francine: open for busy. welcoming foreign investors for the first time. talks with creditors collapse after 45 minutes. battle for air supremacy. the paris air show today. airbus competing for orders that the total more than $23 billion. live in dubai and paris with his stories. ♪ francine: welcome to "the pulse ." i am francine lacqua.

we are joined by hsbc's chief global economist, stephen king. within the last few seconds, saudi arabia has opened up its stock market to foreigners part of its efforts to diversify away from oil and at a pivotal time for the kingdom. mark barton is in dubai. how significant is it? mark: it is hugely significant. the last great, global, untapped stock market. a market cap of 500 $60 billion. that is bigger than all of the gcc markets put together. bigger than the mexican dutch markets. bigger than the south african and russian stock markets. it cannot be ignored. the performance alone this year has risen by 60%.

outperform the stoxx 600 and the s&p 500, francine. outperform to the msci. it is encapsulating developed and developing world. it outperformed the msci emerging markets index. this is the index that saudi arabia what's to be included in and will probably take a few years. ocne it does analysts said it could be an avalanche of money flooding into saudi arabia. we are not gotten a price yet today, a big big day for saudi arabia. francine: it comes at a pivotal time for saudi's domestically but also internationally. mark: it does. oil, we know what happened with oil prices this year. a decline of 60%. they rebounded 40%. this is a country heavily

reliant on the price of oil. 90% of revenues from the oil price. that will affect the economy this year. projected to rise by 2.5%. the weakest growth since 2009. an economy that's diverse of votto away from oil and planning $130 billion of spending on non-hydrocarbon investing -- investing. education and health. where does the money come from? right now, bank reserves at the central-bank drawn a down at a record pace. the budget deficit is going to widen this year to 20% of gdp. the situation from the oil side of the news. geopolitical, saudi arabia is waging wars in syria and yemen. and the run is set -- and iran is set to possibly strike on nuclear deal with us-led powers.

domestically, a new king. since january, king solomon has been changing things domestically at a rapid pace. this is traditionally where things take place at a very slow pace. he has reformed departments. he has pushed his sons from being unknown to third in line to the throne. he is appealing to the younger generation. a culture where over half of the population is under 25. saudi arabia traditionally is all soft approach country. soft, soft to diplomatically back to buy money. now more activist under this new king. this the backdrop under an important time. francine: mark, thank you. mark in dubai. later mark joins us for a special edition of the middle

east and opening all of the market at 11:00 a.m. london time. two :00 p.m. in dubai. after tells between greece and eu officials ended without a deal alexis tsipras is calling on his creditors to become more realistic. he said he will wait patiently for them to move toward realism. hans nichols joins us. the creditors are saying they should be more realistic. hans: two sides in schoolyard taunts. the german side, a key deputy of angela merkel saying he is waiting for greece to reconcile with reality. alexis tsipras saying the creditors needed to have a dose of realism. overlaid on all of this, and cremations in the german media and greek medium and less folks on the german media. yanis varoufakis saying he can no longer rule out a greek exit.

he said you needed to have the actual structure of the dactyl's crucially and importantly, we heard from the junior partner and merkel's coalition. this will largely sympathetic to greece. look at it this quote. he is pretty harsh. he said -- francine it seems like over the weekend a lot more public talk and public planning for what to do about a greek exit. francine: do you think some of these differences will be bridged at what is the eu's role? hans: what they do is perhaps more important than anything in brussels. on wednesday, the ecb will decide how much to increase emergency liquidity. we heard from the bank's

president saying time is running out. his frustration is a mountain. will the cbn pack stricter collateral, -- will the ecb impact stricter collateral or haircuts? they need 2/3 majority. it seems like talks are at a standstill. the ecb needs to consider the mandate and objectives to keep their collateral and loans solid. at what point will they demand more stringent, requirements from the greek side? i'm looking to the wednesday meeting to be more important than the official negotiations which seem they are so far apart. francine: hans nichols in berlin for for more we are joined by hsbc stephen king. what did you make of all of this? guest: the dosie-doe on the

negotiations, it is a power game more than economics. it is about whether the creditors or debtors who foot the bill given the crisis. the responsibility of the greeks to deal with imposing austerity to what extent should it be lost to the creditors and massive difference of views between the creditors. whether germany or imf or in brussels and of the greeks in the form of the current government. the mandate to do something differently from what do they expect. the other issue is sovereignty. the greek government that was democratically elected promising to stay in the euro under new terms. they have not been discussed with the rest the europe before they were elected. francine: politically, it is getting more acrimonious.

70% chance of greece, let's call it a negative event. capital controls or default without leaving the euro. stephen king: the calendar everybody talks about in terms of meeting may be something which is slightly out of control now. it is also what ordinary greeks do with regards to deposits in their banks. if they fear they end up leaving the euro, for those people individually, they get at our money out other banks and covert to your roles bank deposits in the event of greek leaving would be -- money out of other banks in the event that they turn them into euros. it is not just about the diarrhea but how ordinary greeks behave. francine: what do you think? stephen king: i think last

thursday, i was hopeful something would, through. maybe that was rather naive. -- something would come through. the red lines on both sides in terms that is very difficult a breach. who knows how much this is a game of chicken to the last minute? nobody really wants to greece to leave. the terms on which they stay where their fundamental disagreements. francine: what does it mean for the economy? negotiations it is unclear what happens the day after if something happens. a negative event or -- what happens to europe, up or down? stephen king: a feeling in markets if greece was removed from the situation you're the removal of a bad outing. some people i've spoken to who think it was a good event

because it gets rid of the bad apple. the europeans cannot resolve this issue, then what a greek exit would imply it it is no longer a proper, single currency. it is a single currency that console does not become a single currency. once you have that message it could be speculation of other countries possibly leaving. francine: what is the fear factor like? stephen king: the financial markets are quite complacent about this. they have taken the view that things have changed. qe in a place. some type of nasty event taking place and they european bond market which is lower. it is lower. i wonder whether people will see if we'll get to this point. francine: thank you. he stays with us and we will talk about the world economy.

