francine: more evidence the world seconds which -- second-largest economy as imports and exports fall in august. thes: gdp shrank 1.2% in second quarter. francine: as the refugee crisis deepens, we speak to the former -- director of humanitarian aid on what can be done. welcome to "the pulse" live in london. manus: these -- more evidence is

coming through that china is slowing down. the country announce that exports fell by 6.1% compared to a year ago. francine: meanwhile, imports dropped 14%. let's cross live to our beijing bureau chief for more. nick, what is behind a week data and what is it mean for chinese growth? nick: well, the numbers are little bit misleading, especially the import number because commodity prices have fallen so much. so this does distort the numbers a little bit. but it is the latest in a long line of dad data for the chinese it -- of bad data for the chinese economy. maybe easing in terms of interest rate. the big question is going to be what are they going to do about the yuan? aey said they do not want

competitive devaluation, but low export numbers will increase pressure on them to guide it downwards. that is what we will look out for in the days to come. manus: the ongoing debate is speculation that there is going to be more government intervention. they've bought more than 9% of the free-floating stock market so far. i mean, what is your take on that? big questionhe there is how long can they keep this up? so, we just got foreign reserve data yesterday. it showed reserves were much lower as the government has basically defended the yuan. so, you know, what we are looking for us how long does the government wants to keep this up intervening and the stock market but more importantly intervened to prop up the yuan? toy said they do not want have a competitive devaluation, but that may back them into a corner. do they have to keep spending

that money to prop up the yuan or allow it to devalue and risk more capital outflows? manus: francine: thank you so much. manus: japan is particularly exposed to china, which is its biggest trading partner. the data out this morning shows japan's economy shrank by 1.2%. francine: that was less than estimates of 1.8% contraction but the market did not like the news. the nikkei fell 2.%. they are focused on china and not so focused on the japanese gdp number. manus: this brings us back to the great debate we are having. but here we go again. it is about twitter. about china. does china trade data highlight global fertility? grfragility?al fo francine: let's bring in the chief investment officer at axis

management. how do you read china? this is the eternal great debate. we have a couple investors saying don't worry about it. and once that are horrified saying the transition is going to be so messy. chose aeither you anp or wait it out and take investment decision depending on the value that materializes afterwards. our view is that there's no real surprises here. there was always going to be some normalization in the growth trajectory of china. it could not continue as it was. airly exponential redesign of its infrastructure the last two decades. that's not going to continue indefinitely. the data itself is not pleasant, anyi can't see, really, surprises. if you take an equity investors

perspective and you look at the indices, they have a history of 20% fortroughing currently. it does happen. to similarly, i'm not all tha sympathetic for frantic equity investors that look in china and start to be all worried. this is the nature of that market. the characteristic of the index over the medium-term. so, this is not something that really is particularly different for investors' landscape. manus: you make the point that this could be a time that offers investigation, consideration to reenter the market. that is for the brave, someone say. where would you consider you reenter? johnny: we actually escape from hong kong and china, our allocations in april and may after the parabolic rise after government intervention. so, we have not had any allocation there for some time. it is only after this pullback

that we are looking again at valuations. of the two sort of starter metrics we might look at, at a very basic level, you can look at price to book sheet, price to earnings. a lot of emerging markets are starting to look interesting on price to book -- francine: are these european equities? emerging markets. johnny: emerging markets in the context of china. francine: as a whole or the ones that passed the structural reform? johnny: the markets in china are in flux. they had a drawdown. i would even look at singapore as an emerging market given the pullback. what we're finding is that price to book ratios are starting to look interesting. of safetyve a margin when you are buying medium to long-term. if you can make a judgment call on the asset values. the price to earnings ratios are

less attractive. they are little bit more in keeping with recent history. so that's not giving us the catalyst to enter. so, for example, if you take a country like south africa, it's hit from all sides. weakening commodity prices and the currency continues to go downhill. for a country like that you would like to see a turning point. before you invested. with a country like china, what i would not do is go short the market and try to be on the other side of facing off against the government. what i would do as i would enter and probably start defensively and conservatively look at domestic plays and go back into the expressway companies that have great cash flow. i'd probably just try not to go for the high p.e. stuff. feed and go up the risk gradually over bit of time. manus: you said the u.s. equity market, we're all getting ready

whether low the fed takes a shot across the bow at rating -- as raising rates. as far as u.s. equity markets and concern, we have done our poll. it says the s&p market will and 50% higher than where we are at the moment. at 2204. will you join that pack? johnny: i'm not that optimistic. may outperform a little bit, but i see, i don't see there are so many catalysts for p.e. expansion. the prevailing benevolent equity environment with low interest rates generally and various shortages of other places put capital will probably support u.s. equities. deepn't see it have a too correction.

but ultimately, it is probably not the most interesting place for us with a couple of exceptions. m&aee a lot of -- opportunities. and we have always liked old tech as a sector. we do not go for netflix. francine: the valuation story. thank you so much for now. manus: here is look at what it else is on our radar this tuesday. buy aas agreed to london-based rival. amlin directors consider the offer to be fair. francine: paddy power -- betfair investors will get 0.4 new shares in the company. paddy power investors will own 52% of the new entity which will

be called paddy power betfair. tous: samsung is preparing cut 10% of its workforce at its headquarters. the job losses will include staff and finance. samsung declined to comment. the company is undergoing pressure after lukewarm endption for new high galaxy phones and sales attacks from the likes of apple. francine: u.k. prime minister david cameron has suffered his first house of commons defeat since winning the general election in may. it came as parliament voted to the run up to the e.u. referendum which cameron has played to hold by the end of 2017. the regulations -- restrict the announcement government officials can make during an election. manus: the man who helped tony

blair become prime minister has warned that jeremy corbin could be a disaster for the labour party. partyo think that labour has been at its best when it is focused on representing tream british people. there is a real danger to having lost in 2010, having lost in 2 015 that jeremy corbyn will take labour further to the left and that is not a recipe for many. francine: up next, jean-claude uecker has prepared to announce quotas for the relocation of refugees. several leaders have laid out their own plans. ♪

