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tv   Bloomberg Markets European Open  Bloomberg  November 29, 2016 2:30am-4:01am EST

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>> good morning. you're watching "the european open." i'm guy johnson along matt miller in berlin. what are we watching? crude falls. o peck slips. o peck fails to -- opec slips. opec fails. candals taking their toll now. what does it mean inner that economy, korea? should b.a. system supply
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warships to the royal navy? we're going to talk to john parker who has published on the matter today. >> less than an hour to the european open. let's take look at futures here. slight gains in futures after the big drop that we saw yesterday and the cash trade of and is unchanged as the kak the dek as well. keep your eye on commodity for the direction of the market. >> it's a big future coming through on the g.m.m. greece coming off of its recent great run. the dollar inching today -- i don't think it's going anywhere. i think it's wasting starting to get their arm around. 1%.euro is down .210 of we've got austrian vote coming -- he referendum come
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coming up. we are watching spread widening across europe. that is definitely a future. we are seeing some of the more core countries. we've got yields dropping. belgium moving as well. another big move in iron other very volatile right now. so we'll get his take on what has happened particularly on the coal market. plenty to think about. here's julian. >> the south korean president said she's willing to resign after being embroiled in a peddling scandal. he apologized for the controversy and asked parliament to talking about a power transition. >> some politicians from her iron party has been pushing fehr her impeachment. donald trump has met with david
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petraeus. that's the senior official with the transition team, said the foreman being considered for secretary of state. who did you pick inner the most. a massachusetts mitt romney is aid to make him lighter. south african president jacob zuma has survived the latest challenge. that's among from office during a mating of the ruling party national commeck active economy this according to two members at the economy who were at the meing. his presidency has been marred by scandal and policy mistakes and put the nation's credit risk. at jose maria cordova airport said there are apparently no survivors after the crash. passengers onboard included
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players from the bra dillian football team chapecoense. this is bloomberg. mack. >> juliette, thanks very much. the russian oil minister says he's not planning to entertain talk in vienna. they're in fighting over oil production cuts. oil trading off about 46 crens to 47.70. she's in vienna ahead of the meeting tomorrow. what is behind russiaees decision here, this turnover. >> well, russia basically is thinking they're not going to do anything. say what they're going to do and we've heard from them. until o pepc are you going to watch. there's so much insiding. that without them having a deal
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it's rush -- it seems like point lard. what the cartel is going to be doinching. we do know that he is meeting with. in moscow. opec. we want you to. russia knows. they want to freeze. we've heard this from vladimir poe tefpblet >> they will not be attending nasmly not be doing anything until o peck makes their decision. >> does that mean opec is out of time for the deal here at least by tomorrow? >> well, i mean, anything can happen. and we've seen that over the past few months. but it's coming down to the wire. until the saudi, any iranians decide who's going to cut and much and bridge a gap, then there won't be a deal. >> the iranian patrol industry
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betweening that we will not have a quote avement >> they think it's the will of the people. and the the suddens. the oil medicine saying we are not desperate for a deal if they think we're going to cost at any time. that's not true. so let be interesting to see what -- what happened tomorrow. because these technical talking u talks yetting 10 hours. just more discussion and they're each sticking to their point. >> thank you very much. >> as we watch what's happening with opek! . as sppt management. >>. saying thanks for the economy. either way. sound about right? >> i think it sbuzz. .
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>> that's not good enough. >> it's not good to be enough. >> the iranian situation is an interesting one. letting inner do we need to maintain some kind of outfit premise. so there's not going to be done most of thinking. . obvious i they're trying to play some hard balls. it ll end up with probably another 10 hours of talks but nothing actually happens. the collect of o speak moderately sim i would say down, yeah. >> perhaps longer term and more interesting. how iran pick up their relationships as she wests. how does that. he improvement, they can do.
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trying to improve economy ke. . matt. it does seem, . tablized around 346, 47, 48 barrel. do you see it moving in a wligger woing. onds -- you can see it bounced at a bottom and came back up to about 45 and $50 a barrel. is that the range where you see it sticking? >> 45, 50 seems safe. i probably wouldn't expect, you challenge toficant challenge a 45/50 range in particular. i think iran is the interesting one or so how kind of the energy talks have grown is going up. the uses of the -- if oil was a commodity. i think in terms the abilities
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o -- if the u.s. so again, it really system o peck. how they agree within themselves they can't. >> you know, i think beside the word cartel. is it really steal a cow call. >> are they holding each other. they deserve the title cartel? >> >> they're certainly holdinging to. they meet on a regular combay sys, in terms of their ability to agree within themselves. and it's proving extremely black. the first issue that they tried o get the sword out. tries to give the world some element that o peck is a struggling bunny. >> they will release. positive sfamente.
