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tv   Bloomberg Markets European Open  Bloomberg  April 30, 2021 2:00am-4:00am EDT

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anna: welcome to bloomberg markets "the european open. the cash trade is less than an hour away. here are your top headlines. a big day for bank earnings. numbers from barclays and we will speak to the ceo. amazon delivers. shares rise as the pandemic continues to drive sales.
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global covid cases top $150 million -- 150 million. we will speak to the who's chief scientist. welcome to the program. plenty to talk about. we will return to top stories surrounding coronavirus. breaking news coming through in london. numbers from barclays. first quarter investment taking revenue -- banking revenue, three point five 9 billion pounds against an estimate of 3.34. better than anticipated. they are talking about delivering meaningful year on year improvements in 21. that is in terms of return on tangible equity. they are talking about impairment charges being materially below 2020 for the full year 2021.
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an interesting picture to think about the impairment charges moving the right direction, improving. the cost story deteriorating a little. we will talk to jes staley about that. vr reader rating targets and terms of various measures on the balance sheet. lots of interesting things to talk about when it comes to our conversation with jes staley. let's check out where we are on the broader macro scene, the broader picture for assets this morning. just an hour or so from the start of cash trading in europe, european futures looking flat to negative. you're a stoxx 50 futures fairly negative. ftse futures in the red. gains in the u.s.. u.s. futures show weakness here. weakness coming through on the
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u.s. futures picture. the asian story is really interesting. you will see weaknesses in some asian markets. the gmm showing negativity from the asx 200 to hong kong and the hang seng. part of the nervousness is around the pmi story. deteriorating a little from earlier growth levels. china antitrust crackdown, taking action against finance divisions. that is taking the edge of confidence in the chinese trading day and weighing in on what is going on more broadly in the asian equity session. let's have a moment for the stories we are covering this morning. here is laura wright. >> there have been more than 150 million cases of coronavirus worldwide.
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india remains the epicenter of the pandemic, reporting new records for deaths. the tallies in brazil have top 400,000 fatalities in brazil have top 400,000. china's economy is still recovering at a slower pace. manufacturing and services sectors slipped in april. it is adding caution to the outlook for the world's second-largest economy. the u.k. parliament watchdog may probe its prime minister broke the code of conduct by failing to properly declare how the refurbishment of his government residence was funded. the electoral commission has already announced its own probe into the matter. johnson denies wrongdoing. global news, 24 hours a day, on air and at quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg.
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anna: first quarter net income beat estimates this morning at france's biggest bank. the cfo of bnp paribas spoke with bloomberg from paris. >> 2020, there was a very strong effect when it comes to rates, which is now normalized. still not very high if you compared to 2019. we are very solid. >> do you think there is normalization of trading? do you expect the level of activity to taper off in the second half? >> there can always be a spectacular events like we had last year. if you look at the normal levels we are stronger than 2019. i don't have a crystal ball to say with the second quarter is. we see solid demand.
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we have been taking market share and so we are well-positioned to serve our clients. >> let's talk about the banking sector with archegos fallout. your exposure comes from the hedge fund from deutsche bank back in 2019. deutsche bank did say they managed to exit the position without losses. are you still putting into question the chance of assets which is still ongoing by the end of this year? >> the transfer is ongoing. let's not forget it is foreseen by the end the year. activity will be transferred to us. at this stage, the risk is basically managed by deutsche bank, which they have done very well. >> can you give us any guidance on when we expect real recovery in the real economy?
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>> our stance has always been what we see today in europe given the vaccinations are ongoing, they are probably around the third quarter of this year. it will be a balance and that balance will be a sizable figure and a sustainable figure. >> are you worried the french president is exiting lockdown too soon? >> that is yours to judge. what we see is the tapering of it being handled in phases. what we see in europe is that every confinement has been handled in a better way. anna: that is the bnp paribas ceo speaking with bloomberg. let's get back to the banking story. we are now joined by jes staley. very good to speak to you here
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on bloomberg tv. i will start with see i.b. -- cib. u.s. banks have delivered equity trading. fixed income trading up 21% year on year. how does the barclays performance compares and those parts the business? -- compare in those parts of the business? >> we did a mixed result in our equity business. we were close to 100% year-over-year. we were slightly off a very strong first quarter last year. overall, the investment bank generated a return on capital of over 20%, the most profitable levels this bank has had in over a decade, that led to a profitability for the bank overall at roughly 15%, virtually triple the first quarter of last year. anna: can i ask about the guidance you are giving this morning?
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you say full year 21 impairment charges will be below 2020, but overall, 21 costs will be above 2020. >> as you have pointed out, a lot of the profitability in the first quarter was driven by the investment bank. the critical cost function of the investment bank is very will compensations. when we were deliver return on capital and lead the bank to a record quarter, you should take the approval of your various compensation -- your variable compensation up. it is a very controllable number. if performance weakens we can take it down again. it is not the underlying costs that were up. it is the prudent thing to do given how profitable the bank was in the first quarter. anna: i know you can't talk to
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me about second quarter, but given dynamics we have seen that have helped parts of investment banking, when you look at the first quarter, how exceptional does it feel or not? does it feel that momentum is driven by the larger size of capital markets or will it be sustainable into the rest of the year? >> we are projecting economic growth in the u.k. north of 6%. it should be the strongest year of economic growth in the u.k. since 1948. we are seeing robust numbers in the u.s.. a lot of this is driven by extraordinary rollout of the vaccination program. in the u.k. over half the population has been vaccinated. as you said, the capital markets have been incredibly robust. the central bank have used their balance sheets to inject the normans liquidity -- a norm it's-- enormous liquidity.
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the grown significantly. the credit capital market market has grown 40%. the way we are writing is real -- wave we are writing is really -- riding is real. anna: thanks have had to deal with the fallout from the archegos. scandal don't see reference in what i you able to read this morning. do you see opportunity as other banks in the sector are rethinking the exposure they have to that sector. >> you are correct. we had no involvement in archegos and no involvement in greenville -- greensill.
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our impairment numbers were low in the first quarter. really driven by our stage iii losses. actual credit losses are down significantly reflected in the impairment number. we did not release reserves in the first quarter. we have a norm is for -- e normous impairment reserves. the overall credit environment is very strong. the economy i think is showing great strengths. we need to do our part to help economies recover. notably as you mentioned in india. we announced last week we distribute it one million pounds worth of reticle supplies across cities in india.