francine: welcome back to "the pulse" streaming on bloomberg.com, your tablet and your phone. manus: let's turn the attention to the refugee crisis. tomorrow, jean-claude juncker is expected to announce quotas and compensation for the relocation of refugees across the e.u. francine: but three of europe's leaders have laid out plans on how they plan to tackle the crisis. >> those who the protection

should get protection. those do not have a place to stay, have to leave our country. that is why we spoke about handling the incentive. >> france is ready to do it share. the european commission proposes that 120,000 refugees are shared over the next two years. that will represent for france 24,000 people. we will do it. >> we are already the second largest financial donor of aid to the syrian conflicts, including give a 1.6 mayan axis to clean water and providing education to a quarter of a million children. last week we announced a further 100 million pounds taking our total contribution to one billion pounds. hans back's cross to in berlin. hans, obsolete, the british response being very different to the main man european response. talk us through where we are. hans: there is a clear east-west

divide. merkel has signal she wants to support some sort of distribution quota. you are hearing from the easton country and it is unclear whether they have a blocking minority with any e.u. we have to see how things unfold later this week heard what your saying at least on the border between serbia and hungary is more migrants coming through, more refugees coming through, seeking to get inside those 28 member states. what hungary has been saying they want to have a tall wall and keep people from entering. it is clear is that is where their priority is. priority is on redistributing the migrants that are here. take a look at what some of the fund will go to. what jean-claude juncker,we expected to announce is a one billion euro fund. each country we get 600,000 euro s. for being theuros

country of entry. then there would be fines on countries that do not meet the quota system. that would hurt eastern countries that have a much lower gdp. when you talk about where they will be distributed and how, here are the numbers we have. again, remember last time they tried back in may, they tried to agree to a 40,000 figure, that came in at 32,000. we are talking about an additional 120,000 refugees, which may not be enough. here is how it will work. 31,000 in germany. 24000 and france. 20,000 u.k. 1,500.5000 and slovakia mr. cameron is out front. we heard a little bit of them. he is out front in saying you need to actually take refugees that are in turkey and lebanon and not give priority to those in your. europe. david cameron: we will continue

with our personal taking refugees from camps in turkey, jordan and lebanon. this provides refugees with a safe route to the united kingdom rather than risking the hazardous journey to europe which is cost so many lives. we will continue to use the established unhcr process for resettling refugees, and when grant them awe expandion visa and will the criteria we use for existing syrian vulnerable persons relocation. hans: yesterday morning around this time, we got updated figures on how many refugees are traveling through that eastern balkan route. it was 5400. last week it was 3000 a day. accelerating. what everyone is waiting to see is to what extent is this announcement over the weekend by merkel and the chancellor of austria and the prime minister of hungry, what does that do when that said they are going to accept them? what will that do to the

millions of refugees in camps in turkey and lebanon? will it encourage them to make the trip and try to seek safe harbor in germany? guys? francine: think you so much. on this refugee crisis. we also have in germany sc haeuble representing his draft budget. we heard a couple a days ago that angela merkel wants to stick to a balanced budget goal, despite the inflow of refugees. manus: ok, coming up on "the pulse," a wave of m&a in the insurance sector continues. buyingme it is japan lloyd's of london insurance amlin. ♪

francine: another international deal announced. buyn ms&ad offering to amlin. caroline: what a hefty price tag. shares driving the insurance sector higher in the u.k. look at this. 3.5 billion pounds being offered up by ms&ad. the japanese company, the insuring by up amlin. much bigger premium than had been expected. reports for 11%.

36% is what they are willing to cough up. we understand from the japanese perspective. it's all about accelerating international growth, about diversification and indeed, it's actually something we have seen as a trend. let's have a look about one of the other deals. 80 billion dollars worth of deals so far in the sector this year, more than double what we saw last year. interesting reasons why.from an as prospective buyers are coming because they want to increase and expand abroadian. -- abroad. we had two japanese companies snapping up u.s. companies in the last two months. now we have another company being bought. on the flipside, why the consolidation? it is all about the pricing being pushed lower for reinsurance and insurance. hedge funds, pension funds want to diversify.

they're going into insurance. two weeks ago, they said there would be no deal. the ceo charles philip dampened speculation saying actually we are not for sale to we are not running a sales process. two weeks later and they are following through with a deal. it could be done by the first quarter of next year. he says he will remain chief executive. profits have been falling. that is why they are willing to sell. manus: thank you very much. no other government on the planet has welcomed the digital currencies as warmly as the isle of mann. off the west coast england has become a world leader for bitcoin. francine: bloomberg's jeremy cann paid a visit to see how many businesses except bitcoin. jeremy: the isle of man is home to 85,000 people and known for motorcycle races. it is a land of horsedrawn

trams, but it is on the leading edge of financial technology. bitcoin and the technologies that underpin them. so, were here at london city airport waiting to catch our flight to the isle of man where where coin to see how they are trying to attract as many bitcoin related businesses as possible. we will try to use bitcoin to pa y for things. thank you so much for coming to pick me up. so, for this journey, i would itcoin, which ib have in my digital wallet. >> absolutely no problem. yeah, charlie, we'll do it from the --

very easy to use. i will download that and give you a ring. sorry about that. wasn't expecting that. but i never use the app. before. it is not as intuitive as i hoped it would be i can get you a coffee. what would you like to get? can i paid for that using bitcoin? i can? grat. -- great. you do not have an internet connection. wi-fi. try again. there we go. that's great. all right. on the isle of man for the last two days and i'm going to check out of the hotel. and so, we are going to see if we can pay her hotel bill by bitcoin. >> are you confident that will

happen? jeremy: no. so few places on the island take it so far, i doubt the hotel will. checking out. ♪

francine: welcome to "the pulse" live here in london. manus: here are some of our top headlines. ms&ad has agreed to buy london-based rival amlin for about 3.4 7 billion pounds. amlin director say they consider the offer to be fair and reasonable. francine: now, china's exports declined any to growth pressures facing the world's second-largest economy. exports fell to a year earlier. dropped 14.3% leaving a

trade surplus of $57.8 billion. manus: the china slowdown hurt japan whose economy shrank by 1.2%. that was better than estimates of 1.8% contraction, but the market did not like the news. %, erasing fell 2.4$ b all of 2015's gains. francine: we would get more on that market moves with mark barton. mark: china continue to top headlines. yes, we have exports and imports slumping, indicating a tepid demand at home and abroad. focusing on the rebound in chinese equities. remember, the shanghai composite was down by 2.2%. it did rebound to finish up by 3%, suggesting support after four days of declines. i want to show you the nikkei to 225.

