was going to be -- the german chancellor last week said she didn't see any need for any more sanctions. she would be ok with the expansion to have personal sanctions. then nato came out and said russian troops have entered ukraine. two and three now in play. i just finished an exclues i interview with the ukraine's foreign minister where he down played the biting sanctions. >> sanctions is just one point in the in the whole two books. we need a pressure to keep the de-escalation on track. again, sanctions are important but just one integral part in two books. >> for the moment, de-escalation is not on the cards.

the ukrainian foreign minister also told anyway the rebels, pro russian rebels are regrouping and the ukraine, he said, is ready to fight. >> great work. i want to bring in stuart richardson for a few final thoughts on this. talk about more sanctions. talk about what actually the end game is. is this to punish bryon russellia or to get -- to punish russia or to get russia to change course? at the moment it is not working. >> when you're trying change direction, you to reduce the punishment incrementally. this is clearly biting on russia. the economy is probably now back in a recession having a big impact on germany and the rest of europe. neither side is winning. we know that is case. whether they want to take it forward from here. the u.s. wants to keep going and going and going. they are not the ones suffering the pain.

>> they are not feeling pain. europe are. talking about a lost decade. they are also pushing us on the foreign policy side to do more sanctions that is pushing out the likelihood of a lost decade. >> the lack of dollar liquidity after the end of q.e. , strengthening all currencies against the yen. this policy is beginning to gather real momentum. we have seen it in the commodity markets. we know with the merging market crisis, if there is a loss of confidence, the whole house of cards, the con teenage can happen quite likely -- contagion can pap quick -- happen quickly. >> a very interesting moment for

commodities as well. thank you. how low can oil go? we'll put the question to jeff curry at goldman sachs. that's after the break. stay with us for that. ♪

>> welcome back to "on the move." i'm jonathan ferro in london. 30 minutes into your trading day, this is how things are shaping up. the ftse 100, session highs, up 0.25%. the dax pushing up much higher. stock specific, mark barton. >> we are going to start with beer. it is thursday morning. sab miller is down by 0.1%. growth missedfit estimates today, held back by lower demand in asia and europe. so-called organic earnings before interest, taxes, rose by

3%. analysts were estimating a rise of 6%. consumers are drinking less in china and australia. the strength of the dollar is weighing on results. banca monte dei paschi, big percentage moves. overnight, the bank reported its 10th straight quarterly loss. higher bad loan provision. no bank has a bigger capital blackhole in europe. we know that from the european stress test which shows that it is seeking to raise 2.5 billion euros. this is italy's third-biggest which is engulfed in legal probes, eliminating jobs, selling assets to return to profit in 2015. rwe, germany's largest power producer, nine-month profit dropping by 50%. which is net income

used to calculate dividends fell to 763 million euros from 1.2 9 billion. you.to >> thank you very much, mark barton. time to talk, oddities now. wti down 0.4%. brent down 0.7%. rent dropping below $80 a barrel. these are four-year lows. we are going to talk about oil now. our guest says prices are not bouncing back anytime soon. he is jeffrey curry at goldman sachs. thanks for joining us this morning. i looked at your calls for wti and brent. what is interesting to me is if i sat here in june, they would have told me prices are going higher. what has changed? >> i think there is three key

issues that have created this recent downdraft in prices. first is concerns over global growth. it is not so much demand in the global environment, but rather it is a downgrade in the forward outlook. that is the first point. the second point is, we have seen significant increases in supply. look at u.s. shale production, is continuing to surprise to the upside. each year, year over year growth in u.s. production is larger than that of libya. the united states is creating a libya every single year. the third point is, when we look at the strategic case facing saudi arabia and opec against the shale environment, we should expect to see opec be a second mover. when we look at the downdraft, i attribute it to that people recognize you are unlikely to see a cut in this november 27

opec meeting. >> we will get to opec in a second. production keeps surprising to the upside. you say that prices could overshoot to the downside. we are at 79.76 on brent and wti. how low could this go? >> once you get wti prices down into the low 70's, that is where you are likely to see capex begin to be slashed. that is the real key, to see the u.s. producers end up being the first movers. would seef where you the bottom, we think 60 is about as far as you could go. of mostthe cash cost shale producers in the united states. >> i want to talk to you about the saudi's and the reluctance of them to be the swing producer. --re are three reese theories that the saudi's have teamed up with the u.s. is saudi arabia's activity aimed