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our hearts and prayers go out to what's happening in india right now it is really tough. anna: you have operations primarily in india. what impact is this having on business? >> we have 20,000 employees in india, our second most populous country after the u.k.. we are doing ok. the critical thing for us is to focus on mental health and the well-being of our customer and clients there. we are letting our employees take leave if they need to stay at home to take care of a loved one or a parent or child. we are supportive of that. we are keeping employees employed. what is going on is really tough. it does as you would suggest put
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an additional burden on our call centers in the u.k.. they're having to double down. there are a lot of people making enormous sacrifices to help the communities we live and work in. anna: back to the u.k. story, you have referenced the growth numbers we are expected to see. we have seen high saving rates as is common with developed markets. what are the implications for credit growth prospects? is this something that weighs on your ability to issue credit later on this year? >> very good question. we calculate that household deposits are running at roughly 200 billion pounds higher than they would be normally. which means when the economy reopens, the consumer has cut 200 billion pounds of firepower to increase their spending which would clearly drive acceleration of economic growth.
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the flip side is the use of unsecured credit. credit cards for you to consumers is off where it was last year. we will feel that in our revenue line and the performance of barclays u.k.. unsecured borrowing number will not get back to pre-pandemic levels until next year. but it is fine. our payment business is doing great. our mortgage business had a record quarter. it is good to see the u.k. consumer in the financial health households seem to be today. that is positive for all of us as we go into this recovery. anna: how are you thinking about the return to office? different geographies behave differently. different functions within the bank might behave differently. what is the broad thinking a barclays and specifically around investment banking also? >> we have had literally thousands of people working during the pandemic from traders
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and sales people in our major investment banking trading desks to people in call centers in india and the u.k. we have all the social foot trafficking. our employees have been heroic. in terms of returning to office, we are seeing indications from governments that opening should begin late may, june, the latest, july. we are taking the lead from governments. first and foremost will be the mental health and well-being of our colleagues. many of them would like to come back into the office to reconnect with their colleagues. that physical presence i think is important for people. the pandemic has taught us we can be quite flexible. i don't think you will see a strict mandate saying you have to be in from the state to that
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day. we will rely on flexibility and engage with our colleagues, but overall, people will start to come back to work in june. it will be a scaled return. we will keep an eye on how people are doing. anna: do you think there is an opportunity or possibility the headquarters would go or you cut back on real estate in some other fashion? >> we will keep our headquarters in canary wharf. a lot of people at the margin will be rationalizing their real estate footprint. we will do that as well. but our main location will continue to be the headquarters for the bank. we will continue to use the full building. anna: in terms of flexibility,
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tech firms and banks in the past have not had similar cultures. maybe they are merging toward each other. what is the battle for talent like when it comes to hiring tech professionals? banks are increasingly tech businesses. how easy is it to find the talent you need? >> it is one of the great challenges a bank like barclays faces. we are increasingly becoming a technology company and as we digitize finance for consumers and small businesses and corporates, we have to have some of the best engineers in the world. we have a strong leadership team . we are hiring. we have been successful but continue to make debt investments and continuing to rollout digitization of finance is one of the biggest challenges and opportunities for barclays for the next decade. anna: thanks for joining us. jes staley, the barclays ceo
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joining us on the market open. coming up we speak to the world health organization's chief scientist as global cases of covid-19 top 150 million. ♪
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anna:anna: 40 minutes to go into the start of cash equities trading. in london we are seeing a pickup. things improving a little. u.s. futures in the red. european corporate results in full swing. earnings show a bump for the sector. we were just speaking to jes staley. our colleague's interview with
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the dnp leadership earlier on. let's speak to the cio at rooks mcdonald asset management. what he taken away so far from the european earnings season. the pictures and the u.s. was one where investment banking was doing really well and there has been some of that here as well along with idiosyncratic disruptions and risks. what are the key messages you have taken away? >> the investment banking, the trading elements are performing well. the question is over the more traditional banking model. the mortgage books. that struggles you and though we have seen what happened in q1 and terms of steepening bond yield curves. they are far from where they were in 2019 or 2018. the story is loan loss provisions. this is idiosyncratic. certain banks are holding back a little bit worried about either
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third wave of the virus, depending on locations they serve and operate within, but others are taking a more optimistic reproach -- optimistic approach. should recovery continue there will be tailwind. anna: you wonder whether that is part of the barclays story. a little bit of caution in the short-term. let me ask you about your attitudes to risk and your appetite for stocks at this point. stocks remain your preferred asset class. you don't think this is a great time to get involved. we are coming up record highs just yesterday. is that part of the reason? >> that is certainly part of the reason. we have been overweight in equities since the summer of
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last year. we have moved that into a more balanced picture. we have had quite strong growth. we brought value and cyclicality at the start of this year. we are happy with the overall position balanced but overweight equity risks. we don't think now is necessarily an opportune time, however, we think equities will push higher. there is a lot of cash on the sidelines. when that money is looking to be deployed, one of the only assets out there which is providing a real expected earnings yield is equities. that is going to be a structural tailwind for equities in the quarters ahead. but indeed the year ahead. we will get close to zero especially at the short end for the foreseeable future. anna: something to watch for. what about the commodities space?
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a lot of questions about whether we are seeing a super cycle. it could go to 15,000. that is the metal side. incredible booming in u.s. agricultural prices. is that an area you have confidence will keep rallying? >> there are two stories. demand and supply. we are seeing demand increase from a low base. whether that is more agricultural products, specifically in the broader commodities base, we see copper, oil seeing demand from the global recovery. on the supply front there are issues. the pandemic is leading to 80 synchronize recovery. we have major providers or major importers of commodities that have not set up shop yet. i think there is a lot of noise in the current crisis.
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anna: how would you characterize the amount of money we are seeing coming out of financial assets and into real assets at this point? i have a guest in the 8:00 hour who also wants to reference this. how significant is this? >> it is reasonably significant. if you look at your traditional asset allocation models, you are buying equities and buying bonds. most people are probably in the camp that believe equities are an adequate place to be but that does not help you with your nonequity allocation. people are looking away from bonds toward income producing real assets for something that is not necessarily advertised what is happening -- as tied to what is happening in bond markets. anna: thank you for your time today. edward park at brooks
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mcdonald. we will talk to the world health organization's chief scientist. this is bloomberg. ♪
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♪ anna: welcome back to "bloomberg markets: european open." half an hour away from the start of the european cash equities trading session. european futures looking mixed. ftse futures to the downside. elsewhere, a bit of green on the screen. let's get a bloomberg business flash. >> twitter has seen a slow to the debt start to the year. in its advertising business and has not managed to capitalize on the digital ad boom like its competitors, facebook and google, which both reported blockbuster results. it's giving a disappointing revenue forecast, sending shares lower in extended trading. ubs cut banking staff in asia
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last year, even as rivals like hsbc ramped up hiring. it says ubs is still asia's largest employer of clients and retains its top ranking in asia with $650 billion in assets under management. chinese regulators have imposed wide ranging restrictions on the fast-growing financial division of its tech giants. that includes many of the same -- used against jack ma's ant group. they were summoned to a meeting with regulars that spells out new requirements. joe biden says his proposed tax hikes on the wealthy will help finance cuts for many americans. it would amount to a tax cut for more than 2 million families in georgia, adding that it's about time the very wealthy start paying their fair share.
