manus: president donald trump ratchets up the rhetoric against north korea. trump: north korea best not make any more threats to the united states. they will be met with fire and fury, like the world has never seen. manus: meanwhile, pyongyang threatens guam. presidentafrican beats yet another no-confidence vote. rand slumps.ps -- bob iger with the decision that

shocks investors. we will bring your interview with the media giant ceo. ♪ manus: it is "bloomberg daybreak: europe." right here in the city of london. 960 million euros of net income for the second order. 762.stimate was for the underlying profit, 960 the estimate for 573. amro.is upbeat for abn the underlying profit, that's a beat. the commandeer equity comes in

at 17.6%, something the market will be particularly interested in because in the first quarter we had that little bit of a drop in terms of court equity tier one. so we want to see if this is a material change for abn amro. we will dig a little deeper into the numbers with the ceo, kees van dijkhuizen. he joins us at 6:30 this morning. let's get to the rub of the market. ups morning, you're waking to fire and fury from the president of the united states, a salvo sent directly across to north korea. there is something that has been progressing, 72 is the number. this is the fx volatility in the blue. it is above gold, money is going into gold. these are predominantly dollars is risen by 4.5% in

the past month. gold is up 4%. undeniably to do with the dollar weakness story. there are idiosyncrasies that suggest risk might be something that you reappraise. let's translate this into your risk radar this morning. are you really seeing that dramatic move? i would say no, you are not seeing a huge, momentous move. you're seeing moderate moves and moderate reactions in equity. 19% on a tenure high and asian equities. kym johnson has begun to threaten and has been kim jong boone has been threatening. has beenng un

threatening. all a little lower on the morning trade. so. equities rising ever slightly. u.s. equity story stands alone. this is dollar-korean won. a little bit of a move lower in the south korean won, at a three-week low again. volatility has risen but this is nothing like april 2013 when you saw the detonation of a nuclear device. , soequity market dropped you are a little bit reaction but not huge. this is the south african story. the world's biggest loser, by the way. you're looking at dollar-rant as seeing a little more alpha than the south korean won at the moment. what are the political risks for south africa? we will talk about that with our

reporter. no prophetic moves at the moment, just temperate moves. let's get to the first word news. china's producer price gains held steady last month on surging commodity costs. the producer price index rose 5.5%, just shy the economist estimates as demand state resilient. at the same time, the consumer price index increased 1.4%, well below the government ceiling of 3%. has ledh african rand declines among major currencies after president jacob zuma survived the bid to oust him. as the prospect of a new administration reviving the country's economy. his a rule has in meyer in allegations of corruption and mismanagement, reducing the country credit rating and

sending the economy into recession. incumbent has built a commanding lead in the country's presidential election. to commission data, with more than 80% of the vote counted, he has 55% compared to 44% for the main rival. earlier, he rejected preliminary results that showed him trailing , demanding the electoral authorities stopped releasing results until it could provide supporting documentation. oil has extended the climb for a third day amid speculation that a predicted gaining u.s. output will offset efforts to trim of global glut. lacked and limitation of the deal to cut production affirm their commitment to the court at a meeting in abu dhabi.

this was after several nations falter in their pledges to curb output. global news, 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. you can find more stories on the bloomberg at top . trump president donald has ratcheted up his rhetoric against north korea. to an unprecedented level. he warned the regime they will face a devastating military strike if they continue to threaten the united states. trump: north korea best not make any more threats to the united states. they will be met with fire and fury like the world has never seen. ,e has been very threatening beyond the normal state. manus: his comments came after --th korea warned the u.s.

