to "on the move" we are counting you down to the open. with quite a show lined up. let me tell you what you need to know. japanese stocks into a bear market. equity markets fall sharply lower this morning. shock to the oil majors. it is a rout in crude prices. vos day one, the chinese slowdown dominating discussion at the world economic forum. we will speak to ceos. ♪

and so, day one and davos it is quite the day. we already heard from some special commentators. it was fascinating to listen to them earlier. we come back to that conversation in a short time. what we areyou seeing on equity markets around the world right now. asian markets down, and down hard. which of the nikkei entering bear market, european equities don't look like they'll get away from that anytime soon. the euro stocks is down by 2.5% right now. most of the major european 2.5% sodown by 2% or far.

davos day one, plenty to talk about. what have you been hearing? what is going on over there? line fromit was a francine about cautious optimism. the emphasis is more and consciousness rather than the optimism. it was a conscious meeting. ,hen i look at the three things it will be europe and the future. we will discuss that first. and look at markets. if you want to read on china and global trade there is no one better to speak to them we both later. russiacommodity market, is a big state in that bank. russia's future is critical here. if that budget needs to be change, does russia their stance?

what does that mean for a bank that already has sanctions on it? emphasis on the consciousness rather than the optimism. metric, youet a were there last year. more conscious this year? jonathan: we were sitting here this time last are talking about ecb that was about to conduct qe. if we put the question to all the guests and said wearable stocks he a year from now? i'm pretty sure they would is it higher. guess what, where on the qb gains? they are not here anymore. nowhere near the same as what happened in the u.s. from the market perspective, it is very different. we went into 2015 looking at qe and a new round of stimulus the ecb and a sense of optimism. now i wonder about the policy response and the effectiveness of ecb policy. it will be a big

conversation i suspect. what exactly does mario draghi have to say duke of the market on the front foot again? what's to the chinese authorities have to say? who are people listening to? do they want insight into china, to the want to hear from the iea because they want to understand what is happening in oil? jonathan: you want to hear from the saudi's, what will happen with the ipl. will they lift the company if they do? what is the message in the bottle of they do do that. or will it be the downstream business? you want to know him at the commodity effect. in a very simple conversation, they will tell you that commodity price plunges is good on a net basis for the global economy. all we are seeing is the bad guy, and that debate is still ongoing. the baidusticking to president later on.

i want to hear about the chinese economy from a chinese company. the map is something even worse than that, i wonder if the companies that operate there are seeing a slowdown? how does a shift towards this new chinese economy, if the it there without a big downturn? guy: such a great lineup. questions going to be asked and answered. we will take you through the next hour and a half. the coverage continues. the rest of the day with all of us. european equities are sharply lower at the beginning of trading this morning. first, let's get you up to speed with caroline hyde. caroline: japanese stocks have entered a bear market. earlier, shares have it lowest levels cents march of 2009.

slumping oil prices continue to weigh on investment. the hedge fund manager that predicted the subprime crisis says china should weaken the yuan by at least 50% this year. he said that will a policy makers draw a line in the sand at a more appropriate level for the currency. he has been betting against the yuan since 2011. ben bernanke said the greenback may have peaked. we may not see much more. the currency has rallied against all 16 of its major peers over the past two years. chief executive officers have turned more pessimistic on global economic growth. that is according to a new survey. a poll of more than 1400 ceos from 83 nations found just 27%

expected economic upper to improve this year. said it could have been worse. the ceos are really concerned in 2016. it is a less positive result this year than just a year ago. the tread line is not good. concerned about the global economy and the volatilities that exist. secondly, concerned about the geopolitical issues. it is all the potential to continue to be disruptive and unstable. you put the 2 together and the outlook for 2016 not as encouraging than most of us were hoping for at this point in time. caroline: we will get plenty -- davos.f demo's jonathan: it is day one here in switzerland.

obstacles is here and had an earlier morning that i did. you have already kicked things off. economy, does the man of a decent read on what is happening? s: he was optimistic even the you fight the structural deflation. oil and from demographics. in terms of china, he was pretty oldish -- bullish. he did express some concerns about it. >> i compare it with europe in the 1990's. but the first time we had private organizations in germany and a boom and retail investors in the equity market. to prevent those equity loss which turned out be not a wise policy. >> there is a policy of devaluing, but whether they devalue it or not there will be

deflationary pressures. is that the main risk we're facing at the moment? the central bank supplied to replay the economy now for some years. they haven't been very successful in doing that. have tried to reinvigorate and haven't been very successful in doing that either. we are as a point in time and what needs to be tailwinds have added some percentages of growth and reduced -- they downturn into tailwinds. will go through a correction that is ongoing. at the end of the tunnel i think they will come out stronger. we just announce we will more or less double our headcount onshore in china because medium to long-term we see huge potential for china. they are rebalancing grows from industry driven to more domestic

gross. if you look at service sector at 8.5% ins a girl the first quarter. the service-based growth is much more job based. doing the right thing, it is just a tanker that needs to turn slowly. i am quite positive. hans: not really optimistic that the ecb will reach rice targets. on the dollar, divergence from ben bernanke. he thinks the euro will threaten the dollar yet again. a different view from a we heard what seemed to be running out of steam. jonathan: i want to pick up a what he said about china. when you hear the ups chairman bullish on china, i'm not surprised by that. given the amount of wealth in china, it is a place they have to be. it doesn't tell you much but what is happening in the near term or the future.