it's wiped out all its gains for the years. investors ignoring the japanese gdp report which shows the economy contracted less than estimated. choosing to focus on chinese trade data. japan and china are big trade partners. since then, that pink circle in june, the nikkei sunk by 16% from january through there, the nikkei rose by 20%. we've come a long way, reversing all those gains are to have a look at how european have stocks the open the session. . this is a bloomberg dollar spot index bit of debate whether the chinese dado is -- data is going to change the fed's view. weak trade data does have a knock on effect. does that mean the fed will raise interest rates? the probabilities are 20% likely.

in until the probability is 44%. december, 59%. this is the bloomberg dollar spot index which gauges the dollar against 10 trading partners. it' dropped for the first day sinces september 1. since global stocks sank the most in 24 years in august. this is the european stock market. traders choosing to focus on the rebound in chinese equities rather than the weak trade data. it has been four weeks since china devalued the yuan. since then, the stoxx 600 is off by 10% and lost 1.2 trillion euros. u.s. futures, labor day closed in the u.s. market yesterday. we saw stocks drop on friday. that is the job reports that leaves the number -- noe the -- leaves us none the wiser as to the fed. manus: on one hand, officials

want a more open market-driven system. thewild swings come with equity markets. they have frayed the nerves of beijing leading some to say there is a scattered policy approach. analyst sayspolicy the government's policy has worked. expectations of a hard landing in china are overblown. our bottom line is we do not see a property let hard landing in china. economy atacing the the start of this year and the ones facing the economy right now are pretty much by and large the same. equity markets have basically inflated. manus: you'd also say the exit nothe equity market rout is going to contaminate the rest of the economy to the extent of the media hype. donna: for sure.

there may be some negative spillover but not to the same extent as the hype is making it out to be paid equity markets impact.ose a minor the risk is much less. an impact should be much more manageable. manus: give me the numbers, because the proportion of exposure and china to equities versus the american experience in the equity markets, because you made that point. with the impact through consumption, households, for example, at the moment. chinese households have a 10th of their overall wealth. investors in equity. that is in contrast to 40% of the wealth which is vested in property. the situation is much more different with the u.s. i will give you an example. share equity poses

in the chinese economy, only monthly creditw for the china's economy comes from equity markets. in sharp contrast to the 50% that comes from bank loans. francine: now let's return to the refugee situation. european commission president jean-claude juncker is tomorrow expected to announce quotas and compensation for the relocation a refugees. that comes after david cameron said that britain will accept 20,000 refugees. the french president said his country would welcome 24,000. we are joined on the phone from rome by the former italian foreign minister for for affairs minister and former european commission for manager and aid. emma bonini. thank you so much for joining us. we understand that jean-claude juncker is planning a proposal to relocate 120,000 migrants. is that enough? a: of course not, but it is a

good step forward. it will face a lot of resistance, of course, but i think this is the role of the commission to put on the table -- then nationstates will react according to their national interest or populism or in coming elections. are seeing is not so much a refugee crisis or an immigration crisis. i think it is a collective action program. and the fact is that every state, nation wants to go its own way. even if this is not the problem that could be handled by a single member state, not even germany. that is the usual drama tha everybody can see what is the rationale of acting collectively. but then, national interest or

national upcoming elections gets vested interest, get into the way. but i think the commission has to go forward to stem the -- extend the values of the thepean union and leave responsibility to the member states. can you remember that years ago the commissioner made a proposal for a, immigration policy? he was rejected enthusiastically by all member states, even the ones now calling for european action. so, unfortunately, this collective action, a program which is typical in europe on deepissues, is, is a problem. it is not the number per se. may be nobody remembers that if you just call it immigration, we had a much higher number in net immigration.

now we are much lower. francine: the u.k. approach compared to germany is some say not exactly showing solidarity. is it right? emma? sorry? notcine: the u.k. is exactly showing solidarity. emma: no. this is an understatement, let's put it. it has moved forward by the way up to now, the u.k. has accepted a few hundred refugees which is quite a shame. and we are a collective community of 500 million people. and that makes the immigration crisis a tiny problem. the real problem is the lack of collective action. francine: do you think it will change, that this will impact on membershe fellow e.u.

willingness to renegotiate with the u.k.? emma: i think if the commission ternds firm, maybe some bet rational arguments will finally find their way out of hysteria. in some moments. because if you look at the number, the real truth is that we need immigration. we need immigrants. we need them to save o ur state s. and even the u.k. needs them. due to our common democratic to decline. but this discretion all numbers to not find a way because they teria andhelmed by hyseteria populism but time will be on our side. that is why a think we should be firm. the commission should be firm.

day, thehe ended the u.k. will come to the table and try to look at figures instead of looking at hysteria. francine: looking at the figures and maybe we should focus on the a, you and not the hysteri are saying this morning on your twitter feed that it was illegal immigrants make up 9% of italian gdp. do you have any european figures? because we are not focusing on the figures enough and it might change what people think about these refugees. emma: yea, but look, there are plenty of reports coming for that survey show that immigration, for instance, inside europe is an asset for a .ountry like poland or bulgaria but very important -- what is clear from the figure is that immigrants all over europe are really an asset.

they do the jobs that europeans to not want to do anymore. yes, immigration is a problem all over the world. it is not only in europe. but it can be handled. separate managed if we populism and the real need of europe. so, if you look at the figures. there is a report coming in the next few days by the european commission as far as i know. and i think that this is the picture we have to look at instead of. yes, emotion is important. and i think that this is correct. but leadership is exactly there for that. it is to lead the people. it is not to follow the emotion or the fear of public opinion. francine: should the business

community be doing its bit? is there something the business community can do to spearhead anything? emma: yeah. i think exactly the business community has been in -- an important role of looking at the economic trend of immigration in europe. your role i think is extremely important, because it makes it clear something that people in any case see in their daily life. immigrants do the jobs that europeans do not want to do anymore. look at italy. but everywhere in europe, we have the same thing. they do the job that attains to not want to do anymore. -- that italians to not want to do anymore. thatare providing services we do not be able to do on our own. francine: think he's a much for joining us today. the former italian foreign affairs minister joining us over the phone from rome.