here's what else is on our radar. this year's paris air show kicks off today. airbus is not unveiling new products. [indiscernible] we are seeing live pictures out of the paris air show. we have seen some great shots throughout the day as a lot of these airplanes are flying around. ar-350. alibaba is planning to build china's version of netflix. it will be offered in about two months through alibaba's set-top box. and as a newly directed part has become the second film in history to pull in more than $200 million -- and the new jurassic park movie has become

the second film in history to pull in more than $20 million. "the avengers" made or more. -- pull in more than $200 million. at 10:15 a.m., the ceo of the saudi stock exchange as it opens to foreign investors were the first time. at 10:35 a.m., we will speak to the ceo of aercap. at 1:15 an exclusive interview with the ukrainian president petro poroshenko. stay tuned for that. this friday, charlie rose in conversation with the russian president, vladimir putin fsa pittsburgh economic -- at the st. petersburg's economic forum. we are back in two. ♪

francine: welcome back to "the pulse." hsbc's chief global economist stephen king is back with us. we talked a lot about greece. we will talk about the world economy. on a greece, we talk about these data lines. how stern are they and how much flexibility do we have, as an economist? if you were to give advice to

investors compare yourself for the worst, hope for the best how should we look at this? stephen king: investors should always prepare for the worst. we know it is a political debate whereby they have not agreed with each other. no real evidence of what happens if they have to impose capital controls. the big difference in a greece currently and ciphers and the past is cyprus impose capital controls. -- cyprus in the past is cyprus imposed capital controls. at the moment, if greece were to impose capital patrols it would do it without a deal. that would be uncomfortable. these issues of the end of the month in terms of imf loans and july with ecb loans. at the same time, the absence of a long-term plan for greece.

in the absence, the uncertainty builds and continues. at the same time, still underlying fundamental problem which is to where does greece go further? francine: if they leave the eurozone, what happens to greece next? it seems like they do not have the printing machine to print another currency. stephen king: just sort of take all of your euros in greece and stamp them with indicator they are no longer euros but the greek euros. that would not be so easily interchangeable. and they deposits would change as well. in the event greece were to leave, under their circumstances a new currency introduced and my guess it would shake massively. could the greeks look after their inflation rate? if they can and make competitive again under those circumstances

you never know. we are still a long way. first he banged of the month is yours. the world economy is like an ocean liner without lifo boats. it is the titanic and what is the big rock? stephen king: there are a number of big rocks. the fed is one of them. they are hoping they can do what they ecb did in 2011. it could be an emerging market. china is slowing down. brazil could be the emerging market. it could be an issue of the u.s. stock market which is looking pretty expensive at the moment. future profits and growth in wages need to pick up. it would not be so helpful if you send the u.s. equity markets. a whole bunch of things that could happen. this recovery, the federal

reserve has rates for a long way. the average interest rate is about 5%. it was currently and a zero. the chance of repeating an enormous amount of stimulus seems to be low indeed. francine: what does a main? we should be more cautious? -- what does it mean? we do not have central banks with the firepower to intervene we should be more worried? stephen king: one of the ways the markets are so relaxed what will you do, you would do qe. qe is favorable to markets. the more qe you do the bigger the risk of markets overshooting . markets love qe. q in rather than solving the problem may contribute to a mismatch between reality.

francine: what is your take on the u.k.? we are looking at a referendum. does it make a difference to you? stephen king: and terms of the year of the referendum, not so much. i would argue sooner rather than later to reduce the level of uncertainty. that is not good for economic performance. it is clear that companies elsewhere the world that would invest in the u.k. are currently maybe having second thoughts thinking is it the place to really invest? is there were to be a divorce in terms whether wise are not to invest in the u.k., the u.k. has a larger balance. it an event for the deficit. -- it needs the investment for the deficit. francine: you think it why the impact of the ceos investing? i have heard people say it will

not. stephen king: that is a different issue. i think the reality is there are enough people in this country perhaps to be swayed to vote for something people currently do not believe that could happen. the votes in scotland and alaska's referendum, much, much closer than expected. -- in the scottish referendum much, much closer than people expected. if i were someone making decisions elsewhere the world, i might be thinking the referendum happening anywhere is riskier. francine: what impact does it have? when do you expect it to raise rates? stephen king: i think a long way off, probably next year. deficit is not tumbling as much as people thought. inflation is still very, very low. the growth rate is not like it

was at the beginning of the year. a lot of restore the bank of england to hold of this year. francine: stephen king chief global economist at hsbc. the paris air show kicks off today with boland and airbus expecting -- boeing and airbus with $200 million in orders. guy is there. what is going on? guy: let's talk about orders. the numbers are i wondering when it comes to air shows. the indonesian carrier have announced it has a memorandum of understanding with boeing and airbus to take deliveries around 9 billion from both of those two manufacturers. they are ordering 787's and

a-350's. great news, francois hollande is here. he has had a nice little air show this morning and maybe showing off french products. the falcon business jet and the a-350. a nice little interlude as he determines what he will do with the greece next. a nice outing for the french president. what are we watching for the rest of the day, francine? more orders. fairly huge numbers likely to be processed. the fuel prices are a little lower and maybe a little less reason to buy super efficient air jets but i think we will get a big numbers posted at this airshow. francine? francine: what is flying and what is not flying?

