>> opec exclusive. the russia ukraine crisis will have an impact. >> i am hopeful. that wisdom will prevail at the end of the day. they will find a solution. >> taxis take on tech. london prepares for disruption as cabbies prepare to protest cooper. the temperature of the high street. holdings retailers beat earnings retailers-- clothing beat earnings estimates.
welcome to countdown, i am mark orton -- martin. -- mark barton. >> bloomberg reporters are standing by to deliver the stories that will drive you they -- your day. >> ryan chilcote is indiana. na.indiana -- ihn vien and olivia sterns is in trafalgar square in london be read let's get to the aching numbers for -- to the breaking numbers. this is the spanish clothing store that owns a zahra. zara.s not the 11% drop we were anticipating, but lower than last year. sales have missed analysts' estimates.
sales up less than expected. -- the local currency stores, sales up 11%. they are saying this is largely to do with current see. they have been trying to push out in country such as brazil, china, russia. offsetting the sluggish sales in the home territory, that being spain. but weaker foreign countries, especially russia, have been tracking on sales and profitability. see that profit up to 406 million euros. again, slightly lower than it was last year. we will be looking at what the outlook is. the second quarter might not
bode that well, either. you have japan. tax, that willes reduce sales as people read gauge how much they want to be spending in the shops. retail sales looking relatively sluggish in spain for the second quarter. saying theythey are are proposing five new shares. for the share split. we will get into those numbers for you further. >> thank you, caroline. >> the opec nations meet in vienna to discuss production limits. they are expected to keep woodward stands, 30 million barrels of oil a day. that is never the full story. doese story really is,
opec have the ability to to produce all the oil the world needs? is an interesting one. six months ago, the question was does opec quietly need to cut back? or saudi arabia. maybe not the will to -- quota. -- the good problem problem is with supply. iraq.rt with problems in they have the issue of the split between the kurds in the north and the federal government in the south. kurds have started to produce oil and deliver to market. a tankerke a look at called the united leadership, it -- ununited united iraq really is.
the tanker has been traveling around the mediterranean, but nobody wants to buy it because the government of iraq is threatening to sue. then you have the violence in iraq, which was already taking along. cking along. then the fall of most all -- -- a city of 2y million people. there is infrastructure not too far from there. it is a concern here in opec. something we discussed in an exclusive interview yesterday with the head of the uae delegation. we hope that the incidence in iraq is going to be controlled. and the violence is reduced. i think we have enough reserve
from the rest of the member countries to overcome. impact foresee a major on the production of iraq. >> libya is another country that is creating supply constraints. they should be pumping 1.5 million barrels. theirpumping 1/10 of capacity. production has been so low since coffee fell two years ago -- -- since qaddafi felt two years ago. the issue of iran, locked out of the international markets. the iranian oil minister told me they have a spare capacity of about 700,000 barrels that they could deliver to the world if there were no sanctions. the problem is, there is no light at the end of the tunnel when it comes to sanctions. the u.s. is trying to restart those talks. we have the sanctions relief deadline looming at the end of
july. there is no clear and to the sanctions against iran. an iranian oilng anytime soon. >> thank you, we will speak you -- to you later. between taxisdoff and car services will be stopping traffic as more than 30,000 taxi drivers protest against uber. olivia sterns is in trafalgar square with the details. good morning, anna. 10,000-12,000ng cars to set here -- to dissent here and start protests. i have spoken to a few cabdrivers. the plan is to drive continuously around the central landmarks. if that happens, it will free -- create an enormous amount of
gridlock. as you know, uber has been protested before. but this will be a different level. all the cities seeing the same kind of backlash. part of what you could say is a industry broader backlash against disruptive technologies such as airbnb and dario -- aereo. >> what has been the response since uber? they are getting a great deal of publicity. >> our correspondent, caroline hyde, caught up with the u.k. head of uber. she found the response quite disappointing. >> ultimately is about consumer choice and increasing the quality of service we provide to consumers. hire ort about private taxi. we believe there is moved --
room for both. .hey have coexisted for decades >> we have had a response from the institute of directors that put out a statement saying the cabdrivers protesting would not icalble to prevent technology innovation anymore than the spread of the power loom. this is about trying to disrupt -- is about disruptive technology and the entrenched interests that are trying to slow down progress. >> paint a picture for us. is theilar or different service you get in the u.s. compared to internationally? >> i would say the key difference is in london, it is much cheaper relative to the public taxis. a black cab would cost me about 30-35 pounds. if i were to take uber, it would cost me 22.