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five u.s. government agencies may have been hacked. homeland security has determined that -- may have allowed the bridge. cyber security experts are working with the departments that have not been identified. it comes shortly after russian hackers attacked nine u.s. agencies and at least 100 companies in the solar winds hack. that's the bloomberg business flash. anna: laura wright with an update on the news flow we are following. emmanuel macron has outlined steps to reopen the country as the vaccination campaign accelerates. measures on businesses and a nationwide curfew will be relax from may 19, while all restrictions are set to be lifted by june 30. joining us now with more details from paris is caroline connan. it has been a long whole for many parts of europe -- long-haul for many parts of europe. how fast will france be able to exit this lockdown? despite the delayed start of the
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vaccine rollout, exiting lockdown is not going to be much later than the u.k. >> that's right. france is joining quite early italy and the u.k. in using those curbs. they already implemented this lockdown quietly at the end of the first quarter -- quite late at the end of the first quarter. many saying president macron may do this -- may be this exit of lockdowntoo early. by the end of june, restrictions will have been lifted. he will need to prove you have been vaccinated or tested negative to enter some cultural events and sporting venues, for example. clearly, the vaccination campaign in france is still quite slow. if you compared to germany, which vaccinated one million people, a record yesterday, france is only vaccinating at a rate of 300,000 to 400,000 people per day.
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only 22% of the french population has been vaccinated. at this current rate, the entire french adult population will not be vaccinated until january 2022,, so many many questions with this early exit of the french lockdown. anna: questions around the timing. paris has been talked about as an epicenter recent outbreaks and still dealing with heavy caseloads and critical care patients. how is this are acting up -- all adding up to political pressure on emmanuel macron? >> there is a lot of political pressure. 12 -- we are just 12 months before the next french presidential elections. this is clearly something that president macron has to bear in mind. if you look at the latest polls, they show that president macron on the far right wing leader would be neck and neck next
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year and the second round next year, a much tighter race than 2017. president macron is bearing this in mind when he is choosing to ease these restrictions. if you actually look at the economic impact and the gdp numbers we have this morning, this strategy may have actually paid off in the short-term because of the late lockdown in the first order. france return to growth plus 0.4% in the first quarter. this is playing off economically -- paying off economically in the short-term. we will see if this pays are politically in the longer-term. anna: we will give further growth numbers from many parts of the euro zone this morning. carolyn conan joining us with an update on the -- caroline connan with an update on the french story.
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european equity markets underperforming the u.s. in yesterday's session. futures looking to play a little bit of catch-up. dax futures to the upside. u.s. futures are a little bit more negative. we had a fairly mixed earnings picture coming through from the united states yesterday. facebook, amazon to the good, if you like, to the positive. to the downside though, ford and twitter. ongoing reference to a shortage of chips, whether that's apple or the chinese pmi data. all of that hanging over markets, along with regulatory matters coming through in china. mixed sentiment, a weak trading picture in asia. this is bloomberg. ♪
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♪ >> amazon demonstrated its
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staying power and gave a bullish outlook for the second quarter, saying sales would be between 110 and $160 billion. if you look at the drivers of top and bottom line growth, it was aws, the cloud unit, as well as advertising. there were some -- that the boom might end for amazon. it has experimented with the prime day throughout the pandemic. they faced play of questions on succession, how the handover from bezos to his successor will work but there was not much detail. investors very pleased with what they saw. a different story for twitter, whose shares fell heavily and after hours. it gave a tepid forecast for the current quarter, saying sales would be between 980 million and
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1.08 billion in the coming quarter but the street was looking on the higher end of that range. it was in the same week that facebook and google had shown pretty good strength in the advertising market. ad prices are up, volumes are up, but twitter was not feeling the same love. they grew users by 20% in the quarter from a year ago, which is pretty decent, but there are concerns that their branded targeted advertising is not getting the same traction that facebook and google were able to get. we did not get much update on the types of innovations that might change the picture for twitter. ed ludlow, bloomberg news, san francisco. anna: that was ed ludlow talking us through some of the big tech earnings. continuing strong performance to the pandemic, some of those tech names of course. along with the big banks, it's been a busy week for european earnings over all. we heard from the oil majors this week like totale and consumer companies like unilever, plus many more.
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dani burger has been taking a look at the bigger picture for us. good morning. seems like the majority of companies delivered beats. is that playing out in the data? dani: it is. not just the fact that they are beating but they are beating to a near historical degree. the majority of companies so far are beating more than they are delivering misses. on average, companies and the stoxx 600 reporting earnings 40% higher than what analysts had expected. the strange thing is that even though that's a very healthy figure, the beats are good, shares have only moved on average .3% in europe after reporting earnings. the stoxx 600 is flat so far this week. what exactly is happening? a lot it has to do with expectations being so high. for example, if you look at earnings revisions, heading into this quarter, we saw a spate of analysts upgrading earnings
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forecasts. just before they start reporting, we were at a record high for revisions. despite that, they are still beating, but this just shows you that the bar is so high. people expected earnings to blow it out of the water this quarter. anna: earnings looking healthy. what are companies doing with all the cash they have on hand? dani: i am kind of obsessed with this question because i think this will be the corporate team for 2021 -- theme for 2021. companies have near record levels of cash. they shored up balance sheets heading into the pandemic and that was supposed to be temporary. so what do they do with it now? we have heard companies not exactly paying down their debt, but more frequently, they are using it to return capital to shareholders. not even necessarily capital expenditures. this matters not just for corporates, it matters for the economy. socgen estimates about 180
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billion euros are going to be announced from european companies. that's likely how we are going to see cash get put to work. anna: it will be interesting to see if there is some contrast with the u.s., whether we will talk about tax rises, taking that edge off the return of cash to shareholders that we have seen in recent years. thank you very much. dani burger with a look at the earnings story. let's get a bloomberg first word news update. here's all right. >> president joe biden says his proposed tax hikes on the wealthy will help finance tax cuts for many more americans. it would amount to a tax cut for more than 2 million families in georgia, adding that it's about time the very wealthy start paying their fair share. five u.s. government agencies may have been hacked. homeland security has determined that flaws and products -- in products may have allowed the breach. cyber security experts are working with the departments that have not been identified. it comes shortly after russian hackers attacked nine u.s.