saying it would pay dearly for crimes, saying it was examining plans to strike the island of guam. daniel, great to see you this morning. what has been the reaction to donald trump's comments thus far? >> we've heard from several u.s. allies, malcolm turnbull in australia, he put the blame on north korea, saying the threat was coming from them. he also said a military conflict would be catastrophic. south korea and japan, it was a muted reaction from there as well, saying we are happy all options are still on the table, but we would like to push for dialogue. manus: perhaps the rapprochement --h china was the dialogue perhaps someone say more dangerous position. how dangerous, try to calibrate

this for us. markets have a moderate reaction, but the calibration in terms of the political ramifications. >> as far as how dangerous it is, we don't see an imminent lee terry buildup, for instance. there is no obvious sign that a war is minute. however, the risk of miscalculation is very high. south korea said they are watching for another north korean provocation. he could be a missile that aspired. there are some reports that set -- a missile that is fired. some reports said missile could be fired near guam, which would be a serious provocation. we are in a time that is quite dangerous. one little thing could lead to some sort of miscalculation on either side. manus: where do we go from here,

briefly? >> we just came out of the u.s., who got china and russia to agree to sanctions. they were try to implement those. china has set we will try to use that to get north korea to the bargaining table. i imagine all sites will try to ramp down the rhetoric and cool things down. manus: thank you for joining us, daniel. let's bring in mark haefele. i don't await you do, but every time we get together, the world is looks more dangerous to me. let's start with this, because you are waking up this morning, you are the global cio of the ups. what goes through your head when you read this fire and fury line from donald trump? i think in this case, we are at the observed and

orient ourselves, calibrate come as you said. the first thing is observed the market reaction. , less than the kospi 1% down. i think the moves are moderate. then we have to orient this rhetoric and what it means historically and in the context of the trump administration. i'm driving home from work, and my wife says, i'm going to be met with fire and fury at the door. because i've been married for a long time, i know a i'm not going -- i'm not going to get dinner, but i won't be met with divorce papers. the world is trying to understand what he means. manus: let's put some context around this. we have an op-ed from the new york times. mr. trump's menacing remarks echo the tone and cadence of harry truman in 1945, when he

dropped the bomb on hiroshima. he urged the japanese to surrender, warning that if they did not, they would experience rain and ruling, the likes of which they had never seen. with the risk of miscalculation very high, do you act or are you in reflect mood? kennedy was restrained in the cuban missile crisis. this is a move different to other presidents. >> speaking about the rhetoric being used, i think when you start to hear rhetoric about clear and present danger to the defending, life, or protecting and defending the u.s. constitution, those are terms that may be around the gulf war started to see that's healthy estimated -- how they escalated the rhetoric.

that might be the way i wouldn't. as far as the escalation goes, sanctions have checkered history in the past, but in this case, one of the things were watching closely is rex tillerson, secretary of state, is in southeast asia and trying to get nations there to take a harsher diplomatic stance. we know there are technologies and components flowing into north korea through dummy corporations and things. there is a chance that sanctions could slow the process. manus: one writer said this is from the playbook of obama. he exerted such a move in terms iran, that this is from the playbook of obama and that they do work. sanctions can work if they are implemented fully and robustly. is the case, that

because since the financial crisis, there's been tremendous a batsman in understanding the flow of money and tracking it and targeting specific companies. that's what we have seen, and that is part of this escalation in the sanctions regime, which could have an effect this time. so the hyperbole of donald trump has taken the first few minutes of our conversation. i think a lot of the moves have been dollar precipitated. gold, rising in, think those are dollar stories. , i still want to be invested. as you look at the world this morning, what does it do to the bigger story for you? mark: the bigger picture is

still one of global earnings growth, central banks support and gdp growth. i was looking this morning at tech shares that take earnings. they have gained act that summer swoon they had earlier this summer. it's due to a strong reporting season and they're looking at something like 14% earnings growth. there still is a strong earnings component to this market story. said, bob iger last night netflix, you are toast. for delivery go himself. there are huge tectonic shifts in technology. the beast is growing and you change.ney going for take is that a revolutionary moment, isn't it? tech has always change

more rapidly than other sectors. is not priced at the story premium as other sectors of the s&p 500. not to say there is a cushion built in there, but it's not extremely valued compared to other sectors at this time. manus: so that could be one to focus on. this is talking about mom-and-pop investors, and they are running low on cash. of cashthe allocation by weekend investors, at the lowest level since the peak. what i am more interested in from your perspective is, when you see that kind of cash allocation, you are supposed to be head of the smart money. what do you extrapolate from this?

