anna: this selloff in commodities continues from oil to grain. asian markets trade lower. second-quarter earnings are published a day early after an incorrect newspaper report. profit is up more than 50%. we speak the ceo on the numbers. a deal worth $40.5 billion. it could be announced as early as today. fiat chrysler gets hit with a record fine after allegedly

failing to complete safety recalls. the carmaker will now be monitored. welcome, good morning. i'm caroline hyde. he has some breaking news from ubs -- the bank is publishing second-quarter results early. let's get out to ryan, at the breaking news desk. ryan: $1.21 billion is the net income, 53% from what they did last year. that's better than what analysts were expecting. they expected something closer to $900 million, and the reason is private wealth management. sergio armani issued triumphant earnings today, saying he was very pleased with how things

were going. they cut costs and obviously revenue is coming in well. capital rates shows the company staying above target -- 14.4%. these numbers came out -- earnings came out -- over the weekend in the swiss newspaper and it left a lot of people confused. ubs this morning said it also misled people and that is why they moved their earnings up. it is kicking off a very busy week for the bank. caroline: thank you very much. more breaking news -- let's kick it off with the biggest discount airline bang in line with estimates in earnings. profit is up 25% for the carrier -- they say that the guidance will be an hundred $40 million to 920 million euros, but they

say it will be at the upper end of the guidance range. they could see another profit uplift later in the year. they say the second half tends toward the high-end so continuing to add to capacity and competition is on the downward trajectory. they say they are very cautious about weaker projects. we will be speaking to the ceo first, an interview you don't want to miss. breaking news keeps continuing -- check out phillips. this is health care, consumer electronics lighting. second-quarter earnings excluding some items come in at 501 million euros. that is more than the 450 million euros when he had been expecting. they are saying that comparable sales should go up some 3% and

they continue to see modest revenue growth in 2015. they say the separation of the process is correcting well, the fact that they are spinning off their lighting to focus on health care, particularly hospitals. they say the continued operation performance improvement in 2016 and again, we will have another interview -- we will speak to the phillips chief executive franz van houten., live from amsterdam. the market is not often the greatest start -- the bloomberg commodity impact is now at a 13 year low. let's see how it's weighing on asian trade. juliette we had the worst week

for equities this year and once again it is a downward trajectory. juliette: we are seeing a lot of weakness of the asian market, as you indicated. we have copper at six-year lows and gold at five-year lows. there is a lot of weakness coming through in most of the region. hang seng is down by almost 3%. the shanghai composite is down by 2.3%. those markets are coming back online and continuing their decline. we have inamnn hour's trade less. we have seen a big fall in health care stocks but it is interesting to note the australia picture because the australian market is heavily resourced. it is giving it a bit of a lift to the overall smp asx.

that is a picture of the australian mining and you can see some growth. looking at some of the other stocks we are watching in the region, there has been a lot of focus on the hang seng index down 9.6%. it is an electronics company down .9 .6% in the overnight and 12% at the moment. these are some of the non-commodity stocks that are also falling. caroline: thank you very much. sticking with that commodities the, because the slump is also see crude oil traded at a four-month well. -- low. we have our chief energy

correspondent joining us now -- talk about what this quarter has in store. we are expecting profit declines. javier: we are expecting a big decline and profitability. we will see numbers for bp shell down around 40%. but the quarter could be better because particularly the refinery sector he is doing very well in europe and in the united states, so good news for exxon mobil. the companies that have the production the downstream unit it will be very good for the big european oil companies. caroline: talk to us about the silver lining here. why did that managed to keep on outperforming despite the fact that we are seeing oil down? javier: well, oil is cheap. that can generate high margins. that we have also seen very good demand, consumers driving it up. demand has been contracting for

about 546 years. -- five or six years. we have seen some of the best demand numbers in 10 years and it has been very good news for the refineries. some of the refineries we have seen it is fantastic news for those companies who have kept investing in refining, because this is an area that only two or three years ago that is what they wanted to some. caroline: and now they are having to reverse assets. talk to us about the trading. javier: trading was very important in the first quarter because companies really make a profit on volatility of their markets. it probably won't be as important in the second order. trading could be added, maybe a couple hundred million dollars. caroline: and shell -- when we

are looking at shell, bp, these giants, and we see consolidation, looking at how that deal between bp and shell is going on, is it always about the deal, trying to support it? javier: it will be a lot about the bg, but it is also -- the market has been struggling to understand. bp has been lagging, and they are trying to tell the story. the company has been pinned down into a very high forecast for oil prices. caroline: $90? javier: exactly. they see rates of $50 going lower for longer. they have been really hammering down the share. so now the ceo and cfo are back into the market. we think $90 will be coming at

the end, and it makes sense at $70. . it will be interesting to see what the ceo has to say when shell is reporting on thursday. caroline: a big bat. -- b et. et. we will be speaking with him throughout the morning to discuss the price of oil and earningss season. the peaks on thursday hearing europe when 76 companies will report. they banks, big oil, and in the u.s., big tech. let's start with the banks. we had ubs this morning. we see deutsche bank on friday. wti trades in a bear market, and we get an update from the oil majors we just discussed. bp reports on tuesday, tookt ale on wednesday.

finally, grounded to twitter and facebook on tuesday and wednesday as they continue the run of disappointing news that we saw from apple, yahoo!, and microsoft. that brings us nicely into a tech view because we are asking our twitter question. is it time to buy or sell commodities stocks? do you feel that the oil prices sector will recover that we will see $90 a barrel once again? tweet me. coming up on "countdown," we speak to the phillips chief executive in the wake of the second quarter results announcement. stay with us. ♪

caroline: welcome back to "countdown."

