Reuters Insider - Davos Today: Top interviews & news from the WEF
22/01/2014 23:18
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Morning everyone it is Wednesday January 22. This is double today's report due.
By the World Economic Forum and Reuters I'm Axel Threlfall we are alive seven
until 8:30 every morning this week through Saturday. For the old library here in
the very hot -- let me give you a -- left behind this who visited real -- guests
come before the show. Critical -- pressurisation Colin Dyer from Jones Lang
LaSalle. Victory does not just a moment we've got a new feature on the show this
year a guest host Steve how do you go from Bain Capital. They disease David --
hours after we believe a half a power play to talk about today.
Past and of course -- with the gas flows would come through fastow about let me
give you that headlines morning. So if he's thought -- Montrose road for the
world -- push for an end to three of the civil war. But pressure grows on
president Assad's to quit after allegations of systematic torture and execution.
Thailand's capital under state emergency. The government tightening security in
the latest escalation. Of -- showdown with protesters looking to derail
election.
-- for prime minister. IBM -- revenue expectations for the fourth straight
quarter. As it grapples with weakening demand for servers and storage emerging
markets like China. I can't Nokia doesn't deliver the message from the -- to
delegates here. The -- urging them to include others who left prosperity. I ask
you to -- sure -- humanity this there by -- -- who ruled. -- -- So we -- back
along with 2600 participants and fourteen heads of states.
For the World Economic Forum era dance alongside Iran Syria peace talks high up
on the agenda this year. Seeking growth tackling inequality in managing
migration and all topics central bankers economists and CEOS -- -- they figure
out. How will help not harm the world's fragile recovery. The west 34 seem
reshaping the world consequences for society politics and business. It's a big
one some might say is quite unwieldy what you know -- he says -- in the second
we're gonna -- said what it means with a raft of big name interviews. In today's
lineup will talk to bond body's chief executive on taking on Airbus and Boeing.
BOE systems will tell us how you run a defence company when everyone's cutting
spending on arms plus a surprise message sent from the Pope. We'll have more on
that later. -- in the show we also want to hear from you any insights are what
you think we should be talking about we aren't talking about.
Who should be here but it isn't here. -- using the hashed out derby loss today.
Right lifted off with. -- average somebody listing today's Steve -- capital's
managing partner Steve Appel who cap. It's great to have you -- -- -- why should
cut the chase you know -- we hear from the Pope. We hear a lot of the big issues
however why the deal makers like you really jumped about -- visit to sort out
these big problems or -- to do deals.
Its coverage of the two Davos is a great platform. -- -- about what's happening
in the global company. What are the issues countries are facing reality the
macro issues affect the performance of companies -- -- -- so to -- it's been a
wonderful experience both to. Analyst Janney global issues ownership of local
issues. And how that factors in the does -- -- C. Gonna go away with some some
some. Do you -- your belt or at least some progress on deals undeveloped. I
think we we have -- there is situations come out of that China deals with its
real long term player in the that the more you come the more people you know. By
the more -- yet another receives it CEOS get now -- better feel for where should
investors that invest. Is -- this year -- -- about the last. -- stage -- the
last few years and yet they seem to be getting they're.
It's united I think things said the Barnum and -- -- was a shaky -- in 20082009.
Europe should. The mood at that point worst deal with the financial system come
back it's now come back -- it's getting -- -- each country so I think their
customers about -- now. Let me get your view taken a couple of big news items
that happened overnight in the morning. Mohammed Al -- him go he's leaving his
desire to Obama yeah -- as a wide. What you talked.
You know I've no idea and they will work really big cap draws Israeli company
that will -- investor businesses venture capital -- build great businesses and
you know. Those those fox a managing huge portfolios of fixed income interest
rate bets that the -- legacy of those bets go against you. And how those --
those -- have -- agencies yes that's a -- The other big story -- mentioned in
the headlines by the end misses again. China is a problem how worried by China
and that -- -- talk about China permanent staff about how worried. Well China's
really interesting is it's been a driver who want to -- reality for west 1520
years. And currently that big -- -- -- -- 1215%. Real is still as robust growth
compared many places. So you still seeing businesses role in the 68 -- -- and --
-- the ten. So I think China's going to be slaw or otherwise would still -- --
--
Very quickly any closer to the ten billion dollar deal the better. -- choose not
to say it was a little way off. -- -- I think we're seeing transactions though
their progeny at that point times of the market you're coming back alright Steve
over batteries just the second thing. Now Iran start to shut down its most
sensitive nuclear activities this week prompting the US and the EU -- partially
lift economic sanctions. And I asked where founder Klaus Schwab wife do things
around premier -- has decided to attend this is done us. I think it's very
important -- when do you know all we. Are just starting receive implementation.
Of so first face -- -- -- Bloomberg Lehman.
That we all -- -- and so -- first faces a frost phrase. So all we are really
curious to Europe what's the future would be did did the did they approach you
the Iranians or did you approach them. I should give us a common foot. A common
effort. And -- and what is planned W bilateral spine with the US. We do not know
yet to of course -- safari will -- reach refined indulgence always. Afraid free
will who -- framework for -- rocks for bridge building. So we'll see what's
coming now to a but Dimon really. Confident. Those so who will have a positive
outcome. What about a meeting between mr. and Yahoo! and mr. or is that a have
you been tasked with keeping those to a pop.
-- give would be broken glass was formidable -- -- -- of president Kwame. They
have to do -- Professor Klaus -- talked. With the added Steve put words -- --
that we're talking around how excited people use sponges off is much excitement
again won the -- -- about. Opportunities around. I think around the real long
drum up clearly go -- to -- out. Is that we see very large economy then there is
an isolated from many many years. It has great all viewers spend more oil will
help with prices well in the world.