in manhattan, it is typically more expensive than the yellow cabs. i've noticed there is search pricing -- surge pricing. dolondon, the black cabs take special lanes so you can get there faster. that is an upside. in new york city, they have to contend like -- with traffic just like everybody else. in london, you can always pay by taxi. not only black cabs do expect -- ept credit cards. quite a few advantages for uber in london. >> olivia sterns in trafalgar square. tions meet to discuss this question. should the limit of 30 million barrels stay the same? the mobil oilat
news. the european commission will open an investigation into arrangements.tax the announcement is expected to be made today. 55 hundredo hire workers -- 5500 workers. biggest -- they will add the jobs over the next five years as they double research and development staff. named a newntreau chief executive officer. this comes as the cognac maker works to reverse a slump in earnings. the stock has declined 20% in the last year.
welcome back to countdown, i am at a words -- i am anna edwards. and i am mark barton. an order will cancel for aircraft. the first of liberty was scheduled to take place in 2019 -- the first delivery was scheduled to take place in 2019. they are very confident in the wide-body program and their order book will grow in 2014. >> first delivery expected this year of the 85th -- a 350. high hopes. as oil ministers meet to decide a collective production limit, angola's will minister said he is satisfied. >> the market is ok. opec is producing -- we have about 30 million.
not bad. the price is good. it is not bad for us. >> stay with toback -- staying with opec. thank you for joining us. we have spoken to 10 out of the 12 oil ministers. there seems to be a view that supply and demand and global oil before is well-balanced, today's meeting, meaning 30 billion barrels a day stays the same. are you feeling as if eac and comfortable as the oil minister -- are you feeling as easy and comfortable as the oil ministers? >> everybody was very much about, having to cut back. thanks to libya and a lot of
opec needs to produce more than they are doing. right now there are around dirty -- around 30 million barrels. muchding on how much how libya and iraq and iran do. they need to get to 31 million barrels in quarter three. that tends to be bp command -- be the peak demand. that will be hla match. >> what is your biggest challenge on the supply side? is it on iraq? our correspondent was to guess to the issues in northern iraq. is it around libya? what are you most concerned about? >> libya has to be one of the top ones. the country is very close to civil war. there is the whole islamist movement. yesterday,ay before they had to interim prime ministers. no constitution. there was a big expectation in the market.
the if is, what does -- what if libya comes back? now -- a lot of that is going into domestic consumption, which means exports are near zero. iraq is adjusting because they declared a state of emergency yesterday. impact oilt production directly, but it does have implications. you could see little bit of a slowdown in the momentum. the kurdish trying to sell their oil but they cannot. nobody is taking it. >> what is iran -- they have faced relief from international sanctions. the world tries to strike a deal. of likely is a full lifting sanctions on oil imports? >> very unlikely. that was the second big if. with iranian reduction came back -- what if iranian barrels came
back? the fact that they are talking is positive. but things were moving a lot better even a month and a half ago. is, ok, wed of talk will not get a comprehensive deal. maybe a bit of an easing. now we don't expect any lifting. the debate is about the number of centrifuges iraq would like to have. -- iran would like to have. they have been exporting more than they were allowed to -- that will be under scrutiny. >> help us connect the dots between themes in energy markets. we are focusing on opec and what they are going to do in terms of oil production. in other big trend has been for shale energy in north america. increasingly in europe as well. how are these coming up against each other in markets? >> i think god for shale.
without shale, i would dread to think what will prices would be because of all the outages that opec has faced. we haven't even touched on nigeria or angola. not takenhale has off, and we don't to get will to the same extent. supply growth outside north america has been dismal. even russian production has flown down. has loaded down with -- slowed it down. if it weren't for north america, -- >> they are trading at the least volatile level ever. which is quite a thing to say. they have been resilient in a seasonally weak second quarter. why is that? >> it has been amazing. in the last two years, it has been about $100 averages. $30 swings get
between quarters. this has been to-three dollars. for oil, what has happened is the supply-side factors come at outages and let me a -- in libya, has supported demand. the risk is prices do break out of the upside. there is the risk that maybe the refineries cut back on processing because margins are so weak. crude has been so high. rangee stuck in that because demand is lower. >> thank you for joining us. the -- great to get your thoughts. every test in -- amrita sen. >> grabbing the spotlight at the e3. is focusing on some
if this issue is becoming a ijor issue, it is going to -- wisdom willhat the prevail at the end of the day. they will find a solution. >> the pressure on nintendo's new game council is mounting as sony and microsoft student -- steal the limelight. they are focusing on a new grouping of games. >> the challenge for nintendo has been that in the department of selling consuls, it has behind microsoft and sony. there are reasons that people like to analyze why that is. that has put archer on nintendo to come out with a new grouping of games that will encourage
i as they buy the wi move into the holiday season when consuls and game sales are at the most important level. a couple of the takeaways from one nintendo told us -- they will bet on some of the franchise characters with some spinoff games. they are making a bigger push into the action category. with at least one multiplayer game. three, they are going to take a page out of the playbook that companies like disney have been using. they have had a lot of success with something called infinity. or you have collectibles, real-world collectibles, that can also be used and attached to your game and give you an interactive experience. we have seen this with islanders. -- skylandsers. nintendo is doing the same thing.