6:14 here in london 7:14 in frankfurt. europe is stories you need to know. asian equity markets are trading lower this morning after a selloff in the commodities from oil. gold is trading near a five-year low end oil is hitting the bear market as more material supplies are outpacing demand. it was the worst week for global equities this year. ubs has published its second-quarter results earlier than scheduled after an incorrect report yesterday. net income came in at 1.20 one billion swiss francs -- 1.2 one billion swiss francs. ubs says the earnings were published early "due to misleading public information." tenor pharmaceuticals is nearing an agreement to buy allegan.

the $40.5 billion deal could be announced today. the acquisition would extend a wave of mergers that has swept the health care industry this year. let's look a little bit more at health care. what company -- one company is focusing on it, phillips releasing a set of numbers. joining us first is the groups chief executive, live from amsterdam. very good to see you this morning. talk is that the numbers -- it looks like you have beaten analyst estimates. sales are up almost 6 billion euros -- how much of it is foreign-currency helping you and how much of it is growth in the underlying business? frans: thank you. i am encouraged by the results of the second quarter, and of course, on a nominal base, you saw a fabulous sales growth of almost 20%. we usually look at the currency comparable sales growth, and

that was about 3.2%. so pretty good. i'm particularly happy with the sales growth of our health care business in north america. that was strongly recovering. also, we got a very nice deal in north america. i am pleased with but we have in the market on the sales side. i look at the profitability and we saw profitability improvement at all three sectors. in health care, and lighting, in consumer lifestyle. it is an encouraging step -- we still have a lot more to do as we move forward, but at least this one is done. caroline: do you feel that the desire from hospitals to keep on spending, to become more digital, is that going to continue into the next quarter? frans: well, the microeconomic

to environment globally is a bit uncertain. we have seen china's slowdown russia, brazil. these are important markets for us, so i can't say that it is uniform around the world. it is a much more mixed picture. hospitals are interested to partner with phillips because of our strategy where we want to help them drive productivity in the hospital with better outcomes for patients. the time is over where it is just an equipment game. in phillips, we have shifted to include software, health care informatics, and services. that makes us a better partner, so that together we can make the emergency room more efficient, for we can help to treat stroke patients faster. we are strong in minimally invasive surgery that helps

patients to recover faster if there is some thing wrong with the heart. for us it is an exciting place we have decided to focus on, with health technology. caroline: what about china. how bad could this become? frans: we are quite cautious about china. we have seen a significant slowdown in our health care business, but also affects and lighting. consumer spending is still ok but slower than what it was before. it is an uncertain area. we remains strongly committed to the country because it is the second largest economy in the world but we have to reckon with slower growth going forward. caroline: and what about europe? you said you saw fragile recovery -- how about second quarter and the rest of the year? are you seeing a continued

uptick? frans: the second quarter in europe was a mixed picture. some european countries did pretty well, but we saw weakness in northern european zones. i think the recovery in europe is not yet strong and there are many moving pieces in the geopolitical front. for us, that is a wait and see. of course internally, we remain focused on what we call the self-help story. there is a lot of opportunity and phillips to drive better performance. we are strongly focused on our quality management system and driving productivity and to bringing out exciting, new innovation. caroline: we have been looking at your lighting -- the business you decided to spin off while you are focusing on health care instead -- and you increased the cost, sticking to when it will conclude. why do you up the costs?

do you still think this is the best strategy? frans: we are now halfway to separation, and we are on schedule and has made good progress. we know now exactly where every employee will sit on the lighting side and health tech side. it also means we have better visibility on the separation cost. 42015, we have lowered -- for 20015, we have lowered expectations. we are necessarily increasing it, just with better visibility. it is still true that there are a lot of moving parts that affect the reported line that creates the uncertainty. we remain very focused on driving operational results improvement. maybe while i am on lighting, a

few highlights -- a big, important deal with carfour. they are using are leading for shops and that provides shoppers with the navigation in the shop with location-based services. i'm very pleased with it. caroline: sounding upbeat -- it's wonderful to have you. frans van houten, chief executive of philips from amsterdam. let's have a look at more health care and m&a. teva is looking to buy allegan's -- let's get more with ryan chilcote. it's a big number, and it could also be the death of one deal. ryan:tev teva wants to buy allegan's generic drugs is this and it is already the largest maker of generics.

it would get even bigger with this, and at the same time it would allow them to pursue what it appears to be more interested in, which is the branded drugs business. they have higher profit margins and they are to make botox so this might be a win for both sides. it actually has an opportunity of happening. this has been a rather protracted battle so far, which has yielded nothing, and the price could be almost exactly what teva was prepared to pay for mylan. an interesting -- i don't know if it's a consolation prize, because some people are reporting that this is in fact what teva wanted from the get-go, that they wanted the generic drugs business as long ago as last year. this might be a surprise move. caroline: give us a sense of how

much m&a is in the air. it's a phenomenal amount we seen. ryan: this remains to be seen that we might hear an announcement as early as today. that would mean that the value of an end day in the pharma sector is closing push close to a quarter million dollars. all of last year in pharma we had more than $180 billion worth of mergers. that in itself was a huge number. a pretty extraordinary -- it brings everyone up to do different stuff. larrikin can go on with different drugs the result of its own merger when activists bought it and rebranded it. true to the form of the merger mania that we are in there was

a bolt on acquisition to the tune of about half $1 billion. caroline: thanks, ryan chilcote with the updates on m&a. let's talk economy -- let's talk a greece. the cash-strapped government is set to begin talks with creditors this week. capital controls in the shutdown in the country's financial markets in terms of fifth week. hans nichols is in berlin. hans, great to see back. next deadline -- hans: it doesn't look like this august 20 deadline, with 5.2 million is owed to the ecb. there's a lot of talk right now about bridge financing but that's where the skirmishes s is starting. they arty got 7 billion to make

the imf payment -- the question is will the athens government need to take prior action? will they need to vote on things before they get a second bailout? they are going to possibly need that, because talks are getting off to a slow start. there has been a bit of back and forth, a delay on what sort of access the troika the creditors in athens -- will they have full access to all the ministries? health, labor? will they get all the clean data? talks haven't started. this is according to two reasons -- want, they aren't being given the access to the ministry that they need. two creditors haven't firmed a position on what they need to do what athens needs to do. caroline: the ecb is still not wanting to see an opening of financial markets quite yet. hans nichols will bring us more on that throughout the morning.

