>> japan lips into recession. election. we will be live in tokyo with the latest. leaders warn the russian president there could be further sanctions over the conflict in ukraine. they continue to destabilize ukraine, there will be further measures, and there will be a completely different relationship between european countries in america on the one hand and russia on the other. >> it is the $64 billion question. by -- activa buy

another company in a deal that could put a smile on investors faces. welcome. >> it is 7:00 on monday. it is back to work for the japanese prime minister shinzo abe. big problems for the third economy. full 1.6%. a let's go live to tokyo to speak our economist. where does this leave the debate on tax increases? works pretty much dead -- >> pretty much dead. raising taxes in the next 12 months would be economic suicide. when you the debt gdp numbers today, a enough damage was done with the last tax increase --

when you look at gdp numbers today, enough damage was done with the last tax increase. down, but boj double we haven't seen any of the structural reforms the prime minister needs to implement to make japan more competitive, to increase the growth rate, to unleash the economy. there is a lot of potential, but there is a lot of red tape. there is a lot of deregulatory taken.hat need to be what happened as a reminder how little has taken place over the last two years. >> what does it mean for the likelihood of a snap election? do the numbers make it more likely we will have a snap election in japan? >> the snap election is confusing for a lot of us. you could argue prime minister abe has a mandate. the snap election is about

saying, give me a fresh mandate. this is a bait and switch. the election is about shoring up his own support in the government so he doesn't have to worry about elections next year or the year after. is politicalit kabuki. it is four years we won't be focusing on making japan more vibrant and competitive. to me the next four weeks when we're talking about campaigning and the election, it is a bit of a lost period. if you're wondering when it will appear, it won't appear anytime soon. we are looking at early 2015 at best. >> what should he do to get japan back to sustainable growth? >> just announce immediately the tax increases off, forget the election, and spend the next five or six weeks redoubling efforts to boost the economy, loosen labor markets.

he needs to think about reducing trade tariffs. he needs to think about affirmative action for women. be doinga lot he can to make bank of japan more about startup companies. we don't have a lot of young and across with a laptop in a dream in a new company. laptop andage with a a dream in a new company. we have a lot of talk. today's numbers are a reminder of the lack of progress abenotics have made in the last two years. you.c. you -- thank >> breaking news for our viewers. the consumer goods company is in thepharmaceutical side of business. they would take the business and spin off. they are going for a demerger. the pharma business they hope

will be spun off. share, you will get one share in the new company. one of the big issues to convince the marketplace is it will be a self-sustaining pharmaceutical company. they have one huge product. it is an opiate addiction treatment. revenues are going to fall. revenues are expected to fall by 7% to 680 million pounds. that is a hard business to be in. the board considers the demerger is in the best interest. it is a fairly standard kind of line they are putting out there at the moment.

a general meeting to approve will happen. >> we are getting more on the relationship with telefonica. story was covered widely this weekend. telefonica u.k. will provide access to two g, three g, and 4g. the ceo of talk talk -- talktalk is saying this is a significant development, building on the company's success in mobile. idealys they are in an place to benefit from the market. there is a growing number of customers already choosing to take mobile from them. they have a deal with vodafone. add.is another one to >> the leaders from the g 20 nations have been heading home from the australian city of after the summit. the leaders agreed of a gdp

by 2015. 2.1% very ambitious, but is it achievable? >> they say it is achievable. must implements the policy they discussed over the weekend. more than 800 initiatives were discussed over the meeting. they want to raise growth across the globe and port $2 trillion into the global economy. meet -- $2rillion trillion into the global economy. christine two guard sai -- dugard is skeptical it can be achieved. >> our goal will be to monitor country by country, action by action, reform by reform whether

there is delivery or not. we will dutifully report to the so everyone can understand who is doing what and whether it contributes to the growth and jobs that are very much needed. >> the challenges are many. if you take australia, the prime minister lamented the problems he is having here getting his budget passed. that was tabled way back in may. having trouble getting a lot of those measures through. japan has slipped back into recession. next year the g-20 presidency is handed over to turkey. they have compelling issues on their borders and have indicated the next year's summit is going to focus heavily on climate change. in terms of keeping momentum