guy: what is flying and what does not flying? a-400m, the plane that recently crashed out of seville, we saw it flying. there was speculation it might not fly. quite good news for airbus. showing it off. their program is on track. we were told the ceo of the airbus group tomorrow. looking forward to hearing his thoughts on where the 400 goes next. and whether we will see the a-320 flying here. maybe having a few problems with the engine. waiting to find out if it will be flying. fuel-efficient aircraft. we are waited to see what the will fly and what will not stop -- will not fly. airbus and boeing dominating and orders coming through. first the bank the chinese

orders -- francine: the chinese order what impact will they have in the next two or three years? guy: that is the underlying question. whether china will step in and break of the duopoly between boeing and airbus is what everybody is asking. the chinese at some point it will be being in aviation. the question is when will it happen? maybe a whole series of opportunities. a narrowbody airplane that boeing produced for years and years. will the chinese step in? the question people are asking is how big will the chinese be how will they change the market and what does it mean for boeing and airbus and the u.s. economy a european economy? it will be an interesting show. more coverage. the ceo of boeing and the ceo of

airbus is coming up as well. francine: guy, thank you. looking forward to a lot of these interviews. the twitter question -- will chinese breakup of the boeing -airbus duopoly? we will be back. ♪

francine: welcome back to "the pulse." i am francine lacqua. these are the top headlines. greece is answering welcome be a defining -- entering what could be a defining week. the euro dropped as the european commission said at the talks had broken up after 45 minutes. the folks shifts to the thursday's meeting in brussels. boeing has won a commitment for 60 planes and the developing

country. the deal comes after day one of the paris air show. within the last half hour, saudi arabia has opened up the stock market to foreign investors. the biggest economy in the middle east seeks to reduce its reliance on oil which accounts for 90%. more on that now. everything you need to know about the opening. reporter: the biggest oil exporter is home to what of the world's most restricted stock exchanges. that changes today. for investors are getting their first chance to tap into saudi arabia is a benchmark index. they both the biggest equity market in the gulf and shares are up nearly 15% this year. the trading doors are not swap open it yet. regulators say real estate companies are off limits. two of islam's holiest cities.

shares are up for grabs including those in the world's biggest petrochemical producer. francine: more on all of this. joining us is the ceo of the oldest asset management in saudi. thank you for joining us today on the program. give me what it means for you. it is just the start. when do you think they will open up more? guest: this is just the start as you mentioned. it will be gradual over a pedal of time. there are very clear limits of how they can enter. over a period of time more in tuned with markets demand. this is an amazing markets and opportunity.

you have seen the g-20 open up to the world with the size and liquidity. francine: the size of this, a huge number $500 billion, where will the money come from? do you think other emerging markets want to suffer? hasan al jabri: a lot of the investors have their locations and with that, they would divide different aspects. it will take part of the emerging allocation and also from markets and also the additional money coming into this. it does not really have to apply into suffering anybody. just going after an additional opportunity the market has been looking for. francine: do you see saudi opening onto the bond markets? there are very few and this could open up a whole new stride for investors and how quickly

can it come? hasan al jabri: the bond market goes hand-in-hand for saudi arabia. one of the major things that needs to be resolved is the rating agencies rating of these groups and bonds. a lot of work happening on that and we will see that the roman. the opportunity is the stock market. -- and we will see that opportunity. the deepening of the market in terms of the opportunities of retail housing, health care education, a lot. francine: you were saying you think they will ease of the restrictions? how often? hasan al jabri: absolutely, two things. one the settlement period moving from the 2+2 to 2+3 or

2+0, i hope it would change by year-end. also, you will see they star with $5 billion and i would ask that a debt to drop as we go and open up. francine: is it a real game changer if it enters the msci? how soon? hasan al jabri: usually it takes about two years. when uae, when the msci emerging index qualified in the uae market, it took about 2.5 years. after it was included in the index. during that period, the do by stock market went up -- dubai stock market went up by 180 percent. i do not expect the saudi because it is mature.

it is a game changer. francine: i was curious from where you are sitting in the middle east, how do you view what is going on here? we talk about greece and the fed. is a you look at it and wonder why they cannot deal with a better or the people you worry about them? hasan al jabri: we do invest in all of these markets at sedco capital and we watch of these markets. the greece situation one not have an impact on the saudi market. there's not a lot a trade or economic influence. but also one exciting thing you can look at is the currency impact. for the greeks a euro what is happening and what may happen in the future we do not have it there for the investors in the saudi market. the saudi with the dollar and

parity has not changed since 1985. that is an exciting area. francine: and then you get to the fed and they could get it wrong if they hike interest rates before the economy is ready, is it something you worry about? for they know what to they are doing and we should not worry? hasan al jabri: we look at it very carefully for our foreign investors, for our international. for our internal investments, not the same impact, the huge impact it might have internationally. especially what you do realize in saudi, the banking district is a very healthy banking industry with a loss of -- quite well-positioned and it is not highly leveraged market. again, it will not have the same impact as the rest of the world. francine: very refreshing.

thank you for much for joining us. mr. hasan al jabri the ceo of sedco capital. breaking news out of greece. we understand from a local government official the greek negotiating team will meet at 12:30 p.m. local time. a greek government official that texted us to keep us up to date. this is something we will keep a close eye on. the greek counterparts yesterday walking gout. all focus on whether the meeting. that is the next -- the creditors will take place. london tech week begins today. we will have a preview. that is after the break. ♪

francine: welcome back to "the pulse." today is the start of london technology week five years after the founding of tech city. remarkable growth and startups. it hit $1 billion valuation. here to put it in perspective is caroline hyde. quite a flourish of good news out of london. ruling how much is owned by the u.k. and these new $1 billion companies they are called

unicorns, or teen new unicorns -- 13 new unicorns born. 13, of those, eight from the united kingdom. they have got 17 in total in the u.k. out off 40. 80% of the unicorns in the uk's. you have an online boutique retailer. francine: unicorn is something so amazing examples on a real. caroline: hopefully, the less fantastical like a dreamlike so wonderful it is born so quickly. all since the year 2000. great statistics. 18 out of the u.k. six in sweden. far outpace the number two which is sweden. 4 in germany. it takes nine years to get to $1 billion valuation.

showing off the tech version of things. shazam is the number one delivery. the average age of a founder is 35 years old. really interesting themes out of this. francine: great statistics. a long way to catch up with silicon valley especially because they put so much money and scalability is so much easier. caroline: there is great things coming out. money into the u.k. and more of the larger scale funding situations in the last 12 months. not quite to the u.s., we had 13 new unicorns course born -- new unicorns born in the past 12 months and the u.s. had 22. on the company in excess 100 $20 billion. that's smaller than apple and facebook.