oils: now up next with having dropped 25% since the peak, we will speak to the strategist to slahsed his return targets -- who slashed his return targets. francine: warren buffett joins us live from new york at 5:00 european time. ♪

manus: welcome back to "the pulse" live in london.

francine: here are some of bloomberg's top headlines. italy's top court said it throughout the murder convictions against amanda knox and her former boyfriend due to flaws in the investigation. acquitted in march. the court sharply criticize the prosecution's case saying they were blameworthy omissions. manus: david cameron has suffered his first house of commons defeat since winning the general election in may. it came as parliament voted 312-285 to apply the rules in the run-up to the e.u. referendum which camera had pledged to hold by the end of 2017. the regulations restrict announcements government officials can make during an election. francine: reports from south korea say samsung electronics is appearing to cut 10% of its workforce at its headquarters according to the economic daily, the job losses will include

staff, and human resources, public relations and finance. samsung declined to comment. the company is undergoing pressure after a lukewarm reception for the new high-end galaxy phones and continuing sales attacks from the likes of apple. manus: oil prices are down by 25% since june. this, coupled with the prospect of u.s. rate rise, has dampened investors expectations in the middle east. our next guest says there are serious risks should oil prices break down further. it's firm has revised its targets from the region by more than half. joining us, it is head of middle east and north africa strategies simon kitchen. welcome to the show. the issue is this. troublew 50 bucks is for everybody. simon: yes it is, but it depends on how you react. but i think you should look at the uae next to saudi arabia. cut subsidies on

energies, made other reforms. it is talking about introducing a vat. saudi arabia, we are hearing very little about how they are going to approach this. nothing about cutting subsidies. nothing about introducing taxes. just a little bit of headline news about maybe coming -- cutting back on projects. that is the decision. can survive the hit much better than saudi arabia. francine: you would quantify this outlook as uncertain? if you look at this outlook, which is mired in controversy because of the price of oil, where do you find value? simon: let's go to uae. there was a number of reasons for liking uae. there is a very important story --ch is the iranin econom an economy.

people are looking for growth and the opening of the economy is a growth story. next to iran you have to buy. francine: but they have oil, that is not going to happen. simon: who has oil? francine: iran. simon: the interest in thing about the uae is it does have a diverse economy. s trade, as finance and all of which can benefit from 80 million people getting a lift in their income next door which is what is going to happen in iran. saudi arabia, they are reacting less well. as you say, iran coming to the market is more oil, that has got to be bad for saudi arabia. we are waiting for saudi arabia to show us how they are going to react. manus: let's talk about the opportunities. the treasury sector said no matter about the lifting of sanctions, that is going to be great for the neighbors. there is that travel aspects. $500 billion of infrastructure

needs to be built within iran before the country gets going again. is that were the biggest opportunities are? as we look at investors in terms of looking at iran from the domestic landscape. simon: there is quite a diverse stock market. they can invest directly and by pharmaceutical companies, mineral producers and so on. yes, there is an opportunity for contractors, for providers of services to go in and help the iranians modernize their economy. there is an infrastructure and need. they have a lot of gas but it is in the ground. that is a clear opportunity. even though oil prices have fallen, there is an opportunity in iran. francine: talk to me about egypt. for me, it seems a little bit of a basket case. still extremely dangerous for investors. simon: extremely dangerous, i

think that is overstating it. yes, it's more am mixed bag than uae, that they are moving towards introducing a vat. they have made steps towards cutting energy subsidies. last week they announced a massive gas fine. and that can provide income. but political risk is still firmly on the table. simon: it is a different kind of political risk. three years ago, it was violence on the streets. now it is more, you want the government to communicate their vision, their policy more clearly to investors. that is what investors are looking for. they have discounted the fact of more political violence. what they want to see is a clear guide from the government on where they are taking egypt. manus: where is the biggest opportunity? when i look at the index it is worth $600 billion.

there is a differential across the landscape. we talked about uae and dubai and i would only, but what -- dhabi, but when you look at that landscape, where is the biggest opportunity? simon: the advantage for uae and iran is they have relatively diverse economies. however, the index in saudi arabia has done very badly in the past six months. you have 30 million people. there is a consumer market. you have some consumer stocks looking very attractive right now. so, that is another opportunity. you need to spread your bets. there is an intersection story in iran. a consumer store in saudi arabia. francine: thank you so much for that. head of middle east and north africa strategies. manus: it's the biggest palestinian construction project ever. after years of delays, they have finally begun moving in. francine: it's around 30

kilometers north of jerusalem in the west bank and is costing more than $1 billion to build. ellie got consent this report. --elliott gotkine sent this report. elliott: in places it feels like a ghost town. but life is slowly moving into rawabi. among its first residence, this family from malala. -- ramallah. >> i worked for two years to come here. and there are a lot of challenges to come here, but it is a good decision for me. wait.'s worth to a 6000: it will boast homes, a mosque, a church and an amphitheater. it will have taken 10 used to build and cost $1.2 billion. 60% of is being put up by qatar. the founder say this is the first new palestinian city to be built and more than 1000 years.