this tradition from the manufacturing-based economy to a service sector economy. guy: i think what is the medium-term? it means different things to different people. we all know how long it takes to turn around a supertanker. the duration risk here is quite important. he talks of oil going lower in the short-term. what the short-term mean? how long do we ultimately keep on going? he said we would see more volatility without the fed hike. considering the market is pricing that out right now. i think that is really important as well. jonathan: you come back to that as well. despite the fed hike, the fedtility comes from the ending qe. nothing500 has done since the fed ended qe. the market type thing began at

the end of 2014 not when the fed started to hike interest rate. i think that is a critical point for the market as well. is a credit it story. this lack of understanding of and how it isne now rippling into parts of the economy you don't understand. happenedding what elsewhere is very difficult to deal with right now. jonathan: we will be catching up a little bit later. you and i will be talking even more. up next, human dev ross we will be speaking to the eu commissioner for economic affairs. plus, later on the programmable ofaking first to the ceo messina. ♪

stocks are set to slide. .tse down 2.7% dax down 2.4% it will be a very negative open here in europe. guest, we willxt do that in the commercial break. i'm pleased to say i can bring in the eu economic affairs commissioner. great to have you with us this morning. last year the market, we had a greece situation as well. that is off the market. it for usting to get review of the new bailout for greece. when can we expect that news? would get the very soon. they're waiting for some formations coming from the greek authorities. since december, we're trying to build with degrees a success story. the climate is very constructive

in our talks. reforms have been voted by the parliament which are courageous and ambitious. now what we need is reform of the pension system. hard, with a first draft. you will talk about that with the greek government here. greece must go back to growth. everything is interlinked to their. jonathan: when do you expect the completion of that? pierre: i want that to happen as fast as possible. we conclude pension reform, that we are capable of completing the review. greeke might discuss

debt. i know this is an issue to which the greek authorities in greek people are attached. we need to do that step-by-step. i feel, and the europeans feel, the commissioner states that it is absolutely necessary that the imf stays on board with us. three institutions are working on the field. the ecb, and the imf, and it is fundamental that credibility of the program is very important. i'm glad to notice that now the greek government agrees on the fact that we need to confront a deal altogether. jonathan: i'm sure you bump into my them lagarde at the world economic forum. relief, thatebt conversation you will have -- what can we expect? can you deliver that in any way, shape, or form?

pierre: when i'm sitting in a group with the ministers of finance, frankly speaking i see no appetite for a clear debt relief. there are technical ways to address the issue. through debt profiling come i prefer to speak about that. what to the result that we need is that the service of the debt is lower than it was the. this is possible. i don't want to enter into specifics. there is a precondition, and the precondition is at the program the first review is concluded. that we can discuss that altogether. just with of the educated audience, when they hear the word no debt haircut but we can we profile, there isn't much of a difference. is one more politically palatable than another? pierre: it is quite

different. i think the europeans don't want to do that. jonathan: you can reduce servicing costs. pierre: yes we can. we will see that when time comes. first, the priority now is to develop a strong discussion about the reform. i insist that we are not yet in there. this is why our teams on the ground will have a lot of work. i am hopeful. the greek government now understand to only one way for success which is intimate in program. having success on reform, the wicked local of moving on to the question of debt. jonathan: struggles in spain, it was the poster child for reform now it is hitting a roadblock.

when the you expect spain to submit a new budget? ierre: first, you need to have a government. they do have a government. i spoke with the prime minister a few days ago. capableernment is not or the legitimacy to present a new budget. first of all, let's find a way out of the political solution. want to have a government quite fast in spain. then it will compare our figures. , and are convinced, there is still a gap. some additional measures might have to be taken. for ourfor that statistics office. in the spring, i think we will address this question. it must be addressed seriously. the spanish economy is performing well in terms of growth.