at the u.s. shale producers to make them become the swing producer? >> if you look at it from a game theoretical perspective, the u.s. bnp should be between producers. shale is very scalable. it can be turned up, turned down very easy. it is fast cycle production. the second reason is, shale is opec's friend. when we think about the overall cost base, it is around 60. at a full cycle basis, it is around 80. those are high prices. the third reason has to do with the supply curve. it is very flat. that takes away the market pricing power from opec. you are going across a supply curve like that, you don't do anything to the price. is goingsupply curve up and down, you see movements in price. though our structural issues

that suggest opec should be the second mover. we go into the opec meeting at the end of the month and everyone starts talking about opec needing to do something, do you think that is a nonevent? >> i think the market's consensus view is for no cut. even the fact that the brent market is outright short, if we had an announcement of no cut, you could see prices rally. we spent the last five minutes talking about production. let's talk about the currency market. how much does a strong dollar have to do with oil going as low as it has? it isectly, i would argue not that significant but the feedback loop through metals and other markets is significant. it helps to reinforce cost deflation. the stronger dollar begins to

weaken the chilean peso which reduces the cost of producing copper. a stronger dollar also begins to weaken the australian dollar which reduces the cost of producing iron ore. now your input cost began to decline. it begins to feed back itself because the lower oil prices reduce the cost of producing iron and steel. thatve a reinforcing cycle reinforces weaker currencies and emerging markets plus a stronger dollar. >> i have to get the question in, you called the route last year, you nailed that. you are looking for 1050 at the end of this year. is there anything in gold's favor right now? reallye key issues that have shifted over the last several weeks. , it you look at the fomc came out mildly more hawkish which concerned views that the u.s. is on track.

that obviously is bearish for gold. the second issue is the gdp numbers about a week and a half ago were much stronger than people had expected. the third factor is, when we look at the support level, 1185, now that we have broken through that, it starts to create more downside risk. >> when i look forward to the end of this month, the swiss referendum on gold, i think at the moment it is 8%, if that vote goes through and the vote is a yes, they have to boost that the 20%. and that a yes, referendum goes through, is that a game changer? >> not really. while you are talking about potentially 55 million tons of gold that could be purchased, the timeline on it is extraordinarily long. it is not clear how you would implement it.

any of these cases when you see central banks take large holdings, they make calls to the seeing you end up transfers of gold that happen off market. in terms of the potential market impact, it is likely to be limited and very uncertain given the extended time frame. >> one final question. we had some chinese data that disappointed. it provokes the discussion about a slowdown in china. a lot of people are talking about this new concept in china. when du think steel production peaking there -- some miners are looking at 2025 to 2030. could that happen sooner? >> let's go back to the core iron ore market. there, you have already seen production cuts. we estimate that iron ore production within china is down somewhere around 15%. when you look at the key here, it has slowed versus supply

growth that is still north of 10%. is a market out of balance. we would expect to see production cuts, particularly given where pricing is. you look at chinese rebar, it continues to fall. it has been a downward trend. >> jeff, thank you very much. always an education. jeffrey currie. in two.move" is back stay with us. ♪

>> welcome back. i'm jonathan ferro live from london. here are some companies on the move. merck sees tire sales this year higher than projected. the chemical maker raised its to 11.2 billion euros. it says sales of its multiple sclerosis drug have climbed this year. earnings at germany's largest power producer have plunged. nine-month profit declined 60% as a result of falling wholesale power prices. germany's shift towards renewables has led to a surge in wind and solar generation. rival posted as 25% decline in profit. suezng with that theme,

lowers its profit forecast for the year. they operate europe's biggest national gas network. they say profits will be lower after mild winter weather. monte paschi reported a quarterly loss as production costs weighed on earnings. a charge related to job cuts pushed the loss to nearly 800 million euros. two .5 trying to raise billion euros after failing the ecb's stress test. elena. us for more is what is behind the greater loss? this was bigger than the market anticipated. >> we did take a step back and look at the ecb's asset quality review. what that was about, that was how banksstandardize

treat their assets across the region. case, they indicated weresome loans they treating as performing should be treated as nonperforming. what we saw in the third quarter was that more than 2 billion euros of loans had gone from being performing to nonperforming. , the bankers costs trying to scale back, lay off staff, that has added to the charges. >> it is very hard to know what is going on with this company. one day you are down 6%, the next day you are up 1.5%. it is a tiny company. what is behind what is going on with the stock right now? >> i guess you have to take a longer time frame.