>> welcome back, i am an edwards. -- anna edwards. >> and i am mark barton. i thought we would look at sterling against the euro. last month, it reached the highest level against the euro. underlying the strength of the u.k. economy relative to the euro area's. the piece of it or we are watching today is -- the piece
of data we are watching today is unemployment. analysts and economists will also be watching holdfast the pace of average earnings accelerates. accelerate at to a slower pace. average earnings could increase the priorrsus 1.3% month. ratewill come in below the of consumer price inflation, which will have many economist's disposableut incomes. sterling is up against the euro for the sixth consecutive day. that is the best run since september, 2013. >> these are the bloomberg top headlines. the world bank has cut its global growth forecast. the organization predicts the
world economy will expand two point eight percent. the production was 3.2% in january. bank -- invest in 30%stment banks get bonuses higher than smaller rivals. they typically receive owners of the 400,000 pounds and a base salary of 275,000 pounds. opec nations meet to discuss a productive -- collective production limit. country say they are at ease with supply and demand in global oil markets. we spoke exclusively to the uae oil minister. >> most of the countries are in the process of growing. kuwait, saudi arabia. it is a buffer between the
production -- they are very helpful. opec will be choosing a new secretary-general. ryan chilcote in vienna with the details. >> we have a new candidate. her name is from nigeria. -- she is from nigeria. we have had a secretary-general for seven years. he is 74 it -- and his two years passed the five-year term. they have not been able to choose a new successor. they have three candidates. an iraqi, an iranian, and the saudi. good, the bad, and the ugly. it all those countries unable to agree on any of them. nigeria wouldom be good because they are free of
the whole quest or struggle for supremacy in the gulf. free of sectarian politics. she is the first female opec minister. that is what she became after nigeria made her their oil minister. first woman the to lead opec. become up with her and she said she would be delighted to have the job. >> frankly, that would be a privilege. however, i'm not the secretary-general of opec. -- on theonly agenda agenda at this point in time. >> not everybody is really excited about her credentials or credibility. the job of the secretary-general is to be the public face of opec. be ag a woman would positive thing, but the job is also to build consensus, ticker only when there is division,
which there usually is. particularly when there is division, which there usually is. opec countries quietly are telling us they are not convinced she has the right stuff. they would like to look at more candidates. my prediction is this gets discussed at the meeting, but they all agree to discuss it down the road. you know how they like to do that. lead --ent leader remains on for another six months. >> ryan chilcote in vienna. >> they could push that decision downstream. let's get back to another top story. after what the world bank says with a bumpy start, the global growth forecast is 2.8%. in -- thank you for coming in.
let's get a gauge of where you see things. the headline you have brought down your forecast sounds negative. but any forward, you talk about looking ahead with a positive view of global growth. how positive or negative is the world bank thinking? >> we are feeling -- sitting firmly in the middle on the fence. the first quarter has been negative. a weak first quarter in the u.s.. the situation in the situation in ukraine. disappointing performance in the latin america and caribbean. dissipate a significant acceleration. a lot of positive stories in there as well. the euro area has been resilient in the face of the setbacks of us were in the world. ,rowth not particularly strong but not weakening in the sense
it did elsewhere. that is positive. employment starting to pick up in the euro area. whereng a virtuous circle incomes add to demand and so on. there is a solid mix of good news and bad news when we look at the world right now. >> in emerging markets, you are forecasting sub five percent growth. the third year in a row. was is the significance of that? >> is exactly right to really focus on what is happening now. that is exactly right. we focus on what is happening right now. is three years in a row where we have failed to get past that threshold. you have to start asking yourself why. part of the answer is countries goodbeen focused for reasons on the external environment. reacting to what is happening in the high income world.
