bank is giving a ceo direct oversight to strategy. the agm kicks off today, i will be bringing you a representative of some of the institutions. i am looking at futures 50 futures down. dax futures up for it -- dax futures up. manus: china's numbers are disappointing, should we be worried about the contagion? according to larry summers, equity markets are lower. we have had a conversation with specter dynamics. they believe no sector is

expensive. we are seeing analysts downgrade profits. they also say autos may well be of interest. equities are opening lower. deutsche bank is making a run this morning. some individual names are certainly worth taking a look at this morning. george osborne has reappointed the cafferty of the npc. npc. tesco is up 1%. potentially after mr. clark's termination. deutsche bank's flat at the

moment. the challenges will be raised. vodafone is up 13% -- .13%. what they have said here is that the standalone process for vodafone is something they are questioning. they need to reset the dividend strategy. they need to contemplate taking liberty as being the senior role. that is something they are saying. operating synergies could amount to $22 billion. they really do like that tesco news. after that payoff to mr. clark. the mining companies, why am i surprised? china's growth numbers are

disappointing. the aussies are worried about the chinese level of growth. of course you are seeing billy's up. glencore is up. that will be one to keep an eye on. rio tinto up .80%. we will wait to see what these pmi's bring us. jonathan: what a busy morning. french pmi's coming through in the last three minutes for it 49.3 is the reading for manufacturing, slightly better than the survey of 48.5, a

pickup from the previous month. it is getting better. i am looking at services 54.6 below service, 51.9, a pickup from the previous month. the preliminary reading for may, 51.0. not terrific numbers, that picking up from previous months at least. later, german pmi is coming in 30 minutes time. eurozone the key my 9:00 a.m.. -- eurozone pmi is coming in at 9:00 a.m.. earlier in asia, we had pmi data out of china for it hsbc coming in at 49.1 for may, missing number estimates and showing a third month of contraction in this sector. output is a 13 month low. we are going to nick williams

for more. we have had chinese data missing estimates pmi's in contraction territory, is that slowing down for months to come? nick: we did an analysis a few days ago, we found the economic data out of china has consistently missed estimates. everything from pmi to industrial production. that signals to us that analysts and china watchers are underestimating the extent of the downturn in china. it raises questions about the government's of liddy to meet its 7% growth target for this year. jonathan:'s responsibility is it? the government -- will be

government do more as the year progresses? makes: it is tough to estimate what is really happening with this data read there is a lag. the government has not really -- the government effort has not kicked in yet. what we have seen in the last few days as well is other government agencies are loosening restrictions on issuing the -- corporate bonds trade they are really struggling with this balance of trying to manage a market restructuring, also interesting liquidity and easing lending conditions in the country. jonathan: inc. you very much for joining us. -- thank you very much from north -- thank you very much for joining us.

it was a stock story that turned heads yesterday, the almost total collapse of a company in hong kong. trading was suspended after a plunge of more than 56%. the question for investors yesterday was how many energy -- hanergys are lurking? the answer is 2 more. golden property holdings crushed, down more than 50% in one day. look at some insight on these moves, from hong kong, we have the managing director of folk on international. he is chief officer of rmg wealth management. yesterday the big question was how many hanergys are out there? do you exact to see more of this kind of thing going forward? >> we are seeing a unexplained

crash in some of these stocks. some of these stocks have more or less the same characteristics. they have high concentration of management. they have been engaged in market value management practice in the past. in this process, the ownership of the stocks becomes concentrated in the hands of owners. at the same time, the shares become less available. as the process goes on, the share price is substantially higher they can deviate from the fundamental value. there is a rumor that the hong kong sec is investigating. that is causing panic. we are probably seeing some of the hedge funds actively looking

to shop these kinds of stocks. it has a unexplained rise in the last 12 months. jonathan: there is probably a penny stock jumping up and down somewhere in the world right now. these are not penny stocks. this company lost half of its value in under half an hour have you ever seen anything like this in asia before? >> it is almost unprecedented. we have -- we will not say we have not seen it before, but the collapse is almost unseen. i think it caught everyone by surprise. hanergy would like to have the foreign administration office i into the shares before the collapse. some of the hope -- high-profile

buy into shares as well. the shares have reached a level that is difficult to explain. jonathan: stay with us, i want to bring in my guest, stuart richardson. stewart, have you seen anything like this before? the second question, if anything was going to deter foreign investors going into chinese equity planning, the last few hours should be a sign. >> the closest is probably the tech boom in 2000. copies were missing estimates -- companies or missing estimates. in asia, hong kong in 1997 saw some moves.