-- 120 billion dollars. there's concern but signs of improvement. it is getting better. seven m&a deals. that is pretty good for europe. more angels being made. if you as at a company, you start to fund other technology companies. -- if you exit a company, you start to fund other technology companies. the amount of transactions doubled up 96%. people wanting to splash the cash and splash into technology oriented companies. out of the index ventures, they backed 90 so far that were born since 2000. accel partners in california but a big presence in europe is second. and a moscow-based company doing the well.

their valuation on average making 54 times your original put in a money by these companies exiting and the unicorns being born. we are getting a can't of what is to close off. francine: -- we are getting a hint of what is to come. -- francine: they will be ipo'd? the next facebook? caroline: that's what we are hoping for. more u.s. investors are being drawn it to europe like sequoia. also, people have started to see who is yet to make the big crowd? hello fresh, they deliver the food to be made at home. a lot of food. a company all about processing your payments in restaurants.

and sounds cloud, the music one. these consumer base companies in europe about to make a $1 billion mark. there are reasons to be positive. francine: in china companies going off of 50 billion does like over them. -- $50 billion like uber. caroline hyde, thank you. first-quarter profits that fell short of analysts's amiss. it plunged 46%. alibaba is planning to build china's version of netflix. it will be offered in about two months. it will be offered through the top set the box and smart tvs. the new jurassic park movie is the second film in history to build -- to pull in $200 million

on the opening weekend. only "the avengers" made on more in 2012. coming up next, show you some incredible advances in smart city technology. stay with us. another reminder at 1:15 p.m., an exclusive interview with the ukrainian president, page report a shank of. stay tuned for that. -- petro poroshenko. ♪

francine: welcome back to "the pulse." a new district is being built as a smart city. the area is expected to be a worldwide model for the new urban tech. things will do so smart that every resident will stay one hour a day. >> it feels a bit like an experiment. >> a whole cluster people created this. ♪

>> living like this has a benefit. what i like about living in this area is the fact things are being tried out. with saw home automation i can control things around the house. i can turn the kettle on and off. the lights on and off. i can see how much water i have used. i am very much aware of how things are consuming now that i can actually see them digitally. i am definitely changing behaviors. the first time were smart metering will be deployed in a large-scale. it is also incorporating the new kind of paradigm of how cities

are made. part of that is the residents should actually play a part in creating new districts and services. >> i am an optimistic. i am optimistic about european cities. the best model of cities we have in the world. it is hard to make a city be a green city. i think this is the model. the model which retrofitted with smart technology kennedy a sustainable way of doing -- technology can be a sustainable way of doing a city. >> will be much closely connected socially digitally through different types of technology.

these communities coming together in a different away. ♪ francine: save us one hour a day. the solar impulse is the first plane tried to circumnavigate the world using solar power. on its way from japan to hawaii. we break down the stats. ♪

[applause] francine: let's recap some of the news over the last hour on agrees. over the last 24 hours, more acrimony between greece and its

creditors. that this whopping incrimination's over who it -- they have been swapping recriminations's over who is to blame. we knew there would be talks between greece and the creditors and they ended after 45 minutes. each aside seems to hardin its position -- harden its position. marcus have been plunging as we have some of the stock markets. clearly led by greece. european stocks in general are lower after the weekend debt tops the 20 european nation and the creditors broke down. it is all about politics. -- after the weekend debt talks between the european nation and the creditors broke down. it is probably time when mr. schaeuble is getting closer to realizing that degrees should ago. -- greece should go. where hear from the european central bank that everybody is

concerned about greece and he is commenting to reporters in vienna. he said it is too soon. this is the problem -- mario draghi everybody looking at liquidity for the great banks but it does not want to be the one who pulls the plug. a lot of the insiders do not think it will come from the ecb to put an end. angela merkel does not wanted this to be her legacy that the grief have to leave. we understand greek negotiators are meeting at 11:30 a.m. u.k. time. -- her legacy to be that greece had to leave. there will be a meeting when they won't another chance to talk. for those on the radio, first word is next. for viewers a second hour of "the pulse" is coming up. we speak to the ceo of the saudi

market opening for the first time. and to the paris air show. guy johnson is there. this friday, the russian president. all of that coming your way. ♪

francine: open for business. the saudi stock exchange welcomes foreign investors for the first time. greece enters a fateful week. the battle for air supremacy. boeing wins a $10.9 billion commitment as the paris air show takes off. good morning to our viewers in europe. good evening to those in asia. welcome to those waking up in the united states.

this is "the pulse." let me bring you to the paris air show. this is where the french president is just giving a speech. he is speaking to reporters. francois hollande saying that no time must be lost on greece. he is saying that the talks on greece must be renewed. we know the negotiation team of the greek government will meet at 12:30 local time and we will wait for any news. we know that the talks have ended in acrimony over the weekend. the europe group meets on wednesday and thursday. after talks between greeks and eu officials and a last night alexis tsipras is calling on his creditors to be more realistic. he said he will wait patiently for them to move toward realism. marcus, let's start off with

you. how are the greeks responding to the latest breakdown in talks. marcus: as you can see from the statement to the greeks papers they are digging in. they are saying that they came into the talks with counterproposals, but they were rejected out of hand. the government says they just cannot do this. they're going to meet in less than half an hour. tsipras is indicated that their strategy is just to wait. the creditors on the other side say there is no more negotiation to be had. it is pretty much you accept these or not. there was also mention of the course of debt relief.