-- around to become a trading partner Adobe fantastic football finally there's a
big FL. Editors -- against nuclear programme or controlled substance or what. A
marathon dealmakers American CEOS American businesses going to be doing assumed
observation they're going to be sitting back. While in their time watching what
happens all they going to be on the from former pro active speaking to the
Iranians. I think there's a next I think most people will terminate any wait and
see better because these talks often -- produce data. If the dart for something
such sort of where there can be trading -- -- legal training. In Iran can sell
goods -- -- -- -- right I think be -- market but I think it's gonna take. What
types and thanks lot. -- --
It's downhill all the way up what John Gordon hit -- flight with the Mandarin
speaking in front helping bring wealth -- youth with them. And this is worth --
watch shows how governor man with a quick rundown of lineup warn doctors vote
for. The bottom run shot by our intrepid Reuters. Production team with -- blood.
Guess very excited about as you blossoming -- I mean that I was inevitably
drivers got in -- we -- talk a little bit more than the second let's let's talk
though about India.
We domestic as well as weak foreign demand continues to -- on India's ailing
economy while -- uncertainty ahead of elections and making investors and
businesses that they. Joining me -- supply attrition I just a written agreement.
He's president of the confederation of Indian industry and the founder of
instances very good to see you again -- Let let's start with a really hard -- --
runs. Our lack of SD IA questions over infrastructure corruption worries about
this election. How was going to be for India really gets its mojo back. So
clearly -- -- -- -- the -- to decide on -- the analysts are predicting that next
year is going to be six person you'd be -- from the 5% now.
And yet after looking at 7%. Saw in -- I believe -- that the worst is a work. We
have to get -- elections why finish of the you don't bring Chris that as a
massive -- -- that's a massive hit for investors as well had quite how. How
could we see a turnaround in fact if if if if this election brings further
instability which which many expected the -- So if you look at -- beat out. And
underlying bid that there are ten states -- employing more than the national
average more than 67 person on a daily rate now. As we speak. And -- this did I
actually. Larger than many countries might start one of the states.
If if -- -- as it -- going to be probably that -- but certainly the largest
gambling the word in terms of population insights. Many of these states are
actually going big -- per cent and get -- by six. Different what particular
black Jack -- alright. All right let's -- what happens I believe after the
election. Things would look better sleep yet come on -- you -- hardly dramatic
market last Hollywood would make video as well because it's one of the
structures. -- in India is -- -- M -- several worrisome the world very educated.
You know great products ammonia. -- the issue. In India is Israeli governmental
system you're -- -- accounting you know kind of rules what type issues and I
think some of the -- retain any amount of energy said. That's a really big issue
faces -- -- power. How you get to a point work you can trust financial
statements we can really do business in -- have -- course of the synergies.
Clearly you know we have to look better in terms of governance -- but look
better in terms of providing a stable environment for business to operate. But
institution billing Dick -- and are you have to the number -- in you're under
twenty years back has done very well in the last many years. It doesn't have
visited --
Shortly -- little bit that back. I strongly believe that the after the
selections. Lot of at a -- but the expected happen what actually happened. I
expect that because of the pressure via. It kind of economic growth and job. You
need investors believe that. Yet unique unique. The -- capitals to believe that
generally receive. I think investors should have then we'll take cautious
approach India unless there is keeping a tough down improvement -- look for
improvement in those in the systems. Your new by company you have to trust false
financial statements and you have to trust the fact that if those most in seven
issue you can go some -- while. In any judgment very verge of a prior search for
a bond restriction that -- Now we've invested in the year but we've done great
part versions of the -- it's just it isn't this one more horrible than you have
another country yeah if the country had. You know you know 88 -- great court
system. And -- at the Renault corruption. An easy to invest because of many many
-- I think you see investors pouring in in the year.
If you can fix kind of the rule -- -- -- though the -- -- will be treated
fairly. -- -- It's needed to meet expected it's not that -- on. Bad dark black
and white you know if you look at the -- government -- -- -- and energy there.
Hornbeck the next in developed and a big hole in the market in some sense. If
you look at some of the European -- -- the fastest -- model markets together in
India. So yes you know every market as a -- -- it down and mufflers that
defensive at this buyback. I believe that after the election you see a better IM
bank that he can work well look I guess the question on on the sector --
outsource -- -- would you would you be receptive -- -- sectors and sectors I
think so Treasury Secretary others those inexorable trend. Lower cost for
companies and only encourage a great -- ninety asserting -- that the -- I think.
He shouldn't be defensive in his great country I think you if they can really
just.
Go in the direction enough of support in these these new initiatives of reducing
you know corruption making the -- selling -- -- need to rotate up yeah actually
did get rid of the solutions are not actually until we get it needs we
implemented an ample. -- just a quick final question on the turnaround. I think
-- laid off what 1800 people -- semi for a company that lets face has been
hiring like -- years. That that what does that say bankers is what -- about --
So CB higher ahead of time.
And that the sector slowdown in the league goal -- -- -- in effect -- what bonus
expense and into 2011. And came down -- 6% this -- growing our predictive of the
overflow percent actively. So we've been layoffs. Allocation -- off. In our --
that just a bit better going to be -- clearly the -- Alright crystal -- Banesto
had already collection of talk about on the same as the size elusive right now I
hope the outcome Christian white Christian from emphasis and one of the --
shares as it. I'm Steve just a quick word -- new home. We witnessed a number of
people want to put its do you people and we want to -- one of our twenty
questions as well.