in terms of public finances it needs to be clear-cut. my rolled in the commission is the respect of our rules. even with some flexibility and tensions. jonathan: let me just talk about a stability package. we talk about respect for the budget deficit targets, it seems france keeps pushing them back. in terms of the overall dad, -- debt, italy is made no progress towards that 60% mark. how can you have respect for the rules with a by the governments themselves. they are globally compliant for this year. the commission will make sure that is the case. if we speak of another country, the criteria's which are

a debt to gdp ratio 3%. that is quite a different with our rules. i wouldn't say that the debt is softer. the fact is, during the crisis the average debt to gdp ratio increased by 30% all over europe. even if you look at germany which is the better performing economy, the debt to gdp ratio is over 60%. lunchld seem harder to at that time. as far as italy is concerned, it is clear it must now move down 120%, debt which is about far away from what is admissible. it -- the italian government is making reforms.

overall, it is necessary that italy diminishes its debt to gdp ratio. jonathan: what other negative consequence for the government? the ecb is conducting quantitative easing. the market forces the negative consequences and they ceased to exist. are there any negative consequences at all if running a deficit above 3% at the moment it doesn't seem that there is? what are they? that has to be reimbursed. it is a burden to all of us. jonathan: why does it matter? you cannot do anything under public services. you cannot finance education. you cannot finance environment. you cannot finance security. it is about gaining room to maneuver in order to have a

proper economy. we need to go on about the ecb to show great respect not only the way it communicates, but in decisions. they were always appropriate. monetary policies are important, but it cannot do and if he thing -- cannot do everything. this cool consolidation, flexibility, also launching investment. lastly, the states muska want to structural reforms. the key is there. we have to leave it there, thank you very much for joining us. the eu economic affairs commissioner. we come up to the market open,

futures are lower. crude making fresh lows. ♪ the only way to get better is to challenge yourself,

and that's what we're doing at xfinity. we are challenging ourselves to improve every aspect of your experience. and this includes our commitment to being on time. every time. that's why if we're ever late for an appointment, we'll credit your account $20. it's our promise to you. we're doing everything we can to give you the best experience possible. because we should fit into your life. not the other way around.

jonathan: good morning and welcome to on the move. i'm here in london, moments away from the start of european trading. a busy morning. here is your morning brief. japanese stocks sink into bear market territory. european and u.s. equity markets fall sharply lower. shellshocked. the oil makers quarterly profit plunges. and davos date one. chinese slowdown dominating the world economic forum. we will speak to the ceos of moeller maersk shortly. i want to tell you a few things happening here as we head into the european market open. the market is running for safety this morning.

you are seeing yields collapsing. the market is buying the german tenure as it seeks safety, equity markets fell sharply lower, euro stocks down 2.3%, ftse 2.8%, cac down and dax. these numbers are really indicating a sharp selloff, and the u.s. will not fare much value, down by 1.8%. the market is open. let's figure out what is going on with caroline hyde. rally didn't last long after we gained european stocks and eradicate them today. a bear market in japan, the nikkei down more than 20%. we're seeing risk aversion back on volatility, f with 1.9% on ftse-- with 1.9% on the already. it is the miners and oil

companies where will hit the hardest. the cac has not one single stock higher, and the miners are really feeling the pain. china is front and center, as is the oil market. let's see how the oil market is tanking. once again, brent of by more than 2%, $28. they are cutting the overall view on commodities. brent will be 22% lower than where we thought previously. $40 a the average for this year. commodities are where it hurts. one bright spot is the haven. money movers to german bonds and gold, the yen. let's look at what has been happening to the u.s. treasury. this is your best performing developed world bond market this year, with 144 others. yields are up by six basis again. slumped 2% once

clearly this is where the money has been pouring. german borrowing costs are coming down, and have a look at the stocks. shell came out with its numbers today, down by 3.2%, profit plunging by almost a half. clearly this is what a low oil price does for show as it tries to do the biggest deal in the decade. 7%.ch insurance down retailers,in on the and on the insurers. zurich insurance says they will have to take a $275 million payout to cover those costs and u.k. and ireland. meanwhile, this good sink up to 10% -- labor costs are going up in the u.k., and that will hurt the profit overall.

guy: italian banks sharply lower in trade first thing this morning. francine lacqua is joined by another great guest. over to you. francine: thank you so much. lowerare lower today, yesterday as there was a lot of concern about some of the banks. one bank not affected, but is affected by the market selloff this morning, the dax and cac down by 2%. i'm very pleased to say that i am joined by the ceo -- thank you. we have to talk about this market correction. we see a lot of indices coming into bear market territory. the last one was japan. when you look at the market selloff, are we do a correction? is this normal, with how much we see rise? the economy is better but it is not great. >> it is not great, but it is

good. the fundamentals are good, and if you look at the figures of the imf, they move from 3.6% to 3.4%. we're not crazy about any negative situation. correction because there was a significant increase in the market last year, but in the end, i consider this -- francine: give me a sense of why you think the markets are correcting. are they concerned about interest rate hikes or is it psychological? >> it may be there is a significant component that a psychological, related to the significant increase in the over performers. probably they are preparing to have better performance at the end of the year, so it is typical in the market that when you create at the end of the year, you make the correction, and you have some fundamental notation -- but it is

something you can consider as a collapse of the real economy. oil prices the other point. oil price in my opinion is more important than china. francine: what will it stabilize? there are concerns about deflationary pressures coming from youan devaluation or oil prices -- those oil need to find a floor to markefor markets to p correcting? oil -- in myof the view, there could be something positive. you have more potential of expanding for families coming from internal demand. on the other hand you have a reduction in value. thehave to balance increasing pal of expenditures of the family with the reduction of export related companies. but again, in my view, this is not so negative.