the imf chief economist, in a blog post after the end of talks , pretty much confirmed that the imf is insistent on a one percentage point increase on pensions, saying it is necessary to put the finances on a sustainable track in greece. he also reiterated the imf's position that debt relief is needed. i think hans will be able to tell you that this is not a call that would be given too much heat and any creditor countries. we have had words that the imf needs to be on board for any agreement. i'm not sure of that extends far enough. francine: keep it right there. what have we heard from the german side? hans: we have heard this claim that they need to see the greeks be more realistic.

they say they need to reconcile themselves with reality. we have just heard from some central bankers they are saying that time is running out. it is going to be a crucial vote on wednesday. re-have -- we have françois hollande urging everyone to come together. is he talking to the imf? is he talking to the greeks? is he talking to the germans? is he talking to everyone? if it is to wreck to tour the germans and the imf, you could come back together again. it seems that the german side is waiting for the greeks to do something. there may be appetite for a debt restructure in berlin, but first they want to see credible reforms being implemented, not

just committed to, implemented by athens. that is really the key. across the political spectrum in germany, there is a lack of trust in what is happening in greece on a day-to-day basis. francine: the ecb plays a huge role in all of this. are they going to have to take a decision? there are rules on how much he can give out? hans: the big question is do you impose haircuts for emergency liquidity? do you change the collateral the greek and it -- thanks need to put up -- banks need to put up? there were hints about it last week and then they increased the ceiling to 83 billion euros. it seems that wednesday there will be a defining moment on

what sort of collateral the ecb accepts. if talks continue to look as bad as they are. this morning, they looked disastrous. both sides are hurling names at each other. if the state of the talks does not change by wednesday, those arguing for haircuts will have much more ammunition to make their case and they will have the ammunition to say, it is our responsibility is central bankers to ask for collateral that can be redeemed. publicly, greece is saying that they may be potentially heading toward some sort of grexit. francine: marcus, if we have a default or some kind of capital controls that will essentially lead to greece exiting the eurozone, will the government survive it? marcus: we shall see. they still are the party that is coming first in polls. no one really wants elections here. at the same time, the leadership

of the party has not really shown any great appetite to form a unity government with other smaller parties. while some of the government support my collapse if you get into capital controls, on the political scene, on the other hand, there isn't really -- you look at the opposition and you don't really see who might -- if there were elections again -- who might come in as an alternative.

+++ let's get more on what could be the defining week in the greek crisis. marco, great to have you on the program. is this looking very ugly at the moment? marco: i do believe there is room for finding an agreement. it was always going to be ugly. francine: this ugly? marco: yes. tsipras needs to show that he is not only dealing with the creditors, they are also dealing with the left wing of his own party. it has to be quite tough. francine: this is an argument i hear over and over again. that he has to be seen putting up a good fight. which he has. he is putting up an amazing, massive fight. at what point does it become un -rescueable? marco: let's divide the argument into what needs to be done and what is key to the discussion.

i don't think the structural reforms are the key. we all know that the countries are becoming similar and i don't think greece and the euro area can afford greece moving into the opposite direction. an agreement is necessary by the end of this week to avoid the non-imf payment. that is not really the end game. we could have time until next week on the u.k. council meeting. francine: you think the ecb will keep the ela in place? what happens if we do get some kind of default? marco: that is all about the agreement. merkel had an interesting quote. there is a way if there is will. if they say they are moving toward an agreement, it is only a question of a few days, they can overlook a non-imf payment.

however, i don't think they can afford to go beyond june if there is not a staff-level agreement. francine: will greece be in the eurozone by the end of the year? marco: i think that greece will remain in the euro area. francine: because the creditors will give in? marco: no, i don't think so. grexit would be detrimental for the euro area. you destroy the argument that membership in the euro area must be considered permanent. you undermine the euro area possibility in the medium-term. balance and compromise are what we need. there is a material risk. greek citizens want to stay in the euro area. francine: yes if they want to stay, then they should say so. germany just wants this much to sign off and they have not been

getting this as yet. if they leave or there were some kind of default, what would it mean for the markets? is it chaos? or is it realization in the markets that things would be better off? marco: in the short-term, they have the tools to avoid massive contagion. they could accelerate how much they by every month at the ecb. the euro area will have to make the choice. you can survive, but you have to accelerate the integration process or the next time there is a recession, they worry about recession -- secession by the weaker countries. francine: what happens to euro-dollar the day after they leave? marco: the argument is that there is depreciation of the euro.

you could argue with the other way. that the euro area gets stronger. we have so much -- such a rise of populist parties now that that path is not an easy path. francine: thank you so much. here is a look at what else is on our radar. alibaba is planning to build china's version of netflix and hbo through a new service. it will be offered in about two months through alibaba's set-top box and televisions that carry its operating system. the new "jurassic park" movie has pulled in more than $200 million on its debut weekend. it earned $204.6 million across the u.s. and canada. only "the avengers" made more raking in $207.4 million in 2012.

this year prosperity air show kicks off today. -- this year's paris air show kicks off today. this morning boeing announced a $10.9 billion deal from garuda, indonesia. will china breakup the airbus? guy johnson is covering the paris air show for us. up next, we will be live in the middle east. saudi arabia opens its stock market to the foreign investors for the first time. ♪

francine: welcome to "the pulse." let's get more on what could be the defining week of the greek crisis. marco, thank you so much for sticking around. if you look at the big risks to europe, we talked about greece. you think they will stay in. marco: let's say it is more likely than not but there is substantial risk of them leaving. francine: what is the other big risk? we are sitting here in london. are you worried about a possible u.k. exit of the eu? when you look at the big unknowns what do you worry about the most?

