anna: failing factories. china's official pmi signals a drop. equity markets fall. in japan, the rally rolls on. dig -- doj paring the worst start since 2009. new records. we have figures breaking now. how much will they benefit from the plunging oil prices? ceopeak to ryanair's cnl -- and 45 minutes.

welcome to countdown, i am anna edwards. it has just gone 6:00 here in london. it is 7:00 in switzerland. caroline has the details. good morning. caroline: it is the third-largest wealth manager in switzerland and it looks like the numbers are just coming in short of expectations this morning. full-year net adjusted profit coming in at 701 million swiss francs. gesture of the estimate on full-year net. full-year operating income of 2.6 9 billion swiss franc. they are boosting dividend more than has been anticipated. we are seeing the dividend at 1.1 swiss francs. the overall forecast had been

one swiss franc as a dividend. more being handed back to the investor base but you will have to dig into these numbers as time goes on because we are understanding we could be getting an outline of new capital management plans coming from the chief executive and will they update us to any agreement with tax authorities in the united states? investigated as to helping those who work there to minimize their tax. the expected apartment of justice revolution, so no agreement quite yet. >> coming up later we will be speaking to the ceo. speaking tong to be him a little bit later on during programming.

+++ their quarterly update which have missed estimates coming in it whenever to -- seven 2 million euros against estimates of a higher number. they said that bookings and pricing were both weaker after the terror attacks. ryanair sees q4 traffic up by 22% against the previous view of 22% growth. upgrading their guidance just a little bit. they have already returned 4 billion euros to shareholders over the past eight years. theiray they see full-year performance at the upper end of that range they had previously cited. we will be speaking to ryanair's cfo later in the show. how much of a benefit are they seeing from this weaker oil prices. not as much as you might think. 6:45 u.k. time is when we'll have that chat will stop. but with happening in china because we told you about disappointing numbers coming up

there. a record six months of deterioration in pmi. manufacturing pmi at a three-year low. but i wanted try your attention to the services side of things. to get glass half-full or glass half empty view of this . as i've been reminded by our next guest this is the chinese services pmi it is not running in january. the rise in the non-services pmi giving comfort to those worried about that deterioration in china. you're seeing that number retracting we're down to 53.5 no anything above 50 does mean the sector is expanding. let's briefly checking on commodities because brent and wti are getting a decent boost over the last few days coming off of a four day advance this is the longest run of games this

year. this morning we are seeing retrenchment on the oil price. printed 35. 7%. of them down by 1.6 or that's a look at china and the commodities space. the bloomberg first word news, here is there a change. asian stocks are trading higher with tokyo leading the way. that's the impact of the bank of japan's surprise move to negative interest rates on friday. gains despitel shanghai. those offers come after china official factory gauge signals a record six months in a row of contraction. the manufacturing pmi fell to 49.4 in january. the official services index also fell well a private in my survey signal that the industry shank for an 11th month. they suffered their worst month since october as the slowdown

deepened. oil slumped in the wake of that chinese data as well. the kuwait and nigeria helped boost crew production from opec, exacerbating a global glut. prices fell smashing a four day advance which of been the longest run of gains this year. it left a meeting with david cameron singer is no deal over the renegotiation of the u.k. mentorship of the eu. they've agreed to postpone by 24 hours the publication of trump's template for a compromise plan. hsbc will impose a hiring and pay freeze as part of its drive to cut as much as $5 billion in cost by the end of 2016. in june he outlined a three-year plan to pare back of global network by shutting money-losing businesses and in limiting jobs. global news toy four hours a day powered by our them around the

world. let's check in on the markets in asia. haidi lun is standing by for us sony, the move in sony's shares are noticeable overnight getting a little bit of a boost .rom a certain secret agent >> james bond has been a huge favor. minute to that in just a in terms of this astronomical search that we did see today but you talk about diverted picture against people can go look at a big etcher things are looking pretty good. the asia-pacific index is on track for a fourth day of gains. this is largely driven by markets in japan as well as salt we are seeing a little bit of strength coming through from emerging markets and southeast asia. but really it is a little bit of a sugar high. tom the decision to go there

go to negative rates on friday. that's really still playing out across the region lifting risk appetite as was seen across other markets. the naked two to five closing up by 2%. the topics about the same with had that 3% bounce on friday. extending those gains. south korean shares managed to close up the distance. some horrible expert numbers falling at the steepest level since august 2009. so south korea is very much that canary in the goldmine. let's get to sony. we had james bond and adele. two british exports contribute in to the better-than-expected numbers that came out. i finish the day up by 12% was up by 16% at one stage. lenders continue to be punished for the boj decision and they will eventually have to pay to hold onto the deposits. so mitsubishi up by as much as