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>> what does this mean for your invest kating. >> as a mentioned dad. you know, oils is the kind of mine, say a aye year of mine. in terms of what can drive economy momentum. economic growth. political volatility. >> inslotion. being driven out of the united states. if we see ome oil coming down. if you see neil: into the mid 30's. he pushes them off. yeah, i think with -- if you look at samer. i don't think the mark is predicting an increase. >> i think incred. . we do get. a stablization reduction in oil price as an impock.
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as we. you could see some relief from. . and contained -- >> thank you very much indeed. wayne will stay with us. . we said earlier there were no survivors. when there may be a part of columbia's smart. we will continue to update you on that story. matt? matt: coming up on the program. could the u.s. building take off . we'll speak to the national cher build. john parker. so we'll ask them what are they going nair cold business. >> referendum risks. sell off. italian lenders selling off. we have more on g.o. political risk.
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then later london mayor says the last of governmentity on check it. speeding towards. and more so from that interview. this is bloom birg.
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♪ >> take a look at the german capital this morning. absolutely gorgeous day. the sun rising over the
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brandenburg gate there. just amazing. still less than freezing some of quite cold outside. but a lot of action today to talk to you about how side of germany let's get to the bloomberg business flash. july yet? will hold : they holder returns and next. it's also looking at creative a holding economy structure and listing on international exchanges. elliott management had been. to shareholders. has lost its latest smeed. show the. will walk out tomorrow. they are mading for its los angeleser someone. welcome. and may cost the airline about
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45 million you yo. luff than sa climb to almost 50%. politicians should result. this despite concern that fake news spread on the social met york affected the u.s. intersection results. he made the comment and an exclusive interview with bloomberg. >> the only restriction for facebook i think should be the rule of law chfment is against the constitution. what brings people into jail that cannot be published on facebook. they should have the kind of soup. into media monopoly. before and that's going in different reaction. >> and that's your bloomberg business flash. bye. >> so the french data just come across my bloomberg at the
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moment. let me take you to my screen t.j. d.p. coming through, 1.1. .42. consumer spending. .02 last time. i'm curious to know what their french is spending their money on. also it's strong stronger as well. the french are out there splashing the cash. i may be slightly stretching the points. wayne, this dates anyone at moment in time. restics seem to be the issue. that seems to be creating. >> one of the pornl aspects of any -- important aspects as your time araises and your expectation of return and how long you're prepared to wait for that. europe is an example of what kind of patience will be reward. european growth between 1, 1 1/2
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brs. it's a big block. investment is created. investment is deployed. so again, you know,s the numbers are positive. but began from the management of expectations perspective, we're not expecting europe to be pushing the two and a half, three and a half% any time soon. >> it does give opportunity first those investors are who oking at the rotational ak aspects. we've seen massive gains in certain parts of the world. you can see some of the distress in terms of political volatility. you strip back. nd it doesn't look that bad. europe isn't an exciting place. it can be a place for safe haven places. >> we'll attack teleyou what's
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happening in austria. remains to me on set. could be in a bit of troubling. that's a bit of a concern. when we talk about the amount of work na is being generated right now. and ship builds. they will be forced to close. tchs worrisome with the b.a. systems. babb cog. so john parker is the chairman of the national ship building strategy and chairman of national americans. good morning sir, john. >> from from what i suns. your recommendation when it comes to the shit building strategy. wow you put forward. not great move. and it will not be great news for the collide. is that the correct interpretation? >> i think that would be a distorted interpretation indeed. if i can say the report has been a wide ranging one. it will be money lished in fool
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and not edited in any way. and it will be published in full today. so that's the first point. secondly, with regard to the collide and the bae. i have praised their engineered kleinic. six n that record that credits. made your ship building contract that will be left in decades. goes the collide. and that takes the workload through. one that starts to proves, we'll take it through well into the early part of the 20-30's. > it does give to for example. deliberate the international competitive plan. you're looking forward and
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they've already commence there had. to take to a level that's the same as jaguar landrover. what i want to see and is that the yards become world class thabbed they develop themselves to the same ex tension as our car industry. very different. car building. awfully loss. and let's just talk about that buyer. is the issue the way that we expect lon being. but actually with the way he's been -- that the government procures this economic. and until we see the final. . doesn't just price up. and then not deal with the rest. sbhrblingts
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is it to do with robert robbing the o.e.i.? >> it. to complete. i look at all the as pebling. very long scales and how can we prove. but more pornly you've head the nail on the head. that we actually design our ships in a way that can export -- ll as as all their own part of my recognition is that my new type 32 e or e is for that will be villtanlt and's -- they it's tchice you then give your overseas customers is in a menu of choice. in retro fitting economic.