marco: brexit is something we need to look for next year. before that we have other political events. we have the election in spain. we need to keep an eye on what is happening there. we have the rise of the middle, center middle party, which could help avoid tail risk in spain. maybe the risk is more of a fragmented government. i think there is a very, very minor risk of something happening like put them us winning the election -- podemos winning the election. francine: the ecb is putting so much firepower in greece. if something else negative happens, they just don't have the firepower to deal with it. they are maxed out on

ammunition. marco: i don't think there is a maximum for the central bank. it is all about political will. if there is agreement by the going counsel, they can do more. francine: all right. thank you so much marco. within the last hour, the saudi arabia has opened its stock market to foreign investors. it is part of efforts to diversify its economy away from oil. mark, how significant is today's news? mark: it is so significant. it is part of the diversification plan to move away from oil. saudi arabia defines 95% of its revenue from oil. this is the biggest middle east economy. this is the middle east's biggest stock market and the

most liquid. it is big, it matters, it is significant. just on size alone. it is bigger than all of the other gcc markets combined area do it is bigger than holland israel, south africa, russia. it has outperformed all of the other middle eastern stock markets. it has outperformed the s&p 500 the stoxx 600. it is also -- has also outperformed the emerging markets index. that matters because it aspires to be part of the emerging markets index, probably in two years, that is when an avalanche of money will come forth. the rules are barely restrictive, to put it politely.

only institutional investors with $500 billion -- $5 billion can invest. they could own up to 5% of the stock. they could own up to 10% of the entire stock market. they are not opening the barn door. saudi arabia likes to do things on a slow basis, francine. francine: how restricted are foreigners by the rules governing investing? you were mentioning the cap. how quickly will these be relaxed? mark: good question. as i said, there is the $5 billion cap four qfi's. the cma here has said that they could reduce the limit to $3 billion. i was speaking to a guest

earlier who said the reason why saudi arabia has put this cap in is it wants a certain quality of investor. this is a stock market that is 90% owned by retail investors by inviting in these wealthy institutional investors you take out the volatility in the market. this is a market that has gone from strength to strength. it has been a difficult few months for the new king. he succeeded the throne and has had to do with pressures domestically and externally. yemen, syria iran. don't forget the plunging price of oil. finances of saudi arabia have been stretched because of that. the new king has been getting rid of various princes promoting his son to third in line for the throne. this opening up of the saudi exchange this diversification

of the economy, does come at a pivotal time for saudi domestically and in the white or -- wider middle east landscape. francine: thank you so much. later this morning, mark joins us live from dubai for a special edition of "bloomberg agenda." that is at 11:00 a.m. london. also coming up, the saudi stock exchange opens up for trading today. we have an interview with the ceo. stay with the pulse -- "the pulse." ♪

francine: let's get back to the paris air show. we are joined from paris by angus kelly. great to have you on the program. his demand for new planes being impacted by prices? angus: could you repeat the question please? francine: i was asking whether lower fuel prices has an impact on your business? angus: on the fuel crisis. the fuel crisis has had a positive impact on the customers.

the fact that it has fallen so much in value has helped the cash flow of the airlines and has extended the life of older aircraft. we lease an airplane every 24 hours and we have seen an up taken demand -- uptick in demand for some of the older aircraft due to the fall in fuel. francine: how concerned are you about russia? angus: long-term russia is a very important market for aviation. it is the biggest country in the world by landmass. there is no alternative for ground-based transportation unlike the united states and europe. over the course of the last -- since the sanctions -- there has been a downturn in the russian market.

we have taken down our capacity. we took them out of russian carriers over the christmas in january period. what we have seen since the start of the year is that the numbers of passengers has rebounded. the number of passengers traveling in russia is more or less at the level it was at last year. that is the first step in some form of recovery. yields have to recover for the russian airlines. the ruble has strengthened. that is a key input for the russian carriers. so much of their revenue is local ruble based in so much of their cost is dollar-denominated. the strengthening of the ruble has been a key driver of the improved performance over the last few months. there is still a ways to go until the get back to where they were a couple of years ago. francine: this is your first paris air show. how is it looking in terms of leasing aircraft?

is there strong demand? aengus: there is strong demand. if we look around the world today, we see particular strength in the u.s. market -- the u.s. market is leading the world in profitability. over the last 20 years it that has not been the case, but the benefits of consolidation of the major airlines there have given them an element of pricing power and there is very strong demand for the lease markets. southeast asia has been a huge driver. with the amount of aircraft going into that market and the depreciating currencies, the demand has leveled off a bit. having said that, china is still a huge market and huge demand. is china slowing down? when you are in the airline business china particularly, you're focused is not on last

quarter's gdp or next quarter's gdp. the minimum period we are looking at is the next five years. we might have a delivery that goes out to 2029. recent movers in gdp have had no planning for the long-term of these airlines. south america, obviously brazil has had issues recently, but there is still reasonable demand down there. europe has been a place of surprise -- we have moved more planes than anywhere else. we are moving our stuff in the region. that is basically -- we are moving one airplane every 48 hours. francine: when the fed raises rates will it have an impact on your industry? aengus: could you just repeat the question?

francine: i was asking about the federal reserve in the u.s. -- when it raises rates, does it have an impact on the number of aircraft that will be least? aengus: the u.s. carriers? francine: i was asking about the fed the federal reserve. i'm really sorry. the line is pretty terrible. let me try to rephrase. the cost of debt right? once that rises, what impact does it have on your industry? aengus: to our interest rates? an increase in interest rates and our business what happens is that a rising rate environment is generally good news. a rising rate environment corresponds with an uptick in global gdp. ironically, a falling rate environment is generally the toughest environment for us because it is symptomatic in a

fall -- of a fall in global gdp. if you go back to 2009, that was the most difficult period for us, but the returns for our shareholders, our profitability, was at an all-time high in 2007, when rates were quite high. lease rates are a direct correlation of interest rates. as interest rates rise, lease rates go up with them lockstep. with rising interest rates, you generally see inflation in asset values. we have seen a good bit of inflation as interest rates rise. rising interest rates through better global gdp environment are fine for us. francine: thank you so much. thank you for bearing with us because of the technical noise. there is a lot of noise at the paris air show. here are the other top headlines.