, butan have a correction if you compare with 2011, it is growing. there could probably be some other volatility, but in my view we will be out of the situation. francine: specifically on the italian banks, a lot of panic selling yesterday. what exactly are they worried about? it's the ecb in this new review on them. >> in my view, there is a lot of confusion at this point, probably not clear communication . if you allow me to make a clear point on the situation of performing growth in italy -- the main point of concern, if you look at the gross nonperforming, you have a huge amount. but if you look at net nonperforming loss, you are close to 80 billion euros.

200 billion to 80 billion euros. 50% --y, it used to be a it isother countries, and more or less the risk of the portfolio. anmy view, there is attention from the supervisor but not only in the italian market but the other european markets. francine: do you think the selloff is not justified? >> in my view it is not justified. i can give you some figures, just to give you gross nonperforming loss. 39 billion euros gross nonperforming loss. net, 40 million euros. but we have on the other side 40 billion euros of collateral. the coverage is 140%. we do not see the simplification because they are -- all the

italian banks are in risk condition so it is a fight on realistic markets. francine: you are in a different position. it's almost considered the systemic bank. when you look at the valuation past, in a very short amount of time, do you consider that you have pressure to stem -- bank, not the systemic but the bank that is creating the value for the shareholder means we cannot buy. i'm devoting to create -- no pressure. in any case, to evaluate the situation, not to consider only the nonperforming loss but also the level of collateral in the yen, facing the amount of risk at the end. if you have derivatives, you cannot consider the amount of --

he had the devaluation of the portfolio. when you look at leverage in italy, 6% average in italy compared to germany. there are a lot of points of strength. francine: how critical is it to have a bad bank? >> in my view, it is not so important. i'm out of the -- francine: you are the outlier. very important the action the government made to speed up the recovery. at the end, nonperforming worth keeping in mind that a significant amount pastovisions made in the -- if the value of collateral will improve you could be in a position to make a lot of money and not rely on hedge funds.

if you are forced to make this today you will allow other competitors in the market -- francine: carlo, this environment -- how much will it postpone consolidations? >> i don't think it will postpone. if there is a strategic rationale to make the consolidation they will do the consolidation. in my view, what is very important is that they can prepare a palnlane because they have to carry it out -- have to create value for shareholders. francine: if you think the selloff was unjustified, what do you think it will take for markets to actually look at what you are saying? is it because markets aren't sophisticated? do they feel pressure from the market selloff in general? >> there is a selloff in general. you are trying to have occasion to move to what you consider the week part of the market, but the

italian banking system is not week. if you look at the fundamentals and compare nonperforming lost, , commonves, leverage equity ratio, the italian banking system probably does better than french and german. anthe end, probably there is attitude to look at the fault of the 1% market share, a big problem. but the reality another banking are probablyere toay an attitude that is negative. francine: in a completely different basket, you have to increase market share and are very focused on dividends. just give me a sense of what you are seeing in davos. it seems that there is a lot of angst. they don't know what they are looking for but they are fearing something. what is it? >> that's a good point.

there is something that they fear, and it is unjustified. there is for sure some tension, political in china, oil price, 20 basis points lower growth, it is not a big difference. in my view, at the end, there is too much focus on the bare side but there are a lot of negatives in davos, and i'm on the opposite side, both because i am coming from a country with -10% gdp and now from being in an environment with 1% growth for 2016. something that we are coming back to, due to internal demand we are seeing. in my view -- francine: you were talking about

how you are creating life for shareholders. could you update us on dividends? >> we have a minimum movement of 2 billion euros, and we deliver 2.7 billion euros. i'm ready to evaluate a proposal for the next dividentd to the board. the -- francine: -- having the ultimate investment bank space in europe . a lot of your competitors are trenching so far along, saying that it will be dominated by u.s. banks. possibility. there is a possibility that the u.s. investment bank can be the real leader for the future.

there is a probability this could be the case. francine: thank you so much. carlo mussina. we will handed back to you -- plenty margaret interviews coming up. we have seen a lot of moves on the markets and on oil. thespeaking to the to greo director of the iae. guy: i look forward to that conversation. the italian market doesn't have a single stock on the upside right now, francine. italian bangs down very sharply. most men markets around europe are down 2%, 2.5%. very few stocks in positive territory on the stoxx 600. asml, most stocks are down. very, very bleak numbers. the market continues to seek safety in the yen and bunds.