historically, when we see levels like this, they occurred before and intermediate term market top. pond'ause., but a investors,is u.s. u.s. mom-and-pop. i've looked at clients around the world. saye the u.s. picture and yes, we closed our overweight in u.s. equities because the u.s. has moved a lot. i would say that cash levels for private clients globally probably have not moved as much. ande still is a fear trade we have not seen a great rotation out of bonds and into stocks for global private clients. let's do this quickly.

this is the super cycle of the dollar. this is a big move in the dollar. it looks as if we really are beginning to roll over here. do you agree with that? what are the consequences of this weak dollar move? -- this big dollar move? mark: there was a big run-up before the trump administration took office on the hoax of big things happening. that has moderated to some degree. versusoverweight euro dollar. there are a lot of forces at play. morerkets have become internationalize, some of the historic examples are difficult to put in the current context. manus: that see if the data can shift the dollar.

down?hifts the dollar up, the south african president escapes yet another no-confidence vote. this is bloomberg. ♪

manus: 6:22 a.m. here in london. president jacob zuma has now ordered a bit, -- has narrowed a bit, he's been implicated in a series of scandals. let's get to johannesburg. this was a close vote. what does it tell us about their presidency?uma's

>> certainly getting more and more fragile. in march 2016 it became 99 votes in favor of the motion and then 126 later in 2016. now it's 177. clearly the motion keeps getting closer and closer and the ruling party is growing, so the president's fragility is certainly growing, and that is compounding, clearly. whatll be important to see he does with regard to his members of parliament. he doesn't know exactly who voted in favor of the motion, but he can clearly tell that some members certainly do want him out. manus: do you think there will be another attempt? eight times in eight years, it's

not going away, is it? >> you know what they say about cats, they have nine lives, so he knows what could happen. they plan to head back to the cost to shore court and continue with their impeachment process. so they are not abating on this matter. down asident does step the leader of the african national congress in december and then he becomes two years a new president and south africa will be elected. can the country hold on that long? it's not sure considering we are in a recession. soies comes out on friday, will be an interesting time -- moody's comes out on friday. is with us.haefele does south africa have until

2019? they have plenty of issues. mark: this is a country where the politics certainly influence global investment, but they seem to really be having an impact on the gdp growth there, so it's very unfortunate. manus: all emerging markets are not created it will. i just want to get your perspective as the global cio. this is emerging markets, the best start as we head into the second half of the year, since 1993. that momentum, given what you see with the fed and global growth, how do you look at emerging markets? the topline perspective. mark: emerging markets have done ,ell in response to the u.s.

build the wall and sanctions and all those things. that was a lot more benign than many people at fear. that has helped markets in the first half of the year. the other factor is that all markets have done well. from here as we look at the second half of the year, we think the earnings growth can moderate a bit. one of the ways some of the north korean rhetoric is playing out is potentially bleeding over ,nto trade sanctions for china which would have a deleterious effect on e.m. indexes. itus: citrate or is political risk? which is the bigger one in your mind? the trade risks are in expression of the political uncertainty. when you talk about risks out there, inflation is something we continue to watch closely

because that will send the central banks to change the policy. manus: thank you very much, mark haefele joining us this morning. next up is kees van dijkhuizen.

manus: 6:30 a.m. here in the city of london. the nikkei down by 1.4%. donald trump aiming directly at north korea in terms of what they can expect. over to the fx board, you can see the yen is rising and the dollar falling. this is one of the biggest utilities in

germany. euros.ome 881 million dividend,mes to the the first half adjusted net rises 46%. that is a comfortable beat for the company. the adjusted earnings before interest and taxes, 12% in terms of first quarter. earnings adversely affected. confirming for your outlook for 2017 in the range of 1.2-1.5. 25t has been reduced to billion euros. were just waiting to see a little more on the dividend. were having a conversation with the cfo a little bit later, 9:30 spieker.ime with marc

a comfortable beat on the estimate of 647 million. ceo, the new chief executive is a veteran of the company. what will he deliver? second-quarter net income falls 25%. however they are confirming their full-year target. confirming5%, there for your income for the year, profit will be 2.4 billion euros. the business that's really and transformation, they say they're raising the profit target from 150 to 200 million euros.