they have perhaps paid less policies.to domestic the structural reforms that are necessary going forward to read part of what we are saying is, let's put the access on that. the solutions will be found at home, not abrooad. >> you seem to be calling on developing country governments to act in a sweet spot. rates remainrest as accommodating as they are right now, -- to some extent china is doing structural reform. deliberately engineering a lower growth rate. changing the way they do business. where are you impressed and not impressed with what the developing world is doing? >> what we are seeing is a trend within developing countries to move more to the domestic issues. we can see, you mentioned the chinese issue. there are difficulties and
tensions involved. you can look at what happened in india also. in that vein. we have had a robust election campaign where many of the issues were discussed were exactly these kinds of plastic policy issues. >> do have high hopes for the new indian government? >> the fact that you have a majority government for the offersime in 30 years hope that there will be a capacity to act in a way that has not been there in the past. that is good. look at argentina for example. there is a country which, in the past, has pursued policies that have isolated it from the rest of the world. now increasingly, they have made restated gdphe -- figures. inflationdopting an indicator more in line with
international norms. these are the kind of the reforms that address the source of difficulties and address them. these are not easy things to achieve politically or impractical economic terms. >> the last year has been marked with two times of volatility. when it was suggested that tapering might happen. as we know, volatility is at record lows across all active classes. it is the world ready for a tightening of financial conditions? works you put your foot -- >> you put your finger on one of our economist moments. the low interest rates, the liquidity pumped into the system, is helpful for developing countries. it is part of the acceleration in growth from 4.8% up to 5.2%. thate other hand, the fact if a straight and developing
countries have declined does pose a bit of a convoy -- quandary. they will have to tighten traditional monetary policy, to begin sometime next year with the united states. interest rates and developing countries will rise as well. doesn't happen slowly and gradually, in which kate's everybody has time to react? or doesn't happen quickly? if it does, there is the potential for volatility. weh we are seeing -- what are saying is, let's take the know of opportunity. get our houses in order. deficits orare high debt to gdp ratios rising, let's do something about that. >> still talking about reform, the euro area, you think the fortunes will be most shaped over the coming years by domestic governments or by the european central bank? thehave been impressed with
actions since the crisis. >> when i look at the euro area, and are focuses more on developing countries than it is on the euro area, but i am strength of the action that has been taken over the last five years. beenal decisions have taken. a lot of important reforms have been pushed through in a difficult structurally environment. all of that is very good. but you are right to point out that the latin term solution in the euro area is going to lie on the structural reform. that issomething countries has tended to lag. >> the question on russia. russia. question on you changed the forecast to larely growing but stil growing. if the ukraine crisis
intensifies, that could be negative? >> that is certainly true. when we look at the ukraine situation, it has had a big impact on growth. russian cut our forecast. ukraine went to two percent to zero -- minus five percent. for otherad effects countries. that a negative already. going forward, our baseline presumes the tensions do not get worse. there is a gradual normalization of the situation. engines get more serious, there is a real issue. is not so much the direct trade channel but the confidence effects it might have. if tensions rise, firms start to hold back on investments. it individuals weight on -- individuals wait on durable
corruption. armed forces and the police are beefy number -- beefing up security. defense officials have said around 160,000 police and soldiers will be deployed during the world cup at a cost of 850 million u.s. dollars. >> and me turtle has given the host nation brazil been on to win the opening match against croatia. the sea turtle was given the choice between the eating a fish hang from -- hung from a brazilian flag and a croatian flag. guess which wing on he chose. >> this is very scientifically based. >> remember the octopus? >> i was recalling paul the octopus. in germany. he with the animal oracle use
during the -- he was the animal oracle used it during the 2010 world cup. >> is he dead? >> he died in 2010. rizzo's national booze is on the verge of a tequila like sxplosion -- brazil' national booze is on the verge of a tequila like explosion. cachaca. we sit down with a taste test at the original cachaca bar. >> i drink twice a week. when it is raining and when it is not raining. i was born here. inake the best cachaca brazil. >> cachaca is made from 100% sugarcane. has energy for cars
with ethanol. it has energy for the body with sugar. it gives you happiness with cachaca. is very good. it has a honey like quality. it tastes alcoholic. >> the beverages running through my blood. i drink all the drinks in the world. i like drinking as much as a drunkard. >> cachaca is the main ingredient in the national iporenia. the ca mexico exports 20 times as much tequila as brazil exports cachaca. producers hope the world cup puts cachaca on the map.
>> many people taste cachaca for the first time. it can compare with the best scotch, the best whiskey, the best cognac. >> historically, brazilians as a low classa drink to read in till 2012, they considered cachaca brazilian rum in the u.s. you use surea, sugarcane juice and you fermented directly. when it is fermented, you have 12%. >> the u.s. recognizes cachaca as a distinct spirit. toreturn, brazil agreed recognize bourbon and tennessee whiskey. >> i saw the process of jack daniels. sameed to apply the
process to cachaca. it has improved the flavor any smoothness. it is one of our sellers. -- cellars. where we age the cachaca. i raised dairy cattle here before. better.is >> very good. if rizzo wins the world cup, we should try the stuff. >> if they really wanted to take help usy might need with pronunciation. we had a conversation that lasted two minutes about how to pronounce the name. >> i failed every time. we are getting better. >> a new british invasion sweeping across the u.s..
this is one on scottish independence. one of the biggest ever political bats has been placed on the scottish vote. garnish independence. one man in surrey has managed to bet 400,000 pounds that scotland will vote no in the referendum. >> what are the odds? 1-4 for a nore vote. >> not bad. a big risk. >> rish robots ready to take on the world. american on a weeklong to work, showcasing robots. they are being developed in the u.k. a palm-sized drone is being developed that can flap robotic wings. >> i love this cartoon. you will recognize the characters. merkel and david cameron.