shares were down more than 6% yesterday in anticipation of the earnings. reviewhe asset quality was published october 26, the shares are down 36%. that reflects the extra capital the bank has been asked to raise. billion it seeks to fund from shareholders. >> elisa martinuzzi, we have to leave it there. then q4 joining us. we are going to talk about trains. euro star marked their anniversary. anna edwards spoke with nicholas about the company's future outlook. >> we are very confident about the future. us.ears in total for it is all about the future. we are going to go down to the south of france next year.

then we go to amsterdam the year after. we see growth in passenger demand. we had 10 years of consecutive growth. we are very confident about ordering new trains. >> you are buying these new trains from siemens. and you tell me how much you are paying? overall, the new trains that existingfurbishing trains, it will be a billion pounds of investment. it willo three years, be completely upgraded. we will have new trains, reservists trains, and we will also invest in our stations, our website. .t is an exciting time >> you mentioned some of the new destinations. case.e about the business some voices in the travel industry have been skeptical as

to whether you can make those routes make sense for a business traveler. how are you going to persuade business travelers that this is going to work for them? for the route that goes down seille, we will not be targeting much the business market. it will be more for leisure. leisure customers are extremely interested in those destinations. we have a lot of people connecting. we are confident on the leisure side. for amsterdam, i think there is a good case for the business market. we would be stopping at rotterdam and antwerp. it would be just a bit more than three hours. we know that with a three-hour journey time, the big market starts to be interested. i would say we are confident. will take several years to

build up the demand and the awareness. >> tell us about your network ambitions. some people have said this marks the start, or there is some expectation that this could mark the start of euro star becoming a proper train network. >> at the moment, we are seeing growth going beyond our core destinations. we have grown our destinations quite a lot by using the equivalent of code sharing. to thosent to go destinations. at the moment, we are focusing on holland and the south of france. we will also be announcing that we have connecting service with a high-speed operator in switzerland, and a connecting service to go all the way down to geneva.

we are trying to expand our network first by a mix of direct trains and connecting trains with other operators. >> are you ready for more competition in the international train market? deutsche had plans. how will you compete? >> we are already competing very strongly against the local airlines. it is a very competitive market in europe. i welcome the arrival of deutschebahn because one of our issues is awareness. as they come online, i think they will help us grow the market. we have managed to double the size of the market between london-paris and london-marseille. it is not just that we take market share from airlines. when people know about the train

service, the quality, the comfort, they wouldn't take otherwise. i would say for the future, it will be to grow the overall market rather than just take market share. >> you mentioned that you are investing in growth of the network. paris must remain important to you. at are standing there station that was upgraded at the cost of 800 million pounds. you have heard the comments made by one senior business leader, john lewis, about the state of french train stations. howard and is it that you tackle that? -- how urgent is it that you tackle that? it is definitely one of the best stations in the world. we are investing, because we need growth in passengers to

expand our operations. hopefully, we try to make sure -- we try to make it catch up. >> that was the euro star ceo speaking to anna edwards. in two.move" is back ♪

>> welcome back. i'm jonathan ferro live from london. now, and offer price of 283 pence given the company a market cap of 1.2 5 billion pounds. for more, we are joined by richard. why did they postpone this ipo? it was postponed because of volatility. then you were looking at an offer price at the bottom of the range. was it worth waiting? >> for them it would be worth waiting. they need to access the capital market. i think the volatility obviously was a problem for ipos in general in mid-october. we saw huge swings in stock prices. its flotation at the same time virgin said it would delay. they came back and i think they will be happy with today even if it at the bottom of the

range. it is virgin money but it is northern rock, isn't it? >> northern rock, that had bank run back in 2008 where customers were seen queuing around the block. the bankers have undergone a bit of a facelift. it is now virgin money based in newcastle. the government will get 50 million pounds as part of today's initial public offering. that was an agreement set when virgin, run by richard branson, agreed to buy northern rock. >> 50 million for osborne. richard will join us through the next couple of hours. that is it for "on the move." you can follow me on twitter. if you want to talk markets, you know where i am. ftse 100 up 0.2%. the dax up 0.7%. 65 points higher. in the meantime, good luck with the rest of your day.

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as tensions escalate in ukraine, russia may face more sanctions. >> morgan stanley's james gorman weighs in on the currency ceo will tell is about his bet on wealth management. >> plus, abe's political gamble. japan's prime minister plans to call a snap election next month. good morning, everybody.