this is the type of action that when you see stocks over a. of time these companies are prone to big swings with something is not going right. they are regulated by influences outside of your control. it is not just overseas investors who should be careful. jonathan: you have been out front calling for a correction in chinese equity, the big question is, how much downside is there? not just hong kong. how do you expect it to play out in the next 6-12 months. >> right now what we are seeing is the chinese market has been of 120% in the last 12 months --

up 120% in the last 12 months. the median price of earnings ratio on the shanghai cop as it is about 110 times. on the chinese export, it is about 120 times as well. it is dangerous. having said all of that, we are seeing the chinese doing more money in monetary policy. a few days ago we saw some difficult stimulus coming through. a physical stimulus is not expressed by the market.

we are seeing strong market reactions. even though the evaluation is dangerously high, we are seeing very loose monetary conditions. these will actually suppress market volatility. in the worst case scenario, if people want to get out potentially we could see a 15% to 20% correction from the high to where the market can stabilize after. jonathan: i want to pick up something about liquidity you talked about slowing liquidity from market lending you look at the boom in ipos from this year, this is going to drain liquidity as well. you also touched on the concentration of holdings of

some of these companies. should we expect volatility to pick up in a month? >> yes. if the monetary pumping stopped it is anyone's guess. risk in the marketplace is behaving in a way no one anticipates. it is very difficult at this point in time to say how do we time a correction in the marketplace. in 2007, if you remember, during the bull market the market was up six times, this time we are up 120%, the market doubled in the last year. if you compare this. two 2007 we have more room to grow in terms of monetary policy

easing. we are probably seeing a correction in the coming months. after the correction, after the markets have stabilized i would say the market could pick up again. if monetary policy eases, they could. jonathan: i remember the message for the last i remember the message

for the last few years from the states was they did not want to fight. >> liquidity in terms of driving markets separates what is happening from the economy then the picture. the authority they are trying to engineer is great rebalancing. they are having to be loose on policy. with the housing department not doing anything, retail investors are seeing opportunity. i think there's a chance that more stimulus could pump the market higher. very dangerous. jonathan: i want to give you the final say, the regulators sound confident they can handle the margin lending. do you think that confidence is misplaced? >> i think it is very misplaced. the regular is waking up to the fact that the market volatility can search where it is least expected. we are seeing some moves behind the curtain. they are investigating into some of the irregular margins. they are quietly reining in some of the irregular margins. even so, we are still seeing market lending balances up to 2 trillion. if you take into the account the umbrella and other margin lending practices, i would say the potential is actually double in what they had any books. some people want to get out of

the market, that could create a risk later on. those of the risks people want to monitor when they get into the chinese market. jonathan: a lot of risk. thank you very much for joining us. stuart richardson will be with us through the morning. coming up, frustration, what is holding back a central bank. investor mutiny, we will speak to a voice in investor ranks at deutsche bank. what can greece resent that will win over more cash? those stories and more throughout the hour. we are up this morning. ♪

jonathan: good morning and welcome back, we are 20 minutes into the session. the dekes, the weakest it has

been all week. wednesday we take a breather thursday we are up .35%. the euro is coming off a three month -- three week low. yesterday evening it was all about the federal reserve releasing minutes. let's call it federal frustration. the take away, the central bank may be itching to raise rates, but data is getting in the way. peter cook has the details. peter: the minute from the feds today meeting in april made it clear the first increase since 2006 is not likely to happen in june. according to the minutes, a few anticipated the information approved would likely indicate sufficient improvement in the economic outlook to lead the