greece is entering what could be a defining week after last-ditch negotiations the twin the government and creditors collapsed yesterday. the focus now shifts to thursday's eurogroup meeting as a potential make or break session. this year's paris air show kicks off today. sources say boeing and airbus are expected to win at least 220 new orders that will net at least $23 billion. saudi arabia has opened up the stock market to foreign investors -- it has been 90 minutes. the biggest economy in the middle east seeks to reduce its reliance on oil that accounts for 90% of governor --95% of government revenue. let's check in on the markets. jonathan: some good, old-fashioned risk aversion across the major asset classes.

the dax is down. some losses on the periphery, as well. the equity markets in mainland europe. you go further south and you go toward greece and that is where the tension, the nervousness is. we were heading for the biggest two-day loss since 2015 in january. the ase digs in. the greek national bank is down by 9.7%. this index was down as much a 16% at one point this morning. greek equities are taking some pain. if you look into the bond markets, yields in germany go lower. spreads are starting to blowout again. that spread right there in march -- we move below that and then

we balloon back out to 150 basis points. that is the situation in italy reflected in spain, as well. some tension in the bond market. that classic risk aversion. the fx market, i'm looking at euro-dollar, a session high. we come a little bit lower. we are down by 0.3%. what a week coming up. eurogroup meeting on thursday. the small matter of a fed meeting on wednesday evening. francine: thank you so much, john. the latest on the markets and what to watch out for for the rest of the week. today is the start of london's technology week. the u.k. capital has seen remarkable growth with the number of startups recently hitting billion-dollar valuations. here to put that in perspective is caroline hyde we have had quite a lot of london success

stories. caroline: u.k. success stories as well. there is a number crunching game going on to show off just how well the u.k. is doing. we have loads of billion dollar valuation companies. they are relatively new startups that now have billion dollar price tags. get this eight new ones in the last 12 months alone. the financial services are being disrupted by funding circle. e-commerce, consumer facing companies also. a boutique apparel seller has been coined as a billion-dollar. shazam, quite an old company, in fact -- it is now valued at over $1 billion. really interesting statistics coming out.

interestingly, we are seeing a little bit of a trend going on. it takes about nine years to get to a billion dollar valuation. it tends to be a consumer-focused company. francine: we still have a long way to go with silicon valley. caroline: i think that is it. many feel that london should not be trying to be silicon valley but something other than that. we are starting to see trends playing a bit of ketchup -- ca tch-up. we have managed to go 13 unicorns in the last 12 months. the flood of cash, the wall of money that has gone into the united states that has built things like airbnb uber is starting to trickle through to europe. if you put all of europe toss billion-dollar companies, they are still less in value than

apple and facebook but we are starting to see money get reinvested. we have seen initial share sales, and in day -- that feeds the rest of the ecosystem. bitcoins -- it coins other millionaires who can be investors. we are also seeing some of the big payers putting money in companies doing very well. one of them is the likes of index ventures. dst is doing very well. companies coming from silicon valley the likes of sequoia coming over. my last point is that they bet on a few more billion companies to come. francine: thank you.

today marks the opening of the saudi stock market. we are joined by the ceo of tadawul, adel al-ghamdi. francine: thank you for joining us. are there any plans to develop the bond markets? adel al-ghamdi: hi, thank you so much for happening me -- having me. i did not get the first question, actually. francine: you are opening the market to foreign investors. will you develop the bond markets? will you open them up to more foreign investors? adel: i think that is a great question. i think that the bond market has much development to be had as we go forward. i think the bond market has a prerequisite. we are looking to develop a sovereign yield curve in order

for our local issuers to be able to price that. i think the government deficit expected for this year may pose an economic opportunity or pivot point to allow our government to issue new sovereign government development bonds to create that yield curve. it is much-needed and i think this is an opportune time to put that into place. francine: what companies or industries do you think will attract significant foreign direct investment? adel: that is a very difficult question for me to answer, particularly because i am the ceo of the saudi stock exchange and anything i say may be perceived to be investment advice. we have 170 companies across 15 different sectors. that brings a lot of diversity to our potential foreign stakeholders who want to invest in saudi arabia.

you will not find that diversity in any country in the middle east. let me talk to you a little bit if you don't mind, francine about why foreign investors should be investing in our stockmarket. first of all from a macro point of view, saudi arabia is the 19th largest economy in the world. we are the third fastest growing economy in the g-20. we are expected to be growing at a rate of 3.1% per annum over the next five years. we represent 50% -- francine: we have looked at all of the positives and there are so many people that are thinking about it or a very excited about this opening up. do you think that regional instability and lower oil prices is a counter argument to all of the great things you are just talking about? there are also risks in investing in saudi, like any major market. adel: to be honest with you, i

think there are risks in any country however, you have to bear in mind that saudi arabia has been a stable country for decades on the economic and political front. you may have witnessed couple with the ascension of the new king, the quick succession planning we have had with the new generation of the royal family coming into place, that a lot of the speculation that has been had in western society about concerns about that have been mitigated quite quickly. our whole region -- francine: do you have a long-term plan? you are talking about the benefits of the region that is also going through a massive upheaval. do you have a long-term plan to relax the rules for investors? adel: i think what is important to bear in mind is that this is

our first step toward allowing direct foreign investment in our stockmarket. this is an evolution of various steps we have taken since 1999. the qualified for an investor framework is a living framework that will evolve over a long time. we look for our stakeholders to provide us with feedback and some of the difficulties they have witnessed through the framework and order for us to evolve the framework even further. this is the start and simply not the end. francine: are you in discussions with the msci to be included in their emerging markets index? adel: we have a very strong relationship with the msci. i had a conversation with them yesterday. i think inclusion into the msci emerging markets index is going to be fundamental for us as we go forward not because we are

looking for further foreign investment flows into the country, but because with foreign investment flows into the country, it rings -- brings with it the long-term value investors we are looking for who helped shape the direction of the companies that they invest in, which we hope will help us align ourselves better with global, international practices accelerate our convergence to higher standards of corporate governance, investor relations issuer disclosures and provide broader and more sophisticated research coverage. so yes. it is a goal for us. the goal is primarily to achieve the qualitative influences that i just described. francine: thank you so much for your time. adel al-ghamdi the ceo of saudi tadawul.