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agencies and at least 100 companies in the solarwinds hack. italy's government has given its final approval to a recovery package worth about 260 billion euros. sources tell us the plan leans heavily on funds from the european union and is due to be sent to brussels for approval by today's deadline. prime minister mario draghi is also setting up plans for a forum to boost competition and cut red tape. global news 24 hours a day, on-air and at bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. anna? anna: laura wright in london. moderna is boosting capacity at several factories in the u.s. and europe, allowing it to produce as many as 3 billion doses by next year. the investment in factories nearly double his capacity. moderna's ceo spoke with alix steel and guy johnson. >> we are already getting calls
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from governments all around the world. there's been people needing more vaccines right now, but also, more importantly, people are thinking ahead of 2022. last week, we announced a new partnership with israel, who has done a great job this year, and they are already buying variant boosters for 2002. i think -- for 2022. in the u.s. or the u.k., where the vaccination rate is great. the variant is devastating. india with this environment, what's going to be the impact on the vaccine being tested as we speak? as soon as we know, we will cross publish it. i think the next six months will be very difficult and then
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winter. in the south, people are much more [indiscernible] there is many more people in the south than in the north. a lot of people are hiv-positive, which is a great ground for the virus. variants emerging. we decided to invest more. >> i think it was 3 billion vaccine doses that were going to go out in 2022. are the doses going out now already tweaked? how many of those doses that are going to go out next year are going to be first and second shots, and how many do you think will be third shot? >> great question. today, it's still the vaccine available in the u.s. or u.k. or 30 plus countries, it is the one getting out of our factories. the variant is in the clink. we are testing three different strategies for boosting.
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we are testing the current vaccine as a boost, because we think it will help your immune system by boosting all your antibody's. we are testing one that is for the variant identified in south africa, a 50-50 mix. i think next year, we will see mostly boosters. we are still going to see some primary series for the variant. the 12 -- the very young. the 12-16 should go for approval very quickly. so we can go back in school normally. i think next year is going to be mostly booster, except for the variant. >> can you walk us through the potential pricing for a booster and that market, considering the j&j and astrazeneca have suffered some reputational damage? looks like a lot of companies will be betting big on boosters
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from pfizer and moderna. >> we have not talked publicly about pricing. at this stage, what we really care about is getting as many vaccines as we can two people. one dose per person, two dose per person. what we care about is really volume. we think the pricing can be very similar to this year. it might be a little pricing premium we see as we speak. the key is to help the world, including the south. we will not need it if next year and the boost market if we only cared about the north. we are already going to -- we are in excess of one billion. what i worry is if we don't treat this virus as a global collaboration in the next 12-18 months, it's going to keep on going. anna: that was the moderna ceo.
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interesting perspective on the variants and when younger people will be vaccinated as well. trial date due shortly on that front. coming up this friday morning, we will get back to the stock market and the stocks we are watching, including food delivery companies like deliveroo, after reports that u.s. rival doordash is hunting for deals in europe. this is bloomberg. ♪
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♪ >> when we deliver a return on capital well north of 20%, lead the bank to virtually a record quarter, you should take the accrual of your various
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compensation or the bonus pool up. it's a very controllable number. if our performance weakens, we can take it right down again. it's not the underlying cause that were up -- costs that were up. i think that's the prudent thing to do given how profitable the bank was in the first order. anna: that was jes staley speaking earlier on, talking about the cost of space of the business. dani burger has been going through the details of the stocks we are watching. dani: we got both barclays and bmp today -- bnp today. i was trying to discern whether the sentiment was higher or lower for both of these and it's kind of all over the place. i think one of the big stories is that we just had such good earnings from banks this week that any sort of wobble might be really scrutinized by investors. i wanted to point out that both the banks missed on fic after deutsche bankc -- on ficc after
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deutsche bank reported a 30% rise in ficc trading. bnp's was down 17%, which was another mess as well -- miss as well. there's a lot of different forces that investors will have to digest. anna: barclays taking a different approach when it comes to writing back provisions. let me ask you, sticking with the banking sector, when i spoke with jes staley, i was asking about archegos. there was no exposure there and that's what jes staley told us. there was exposure at credit suisse, which we know very well. we are seeing ongoing talk of management change their. dani: exactly. was developed this morning is more or less a win for shareholders. there had been a big, drive-by shareholder proxy advisory firm is saying to not reelect the risk committee.
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this is what a lot of shareholders had wanted. we will see whether they reward shares with demo today. anna: interesting -- with that move today. anna: interesting. the food delivery sector, we spoke earlier on this are to one business in the food delivery space. clearly, it was a very good first quarter for these kinds of businesses. m&a never far away from the space. what's the latest? dani: doordash is one of the food delivery services in the u.s. they are very large. sources tell us they are looking to do m&a. key here is that they are looking in europe. look for all the european listed food delivery services to move. that will be your delivery hero, your deliveroo. sources it they would be interested in grocery delivery. this would be a big acquisition. anna: we will keep a night on
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all of these players in that market. thank you very much. dani burger with a look at some of the stocks we are watching. we could have chosen others. nestlé also vary in focus. m&a was something dani was talking about. nestlé buying the core brands of the bountiful company for $5.75 billion. this is certainly something we will keep an eye on. let's have a quick look at futures as we head towards the start of the last trading day of this week, the last trading day of this month, in fact. let's have a look at where we are on european equity market futures. cac futures and dax futures heather bit higher -- a little bit wider. we have had -- higher. we have had a host of earnings. text challenges over in china -- tech challenges over in china.
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asian equity markets under pressure this friday morning. msci asia pacific down by 0.7% rate. u.s. futures a little sluggish, they point downward's. we will be back with the european market open next. this is bloomberg. ♪ ♪ ♪
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♪ anna: welcome back to "bloomberg markets: european open." a minute to go until the start of cash equities traded. bank earnings galore. we've had numbers from barclays, bnp paribas and bbva, among others. amazon delivers. shares rise as the pandemic continues to drive sales for the company. globo coronavirus cases top 150 million, as germany accelerates its vaccine rollout. we will look ahead to european growth data. good morning. welcome back to the second hour of "bloomberg markets: european open." we will get to the market open in about 25 seconds.
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european futures a little mixed at this morning but it's really ftse futures that stand out as an outlier. ftse futures to the downside. looking to play a little bit of catch-up with the u.s. perhaps. euro stoxx 50 futures to the upside -- euro stoxx 250 futures to the upside. a little more negative earnings news coming through from some other businesses. european equity markets opening up, as we can see from our screen this morning. in fact, opening fairly flat, i should say. the ftse 100 is the only one that is open right now. we will wait for european markets to get into their stride. a bit of a negative handover coming through from the asian session. they are way down by the latest data -- weighed down by the latest data out of china. as we have more markets opening up in europe, things looking more positive.