they wanted to be modern, affordable, and a sustainable, but they wanted to give the palestinian economy a much-needed boost. >> on implement the west bank today is 23%. --unemployment is 23%. a project can give 10,000 jobs. the domino effect of this project is you will see rawabi 2, 3, 5. 50,000 jobs is 25% of employment. says delays to the project to access roads and water supply almost bankrupted his company. he blames israel and the settlers on a neighboring hillside. in response, the senior government official says israel supported the project, took steps to facilitate it, and any charge we deliberately saw to delay it is false. the israeli government understands that economic

development for palestinians in the west bank is a win-win for us an d them. to build anims industrial park. it hopes multinational companies will join residents who can finally call rawabi home. francine: now, for those listening on bloomberg radio, "first word" is up next. for viewers, the second half of "the pulse" is coming up. manus: more challenges facing china. an interview with donna kwok. francine: egypt's richest person is offering his own solution to help the refugees. we speak to him about his plan to buy up an island. we're also getting some -- in the sense they are quite painful to watch. when you look at the refugees'train arriving at munich train station in d budapest. you sometimes stop two seconds

in your life and think what these people might be going through. yet it also gives you a message of hope if the e.u. finds a solution. manus: you can find us on twitter. your thoughts on the refugee crisis in europe. ♪

manus: china's lowdown, more evidence the world's second-largest economy is losing momentum. fallsne: the nikkei erasing all games. gdp shrank by 1.2% in the second quarter. manus: as the refugee crisis deepens, jean-claude juncker compensation plans for the relocation of refugees across the eu. ♪ manus: and good morning to our

viewers in europe, africa, good evening to those in asia, and welcome to those waking up in the united states. i am manus cranny. francine: i am francine lacqua. we are getting better gdp figures in europe. it grew 0.2%. it is not that much more, but we will take it. euro-dollar, 1.1183. manus: a little bit of a reprieve for europe. china is selling down this morning. exports fell. that is compared to a year earlier. dropped moreorts than 14%. a trade surplus of $16 billion. let's go to the chief asia economic correspondent.

behind these growth figures, what are we worried about? good morning. for china'sr day economy, but it is hard to see something that would turn around exports in china. the manufacturing sector is suffering. they are suffering from deflation. japan, they refreshed their gdp to show that japan's economy is in the doldrums, that is not good news for shipments out of china. into is not a breaker china's economy yet as we go into the end of the year. manus: this is not a bad set of numbers. tried toion is, dan whole -- they have tried to hold. interventions, what is your take? enda: they have.

willis stage, economists say they could do more. there is an expectation out of infrastructure spending that is the great big hope to get a bump in the final quarter. they have been channeling money to the state governments to try to get them to build bridges and roads. they hope they will get a dividend amount in the final quarter. the other temptation is on the yuan. to see if they bow to market demands and let the yuan weaken to get a fill up on the market side. particularlyan is exposed to the slowdown in china, which is the biggest trading partner of china. manus: we have more data from japan. by 1.2%.nomy shrank that was less than the estimates of 1.8% contraction.

1.4% -- by fell by 2.4%. does the china trade date highlight global fragility? manus: let's bring in davide of -- the founder management. how concerned are you about global growth? the japanese and u.s. job numbers were not up to pace on friday. what is your read? >> there is a global job scare. that is due to the u.s. and the anglo-saxon world has been in doldrums of a about to take that off.

it is like when you give your kids sugar, then they have a sugar rush, then you take the you see what happens. we're seeing the expectations of increasingy be that rates is putting every industry on -- ok, let's see what happens. announcing theof mix between fixed investment and consumption has led to a commodity boom bust that was inevitable. when you think that china has used a warped field in the last three years, america is behind it, and it was inevitable. francine: central bank policy has to normalize. you cannot keep giving your kids sugar all the time because they will go crazy and it will get out of control. we knew there would be a tantrum from the emerging markets when the fed was about to raise interest rates.

just policy that went wrong? is this normalization or are we looking at the specter of a credit crunch? uses china'sody number. the world was on its knees. aina counter the balance with massive fiscal stimulus that has built up in credit. assets are five to six times gdp, public debt is less than 2, and is a closed capital account. debt is one of the lowest ever. nobody mentions the rates minus inflation. today, they are 4.5% in china. u.s., it negative in

japan. that is one of the highest. -- i wouldback expect china to lower interest rates and reserve rates and requirements. appears more than sustainable. it might rebalance the deflation. they were in a stock market double, because the economy has been slowing out of policy mix. it is not normal to grow at 8% or 9% when you have the same size economy as the u.s.. they opened 40 million brokerage accounts, and rather than going to macau they decided to trade the stock market. in mys fragility, view, of the chinese system, because they all decided to buy stocks at the same time.

same ballparkhe 2011 andthe lows in 2000 nine. it is undeniable the world is in a better place after the low in 2009 and 2011 when we had the potential of a euro breakdown. hass: one thing that ramifications is more policy levers being enacted over the next six months. ,lready appreciated the yuan the myth of the break on that, for whatever reason. they're burning through reserves. they make it to christmas -- they may get to christmas and stop defending the yuan. how do you look at the contagion from what the chinese are doing? is there a tightening from deutsche bank which propagated yesterday? david: they depreciated by 2.5%. it is a big number. it is 2.5 percent, that is a

smaller number. they have and evaluating since 2006. nine years they have been devaluing the yuan constantly. francine: it is small, but it created mayhem. what happens is that that accelerated the selloff on the asian market. people took it as a massive change in policy. i don't think it is a change in policy. trade surplus in the hands of a bubble. if you look at the capital account, they are still in the plus. 2 trillion. it is calling for keeping,

maneuvering, and shifting the economy. the policy shift is more for the mantle and is having success. for the external and doesn't work because we only look at the stock market. francine: thank you. algebrasrra from investments. manus: the japanese and sure ms and av is buying london-based rival for 3.7 million pounds. shares have risen this morning. the terms of the merger to create the world's biggest publicly listed online gaming company. investors will get 0.4 new shares in the new merged company. shareholders will receive 80 million euros and a 52% entity which will be called its fairinal patty power bet field. manus: cutting 10% of its

workforce. the job losses will include stocks, public resources, public relations, and finances at samsung. they are under growing pressure after a lukewarm reception for a new high-end galaxy phone and sales attacks from the likes of apple. francine: prime minister cameron has is first defeat since the general election in may. the eu referendum has been held by 2017. their regulations will make it -- and the regulations are for what they can do during the election time. corp. and could be a disaster for the labour party. byn could be a

disaster for the labour party. >> i think the labour party is at its best when it is focused on representing mainstream british people. i think what is happening is that there is a danger of having cor in 2015 that jeremy byn will take the labour party further to the left, and that will not be a recipe for winning. francine: after the break i will be asking not only about the popular european loss with deutsche bank, but the italian bank as well. we are back 2. ♪

