manishi raychaudhuri from bnp paribas. we will ask why he has changed his calls on indian stocks as within mumbai remains within touching distance of record highs. the r.b.i. almost certain to cut its key rate today. we will ask about the chances of another cut in june. this is bloomberg. ♪ juliette: it is central-bank decision day in india. expectations for a second rate cut this year have already -- lift thethe equity market to an all-time high. the rally has been fueled by foreign investors. domestic institutions have been selling shares, pulling about $2 billion from equities in march, the biggest withdrawal in three years. let's bring back manishi raychaudhuri, head of equity research from bnp paribas in our hong kong studios. you are overweight indian stocks. this impressive rally we have seen on the sensex you think will continue. is this across every sector? manishi: for the time, it is likely continue for a couple reasons. we are seeing a secular declining cost of capital. that will likely increase the gap even fu

we will be talking to the chairman of bnp paribas. in equity rally send the 10 year treasury yields moving lower after hitting a 250 handle yesterday. this is bloomberg. ♪ want more from your entertainment experience? just say teach me more. into your xfinity voice remote to discover all sorts of tips and tricks in x1. can i find my wifi password? just ask. [ ding ] show me my wifi password. hey now! [ ding ] you can even troubleshoot, learn new voice commands and much more. clean my daughter's room. [ ding ] oh, it won't do that. welp, someone should. just say "teach me more" into your voice remote and see how you can have an even better x1 experience. simple. easy. awesome. be: this morning, there will a five-hour meeting with the the prime minister's cabinet staff that need not attend. government implodes and sterling resilience. there will be silent as those on missa grateful market down 2% from record highs. and there is a way to bank in europe and do it right. considering the chaos of the germanic banking experiment, we jean to

he is with bnp paribas.ill be interviewed by bloomberg and you go down the statement and there is earnings before interest and taxes and you pull the balance sheet as well. do these companies have any hope and prayer of ebita? daniel: it depends on how much faith you have and your time horizon. how much premium are you paying for future profitability, how long will you wait, and how long in the interim? if you think about other companies, industrial companies or other sectors using technology, investing in technology, we can see that in profitability. is services companies, it more ephemeral. francine: do you like technology in general? where do you see a good opportunity? daniel: two sides to that coin. pretty much every other sector in the economy within the index is having to invest more and more in technology. that is a benefit for the technology sector itself. the out book test outlook has got to be positive. on the downside, we are seeing with amazon that decreased profitability -- increased profitabil

coming up, we will speak to the chairman of bnp paribas. catch that exclusive interview after 10:00 a.m. london time. this is bloomberg. ♪ the: welcome back to european open. 22 minutes into your trading day. whole, gaining momentum. the ftse 100 the best performer. pound weakness. the driver. we are up by 0.5% on the ftse 100. the cac up. havemerging-market assets started the second quarter on a stronger footing. holdingghai composite gains of over 3% over the last two days even if some of the steam came out of the rally in the most recent session. andrew is still with us. let us talk about something away from the equity's story. something closer to what you are talking about and that is the chinese bond market. we have seen the bloomberg barclays index. getting bloomberg involved there as the name suggest. how interested our clients in tracking that index? andrew: it is a monumental event. yesterday china entered the bloomberg index. opted for the bloomberg index were automatically rolled in and will get some exposure or the index will ha

greg boutle of bnp paribas.ng us huge value in london last week and now back in new york it i decided not to read one sentence of the mueller report and rely on experts. it is a cottage industry of experts analyzing and analyzing. have you gotten value out of the experts? martin: i have definitely gotten value out of the experts, but i spent the eight hours on the flight back reading the mueller report. tom: get a life. [laughter] you're supposed to watch "a star is born" for the 14th time. martin: i was tempted. tom: what did you learn? martin: it is an impartial and almost novel-like in its unemotional recounting of the things that happened from prior to donald trump's elections afterwards. lisa: pretty much people who have read through it say it is not exactly the all clear, no collusion, no obstruction, everything is great kind of rosy picture, but is it enough to carry forward and continue to harp on for the democrats, given the fact most of the american public are sick of it? martin: that is the absolute q