we will be live at the paris air show to talk to the ceo of airbus. that is coming up. ♪

francine: welcome back to "the pulse." here are the top headlines. shares and product have fallen to their lowest level. -- shares in parada have

fallen to their lowest level. alibaba is planning to build the chinese version of netflix and hbo that will be offered in about two months through their set-top box and smart televisions that carry its operating system. the new "jurassic park" movie have become the second film in history to pull in more than $200 million on its debut weekend. "jurassic world" earned $204.6 million. only "the avengers" made more raking in $207.4 million in 2012. we are just getting some live pictures from a greek official talking at the moment. let's bring those pictures up. i think that is in athens. we have been hearing from various greek officials things at the negotiating party of the greek government will meet in

about 45 minutes. we are getting a lot of greek news from various officials around europe. we are just hearing from the belgian finance minister saying that giving into greece would undermine the credibility. he is saying that greece and partners have to stick with their own agreements and he is saying that there is absolutely no way that they could renegotiate the structure. the greek debt relief is not on the table right now. that is according to the belgian finance minister. we will be keeping a close eye on that news conference and we will bring you any breaking news from officials around europe. coming up, we will be live at the paris air show to talk to the ceo of airbus. don't miss that interview. also, we will be heading to kiev to get the latest. you don't want to miss that. ♪

francine: welcome back to "the pulse." we have got a great interview coming away from the paris air show. but first, let's beat to guy johnson about how it has all been -- let's speak to guy johnson about how it has all

been so far. guy: we are just waiting for fabrice brégier the ceo of airbus. i can understand why he wants to talk to potential customers. the big question surrounding this airshow is how much more will demand be there for the big manufacturers like airbus and boeing? fuel prices are coming down. will airlines say, we can carry on without the latest all singing, all dancing fuel-efficient aircraft? that is what people are watching here. they are trying to figure whether the fed raised in -- raising rates the cost of the impact? it is pretty much the same themes we will talk about.

the big question for airbus concerns that thing. they are struggling to sell them. they are struggling to figure out what they are going to do next. the sales guy at airbus was talking about stretching it, making it a little bit bigger than it already is. is that going to be enough to satisfy the likes of tim clark, the ceo of everest? he would like to see airbus putting new engines on this airplane and making it more fuel-efficient. he said he will order to hundred of them if airbus does that. but the ceo of airbus group says he will not do it for one single customer. we will talk to tim clark tomorrow at the airshow and we will try to get his point of view on what needs to happen next. that is the big, overarching story area what is going to happen with fuel, what is going to happen with the cost of capital, what is going to happen

with the efficient planes that manufacturers are making? fran a lot going on. you kind of feel that maybe this is about as good as it gets for the big manufacturers like boeing and airbus. fabrice brégier could be coming around the corner any second now. we will wait and see whether he will join us. in the meantime, let's talk about the defense side of the businesses. we are watching very carefully the impact of the apartment of defense budget cuts that continue to ripple through the defense sector. it used to be that shows like this used to be dominated by the defense side and now they are very much dominated by the civil side. cost cutting is a big theme running through that sector, as well. anyway, we are waiting for fabrice brégier. we will bring alive or we will tape it and show the interview

later. francine: yes, we are looking forward to the interview. guy johnson is in paris. now, we are joined on the phone by ryan chilcote. you are in kiev. hans:ryan: there are a few things going on that are worth discussing with the ukrainian president. their forces have been shelled 100 times in the last 24 hours and 50 troops have been wounded. separatists are also claiming losses. you also have sanctions that will almost certainly be extended by the eu. this week, the big event is in st. petersburg russia, where vladimir putin will be willing international investors to poor investment back into the country. the ukrainian president what he would say to those business leaders considering that

decision. francine: later this week, you will be traveling to st. petersburg for the forum. ryan: we will get a decision from the bank of russia and about 40 minutes' time. the expectation is that the rate will be cut by 1%. inflation has come down a tad in russia but there is still concerned about the ruble and the ruble weakness contributing to inflation. the expectation is 1%. francine: ryan, thank you so much. the very latest from kiev. keep it right here on bloomberg tv. stay tuned for the "surveillance" team. you can follow me on twitter. guy johnson is covering the paris air show. the twitter question of the day is on china and whether it can really infiltrate the duopoly of airbus and boeing.

we know there is a news conference going on in athens. we will be watching that and we will also be watching anything that happens with dubai. mark barton is next. ♪

announcer: this is "bloomberg surveillance." tom: greece and its creditors move toward realism. time is running out. as deposits run out of greek banks, tsipras carries on the

back the dignity of his people. and a conversation with outgoing chief exec officer. we are live from our world headquarters in new york. it is monday, june 15. i'm tom king. joining me, brendan greeley. greece -- and you mentioned moving east? brendan: the possibility of a brigade moving into -- they do not know exactly where and it is not final yet, but somewhere from eastern europe, estonia. that means taking the line of defense, moving it through the gap and onto the other side. you are a cold war baby. tom: i am a cold war baby. richard haass will join us with an important perspective with the news out of europe, and out of libya as well. top