manus: welcome back. this is "the pulse." we are live from bloomberg's european headquarters in london. francine: we're back with davide serra. thank you so much for sticking around. ?ho will benefit the most does it mean better times ahead? davide: i think the best bank, my view is when spain created its own bank they used european money. they used it as a lever. i think that today in italy, and setting up the bank is a little late in the way that the banking system has already fallen away. you also have the euro stop 50

which is one of the most valuable banks. in europe they had the clear and national champion. view it is slowing the restructuring that there is more popularity of banks which are under the banks. capital is readily available and the reforms that congress but in terms of how long it takes to get back assets -- in the u.k., to get an asset takes 12 to 80 months. it is two to three in france and germany. in spain and italy, for up to eight. the average is six. time/value matters. is that something you would consider? davide: there are no details. they do not even know what they -- they are discussing. most of the

italians have a discount. they want to see more evidence. it'll have to go through the european commission. anyre state money can back african bank, it has to be bills in. there is no way out. end andew, this will avoid moral hazard in the system. you will always have a local guy that prefers to his friends. this weekend, i said the oldest bank in the world survived the medieval ages, the plague, but did not survive the last 20 years of italian policies. as a result you need a clearer attack on accountability. thank god the ecb is in control. they are basically running through the eq are. -- the eqr.

been aif there had shakeup from the top. jenkins and brady are gone. when you look in some of those hasnames, and deutsche bank 11 billion that they have for regulation issues, would you expect? where is the strongest player? where you most inspired when it comes to the change in leadership? davide: the change in business model, i would say that in my view it is in the case of deutsche bank. they kept saying they wanted to build a goldman sachs of europe. i was wrong. it should be the bank of america or jp morgan of europe. thanks manning from retail. if you think that goldman sachs is now a retail department, and

america, intel shoe how he was wrong. , in my view, the most intriguing is definitely probably overbank. that is because in deutsche bank, there is a significant cost-cutting organization. too many investment bankers and not enough focus on the bread and butter of his news. they have one of the world. their clients are the most successful, how can they make money off of that? it is a question of focus. with the jean i think that with deutsche bank, i worked with him his analyst. it was an experience. he is a momentous focus man and of the right man for the job at the current time. -- they are adjusting.

there have been only 20 risk, not perceptible. regulators are increasing after four people. what would happen is that they are underestimating how much fixed income in certain parts of their own business and investment banking will be the bread and butter. i think that that will shift again. in the case of barclays, i think slightly possible, because they have lots of stop and go. as a result, but at the same time, shares are priced more attractive will he. on a 12-80 month view, i can see oversight. curtis has to raise

capital. if you unwind a lot of the risky portfolios it is a huge and gutsy move that they needed? davide: on our numbers, deutsche bank is more at risk of raising capital. that is the long and short of it . deutsche bank has more to do with the level three access and head of which is not shrink as fast as it should. moree case of swiss, it is of a question can they d lever the balance sheet? if you've seen so much capital, there is no point in raising capital. manus: it is not an environment de-leverr -- two is it? davide: this environment will not last forever. lever youu can should do it.

going to do business plan that will be a five-year business plan. they will take action sooner. nextine: focus in the three to six months. it is a bold call from davide serra from algebris investments. jean-clauderow juncker is expected to announce closures and compensation for the relocation of refugees across the eu. francine: three of europe's leaders have laid out plans on how they will tackle the crisis. >> those that need protection will get protection. those that cannot stay will leave our country. to do itsis ready share. the european commission from commission proposes that 120,000 refugees will be shared. that will represent 24,000 people in france. we will do it. largest the second

bilateral donor of aid to the syrian refugees. last week am a we announced a further 100 million pounds, taking our total contribution to over one billion pounds. go to hans nichols in berlin with more on this story. are we still at a disparate response from europe? there is the east and the west? clear dividinga line. he get a sense of what is happening in eastern capital. you look at the latest pictures with potential immigrants, refugees, and migrants coming across the border in great numbers. errect a razoro wire fence of have some sort of prohibition. there is a monetary

component. they're talking about 6000 euros per refugee per country. an additional 500 euros for the country that receives them, the point of entry. there are five on top of that for every country that did not abide by the quota system. there are additional 125 thousand resettlement, bringing 160,000 to the goal. looking at individual countries, 31,000 for germany, u.k., , 15,000.pain that is giving you a sense with the burden sharing for refugees for the smaller countries will be. the arguments in the east is that these are migrants not refugees and to many people are coming here for economic reasons, not leaving a war-torn country. they would classify refugee. that is the argument from the east. we will see how the plan is presented how the plan falls out.

which way is poland heading? if they vote with the western countries, the plan could be muscled through, even though you have a great deal of dissent from the eastern countries. even in the face of that dissent they could face penalties if did the eu take what decides as their share of the refugees. it will be a late night in brussels. the beginning of a difficult conversation. 160,000 does not begin to capture the amount of numbers we are seeing come in. the number of refugees has been accelerating over the last couple of days. manus: we heard from angela merkel saying that it could be up to 10 billion euros spent. as 800,000 refugees are going into next year. hans nichols, thank you, very much. francine: the wave of m&a in the insurance sector continues. we will tell you everything you need to know after the break. make sure that you stay tuned to

bloomberg tv. we have an interview with investor warren buffett at 5:00 p.m. london time. manus: our twitter question for andday, @manuscranny , you have poor data the china and a slowdown in japanese numbers. the question is, does china trade data highlight a global fragility? that is the critical issue and concern. , @manuscranny,#th epulse. this is one of angela merkel's coalition.