edmund shing of bnp paribas and stephen gallo of the amount -- of bmo capital.etailed note. how do you write a note on the greeks for pros who have missed the great bull recovery? edmund: it is a little deceptive. it is a great bull market recovery -- except if you were long vol. when i have conversations with investors, all institutional investors i spoke to were very cautious still. on the one hand, you may say we have had this great bull recovery since the end of last year. on the other hand, i would say that is all very well, but investors have not loaded up at all. have continued more out of equities then into equities. that tells me this is somewhat fragile and that people have not participated. i would say stay long or go longer, but also take advantage of the low volatility levels in markets to do hedging. put your hedge in long positions now. tom: where is normal vix? like eight weeks or 10 weeks ago, there was an idea of a new reset on vix. then all of a sudden we have come down in the calmness of the market to a lower number. are we still on the same

tom: deutsche bank is at 41% of book of bnp paribas. of book ofnk at 54% bnp paribas.nt, their regulators, and their national cultures? alison: to some extent, that is what we have seen in german retail banking. tom: good bank, bad bank? alison: they have done that, they have sort of paired off assets. the issue with deutsche bank and with all banks, bank stocks trade at a discount for a few reasons. there is a hole in the balance sheet and they need to raise capital. number two is that people do not believe the balance sheet and three is just they are not earning their cost of capital, which can erode value over time. the fact that these companies are not earning their cost of capital and there is not a line of sight during their cost of capital, we are starting to see that it credit suisse, but at deutsche bank we need to see a path. to comment onnt oil or vice president biden or anything else? strong dollar, what catches your eye on this crazy morning? francine: the crazy morning is what catches my eye. we have a lot of earnings. i was surprised at how well the tech

it is well behind even the likes of bnp paribas or barclays.is really at the bottom of the scale. someve got to try to make dramatic cost savings, just to put a convincing case to shareholders. joe: if the commerzbank deal doesn't happen, what do you see as the next most likely path forward for the bank? nick: well, it is whether the current management, and as you know, this is a bank that has had a lot of public splits in its board. the fighting has become quite public at times. the've got to sell shareholders a convincing strategy for transforming this bank. at the moment, the risks are portfolio isacy one of the riskiest in the world still. the federal reserve is putting stress tests on this bank's operations. it is still the same as deutsche bank in a lot of ways. they have not convinced anybody yet that they will turn it around. caroline: coming up, pinterest is going public, but did the virtual corkboard wait too long to go to market? this is bloomberg. ♪ caroline: time for a look at what stories are trending. user -- users were reading a

. -- hsbc and bnp paribas. european firms slumping the most in more than a month.d at a six month high. dani: we have this issue where european banks are suffering from a toxic brew of structural problems. field ofa clouded smaller institutions. high cost, not to mention a tricky political landscape. i want to take you into my terminal. the struggle is really apparent. when you compare them to their u.s. rivals, when you look at the top five banks in each region, over the past 12 months, 100 millionked in in profit. checkout europe. that's a third of that amount. when we look at monetary stimulus, it is no squeezed margin for eu banks. continuing to widen in the opposite direction. eps estimates for european lenders, the lowest in a year. markets.s., capital provide the majority of funding, which means banks can concentrate on earnings from trading. in europe, closely tracking the yield curve. that is because 70% of financing comes from vanilla lending. even though we have below zero interest rates, lenders have to pay interest to attract depositors. commerzbank, m

they, along with their bigger french rival bnp paribas had for years looked to investment banking and as growth drivers. they felt they had a particular expertise and value added in exotic derivatives and that sort of thing. they got a little over their skis and especially after the first quarter, both of them, the revenue disappointed and they said they were going to pull back a bit and now the penny has dropped. they signaled it and now they are doing it. , seniormes hertling finance editor joining us on the socgen story. looking for m&a within the banking sector with regards to germany recently. let's talk about the stock market broadly. goldman sachs has a warning for stock investors. fear of missing out. it is likely to grow as economic data improves against a backdrop that begs for costing -- caution. bt i am agrees. they spoke to bloomberg exclusively this morning. >> it has become fashionable to say we have synchronized global slowdown. actually, i think that hides rather than helps the truth. anna: lucy macdonald from allianz is still with us. a few thoughts mixed in there bu