>> and opec exclusive. theuae tells bloomberg crisis will have an impact. >> i am hopeful that the wisdom will prevail at the end of the day. taxis take on tech. london braces for severe traffic disruption as cabbies gear up to uber.st against huber. -- >> and a safeway looking at the second drop in sales. the last time under justin king.
," ielcome to "countdown am mark barton. >> bloomberg reporters are standing by to deliver the stories that will drive your day. ryan chilcote indiana as opec decides on a collective production limit. >> the cities traffic -- taxis stop to protest uber. and earnings. >> making my way through the first quarter trading statements. total retails for the first quarter up by one percent, excluding fuel. like for like sales, for the first quarter, down 1.1%. excluding fuel. include fuel.ou
that compares to what many analysts were looking for, a drop of one percent. within the same ballpark as what was expected. it a drop in like to like sales. the company -- this is the last reporting under justin king, the chief executive. lower food pricing, inflation, and you will places are a welcome respite. the lower food prices and prices generally for supermarkets is one of the biggest it -- stories. >> they have taken 3.5% of market share. they have to try and withstand the competition from the likes of them. sda and william arison -- morrison investing as well.
price war. real but there is always a price war? >> yes. they always compete on price. that is the message some of the senior executives tell us. is expected tong remain cautious. we will continue to invest to remain competitive. suggested, ande we have to point out that this company reported for nine years and in broken run -- an unbroken run of like for like sales. they have pointed to the focus on fresh produce and luxury label items as something that have helped them gain market share. iny withstood the decline market share the other supermarkets have seen. the three big ones that have lost market share. it has actually sustained market
share. weeks, they lost market share. it was only asda that gained market share. to tesco. wasip clarke, the ceo, stacking shelves as a schoolboy there was ae -- decline that's deep. >> we have talked to sainsbury the number of times. the online delivery. which grew over 10%. that will be a key battleground for many the supermarkets right now. they are talking about sainsbury bank. one of the analysts was talking
positively. >> a market -- the market is bearish. just got some breaking news. on rolls-royce. >> the emirates decision cuts by 2.6.r book >> roils royce providing engines 50 with a thrifty -- a3 the emirates saying they will be needing as many a350s. airbus a350 remains strong. >> the 12 opec nations meet in vienna today. they will keep the collective production level as it stands. the quota -- talk us and take us
behind the scenes. >> behind the scenes, these guys cannot pump oil fast enough. there is a concern that they may not be able to meet demand going forward. it is different than the situation they had their last meeting, six months ago. they were worrying about whether they would need to take some oil off the table. whether saudi arabia, the swings ramp up andch can afford to take away production, whether they should pull back in terms of their production. good problem to have. demand is good. but the other side of it is supply. six months ago, it looked like there was more supply that would come online that has not. that has been the disappointment. iraq the biggest disappointment. a couple of years ago, they were talking about upping their production to nine marilyn -- 9
million barrels a day. at three .5hey are million. there is a tanker floating around in the mediterranean that is full of kurdish oil. it has not been able to offload oil. . it has been going from port to port. that is because no one wants to touch its product. the iraqi government has threatened to take legal action against anyone who does. the tanker is called "united l eadership," but it underscores the problem affecting iraq. there is no united you the leadership -- there is no united leadership. there is a shia government in baghdad and then there are kurds up north. is bad.ence already we had pipelines blowing up. that has been an issue as well. especially with the follow most mosul.with teh fall of
not too far away from somebody pipelines they were hoping to get back into shape so they could pump oil not just through but also through the north. it looks like those plans, because of that violence, could be deferred. it is certainly something everybody is talking about. we cut up with the will minister of the uae. here's what he had to tell us on that matter. >> we hope that this -- the incidence in iraq will be controlled. the violence in oil-producing countries is reduced. reserve from the rest of the member countries to overcome. impact foresee a major on the production of iraq. >> if iraq was the only
disappointment, that would be one thing. but it is not. there are three. libya is another big issue. they can produce as much as 1.5 million hills a day. it is producing closer to 150,000 barrels a day. they haven't exported so little sense colonel qaddafi fell two years ago. the oil is not getting to the ports and getting out to sea. then there is iran, which remains blocked out of international markets. six months ago, there was hope there would be some sort of reg through and the sanctions would be lifted. there have been some sanctions relief, but nobody thinks we are close to a breakthrough that would lead to iran being able to send its 700,000 barrels to its needs to