heading towards the ambitious growth targets, good luck. >> thanks, paul. we will see you later. over the weekend the g 20 summit in brisbane. vladimir putin received a chilly reception from world leaders. ryan chilcote joins us. some of the imagery i watched over the weekend reminded me of british politics -- splendid isolation. over hisft sitting lunch. that was it. >> a difficult reception in some of the leaders. this was extraordinary. david cameron mocking the russian president, saying he had becauseht any warships he felt safe. we had the canadian prime minister saying, i guess i will

shake your hand to the russian president, but one thing i want to say is you have to get out of ukraine and the russian president himself telling everyone he has more important business to attend to. have a listen. >> nine hours to travel. home, andve to get monday i have to be in the office. i need four to five hours of sleep. i came to tony abbott and explain that to him. he responded with understanding. i think our work is done successfully. >> we are going to hear back from the european union. the foreign affairs council will meet. sanctions.ct more the diplomats are gathered over the weekend with u.s. diplomats. it is going to probably be limited to personal sanctions and assets of individuals that have been sanctioned for helping the rebels in the east of the country set up of elections. will it go be on that? we will have to see.

everyone suggested they might have to see more sanctions against russia, but that wouldn't happen until the 18th of december when eu heads of state gather. >> that continues the sanctioned conversation. putin has been trying to deflect criticism away from himself towards ukrainian leadership, hasn't he? talking about some of the move the ukrainian counterpart poroshenko has made recently surrounding the financial services industry. >> it's important to watch how the conflict is evolving. the russian president is talking about a decree president poroshenko issued as part of the peace talks that gave the region a special status. as long as they recognize they were autonomous and ukraine. over the weekend he said they it.not recognizing he is also telling state companies operating in the east of the country as well as banks you cannot do business there

anymore. if you think about it, there are 3 million people in the rebel held areas. four pointn from five before the conflict began. they cannot get money. this is already a .isenfranchised group of people anybody who could get out pretty much did get out. this is the russian president saying, that was the wrong move and i am going to take this up with the ukrainian president. i think escalation is more likely at this point than de-escalation. >> thank you very much. stay tuned. the president of the institute for economics will be joining "the poles." digesting some of the information coming out of the g-20. >> join the conversation. tell us the stories you want to hear more about and the stories you want to hear less about. what do you think about this bydge to boost gdp by 2%

2018. >> big numbers. will they ever deliver is the question. @manuscranny. >> make his dreams come true. our next guest says the future is small. .e is the managing director williams tells us why he is investing in small caps. ♪

>> our next guest says the future is small in a world where growth for large companies remains sub normal. joining us is the managing group -- they tone managing director. your book about the best performing market. >> when the world is not growing large companies are struggling to dodge the bullets. intoof us are happy to get smallness and small companies.

>> we see japan going into recession. a lot of conversation about the state of the eurozone. you are saying because global growth is not delivering the big companies are caught up in that. how is it small companies can stay away from that trend? like small companies will be struggling. some companies can buck the trend. happens much more often in small companies and big companies. if you can back those companies they will grow. as they grow the share companies depreciate and that drives shares up. >> you also draw dividends into this discussion as well. you say investors may put a little more pressure on smaller companies to reconsider the dividend policy. what does that involved? why should we think about that? >> i think a lot of us have gotten used to being lucky on stocks. you get in a stock and it goes up a long way. i think we have become more

hard-nosed. i think if we are going to invest capital we want to see capital going in, but we want is the cash coming out. if you go back to the 70's and 60's when the comp -- the economy was struggling, dividend growth in big companies was quite muted. mall companies grew their dividends much faster. in the last x months that is beginning to happen again. months thatst six is beginning to happen again. suggesting investors should put into small cap stocks. tell us how big a shift it would be? >> they are putting in -- i am saying they will put in smaller micro cap stocks. in the 60's and 70's investors were not getting much growth, so they had to put a decent portion in micro caps. markets developed around the world in smallness is

japan. >> tell us about the individual businesses you like at the moment. oil prices falling. it seems to be fleshing out some him an a and the sector. i know that -- some him in a -- m&a in the sector. >> i am quite hopeful we are not going to get low prices compared to where they have been. i am trying to resist takeovers at the moment. a good example is the oil companies need to reduce costs anonymously. one of our larger companies is marine services. it does jack up arches, which cost about a third of the value of a jack up rig. we'll companies cannot make them fast enough. they are getting fantastic returns, growing dividends. they should be doubling. >> there is a structural change

or a technological advancement, and that small company is on the forefront. therefore they buck the global trend? >> absolutely. earnings will probably double, against the flat markets where growth is very low. it is sensational. >> investors have been on the sidelines of late. what is your feeling when you talk about recovery. where are we? >> a lot of people are very confused. the information keeps switch backing all the time. a lot of investors get caught up once or twice. a stand back. we get a lot of investors who are very confused out there. smallness is not very convenient. it is a liquid. liquid.our -- il is the ftse underperforming this year?