8% when talking about that sector. i would take you through some of the big losers in hong kong. shanghai and hong kong are dragging the rest of the region. coming off of these earlier losses but they're reporting the 2015 preliminary profit that will be down by as much as 70%. we spoken about the pmi spoken about this other side of the story which is the overcapacity. the slowdown affecting china's own companies. anna: heidi, thank you very much. set up our next conversation talking but the data out of china. let's get more where the official factory gate signals conditions deteriorating for record six months. we are joined by our asia emerging market and fx editor.

what does the data tell us about the state of china's economy? about are feeling gloomy manufacturing in china it might not give you cause to change review. >> going back to what you were discussing earlier, i prefer the glass half empty. this really copper kates things for the policymakers in china. don't forget the cut interest rates about six times since november 2014. cameirst interest rate cut after a couple of years. so if that cannot stimulate an economy and if we cannot see the results between filtering and now it's been a while since the last one of these. youhe problem with this is cannot create immense volatility in the currency market and the stock market and expect to see people showing immense confidence in manufacturing or anything for that matter.

this really complicates things so what does the pboc and what does xi jinping -- what are they economy ishat the back on the path to recovery? anna: thank you for joining us. robin ganguly from hong kong. david, i'm smiling because we were having a debate about whether you would look at the services number with a glass half full or half empty approach. you prefer to take a glass half-full approach. territory. expansion not the most wonderful either.t not too that

we manufacturing pmi's out of the united states later. i don't think that we can listen to the chinese government say that they want to move away from industrial production and then be shocked when they allow it to slow a little bit. the debate is still within china, which policy tools to use to manage this transition. the ones which show the have the -- the debt levels of the federal government in china are still very low. cutting taxes for consumption for example encouraging employment and have a good outlook for that. anna: you listen up are of good policy measures that the pboc or chinese government could introduce that are not necessarily cutting interest

rates. they are in a bit of a bind because they might want to cut interest rates to boost the economy or the older parts but at the same time that's triggering further capital outflow. see your say there are ways to trigger it they get in the new economy and not the old? >> absolutely. first you do the outflows as you say because the differential drops but if -- what are they trying to do? get people to take on debt. debt levels in the nonfinancial corporate sector are very high. i don't think you expect them to leverage up much more. certainly i don't think they should be pulling other policy levers. me theree main one for are obvious the other reforms they can do to increase -- reduce volatility. i think they have a range of

tools the currency being one they are very careful over. i think more people are surprised in the last couple of willingcause china is to let the old economy flounder is a manage this progression edit the same time change cultural norms such as a clampdown on luxury spending. >> let's get a brief word about what we saw from the japanese because that shocked many people in the markets. colleague and hong kong talking on how markets are still on a bit of a sugar high. with a sugar high you tend to come crashing down. what are your expectations? had a sugar high that lesson a number of weeks or months with a huge rally. that ultimately reversed for a number of reasons as well. these announcements will push investors into other asset classes. some of that money will go into equities.

earnings is the lifeblood of equities and markets continue to focus on that. on the bank of japan, it is fascinating that we are watching the scale of the policies pay span before our eyes. only a few years ago, the thought of a central bank going into negative territory would have been crazy but here we have the ecb and the swiss national bank and others in europe another bank of japan. i was aty -- obviously a few conferences and i'm not sure if people read it this way but i read it within the limits of quantitative easing. they have done so much, more than any other central bank. see: and in some ways you diminishing returns. >> absolutely. and the view now as they're looking at some of the things on the european sector driven by the negative rates which encourage people to move deposits around.

theysay that's the lever should be pulling all along. anna: thank you. david stays with us this morning. it's a very busy week in terms of data so let's tell you what you need to be aware of. we seen these pmi nubbers out of china. the u.s. data is due out later on today. we will also hear from mario draghi and the fed family of fisher. then iowa holds the nominating caucuses in the republican and democratic presidential contest. i'm sure that is marked on your calendars already. plenty of analysis of that after tomorrow. later in the week at super thursday and the bank of england will set interest rates unveiled a quarterly interest report and unveil a news conference. year, flying steady. ryanair announces no change to its full-year guidance. we break down the figures in more detail next.