Who was should be here would you like to see here who isn't here and there are
some of the biggest -- on here this year. What effect is missing. Well there's a
lot of people who as a -- -- fresh volume -- touch almost every sector and every
country in the economy. I think there could be more people from the energy
industry here -- energy is really. A key issue in powering global golf United
States resemble I think arrested many energy costs afforded for Jupiter Florida
Europe. That at this is going to great kick start our manufacturing cell -- was
not. You I think -- here but -- right here right in the numbers of the represent
over their impact on the block.
Alright Steve thanks a -- now I as a so let me -- a lot of people that this is
what am Klaus Schwab said when asked him. I would have liked to see support --
Because she has a strong message but I'm very pleased to -- all -- -- -- -- said
it. A message to be read to via a one -- -- -- for more was spurred cardinals.
Wanna my username your thoughts I really think should be -- dog buster -- here
we've had a number of responses so far. Where all the traders -- -- -- hauled up
what I think comments we've had. Do -- responses using the hash -- da Costa --
any other thoughts of course welcome as well. Slow rally with a long way to run
a new bubble that already looks dangerous joining me now with his thoughts on
the global property market Jones Lang LaSalle CEO Colin Dyer. I don't -- economy
at around about -- better view among this year with that was Steve today. --
just launched the latest global property outlook. Super cities London Paris new
York and Tokyo still dominating. Are you worried about are you worried about
bubbles in the markets. Not -- V recovery from the great financial crisis. Is
probably going to be 67 year process and so -- down only three -- four years
into that. The equity markets are strong has done a lot of equity flowing into
real estate at this point only -- moderate in the amount of debt. -- bubbles
really get going weight of debt takes over and we get very high levels of debt
financing in real estate. -- from -- investor's perspective -- that should
investors looking at the -- equity you know cities as. As investment best bid
because of that that the bubble went on I don't you talk about wells -- -- and
added I'm talking about how much you get questions often. Well I -- I think in
general if you look at -- we know the US. They had not like building plus -- for
a view from the crisis hit these projects take a lot of time for much of the
areas. Break now but stability in many cities excess. There's what do -- their
supply for -- use the -- about the real estate business product but agree. We we
gonna see anything in terms of our company's board ourselves even looking for a
space we're in the sector ridiculously expensive. Catalyst coming back is if --
in in in mid cycle and -- -- has room right. Industries Ross -- still very. Well
sure it was -- property.
Driver right absolutely there's a lot of corporate demand picking up as well
which is good for the fundamental. About the fundamentals of -- -- You like
capital flowing in -- dead following a fund to fund the purchase solar to a
state. As a fundamental. Fundamentals are driven by corporate demand and that's
only just beginning to pick up again. What excites you more back in US
commercial residential. Our commercial her at this point -- -- notably because
there's warrants more stable long term profile. -- the sector in general and --
-- something -- you retailer accident or what what particulars like what do you
like. Which if -- Bain Capital was founded on the principle of of kind of
helping businesses to grow in value. So we we that the real estate -- say --
assets but we will give companies -- hotel companies. A cruise companies come as
a real estate component we've actually done some investments in that area a
certain about their because -- also susteren in comeback any kind of. What would
what is -- -- -- to get a massive city status what what puts it on land SA
measure that. And everything.
Most importantly transparency which used to say ease of access to information
not market's good regulatory systems low level of bureaucracy. And most of all
to appoint soon residual -- India earlier on good judicial system to who will be
sure. The the -- Dubai can actually access. They -- infrastructure education
communications and all those other factors which play as evacuation from --
educated population. What do you give -- -- on -- larger market property. It's
-- with that in mind when I think anything emerging markets you got to be.
Taking a long term view because for the short term you're always going to be
suffered cycles. Again India was boom in four years ago it's a political issues
now China has -- up a lot these economies -- long term growth patterns. And the
real -- in those economies is similarly a long term growth trajectory but anyone
period through four years. The cycles today the -- Is is as the -- address as a
as a global farm. You see an ownership they you can identify these cities in the
division probably to -- will -- find the right places for corporations so you
can elevated prices of finer points. -- -- Security sort of -- investor clients
who want their buildings filled up they once an interest corporations have
another. And corporations are looking for sure good quality real estate in major
cities but there -- a lot of other considerations from tax to -- access to good
people. -- all that together and that dictates where really -- corporations
would like to have -- to the situation in their offices in real estate needs.
Just. Acid test disease yeah I -- million to two investor your hard earned cash.
And you wanted to put it into property which city which would would you look to
them. I'm really is no better. -- -- as a relative. -- if you had. At any
Verizon as I said you should then the second tier Chinese cities are very good
bet. So -- see Yahoo! hand showing Yang OK so you -- -- -- the that you're
probably runs a much -- artistic value. There's no infrastructure analyses were
your farm's owner of the building -- that you can work -- bushel. I mean they're
not quite what we have called western investment grade yet but the
infrastructures in place the education systems coming together. These vast.
The cities of multibillion population and have a very long good long -- get
their red China has fewer children 32 -- -- million. -- -- -- who has fifty
years of. That is under orders were your -- Tuesday. Boston fostered all our
stock they have no comment thanks a lot Gavin Colin -- Genzyme was out. Let's
get our rundown on what's on today's agenda here at the World Economic Forum
Reuters Amy Gardner has details for us. As central banks that scaling back
stimulus and a supply of cheap easy money dries out. What sectors and industries
while office paper breaks AdSense.
The IMF deputy managing director means you and French immigration minister flag
have ran into the big names giving let's just in. Mass customisation.