coming up on "countdown," a gauge of how greece's tourism sector has been affected by the crisis. more on earnings. stay tuned. ♪

caroline: it is six goal and 30 a.m. here in london, 7:30 in brussels, and here are the top stories. c at chrysler has agreed to a record $105 million penalty with the u.s. department of transportation. the announcement follows an investigation into whether the carmaker delayed on acting with safety defects. the company has agreed to buy back more than half a million vehicles. it could cause a loss of control. the great government is said to speak with creditors about a new bailout agreement. the ecb, imf, and euro

commission are set to begin talks tomorrow. the discussions will be about many policies greece needs to return as much as 86 billion euros. ryanair has reported a 25% increase in fourth-quarter earnings. the company says that it has strong bookings over the summer. the expected earnings will be at the higher end of 940 million. with more on that story is that ben katz. they aren't fully upgrading their gardens. ben: they have given the indication that it will be close to the top and closer to 970 million.

that is led by interest in profits. interesting is that they decreased about 4% over the period and that is only related to oil prices. they have managed to keep up the load factors, which are at 92% which is very high for . compare that with a 7% drop in euro costs and they have managed to maintain a 25% increase. caroline: how worried should we be, though, by some of the statements? they are very cautious about the fed in the second half of the year, the fact that we may see that deteriorating. how much of this is capacity driven? ben: it's a combination of all those. the winter months are always more difficult for the airlines. four people travel in summer. what they are seeing now is that they are more cautious and they are seeing themselves taking

themselves to ground fewer planes and open new routes to israel, germany, sweden. that adds capacity, which might lower prices. but with the drop in the oil price, competitors like easyjet are expecting it. they are expecting to drop between -4% and -8%. caroline: it's an interesting movie been doing and grace. it seems as though -- move they have been doing in greece. ben: we had the ceo a few months ago saying that this was a big push for them. they are trying to get toward customer service where customers feel welcome on the planes which may be hasn't been the history of ryanair in the

past. they initially said they were going to get free flights but they ended up offering flights for just five euros. caroline: and in cash. ben: exactly. not bad. caroline: it has been great having you talk us through the numbers -- ben katz. we will be speaking to the cfo of ryanair later. oil is trading in a bear market so let's get more on how the commodities slump is playing out in global markets. also with us is paul mcnamara. wonderful to have you on the show, paul. give us a sense of where you are seeing some of the commodities affecting the emerging markets. is this all a china play, and which of the countries are exposed when it comes to the selloff, not only an oil but

across the board? paul: it is a commodity story. oil, less so. china has 10% of global oil but 90% of iron and coal. brazil is a huge oil exporter -- excuse me, huge iron exporter. soybeans out of argentina, all of south america is somewhere we want to look. also gold and coal out of south africa. around the world -- it is easier come in a way, to talk about the countries which are less vulnerable, which i think is india, central europe, mexico. these are the countries which manufactured goods, and they are seeing a big cost improvement. the oil price dropping is a huge deal for manufacturing plants, mexico.

but across the board, i think brazil is the one we have seen the most -- at the same time we haven't seen the price of iron dropping and the government back down on some reasonably orthodox fiscal plans. the market got hammered, and what interesting is we are seeing the return of the vigilantes, saying that the government has been running loose fiscal monitoring policy across the world with no penalty. then suddenly we saw the brazilian finance minister a 1% gdp loosening, and immediately rates blowup 70 basis points across the curve in brazil. emerging market is an exciting area to be in but it is one where you have to tread carefully. caroline: you've been thinking that brazil is somewhere you like. ben: the thing aboutpaul: the thing about

brazil as they are running very tight money. it is one of the few were commodity importers where the currency counters on the good path. we still think it is 13.5% -- you will make money out of brazil, but your payoff date is pushed off into the future. caroline: give us a quick sense on china. we are worrying about economic growth, corporate profits sliding in a little bit. our u.s. worried as the market is about china? -- our u.s. worried as the market is about china? paul: -- the credit growth has to come down in china. it is at 240%, which is huge. no country at that income level has ever had that much debt. credit growth has to come down growth has to come down.

the equity market is interesting, but it's a much smaller story -- this is about credit flowing. chinese growth and investment are going to be lower for some time to come and that's not great for commodity exporters. caroline: it doesn't seem to be setting off and and a quite yet. -- setting off an end a quite m&a quite yet. pearson is moved close to another exit announcing plans to dispose of its 50% stake in "the economist" magazine. let's get more on manual that el bagor. it seems to be disposing of assets. manuel: good morning. first it was the ft and now they are selling their 50% stake in the economy as they tried to shift mochas more and more on

education. they are talking about some potential the most logical buyer for this asset being the owners the families, the trustees. we will see who ends up buying the stake, of the families have a good chance. caroline: more and and a to m&a to come? manuel: it's possible. some deals and some interesting brands are interested, negotiating to merge with revenues of media groups. maybe it is a good trigger for other organizations to speed up. caroline: i know that paul looks at israel -- you talked about

the deal with teva. this is an israeli company looking at howt allegan. manuel: the industry just has an explosion -- it's crazy. the number of deals in the last two years. as you mentioned teva was trying to buy a mileylan. you are following that for a few months and now with that they have found allegan. they are trying to bring the business, trying to sell generics for $1 billion in sales -- a pretty good deal. maybe just taking on the shape of a more innovative product. caroline: as an investment structure -- i know you're

more on the credit side of things -- but do you look at corporate optimism? paul: yes, and also evaluations. that's part of what keeps the economy moving, the payoff of low interest rates. one of the things we were curious about was why such huge prices paid. really, from what i've read, the valuation was very aggressive and we were curious about why that was. manuel: i think it comes down to the brand. especially for japanese buyers, japanese companies trying desperately to diversify. this is perfect to get into europe, to get more exposure in the u.s. as well. i think they were going to play keen on whatever talk. -- took. caroline: interesting consider