♪

anna: welcome back to "countdown." let's get to the bloomberg -- bloomberg business flash. creditbarclays and suisse are expected to settle allegations over the management of their private trading platform. tell us that barclays will pay a $70 million penalty and admit and misleading investors and violating security laws. aroundsuisse will pay $84 million but is not expected to admit any wrongdoing. any chairs arisen the most in year after the country reported better-than-expected profits and was given a huge helping hand with the record-breaking sales of the album "25. meanwhile, playstation four sales help to offset a plunge. ryanair doubled earnings in the third quarter.

profit after tax was below analyst asked him it's. airline also cautioned that a decline in fares is set to accelerate during the remainder of the year. anna: let's get more on those numbers that you mentioned. terry lundgren joins us on set. let's talk a little bit about the numbers. it can be challenging for this industry but they still improving their numbers even though the overall seems to come in below estimates. >> they did see a bit of weakness after the terror attacks in paris but they're really focusing on this strategy of load active, yield passive. so they saw passenger numbers up really driving a lot of that with lower fares. the response of the terror attacks in paris went on -- they offered lots of cheaper fares

and helped boost load factors and that helped drive the earnings. anna: we have seen fuel prices fall significantly. not all airlines are created equal in the sense of a hedge to different degrees. so what is the secret for the season, which ones will actually benefit? >> reiners sing in q3 they saw the fuel per passenger cost down about 10%. much of this improvement will be coming through in the next fiscal year. in windfall will be coming fy 17 all stop they have been using it to drive lower fares, but it will be waiting on yields. we are talking about a 6% decline in yields for the fourth quarter. that will be another factor. it will be important for them to remain focused on costs.

ryanair, is this a business that impresses you? >> every time i read about the fiercely competitive nature of european airlines, we talk about the benefit of oil and that coming through. , theu strip away that cost per passenger fuel costs of ryanair are the lowest in the industry. aboute discussing before what causes that. they have some new planes but domicile and ireland helps that as well. to keepey managed distinct from easyjet for a long time because they were a slightly different product and they changed their business model and the types of airports that they fly to.

they would not describe it as similar, but they say it works well for them. >> it does not put them in competition with easyjet. away from they description that they are copping the things that work for others. interestingto be over the coming year. as you look at the airport to airport basis, they have had little overlap. we have the focus of both airlines on business now. is it a big deal for their earnings? >> it is feeding in because it is a higher value passenger. areof those things ancillary revenues.

if ryanair is asking for a cheap fare to get on the plane, than those extra things, paying to have your seat. anna: you can be sure they will want to sell you something else. >> exactly. anna: cameron will join me for the conversation with the cfo in just a moment. david, let's talk a little bit about oil because it has been a preoccupation with investors from december into january, more even than last year. we will get some really important gauges and for all the negative headlines that we see about oil headlines falling. the consumer will benefit. in the u.s., the u.k. and india. what evidence are you sing that is true? >> is personal income and expenditures report. it tells us all the different components of income and how much is spent.

two,ifference between the the first is the savings ratio. that is higher than people thought it would be. this can obviously be read a number of ways. i think that we have had a change in spending toward attitude and that toward towarde -- in spending -- change in attitude toward spending and debt. we will be looking at that to consumertrength of the which is where the bullish arguments hang their hats. in the u.k. we have the credit figures. this is where they are seeing real strength. david stays with us.

don't miss the conversation with the secretary-general. monetary policy and tax treatment. all of that coming up next. stay with us on "countdown." ♪ . .

anna: welcome back to "countdown ." let's get the bloomberg first word news now. >> asian stocks are trading higher this morning with tokyo leading the way. that is after the impact of the bank of japan's surprise move that continues to be felt across markets. losses in hong kong and shanghai came after china's factoring -- manufacturing pmi fell to 49.4. a private survey also signaled the industry shrank for an 11 straight month.

the services industry fell, but it is still an expansion territory. kuwait and nigeria helped boost food production from opec, .xacerbating a global glut prices fell, snapping a four-day advance. the eu president held a meeting with david cameron, saying there is no deal over renegotiation of their membership of the eu. workers -- the panama-registered modern express is drifting on its side in gale force wind at cp the latest attempt to save it failed. global news 24 hours a day, powered by 2400 journalists and more than 150 news bureaus around the world. anna: thanks very much.

the pictures of that ship make me feel a bit queasy on this monday morning. is left for policymakers in beijing to do? let's get a read on the global economy now. we are joined by the secretary-general of the organization for economic cooperation and development. also known as the oecd. we have seen deteriorating chinese manufacturing. what is left for policymakers in china to do? what moves do you expect them to take? >> there is a transition going on in china. they are moving away from the ledstment-led and export model and they are moving more into a consumption-led model with more services provided to their population. so this is what is happening now. a trough in terms of

investment and in some areas, overinvestment, like in the case of steel, which is creating a serious problem of oversupply in many countries in the world. the price has dropped. you see the result of this transition. it has gone on for some time. we're going to have oscillations and some turbulence over the next few years. anna: do you expect further stimulus from chinese authorities? we had seen weakening in the services pmi number. what can they do to target that? angel: china is inevitably going to be moving more into a services-led economy because, first of all, the exports and manufactures that they do are going to have a greater content of services and knowledge to