Essentially technologies and -- Internet surfing -- Yahoo!'s Marissa Mayer and
leaders from medium -- they offer their insights into their next big
breakthroughs to the world of ten. -- -- -- Breakup speculation has quietened
down and equities around the outbid but doubts remain about the continent's
recovery. Economist Kenneth robust -- added men Martin Sorrell. Joined by
executives that -- ten and UBS -- -- aggressive -- after the lions bears in
Africa's next Bay Area. That the Nigerian president good like Jonathan and
business magnate like -- -- data -- discuss sustainable rate. On the continent
where the population is set to hit the humiliation of nitrate as a liberty.
Other markets safer an album that this GO Antony Jenkins and other industry
leaders debate whether -- international financial system. It's not secure now
than I was five years ago. Right there are lots of Reuters photographers of
course on the ground and our costs and what we bring you some of the best shots
of the week. Let's -- quick look at our first pick of the day. Security sites
around the latest addition to the world of luxury hotels in Davos a futuristic
looking. Intercontinental only opened in December but it'll be home to many of
the big names attending the World Economic Forum this week. -- -- by the way
from the group CEO later on in the show.
Now they should've been -- -- the -- -- his biggest ever gamble paid off the
company's new small airline was -- gender servers and take on Boeing and Airbus
but it's been delayed again. And analysts are questioning whether the orders
will ever come joining me. Bond buyers see you know perhaps -- -- -- am eager to
see you -- yet determined it's been it's been a tough year -- will come onto the
C series and just in just a moment but. What's this week's EU is about doing
deals is about doing deals on the infrastructure side. Lot of our relationship.
Of customers from -- world leaders to work.
-- good people represents -- is airlines are here and of course private aircraft
themselves. Let's talk about sees -- as -- -- we've got to do that investors are
clearly worried about cash position. Investors worried about the -- I think but
investors are worried we're gonna see further delays investors worried that that
certain that that the -- gonna steal a march. What you say -- -- investors. Part
of big program that we've been developing the aircraft for a five years winter
flight test now also -- from a development perspective we're really the
institution failures were. Where I think -- of various -- in the development. --
-- -- very well accepted the we have under nine need orders we've given that I
myself have -- -- to -- -- -- -- orders before.
First deliveries saw Ramos then. What -- sector. This -- sector you have you
have big downturn after the crisis and people were. Activities -- picking up and
collectively generating a means to be everywhere and these -- were quite. -- how
how and AltaVista -- -- what do you say guess how -- as bombard you win back the
trust of investors -- -- -- enact climate like this and given these delays that
was. We solve the issues were borrowing in buying real dip down when they have
their issues -- great company as well they came back from -- -- -- three years.
Sell so young people were used to seeing the fact that this is a very come close
industry's very complex to -- these planes out. But -- zero white as a great
qualifying in the during regular trading zone tangible. OK so you're giving you
when you're getting ever doubted -- you're giving -- deliver yeah. Are investors
going to be the better than. Yeah by just like to -- also that if you look at
our development from around what actually year NAFTA did two years short period
in the programs useful cabal saw. Our program is the physical well into the --
-- it takes a little longer but there's going to be done right. Will be
delivering at a press for the next -- -- -- news went on the Serbs released late
summer is that it will say -- admit though we're -- second half of 2015.
Four revenues perspectives rush when you just announced I think what 171800 job
cuts -- -- -- we you know we like using more. Well we've seen a -- growth since
2008 -- added above 5000 -- even during a recession that because we're investing
to a future. We decided to make an adjustment now more from an efficiency
perspective. I feel another we're looking at growth -- involved in business
aircraft and commercial aircraft and definitely in the trend -- -- -- well. --
traps are steel which would close markets do you see -- out of the business to
grow -- business really. To just -- back in in 2002 only nine -- -- seed company
betting on companies using planes. -- benefactor of the river level is more and
more global companies that are investing in incorporate play information that
they can make connect and -- -- customers across the world. We in the larger --
we've seen -- come -- already and factored in release will now that in 2000 made
large business aircraft. But whether we're seeing now of the smaller business a
-- for a comeback as the economy comes back in the US. Clinton -- ground
transport underground transport units make up for the lost revenue on the
aerospace side. Well it's alpha -- on worries grow and avoid a growing -- -- low
investment in infrastructure and I think this as a good growth area which we --
-- you told you disagree opportunity doublespeak to country leaders about
infrastructure projects. Where where Israelis hope right now -- -- -- structure
let me -- investors these synergies America finally gonna get serious about rail
investment. Well -- absolute growth we just fell out of big time tracking and
Australia and Queensland. Two point eight billion being infrastructure project.
There's more there's more -- -- in Asia of course. In the in the US were seeing
replacement of the system that very -- we just another big a big -- a herein in
San Francisco. Just modernising the fleet of metro was there so I think America
is serious about the trends that in the city's IPO gonna stop some sort of
coming in -- A -- one. -- just on the back of that investment in infrastructure.
Is US gonna get serious about can we get mentioned San Francisco. Well -- -- is
critical US testing of serious about a during this recession judgment -- money
taken away from Volvo's discretionary programs investment infrastructure. -- --
now doing that so I think is getting the point that there will have to invest.