the effects, given that the japanese yen is so weak. paul: and money coming off shore from japan. caroline: we will keep tracking this. always great to have you on the show. you will be staying with us paul. that brings us to the question -- i wanted to keep the focus on commodities and whether you are a buyer or seller. tweet me. is it time to buy commodity stocks or sell? let me know. after the break, we will be talking about what to expect from oil companies due to report later this week and experts in the energy equities. of course, we will be keeping the flood of earnings for you. ubs came out earlier today, a day early. we will speak to the chief executive, and you don't want to miss it. ♪

caroline: welcome back. 6:45 here in london. here the top stories you need. the at chrysler agree -- fiat chrysler agreed to a $105 million penalty. the announcement follows an investigation into whether the carmaker delayed acting on safety defects. the company has also agreed to buy back more than half a million vehicles -- mostly pickups -- whose defective parts could cause a loss of control. the greek government is set to begin talks with creditors on a new bailout agreement. the ecb, imf, and euro commissions will begin negotiations tomorrow. they will discuss the many policies greece needs to implement to get emergency loans. it comes as capital controls and

the shutdown of the financial markets going to the fifth week. asian equity markets are trading lower this morning as a selloff in commodities from oil and green deep in. gold is trading at a five-year low and oil is in a bear market. this follows the work we -- the worst week for global equities this year. joining us now to talk about the commodities market -- in particular about oil -- is the head of equities, as well as paul mcnamara. wonderful to have you on with us. you were already been up for bp shell, total. it is going to be profit down because with oil prices are lower. what do you want to see? richard: what it would be nice to see is some sort of reaction from the companies and what they think. clearly the market has its own perspective but to listen to

the practitioners and to find out exactly where the supply and demand chain is would be interesting. it will be on a macro country level but the companies themselves tend to be led by the market price of oil rather than to give their own views. that would be a nice change from normal, just to have their insight. caroline: they are seeing a bit of disparity -- bp is saying it will be lower, and shall desperately trying to by bg. how much will this dictate your decision to buy or sell oil stocks this week? is it on the earnings or is it your view of where it all goes? richard: clearly, the earnings are important. they are in slightly different places at the moment that i do think the deepwater -- for bp

are they turning the corner? we had the latest settlement in terms of the gulf $18 billion perfectly manageable. but in terms of bp and shell the main point of interest will be the something the ceos have been quite adamant about. when you have shell paying 6% 6.4%, clearly the traction is there for a wider current interest rate. again, any comments on the dividend will be good. caroline: paul, you are looking at emerging markets -- how much does your investment think oil prices will be affected? paul: it's hugely important for a number of emerging markets -- china doesn't have much else going on besides commodities. but venezuela, malaysia -- even

mexico, where it is much less important, but still matters on the fiscal side. it was curious because mexico was trying to auction some of its oilfields, and the auctions went rather disappointingly. are the oil companies really positioning themselves for a long pure of waiting for recovery -- a long period of waiting for recovery? richard: i think they have to. as time goes on it gets harder to extract. in the same ways that opec countries are currently positioning themselves for a longer-term $50 a barrel, and similarly, we would like to hear from the companies exactly what their strategies are. caroline: strategy is interesting -- when it comes to m&a, teva and allegan m&a

could force bpi to be a buyer or target. richard: well, shell is certainly doing something bright to consume an acquisition at this size. in terms of bp, that is an interesting one. it has been generally accepted so far that it's rather too much of a buy. having said that, the latest settlement takes away a great deal of legal uncertainties which could put them back into play, whether they want to come out of the gulf of mexico and go straight into acquisition -- it's less likely. caroline: in terms of the earnings bright spots when you are suddenly confronted with a barrage of numbers that will land on our plate, what do you think is going to be the key

dictator? willoughby all about the dividend? richard: i think that will be the main headline. clearly on a quarter by quarter basis there shouldn't be too many shocks. that kind of discipline, the ability to maintain it it is a major attraction for those two stocks. particularly where we are in terms of interest rates. the ceos are being insistent that they will maintain that dividend. caroline: there is still a buy? our question of the day -- are commodities a bio resell -- a bu y or a sell. richard: as with any investor it depends on your attitude for risk. in terms of any commodity, you

are looking at a shorter-term story. in terms of oil, if any of those are going to be well-placed for any potential uptick it will be the likes of bp and shell. caroline: in terms of countries that we should be looking to benefit from oil prices being so low, where would be a buy? paul: the standout as venezuela just because it's such a disaster at current levels. it is priced at recovery values -- you have queues industries that disrupt supplies in the economy. an awful lot of things have come off the bottom. obviously there is russia with a stronger oil price, where they might start wars because that generates political instability. the thing that comes through is that these countries are not prepared -- the companies seem to be better prepared. the countries are not prepared for a long period of low oil prices. they have economies -- when

there is in that spirit to dole out, things get very unstable. in terms of if you are bearish, the countries you want to avoid it -- but if you are bullish there is more upside on the countries. caroline: always a glass half-empty. [laughter] wonderful to be having you. thank you for coming. now let's take a closer look at the other top stories on bloomberg.com. we will be looking across the board at some of the key issues and fascinating stories. oil is one of them, that we will also be looking at stakes and whether or not you should be concerned. tim coulter joins us to pick through the best of bloomberg business.