up next, what is going on around the world. the focus is davos. this is the man we are talking to next, his insight into what is happening in china with the president, next on "on the move," live from davos. ♪

guy: welcome back. you are watching "on the move." let me show you what is happening with global markets. quite a story. this is the european picture right now, most of the main markets down by 2%, 2.5%. an extensive selloff following yesterday. let me show you some other asset classes to focus on. wti dips below $28. that's something to think about. and we continue to watch what is happening with the asian markets, closing out now, down very heavily. look at what happened on the nikkei and hang seng, nikkei now in a bear market. this is the bund yields, the move we are seeing right now. it is a very sharp move lower in the german 10 year, buying it, looking for somewhere to hide

out. that is the story that is reminiscent of what is happening with the yen. fixed income is the beneficiary of the selloff. let's get you up to speed with everything else you need to know. here's the first word with nejra cehic. nejra: european stocks are selling off sharply this morning with the stoxx 600 falling more than 2% in the first moments of topix down 21% since august. earlier, hong kong shares have the lowest since march, 2009. hedge fund manager who predicted the crisis in and european debt problem says china should weaken the yuan by 50% this year. he says a one of devaluation would let policymakers "draw a line in the sand." he says he's investing against the yuan. saudi arabia and banks are said to have been told the stop

selling products that allow investors to make cheap that's on the devaluation of the real. themonetary agency issued instruction in a meeting on the 18th. traders are expecting a slump in the oil price will cause the gulf state to abandon. he believese says much of the appreciation in the dollar may have already happened, and we may not see much more. the currency rallied against all 16 of its major peers, amid speculation that the fed will boost borrowing costs in contrast to other major central banks. that is your bloomberg first were days. over to you, jon. jonathan: thank you. we are going to bring in the baidu president, who joins us now in davos. the president of china's largest internet search engine. great to have you with us. you come here as part of the big chinese delegation, and the big question is what is happening

with the chinese economy. what is your read on what is happening? clearly, the market is taking a position -- a very pessimistic view. what is your read? >> first of all, you have to look at the overall economy. 6.9%, which is not bad at all. obviously, it has to slow down a little bit, but if you look at the sector, the consumption, and the sector and technology, it breeds pretty well. china is in a great position to move into a new model. it does take an appetite. jonathan: the problem at the moment for your stock on the nasdaq, still being used as a proxy for slow down, whether it is a manufacturing or not, is that a reflection of anything happening with your company, or is it just what is happening more broadly with the data in china? >> i can't comment on the stock

itself, but overall, there are really two factors to look at how we move forward. the first is the macroeconomics, and the economy. the second is how fast people move online. online/offlit ne connectivity, less than 1% of business is done off-line. there is a huge potential for all this activity. that is the most exciting part for china's business. in china, we call this internet plus, to apply the internet to traditional business models. that will take off in a profound way. jonathan: the founding of your company, you're pushing more into financial services. >> the search continued to be critical, whether it was for pc

or mobile. if you look in for mobile internet search, it is taken differently. it is not only to look for information but connect people to real services. off-linet connectivity, that people use cell phones to look tickets, -- to book tickets, call taxis. that's super exciting for us. we also look at technologies going to change industries like finance, education, health care. also things like -- jonathan: that all sounds super exciting. it echoes with what google is doing on that side of things. all these new super exciting things you talk about, they are not exactly helping the bottom line. you wonder when that will start to deliver something for investors.

what time horizon do you have where contribute significantly to the bottom line? >> we are in this for the long-term. we are a technology company. we invest in things like artificial intelligence, and it has a long-term impact. it helps search engines be more efficient, voice recognition, picture recognition, transmission technology, more ac curate. it will change our business very fundamentally, and that is what we are looking for. even an online to offline, in the short-term, that is a lot of investment. but, you know, when this stage toover, we actually are able make it very efficient using technology. online/offline is not only about the subsidy. you want the subsidy, but it is technology that is making

inefficient a more competitive. jonathan: those investments you make, is it easier to do it via m&a? do you expect to do even more in 2016? >> we really look at our product service to be the core strategy. we will continue to live that. investment, all those things, are part of our business strategy. jonathan: it is a competitive business. what is the edge of baidu over other chinese companies? >> it is technology. it's that we invest 50% of our revenue into r&d. all the stuff we just talked about, voice recognition, picture recognition, machine translation, deep learning, all those things will make us competitive in the long-term. and short-term, too.