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in order so we can attack it. >> we want to expend the schiff building base. >> we want to create the first of all the right design. to that which is i am concerned. . and to create prosperity across the nation. and what i find us a number of our yards went through very. . they've become very competitive and we will use those to building blocks in series of this new ship. so that we can have the being team. . that way it will be a time to build on. >> one final quick question. does anyone do this well? i've got to look back. typhoon, tornado. if i look at what happens with
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the d.o.d. does anybody do this well right now that we can pick up. and get our strategy won. >> i think our friendship in the last few years managed to lift the exporting capability. the defensive. i haven't gone into their. how can we make improvements? how can we design something that's suitable from our end. theish issues looks to not just for exports but also insure that they're all navy flet numbers. >> and indeed their sbings is to grow in the earl 30. the trade you and and the government and the m.o.d. question actually do something that's with the grain.
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>> matt mihmer 450ed. >> if i could i know that's a economy that focus on diamond and flat numb. . the noncore buildings are. i guess you had planned to sell off. but now the rices is gone through the rough. are you going keep today. far longer term. are you going to wait it out and try to make as much money as you can. and tell them later. >> well, cash flow is very porn. we will sell any business unless t retained right value for us. . all right. thank you so much sir john parker chairman of the national shim building strategy.
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we've got a lodge on ships. up 300%. if you bough that in january, it. this is bloomberg. k4rr
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>> good morning. welcome. i am guy johnson. we are at bloomberg's european headquarters. matt miller is in berlin. we are at the start of the european trading at about has your morning brief. , oil slips aslls opec fails to bridge its differences. we are in vienna with every twist and turn. political risk grows in europe. scandal takes its toll in south korea as well. the president says she is willing to resign. what does it mean for the economy and for all of asia? in shipshape is the question. he wants u.k. shipyards to become world-class and match the country's auto market.
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we are 10 seconds away from the european equity market cash open. let us take a look at where we stand. we are expecting a mildly negative start. as you can see, rally yesterday. we are expecting it to roll over a little bit. munden market opening flat as expected. -- london market flat as expected. it is not all about the indexes. let us find out what is happening at the stock level and the gilt market. to theus go straight imap function on the bloomberg. as you can see a slight downside. looking at utilities, really bugging that trend. yousef: we can see the leaders among all about. 0.6 percent.lmost
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uncertainty about what is going to come out of the opec meetings in vienna. let us see what is happening yeartenure gilt -- 10 gilts. of course, this is all part of a wider european conversation. worry about the italian referendum. this shows you beautifully about how italian stocks have underperformed their european here stocks. stocks.-- peer italian lenders hit even harder. that will be one to watch out for in the coming days as we count down. stocks in focus. let us run you through those. we are looking at at kelly on -- actellion. they are looking to combine parts with the pharma business. talks had begun about potential
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takeover. currently, actelion, that stopped getting taken down a present. filing with the spanish regulator saying they got notification from the ecb so they should be at 7.75% and that is level compares to 12.44 rate at the consolidated level. that update currently slightly below the flat line. lufthansa. they wanted to prevent pilots from resuming strikes on tuesday. 27% of its normal schedule is scrapped as it stands. very all right, thanks much. you mentioned the italian lenders to law for yesterday amid concerns of risk to their financial stability from the upcoming referendum. ais morning, shares look
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little changed. union credit unchanged as well dropping a-- little bit. mario draghi warns there is more to come. >> the geopolitical insurgency uncertainty has become a major source of uncertainty -- the geopolitical uncertainty has become a major source of uncertainty in the months to come. guy: how do i price risk into europe? he cannot do it with the europe -- you cannot do it with the euro. >> you can take advantage of political volatility if you are swings that seem incorrect compared to fundamentals. on the financial market's derivative, second of the referendum so you have
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that political shock feeding through into well-made plans to re-energize the italian bank sector and that puts another headwind in terms of that sector. wayne: it is very difficult i think if you are a risk taker to try to avoid some of these areas . they are all contagious in terms of the flow-through effect. it is difficult to avoid because again, i think we had it with deutsche bank with that issue. it would not have been the deutsche bank failing that would have caused the big shock. it would have been perhaps the smaller lenders, the smaller companies that rely on deutsche bank as a service writer. a bank that has been impacted. feeds through into itself. it is difficult to avoid. matt: the referendum, is it really so key to the stability of the italian banks? obviously, renzi has staked his
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leadership role on the s take aum, but does bnp hit if we get a no vote on the referendum? last few days have had a significant repricing of a pali and -- of italian bank risk. we have seen it a downward trend in place so there is a lot of risk being priced into those stocks if we look into the bond price. in terms of the actions, the bank need to take, the agreement they need to have with major shareholders and people that would eventually by their debt as well. the negative result from the referendum and renzi basically ensures that perhaps, certain elements of the investor community keep their hands in their pockets and says i am going to wait for the political risk to died out or settle or to at least know who's going to lead italy through a technical parliament. is there a way forward?