tim, first of all we've been talking about oil -- you have a great story about oil. tim: we look at the data to see if the futures trading commission -- the data shows that hedge funds, people can't get away from oil fast enough. the problem is supply, supply supply -- there's too much of it. caroline: adding again last week, were they? tim: yeah, and people have been saying the market should balance itself, but it hasn't. caroline: meanwhile, you are looking at -- talk us through this particular story? trash? tim: just like oil, there is too much trash, unfortunately -- this is in mumbai. it's a fascinating story, and it tells a larger story about what are we going to do with the stuff we throw away. we throw away 11,000 metric tons

of trash every day and what do we do with it? it takes an interesting look at mumbai, and how they fill up this size of central park just with trash. this land -- there's not enough housing in mumbai and if they were to develop it it would be worth $4 billion. caroline: it's certainly a country you keep an eye on. paul: india is one of the places set to benefit when oil goes down. they manufacture goods and services so they would be doing better than other emerging markets. india is something we are positive on, but if you visit their it is fairly clear that this needs to be dealt with. caroline: lastly, what about -- china? tim: another interesting story

about how the luxury goods company are trying to battle on. people would see a $50 handbag and know it is fake but now people are selling them for $80,000 online. ♪

caroline: ubs a second-quarter earnings are published a day early. after an incorrect news report. it is a beat. we speak to the chief executive on the numbers. equities slump as monkeys deep -- as commodities deepens. teva is set to buy. to create a maggot drug giant -- to create a mega-drug giant as early as today. a failing to complete safety recall. the carmaker will be monitored.

♪ welcome to count down. i am caroline hyde. ubs our top story. reported second-quarter profit. profit up. the bank published the results of early, after they were leaked incorrectly over the weekend. let us head to zurich. jeffrey is standing by for us. tell us about the next early release. jeffrey: care desk caroline connan can you hear me -- caroline: can you hear me, jeffrey? jeffrey: yes.

it seems that ubs was surprised by a report in the local newspapers that claimed to have the numbers for ubs's second-quarter. it turns out the numbers were wrong. that is forced ubs to publish their numbers today. -- that has forced ubs to publish their numbers today. kirilenko -- caroline: let's break them down. jeffrey: it seems the results were driven by wealth management. it wasn't the operational excellence. a not repeated litigation charge from last year. they had a fine for tax matters in germany. that was not repeated this year. we mustn't forget that ubs had

to post a bail of more than a billion euros in france. for helping people to evade taxes. there is always the danger that these charges will make a comeback. caroline: it is great to have you on. joining us from zurich, talking about wealth management. its best quarter since 2009. coming up, sergio ermotti will be joining us right here on bloomberg. he will be speak to manus cranny. on to more earnings, ryanair's forced -- mine is first fiscal quarte ryanair's first fiscal quarter. paul not macnair -- paul mcnamara is still joining us.

25% growth in profit. tell us about the bookings. how are we pressing? >> we are 4% ahead. as a result of that, we are more optimistic. we are guiding average fair. kirilenko -- caroline: give us a sense of the winter. it's in this capacity driven? neil: we're still he -- we're steadily growing. this winter, we are going 15%. we think in the kind of fuel environment without too much hedging, we may see a competitor

reaction. we have limited visibility at this time of year. we do 10% -- we have 10% of our bookings in place. with limited visibility we expect to be cautious until winter. might as a minus four in our guidance range. we're moving to the upper end. we will be close to 970 billion in gross profits this year. -- 970 million and gross profits this year. there is a lot of unknowns. we are not seeing a huge reaction yet. with the lack of visibility that everybody has, people who have not viewed -- who do not have --

as moved to next year, we have strong field hedging. up to 70%. that is under $66 a barrel, compares favorably to the $91 per barrel that we are heading toward the current year. caroline: paul has been discussing the oil issues. how much is oil -- you have been in outlined some of the figures. neil: we were down 7% in the first quarter on oil alone. ex fuel costs at a time when we are growing -- we're looking at 3% cost. we think is a pretty good performance. caroline: ryan -- paul, ryanair is the -- paul, you're the kind

of person that ryanair has been targeting. paul gosar -- paul: i think the speciality. 18 miles from big places. neil: not anymore. paul: the stereotype. you have: moving into israel. -- you have poland moving into israel. neil: we been growing extensively in the major airports around europe. lisbon and portugal. we will continue to add a primary airports and we will wrap up this winter. airports will be launched last winter. there is no reason you shouldn't -- there's no reason you should not be flying with us.

caroline: you said turkey is in the midterm for you. where is the low hanging fruit jackal neil: -- low hanging fruit? no: -- neil: we are bringing in a lot of opportunities in airports alike. the biggest difficulty is a shortage of aircraft. we can fill more aircraft than we currently have. a lot of opportunities. we were the leaders in costs for many years. we are getting better program well ahead of everybody else. the airports are aware of capacity being pulled out of the market. they are very keen with the growth that ryanair can bring.

caroline: what about the u.k. where there is ongoing debate on which airport we expand? neil: we have been clear. we think there's enough capacity and growth capacity for all three major airports. if you look at stands, it is probably the largest connecting airport for european flights in the london market. it is groomed to grow there. caroline: give us a sense of where you are seeing concerns on pickups? the ceo of philips says he is worried about the eurozone. a lot of good numbers coming from southern europe. you made a big play on greece. you offered three flights and greece. what are you seeing now?

neil: we have an average fair of 145 euro. greece, we feel it is the right thing to do to keep the flying through the economy. we want to be there. we think it is a great and would market. clearly 30% off we've offered for domestic flights -- 30% off we've offered for international flights -- the u.k. is a big part of our growing extensively. germany we have a 5% market share. we expect to grow 20% over the next five years or so. it is a huge opportunity over

the next number of years. caroline: your pretty convinced that the eurozone economy is one of the gross trajectories. neil: i think there are opportunities for companies like ourselves. you got the right costs and fares, you can survive in a week or strong economy. we've been staying much more confident in the last year. there were some countries the never slow down. caroline: wonderful having you on. thank you for joining us. he is ryanair's see -- he is ryanair's cfo. stay with us. earning season is in falsely. it takes on thursday here in your. 76 of the stock 600 companies report. we start with the bank. that start with the banks. barclays -- looking at oil, the