the market. that is another big thing. nobody pricing that oil coming into the market. everybody thought six months ago they had a reasonable chance of ending the sanctions. now everybody is wondering again. we are back where we were nine months ago. wherein -- >> ryan chilcote indiana for the vienna for the meeting. >> more than 30,000 taxi and limo drivers from london to milan protest against san francisco-based uber. olivia sterns is an trafalgar square the details. >> good morning. taxi drivers are promising chaos. we are expecting anywhere from 10,000-12,000 black cabs to show up. plan to protest around the area of trafalgar square, where i am now. also around parliament square. two main central landmarks and
arteries for traffic. on theuld cause we log enormous scale. interesting development this morning. said lackhot back and cabs will be no option for the service, already available on the website. it will be interesting to see if the drivers, who now have the option to join ubeer, turnout in the same numbers. they might get might be an option to work for uber. we have heard that uber make more than public taxi drivers. this is not the first time that uber has been protested. here it is on a larger and coordinate its keel. there will also be protested milan, paris, and madrid. is a backlash against disruptive technologies. a heavily regulated industry. it is similar to protests
against airbnb and aereo. not a huge portion of uber's businesses in europe. but a sign of the times. the economic and labor reforms that the european economies could use to get their economies going. generally a sign of disruptive technology. anna? >> thank you very much. olivia sterns joining us from a business -- busy trafalgar square. click -- >> expecting gridlock. not as bad numbers, as expected here equips this is a company that has always posted positive growth. it is rare that we see a drop in
profits. profits down seven percent. not as bad as expected. many foresaw 11% or double digits. there is a drop in profits. sales missed analysts estimates. with weakening currencies, particularly in emerging markets. this is a company that is dominant within europe. the home is spain. we know the austerity and the decline in retail sales. they are renting out and look into the emerging markets like pressure, china, brazil. if -- we sell but the colossal falls and emerging-market currencies. the ruble losing propers and of its value against the euro. similar drops. these headwinds have hurt the bottom line. .> 11% growth
that shows the disparity. there was 11% increase in local currency sales. just four percent in constant currency. 5-1 doing a 501 spot -- stock split as well. coming up, a warning from s&p. debt levels in peripheral countries will drag on european growth for years. we will talk to him after the break. ♪
eurozone deleveraging could stunt growth for years. he joins us in his first tv interview of the day. thank you for joining us. >> good morning to london. thehe overall leverage in euro zone per their furry -- an all-times near high. how long will it take to reduce the persistent debt overhang? look at thef you overall debt stock, combining the private sector and public sector, the d leveraging has hardly begun. under the surface, you see some cross currents. in some countries like spain or ireland, the private sector has advanced quite a bit. as a share ofload gdp. at the same time, the government has been increasing. it if you added it all up, the is near in the economy
all-time highs. only last reached year in most countries. that implies that while economic agents, private or public, continue to repair their balance sheets, we are at the beginning of the d leveraging -- deleveraging. if we projected that the deleveraging in the private theor would continue at same pace into the future, by the end of the decade, we would be back to debt ratios a roof around -- of around 2005. oft is where the ramp-up credit was maximal. >> with you make of the most recent actions by the ecb? the cut in the interest rate and other nonstandard measures that have been announced?
do you think the things that have already been, committed to, will they have a material effect on the european economy? >> a lot will depend on whether credit in the periphery is due to supply factors or demand factors. whether it's the banks who don't want to lend for credit risks or other reasons. like running up their capital ratios. or whether it is really a demand question. where they feel over and that is already. if it is the latter, a lack of demand, the measures that the ecb is taking can only go so far. the truth of the matter is it will be somewhere in between. there will be demand and supply factors. what the ecb has been doing over recent quarters, and more specifically at the recent meeting, will address the supply issue. be that as it made, what we are
trying to point out is the debt level overall is high. many economic agents will continue to reduce it. while they are doing it, domestic demand and economic growth will be rather subdued. unless you have exports kicking and in a bigger way. the external surpluses we have seen any periphery's rising further. >> on the subject of the european bank, if the -- is the banking sector to big relative to gdp? i know the increase between 1999 and 2011 has been reduced -- reversed. one number jumped out. that is the biggest. europe's simply, is banking sector to big relative to gdp?