they do not expect the budget to be changed because of the migration crisis. andill have more on that, back to what hans nichols was saying. we are back in 2. ♪

francine: welcome back to "the pulse." i am francine lacqua. manus: i am manus cranny japanese incher in mess and az are buying london raised rival amblin for three point four 7 billion pounds. storedhares stored by -- by 30% in london this morning. francine: adding to growth pressures against china's second leading economy. exports fell compared to a year earlier and imports have dropped three point 1% leaving a trade surplus of $15.8 billion. manus: the chinese economy hits

japan. that was better than estimates of a one point 8% contraction, but the market did not like the news. the neck i lost 2.4%, erasing all gains of 2015. in on thelet's check markets with mark barton with the latest. mark: china devalued its currency four weeks ago today. china is continuing to hold the headlines. trade data is disappointing. exports and imports both felt demand. tepid the chinese stock market was the answer sting performer, up 2.9 percent. the stock market rose in the final two hours of training. the china composite was down, and that suggests we have stated back buying. state

ya --china devalued the the stockhe yuan market's down. investors are focusing on the theghai rebound rather than decline in chinese exports. looking at the euro, rising against the dollar for the third day. lastconomy grew .4% quarter rather than .3%. that is an upgrade riven by a surge in exports and consumer spending. stirling is a fascinating currency in the last two weeks. through friday, the pound fell for nine consecutive days against the dollar. the longest losing streak since 2009. today it is rising for second day. the bank of england on thursday will get minutes. the new era of the bank of england. how we get the decision, houston

before we get a rate hike on the bank of england. look at what is happening in the bond market. one eye on china, one eye on the united states. the probability of a rate hike next thursday is 28%. the probability of a rate hike in the u.s. in october is 40 4%. in december, 59%. there is an appetite for risk as you can see on the board. with the european stock market, every single industry group is rising today. -- let's focus on the rebound rather than the trade day. minutes, we're joined from europe. i view had a good break yesterday, you are back. futures indicate a higher.

on the east coast, kids go back to school on wednesday and thursday across much of america, the kids are already back in school. i was in school this weekend on the crisis of europe. that is about refugees and migrants. we will speak with richard haas the council on foreign relations and three hours. we will talk to ambassador richard haas about europe and the challenges you are witnessing in real time, whether it is in munich, or the debate within the united kingdom over refugees and migrants. motor mercy year will join us. he is good on american retail. mercy willr join us. he is very good on american retail. her father has done well in fashion. she has done really well in chocolate. ourbuildings away from

world headquarters is her emporium on chocolate. not that you would have ever darkened the door for dark chocolate in dylan's chocolate shop. francine: it is like the walmart of the best sweets. i'm quite jealous of that interview. clumsy aboutuite chocolate here, as i have learned. toblerone is real european chocolate, unlike this american -- true european accents. i'm very proud of you. more from tom keene and his lovely british accent. sanctions on iran are expected to be lifted within the first three months of next year. according to diplomats with knowledge of the nuclear

monitoring process. austria's president is the first european head of state to visit in iran since 2004. austria exports to our iran are expected to reach 500 million euros by 2020. for more on the business opportunities and iran we are joined by the founding partner of -- the austrians are there. they're there early. they're optimistic. give us a sense of how quickly the benefits to those people, business in iran, will be scaled up in 2016. question. a good a couple of trends that we are seeing, on one hand you have trade delegations going through iran from various european countries. .hey're going to countries this week, there were reports from the iaea that the process that iran has to go through to prove that they are abiding by be goingment seems to

well. there is every reason for them to abide by their commitments. you will see sanctions relief as early as 20 16 with implementation day come and that applies to the eu sanctions. you have the opportunity for businesses and certain sectors such as the agricultural and pharmaceutical sectors to ramp up their business that exists in iran now, because it is under and calledons humanitarian and general licenses. these are considered fundamental, getting medicine into iran, so it is permissible at the moment. we expect that to grow well business relations expand from there sanctions-euro level. francine: you're saying it would be consumer lead, the industries that want to get in there. because of iran's past there are certain connections, like her

example, france, with economies that have been men -- have been more friendly. or is that not true? esfandyar: the european countries that have been active in a run for some time and were active until 2012 when the sanctions were tightened, they are in full position. the political relationships are there. the business leaders from the european countries know their counterparts in iran. the story of iran opening is often told in terms of huge oil reserves and infrastructure potentials of the country. i do feel that what will take iran from its current level of one of the top 30 economies in the world into the g-20 is not so much a change in oil fortunes or infrastructure overall, it will actually be taking advantage of the iranian user, the consumer, and making that market a place for products

and services are delivered to those individuals at street level. manus: in your notes this is what you said. the consumer part of the iranian economy has gone from 45% gdp to gdp. you said that they are an untapped and repressed nation. they are hungry for products, aren't they? this would be the forefront of your thinking? esfandyar: they are hungry for product. you could look at that from the demand side to say it is about consumer demand and, in terms of economic growth, a supply side story. you have a private sector that is between 20% to 30% of the economy that is well-positioned to deal with international partners. they have relationships. they are a well operated and transparent entity that is in the basque position, from a risk standpoint, to work with foreign companies. the private sector is one of the key areas -- they have kept their anchoring points in the

consumer focused industries. fast moving consumer goods, food, beverage, pharmaceutical, remain something the private sector is invested in. infrastructure and oil has a lot of state components that will evolve in a way that will match to the compliance needs of foreign partners. francine: thank you. the founding partner of the european partner of ehb. manus: let's bring breaking news fe,m chinese regulator sa they have asked china to exchangen the foreign market. this is after the initial moves that they made on the currency, allowing it -- francine: it is according to three people familiar to the matter. just to clarify. it has huge repercussions on the

market. we will see if it follows through tomorrow morning. mna has been rife for india. it has been announced that japan is buying apple and. -- is apple and. is a hefty price tag? caroline: it is bigger than originally reported and has sent stocks soaring. sabe insuranceof unit in japan. pricellion pounds is the point. it combines the 11% that had been reported earlier in the week. the ration out has been -- the rationale has been laid out. trying to say, look, we are accelerating our international expansion and growing abroad. interestingly, this is a massive trend. billions are being spent.