this is how it is with every single economy that becomes more sophisticated. more and more services are part of what is known conventionally as export manufacturers. partwhat you also have is of the workforce is moving into cambodia ,laos, vietnam. we seem to have a little bit of a problem with the line to the oecd secretary-general, mr. gurria. that line does not seem to be that stable. we will see if we can reestablish a connection with him. apologies if you can hear me, angel gurria. let's get back to david, who is with us in the studio. we were talking about the data we're going to get later on

today from the u.s. i have what the interest rate markets are telling us about expectations of rate hikes rising. the rate hike in march is coming down fast, isn't it? david: the chart on the board was almost about 50% at the end of last year. the fed did the first rate hike. i think that is much fairer. i do not see how the fed can look at the u.s. economy and tighten further in the short-term, especially with manufacturing contracting. anna: i think that we have mr. gurria back with us. apologies for that. we were just talking about the u.s. economy. you wanted the fed to get off zero and to hike rates. do you think they made the right decision? does it still looked like the

right decision? angel: [indiscernible] ok.: it looks as though we still have a problem with that line. sincere apologies to angel gur ria at the oecd. thank you very much for joining us. let's look at what is happening in the markets right now. caroline hyde is standing by with a look at the latest market action. slightly positive coming through from asia. caroline: i am going to start with my glass half-empty. i want to look at the negative first because china is trading in the red at the moment. the shanghai composite is trading lower today. we are now down by 24% year to date. ?own 24% in one month

clearly, the shanghai composite still feeling some of the pain. the chinese data that you were painting so well for us. a record sixth straight month of deterioration. the pmi coming in at a three-year low. you have a downward trajectory across the board for chinese stocks. emerging markets, indonesia, thailand, taiwan, all trading lower and having a negative effect on metals as well. copper is lower. aluminum is lower. this is the juggernaut of the country that soaks up the commodity space. gold is rising because of risk aversion. that is what i say you is an important bottom. meanwhile, oil and the commodities spectrum also on the low aside. its own uniquein

passion due to its own supply and demand concerns. down 2.2%.mex crude you have brent trading lower. the reason, opec continuing to pull oil out of the ground at the moment. we are already concerned about the global glut and what the likes of opec are likely to cp -- likely to see. quite a ramp-up in oil prices coming to a halt after the longest winning streak that we have seen this year in oil. you are seeing that come to a halt over the course of this last trading day. keeping an eye on the higher side, let's go to the optimistic side, the glass half full. the wave ofve optimism coming through from japan after the surprise cut, the surprised stimulus from the boj. yields are continuing to plummet

on the 10-year japanese debt. lows. now at phenomenal keep an eye on the ongoing optimism and risk appetite for the japanese area. anna: david cameron and the eu president are holding talks after both men fail to reach an agreement last night over a remediation of britain's relationship with brussels. hans nichols joins us from berlin with more. good morning to you. so no agreement. another 24 hours of talks to go in london. : that is what mr. cameron wanted, a 24-hour reprieve. the eu president was supposed to start circulating his draft template to other eu leaders. they have agreed to postpone that another 24 hours. the deadline for all of this, the february 18 summit in brussels. last night, when the two men met, they were all smiles.

there was some flash photography and some smiles heading into that meeting. there was regulation that they could have a deal. it looks like the eu president tried to tempt down on the speculation. said onwhat mr. tusk twitter -- what we really want here is an emergency brake that he can apply that benefits new arrivals in the u.k. he wants to be able to apply the emergency brake the moment after he calls the referendum. that is one of the sticking points. tense negotiations. remember, mr. cameron on friday met with jean-claude juncker, the president of the european commission. youpossibility is that could have a referendum in the u.k. on june 23, two days after the summer solstice. you should market in your calendar.

one other thing we should note -- when you look at what the pound is doing versus the dollar, earlier, it hit a five 5-5-year low.- a remember, mr. cameron will have a couple of chances to pledge his case to chancellor merkel on thursday for the summit. later the month -- this month, mr. cameron is going to be giving a speech on europe in hamburg. this is one of my story ideas. we can do it -- we can do a tour of all the states across the baltic. hamburg is an important one. obviously, you are going to correct me on my geography. anna: i think you are just talking to yourself right now, so i will help you out. certainly will not be watching