the ceo says we are well on track for a full-year profit target. will have a conversation with a.m., a coming at 7:30 little bit later this morning. nordiskt to novo because we have some breaking news coming from them. it, ad-quarter eb comfortable beat. 12.34 that number, they see full-year guidance at 1%. on a sales level they have in.en on what was penciled

we will have that conversation little bit later on for novo nordisk. :00 a.m. u.k. time. this company is very much in re.us thei those are the three breaking stories fresh on your plate at 6:34 a.m. in london. in expanding dutch economy help the bank more than double its profit. is keesus on the phone van dijkhuizen. great to have you this morning, welcome to the show. talk us through the numbers, it looks like it was a good order for you. give us a sense of the dutch

market. kees: good morning. it's a related to the sale of a private banking asia, compared to 662 million a year ago. that's 5% up. it's driven by a very good performing dutch economy which is good for the clients. the european economy is doing well also by the way. we see growth across the board. margins, and a robust capital buffer. manus: the sustainability of the european and dutch recovery,

that holds true for you? there is nothing out there that worries you at the moment? kees: think indeed the economy is strong. europe is more recent, so we expect for europe and the dutch economy a couple of years of good economic performance. manus: one thing that has come up his amsterdam as a destination. rbsught up with the ceo of last week. it looks like amsterdam and the netherlands will assert itself as a serious contender to challenge frankfurt. is that how it appears to you, and is that good news? news, we have a good climate here, international climate, a lot of international companies are here. we see japanese banks coming here. we welcome international banks.

we understand there is also effort in paris, but we love to see more banks coming to amsterdam. you see a risk is as strong and progressive growth story for yourself, do you think it will heat up the employment market or does it bid up employee wages in the netherlands? we are not worried about that because it will improve the quality of people, so i'm not worried about that. manus: obviously the other big question is this. i want to get your perspective on the banking union. progressive relationships being developed between germany and france, for example, on tax. -- banking union still very is banking union still very much in the cards?

say this is a work in progress. we've seen the financial stability board yesterday, the chair reaction to what happened in spain and italy. it's also being discussed in europe. i think it's important that we continue to develop a more because banking union it is good for europe, and it's also necessary. manus: i want to get a sense from you if there are any canaries in the dutch market. the property market, it's red be aso banking has to little more cautious in their

lending. do get that sense that you should be a little more prudent? risk provisioning is quite low and has been progressing for some time, hasn't it? amsterdamect, and housing market has cooled in the last couple of years. having said that, eight or nine years ago we had a serious decline of house prices. you should take that into account as well. the new standard for lending in the netherlands for households, that has changed. that is no longer possible and people have to redeem mortgages. for banks are more cautious than they were in the past. we are not worried about that i think the dutch housing market will continue to grow both transaction wise and pricewise in the coming period. the euro has had a

stellar run, to say the very least, and the bund market along with a number of other benchmarks have rallied. in the bond market, our markets priced now fully for a moderate adjustment by a the european central bank? that's a very difficult question, of course. good that there is discussion in the european central bank about relaxing quantitative easing. cranks any it, i mean, sorry. the u.s. is much further down the road, but on the back of a strong performance in europe with respect to growth, we should start to change the

policy there with quantitative easing in europe as well. kees van dijkhuizen, thank you very much for joining us this morning. south korea is now down over 1%. fire and fury has not squashed the market. >> let me talk a little bit about that. aluminum remains strongly bid again overnight. a big session overnight in your seeing that again today. let's talk about equities. nikkei down overnight. japan at the forefront of the story when it comes to north korea. the south korean won is trading down by about .5%. the idea that these moves are not very big needs to be taken

with a little bit of caution. let's talk about the context of the last month. volatility continues to be crushed. we're seeing smaller and smaller moves on a daily basis and that's becoming the norm. five years ago, you would've seen markets moving by 1% or 2%. you are not seeing that. volatility is the story. s&p move today by .5%, that's a huge move relative to what we have seen of late. vix futures is at a record right now. the market is incredibly short and that's something you really need to pay attention to.