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the ftse jumps up 0.1%. the ibex fairly flat this morning. it all adds up to a fairly flat start for european equity markets. it has been a big week for european banks, of course. we have had plenty of earnings coming through for the banking sector. we have had earnings from a host of names, showing a bumper first quarter for the sector. joining us now, thomas lloyd group head of research and esg. good to have you with us. in terms of what it teaches us about the global growth story, what are the headline narratives you have been taking away from what we have heard over corporates over recent weeks? ben: i think the big thing is that expectations were very high and they have largely been met. it was a story of solid growth and positive momentum and that's across a range of sectors. we've had oil, consumers, banks,
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tech. it was a high bar, and i would say largely, it has been cleared. that's the good news. the problem is seeing how that translates into share prices. here we are, the s&p 500, 15% above its 200 day moving average. almost every time we have got to 15% above the 200 day moving average, we've had a pullback. it's hard to see where the value lies in equity markets at these levels. let's take banks, for example. barclays is up 30% since january. it is up 100% since september. lloyd's up 90% in september. in europe, bnp paribas is up 75% since september. here we are with positive earnings. in some cases, beating expectations. but it's largely in the price. it would be very difficult to identify value in global equity
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markets at the moment. anna: i know that your focus is very much more unreal assets rather than financial once -- more on real assets rather than financial ones. global recovery might play to the advantage of banks and other value names. and therefore, stocks could go higher from here. what makes you convinced that the future lies in real assets and not in equities? nick: i think on valuation grounds, on every single metric apart from the relationship with bond yields, equities are historically very, very expensive. whether you look at price to sales, price-to-earnings. every single metric has got equities in the very top decile of valuations. i think on a relative basis, if we look at the prospects for real assets and for infrastructure assets, where we are talking, you know, assets with a very long-term payment streams and income streams, i
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think we can be a bit more certain and a bit more sure about those cash flows, and we don't have to put up with the vagaries and twists and turns of public markets. i think it would be a prudent approach, where possible for firms, to be looking to di versify into real assets. it's very frustrating to see that u.k. pension funds cannot invest directly into infrastructure. here we are with a desperate need for infrastructure investment, but they are constrained by only investing liquid stocks and bonds. it's very frustrating. anna: there is a review underway, or plenty of calls for a review of that situation. let me take us to other territory, something that has been the narrative over the last 24 hours. we have pmi data out of china pulling back a bit since the
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previous readings, which has given some reason for pause. i was drawn to some comments from the statistics office over in china, where some companies have been citing chip shortages, poor international logistics, a shortage of containers and higher freight rates as things that will weigh on their business. these are risk factors we have been talking about for quite a while. what are your thoughts on china at this point? nick: they've got the supply chain bottlenecks in a range of sectors. we've already seen that impact in autos, in consumer goods. it does seem to be that these disruptions are going to continue. you've only got to look at shipping costs and you can see the costs of freight transpacific from china into the united states have doubled over the course of the last six months. we have got higher costs of freight, we got specific shortages, and chips is a
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very good example. we heard what ford had to say about that and the impact it is having on their bottom line and production processes. over time, we are going to see a process of shortening global supply chains, but it cannot happen overnight, it cannot happen in one year. i think over time, those in europe and in the u.s. are going to bring back some of those production processes onto home territory. the hope has to be that over time, those global supply shortages and supply bottlenecks will diminish. but certainly, it's going to put pressure on production plans and i think it's going to be very, very difficult for firms to plan their output schedules and workflow schedules over the coming quarter. anna: ok, thanks very much for joining us. in fact, stay with us here on the program this morning. nick parsons, thomas lloyd group
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head in research and esg. we will be talking about share buybacks. european companies are returning more cash to shareholders. dani burger was talking to us about this earlier on. we discussed that splurge next. this is bloomberg. ♪
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♪ anna: welcome back to "bloomberg
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markets: european open." 10 minutes into our european trading session and things pivoting to the upside from the early futures picture, which looked a little bit weaker. ftse 100 up by 0.3%. we are getting the ipo coming through for dark trades and getting the opening prices mentor. it ipo'ed at 250 pence per share. 347, up by 38% on the day so a strong debut for this business, which is an artificial intelligence company that uses machine learning to try to identify cyberattacks. some areas of the market no doubt seeing some strength in recent years. let's get a look at some of the stocks on the move. here's dani burger. dani: it is a change from earlier in the week, when banks were reported. most of the banks we have seen reporting today were falling.
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bbva did beat on a few metrics but their net interest income was a sizable miss. despite the fact they are rebounding from the pandemic, they are releasing more loan-loss reserves, still down about 1.3%. barclays is down even more. it is the second biggest loser on the stoxx 600. he spoke with jes staley early this morning. more conservativism when it comes to those reserve leases -- reserve releases. shares down 6%. we have heard of those big u.s. tech companies like apple fueling test feeling the burn from the semi conductor shortage. companies concentrated in this industry also are. this is one of the biggest losers today, saying that they missed because delivers for this quarter have had to be shifted to the second quarter because of that crunch in the supply chain. overall, it is a tough day for tech, especially tech in hong
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kong. that's what led to the asian session lowered. it is still down more than 2%. more restrictions on the financing of a lot of the tech companies like tencent. the s&p 500 struggling to get up today after a big earnings day yesterday, after some gains yesterday. but really not a lot of impetus to move. the dollar looking at basically flat. for the entirety of the week, we are headed for our longest streak of weekly gains since last july. anna: thanks very much. dani burger with the latest on these markets. european companies are returning more cash to shareholders. blue chips are among those repurchasing shares. socgen strategist estimate european firms will spend 150 billion euros on buybacks this year. nick parsons, thomas lloyd group head of research and esg, you focus more on real assets. do moves like this by listed
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companies to return cash,, does that challenge the thesis that money should be flowing into real assets? it's this kind of return of cash to shareholders that might keep people in equities. nick: it might well keep people in equities but i find it quite depressing. if companies can think of nothing better to do with all that cash than to give it back to the shareholders, i think it's a rather sad indictment of management. there is a desperate need for infrastructure investment. we see that from governments across the world. in the run-up to -- 26, we will hear more about the enormous sums that need to be infested to fight and mitigate climate change. we have companies that are very cash rich, who come out and make very bold statements about what they are going to do for the environment, and at the end of the day, they can think of nothing better to do than to give the money back to shareholders. i find that very sad.