any football, which is crucial when it comes to calling and election in the u.k. we run up to that important eu summit later on this month. david is still with us. in terms of the timing of all of this, we used to talk about the -- the brexit rubbing up against england -- the bank of england. david: this is one of the benefits of the u.k. data looking softer in recent months, especially on the wage side. it does not seem the real economy is going to be in a place where he would raise interest rates in the first half of the year, even if there is a referendum. we do not know that this referendum is coming. once the data is set, we will see some market participants focus on it. for global markets to push down the currency and the valuation

on large companies listed in which would be the obvious impact of the referendum , i think you need to get it moving in a few weeks. people over the world to have it on their calendars and start to traded quarterly. anna: it seems that the currency markets are already alert to the risk of brexit. maybe they would become increasingly alert as we get closer. thed: you never know composition of drivers that make a market move there has been a solid push back from the bank of england. interest rates have been the key driver of that move. the activity and inflation data in the u.k. has weakened quite significantly. there has been dovish rhetoric out of a lot of policymakers as well. about thellor morning

economy. i'm not convinced that this move is much about brexit. i think the move is still ahead of us. anna: not sure if that is comfortable or not. depends where you are on the pound. david: if you have your money in u.s. stocks, it is very comfortable. is a different conversation. you could buy treasuries and feel bearish or equities and feel bullish. i think we are in a grinding dollar bull market. anna: let me talk about something different. i want to read you a bit of this piece from this morning. kong looks tohong be a decision that has already made itself." where or may get news on hsbc is going to put their headquarters. really, it is a reason to talk about -- i mean, this is not exit related to -- exit related

-- brexit realted. the point being made is that a focus on asia looks misplaced given where the global economy is. some of the european data looks pretty good. if you want a positive macroeconomic story, you can in the labor market, financing conditions, and some of those surveys. it does not mean that european equities are going through the roof. they are impacted by global worries as well. sentiment towards global equities has not been great this year, to put it mildly. once the noise about china's cedes,wn receives -- re and i think that was taken a couple of years, you are left

with the fact that asia is a larger region that has more of a possibility for gdp growth. i do not think the focus of a major change like this, done over a 50-year timeline, i think you can make the argument that asia is more attractive and bring the focus back to countries like the u.k. what do we do in terms of regulation and tax? big companies will not look at this in the same line of belief. anna: david, thank you for joining us this morning. up next, ryanair doubles earnings. but the airline gives a somewhat cautious outlook for 2016. we speak to their ceo in just a couple of minutes. ♪

anna: welcome back. you are watching "countdown." let's get the bloomberg business

flash. reported lower than expected full-year earnings after providing for a potential 500 or the $7 million settlement over american tax dodgers and weaker client activity in the second half. coming up later, we will speak to the ceo of julius bar. sony shares have risen the most in a year after they reported better-than-expected profit. it was given a huge helping hand " and recordre selling sales adele. ryanair has announced a hundred million euro shares buyback as it doubled earnings in its first quarter. at the same time, the budget airline said profit after tax inrease to 103 million euros the three months at the end of

december. that was below analyst estimates. that is your bloomberg business flash. the numbersre on out of ryanair, we're joined first here on bloomberg i ryanair's chief financial officer, neil sorahan. great to see you. thanks for joining in. i want to tap into just how gloomy or optimistic you are feeling about the year that stretches ahead of us. tell us about the numbers, of course, but just how optimistic are you feeling? you are sticking to your overall level of guidance this morning, but fuel prices are coming down. people want to know how optimistic you are feeling. neil: we had a very good quarter. profit up to $103 million net profit. as we move into the fourth we are of the year, passing on some of the lower fuel. but our unit costs, in the two

years since we lost, people would have felt that we would see costs increase as a result of that. 2% ine seen them drop by that time. so we will have our breath -- our best profits. as we move into next year, we have to move forward with the fuel savings. the big question is how much of that will make its way back to the passenger. earlier that say we will hit 113 million passengers next year. we have the lowest costs, the best balance sheets, we announced our buyback this morning. anna: we will touch on all of those. net-net, how optimistic are you feeling for the rest of the year? wonderd lead people to

about fare wars. a lot of airlines are seeing their fuel hedges coming off. it is inevitable that we will see some pressure pricing. be lower12 months will fares across the board. with the kind of hedges we have put in place, we feel we are very well-place for profitability. carrie: talk a little bit more about costs. where are you going to be driving the cost improvements? how much more can you do? you have already done quite a bit. done?lse can -- can be neil: we are now buying aircraft cheaper than we have ever done before. 52 of those aircraft are delivering in the next 12 months. that will drive cheaper costs. we were rising money in the bond market last year at just over