-- happen the US is you have have a poll rise higher return that much is
happening in the federal level that's on what it delivered the -- that. That
backed their twenty usual 50% of the dollars literature -- -- come out of the
federal government and help cities like Boston build things out -- 25%. Self
sees revenue number -- we're getting great leaders coming Mercedes we've had you
know Middlebury and then depth and -- -- -- coming into -- -- bottle Boston that
one improve the infrastructure show. I think that Boswell on the city finances
in the -- are up better of the slower places so is dollar have a -- will --
well. How just specifically on Bain Capital house fundraising -- -- and the
like. But wouldn't you -- -- a chart about a fund raising by that it is sir is
it looks very good for Bain Capital we've had in the same investors for three
years. It very well which sectors do you really -- this year. But if you if you
if you break with regular rundown into kind of the growth sectors which earlier
TM GMN medical. And then there's industrial. We like all three of those sectors
because there -- a comeback in -- industrial. And we're seeing companies perform
really well -- which -- -- find companies.
Bed and number two we're all -- -- come -- we think we can transform the maker
-- global player of in the new markets or -- several -- clearly is a return
about the for the future. And you know this -- as honorary granular -- 11 final
question unite and arazi sometimes talking about bubbles but let their debt.
That there are a number of areas we -- see when we see bubbles we've we've
talked about China you know let me throw the Dow crossbar Hollander as well you
know everyone here talking about these big issues. What what what comes of the
Dallas apartment search -- what what's the what's the that the most dangerous
you right now which has saved. I would say the largest bubble is is is again the
-- pioneers. Is avoid to be -- Laid out power to reduce the deficits --
sovereign debt as a sort of happened in the United States in Europe and other
countries. So that -- can kind of see sustainable. Reasonable economic -- four
if if we keep borrowing. And we keep building up you know building -- for the
future generations to payback at some point. That's gonna hurt us and then it's
going to be great and -- of the situation in Greece.
One day use abuse on the beach selected as a measure doesn't another much a
change in those two days -- -- people recognises it's a tipping point. Now the
good losers -- legal climate has performed very well -- couple years. Spectrum
more stable the banks the US about a stables over revenge. Which -- only get
better in Europe. Literally give consumers with more savings so they're plaza
signs I think the big picture is it if the ball -- fiscal. Services can be
brought down already one proved time would be better overall funding. Berlin
dampens obviously -- -- be great to have your way to really appreciate it really
ratio was well save you go for a Bain Capital are very first guest host. You're
watching doctor -- time 731 the headlines. So if you thought start of -- -- of
-- power -- -- -- the availability disarray after blocking UN invitation will
rallying.
An explosion in -- wrote in the new evidence of torture -- that that government.
Thailand's capital under a state of emergency the government tightening security
in the latest escalation of the showdown with anti government protesters. Toyota
says it may cut production. If the unrest -- will stop soon. Five M shares slump
after a fourth quarter fourth straight revenue -- rather the world largest text
of the firms suffering. -- the Chinese Government put the brakes on -- spending.
Plan whatever chances of a bilateral between the US and around this year's World
Economic Forum founder Klaus -- -- -- we shouldn't. -- -- Five live -- has
always.
-- -- free will move Freeman -- for the dialogue for which building. Right
Intercontinental hotels launched its new Davos hotel to coincide with the west
meeting here the futuristic. Horizontal leg design is encased in the -- tone
metal show all the changes according to the web that -- No shortage of high --
in town just now of course but that is the rest of the world we discoveries
among the last. Reuters John Gordon spoke to company CEO Richard solemn. Medium
term. Hotel business is very exciting. -- if you look at the best correlated
hotel revenues is GDP growth of infrastructure investment that investment of the
growing middle classes look at. Pages of disposable income it's all very
positive particularly for the branded -- 10-Q we supply -- So I think long term
looks very good -- short term driven by economic cycles. But that's supply and
demand balance whether it's purely economic malaise that we've seen in -- in
Europe. But overall it's actually I think very positive outlook and France's
wanna -- brand families out there. Then -- the future looks actually very
positive way type of a short term versus long term you know you fear fear out of
like my office. We look at -- stimulus has done to properly crisis and has and
that attempted -- Kim maybe we can tweak the moral. No causes -- it's more than
just purely financial in -- of the extent that. I think being a pure play and
having investors' understanding and for your own employees to understand what --
about be focused really really important. But I think we work very closely with
real estate investors worldwide and putting context we've got 4600. Hotels under
brands -- alienate. So. I think eyes. Every -- I am delighted when our owners
are making money from the hotels cause we're helping trade well for the making
money for real estate investment -- our call.
-- skills you know more rats away would be a contender Minnesota Caribbean be
how do you regulate something like -- Well we're we're we're no stranger to
competition at a competitive marketplace and growing -- where you've got growing
demand always -- new competitors with its. Cruise ship sometime -- all -- in the
I think regulation is the important point which is that. If mass market to
market businesses like ourselves and regulators -- -- today. To protect
consumers whether it's health and safety fire life safety food safety. Whatever
might be pan. Building safety think of the rules and regulations that go into
doing something like this to make it suitable for paying guests for the were --
-- while basic zero is a middle ground. Well I think -- if you if you will kill
the model I think you have to ask -- -- models appropriate I think it's one
thing to let friends keep an -- I think it's quite another. For an organisation
lycopene beta market itself. To go out publicly and say we're going to be bigger
-- -- issue is one of the biggest hotel companies and then -- -- actually don't
need to regulate the properties that we conduct our brand I think. I think give
legislators -- serious about consumer safety which they -- today and and and
what actual product -- buying services living given it they would be a level
playing -- that's wall. I'm asking for is a level playing for -- -- and
appropriate. All right interesting on -- B&B would get us speak would Brian --
who by the -- founder -- in B.
On Friday. Will no doubt play that that sound -- him see what he has to say. Now
Japanese prime positions are -- has done at least two surprising things you --
in office for more than a year he's taken some decisive actually. Assimilate
just chuckling at -- decisive action on the economy. -- assessed could have yet
to come joining me will insiders special adviser in Japan's capital cabinet
office. Great to have you back but when I spoke July last year you said --
quote. Japan needs to reconnect with the world it thinks it's an island it's
not.