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i think it's a real indictment of the whole listed equities space. i think that money could be flowing into real assets where it can make a real difference. thomas lloyd, we develop our -- anna: may be some of those shareholders who received that money put it to work in exactly the field you talked about. that's a conversation perhaps for another time. we talked to a lot of gas about esg -- guests about esg and investing. you make the point that impact investing is not the same as esg. is impact investing your focus and how does it differ? nick: impact investing is very much the focus at thomas lloyd. we view esg as being very important but esg is around behaviors, how you conduct your business. impact is really about outcomes. it's about, what difference did you make? how did you improve the lives of the people in the communities in
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which you operate? how did you raise the standards of living? how, as a direct result of that investment, did we see improvements in health care, social care, housing, life expectancy? how is economic development sustained and sustainable across the communities in which we invest? i think that's the difference between esg and impact. impact is about outcomes and esg is about the behaviors that you exhibit along that journey. anna: what are the outcomes that you measure at thomas lloyd? nick: we produce impact reports annually. one of the things we measure is the number of jobs created, we look at the taxes that we pay locally. we identify the tax spend and how that goes back into projects, as diverse as putting new roofs on schools, building
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new roads, as women's livelihood improvement programs in some of the localities in the philippines where we operate. we have got a whole host of metrics where we can judge the direct impact of our investments. at thomas lloyd, we really do take this very, very seriously and retake our responsibility to those communities very seriously. we have transformed some of the. we have created directly more than 3000 jobs in the philippines. that has translated into between 12 and 20,000 indirect jobs that have been created. when we see the security that that brings to families, when we see the certainty that that brings to livelihoods, and when we see the stability around all those towns and communities in which we operate, we are very proud of the difference that we have made. anna: thanks very much for joining us. nick parsons, thomas lloyd group
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's head of research and esg. back to a couple of stocks on the move. darktrace having a strong debut just 16 minutes into its trading life. the ai firm uses machine, learning to detect cyber threats, up by 36%, 37%. . from its ipo price. barclays to the downside, down by 3.6% this morning. a focus on a mixed trading picture versus some stronger performance on fixed income by other banks. also, a focus on the cost side and bad debt provision over at barclays. that seems to be weighing on that particular business. i spoke to jes staley earlier on this morning. coming up, germany has given a record 1.1 million covert shots in one day -- covid shots in one day. the countries leading the charge in europe's quickening vaccine campaign.
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we will discuss that next. this is bloomberg. ♪
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♪ >> this week, we inaugurate a new administration and pray for its success in keeping america safe and prosperous. >> president donald trump and
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those remarks was quite calm and collected. it was anything but that when president joe biden entered the oval office in january. covid-19 cases coming out fresh eyes, millions out of work, rising calls for racial justice and the ongoing climate crisis. americans left reeling from the deadly january attack on the capital and were used to a presidency conducted largely by tweet. the tone of the biden presidency has shifted washington. in his first 100 days in office, he has surpassed of the goals he set for covid vaccinations, seeing the passing of a $1.9 trillion pandemic relief bill to confront the economic downturn. >> it's going to make a difference in the lives of millions of people and very concrete, specific ways. >> he also convened world leaders to the climate crisis. the next 100 days and beyond could be more turbulent. the president faces a human rights challenge on the southern border, new variants are fueling
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the pandemic, and there are troubling signs that the u.s. is running out of people who want a vaccine. his proposal to almost double the capital gains tax for wealthy individuals has rattled markets. >> that's a really big problem. that's a huge headwind for the stock market. >> the american jobs plan, biden's infrastructure bill, is by no means certain to pass. the next bill on the horizon, the american families plan, looks like a long shot in its current form. that's of politics is all about, compromise. as the biden administration moves forward, they will be marked not by the first 100 days, but the years to come. >> i'd like to meet those that have ideas that are different, they think are better. i welcome those ideas. but the rest of the world is not waiting for us. i just want to be clear, from my perspective, doing nothing is
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not an option. anna: that was a look back at joe biden's first hundred days in office. let's give it to some european political factors now. the french government says it will ease coronavirus measures in 4 stages starting on may 3. all restrictions set to be lifted by june 30. there has been positive news out of germany on the pace of the vaccine rollout. joining us now from brussels is maria tadeo to try to tie all this together for us. good morning. tell us more about the french easing plans and germany's plans with its improving vaccine rollout? >> yes. the number you mentioned, 1.1 million germans had a vaccine in 24 hours. in one day, germany was able to vaccinate 1% of its population. overall, it has vaccinated at least 25% of its population with one shot. the numbers have improved majorly.
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it reflects the story we have talked for weeks now, that european vaccination rollout has really accelerated in april. we have seen much faster and in bigger number distribution and does very. i want to bring you numbers from into, which was able to vaccinate 500,000 people in 24 hours, that's half a million people in one day. it's a significant number because this is the goal mario draghi set out for himself a month ago. he said we want to get to that stage, we want to do it quickly. it's been able to triple the pace of vaccination in a month. a lot of this highlighting the production of vaccines has really accelerated in the european union and is now feeding into the national distribution data. anna: absolutely. good to see those vaccine numbers on the rise across europe, certainly in parts of it. today is the eu recovery plan deadline. as companies think about their successes in rolling out those vaccines, they are also mindful of the long-term investment that these european economies need.
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today is the deadline for submitting plans on the recovery fund. what have we heard from various countries that have submitted plans? maria: we have had 4, including that of germany and france, he still have 23 to go. the idea is that come july, the european commission will look at those plans and will start to prep payments coming out from that recovery fund. if you put all of this together and the forward-looking data we are seeing, the combination of much faster vaccination, the fact that you have the european union tapping markets, 800 billion euros coming into the market of aaa rated debt, and the fact that we are seeing this reopening ahead of summer, it doesn't show that the prospects for the european union have picked up over the past few weeks. if you look at the index of european economic sentiment for the eu, it jumped the most since pre-pandemic levels. the tone and language around the european story really changing based on those factors.