we have very skilled people in the banking industry at bnp paribas.ion and training making sure some of our skilled people can basically evolve into these new activities within is very important as well. alix: what about investment banking? globally there is retrenchment in terms of employment. what does that mean in terms of the u.s. business? we haveeographically europe, the u.s., and asia. protectedittle more from those trends. that is the way to mitigate when some sectors and activities might be more challenged. alix: thank you so much. it was so great to catch up with you. of bnpes fillion paribas, thank you. david: coming up, march madness comes down to the final four. this is bloomberg. ♪ viviana: -- renita: this is "bloomberg daybreak." coming up in the next hour, drew ceo.oy, transfix ♪ viviana: this is "bloomberg daybreak." decline inorst profit at samsung in more than four years. the latest quarter, operating hurt by falling memory chip prices and slowing smartphone sales. microsoft vowing to focus on gender harassment following an uproar f

and bnp paribas. -- hasing to know go food against a plan. >> australia heading for the polls.lection called for may the 18th. by scott called morrison. how much of an uphill battle is this? >> it is going to be a challenge. behind in the polls now. for a number of years now. the government is an unusual position. get back win seats to into power. scott morrison has held off as long as he could before announcing this. he has been hoping voters forget about all the dysfunction of the past four they years. not quiteors still do understand. a number of high-profile women have left the party. julie bishop. scottof problems for morrison. narrow, treacherous have two victory. to the drinkers a fax they are running on the idea they are steady hands when it comes to economic growth. they are projecting the first return to a surplus and about a decade. of the policies are also attacking things like wage growth. >> labor will be campaigning hard on wage growth. >> wage rage. profits have gone up something like 40%. there is an argument to be made some of that should be spread around a li

bnp paribas and barclays are viewing the direct lending market. manager surged by more than 15% as the company reports slowing outflows as it completes the liquidation of the scandal hedge fund. the treasury department on how to sell debt. alix: joining us now, still with us come up rick rieder, blackrock global fixed income cio, and bloomberg's peggy collins. this is barclays and bnp talking about getting into this space. walk us through some numbers in this field. peggy: one of the things we've been seeing from the investing team, particularly in the world of private equity, is this rush into private credit, direct lending. some of this is because banks over the last several years have pulled back from some of this lending to smaller companies, and private equity firms have moved into the space. now you are seeing banks like bmp and barclays potentially trying to get -- like bnp and barclays potentially trying to get more of that. equity firms are getting a larger and larger piece of this loan market. alix: is there a risk? it is interesting. if

bnp paribas spoke to officials at the same time. it may rise as a suitor yet again.arned santander and societe generale has expressed -- have expressed interest as well. our guests are still with us. this m&a, theat cross-border possibility, names are being thrown out there. banku can't get deutsche and commerzbank done, why would the others have a chance of getting through? >> it is business catering to the backbone of germany's economy. that is what everybody is after. i'm sure you have noticed that there are many suitors. what we have not heard yet is that the business would lead to other combinations across europe broadly. tom: i want to go to the screen, .liv i want to give the audience a window into the jewel of bloomberg. this is allison williams who will join us later. she listens to the conference call on deutsche bank. you get a running stream of commentary. what i see is the greatest amount of nba speak i have seen since the mckinsey conference two or three years ago. let's start with the dumbest phrase. what is controlled growth? are absolutely right

clients, the that business is attracting attention and that is what the likes of unicredit and bnp paribasmer market is cutthroat and the margins are thin. that puts potential buyers to the outside. francine: when you look at the jamie dimon letter, he talks about being ready but not expecting a recession, the tax system in the u.s. is there anything that stands out? elisa: he is reiterating the concerns about cyber risk and the frothiness and the financial leverage sector, particularly nonbank exposure for that part of the market. .om: an important question steve bannon reportedly put the portrait of andrew jackson in the oval office. is identified with mistrust of banks and yet canada with essentially five banks, the united states banks drinking down, and germany -- shrinking down, and germany is the land of little banks. does european banking need to be more like canada? joachim: i think they would, but this is a problem that is difficult to solve in germany because it is a fragmented system. you have these public-sector players, savings banks, and the cooperative banks that take a larg