How much progressively make. -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- --
-- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- --
-- -- -- -- -- -- Before that. The big big test comes in the spring when when --
is is set to raise the consumption tax. Is gonna pass a -- wondering. The up for
a stage I think that there was accepting this -- a well happen it's a catch 22
for him and somewhere business. Wealth -- I think -- We we have as a two stage
process. Point 45%. Is. Pretty much fear of public people people accept this I
think the bigger test is from going from eight to ten. Maybe next year. I'm
deregulation another big test spam.
Is going to deliver on that the structural reform packages when when the when is
the market going to be convinced that he's coming through with -- Write this as
the -- most -- -- Ferreira and right exactly. And I think to be giving a keynote
-- -- your -- lot of has plans been outlined that and to about forty will be
definitive the year in making insurance -- -- -- -- happening -- and -- couple
examples when I was gonna say this morning. As the desert gives heads up
Citigroup. A lot of these things where it in terms of -- -- privatisation arc
energy Chu is obviously a topic that affects -- country. How are you make a
country competitive again -- -- connecting to the global environment things like
woman empowerment entrepreneur Jack. What are talk -- -- -- -- process exactly
let's start with Salomon -- Harmon. It's clearly our priority but the west's own
global gender gap -- believe in 32 put you 105 out of 1036 countries. Huge -- to
-- And making any progress on that front. I do think so the prime minister has
outlined plans to make sure of that board members and politicians have. Certain
requirements in terms of a woman and in in those positions and -- those targets
I think our reasonable amend -- -- bin -- -- that happen. And then
entrepreneurship. Against something I suppose you lost your new broad view you
call yourself an entrepreneur and innovator.
I think this is what can you tell me one of the reasons you brought in in the
first place to -- to reconnect with science technology new industry. How much do
you is that. To driving the change that Japan's desperately needs fine I think
it's critical I think to to wildly -- research -- warranty is very didn't Japan.
Trinidad development new products new companies and industries in the spotlight
last few decades. Are -- -- thinking outside the box do we knew things in
different ways. This is I think uphill hurrah of these are -- reliably. -- to
stay with us William I'm just introduce our next guest wanna. I don't get a
discussion going there as well Japan had been talking about our is finally
tackling deflation the US recovering. Chinese growth worries overstated some say
even peripheral Europe bouncing backs up what is right in the global economic
garden right. Some say -- joining me now as for -- deputy managing director John
Lipsky great to have you back in studio joined -- -- -- except farming and those
areas on a American babies was premature but let's let's let's kick off with
Japan. I don't know if you've been listening to what will -- -- -- This year
we're gonna find out whether this.
Well -- -- -- -- of that's more than just the monetary experiences that 2000
said the look. What is going to be the effect of the fiscal policy that changes
and of course most importantly. What was going to happen to productivity of the
Japanese economy going forward. The result of the structural reforms that are
upcoming I think. A Reuters looking forward to hearing prime minister -- --
today. But more importantly looking forward to implementing changes that will
make the Japanese academy perform better in the future either gonna get.
Attitudes and inflation on time and made at a time for a recession such. Over
time difficult -- in question. But that necessarily clear that there has to
happen. By its are obvious that there has been. -- the Japanese consumer is no
longer expect extended deflation. And there are already has an important at a --
that we. But if you're a betting man where would you say inflation would be just
slightly unfair question is -- whereas inflation oblivion this year. That's the
better rate question I think what's surely is that problem Japan's deflation and
the -- -- we look we're getting out of deflation and end end. I think a little
bit of inflation is not a bad thing what that is whether that between wine to. I
I cancer by -- dip and inflation. I think the big story here. Analyst wanna
deflation especially in Europe. Credit came out with with -- forty S left out
how worrying about deflation in Europe. Well obviously these continued to climb
above core inflation news has been very very inaudible. Inflation rate if you
strip about the effect of -- Cash changes were administered price changes you'll
find in most European countries inflation. That in that -- underlying inflation.
Is correct course put one here for 1% for the quite well. -- saw the but they
get from Baretta outright deflation in the sense that the Japanese dot witness
that. It consumers and producers expected falling prices of all the time. That's
a long way --
It shouldn't happen there's no need for it is going to work on battle both of
you actually on non US and tapering in the -- the markets dealing -- that's.
What are your expectations are they gonna get -- Yes I -- -- doesn't think that
it's been as crucial as many observers have five. I don't expect the economy on
markets at this point. -- of their sensitive. To the decision than -- especially
because they're going to be guided by the economy. In other words the Fed is now
going to be taking preemptive steps in the current environment what's going to
be most important is the evolution of the of the real -- Five seconds on taken
-- you will surely get.
Yes I think the biggest concern here is how will probably affect the Euro yen
dollar exchange rates and that's probably going to be something monitored
carefully and bad. -- John thanks so much -- -- -- -- -- brief William thank you
very much for coming back hopefully we'll see you and Mexico as well I think
fifty. Now the trade gap between rich and poor poses the single biggest risk to
the world this year so says the World Economic Forum often criticised for being
elitist. But just how believed just visit as a cautionary factoid from an Oxfam
report released on the eve of the gathering. That the charity calculates that
the world's 85 richest people have as much wealth as the poorest we -- half a
billion on the planet. Carlos Lehman Davos regular Bill Gates still the top two
names. On that list another way of putting it almost half the world's wealth
about a 110 trillion dollars. Is owned by that famous 1%. More than a few of
them of course here in Davos today. It's senators' thoughts on that.