why is it underperforming? >> him of the largest companies have done badly this year. was 4.2 billion. i am afraid it is growing much more slowly. we have seen a few other stocks comewhen dale -- quindale down. many other companies which have gotten lucky have also been badly affected. if you look at underlying companies generating regular dividends, they perform much better. >> inc. for joining us. -- thanks for joining us. >> coming up another wrinkle in the face of the botox maker. why there could be a $64 billion deal on the table.

>> time for company news. a deal to buy the botox maker for $60 billion. the deal could be announced as soon as today, and activists could pay-- actavis $216 a share. lastfollows a takeover bid month. facebook is developing online tools for the office.

to "theaccording financial times." the new venture would allow collies to chat and collaborate on documents. facebook will face competition from the likes of microsoft, google, and linkedin. alibaba has resumed merger negotiations. the companies have restarted talks after initial discussions last week. an announcement could come in the next few days. any deal would face scrutiny from u.s. antitrust regulators. if you ever wanted to invest in shanghai comp is it -- comp is it, now you can. opening up chinese stocks to overseas investors and giving those on the mainland and ability to trade hang seng chairs, there is a limit to the total of -- shares, there is a total revenue.of

>> tom mckenzie filed this report. >> china is opening its doors to the outside world. a 4.2 trillion dollar market unlocked for foreign investors. it had previously been off limits for all but a select group of money managers. they had to strict -- stick to strict quotas. now anyone with an account can buy shanghai listed equities. stock markets have rallied in expectation. expected to turn shanghai into an international financial center, and it doesn't stop here. investors are betting on similar links with london and paris. >> 7:26 here in london. coming up, we will bring you an

exclusive interview with israel's biggest listed tech company. that is coming up after a short break on the program. this monday morning in london. ♪

>> 7:30 in london. thele are taking money off table. the dollar index is a little bit lower this morning. 87.46. ,fter good numbers on friday which means good economic data, two days in a row, and the dollar struggling to rally on good data. could that indicate the end of a pretty good run?

japan is back in recession. headline news. the underlying data components were less than enthusiastic. begin is rising. the market is taking risk off the table. equity market set to open lower today. the yen yen is rising. have a look at all or ruble. uble.llar r we are just a little stronger. the volatility of ruble is that a six-year high. is the highest level in almost nine years. that puts some context around it. three times the volatility of the rand. putin is warning of catastrophe based on oil prices.

tople are beginning to refer 1998. i will give you a clue to what happened in 1998. russia defaulted. blunder, ifor my have rewritten my note. this is mcnamara -- i would rather have root canal than by the ruble. there you are. >> these are the top headlines. president obama says the beheading of the american aid was an act of pure people. the video showed the aftermath of his murder. he was 26 and converted to islam after his capture. david cameron reported there are red lights flashing on the economy. there is a dangerous backdrop of uncertainty that presents a real risk to the u.k. economy. those risks have been highlighted by mark carney in

and -- mark carney. carney says the u.k. has huge deflationary forces coming from trade partners, particularly europe. his remark comes days after the bank of england lowered its inflation forecast. bird fluke causing concern in england. up to 6000 birds could be cold at thefarm -- culled farm. there is also an outbreak south of amsterdam. the strainent said can be transmitted to humans by direct contact. ,> if you are catching a flight there is a chance your actions could be captured. shares in israel's biggest tech company are at an all-time high. good morning, elliott. >> i am pleased to say the ceo is joining us in his first ever

tv interview. a great time for you. you have been on the job seven months. you had recent earnings that beat estimates. shares at a record high. you probably couldn't dream of being in this position. >> we are proud of third-quarter results. for us it is just the beginning. we are starting to see the result of the plans we put in place about a couple quarters ago, and we have seen improvement across the board. marketrovement in the the thirdsult in quarter. we believe and hope it is the of what will happen in the next few quarters. >> you have three areas of business. you have call centers, security, and financial crime in compliance.