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i don't think it solves the long-term play from a recapitalization, restructuring from an italian bank perspective. it certainly does not accelerate it. matt: we have the store across in the bloomberg's morning, credit has picked nine lenders to help it recapitalize itself, only one of them italian, by the way. is there any appetite from investors to do that or is it a case of anything as its price? are absolutely spot on. everything has its price. that will come into play, a price point where someone finds this attractive and one area, one element of the business. from the ecb's perspective, the bank of italy's point of view and the italian government's perspective, they are desperate for some stability in this sector. it has been a worrying trend we have seen from italy and it does not seem to be sorted out at all very quickly.
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the sooner you can get kind of, , somexic assets contained of the banking organizations recapitalize, the happier they will be and the investment community. the longer it goes on, the more people worry and the deeper their hands on their pockets. guy: everything has its price. unicredit is going through an extended process trying to understand what it loan book look like. -- its a very long t loan book look like. that is a very long-term -- people are putting their hands further in a pockets. they simply do not understand the mathematics. they don't understand what the political risk look like. it is higher than deutsche bank. they don't understand what the loan book look like. everything has its price but i don't understand how you can figure out what that price is right now. wayne: no, i think the
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authorities, whether it is the regulator, ecb or italian government have a duty to ensure transparency to help the investment community. guy: how do you make that happen in a short enough time frame? unicredit means money each -- unicredit needs money now. wayne: there has been a criticism of the ecb overstepping its mark, it's overreach. au are trying to come up from government perspective, protect the taxpayer from yelling out -- bailing out and a need to ensure that you have a banking system that is working effectively. that is different from the evaluation of a company. there is a need to make sure you have stability from the banking system and if there is a risk that that banking system is exposed or weekend because of member -- weakened because of member constituents, that is where you want the authority to
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step in. i think the valuation is a secondary item from an investor's perspective. you are left with a lower value assets with stress on the assets, period. matt: all right, you're going to stay with us here at the open. we are seeing downward movement in stocks. it looks like the market is taking shape, taking some color. that color being read. says the lack of clarity from theresa may on brexit is leading to wondering and worrying. more from that interview plus fate in the balance. ark saysrean president p she will let parliament decide whether she should resign. later, referendum risks. is impacting italian banks. we have been talking about that. we will continue to talk about italian banks. that and more, still to come. this is bloomberg.
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matt: welcome back to the european market open. we are looking at losses across the board as far as equity indexes are concerned. the stoxx 600 down 0.4%. the dax doing a little bit better, but in the red. beginning to take shape here.