jonathan: full circle and very quickly. you turn up at the world economic forum. you will get question after question about china. is it a buy or sell at this point? >> in the short-term, there is a pressure. we have to face it, and it takes time. that makes the transition from manufacturing to service. but it's happening. i'm bullish in the long-term, and we have been in china. jonathan: thank you very much for joining us. up next, shipping profits. we talk of global trade and the strength of the economy with the ceo of ap. that interview, after the break, live from davos. another leg lower this morning, crew to making fresh lows as well. we will talk to global economists shortly. ♪ the only way to get better is to challenge yourself,

and that's what we're doing at xfinity. we are challenging ourselves to improve every aspect of your experience. and this includes our commitment to being on time. every time. that's why if we're ever late for an appointment, we'll credit your account $20. it's our promise to you. we're doing everything we can to give you the best experience possible. because we should fit into your life. not the other way around.

guy: welcome back. equity markets open for half an hour, and it has been quite a session. the numbers speak for themselves . the dax is now down by nearly 3%, as is the cac. london is not far behind at two 2.5%. the euro stocks is down by 2.5%. elsewhere, wti brent both down. brent is some $28. is beingn 10 year bund moved into. dollar-year in a few moments ago touched a one-year low of 116.13. watch out for dollar-ruble.

the all-time intraday record is 18.1 and we are trading at 79.8. let's talk about some of the stocks on the move, and there are plenty of them. caroline hyde, over to you. caroline: i want to channel in the commodities, the minor ers among them. that is not only as they see the repercussions of citigroup getting more negative on the commodity outlook, but also the fact that they are downgrading their overall forecast for iron ore. they are saying they are going to get less out of the ground, due to the deadly incident in brazil, as the dam burst. and the entiret, industry group sliding a lot. meanwhile, zurich insurance is down, one of the biggest followers, down a .5% for this insurance company. this time, the u.k. weather wreaks havoc for an entirely

different reason. before we had to warm weather hosting it, and now we have these storms that hit the u.k. and ireland, really hurting the insurers. they will have to cough up almost $250 million to help cover these damage claims. $275 million for the u.k. and ireland. they are taking a hit as they update us with their earnings. asml -- i have to focus on one i n the green. the chip equivalent maker is up 6/10 of 1%, coming off their highs. they are giving money back to investors. let's paint has been felt by the investor, already hit by about 10% so far this year. asml now has back one billion euros in terms of buyback and is also seeing a rise in dividend to quell the concerns about the first quarter, which they have also said will be less. let's head back to davos. jonathan: thank you. i'm please do to welcome another

guest -- the global economic trader and ceo of nielsen group. great to have you. we get to sit next to each other for once is that of down the camera. great to talk about what is happening. the market is quite clearly taking a position on what's happening with global growth. it's not pretty. for a man that operates a global company and is so exposed to global trade, what is the global economy that using? -- that you see? >> right now, we are coming out of a pretty difficult 2015 where global growth in trade has been the lowest for a long time. but at the beginning of this year, things look a little better. we do expect the euro to develop better this year than it did last year. spot, is in a pretty good with a competitive euro and low energy prices. it's good for the european

economy. we think it will start to pick up consumption was. -- consumption wise. we had 50 climbs last year on imports, so there are a lot of structural changes. toathan: things are starting look better next year -- is the volume picking up, the rates? >> now we are seeing volumes picking up a little bit, but we are talking two weeks, so it is very early days. we find it difficult to believe that the european trade will continue to be negative. jonathan: a few months ago, the forecasters were being overly optimistic about global growth. they cut their forecast 3.6% previously, now 3.4%. is that still to optimistic? a lothink fundamentally

of good things are going on in the global economy. you have to developed markets in u.s. and europe being in ok positions, and the pressure in the emerging markets. there is more risk to the downside at the moment because of the general pessimistic tone on the stock markets and on china. if you look at china, they are changing the economy toward a more domestic consumption focused economy, just as they said they would. this has an impact on export and energy and so on. it as part of making the global economy more healthy. i think we are going through a period when there is a bit of disruption, but if you ask me, i think imf is probably a bit optimistic. jonathan: in terms of your industry, the whole shipping industry, theme has been one of overcapacity. just in terms of fundamental supply. are we anywhere close to

shifting toward an equilibrium where we move away from this overcapacity? how long will that take? >> the shipping and oil industry at the moment, they have to much supply in the market. that's driven by a lot of factors. you can take the oil industry, and definitely we need to work down production in the more expensive parts, and in shipping also we need to see some amongint in new vessels the people who have not made money for five or six years. they will have to make decisions. but until that happens, we struggle with overcapacity, and i think if you don't make money now, don't count on lack of capacity to make everything. jonathan: a conversation in the oil market is that we need to see bankruptcy. is that what we need to see in the shipping industry?