-- bnp paribas? >> the asset prices reflect that. tom: that is good enough for surveillance.ys? the end of the world? >> we are long sterling but it is negative for equities. it depends on the market you're talking about. a good outcome could be bad for certain markets. francine: there may be a couple of people in theresa may's "circle" that may decide to jump ship. thank you both for being here. with us. prime minister questions is coming up in one hour and 42 minutes. 12:00 p.m. in london, 7 a.m. in new york. in this is bloomberg. ♪ tom: good morning, everyone. bloomberg surveillance, tom keene and francine lacqua on queen in london. we have some good quests -- guests. we are not ignoring markets. really reaching out well over 26,000 this morning, the futures. i saw the story three or four hours ago. and absolutely spectacular new york-based story on deutsche bank. , all this talk of money laundering. we go to frankfurt and speak to steven arons. for everyone in global wall street, this is common knowledge. people running around manhattan ofing to launder gazillions dollars

only a few major european lenders set to report including bnp paribas. lost ground to u.s. rivals.r results send european firms slumping the most in a month last week while u.s. peers traded at a six-month high. joining us is dani burger. of what is driving that divide that you mentioned is really this brew of toxic structural problems. there is competition from a crowded field, smaller institutions, u.s. rivals, high cost, and a tricky political landscape. is especially drastic when you look at the u.s. rivals. the top five banks profit in the overwhich is in the white 100 billion in 2018 and the past 12 months trailing. we also have aggressive monetary stimulus in europe that is squeezing margins for u.s. banks. the for the financial crisis, earnings had be that of their u.s. peers. look what happened after the financial crisis. the gap widened in the opposite direction for european lenders in the white, the lowest in about a year. in the lowest, you have capital market setback the majority of funding. you can concentrate on earnings fees from trading and an in europe, 72% comes

i put it out on twitter earlier with a terrific some of all of the players, including bnp paribas.y to come out? gideon: i don't know whether -- guy: i don't know whether this is an indication the talks are not going well. presumably, there must be a plan b. wondering what i plan b looks like, is it the same as the bank has been dealing with, a merger with somebody else? the point is an interesting one -- why can't europe get its act together when it comes to making progress with key areas like a banking union, a structural capital markets union? -- andeurope failing germany is at the heart of this -- why are we failing not to get a grip on some of these key issues? banking is so important yet we cannot get our arms around facing them. gideon: cooperation is difficult. we cannot get along within the united states and europe is having problems cooperating countries. the basic problem is coordination of multiple different entities in a game that is a positive sum game if you play it well together, but can devolve into a competitive zero-sum game. the big picture is europe has done we

paribas,redit, bnp socgen, santander even.ttractive asset someone, and even more attractive to someone else that it ultimately is to deutsche bank. david: i also noticed there's no line of suitors for deutsche bank. [laughter] david: if any of those come in, what has deutsche bank got left? talking to matt miller earlier, i understand plan b would be a sped up plan a. that doesn't sound very good to me. alix: either way, you have to raise some kind of money if you want to buy something, and you have to cut costs. david: they've been saying that for years. alix: exactly, and it hasn't done anything. -- i haveclear in no clear vision on what they want to do with their investment bank. jason: there's this whole element of the german government is ultimately going to have some the gout say about both of these things. david: my third story is an sec sayingion coming out and it is time to step in on bank regulation. everyone has said you have to watch these nonbank banks making loans. are they disclosing liquidity the way they shoul