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a drop is that shape. the dollar index coming down a little bit. .08.euro trading at 106 bloomberg first word news. we go to sebastian. >> the south korean president park geun-hye says she is willing to resign after the peddling scandal. apologized for a third time over the controversy and asked parliament for help in a power transition. some have been pushing for her engagement. parliament has not set the path for her future. carrying 81 plane people has crashed close to columbia's second-largest airport. the airport said there are apparently some survivors. passengers on board include players from the brazilian football team. --h african president
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faces the serious -- this is according to two members of the committee who were at the meeting. presidency has been marred by scandals. the nation's credit rating was put at risk. global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. this is bloomberg. he has received private assurances from the government that eu citizens living in the capital will not be forced to leave the country. he expressed over caution on how prime minister may have been dealing with brexit negotiations. what i'm hoping is that when theresa may said she is trying to keep her cards close to her chest that she knows what is behind those cards and the lack of clarity leads to investors, executives, it innovators, business people, wondering and
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worried whether there is a plan. mario draghi says the hard brexit will be hardest for continental europe. >> such developments would first and foremost way on the you -- weigh on the u.k. economy. they would also have limited spillover effects on the euro area. impact would vary across countries depending on their trade links with the united kingdom. guy: wayne bowers. we don't know, do we? wayne: the only thing we know is that we have had the vote. that is it. [laughter] wayne: in terms of, again, we have seen significant moves from the currency perspective and positive economic data which has helped kind of support the ist vote we have had from the u.k.'s economy
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perspective. mario draghi neatly summed up -- these are the effects of a hard brexit. guy: of course he does not know. wayne: what we would see from a u.k. perspective going into a is something mark carney reference a few weeks ago is the cliff, that level of uncertainty. we have a route to market all of a sudden. that route is stopped. what would you do if you are running a business and had export segments you are selling into? invariably, you would try to maintain your market share even with a tariff imposed. pricing strategy helps hopefully with the currency as well. one of route to maintain momentum from a domestic perspective. we would expect to see they'll tightening. -- belt tightening. it is a shock to the economy. we don't know. --t: are we still expecting
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everyone says we expect to see it. we are five-month on, must have a year on from the brexit vote. are you seeing that uncertainty really hurt the u.k. economy. are you seeing hard numbers, not expectations or surveys, but actual hard economic numbers that show brexit has really been a horrible thing for the u.k.? think we, i don't have. i think, you know, for those of us in the market, and we watch markets carefully, i think, the predictions that we were trying to play out, there was a caveat based on time. you know, that time is an important aspects to understand in terms of, you know, the actual changes we will see from the u.k. economy. nothing has changed yet apart from the decision. i think there was a reassessment and appreciation both from the bank of england as well as the u.k. government to try to provide significant support into
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the u.k. economy, which has helped. there is an element of relief that we are not seeing significant shift or change anytime soon. i think that is different to how the market was assessing brexit going into the vote. there was an expectation you would get the result, the dominoes would fall, and we would see significant changes. that has not happened. just to allow that we have got two-yearh a potential negotiation period after that puts in another 2.5 years to put any significant effect and change. matt: we always talk about, i big events like this, how horrible the uncertainty is going to be. whether it is the brexit vote. i mean, remember the predictions about how bad the economy and markets would performance donald trump actually won the u.s. election. they were dire, and every thing seems to be going just fine. of course, it is early days and i'm sure disaster could strike and the ship could sink.
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the uncertainty has offers an us in our path yet in either case, -- has not frozen us in our path in either case. wayne: we are seeing big barks with tiny bites at the moment. it goes back to the italian story. if you remember, this political sentiment, the political volatility, that can drive underlying market valuation and market volatility, you have to take a step back, take a deep breath, look at the time horizon and fundamentals. the fundamentals, european growth not being stellar, but they are not recessionary either. from the u.s. perspective, the consequences of trump winning any significant importance of a clean sweep from the republican party not only allow an improvement from a logjam or from a build america program,
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but the speed of change can be a positive one versus the heads that were being banged together with that splits lower/upper perspective. so, again, some of these political events in terms of the worry, the bark, when you see the results and you work through the resolve, you look at economic fundamentals, can be quite positive. guy: great to see you this morning. cio. bowers, international political risk, south korea's president with her fate in the hands of parliament over and influence huddling scandal. -- pedaling scandal. peddlinge going -- scandal. we will be going to seoul. this is bloomberg. ♪
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matt: -- guy: welcome back. are softer markets today. london underperforming. basic resources, oil and gas, two sectors underperforming at the moment. we are seeing some of the powerful bond markets that are relative to the course. periphery spreads tightening up today. it is interesting to see what is happening with the banks. it fits into that narrative. it is not a massive move but the banks of the best-performing sector in europe today. absolutely.