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anna: maria tadeo in brussels. we have had some of that data. more of it to come this morning. back to the markets. a quick check of where we are on the market story for you. european equity markets playing a little bit of catch-up with the u.s., also buoyed may be by some of the earnings stories. stoxx 600 up by 0.25%. the ftse 100 market up about 0.3%. the dax up by 0.5%. in terms of response to earnings, i can see some mixed response to the earnings reports from astrazeneca, on the rise, barclays falling. we have had other banks to the downside as well. some of the banking stocks moving other bit lower. barclays, as i say, to the downside. darktrace up by 37% on the back of this ipo for this artificial intelligence business. we are going to talk about the movies. grab your popcorn. we speak to the ceo of the bfi
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about the plans for reopening, funding for films, and how the business can come back after the pandemic. we will talk about all of the crosswinds that affect that business right now. this is bloomberg. ♪ so you're a small business,
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♪ anna: welcome back to "bloomberg markets: european open." 30 minutes into our european trading day and we are -- across european equity markets. we are only up by 0.8% in aggregate. the ftse 100 up by 0.25%. i am looking at the sector breakdown and what that tells us about where we are. autos in parts bouncing off of some weakness yesterday. big concerns around chip availability for that sector. that's been a global theme. autos and parts in europe still bouncing today after some weakness in the early parts of yesterday's session. basic resources the sector that
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loses the most ground. banks also under pressure. barclays a little bit weaker this morning. let's get a bloomberg first word news update. laura: president joe biden says his proposed tax hikes on the wealthy will help finance tax cuts for many more americans. in an atlanta suburb, he said it would amount to a tax cut for more than 2 million families in georgia, adding that it's about time the very wealthy start paying their fair share. china's economy is still recovering but at a slower pace. gauges for china's manufacturing and services sector both slipped in april. it is adding more caution to the outlook for the world's second-largest economy after more balanced growth in the first quarter. the u.k. parliament's watchdog set boris johnson broke the code of conduct after failing to properly declare how the refurbishment of his government residence was funded. the electoral commission has a
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ready announced its own probe into the matter. johnson denies wrongdoing. global news 24 hours a day, on-air and at bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. anna? anna: laura wright hundred -- in london. it has been a tough year for the film business. production was originally disrupted and cinemas shot and reopened and then re-shut again. in england, cinemas can reopen once again on may 17 if all goes ahead with the government's roadmap. that includes wanted's -- includes wanted's -- includes london's bfi. joining us now is ben roberts, the british film institute's ceo. looking ahead to reopening first. may 17 is the date in the diary. what kind of excitement do you have for your business and for the sector as a whole in terms
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of that return to cinemas? do you think we go back to 2019 levels or do you have slightly reduced expectations? ben: everyone cannot wait to open their doors again, obviously. the exhibition sector has been very hard hit. there's a long list of films waiting to be released and cinemas. we did see a little bit of what life might look like when we reopened earlier. yesterday, we were talking to some partners who had done some research across london to identify what leisure activities londoners were most looking forward to returning to. number one was going back to the movies. on that basis, we are pretty confident. anna: do you think that the disruption that streaming has brought, i mean, without the option to go to movie theaters, many people have been grateful for the ability to stream video at home. is that going to be a long-lasting disruption that
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your industry has to get its head around the impact of? ben: it has definitely been disruptive, no question. we all spent the last year in front of our tv screens and other screens. we had seen before the pandemic that streaming services, which obviously were already a reality and rising, were not having a significant impact on the cinema business. there's no question that i think habits will have changed, and expectations of what you can see when and in what screen, big-screen, small spring, that changes. anna: what does the pipeline of films look like? that has been worked through. many films have been onset. what does the pipeline look like with all of that in mind? ben: the first thing i should say is we have had some amazing
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support from government during the shutdown. the industry worked really hard with government to cover certain key issues, like insurances. a lot of production was able to get back up and running. we were reporting the overall production for film and high-end television had only actually dropped by about 20% on the previous year. , obviously the ripple effect is that we now have a lot of movies which are close to be in the can, so to speak. we know that the second half of this year is going to be incredibly busy in terms of big studio movies, independent films that have been waiting for cinemas to reopen. it's going to be a busy time. there's going to be a lot of choice. anna: talk to me about the funding arrangements, particularly independent films have in place. you talked about the funding the government has put in place. since brexit, that has changed. i know you also rely on a
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complex arrangement of independent financiers here in the u.k. and elsewhere. has all of that funding stream, has it stood up to the pandemic? or has it been more difficult to secure the money required? ben: independent film is a very complex arrangement of financing across the u.k.' a lot of mone is drawn from overseas. we launched a fund last week called the global screen fund, which is designed to invest in the international development of independent films. this enables brokers, agents, producers to go overseas to raise finances. it is a difficult model, raising finance for independent film, and the disruption to the cinema business definitely has not helped. it is also whether streaming business has been quite supportive. this trending business is a major pipeline -- the streaming business is a major pipeline. we are optimistic. we have had lots of support from
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government. once cinemas are open, i hope we will be back to some form of normal. anna: some form of normal, we can all hope for, can't we? diversity has been a big theme for the industry in recent years. we saw the oscars and bafta's, after criticism, did deliver a diverse range of nominees and winners also. it seems like an abrupt change from outside the industry. but from within, has this been a multiyear process? ben: we have been working on changes to expectations and standards within the industry since i would say around 2014, one we introduced our diversity standards, which was a template for what representation could look like on the screen and behind the camera as well. there have definitely been some very hard interventions over the last couple of years. and i think in the last 12 months, you have seen that in terms of how bafta and the oscars have worked really hard
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to ensure that the systems and processes of films being selected has been managed well. this year, i think we have seen that there is really an incredible array of diversity and representation, both behind the camera and in front of the camera. we have just seen the first woman of color winning the best director oscar for "nomadland." it is a lot of work that i think we have to continue. anna: another big talking point within the industry has been it's a sector that has been say haken by scandals around sexual harassment endorse. we see ongoing allegations in the u.k. around this. is there more that can be done to keep people safe while filming takes place? ben: the first thing we have to do is believe the accusers and the abused. i think this is all about
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believing brave women who have come forward with stories. there is a lot more to do. we do have some bullying and harassment guidelines that we have developed. they are built around a framework of disclosure and trust. you feel you've made some headway and then a story breaks and you realize there is just so much more to do. every time accusers come forward, i think we make a step forward. anna: thanks very much for your time. really good to speak to you. i host of topics to cover with you this morning. ben roberts, the british film institute's ceo. for more on the state of the entertainment business and the streaming wars, go to bloomberg.com/screentime. real estate boom or bust? the economy is coming back but more companies are forgoing office space. we debate the future of property
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in this week's money undercover. that is next. this is bloomberg. ♪
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♪ anna: welcome back to "bloomberg markets: european open." 40 two minutes into our european trading day and modest gains overall for european equity markets. better gains coming through from the auto sector.