-- sell all your thoughts were on that weather reports sparked question as well.
Who do you think should be in -- but isn't here. Is -- apple boss Tim Cook
President Obama Warren Buffett Mark Zuckerberg. Some -- some of the -- as that
would be talking about this point -- using European using that cash back. Davos
today. Winter tourism was practically invented in Davos visitors have been
riding the -- out railways since it was built back in 18199. This year Reuters
has been riding the famous for macular with pioneers of the future. In today's
episode our reporter Jon Gordon takes priority CEO Andrew Thomson up -- out to
ask him about taking on traditional health -- -- -- Does what is wrong -- -- --
today well finalists and view on the surface.
What we want to do is build healthcare system to complement the sick care system
that we built in the tries centric. -- do because you've got a -- -- Euro tech
company we're doing to address and so sector system. -- to solve the problem
trying sentry key disease than does a great job buildings where you plug into
electricity people with knowledge in their heads. Price -- -- designing safe and
everybody in working somewhat healthcare system -- -- designed to deal with a
twenty centric healthcare challenges that non communicable chronic diseases. Use
the best technologies we have now and that means. Mobile devices where you
logon. It means soften the software and servers and -- -- in the crowd. --
services -- -- continue your -- your lifestyle your paperless title overturned a
buyer's doing you've got an adjustable velcro adjustment adjustable -- and
gather ideas -- patients who hasn't exactly so what were billed as a digestible
sensor designed specifically giving them -- -- right drugs so turns these
everyday medecins everybody users into digital devices. When they swallow every
vote today on -- side about what they swallowed had a quite some time -- --
exactly right yes and it's going to be powered completely by you so it's. This
devices built only from adjustable minerals. Things that you have your die
anyway if you know anything about Taylor Valerie Taylor Barry's made the -- the
magnesium even take over when you swallow all of our devices you cannot take --
job hello -- -- Jeff. So -- the -- and the sector -- -- go -- gonna work with so
it goes from your body into wearable devices. To your phone number -- the client
daily gets processor gets drop down into applications better designed to be
relevant to you in the situation -- so how we. Give -- to a patient or family if
there are now standard patient is different from of their heart failure patient
or hypertension -- diabetic patients just rebuild information right now we're
satellite phone companies are ones being -- morals. You know as a valid polling
data as a there's a lot of pressing questions about how I was just wasn't given
that. Yes so for us it's very clear architecture that the patient burns the data
if they want to share then they have the maker. A positive decision to do that
they can share with their family members regular position -- -- -- one they can
share with us if they think that as a company we can help them gain better
insight. Into their own health but that's choices they made so privacy in
sharing is a really important -- philosophical -- question. I'm -- -- what we're
giving -- ruler captain of the State's ability like -- -- positives of --
regulations. So what's -- plan. So about -- -- basin states we spent many years
working with US regulators I would say that while our very best assets as a
company is a partnership with -- with the US FDA -- summit -- -- with the
European medicines agency said the these devices. Laurie -- cleared and ready to
be built into. Obstacles. They face a life. A talked a lot about emerging
markets -- this morning emerging market woes. Proved costly for some asset
managers last year so where is 34 the time to play it safe to double down on
emerging markets or even. The push out along the risk over the frontier markets
joining me. And Richard CIO. Aberdeen asset management and thanks so much for
coming -- so early in the morning and plus that I saw you we're in Oxford
debating -- -- well I do want to talk about down again. I think lost activated
-- yes.
-- about Barclays it was it was very toughly. It's been very tough view there.
When you think this situation is going to recover about hanging in there will.
What's the timeframe. I think if you look at how major markets over performed
relative to developed markets. People think all the -- performance -- started
with that -- attention last year that's not actually true. The underperformance
of a major marker test -- markets goes back probably at least four years. If you
look at the progression of our earnings -- that underperformance elastic is
really quite stretched so given that the companies have continued to perform
really well. And for the most part -- emerging market space we think actually
it's quite good controlling called our -- already OK can you please state power
that you're really is saying -- absolutely do and you have to degree to screen
-- the politics and focus on. What companies are doing on the ground and the
companies that had been working all of these markets for a very long time --
Equity markets bore the brunt -- -- emerging market debt property very funds do
-- -- a lesser job -- just stick with those now would you go back into equities.
Think again it's not for the faint hearted necessarily because there's so many
elections coming up in emerging markets basically will inevitably see volatility
through this year. But I think for choice to say about volatility in the equity
side it's actually an opportunity it's not a threat it you can use that.
To get into Chinese companies at lower levels -- multiples the ability for us
over 2%. About runs sideways -- may have further reasons US. What what are we
gonna see -- doing in US this year. Well I think this year obviously we've done
a fairly major transaction which is poised to complete hopefully in the next
month or two. And which has -- you quick UK based transaction which is there and
investment management kind of like banks attitude as yet and that applies.
Trustee US is a huge market and we are relatively under represented -- I think.
For the time being our focus is very much on the organic side and trying to grow
our -- business organically there but it's such a huge market amid a small
acquisition last year for a -- of high yield. About the investment grade high
yield bonds a company called arterial. And I think if you could see the rightful
title might consider doing it. But turned you know for us it's really primarily
about organic growth in the short term.