bti trades in a bear market. we get updates from the oil majors. in the u.s. on friday, we get exxon. round two from the titans opec. will they continue the run of disappointing you? we are going to amount to make all of those things into one -- we're going to amount to mate all of those things into one. is it time to buy or sell commodities stock? tweet me. coming up, ubs beats estimates. was been to chief executive sergio ermotti right here. ♪

caroline: welcome back. it is 7:15 in london. 8:15 in frankfurt. he are some of the top stories you need to know. asian equity markets are trading lower as commodities from oils to grains deepens. oil is in a bear market. concerns ball material supplies are outpacing demand. that's concerned raw materials plans -- concerns raw materials are outpacing demand. -- incorrect report on the figures. net income came in at 1.2 one billion francs. beating analysts at best you just says the earnings were published early due to a misleading -- the $40.5 billion deal could be announced as early as today. the acquisition could extend a

wave of mergers. let's get more on that story now , paul mcnamara is still with us. our again -- allergen suddenly -- >> what does it mean for them? it lets them get out of this protracted public very ugly battle which they have been engaged in for the last couple of months. there is his whole roundabout going on. when we had this story on friday , everybody was saying this is a great time for them to be doing it they can command the significant premium.

the ceo of our again who is a great deal making guy, he did a lot of deals. it gives them a chance to move away from generic. he can focus on branded drugs. caroline: give us the sense of what it means. ruth: it gives -- i think it gives -- it has been a lot more friendly compared to what is been going on. he has said there is an interest. they are pursuing another company. they do want to do a deal. now they are thinking, if there are all these problems, why

don't we look for an acquisition target that is easier? caroline: paul, let us talk about israel. talk to us about the economy. not a commodity play. paul: they are in the right place. a lot of pick -- many people there would object to be called an emerging market -- would object to being called an emerging market. they're importing the stuff that is cheapening up. they are exporting to developed countries, europe, japan, u.s. u.k. which are beginning to recover. they are in a sweet spot. they are not the only country out there but it is a good example, because they have very different economic compositions. they are in the right part of the global economy right now. enjoying the economy and benefits.

caroline: have clash that's they have cash to splash. you think pharmaceutical companies are going to be continuing this in normal -- this enormous deals? wrote: 880 billion -- ruth: 880 billion for this year. it could be mostly cash. finance markets are doing well for all of these companies. could we see more? definitely. caroline: we saw you talking to all of your sources and dealmakers. any of them worried about what is happening in china about mobile growth? are they worried about the fed rates? what is playing into these people's viewpoints? ruth: it's interesting you mention china, when greece was at his pink, we were asking

people if they were slightly more worried about china? we don't see a place a much into dealmaking. everybody speak to says we are really busy. we're working on the coming months. a lot of these companies, we thought there would be no deals, and then shall bp happened. caroline: across the board we can see billions inc. spent. -- billions being spent. paul, we are expecting more optimistic rumblings that they might be looking into it for the rest of the year. gdp figures coming out of the u.s.. how much does this play into the emerging markets? paul: the two things that matter at the moment -- mobile

liquidity and commodity prices. we are sure that community -- the commodities are going to be coming back screaming soon. down here presents challenges. we are fine and lesbian inflation. -- we are fine unless we get inflation. if we find that the federal reserve is on the warpath and this -- the sort of thing that would turn that around. we need to see inflation. you do not get inflation without rapid wage rises. 25 here or there is not the issue. the issue is if there is a big shot coming. caroline: with david joining us. our to bring you breaking news. were talking about china, saying hang index falling over concerns

about corporate profits. the month of june down 1.3%. the profits beating into the china economy is slowing down. the shanghai composite falling 5% this morning. let's bring it back to corporate profits. let's look at ubs, reporting its second-quarter profits. they beat estimates here it ubs reporter, manus cranny we have usually sent you off, but you got the chief executive on the line. manus: some ceos would go to any lengths to not be in the room. good morning, sergio. how are you doing? it is good to have you on the phone. sergio: the morning, manus. -- good morning, manus. manus: you read the numbers. up 53% wealth management. oil doing nice.

heise -- how sustainable are these numbers? sergio: you look back at our track record in the last three years, it looks like the trend is clear. look at the first up of 2015, compared to 2012, we had a 14% growth in our wealth management business. i am confident that both our focus on managing pretax profits and serving our clients and fundamental underlying growth for wealth management makes me competent -- xp confident about the future -- makes me confident about the future. manus: your business is focused on ultra high net worth in asia. when we see in china so far

should it be a cause of concern for us in terms of you noting -- in terms of you building in that geography? sergio: you should be concerned if you're not noting our business there. it has been growing double digits for the last years. we have been in asia for 50 years. our presence is strategic and long-term. the prospects in asia and china are very important. you should look at the opening of onshore markets in the near future. it's really itching for growth. manus: last quarter, you explained there are certain deposits within ubs which are not profitable. take your money and put it elsewhere. that is reflected in these numbers. who is the group of banks? is about the bell? is a credit squeeze?

-- is it credit squeeze suisse? cisco i can it does sergio: i can tell you didn't go to -- sergio: i can tell you didn't go to banks. opportunities in terms of capital liquidity requirements. i am pleased we managed to identify solutions for two thirds. we found different ways for our clients to invest without creating a capital problem for the bank. other clients decided to take advantage of better conditions. overall, the majority of clients were not relationships that were

profitable overall. manus: no matter what the regulator might ask, my question is does or come a point i have built enough capital. i am a confident ceo. my job is to return to the shareholder. have you reached that point? can shareholders expect an additional revision of the dividend policy? sergio: yes. our capital return policy is clear. if we are above 30%, we are committed to return at least 50% of net profit. we have to look at capital in different ways. we're looking at leverage as the other element. we're looking at stress.