you get a move here and that will spread out and ripple aggressively. manus: never a truer word was said. guy johnson there putting the markets in context for us. piece by story is a our bloomberg columnist, talking about chinese money leaving the world's property market. get a look at that because it is basically saying that china's property pullback in new york, in sydney in london, brace yourself for tumbling real estate prices. just one number in here which is absolutely's anchoring, the amount of money that has flowed

around. -- one number that is absolutely staggering. you're looking at direct property investment dropping potentially 84% this year and another 15% next year. other potentially one headache for global markets and investors. let's talk about opec. reaffirming a commitment to oil cuts. the producers met in abu dhabi and discussed compliance and that global glut. there is concerned the agreement is failing to train the world's bloated stockpiles. , your takel el-din on this chart. yousef: what you said pretty much sums it up.

there's no larger document where they address how they measure production and allocate quotas, none of that. a brief statement on the opec iraq is as much as 29% compliant in the month of june according to bloomberg estimates. nothing much further than that, which means the attention will calm with what is happening with u.s. inventory. but drawdown last week, and a bloomberg survey suggests the same thing. in terms of revised forecast over to for u.s. production for 2017, let me show you the state of play for u.s. production and opec production. we put both of them in a chart on your bloomberg.

happeningat has been with the rate count. and the line in white is the u.s. production as well, up 9.4 million barrels a day. forecast is017 slightly higher, but 2018 is more significant because you're 9.9ing at a change from 29.9. that is offsetting some of the drawdown we are seeing in inventory. manus: thank you very much, yousef gamal el-din with the latest from dubai. the disney ceo says he's ready as they waltzix toward the online market. we'll hear from him next. this is bloomberg. ♪

it's 1:49 in the city of new york, the city that never sleeps. says he sees a future without netflix and other video streaming channels. the world's largest entertaining company outlined plans to offer programs directly to viewers online, sidestepping the margins. >> we will continue to distribute the espn linear channels through the cable partners. we have managed to create a highly profitable business. distributors and programmers alike have been experiencing disruption that the home market is seeing and multiple businesses are seeing froman fences in technology and changes in consumer behavior because of that. i guess is the distributors will

look at this more as a threat than anything else. it's not intended to be that. to marketplace conditions and taking advantage thehe passion re-create and technology that allows us to reach consumers directly. virtually all of our bid -- businesses touch the consumer through third-party distributors. this is an opportunity for us to reach the consumer directly, and that is an important step for the company in terms of growth. >> let's stick with espn for a moment. early 2018?ble in of espnnt get all

programming unless i have authenticated it through my cable writer, is that correct? >> that is correct. this will give you the ability to buy access to another 10,000 live events with a subscription, which should be a very user-friendly method, as far as we can tell. eventually you could maybe predict that you can watch some linear channels in a similar fashion, but we don't have plans to do that right now. we will watch the marketplace and see how it evolves. >> is this beginning of the end for the bottle, do you think? of the end forg the bundle? know, first of all, it is

still highly profitable. there have been incursions on huluundle, youtube and being a couple of them. there is more competition to reach consumers with multichannel services. this is thek beginning of the end, but it represents a continued shift in consumer behavior and the opportunity that technology provides. >> is this most like netflix? what is it most similar to? >> you have to look at disney and espn differently. the goal on the espn front is to create the ultimate digital marketplace for live sports, a destination that's boards fans can go to to access -- that sports fans can access the

largest array of live sports available. if you want to call it a marketplace, that is what that is. espnss you could compare to netflix, maybe the netflix of sports would be one way to look at it. disney is very different because it is a pure brand play. they have an incredibly robust fan base with a great history and a great present and a bright future when you look at intellectual property. universal appeal, even though it's almost a 100 year old brand. they have been welcomed into the home and on mobile devices for kids and families around the world. playa very specific brand in a great way for disney to reach consumers directly, which able to do inen