1%. we will probably finance ourselves with cash and next year, we have a billion worth of press -- worth of cash on the marketing side. a big initiative that we just is the base agreements that we have done with all of our pilot and cabinet group. we have a five-year deal. conditions and relations have never been better. we are continuing to drive efficiency and cost savings. why do the buyback? i have a share price chart of five years at ryanair. why make the decision to do the buyback? neil: we are at a stage where we have a lot of free cash in the business. large capital expenditure and significant distributions through the last year. we had $800 billion worth --

$800 million worth of buybacks. to the has always felt extent that we can reward shareholders, after the buyback, we will have given back almost $4.1 billion. to the extent that we continue to be profitable and have significant cash in the business, we will do more buybacks over time. terms of the always getting better program, what else is left? you have done a lot. you have allocated seating. people can get on earlier. the business plus program, all of those things. have you got the low hanging fruit? neil: we are in year 2 of the always getting better and -- program. kenny'swant to steal

thunder by announcing what is going to happen in year 3, but you will see a lot of new he's around our website and personalization and the offerings that we have. our crew will be sporting brand-new uniforms in the u.k. and that is a big initiative. we started getting extra leg room for passengers. me,rtant maybe not for because i am not the tallest guy, but for a lot of people, it is important to -- important. it is going to save me a fortune on either of his jackets -- on high-vis jackets. anna: good to see you this morning. neil sorahan, the cfo of ryan at -- of ryanair. it is 6:56 in london. we are minutes away from the second hour of the program. we will be talking about bt, the

telecoms giant pit under fire perhaps. to tony about the numbers. ♪

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factories.ng china's official pmi signals a sixth straight month of deterioration. oil snaps a four-day advance on the news. in japan, the rally moves on. aring the worst start to a year since 2009 bond yields again fall to record lows. ryanair announces an 800 million euro share buyback. but they give a cautious view on the year ahead.

welcome back to the program. this is "countdown." it has just gone 7:00 here in london. let's talk about the numbers coming out of bt right now. q3 sales coming in at $4.59 billion. this is a business facing a little political pressure. asking for the breakup, to some extent, of this business. this is something that bt's competitors have been calling for for some time. ebitda sales matching estimates. we are going to talk to them about that. they have just done their deal with ee as well, buying that mobile phone business.

it seems to get more resistance when it tries to do its own consolidation in the u.k. it will be interesting to get bt's take on where they see the consolidation debate going from here and how much they have to invest in content. adjusted eps coming in at nine pence per share. let's break into the conversation to tell you what has been going on overnight in terms of the chinese growth story, because it has been the preoccupation for a little while. chinese nonmanufacturing pmi is not rising, which is the broadpoint. over the last couple of months, that has been giving people a little bit of hope, the orientation away from manufacturing towards the nonmanufacturing side of the economy. it is still growing, the services. that is in expansion territory.

but it is not growing as fast as it was last month. that plus the weakness in the overall manufacturing number, that giving the pboc a few headaches. do they go for more expansion in terms of their monetary stimulus? we will keep an eye on what is happening on the chinese story. let's look at what is happening in commodities. we have seen some moves in commodity prices as a result of that data. both nymex and brent moving a little bit lower. both of those down by more than 1.5% compared to the close in the last trading day. let's bring to you what we have what thee futures, expectation is in terms of where markets are going to open up. a mixed picture coming through from asia. a continuing sugar rush, as my colleague was describing it, and the japanese session. asia overall.e in

we are expecting to open up a little bit on the front foot this morning. caroline hyde joins us. caroline: asian stocks are trading higher this morning with tokyo leading the way on the back of the bank of japan's surprise move to negative interest rates. today's overall gains come despite falls in hong kong and shanghai. china's official factory gate signaled a record six months in a row of contraction. the official services index also on a private pmi survey and signaled the industry shrank for an 11th month. oil slumped in the wake of the chinese data and figures show that kuwait and nigeria health to boost crude production from opec, exacerbating a global snapping fourell,

days of gains. met with davidsk cameron last night, saying there is no deal yet. the pair have instead agreed to tusk'se by 24 hours template for a compromise plan. hsbc will have a hiring and pay freeze this year. planne, the ceo outlined a to pare back a sprawling global network by shutting money-losing businesses and eliminating jobs. day,l news 24 hours a powered by 2400 journalists and more than 150 news bureaus around the world. anna: let's dig into the earnings figures from bt. we are joined by the company's finance director.