>> i don't think you have a reliable measure. the eurozone is a much more important transmission in the markets then it would be in the u.s., which has a more developed capital market. that is why the credit crunch have seen in some peripheral countries is particularly damaging for demand. relatively little other sources to go to. we have seen the corporate -- increasingly also tapping capital markets. the example that you mentioned anh ireland has been oversized the banking sector. what we are seeing, not just in ireland but elsewhere, is the balance sheets of banks are shrinking faster than the leverage overall that i described earlier. the reason is twofold. one is that the government is
becoming a bigger chunk of the debt. e-government usually doesn't borrow from the banks, it borrows from the capital markets. the other one i alluded to is the corporate -- they have started going to the capital markets. >> think you very much for joining us. morris from standard and poors, we will take a short break. ♪
>> 35 minutes ahead of the european stock market opening. who better to tell us about which stocks to watch than caroline hyde? looks downtown percent -- >> down 10%. their profit will drop by 10% as well. they are dependent on petro. petrobas and rozelle is cutting its own owners and slowing demand. itsn brazil is cutting down orders and slowing demand. downgraded by a lot of analysts. >> airbus and roils royce. >> $21 billion is the amount of orders pulled by emirates. 0s.a35
it should increase to 6.7%. watch out for average weekly earnings. inflation is running higher than that. sterling is that an 18 month the euro.st >> the world bank has cut its on weakerwth forecast outlook from the u.s., russia, and china. they predict the world economy will expand 2.8% this year. bankers getestment bonuses 37% higher than rivalsparts at smaller according to a new survey.
receivedthey typically the mrs. of 400,000 pounds. countries representing 97% of the groups outlook say they are with thee -- at ease oil market. airbus says emirates has canceled its entire order for wide-body aircraft. idea about what this might have been worth. >> good morning. this is a big order. talking about $21.6 billion. this was one of the largest orders for airbus.
airbus made an announcement but we have yet to hear from emirates on the matter. airbus said this was due to the , and we are yet to hear from emirates on the matter. this we have any idea why is being canceled? we haven't heard the emirates side of things. do you have any details? yes, their president has always been critical. didn't fit with the requirements and specifications. said more than that regarding this matter.
this will certainly be a blow. this comes around six months before this goes into operation. to hurt airbus. on the one hand the company is saying they have around 740 planes. this plane will definitely go into operation with qatar airways. >> that is said to be one of the customers. thank you for joining us. rolls-royce cut at trade. >> price-cutting by competitors is hurting. since very reporting a second straight drop in same-store years ofer nine
unbroken growth. here is charles allen. nine years of good times. now negative same-store sales. what is going on? >> inflation is down. it's not only overall price-cutting bud rates of inflation have followed. we are seeing consumers continue onchoose to go on spending things like clothes where retail sales are a lot stronger. at st. mary's it is just difficult. i suspect april was ok. it was over easter. martin may into june have been much more tricky. >> i can't eat my clothes. something more tricky is going on. he leaves this in the hands of mike coop.
what we make of the transition? forhey have worked together seven or eight beers at sainsbury's and had worked together before that. i don't think there is a huge difference. i think they will make sure that works well and st. mary's -- bury'svery -- saint remains competitive. >> it's in a better position. i think i am right in saying the market share hasn't buzzed while others have to climb. on year it has performed better, hasn't it? >> it has. it's difficult to say exactly what that is. customers are the
slightly older and haven't been squeezed quite so much. i think they would attribute it to a better food offer and say that people want to buy their food, and they have been disillusioned by what they found. >> the stock is seen as a little higher. >> i think the numbers are a little bit better than immediate expectations. profits are down. sales growth is only four after the currency took six percent off for growth, but that was better than people were expecting. it's really how things look after expectations. the competitor is number two when it comes to clothing retail. it was up from 19% from a year
earlier. tops the 12% average estimate. who is doing better right now? >> there is always a comparison factor. h&m do seem to be flying. it may be part of the geographic exposure. they have a lot of exposure to russia and parts of the middle east where things may have been difficult. >> they are exposed to different currencies. eurothe strength of the and other numbers. >> i think the kroner hasn't been particularly weak either. it's more the geography in which they are operating.
has been very strong in clothing, and h&m is much bigger in the u.k. in the overall pattern. germany as well as h&m's biggest country. i think that has been stronger for them. >> thank you very much. >> 7:39 in london. just one day until the world cup kicks off. it's the biggest event on the planet. chances are they will be decked out in a colorful boots for the tournament. we spoke about the big business of football boots. >> that is cristiano ronaldo. he's the best soccer player in the world. i'm in madrid because nike wants me to see his new shoes. of footweary as vp
for nike. >> this is the latest edition. an industry term. basically a line of shoes. >> i am curious about what nike called the silo approach. this is specifically from one type of player. >> at the modern game defined by for playing styles. when you think of cristiano ronaldo, his game is about explosive speed. we can create a product based on that insight. >> at the world cup this summer he will be wearing the mercurial super fly. a line of cleats is an expensive investment. any player can blow out at me or have a bad year. in soccer nike and adidas don't make a product around an athlete. they make a silo and move an athlete into it. when he gets old and injured there is a new player waiting to step in.
even nike admits there will probably never be aired jordan for soccer. >> is it possible for something to happen the way the air jordan became something greater than a shoe, or do you think that is not going to happen again? >> there is always moments. is defined byme key moments. when we can link product innovation to keep moments that is when the magic happens. >> what he means is no. just like nike, adidas has for cleat styles, but it started earlier with the predator, a cleat with groups over the toes -- grips over the toes. in 2004 adidas launched a limited run of the predator style in david beckham colors. at 720 euros a pair. own logo but not his own shoe.