we're looking from a cyclical standpoint what we can use in terms of regulation. any litigation charges that we may need to take. when we have those data, we make an assessment about capital returns. we deliver at least 50% of net profits to shareholders. manus: what about that special dividend? when will it be paid? sergio: it will happen late this quarter. manus: great. out get my money -- i will get my money. to jen jian that's two gmt on -- tidjane thiam around the corner. how does this work for you? are your heads of divisions seeing

lots of people coming to work for you. what is the opportunity? how can you see this as an opportunity when the rest of the landscape is in change? sergio: we are pleased that we can take advantage of being a mover. we can concentrate on our clients business. we're working on improvement -- on improving our efficiency and effectiveness on how we operate. we are making the necessary investments for growth. we want to continue to expand our business. manus: are you ahead in this game? the rest of them are about a year behind you. what specific advantage in terms of pricing for new business? sergio: we are focused on serving our clients.

we're's -- where focused on serving other aspects of our growth path and plans? we can focus more into the future, rather than looking backwards. it is a challenging environment for everybody. we are not complacent. we stay focused, although we have to recognize having moved third year was an advantage. manus: we leave it there. thank you for joining us. sergio ermotti, ceo of ubs. caroline? caroline: fantastic interview. fantastic to hear him saying they will be paying out profits. it is 7:30 here in london. a: 30, if you are in frankfurt. here are some of the stories you need to know. fiat-chrysler has agreed to a record 105 million dollar

penalty. an announcement follows after the investigation. the company has agreed to buy back more than a half million vehicles. suspension parts could cause a loss of control. the greek parliament is set to begin talks. they are due to begin the negotiation for -- with their great counterparts by tomorrow. the shutdown of the financial markets enters a fifth week. minor has reported a 25% increase in third-quarter earnings -- ryanair has reported a 25% increase in third-quarter earnings. -- first-quarter earnings.

we are just under half hour away from european market open. brian is that the market desk. -- ryan is that the market desk. brian: a lot it into two starting with oil. take a look at this. oil trading below 55 a barrel. 54 76 -- 54.76. the rig count in the united states pulling oil out of the ground, actually rose to the third week in the row. people talking about perhaps this supply will continue. oil producers are showing their resilience. that is an interesting thing to watch. we have seen oil below $55 a barrel twice this year. we will have to see if it remains. is this the new normal? that is the question everyone will be asking themselves.

gold showing a little bit of resilience the itself -- resilience itself. it has come back a bit. china you want to pay attention to the shanghai composite. down by 5.5%. that is the biggest fall in chinese stock since the chinese government intervened with that intervened on the stock market there. weighing on equity futures. looking at your stock 50 -- looking at the euro stoxx 50. they start trading in little less than a half hour. airline? caroline: -- caroline? caroline: talking about commodities there. it is a big week for all oil. crude trade at a form of low down by 2.9%. joining us, javier blasts.

what does this quarter bring up? profits are going to be down. javier: they're going to be down for the last year. we're going to see the majors beating shale. down between 40% to 50%. it will be a bit blood -- a bit better. big oil in europe could be up. caroline: give us a sense where the bright spots might be. it is all about refining. javier: it is all about refining. we are talking down. we're selling down the refineries. it was seen as the ugly sector of oil companies. all that was important was production. money is very high for refined products particular gasoline here in europe. we could see an increase in

profitability in the first three month of the year. caroline k tell me about -- caroline: tell me about trading. javier: within -- we think trading profits can be down, because markets will be nearly as volatile. trading would be together with refineries. caroline: an interesting theme is people talking about consolidation. whether we are going to see more of these oil majors fight with each other as we see oil prices at record lows. what can we do in this situation? shell has been eyeing a bg group. shall, what can we expect? javier: this deal with bg and certainly the ceo is going to have to make an effort to

communicate how this is going to look. since the deal was announced, the market has been punished. these shares are down. it is important because the markets have this view that the bg shall deal is about high oil prices. -- the bg shell deal is about high oil prices. he needs to find in his methods with saying yes, we think the boy -- the oil is going to go up to $93. we'll see if the market delivers. caroline: shares are struggling but what people want is the dividend. javier: it is fantastic. you can get shale dividend. that is the question if the dividend can be sustained.

nearly 7%. that is a dividend that we had not seen in shale and every -- and nearly -- in nearly 20 years. 7% looks pretty good to me. investors are not buying into it, because the big question is if the dividend can be the same. yes we can. we can cap. we can sell more assets -- we can cap. we can sell more assets. killing: it is always great to have you on. -- caroline: it is always great having you on. let's turn our attention to economics. greece never far from our minds. the government is set to begin talks with creditors on a bailout agreement this week.

the banks shut down into is a fifth week. hans nichols join us that's hans nichols joins us. -- hans nichols joins us. hans: it is the august payment to the ecb that is drawing a lot of talks. it doesn't look like it is going to happen. the talks have been delayed. these are the talks on the 86 billion. the troika is meeting in athens. they have not gotten access to a lot of their key ministries that they need to have access to. what we have, just to give you an overview, you have a delayed that is being driven by this question of what you have an additional bridge loan? we you get them past that august 20 date?

secondly, it doesn't look like the creditors are given full access to the buildings. they're asking to have access to. it is those two things that are slowing down the process. like it is going to get started later this week. it does not look like the athens government is playing with the intent to have a quick and easy compromise. caroline: not quick, not easy. talk to us about whether we will see make -- ch opening of the exchange. hans: there was a proposal to open up the exchange with no restrictions. that was rejected by the european central bank, according to a spokesman. what we have is a ministerial decree coming out of athens. it would include some restrictions on trading, namely safeguarding the banks that

could -- that could take place on the exchange. caroline, in the -- caroline and does not look like it will open today. the one-month anniversary of capital controls. it has been shut down for more than a month. this is what needs to happen to get things open again. caroline: thank you very much indeed. now, let us get a quick check on the shanghai composite. i'll just show you what is happening across the board. the equities selloff happening in asia. this chart telling his 5.4%. that headline saying this is been the worst selloff on the shanghai composite in six months. clearly, china is still feeling the pain. the numbers out of china shows the industrial profits down.

concerns that the second-biggest economy in the world is going down -- is slowing down. they are still ending for 7% overall. many feel with the commodity selloff, this is adding to the pain. this is why we are seeing oil and metal down. china is such a big commander of these commodities that's is such a big demand or of these commodities -- china is such a big demander of these commodities. i want to check in on the data that will shape up this week. tuesday, u.k. gdp for the second quarter. economists are predicting a 0.7%. a bit of a growth. u.k. recovery on track. wednesday, eyes on the fence. -- eyes on the feds.

the july meeting comes amidst a consensus that they will raise rates. 50% of economists believe so. thursday, we get the u.s. gdp readings. what rebound after a faltering third quarters -- third quarter? coming up on countdown financial times and the economists. they shed their assets to focus on educational publishing. we'll get the latest on the selloff after the break. ♪

7:4 caroline: welcome back.