committee to judge that the conditions have been met. the minutes go on to say that many participants thought it unlikely be data available in june would provide sufficient confirmation of conditions for raising the range had been satisfied they did generally not rule out this possibility. instead, they agreed the fed should take a meeting by meeting approach. they debated whether the slowdown in the first quarter was due to transitory factors or more persistent weaknesses. the fed has a concern over a taper tantrum. the minutes said it was suggested that the volatility may be greater than it has been in the past. the decreased inventories of

bond and elevated assets. a couple of participants underscored the need for a better understanding of the bond market and the current environment. they asked the staff to increase their updates as normalization approaches red big knowledge to their own communication skills would be critical in preventing another taper tantrum. jonathan: signs that the federal reserve may be shared -- scared of their own shadow. stuart richardson is still with us. are they scared of their own shadow? stewart: they are micromanaging the situation. they're trying to control the bond market. they are trying to steer the equity market. we have brought up this huge financial rally over the last several years. we are now worried about

financial instability. it is an incredibly tricky situation. could it be september? it is financially stability dependent at the end of the day. jonathan: i want to quote, the fmc's biggest worry is not lift off but what happens if the economic recovery dies of old age without the fed actually having done anything? the dollar would probably fall farther than it rose from july-march. this is a school of thought, is it when you subscribe to? >> when you listen to some of the governors, it almost seems like are going on that road. i don't agree have. there is going to be a recession. they need ammunition for when

that time comes. we do give credibility to that school of thought. we also give credit ability to the thought that recovery may die of old age. the lack of recovery is clearly impacting business investment. it shows that the underlying economy never gained enough traction. past recovery it looks meager in historical terms. jonathan: you and i would need an hour to talk about the euro raise. the bond market, worried about liquidity, why not just let maturing securities roll off the balance sheet? finally do that next week -- next month? why waste until september, when that is something you can do month by month? >> this goes back to financial stability.

they are petrified of future potential actions creating a tantrum in terms of bonds, equity markets. they have realized the past cycle, the downside of 2008 when is -- when it is that severe, you don't know what to do in the economy. jonathan: going straight back to the beginning, scared of their own shadow? maybe for good reasons. coming up, we will speak to dr. hans christoph hurt he is calling for deutsche ceos to step down. you don't want to miss that interview. it is coming up after the break. also german pmi, we are 27 minutes into the session here in

london. the equity market pushing just an inch higher. it is a blanket red across much of europe. back in 2. ♪

jonathan: hello, and welcome back. i'm jonathan ferro life in the city of london. german pmi, the luminary reading for the month of may manufacturing coming in at 51.4. it is down on the previous month. i am looking at the services pmi reading of 62.9 -- 52.9. 52.8 is the opposite. -- copy sent -- composite.

that is the fx market on the board right there. the euro pushed higher in the last 30 minutes. they are just unwinding that right now. we are set on the day at 11113 against the dollar. the other top story is what is happening in germany. deutsche bank is holding its agm as some of the company's largest shareholder is to vote against management. hans nichols is in frankfurt talking about the agm. hans the changes the deutsche is making? they made changes and they? hans: there is a little bit of musical chairs going on. there is a little bit more power for on to gain who is the co-ceo. he is going to take it over the strategy he will take over

stephan krause. he gets to be in charge of the non-core operation unit, that previously was held by mr. juergen. if there anyone -- if there is anyone appearing to lose power is mr. juergen kitchen. i am going to look through these names, there is alan protein, he is the co-ceo of asia-pacific. there is the ceo of the united kingdom's operation, there is the head of the private and business client division. all of this is on the backs of this big strategy reorganization here. they have these big plans, they are cutting retail banks. they are lowering the targets for return on investment. this is a bank that is in transition.

we will find out if it is in crisis in terms of the amount of support they have commercial -- shareholders. we are expecting hard-hitting speeches. whether or not there is enough percentage wise to force the board to change, we have to wait essentially for a long night. every shareholder under german law gets to ask russians. we could be here pretty late. jonathan: that sounds like congress. you enjoy yourself. hans nichols, joining us live. joining us now on the phone, is an investor who said he will vote against approving actions for deutsche bank management. we are joined by hans christoph hurt. hans christoph, great to have you with us this morning. where do we start? deutsche bank seems to be giving

the co-ceo direct oversight of strategy. does that change any of your thoughts? hans: first of all to be clear we are not asking for anyone to head to agm, we are asking the supervisory board to take a critical look at the composition of the supervisory board. we have concerns. we welcome some of the changes that are being made, but our question will be is that enough to address the concerns we have. jonathan: it seems, on first look, do you want to see more control?