>> in the shipping industry, it will take some time. people need fundamentally to stop ordering capacity that is not needed in the market. we need to see some consolidation, but it's too different. a different kettle of fish. it will work itself out, save some time, and i think it will be the same in your market. jonathan: your company is known first and foremost almost exclusively for the container shipping. the oil operation interests me. is that a business that you really want exposure, that you want to have exposure to for the long-term? >> you know, we have been among the most profitable oil producers. we made very good money in them, we think we had very good operational skills and technologies that will help us in a market where competitiveness and low production costs have become

more important. we actually see continue lower prices. at the moment, we will work this we need toof course find the right opportunities, and that is what we will do. jonathan: i wake up every morning with oil at a 12 year low, fresh lows again this morning. when you see those prices, do you have to look at the banerjee began and cutting even more costs? >> we've gone through all the businesses and it is tremendously competitive with that five-year continued pressure on costs. that is paying out, of course last year we had to make it was notut i think an on phil move and i think everybody has to do that. we are well positioned for the

future. we have a strong balance sheet so what we will do is continue to work to be competitive, continue to focus on our customers. we want to make sure that we also have the balance sheets to take advantage of an acquisition opportunity. jonathan: is that something you are looking to do this year? >> we did a couple things last year. we bought container terminals in africa, and we will look for more activity in those areas going forward. jonathan: final question. let's say $30 crude is the reality for the rest of 2016. is your balance sheet position for that? >> yes. we would have no problems for with that, actually. we broke into the oil business quite significantly, so we aren't making a profit for $30 but is not going to be a cash loss as far as i can see. we're position for that, and on

top of that, we. area conglomerate and are very strong jonathan: that operate -- we are a conglomerate and we are very strong. jonathan: iran. competitors are getting back in. where do you think the opportunity is? what is the time horizon? >> for us, we are looking to the oil area. iran is historically a very big oil producer. the immediate steps you see us taking is that we will get backing on shipping. iran beforeped in and that is something we can move quickly on. jonathan: if china was a stock, buy or sell? >> at the moment it is difficult to say. i think the fundamental long-term chinese economy will do well. there will be lots of turbulence, but i think what the leadership is trying to do was the right thing. it is the only way it could be

sustainable in the global economy. i think we have to be patient. jonathan: thank you very much. the ceo of the moller maersk. , more from -- up next,, more from davos. we will speak to the chief executive of btv bank. 41 minutes into the training sessions, stocks sharply lower, crews making fresh 12 year lows. good morning. ♪

guy: welcome back. 8:44 in london. we have something of the selloff on our hands. if you are looking at equities, look away. we are seeing a significant selloff across european equities. that is the picture you are seeing, down over 3% on the dax and cac, euro stoxx 600 down close to that number, ftse not far behind. mining stocks, oil stocks all taking it very, very hard. it is a mix across europe as to what is happening. banking stocks are down very aggressively as well. let me show you some of the other things you need to be aware of as well, the fact that the nikkei closed in a bear market, down 20%.

hang seng fell aggressively, shares really taking it hard. to shanghai composite was off over 1%. nymex crude, $27. ruble is flirting with an all-time intraday record against the u.s. dollar. aussie dollar selling off aggressively as well. the whole story is one of negativity, of concern. let's show you the numbers -- there they all are. let's get you up to speed with everything else, here is the bloomberg business flash. says fourth-quarter profits plunged. adjustedny sees profit with changes of $1.6 billion to $1.9 billion. they are buying bg group in the largest deal in a decade, cutting jobs and reducing spending as it prepares for a prolonged downturn.

zurich insurance group expects a second straight quarterly loss as they expect to pay out $275 million to cover damage claims from stores in the u k and ireland. it is one of the biggest followers in europe today. buying back in additional $1 billion of its stock, the european biggest chipmaker as its stock dropped 10% this year. the purchase will be made in 2016 in 2017. asml is the only gainer on the euro stoxx 50 this morning. s.t's get back to todavo jonathan: we have a selloff in the equity markets, crude with a 27 handle. i think it is time to talk russia. the impact of the sanctions in the oil price slump has out priced to country. how is the banking sector coping? andrew costkin.y cos

clearly, quite a lot of pressure on the russian government to sell down there spanking your bank. are you ready for that? >> i think we should all be ready for everything, including this. the government is the owner of the stake, and if they are willing to sell, they can sell it. i spoke with people in the government, and they are quite serious. but we shall stay, without discussing details or reviewing instructions. jonathan: the impression you have -- what is the time horizon? months, a year, two? >> if the government wants to sell this year, we should start to get ready quite soon. own atyou know, it is the moment by the government with 61%, and we have an existing war.