great to see you again on the program. congratulations on the ee deal. you are announcing six lines of operation. you will change the structure of the business. will it have a revenue or bottom line impact on the business? tony: we want to focus on the global services business to make sure it looks after multinational companies as a separate entity. it is an area of focus within global services. within the u.k., it is ensuring that we do not have a current overlap with the global services portfolio. a lot of decisions are made at a local level. it makes sense to combine what we are doing in terms of public .ealth at a regional level this is primarily about revenue generation as opposed to cost-cutting. anna: does this have any bearing on the open reach conversation? whether focus as to

open reach should be cut out as a separate part of your business . does this rub up against that story at all? tony: not at all. it is completely independent of that. mpa: on open reach, 121 support foressed breaking off parts of your business. do you feel under increased political pressure to explain more why you want to hold on to that part of the business? tony: it is a badly-written report. it is factually incorrect and has a number of inaccuracies. the level of government states that we are having is incorrect. there are a number of other factors that are not great. the key point is, what are the absolute facts? by the end of next year, we will have reached 95% of homes in

terms of the superfast broadband product. that is immaterial number. if you look in terms of what the rollout is, last quarter, we did 500,000 homes in the quarter. homes, 500,000 new capable of receiving broadband. effectively, our pricing is the lowest in the big five economies in europe. we are lower than frank -- spain, france, germany. in terms of the reach of the product, we are further on than those same countries. the reality of the situation is people get broadband. we are rolling out quickly. the cost that they are paying are lower than anywhere else. the other point to make is we have committed to invest money to get, by 2020, 10 million homes -- to reach 10 million homes.

it is calledg-fast. g-fast. called made, itvestment was would not have been made because open reach would not have had the funds to have bought it. the investment was made on the back of the fact that the downstream businesses made profits out of it. -- i can i ask you, though haven't heard everything you have said, but the regulator may or may not take a different view . are you contingency planning? tony: it would be very disappointing and unlikely if that happened but if it did happen, we have got plans which i am not prepared to discuss in this public forum. we think it is unlikely that it should happen. anna: congratulations again on the ee deal.

just the last couple of days, you have confirmed that that is going ahead. others trying to consolidate are being met with resistance. why should you be allowed to buy ee and they are not allowed to do their deal? bt did not have market share in the mobile space. it is a question of no reduction in terms of competitive activity . if a deal is going to go through, it is unlikely there will be revenues. anna: what revenues would you like to see? i read reports that iliad could be considering entering the u.k. market. would they be a competitor? there is all sorts of speculation on that. i think it is better for you to address that to the relevant parties. anna: let's talk about your

growth expectations. 1%-2%ink you can get revenue growth. how much of lift are you expecting from revenue as a result of ee and how much is the underlying business going to deliver? we have materially been consensus in terms of revenue and into -- and ebitda. we have given guidance of 1%-2% and that excludes the business. ee gives us an opportunity for revenue synergies. we have a cross sell opportunities in terms of the consumer space and the business space. it is quite an interesting factor. we have 24 million customers in ee. add that to the fact that bt has a relationship with 10 million homes, it gives us a material customer base to be able to work

on, cross selling the product. anna: can i ask you about your attitude to investing in content? you want to invest in content to attract people to your tv products but you do not want to invest too much. what is the complex mask that is going on behind that decision? tony: content is not vital to us. it is important, but not vital. we want to be a strong number two to sky. we had a critical mass now. what are we going to do in the future? i am not going to declare what we're going to bid or and what we are not going to bid for. every piece of content is based on a firm financial case. if you look at what we are paying in terms of the premier ,eague, the price of a game is roughly speaking, 25%: -- 25%-30% less than sky's number.

anna: thanks for joining us. bt group finance director. let's check out the market action in asia. 's danny by for us. i said at the top of the last hour that sony shares were getting a boost from a certain british secret agent. i neglected to mention that adele had a hand in this as well. haidi: that is right. also getting an equal boost from a certain british songstress. i want to give you the broader picture with chinese markets closing for the day, bucking the trend. on the bank of japan-driven rally that we have seen that has lifted sentiment across asia for the second day. off its intraday lows. it is still in the red by .5% as well. we did see a bit of a reaction

to this pmi number, falling to a three-year low. this is the week before chinese new year, so people are going on holidays and pulling money out of the market to prepare for the holiday. liquidity becomes a squeeze at this time of year. also around the region, the boj rally you were talking about putting on close to 2%. the adding on to gainstopix of about 3%. export numbers have been terrible, falling the most since 2009. the weakening yen taking an effectth. e won -- taking an effect. won lower. you talked about sony. let's talk about the big movers. sony was one of the biggest

movers in the tokyo session. it was up 16% in the early session, getting a surge from those results. results, finishing up around 12%. on the other end of the spectrum, japanese lenders really taking it in the chin for the second session. they are doing poorly from the boj decision. they will have to pay to hold onto deposits. the china session, weaknesses across shipbuilding. these are the old economy stocks that are seen to suffer quite significantly. you can call it a rebalance away from manufacturing and investment-led china. petro china is expecting preliminary results to be down by 70% when it comes to operating income. anna: thank you very much. here is your week ahead.