the past because the technology did not exist to allow that to happen. >> when's ceo makes a major strategic decision like this, they have to inevitably ask, do i build it, or do i it -- or do i buy it? buy as way, this is a well. we can go into the space much faster than if we had built it. i won't comment on what acquisition opportunities we have looked at her hat. we obviously had the financial wherewithal to do a number of things. it seemed to be the best step in terms of creating a growth strategy and growing the company long-term, and taking a long-term view, but addressing the near-term issues, which is about the disruption created by

ditto technology -- by digital technology. manus: bob iger talking about the future of disney. 10:30 u.k. time. we have another major interview for you, sheryl sandberg joins emily chang for an exclusive interview to discuss the social networks in power. this is what you need to know, fire and fury is the message from the president of the united states. the consequence for markets is this. the nikkei is down 1.3%. the south korean market is down by 1.1%, coming off a rally in the msci. , andhat aggressive

volatility is nowhere near it was, but markets are lower. this is what you call a protracted sell down. this is bloomberg. ♪ we check our phones 85 times a day.

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mass: president donald trump ratchets up the rhetoric against north korea. trump: north korea best not make any more threats toward the united states. they will be met with fire and fury like the world has never seen. threatens guam. african president beats another no-confidence vote. disney ditches netflix. stream content earthly to the customer online. the decision shocks investors

sending shares lower after hours. we will bring you our interview with the media giant ceo. bloombergcome, it is daybreak europe, our flagship morning show. in is 7:01 a.m., i am manus cranny. there are stocks aplenty breaking across the lumber terminal. g4s. due -- let's do income comes in at 128 million pounds. paying down the debt is with the investors want to hear about. financing effectiveness between 90 to 100 million by 2020. 128 million pounds for g4s

security. g4s. are the top lines for it will have a discussion with the ceo of g4s joining the daybreak team and -- in under 15 minutes. this is one of the uk's biggest asset management companies. pounds, 1.4 billion let's get in a little bit deeper into these numbers, rather than me read them, let's do it the old-fashioned way. come --ve a conversation with the ceo. i will recur -- recap markets. 951.1 >>der management a terrific number across the

board. we have invested a lot of money in the u.k. for the lower term and it is delivering. for society, the economy, and shareholders. at 41% to 1.2tax billion. manus: we will continue that conversation in a moment, we will bring our viewers a quick update. these are the futures, london, paris, and frankfurt lower. the new york times as saying channelingrump is harry truman the moment when he fired a bomb on hiroshima. is the rhetoric bellicose or could it manifest itself into a miscalculation step which takes us to a point which is something more severe on a level politic level. stocks are lower, down .41%. asian equities, this is that

risk radar. this is the personification of risk this is the sharpest loss in a month. the market has put in 19% in the first eight months of the year. thisis a 10 year high but line from trump setting -- deciding his rhetoric. the korean won is down. it is -- the south korean won is accelerating. we will take your mind that too much 2013 when they detonated a nuclear bomb. it retraced all of those moves by early may. in terms of the south african rand, surviving his eighth attempt in -- at being ousted by the party. you are seeing a little bit of a selloff in rand, will it

continue, where do you put your money, do you put it into gold or is that a soft dollar story? the red headline coming through, agreeing to buy some breaking news, another deal on the payment system world pay. we have a green to why world pay. it is seeking a secondary listing on the london stock exchange. you have world pay being bought vantive. -- shery: let's expand on that north korean headline. the regime examining an operational plan for firing a medium to long range missile. that came after president trump ratcheted up his rhetoric theyst the rogue state and

are facing a devastating military strike is best continue threatening america. i expect not make any more threats to the united states. it will be met with fire and fury. like the world has never seen. threateningvery beyond a normal statement. shery: the producer price index rose 5.5% in july from a year earlier, shy of economist estimates. that is as demand stayed resilient and the governments rise to reducing capacity takes hold. the consumer price index increased 1.4%. the south african rand has led declines after resident jacob zuma survived a bid to oust him,