which of those areas are showing the most promise right now? >> we are very fortunate to operate in these markets. they are all growing market for us. we see a positive momentum in all businesses. all of those are key drivers of our business. a common thing for us in all of those businesses is analytics. we bring analytics solutions into these markets. never far froms our thoughts. it was seemingly unstoppable, but it has weakened about reporting 8% from the dollar -- about 3.8% on the dollar. is that a level that is acceptable? >> it is a company that has a lot of engineering in israel. a stronger dollar in order to benefit from the situation. to have it more sustainable, we probably need the shekel to be a bit weaker. >> has it impacted earnings at

all? has it hurt you? >> definitely in the past we are exchange.r if it will continue to have a positive impact on our business, our ability to invest in engineering in israel. isone of the hottest things big data. are you focusing on that right now? is it just educating? you have been doing big data before most people even heard of it. >> we are able to do gigantic data. we take a tremendous amount of data since we started the and we 28 years ago, bring analytics and applications using this data. of havingbination even more technology. a lot of education, which is is helping our

business. >> you talk about strong organic growth. plan to also said you aggressively pursue acquisitions. what kind of area are you looking at? how much have you got to spend? when could we see a deal being made? >> we are focusing on organic growth. we are not share a -- not shy of making acquisitions. we see it in two areas. one is stepping into an adjacent market. in terms of money to spend we have a solid capital structure. we have cash in the bank. we are debt free, and we have the ability to leverage if needed. >> more than half a billion? >> everything is right for the right company and the right price. >> you are listed here and in new york. do you ever think of delisting due to regulations that put off many companies in the first place? >> we see a lot of benefits.

definitely the regulations are not helping us. we would be happy to see a bit more companies like ours, but it is not on the agenda for us. fore thank you very much joining us for your first ever tv interview. we hope it wasn't so painful you won't ever come back. thank you very much. i will handed back to you guys in london. >> thanks a lot. you will hand it back to guys in london. >> talktalk has reached an to begin selling to customers. joining us is the chief executive. good morning.

good to talk to you again. tell us about this relationship with telefonica u.k. ?hat does it mean for talktalk >> it is a significant development and builds on the we have on mobile so far. it is going to allow us to build on the acquisition. we are moving into quad play with just under 10% of our customers taking mobile from us. this is going to give us the ability to accelerate and cellime build a small network, basically to put something into our customers be ablend in doing so, to give much better mobile coverage in the home and save money. >> is that the ultimate ambition? in the release you say other opportunities will arise from working with telefonica.

what are those opportunities? >> for the short term this is a commercial relationship that will give us access to 4g services, and enable us to roll faster.ting quad play overall the mobile spectrum does not work very well when it is blasted over walls. if you can build an inside out mobile network, you can mean customers have much better call quality inside their own homes. we make 40% to 50% of our mobile phone calls inside our own home. if you have better signal inside your home and all those calls going down the line, we will be able to save customers a lot of money. that is the long-term position. >> why telefonica u.k.? you started with vodafone in 2010. you were the first of the mobile services.

why telefonica u.k.? >> we have been in discussions with all the -- all the mobile networks about this plan of ours. we are really pleased to have agreed to this deal with telefonica. i would say we had a happy relationship with vodafone over the last five years. his is about taking it to the next stage -- this is about taking it to the next stage in accelerated together. i think we are happy about that. >> we were talking about it last week. and you have 348 thousand mobile customers at the end of september, what is the ambition? how is this going to boost those numbers? >> it is certainly going to help accelerate those numbers. we don't have a specific target. the market is just moving to quad play now. to 10% from no customers taking mobile in two years. i am confident it is going to be a much higher percentage of households, but i wouldn't want

to call how much that is good to be over the next few years. it is in the pretty early days. >> you mention quad play. the day in theof telecoms industry. this battle?to win how many are going to be left standing if everyone is doing the same thing down the line? topersonally, we are going win the value for money. there is a lot of space for people interested in premium customers and products. most people are going into quad play to try to protect the premium product. we don't charge a premium. forgive me for being selfish. we see a long-term future in growing our quad play business. see a told us you long-term future in staying independent. you are very adept at working me last week.