we kick off a busy week with pmi day across the globe. we have had those numbers out of china. numbers across europe and the u.s. throughout the day. we will talk run the u.s. manufacturing picture and the consumer as we look for where the oil price dividend is going to. we also have the head of the ecb, mario draghi, and stanley fischer speaking later today. and then iowa holds the u.s. nominating caucuses in the republican and democratic presidential contests. the bank of england will unveil the quarterly inflation report and hold a press conference on thursday. on friday, the all-important jobs data from the united dates. up next, we are live in zürich. manus is there. we will speak to the julius bar ceo as the bank sees profits

eroded.

anna: welcome back. this is "countdown." let's get the bloomberg business flash. here is caroline. caroline: reiner has announced an 800 million euro share buyback. it will start on february 5 and will be executed over nine months. the budget airline said profit after tax increased to 103 million euros. that was below analyst estimates . sony shares have risen the most in a year after the company reported better-than-expected profits. it has given a huge helping hand andhe james bond film record-breaking sales of adele's album. playstation 4 sales help to offset the plunge in orders from

smartphone customers such as apple. julius bar reported lower-than-expected full-year earnings after a settlement with the u.s. that is your bloomberg business flash. anna: for more on the julius baer story, manus cranny is standing by in zürich with the bank's ceo. good morning. manus: yes, we have boris with us. you just had the numbers. the dividend is up by 10%. welcome to the show. you have made provisions for your issues with the u.s. you said that would be sorted out in a timely basis. the dividend is up and you have gone for a payout ratio of 40%. the balance now between

dividends and capital for deals, walk me through it. way we are looking at it is quite simple. we believe the market will continue to consolidate, so our industry will be producing m&a opportunities. we are keeping some reserves for that. at the same time, investors are continuing to like dividends. so was the second time in a row, we are increasing the dividend. we have now given, for the first ,ime, payout ratio guidance which is something that i think the market wanted to hear. and that takes into account the opportunities that may surface in the m&a space. manus: let's talk about the opportunities you are not interested in. give me a sense of what kind of deal you would like to do domestically. of institutiond

you are looking at? boris: ideally, we would look at a portfolio that is diversified, so the client base comes from different areas which are compatible with our footprint. asia, middle east, europe, switzerland. ideally something of large size that would move the needle for us. today, to make an acquisition of $5 billion-$10 billion, it becomes more of a rounding error than something that will change the size of the firm. and something that has gone through regularization and has left legacies behind. manus: talk about the negative interest rate world. the japanese have joined the negative world. how destructive is that to the clients? boris: it is a new concept to clients to think that keeping

money with their financial institution, they need to pay for that. what we have seen over the last 12 months from swiss franc orders is that you can engage the clients. you can talk to them and try to mitigate the negative interest rate by increased activity. manus: at what point do you begin to have to charge the clients? consensus is we go to -1%. where is the capitulation point? boris: it changes for every institution. the way these negative interest rates are charged to the banks depends on how you are working on your balance sheet. we are lending money also to clients, so the impact is not that great. today, if you are asking me, we could still absorb another increase, which i do not think will happen. manus: so you think the cutoff point will be at 1%?

in terms of global volatility, more coming through from china today. your second home is asia. what is your biggest concern about this emerging market for you? boris: frankly, the market sentiment. it is changing so fast. if you look at foreign investments in china, they have pulled back massively. we can see market flows that are aggravating the movements already. my biggest worry is more market sentiment. the fundamentals have not really changed that much in the last six months. sentiment, market your margin is slipping. it is not transferring through to transaction. boris: it correlates once there .s a market direction clients do some trading, but not as much as when there is market

direction. it can be on both sides. manus: absolutely can. in terms of the rest of asia, do you expect retaliatory moves by the other asian central banks? boris: i don't think so. i think that was a japanese situation. fors: we wish you well 2016. thank you for joining us this morning. back to you. they have record assets under management. the dividend is up as you told balanceing about the and the ability to do more things, looking for his next elephant. not quite sure where that elephant is going to be. back to you. anna: thank you very much. also talking about how it is a new world for investors, this negative rates environment. we will see how the japanese moves continue to be received by investors. we will take a break. "on the move" is up next.

let's check out the futures and tell you where we expect to open. the asian session, a little bit mixed. we had some gains in japan and weakness in china. i will see you again tomorrow. ♪

guy: welcome to "on the move." we are counting you down to the european open. negative rates. what is happening out in japan? it is all beginning. jonathan: china's official pmi signals a record six straight months of deterioration. equity markets fall and the commodity rally falters. crude reality. nigeria in talks for a $3.5 billion loan from the world bank. sores --ir