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all right, there is political upheaval today in south korea. as we look towards asia, the president has been in broiled in and influence peddling kindle which brought hundreds of thousands of people's -- m mbroiled in an influence peddling scandal. >> i will leave everything to the parliament's decision. i will resign along with the schedule and procedure which is decided by political parties that can minimize any confusion arising from the unexpected transfer of power. matt: for more, we're joined by kimomberg news reporter sam in seoul. she has a 4% approval rating and there is massive limitations magicians across the country. will she get arrested? atit is a little hard to say the moment because she has been
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resisting the request from the for face-to-face questioning. there is clearly allegations she was a suspect in this influence peddling scandal and the prosecutors want to see her but at the moment, they don't have the courage, so to speak. they don't feel they cannot the moment actually arrest her because she certainly enjoys presidential immunity under the constitution. sam: she cannot be impeached and the prosecutors made it clear. there is controversy on how much the investigators could do to get her into questioning, but at the moment, they are not really taking major aggressive steps to take her into questioning. matt: do you think she is really going to resign if asked? will she resign nicely or does the opposition going to have to take legal action, in peter, forced her out of office.
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impeach her, force her out of office? an: she did not provide exact timetable. she said the parliament should decide for her when she should step down. backup look at a lot of things here because as you know, a robust democracy like korea, can be a real rabbit hole for any cup of discussion. in essence, -- any type of discussion. she is trying to buy time to .tay in power a little more you saw that she would have time to provide, to come up with better alternatives to dealing with this situation. thank you very much indeed. sam kim joining us from south korea. that is good to south africa. we need to talk about what is happening with this man, jacob
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zuma, a serious challenge to his leadership. we'll take you to south africa, next. this is a bloomberg. -- this is bloomberg. ♪
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this tuesday session. let us take a look exactly where we stand with the european equity markets far from having their cake and eating it. it seems to be a bland session right now. down by 0.2%. the dax is -- cac is outperforming up the moment. matt has swedish data for you. matt: we have swedish gdp actually, guy, which came out at 3.1%, a little bit less than the 3.4% year-over-year figure we saw last time. swedish third-quarter gdp growing 0.5% quarter over
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quarter but the year-over-year figures are the one you'll want to look at, i guess, a little bit more closely. what i love to look at on the bloomberg is the coun function. i have sweden in the coun function, which shows a number of different things. the profile tab gives you, well, there you see the krone. it gives you less than 10 million people living in sweden. here it is between norway and finland. you can click on different tabs like risk to see standard and poor's rating in sweden. bondy solid in terms of risk. if you throw in south africa here which i think is also fascinating, they have triple from standard & poor's. stocksgo now to our top
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stores with yousef gamal el-din. yousef: some of the stocks i'm watching for you this morning as we speak, actelion, the latest report suggesting that relevant parts of j&j will be merged with the company now and i would effectively leave actelion independent. that is the reaction there. stock down 5.6%. bt group saying its proposal ofuires bt's infrastructure overreach to become a company bt it was "disappointed that has not come forward with proposals that address competition concerns." downside pressure on that. 345 a share. down.nsa ongoing discussion and debate around the strikes, the latest being the injunction being denied by a court.
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flight schedule currently scrapped. xe 600 index down. where are the oil talks going to go in vienna and what are the implications for oil prices? 600 dollars in market value. is all of that going to go away? investors nervous. guy: letters go to a country that is in between namibia and mozambique. invincible. he has survived the biggest challenge to his leadership from a group of ansi officials. that is according to two committee members. he spoke on the condition of anonymity. reporterfrican com joins us from johannesburg.
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zuma has come out fighting. those are the statements he is issuing up the moment. he's talking about all kinds of things going on. what has happened is that the minister of tourism himself has decided to put forward a motion of no confidence against the president jacob zuma. most was at a wedding in cape town in south africa and zuma's party was factionalized in a sense. the other half of the party was here. it seems as though the president would lose his spot as the leader of the african national congress, which is the majority party which holds the majority here in the country, so that motion was tabled. it seemed to be postponed along getway as they scrambled to more party participants to come through to the national executive committee meeting in order for jacob zuma's life to be saved if we quarterback.
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it is the first -- we quartered that. it is a first time the party has issued a motion of no confidence against jacob zuma which sets a big precedent. guy: there is a press conference at 2:00 local. what is going to be said in that? the directione of of travel year. is it towards -- travel here. will he be departing soon? very uncertain at present. you can believe a unified message will come out from this ansi is noty the factionalized. they will note a change is good for the party, but not necessarily that the leadership itself must change and the process is often must go ahead properly and effectively and that zuma will be president for
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some time to come. president jacob zuma himself has said he is going nowhere in the and what was incurred by the ruling party in august when we had a local government elections was not his fault and he says he is not going to go anywhere and there are few people within the party that are beginning to work with opposition political parties, which he is not happy with, of course, but of course, many expecting a unified message at the time. let me ask you about, i have this country's snapshot love,p again, which i under the economic tab. you can see gdp for south africa going from 2011 through to forecast in 2016 and 2017. inflation, rising, an upward trend. is this the main problem for
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zuma, the economic state of the country? >> just listening to the finance minister not so long ago, less than one hour ago in fact, he noted the big story in south africa is growth. it is as important to us as it should be for the ratings companies. jacob zuma's primary focus should be growth in the country, but it seems at present, political turmoil and infighting within his own ruling party seems to be taking over the mantle and really taking the headline, as opposed to growing the economy and making it as good as it should be with regards to the african context as well, one of the big emerging to grow but scheduled at the slowest pace since the 2009 recession, 0.5% according to treasury, 0.4% according to the central bank. it is not looking like a good picture for zuma and the government. guy: great stuff. thank you very much indeed.