let's look a much we have seen in the industry. 18.1 billion, double from last year. why the activity? you are looking from the buyer's perspective. interestingly, we have had a couple of late. , andave had life insurance another company, in the last two an buying other insurance related companies abroad from the united states. asian companies are looking to grow outside of their current where growth is slightly slower. what is the pressure on the targets? why is consolidation so rife, especially in europe, and all of lowerices being put globally for insurance. there are more players in town. you have hedge funds hitting in on the act. pension companies wanting to splash the cash and get diversity away from bonds and

stocks, and instead, plowing into the insurance market. more players is driving down the insurance premium. countries cannot make enough, so they go to consolidation. that is something that was rebuffed by amlin a couple of weeks ago. they did not to be seen as a target. of these group, all countries that are independent, are being thought of as targets. two is charles phillips weeks ago saying no, we are not from sale -- we're not for sale. two weeks later, he and his entire board are unanimously backing the deal coming from japan. the rationale is clear. with insurance prices going down in two weeks ago, that is why they were down. that is why they are happy with the 7.6% premium being offered

by japan. francine: thank you with the latest on the insurance m&a. manus: next, we speak to a billionaire who was to solve the refugee crisis by buying an island. he has been on twitter this morning. he is asking for suggestions and opinions. sawiris, theuib ceo of orascom telecom. that is after the break. ♪

manus: welcome back to "the pulse." we are live on bloomberg television. had to state are coming forward refugees, one billionaire is taking matters into his own hands. 's ceo wants greece to solomon island to help those playing their homeland. it is great to have you with us. you propose buying an island, which am say is commendable. you want to buy that from the greeks. there are 4 million people who are displaced as a result of conflict. a substantial proposition, or is it to raise awareness? mr. sawiris: i'm not someone that needs to raise awareness.

we are watching what is happening to these people who are drowning in the sea. when you talk about 4 million people, many are hosted in and jordan.pt, what i'm talking about is trying to salvage what remains. these people are fleeing with their lives and bringing children to the shore. it is not only about awareness, it is a very simple idea. when people landed in america there was nothing there. they built homes and a new life. what i'm saying is that this is a temporary solution. buyingllenge is not me the island, it is governments accepting that they can land on this island with their boats. these people could work, bring their own homes, school, and if they are farmers they could

farm. this conflict will not end in days or weeks. manus: do you think the italian or greek governments, or the european governments, will take your proposition seriously? they barely have their own house in order without considering this kind of very radical and commendable proposition that you are making. what do you make of that? mr. sawiris: i sent a letter to the prime minister of italy and greece. i'm not known to be someone that is not serious. if they have other solutions in which i can in gauge, i am open to solutions. manus: have they responded to you? mr. sawiris: no, these politicians, they take their time. that is the problem.

us in the private sector, we asked, we build, and we do. i'm using you to get their attention and tell them i'm serious about the proposal. we just need to make sure that they are watching. that could have been your child or mine. images -- the images you are referring to, are undeniable. they have brought home to every single person of 500 million people living in mainland europe how fortunate that we are in our daily lives. cameron and the united kingdom proposing to take inugees from the camps lebanon, turkey, and jordan opposed to huge numbers, they tol take we understand of

20,000, what do you make of the u.k.'s response? mr. sawiris: it is easy to ask other people to do what you should be doing. syrians.s one million they cannot afford this number. you need to understand that these are people trying to escape. they're trying to escape mr. escapethey're trying to the bombs. for theirying to run lives. my proposal i think is good in , not that it is left over being used, and turns it into a hope. islands, here, you can move 50,000 or 100,000 immigrants to this island and

100,000 to this island. i would give them a decent life until their country is safe, then they can choose to go back over remain. manus: are you going to personally fund this island? for what period of time? mr. sawiris: yes, i can. i can afford, and i will sacrifice a large part of my wealth for these people. enough is enough. i will not watch this happen. incredibly is an commendable opposition. what you make of the hunt gary and in eastern europe. they are repeating their message to migrants, do not come here because we will not let you through. the hunt gary and prime minister -- the hungarian prime minister,

you perceive that kind of response from a european prime minister? mr. sawiris: i don't like the response. i don't like how they are treating these people, like cattle. they are forced to flee the country. they should be treated honorably and with dignity. i understand their concerns. they should provide a more decent reception to these people. i must also condemn the the statement that they do not want muslims coming in. naguib sawiris, thank you very much. the biggest construction project ever. after years of delay families have started moving in. the israeli controlled west bank. it cost more than $1 million to build. >> in places it feels like a

ghost town. intois slowly moving rawabi. went for two years to come here to rawabi. there are a lot of challenges to come here. this is for me. it was worth the wait. it willwork on rawabi have 6000 homes, a mosque, a church, and a theater. it was taken 10 years to build and cost $1.2 billion. 60% of what is being put up by qatar. they say this is the first new palestinian city to be built in more than 1000 years. they want it to be modern, affordable, sustainable, and most importantly, they wanted to give the palestinian economy a boost. unemployment in the west banks

is 23%. in numbers, it is 200,000. a project like this creates 10,000 jobs and it is up 5% of unemployment. the domino affect is you would see 2, 3, 4, 50,000 jobs. this is significant. he says that delays to the project of access roads and water supplies almost bankrupted his company. he blames israel and settlers like those on a neighboring hillside. in response a government official says that israel supported the project, took active steps to facilitate it, and any charges that we sought to delay it are false. they said that development in the west bank is a when-when. they urge greater and further development. anabi aims to build industrial park. next year they help multinational companies will

join residents who will finally call rawabi home. francine: before we hand you over to our u.s. colleagues, tom keene and "surveillance" is up in 5 minutes, let's look at the markets. it has been volatile in europe, but yesterday was labor day so the u.s. markets were not open. from the dropped 1.5% payroll numbers. looking at a brisk pen in the u.s. we will see how trade takes it away. there's a great article saying never has there been a more prime time to have the markets go for interest rate hike according to the bond markets. francine: the european stocks are climbing for second day. we understand china has put in more support serious this is a bloomberg exclusive. europe is 600, gaining 2%.

it here on bloomberg tv for "surveillance". the interview that i'm looking out for is the handy shop. look out for that. ♪

announcer: this is "bloomberg surveillance." sportsina exports and in collapse as growth -- china export and import collapse as growth and equity is challenge. true austerity and collapsing markets.

summer is over. it is so back to school. my new health kick. it is jar chocolate -- it is dark chocolate. this is "bloomberg surveillance ," live from our world headquarters in new york. i'm tom keene. rendon greenlee and vonnie quinn are off. michael mckee and i prepare for back to school. -- you: dark chocolate must have been shopping for school supplies with someone small enough to appreciate it. tom: we were talking about chocolate or the lack thereof in our school lunch. lots to talk about. that's gets a top headlines. here is ramy inocencio. ray micco there is another -- more china exports fell by than 5% in august because of weak demand overseas. chinese stocks fell on the news, but they bounced back to post again for the first time in five days.