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let's now turn to real estate in europe. for this week's money undercover, triston capital is a 12 billion euro manager which manages across europe. it has been buying up property and everything from student housing to german office space. dani burger is here, joined by tristan's cio. dani: i am thrilled to say that joining us is ric lewis, cio of tristan capital partners but also executive chairman and one of the founding partners. i really feel that there is so much we could talk about. really top of mind, i think of the interview anna just had with jes staley of barclays, who said there is this debate going on of workers wanting to come back in, but i the same time, reevaluating their real estate footprint. do you have any read in which way the demand is flowing at this point? ric: certainly. if we look across our portfolio,
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there's a bunch of asset classes and some of them are cyclically challenged and some are struggled we challenged -- some are structurally challenge. what is the path to feeling healthy on the way back to office? i think you guys publish that 50% of white-collar workers from the u.k. made an attempt to be back in the office in the last couple of weeks. we certainly see that among our population. there is a real drive to be back in the office. i think people are thinking, you know, i have been working a different way and that might be interesting going forward. my team and i are betting on human nature. there are three important factors. in the short-term, to accomplish social distancing, we are going to need more office space, at least temporarily. as we move back to a hybrid model, some people in the office and some people at home, there's going to be fomo and the hamilton moment and there going
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to want to get back into the office to make sure they are in the midst of the economic and leadership activity. the third is unspoken. as much as we love our partners and families, some scarcity value would be helpful. having to have a mix between being in the office and being a home would be delightful. i think we will come to some kind of hybrid model. i think over time, we are betting that we are going to need somewhere between 85% and 100% of the existing office inventory because people want to be in the office. our people are clamoring to be back, they just want to be safe. dani: if you are betting on human nature here, how do you position for that? what do you buy in this scenario? ric: one of the big things we have had to get everyone accustomed to is that this was not an armageddon moment.
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the end of the world will take care of itself. if it is truly the end of the world, you have much bigger things to worry about. our job is to figure out what we should be doing for ourselves and on behalf of our clients. it's not the end of the road. -- world. is this going to be a time after the pandemic when we not just want to survive, which we have done, but thrive? figuring out, how do you profit on behalf of our clients from that dislocation? or the outside economic road that's going to come, that striving operations and value because economies are restarting and growing at above trend levels. we look across the european marketplace, almost every country, there are still some challenges to it, but almost every economy is slated to grow between two and five times over its 2016-2019 gdp growth rates.
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we know there is activity in economies that's going to translate into real estate. which comes first, how much? there's a lot of challenges in that geography, urban, nonurban, asset class. that's the challenge, but there's also the opportunity. there is some real value for first movers in this stage. with conviction and with experience, but there's going to be real value. dani: if there is economic growth and if that brings with it higher inflation, are you concerned that there could be regime change where that bid for yield, that duration play, that starts to pull back somewhat? ric: i think so. we have to watch out for that. if you look at our client base right now, almost each and every one of our clients has an insatiable appetite for duration and yield. they have looked to alternatives
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in real estate. as equity markets rally, they have a denominator problem where the values of equity portfolio is going up so the allegation that they have in real estate has been going down. they need more real estate, more income, more duration. as alternatives for duration and yield,, the bond market, etc., higher dividends from the corporate sector will have a moderating effect on real estate. i think there is such a powerful movement into real assets and alternatives in a near zero rate, 100 year low interest rate environment, that we are not worried about it in the intermediate-term. dani: definitely that real asset inflation picture one we have been concentrating a lot on. thank you so much for joining us card that is ric lewis, tristan capital partners chairman and chief investment officer. anna: thanks very much.
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really interesting conversation about the return to office and indeed those real assets. thanks very much for bringing us that. coming up, swiss re shares climbing this morning as a strong performance overshadows a hit from the pandemic and whether. this is bloomberg. ♪
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♪ anna: welcome back to "bloomberg
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markets: european open." 51 minutes into a trading session that looks fairly positive for european equity markets. u.s. futures have been a little more sluggish than europe through the morning. let's turn to the insurance industry. swiss re shares are climbing as a strong underlying performance overshadows a hits from the pandemic and severe weather. let's speak now to john dacey, the cfo of swiss re. good to speak with you. shares up 4.5% this morning. what do you think the market has underestimated about the more positive momentum in your numbers? john: i think two things. as you said, the underlying businesses across the board are healthy, reinsurance, property-casualty reinsurance and property-casualty of -- delivered strong performance. the catastrophe losses that we booked or probably lower than people might have expected.
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we have done some important re- underwriting of our book to reduce some of the exposures that were otherwise going to be hit by the kinds of storms that we had in the united states in february, in texas in particular. that reduction of exposure led to smaller loss than expected. anna: you are obviously the world's largest life and how to reinsure. in a year like we have had and a quarter like we've experienced, we are reminded of the human toll of a pandemic and that is clear to see in the business that you are involved in. what is all of this going to do to prices and life insurance in those markets where people are lucky enough to have access to life insurance? what does it do to pricing? john: we have continued to support the primary industries in the united states, the u.k. and other markets where we have experienced these losses. pandemic losses for life insurance, frankly, is part of what we are therefore.
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while the numbers have been huge this time around, they are not outside of our own modeling. we have made some adjustments to the pricing models, but i wouldn't say if anything extreme. we want to be sure that we are insuring people for the future. we are cognizant of susceptibility to this particular pandemic, virus, covid-19, but we are also trying to provide a price gauge which helps people think about leading healthier lives broadly, and avoiding some of the comorbidities which have been particularly devastating for people that been hit with covid. anna: the pandemic has cost lives. it has also disrupted daily life for many people, many more people. what about event cancellation and that kind of insurance policy? where do we stand on the latest there? john: what you saw in the first quarter results at swiss re was
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a material reduced set of losses in our property-casualty business, cancellation for the business interruption, or what we called credit and surety lines. we think that will continue to be moderated in the course of 2021, compared to the losses that were booked in 202. with respect to life and health, we also expect given the success of the vaccine programs in the you can unite states, the most important two markets for us on economic exposure for life and health, that this program of vaccinating the population will materially reduce the losses that we see because it materially reduces deaths. anna: just briefly, a brief talking point among financial services professionals is returning to office, working from home, hybrid models. what is the swiss re thinking on that front? john: overall, we have been
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operating largely away from the office for the last four quarters. we expect people to be coming back in and some of our asian offices they already have, whether it's singapore or beijing. our people are on the ground and operating in something that approaches normal. i think in our european offices and in the united states, we would expect a return to something approaching normal in the second, more likely third quarters. i think there will be some long-lasting changes, in terms of flexibility, but we've had a program referred to as own the way you work for the years preceding the pandemic and this is just accelerating some of those transferred anna: john dacey, ceo of swiss re. that is it for this morning, this week, this month.
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that is it for the european market open. surveillance is up next. they will continue to take you through these markets. european equity markets on the front foot this morning. this is bloomberg. ♪ ♪ ♪
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and corporations pay their fair share. >> tax and capital gains at the same rate as wage income i think is insanity. >> [indiscernible] >> this is "bloomberg surveillance: early edition," with francine lacqua. francine: good morning and welcome to "bloomberg surveillance: early edition" on this friday the 30th of april. i'm francine lacqua in london. european banking rebound contin

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