>> let's wait for the explanations of deutsche bank. we want to understand the changes. i'm sure there will be explanation. there will also be problems. the unsatisfactory implementation of strategy, the performance, the litigation investigations, 2.5 billion euros -- $2.5 billion u.s. libel issue those of the issues we're focusing on. jonathan: the list of issues, that could of been any bank across europe, what is it that deutsche bank has done that perhaps other banks have not done that is really annoying you? i asked that question because the whole financial sector seems to be in the same trouble. is there a bank in europe that you would like deutsche bank to model themselves after? >> that is a difficult question.

every bank is different. it is difficult to make a comparison. deutsche bank is rather different in that they have been put in a strategy in 2012, 2015 this strategy has not been working over the last three years. we are saying this is part of the reason for your share price performance. we also think maybe you have waited too long in order to address the underlying problems. unfortunately, we have not got a lot of details on strategy. jonathan: as you go into agm today, you represent 5% of the shareholders of the total stock of deutsche bank, how much support is that? how many people are against the strategy? is it just you?

>> we represent just under .5%. the important thing is that we believe that more than 20% of the shareholders will vote against the discharge of the management board. we are saying 20% of the shareholders no longer have confidence in the management board. we are urging the supervisory board to make proper changes, or at least look at what the problems are and what the problems have been over the last three years. we believe there will be a strong vote against the management board tonight. jonathan: is a final question, in early january there was a

similar call for the chairman of siemens to step aside. is there something happening in corporate germany? >> we are present a group of more than 40 pension funds in the u.s., working together we have the capability to address some of the concerns we have with german companies. speaking out at the agm is important. things are shifting stewardship and responsible owners of companies are coming to germany. jonathan: fascinating. hans christoph hurt, the hermes equity ownership service

director. stewart is still with us. he could've been describing any number of banks across europe, is it a deutsche bank problem? >> it is a general financial services problem. it is an interesting week would be multibillion dollar fine across the different markets. we still don't know what the ultimate end of the game is. the problem with financials is where is the growth coming from? if we see growth coming through in a broader economy, these banks will struggle to really show any sort of forward momentum.

we are neutral at best on the banks. jonathan: still to come, the latest on the greek situation. -- greece situation. what can we expect for debt restructuring. who knows. ♪

jonathan: good morning and

welcome back. it is 42 minutes past the hour in london. greek prime minister will present the government plan for debt restructuring. let's go to hans nichols. you are going to have a is the agm for deutsche bank? hans: no one thinks they are going to be a technical or political solution everyone has been downplaying expectations all week. it only increases pressure for a deal next week. this morning we have heard -- in an interview he said not enough progress was being made. he said he did not rule out a bankruptcy for greece.

he said that before, but the timing matters. we just know that les echoes published the interview this morning. they have been consistently unimpressed by the effort of the new greek government even in the 11th hour, it is not argue with four optimism. one final note, it matches on what he told a closed-door meeting i believe on monday where he said he did not think of this as a person familiar with the matter in the room he did not think greece quite understood their predicament. that was the beginning of the week, not a whole lot has changed now. jonathan: i will not comment. take it from the greg set to the breck set -- brexit.

there was a suggestion that mark carney wanted the same thing? does that bring you forward? hans: they want certainty. everyone once the economy to grow. you see that manifest in the situation in greece where because of the uncertainty, and mr. verify this was quite honest about it, because of the economic uncertainty, the greek economy has slowed. the same is true of germany when they look at the political uncertainty of the united kingdom, if they left the eu they would want it to happen sooner. that gives cameron less time to argue and litigate the treaty changes he wants. it looks like merkel as applying a bit of a squeeze to david cameron. she is pretty good at applying squeezes to her partners and competitors. jonathan: what a busy day.