>> as a little kid you want to be the next messi. how do you do that? i want to be that player. >> this is my best friend's son at soccer practice in germany. whether lionels messi wears adidas or nike. wearsf the kids think he adidas. half the kids think he wears nike. adidas. it doesn't matter that they don't know which shoes lionel messi wears. at this age their parents by their cleats. when they are 15 and have their sales will start to
>> aig has promoted the ceo. the company is focusing on growth after the predecessor stabilized the insurer and paid back a government bailout. a new chiefau named executive officer. this comes as the cognac maker works to reverse a slump in earnings. the company last week reported that 39% drop in profits as chinese customers cut back purchases. ibm is nearing a deal for its chip manufacturing business. the tech giant has searched for a buyer since last year. foundries is mainly
interested in acquiring ibm engineers and and no actual property rather than manufacturing facilities more than a decade old. welcome back. >> it is seven: 50's -- 7:46 in london. for more on the biggest apparel theiler, let's bring in director at cantor retail. brian, good morning to you. multinational and multi platform. >> i think that is three great strengths they are seeking to emulate. it does have a multi-brand presence you can virtually shop without realizing it. a wide variety of styles. andives huge flexibility
all the existing markets. every broad sector of the population. >> in some industries it seems specificense to target groups with specific offerings. you are not disadvantaged by cannibalizing other parts of the business, or as in other sectors it is seen as a no-no. you do not launch these many brands because they risk cannibalizing your business. how is it they managed to do ok even though they have these in-house competitors? >> to does make a great deal of sense to have a highly segmented offer. some retail has achieved that with different brands in their mainstream store format. >> m&a for example. >> that's a great example. they are using the big mainstream brands legs are as a mass offering.
-- big mainstream brands like offering.mass they have a huge adaptability to take on lots of these different international markets. they continue to globalize at a rapid pace. >> is there a limit to how many rants it could introduce? brands it could introduce? is there a limit? there is a feeling when you come to the level where it is a operation to manage. all of these will have different aspect in terms of logistics and marketing. i think you can overcomplicate. is looking to mimic this with all thesel
successfullycepts targeting different parts of the market. >> tell me about the global expansion strategy. they have been pushing into emerging markets. i am always interested how retailers in the clothing sphere manage global growth when you talk about different seasons across hearts of the world. i lived in the middle east. it was amazing to see enormous coats on sale when it was 25 and more degrees outside. stratum retailers have been fearing the arrival of european businesses. >> there are complications when it comes to different markets. averageght be different body sizes. a number of retailers struggle with basic things like that. seasonality can be a big issue.
iny are very responsive terms of this beat with which they can change their collections or perhaps liquidate stock which hasn't been quite so well. it's not a simple business for any retailer. clothing seems to be the most successful in terms of eating portable and adaptable and linking up to local partners to idiosyncrasiesnt you find in different markets. sainsbury question on . they all left at the top as things were just creaking. >> i think there are a few skeletons in the cupboard at sainsbury compared to tesco. they clearly are slowing down. i think -1.1% in a zero growth market, and tesco and morrison's are doing worse. sainsbury is still a
>> welcome back to countdown. >> plenty of companies to watch out for at the start of trade. we have been talking about the emirates airbus story. we have been talking about retail. stocks lower.e we can look at the upside because intertech and h&m are rise. it in him strongest monthly sales since november. >> they say there were some calendar affects and an extra saturday in the month. a lot of european cities were look for that stock to rise two or three percent. -- indetech.e tech you saw it was not as bad as people were expecting.
>> welcome. you are watching on the move full we are moments away from the start of european trading. there are production limits that shape the world energy markets and we are looking for a new leader of the organization. here with the now as ryan chilcote and caroline high will stop let's start with you in vienna all stop >> -- in vienna. of my death is an exaggeration. m.r.i. channeling mark twain? -- am i channeling mark twain?
yes. that could be said about the cartel ministers today. the revolution failed to kill them off. and well.ive i will give you the latest from the meeting here in vienna today. >> thank you. rare drop in profit today and we saw weakness a cross emerging-market currencies. not as bad as expected. there was a seven percent drop in profits and the shares could rise. on the flip side, they are doing well and we have the strongest monthly sales since november. up 19%. i will be back with the biggest retailers in a moment. >> thank you very much, indeed. are watching european markets. a little bit of data today. you have,