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a -- arabile omet gumede. we will get a chart to show you exactly what is happening. that story, next. ♪
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guy: 40 minutes into the equities trading session in
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europe for the cash open. european equities looking sabi right now except for the paris market which is doing quite well. right now,soggy except the paris market, which is doing quite well. we were speaking to bloomberg. -- as idea that people bargaining chips is offensive. it is inconceivable that you would be forced to leave london, and that is crucial. welcome here. you will always be welcome here. -- samsungme of that will conduct a major buy back through the end of january. it is looking at creating a holding company structure and
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listing on international exchanges. investors have been urging samsung to restructure. lufthansat has -- denied an injunction. all pilots will walk out tomorrow. lufthansa is heading towards its longest injunction. they cost the airline about 45 million euros. that is your bloomberg business flash. matt. matt: sebastian, thanks. italian citizens are going to head to the polls on sunday to vote in a referendum on the country's constitution. the prime minister, matteo renzi, wants to reshape the senate so it can no longer block legislation indefinitely and gets consulted on fewer matters. the aim is to improve political stability in a country which has had more than 60 different governments since the second
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world war. potentialrns over the fallout from the votes have been felt on the ftse over the last month. italian lenders closed over the last three months. the 2016 slump has been brought to 52%. i wondering. -watering.e -- eye0 . what is renzi in particular saying? >> several reports renzi might quit even if he winds the referendum on sunday. he would then seek to form a new government and push the country toward new elections even next year or as scheduled in 2018. matt: previously, he was going to quit only if there was a no vote, and no you are saying he could quit even if there was a yes vote? >> that is correct. he promised to quit if there is
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and over. he does not want to hang around without making major changes. he says that is not his style and he would leave that to some appeals. guy: where does that leave business? where does that leave the markets? kevin: the central bank of italy has already warned of potential market volatility after the vote on sunday and lots of experts are warning there could be major market fluctuations due to this referendum. of course, this is another major strain on the european union after the u.k. decision to leave the eu in june. guy: kevin, how is the market pricing risk right now? we have seen the financials coming under pressure. is there some thing else going on as well or is it the kind of really obvious things like that, because you cannot price this in with the currency, which makes it different from brexit or what happened in the united states. kevin: right now, most of it is
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priced in. i don't think there are any more surprises coming so the markets are pretty much looking at this with possible volatility. all right, kevin, thanks very much. kevin costelloe from bloomberg news out of our rome bureau. oil slides on skepticism that an opec deal will actually happen. we are live in vienna to look at the sticking point ahead of tomorrow's crucial meeting. this is bloomberg. ♪
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ofwe think the fundamentals supply and demand work and we are heading towards a rebalancing during 2017. two years in a row with investment cuts and 2017 might be the third year and we think will outpacend supply and we will see an uptick in the price. it is very well positioned for the upturn. cfo giving usil his luck. isq's oil minister saying he confident about the meeting going on tomorrow despite infighting about oil production cuts with reports there are still objections after 10 hours of talks yesterday.