bankould define that the should stay mainly over the government. with thinness we can sell 10%. beyond this, we need a change of position. we should still have to see what will be the possession of the government, and it is a very consultative situation. markets onnt the these are though we are selling the stocks. this is not under the sanction, but still. the whole situation is quite difficult. jonathan: the existing equity. 10% of the market. are you speaking oto long-term investors, and other prepared to -- our last place it was in 2013 when we made a club deal, with qatar and in norway and also by

azerbaijan. we didn't think about it because we didn't think it was right. now, we thinkment it will start working. we will go to a large investors in the middle east and in asia before going to any others. jonathan: so you haven't started those conversations. >> no. jonathan: nonperforming loans. crudeble back near 80, around $27 per barrel, and a nonperforming loan -- will that situation get worse and worse or is it getting better? >> last year, we finished with a level of something like 6.2%, and the view for december was quite optimistic. we didn't expect an increase, price,rting from -- oil

growth in china and many other aspects. commodity prices in general are quite depressed. we still have to feel how our -- at the moment, there is no directive to change, but it continues for some time. and we expect that it might worsen jonathan: you expected to pick up? >> we will have to see. the have two scenarios -- one is pessimistic and one is optimistic. side industries have started to feel -- some industries have ok because ofel l the continuing devaluation, bringing them more money. jonathan: investors were hoping that the company was becoming more profitable. do you anticipate that? >> i don't think in general the profitability will increase for

the whole economy, but in some industries -- jonathan: your bank specifically. yes. bank, last year, we had breakeven. but we still are cautious about the problems you mentioned. becauseinterest rate -- our expectation was that the central bank will bring it down by the end of this year, now it's more difficult, still believing there is room for never. jonathan: you don't expect profitability to pick up -- >> it might, it might. it might go up, particularly if the bank managed to suppress inflation. i think inflation will go back to one digit, thus bringing the interest rate to earn more. jonathan: a strategy update -- can we expect major changes?

are you committed to the dividend? >> we do commit to dividends, and our policy is that it will be consistent. a major shareholder for the annual meeting. approximately 3% dividend. we will try to keep this level. jonathan: we have to cut costs to accommodate -- will you have to cut costs to accommodate? --yes, and we can jonathan: give us some numbers. >> it's too early to say, but we are working on the program. jonathan: the argument against the russian economy more broadly is that it has failed to diversify and now it is suffering. is this it now? is it just the commodity exposed economy, even more difficult to diversify? >> it's difficult, but there is

a fine, unique investment with technology. think that's the situation. things are changing, particularly in every culture where we have improvement. but overall, i think there are tough times, and diversification will take place. jonathan: tough times all around for anyone operating in russia. iran entering a new phase about sanctions. are you hopeful that can happen for russia anytime soon, or du run the business anticipating, assuming that this is that? -- this is it? >> iran is an opportunity for everyone. are bank has a frozen 20 relationship because of the sanctions, and we used to have quite a large business with russian companies. are now studying very

carefully what the new sanctions are and whether we can be involved. in general, the russian economy would be -- jonathan: final question. i want to speak to the trader in you. crude, fresh lows. kostin buy or sell? >> i think i will still buy. most of my colleagues in russia are appreciating it to go down. jonathan: thank you for being with us. -- johnson, i have to say it talking in his book on crude may be -- guy: yeah, i think he would be a happy man of those numbers are posted. the whole of russia would be very happy. it's not just oil taking it on the chin this morning. plenty of other asset classes are as well. oil is one we are watching

carefully. equity markets sharply to the downside, oil stocks, mining stocks, two made areas of focus. oil is a big focus -- let's show you what's happening, which now has a 27 handle. that was the asian markets, and there is the nikkei -- there is my next him at the bottom. jon, it's been a very busy morning. what do you have coming up? jonathan: it will be a busy afternoon. we will cover the deflation of europe to the inflation of south africa and what it means. i will be speaking to the governor of the central bank. you know the story -- if you want to go on vacation as a brit, there is only one place to go -- south africa, with the rand reaching record lows. it will be an important conversation and i'm looking forward to it. guy: you were just talking about russia, and i was talking about

people talk about them in the same kind of conversation. south africa, the misstep, the firing of the finance minister exposing that country to that massive drop we saw. who saidto one analyst turkey doesn't have a growth problem but it hasn't inflation problem. south africa hasn't inflation problem and a growth problem. and then you will be talking to has a double problem he has to deal with. i'm fascinated by that conversation, as i'm sure so many people will be. jonathan: 12 months ago, if we have sat here and have a conversation about south africa and i said i would speak to the central bank governor, i thought we would be talking at the federal reserve. as i go through the questions and prepare, the fed doesn't think as much as it would have -- the domestic and commodity story is much more important for south africa, with the currency story at the forefront. stay with bloomberg tv. plenty more. "the pulse" is up next.

fall above us on twitter. good morning to you all. ♪

rout resumes. tumble as japan enters a bear market. fourth-quarter profits at shell plunge. day one. $28 oil dominates the agenda. bloomberg first with the i.a. so, welcome to "the pulse" live