7:45 here in london. fiat-chrysler has agreed to a penalty with the u.s. department of transportation. it follows an investigation as to whether they delayed -- the company has agreed to buy back more than half a million vehicles mainly ram pickups. the defective part caused a loss of control. the greek government is set to begin talks with creditors on a new bailout agreement. the officials are set to begin tomorrow. discussions on the many policies greece needs to implement in return for emergency loans. it comes as capital controls enters a fifth week. i selloff and commodities from oil and drain -- oil is in a

bear market. concerns that raw material is out supplying demand. let's get so much more on these asian market most. shanghai composite falling the most in six months. we have 7.5% loss today. what do we need to know, julia? julia: we are heading into the close. we have seen this big pullback in the last hour or so. we have fallen to the worst drop in the six months. at the moment, the shanghai composite is down 5.7%. the shenzhen competent 4.9% -- the shenzhen competosite is down 4.9%. mining stocks are under a lot of pressure. we have financial stocks very

weak. industrial profits fell by 20% in june -- industrial profits fell by .3% in june. it's looking like we are going to have a big selloff coming through as the markets close. there was a lot of selling in the region as well. caroline: thank you very much indeed. a full picture happening in asia. despite the selloff, it does not seem to be stopping m&a. pearson has moved closer to a next it as it -- closer to an exit as it announces -- the move comes after news of the cell of a -- news of the cell of their newspaper to a japanese newspaper.

i would to kick off with you about them in a sentiment -- kickoff with you about m&a sentiment. what we are sick -- we are still seeing m&a being desirable. david: you have had six years with no interest rate hikes at all. you had for four years no inflation to speak up. margins narrowing all the time. companies cannot deliver profits , particularly large companies. you have two actions left. share buybacks. we know from bloomberg's data ibm's profits -- apple, 10%. the only other way is the large cap's. you commented on the drug

industry. you're missing more this because the big cup and is pooled their resources -- the big companies will their resources pool their resources. it's sickening .3 in the ftse. something has to give. in less you come to something that is very positive, taking remedial action these guys are not going to deliver. this is what is going to happen. caroline: talk to us about this deal. we're starting to see them selloff assets left right and center. manual: some are questioning whether it is the right strategy.

they want to focus on education. this huge market may have more opportunities. want to concentrate on this one area. -- they want to concentrate on this one area. nikkei is starting the process for -- economies. i think every single media company has eyes on these well-known magazines. the structure of the shareholders is so complicated, the execution rates is very high. the families that own the other half of the business [indiscernible] caroline: we have median the spotlight tomorrow. we have earnings coming out as well. which industries are you focusing on at the moment echo

is it all about m&a? david: 10 out of 10 said the pearson group. where is 12 times -- whereas 12 times for most media companies. we love telecoms and media wide? because it is a national correlation. is at&t going to do this? is itv going to set their delivering more profits? it is done really well. these are the sectors. t that out again is just typical of what -- feteva and allergan is just typical of what can happen. caroline: we have had some big

misses from some of the tech giants microsoft apple. in terms of u.s. earnings, a lot is indicated by the dollar? ; pretty much so. anyone -- david: prima so. anyone involved in sales -- have seen bp lose 23% of its value. we've also seen the banks, which have been mixed. 20% rally on the shares. since he took over, 10% up. there are things worth watching. i still say we have a problem on the growth in china. can you deliver earnings in the u.k. and united states? these ratios are getting rich. caroline: when the u.s. opens, we're going to have eyes on whether we have that deal come

through. manual: now everything is focusing on the business which makes sense. maybe we should wait for table to buy -- for teva. to buy. caroline: jonathan ferro, what are you can be watching? jonathan: i'm looking at a shanghai composite, it is down. over 7% this morning. the route is back -- the rout is back. you have restricted ipos. you still get a fall of 7%. a lot of people will be talking about the health of the economy. the commodity route content --

the commodity rout seems to be continuing this morning. the bti firmly in a bear market and a huge week for oil earnings. we'll talk oil earnings for this week. china happened, ubs happened to go -- ubs happened to o. caroline: will be up with you in a moment, jonathan ferro. anchoring on the move. that is a most it for us on countdown. a check in on the markets. on the move is next. ♪ .

jonathan: good morning and welcome to "on the move." i am jonathan ferro. moments away from the start of european trading. shanghai, industrial profits fall. trading below. plunges more than 8%, the biggest drop in a year. ubs' profits surge. up 53% from a year earlier. the ceo tells bloomberg he is confident about the future. $40 billion deal. pharmaceutical central be buying a generic drug business for $40.5 billion area it could be

announced as soon as today. that is what i will be talking about through the morning. we are in the red. for c futures are down. -- ftse futures are down. in asia, we have been talking about all morning. caroline hyde five seconds in. we are expecting a down day. the worst week in stocks, global stocks the entire year last week. another downward trip. off by 0.1% at the ftse 100. i want to bring you up a quick look at asia. we will be going out there in a few moments. what is hammering on shanghai composite awful by 8.5% at the moment. a phenomenal selloff. corporate performance.