does this new relationship with telefonica possibly open up the doors to a more fruitful relationship in other areas? maybe a merger down the lines? rule out the possibility? >> i think this shows talktalk can build a scale and independent business. we are a public company, so you can never say never to anything. i think this shows you it has all that it needs to continue growing the business for customers and shareholders. >> you are finding it too easy to swap me away. -- swat me away. thank you for joining us. >> nice try. small cell network. does that mean i won't have to open the window and hang out the window when i want to make a phone call in my house? coming up, sports direct could

be in the market for a big health and fitness chain. find out where the billionaire might be putting his money, next on "countdown." ♪

>> has the rebound in the s&p

500 ground to a halt? that's my question of the day. this is the chart. this is the s&p 500. steady.een pretty on friday it closed at a record, having risen for four consecutive weeks. 9.5% from rebounded their to friday's close -- from there to friday's close. the yellow circle was on september 8 team. it actually fell by 7.4% to october 15 on an intraday basis 9.4%.cline was the rebound has almost ground to a halt. stars -- those four

last week we had the index rising or falling less than .1% on four consecutive weeks -- four consecutive days. that was tuesday, wednesday, thursday, friday. that's the largest stretch since may, 1970 nine. if you average the week of the whole the s&p had swings of .8%. why are we seeing such small moves? analysts say markets are getting skittish as the s&p tests all-time highs. analysts are asking what is going to be the next drive to push higher. cautious reasons to be . valuations are at the highest since 2010. the s&p is trading at 17 times projected earnings. the rally from october 15 through november 11 was the fastest 20 day increase in a lot

of years. it isn't the only -- it isn't only the s&p that has risen. has added more than $3 trillion since that low, but still, that is $2 trillion to make up for the record on september 3. that's below. that is where we are on friday. we have again ground to a halt. >> big questions. russia is in focus after putin left the g 20 meeting early and scolded ukraine for cutting its ties in the east. let's go to the head of cross market strategy. inc. you for joining us bright and early to start your week. that put the latest on russia in context. the latest on

russia in context. is there anything that changes your thoughts on the crisis? yawn.0 is a bit of a the one thing people were looking at is whether there would be some sense of between russia and the other g 20 countries. we were very hopeful but the fact rooted has to go home early because he wanted to sleep and the fact putin has to go home back early because he wanted to sleep i don't think was a positive development. we don't think the situation is improving on the ground. we think the central bank in russia is doing the right thing, and that is important on foreign policy. it is not clear the capital outflow from locals is subsiding. the risk is the dollar demand from retailers does increase,

although the central bank is doing the right thing. >> speculators -- >> many policymakers do blame speculators. the russian ruble has been in crisis seven or eight times in the last 50 or 60 years. this is not new to them. so far you have to say you haven't seen very aggressive demand from local retailers, which is impressive. the central bank is doing the right thing. if they begin to buy, if investors lose confidence, it might be difficult to put the cat back in the bag. >> stay with us. a short break. back in two minutes. ♪

>> the head of global markets joins us. oil will continue the decline with catastrophic risks. how big is the risk of the climbing oil prices beyond russia -- the climbing -- declining oil prices beyond russia? morecause of supply it is of an art than science. if you look at relative decline markets oilother

has declined more than other commodities, which is a positive because it reduces inflation, which is bullish for emerging markets stocks and also because it helps confidence. it helps growth. let's keep this in context. this is coming with very weak global growth. we think growth is likely to shrink next year. >> you are worried about china. >> weeping growth in china is going to decline further next growth 6.8 -- we think in china is going to decline further next year to 6.8%. construction is likely to remain weak even if sales improve. it is not great news. >> you can come back next time. marketd of emerging

very much.hank you >> the nation unexpectedly slips back into recession. all the details coming up. we will see you nice and early tomorrow. ♪

>> welcome. moments away from the start of european trading. welcome back to work. japan is back in recession. japan drops. omics comes into question. i want to talk about the g-20 aftermath. david cameron warns that we are on the brink of another global downturn. it is the early exit of vladimir then that dominates

headlines. today he you foreign ministers -- eu foreign ministers meet to russia. futureslooking at dax down 86 points. futures on the stoxx 50 down 26 points. let's get to manus. it is all about japan. >> it is all about japan. just under 3%lied , all predicated on the fact would comed -- abe to the country. you are looking at a substantial reversal. it's not just the headline number within japanese gdp, but it is also about capital expenditure.