the eighth attempt to crush -- to remove him crushed. it reduce the country's credit rating to junk and set the economy into recession. hasenya, the incumbent built a commanding lead in the country's presidential election. earlier he rejected luminary results that has shown him trailing demanding the electoral authority stop releasing results until they can provide supporting documentation. global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. you can find more stories on the

bloomberg at top . let's get a check of the markets in play right now because we are seeing downward pressure from that risk of sentiment being sparked because of that north korea tensions. we are seeing the nikkei leading declines in asia, we're seeing the japanese yen, the dollar-yen pushing through that 110 level. right at those levels but very strong. we're seeing the nikkei feeling that down saint -- downside. the hang seng is using ground although the kospi is suffering the most. down 1%. i did mention earlier about china.pi numbers out of commodities have been good so we gainingn the asx 500 ground. the pensions and volatility rising. manus: thank you. is in the sea with us, we saw the numbers them

operating profit of 27%. line, thee the top assets under management, great first half profit 900 52 million pounds. it has been a year since we set down and spoke a lot that -- and spoke them a lot's happened. in the u.k. in this post debacle thetics, how do you look at u.k. now with this government which is leaning on the union but not that strong. guest: the local politicians are -- and we're seeing a massive change from year ago. when everybody was talking about the loom around exit, realizing it will be a short term downturn. we have to have a positive set

up a investing in the u.k. and our results a testimony to that. our results are great because we have been investing for the long-term in the u.k. been a shiftre has and as you said when you came on the show year ago you talked gett the top five, about worth expansion, crossrail, building houses, and get which has gone to heathrow, houses --e promised but they seem there seems to be a bit of a backtrack. crossrail is not in the queen's speech. i wonder how distant the momentum is between your choice list and what you are saying now. guest: we have done a half manchester,ect, in cardiff, birmingham, across the country. we prefer a different list. none of them are happening at the moment. we have supporters we like to

see gatwick as an initial investment. manus: is that where the next leg of growth comes from? guest: there are a lot of back books lying around that need it .r management have you had manage -- conversations with prudential? guest: we have been encouraging

, if they want to come and have a chat. guest: we did no acquisition. acquisitions by competitors have been good. some of the flow needs competitors and moves in to our coffers. trade one and done or is there more to come for you? guest: more to come for us. consolidation will happen across financial services. we are not interested in large deals.

we will do both on acquisitions. manus: while other people do merger synergies you'd do the pricing in terms of the business. do think there will be a better opportunity to price business more aggressively? guest: yes. we are competitive, we have a huge industrial scale which is bigger than anybody else and we have lower unit costs. we will see more of that. we continue price pressure in general. manus: the fda did a review. they have identified some risks and i want to get a serious case from you. they talk about five major risks, consumers are under 65, those parts have been fully

withdrawn. over 50% of going into other products in savings. like,mells like, walks sounds like, has all the hallmarks of a huge big cauldron of issues for the u.k. economy going forward. isst: it is a huge issue, it an issue that people are have not been rational enough about their retirement years. therefore we need to do two things, three things. the lifetime mortgage market needs to expand, we have a 30% market share. there is a 3 billion pound market. people use the housing equity to discipline their income. we like to see a huge rate -- increase, people are buying another one and expand into that. we would like more guidance and the opportunity to give advice to customers. therefore the fca to walk the talk and encourage firms like us to give guidance, to give advice without all of the complexities

that it involves. people do the right things with their pension money. one final comment from you, we have lots of warning signs from the bank of england, brazier talking about the lenders are dicing a spiral of complacency. are there risks in the u.k.? we hear it is time to get optimistic. andhere anything out there you say i am concerned, i see some of the validity in terms of lenders dicing with spiral of complacency. guest: we live in a pretty good world. there's potty of capital available for expansion across the u.k.. we have to step up investment. we are not going to succeed just by talking about things, we have to do things and we are seeing a bigger doing culture in the u.k. at the moment. manus: thank you very much.