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we have got brent trading currently at the moment at $4 7.99. let us talk about the objections first of all. where is the difficulty lying? lies betweenulty the saudi's and their two biggest rivals, iran and iraq. he said he is still optimistic of a deal but when we asked him about how much they are willing to cut, he gave no answer. annmarie: this is rather problem lies, in the details. the iraqis are debating supply estimates with opec. the basis of where they cut from his lingering. the irani and refused to cut. they want to continue pumping at pre-sanction levels and don't want to accept any limit. that will be a hard deal domestically. the saudi the said sunday that, listen, we are not going to do a deal at note cost. -- no cost. this is where we have the
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infighting within opec. between the saudi's, irradiance, and iraqis. and iraqis.ranians, at the moment, it seems like the 10 hour meeting yesterday yielded nothing concrete. we built go to the ministers are. iran you are talking about producing 3.7 million barrels a day and iraq producing 4.6 million barrels. the saudis are producing nearly 11 million barrels a day. the other ones who could make it a concession could get it deal side, right? annmarie: they could make a concession, but do they want to? they have been fighting market share for the past few years and don't want to look desperate to do a deal. they wanted to be their rivals who join as well. they made it clear on sunday. the market can rebalance next
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year without a car. they are basically saying they are not desperate to do a deal and refused to do one without everyone sharing the burden. it would be interesting to see what happens on wednesday because if they don't do a deal, prices people are saying could fall, maybe into the 20's. amrita told us' yesterday. the volatility on oil has been going up and down depending on everything these ministers say. goldman staff are putting the probability at -- others are saying 50-50. analysts are thinking the possibility of not having a deal is a new reality. guy: thank you very much indeed. annmarie hordern joining us out of the anna. good morning. now or never for opec. >> i think so. i think of a deal is not done
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this week, it won't make sense anymore with the administration ing already said it would be supportive of the sector. it is opec's just show it is still a global player that can come to a deal when the deal still matters. the differences are so small between the various parties that it does not make sense for the deal not to happen. florence: there is technical differences that are being hammered out. it is normal they would be. for the iranians, a small hold on productions or cut would go such a long way in terms of its return to the international scene and in terms of its capacity to collaborate with regional players, partners, within opec. matt: let me just, florence, let me break in for one quick second on another story we have been following. matteo renzi is denying or rather, his office is denying
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reports that he would possibly resign on a yes vote. obviously, everyone is paying attention to this italian referendum. the vote will happen on sunday and it is one of the things people are really concerned about as far as the market's course. back to oil, which is one of the other things. we talk about opec doing a deal right now, now that it really matters. how much does it matter right now? at $47 a barrel, are they making money? where is their breakeven cost? florence: as we have been saying over the past couple of days and many analysts have joined me in this point of view, it matters more because of the downside of not having a deal then it itters because of -- than matters because of the upside of delivering a deal. he said he thinks the markets will rebalance anyway in 2017, and that if a deal does not happen, it is not the end of the world and clearly indicated that saudi arabia is not willing to
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shoulder the bulk of the burden of these cuts in order for the deal to happen. i think a deal makes sense. if it is done this week, just because the incoming u.s. administration has indicated very clearly that there will be support for the energy sector and in six months, a deal will no longer make sense. i think that a deal will go a long way in demonstrating that the various players within opec, which today have become more significant than simple layers and opec, because of other issues -- players in opec, because of other issues such as geopolitical risk and the impact of that on europe and various things including the populism sweeping through europe, these players have to demonstrate that an form an opinion that is constructive the global community. matt: a cartel is loosely
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defined, when a group of businesses or countries come together and make a deal on output or production that helps to decide price. we refer to opec as a cartel, but they have not been able to make really a deal that does that, even when they do decide on a deal, they do not stick to it. is it fair to call opec cartel? florence: absolutely. opec is a cartel. beay, this week, it will tested once again, but it is very much of a cartel and they are able to come to an agreement if they choose to come to an agreement. i think that, like in on the negotiation's, these things are not straightforward, however, this time around, the technical differences are worth overcoming and it would make sense to have a deal that is limited in duration, fate six months -- say six months deal or nine months of deal before the cartel look at this again. guy: can they control the price
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component? is ity have power -- saudi the producer or is it u.s. shale? florence: today, it is a combination. it is saudi and u.s. conventional production and unconventional production it is a total production out of the u.s. and the production after saudi arabia. the price has become more difficult to control than it used to be in the 70's when things were much simpler, but that is why international corporation is now more important than ever because this is a public good that is shared by everyone, and you are right that opec as a cartel on its own cannot influence everything, which is why getting the cooperation of the russians is significant here and very good that the russians have said they would play ball. it is very good for various reasons outside of opec as well
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because of regional role russia is not playing. guy: thank you for your time. florence eid-oakden. up next, surveillance. ♪
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francine: a divided cartel. after 10 hours of talks, differences over the details of an opec freeze remain. scandal in south korea. president hart says she is willing to step down over corruption allegations as a controversy rattles asia's fourth-largest economy. renzi risk. the office of the italian prime minister denies he is resignationa


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