he has to go to a deutsche bank agm. stuart richardson is still with us. we have to think about a brexit you are managing money, what is the big concern? stewart: greece is worse if you think the fed is frustrating. it seems like merkel will try to kick this into the autumn. that is probably what will happen. the banks and government is not solvent. the hard work will be seeing in the autumn. we talk about gap risk in the

euro, greece could decide to rejoin. we're talking about default. the market are quite calm about the whole thing. the bigger issue is the taper tantrum in germany. greece has continued to try to forget about it. jonathan: this has been a federal reserve frustration. why care about greece at this point? a lot of people watch it for the soap opera that it is. >> it's it's there in the background.

we are not overly bothered. if something happened to greece portugal italy without growth these countries have assist -- unsustainable debt profiles especially if interest rates should be higher. the european politicians have got no right to hide. they have to have some sort of change. jonathan: to wrap things up on the european bond market i think you have to be brave to say that a greg set would do nothing to the bond market. quite clearly it could have a big impact. you look at the backup in yields, the speed at which yields backed up you are a betting man a 10 year in

germany is 63 basis point, at what point does that become a by? >> this comes back to a similar situation in china. people are buying 10 year bonds because the momentum was there they thought the central bank had their backs grid as soon as you see the momentum come up they slide. they say they will fast-track qe, that is a typical response to get that euro-dollar down below 110. the trouble is if we get another situation like this, people will lose confidence in the ecb ability to manage markets and economy. if they lose credibility we see some market boosts. jonathan: a

big question about ecb communication after ben walk where a speech so news, the european central bank will end the practice of providing embargoes to media. apparently that is the problem. do you think that with all things? >> we tend not to be invited to those meetings. we are not too upset by that. jonathan: maybe we would have a different conversation if this was the a ceo. still it come, we will hear from the ceo of l'oreal and how climate change is affecting the company's strategy. we'll talk about that after the break. ♪

jonathan: good morning, and welcome back, i am jonathan ferro. the pulse is coming up in seven minutes rid. we are joined by guy johnson and francine lacqua. francine is in paris, where she is speaking to because medics a giant, l'oreal.

francine, i know you would rather be in guys seat, tell us with the big man had to say. francine: eiffel tower or jonathan ferro there is no competition. i spoke to ceos here in paris there is a general sense that with climate change their are going to be big talks at the end of the year. executives are starting to talk to each other and see whether they can push their agenda. if you look at the groups, it is very obvious if you are in oil and gas it will be a different story than a cosmetic maker. i spoke to the ceo of l'oreal. he told me they are doing efforts in terms of reducing packaging, water, and waste management. he said it is a conflict in conscious. at the end of the day, the

consumer wants to be climate friendly. >> the paradox is consumers around the world when you ask them, which you be ready to buy more to protect the environment, they say yes. when they ought -- when they are in front of the shelf, it is not always the case. francine girl i know your friendly this is why a lot of the business leaders are here to discuss. jonathan: francine, the weather looks terrible. i have guy johnson next to me and he is going to tell me what else is coming up. guy: that is the climate change i am looking forward -- four. if you look at the numbers out of france and germany, i think we are fading be rally in terms of the eurozone.

it looks like you to in france has been weaker than one. you can see it in the french numbers as well. you are getting evidence that maybe this early stage recovery is already finding it hard despite qe. we need more speeches from the ecb. jonathan: if you are offered a ticket to the deutsche bank agm or regal where would you be? guy: i would go for rieger. jonathan: 9:00 a.m. don't miss it, at2:45 p.m., u.s. pmi. it is spread across europe. the backs off -- dax is off.

the euro is a little bit higher. good luck for the rest of your day. ♪

guy: shareholder showdown deutsche bank announces the code chief executive is to lead the strategy overhaul on germany's biggest lender. the company's agm is just getting underway. the latest from frankfurt. china's manufacturing output slips to a 13 month low. we have the eurozone pmi data breaking now. you'll will be those numbers in just a moment. francinee: i am in paris and we will be speaking to a lot of ceos and different busine