nigel worth is the legal and general ceo, it is time for people to change the record. thank you for your take here. g4s joiningceo of us for his first interview of the day. we will go through the numbers. this is bloomberg. ♪

manus: it is 7:19 a.m. in the city of london, this is a market look. futures are looking at the moment just like -- slightly stronger by .2501%. 10 year government bund yields are flat at .4 of 1%. for some reason, i do not think

that reflects the true situation. oureuro stoxx 50 right now, apologies in terms of data. down .6 of 1%. london, paris, and frank for down, paris down .8 of 1%. markets are lower. shery ahn is standing by. shery: thank you. disney has outlined plans to sell some of its premier content directly to consumers online starting next year. the world's largest entertainment company will offer live sports and animation. to pay-tv providers. shares fell in extended trading is losing aix who key supplier. >> the distributors will look at this more as a threat than anything else.

it is not intended to be that. what we are doing is reacting to marketplace conditions. we taking advantage of the quality of our brand, and the technology that enables us to reach consumers directly. shery: a gain from the [inaudible] has more than doubled profit in the second quarter. net income rose to 9000 60 million euros beating estimates. its completed the sale of asia and middle east wealth operations. second-quarter earnings that eat analyst estimates. inflation returning in the u.s. they reported an increase of 11.4% in underlying operating income.

beating estimates. revenues increased to 60 billion euros matching estimates. that is your bloomberg business flash update. manus: thank you. the latest on the markets. let's get to our next story, g4s reported first-half adjusted net income of 128 million pounds. great to see you. thank you very much for joining us. i just ran your numbers, your of 40% on the year. this is a stock that is delivering. give me the complexion of what is going on in the first half. >> in the first half we saw continued growth in our revenues, our revenues were up 6.2%. wer the past 18 months averaged growth of over 6%. that in turn reflect the growing demand for security across our

global footprint. also the fact that we are bringing new products and new services to the marketplace. continuation of revenue growth in the first six months and that translated into earnings growth as well. as we look ahead. our pipeline is stronger than it has been. so we are optimist about the prospect over the medium-term. 6%,s: the target was 4% to you promised the market. why not just upgrade? can i expect you to hit the upper bandwidth before the end of the year, is it going to continue through? will not have said we grow in a linear fashion. very few businesses grow in a linear fashion every order, every six months. there will be times when we grow at the top and and in the past

18 months above our and and times when we are below. we will not be changing the guidance. manus: you are in different stitcher mode and restructuring are at 15 upon the block. how far are you through that process? are you still confident that that is the number we should be looking at in terms of the overall restructure weston mark guest: yes we are. we are most of the way through that program, we are into the detail of the word folio program with small businesses dotted around the globe. example, a storage business in africa. storage is not core to what we do. at the right place we will sell that business. we are through most of the program. news: let's talk about the innovation. you sold -- signed up walmart. reports, they are

great, they must be the bane of your life. achievable, a significant double-digit organic growth rate, how does the pipeline look there? guest: in the first six months of this year in north america, revenues from both of our businesses, security and cash grew by 20%. over 20%. amountossible for short of time, we do not think that is a sensible long-term growth rate but it is true that our cash 360 product is finding very strong traction in the marketplace. principally in north america that we are extending our , africa, andeurope asia. we are starting to see interest there is well. employeru are a huge in the u.s., we are constantly talking about is their wage

inflation, are we at full employment? so let's pick it down. do you find it hard or easy to hire people in the u.s. guest: it is very localized. there are some markets where we do not have any difficulty in officers, fory example. there are other markets where it is very tight and our security group grew by 5% in north america. that is a constraint growth rate. there were situations where we simply were not able to bid in a way that gave us confidence we could find all the people we would need to satisfy the contract. it is tight, it does constrain our growth in north america and it will ultimately have an effect on wages. manus: are you having to pay more money? we have less than that. guest: in some cases, we are.

manus: that is the tightest answer i have gotten. joining us here on daybreak. thank you for your time. equity markets are lower opening.

manus i am guy johnson in london. met miller is in ruling. trump ratcheting up the rhetoric against north korea. correctlyity priced given this geopolitical risk? are investors taking too much risk in the credit