Have equity markets just entity must do so on we know we are we going to see a
real pullback in equity markets are. How I don't think for analytics as a shot
of a really big surprise probably not. But -- -- -- clearly they've gone very
far very factors earlier bidder that -- steadying in short tensions were
slightly for a final question mentioned Oxford debate. I was about European --
debt user wants clear your audience and believe. When you look at what's
happening now in Europe and things start to recover -- just just still really
think that freezes over. I think Europe faces some very major problems on the
demographics are made I think deflation -- -- -- earlier and that's connect said
very recently deflation as a real -- in Europe. I have to say the periphery is
getting a little bit more traction perhaps some Portugal be one example than
people thought it would. And France and Italy in the middle actually probably
the biggest challenges for Europe frankness that as a long way to -- in Europe
as not dead yet to receive that -- part of -- excellent -- and thank you very
rightly that Richards Aberdeen Asset Management. Coming up about later in the
show.
BA systems chairman Richard Nowak tells us how he hopes to market defining
global defence spending that's -- the top of the -- But before we go work on
have party with a lot of -- who. The Korean government hopes to lure investment
we -- get together featuring food music and country he told the the back of that
international pop star side. Fallon who -- But anyway. Vioxx directly hallowed
-- one of the world's biggest accounts. Should know how corporate bottom lines
looking earlier I spoke at a handsome young CEO Marc Weinberger. -- a good
losers were -- about growth we're now talking about what may energy from crisis
to crisis. Gross natural growth is gonna come from getting people back to work
its gonna come from the energy in the -- biological disruptions very happening
in the workforce --
It's gonna come from getting government business working together. To address
some of the -- will look on economic issues you talk about employment ya what
5060000. This year yeah we're bullish in in virtually every market developed --
an emerging. 50000 this year looking for 60000 next year. We have a very young
workforce the average age is in the late twenties. -- -- cut -- -- youth
unemployment something very focused and we have to get people with the right
skills to be would come into our business like go the other employees. Number
one worry for CFOs and CEOs and your big clients. What I spoke you last year. It
was regulation was compliance it was it was China work out what's happening
where and when what does this. Well Citigroup question I think we're still
worried about regulation now we're gonna start seeing -- the enforcement. Under
regulations or written over the last couple years whether they be things like
dad -- called the accounting rules with things like there. -- -- a focus a low
under one off factors of production. Getting more people with the right skills
and in the workplace and that's what I think -- -- -- focus -- A -- white castle
looking a geopolitical issues and seeing where a different part of the world. It
is going to be any major government change so we have worked and what worries
you most what worries declines both geopolitical. Well we certainly why -- the
government sustain a win -- we look for hopefully the end of austerity in
government intervention and -- in the market forces comeback constructed drive
the overall -- -- Take -- obviously very. Real issue right now firfer -- clients
how you advising companies to prepare for the us. Well you know take three years
-- -- -- -- will be the right Novartis medical worried about tapering Ross were
about -- will stay tuned. A monetary policy which could have a negative effects
of you know we were hopeful that the government's gonna -- measured entrenched
parent approach. To reduce the amount of investment in his -- -- obligations
sort of what -- any increase in interest rates which would be one of the big
concerns we got out or increase inflation is -- And without without as a
backdrop what is is because it is the time horizon for investments getting
longer would you say. Quayle to good question -- they -- would be either calling
the title liabilities -- about sustainable growth. We are going to have
volatility especially in emerging markets and part of our businesses there. But
you have to work for what's gonna happen over the next 510 years and now --
focus and financial issues proper science and economic and social issues and
focus on creating a work -- for the future -- who you -- talking with --
Benedict any big names we should know about. -- -- -- -- -- -- -- -- -- -- -- --
-- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- --
-- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- China's economy didn't quite
-- expectations for growth to fall to a fourteen year low in 2030 but I wasn't
far off is a cool down inevitable nor will the fruits of reform. But the Jews
back into the country's growth engines -- -- -- -- -- chairman and CEO Citic
capital holdings part of China's sovereign wealth fund diverse have you in the
studio many thanks for coming -- What China need to do to move this economy
forward. China though clearly are on the whole team -- -- -- Amado hers who --
chorus. Nile. New stream -- our reforms I think the that couple -- gold the
year. Let's see that the company's priority therapy one on worry the higher.
Start our very -- told a framework for reform. And that's what we need. --
assured current I believe the economy.
Well will slow down their commercial slaughter. Utah about a third -- performs
what. What are spectacular have on the rest the world might look but the best
way to invest in them on these forms from the outside which has. Garden had I
think there as a short term impact -- a longer term impact. China has been done
me you -- German export to a marble and a is well law that's you -- style not
one a sustainable. And your soul you bother to at all. Tumbles to a domestic
consumption driven public our growth smuggle. It takes so long time and takes a
lot of pain. Saw you withdraw Karen all -- reform measures spelled -- some of
them naturally. Our -- hope growth rate as for example clamping down are on
local government spending and thoughtful forward. Some of the Mars probe royalty
in the sense that the -- Free deregulation. Allowing. Primary -- secretary last
month as. You're right what what sectors -- you focus on what -- deals. You
focus on right now. We are also leave -- causing -- sectors. Because
manufacturing sectors. Is characterised by a reckon has seen almost -- in you
know -- EU industry. -- sectors. As a do you know of -- of the bubble reports on
the economy is still above 46%. Soldiers are a lot of growth -- GMT. Healthcare
area. Tourism these -- the -- as well as property as -- -- Probably what you are
you worried about bubbles in the property really -- won't -- so -- -- without --
I think the property you all of the though you know is -- Sheen.
Many cities Barney had a hand you some of those cities is Bismarck number
probably believes the end of days or call. But there's -- we are -- more aren't
secondary cities laurel regional models of these -- the year. Do we believe via
word that the valley cities like. So it is like trump shah hard day visa
provincial capital. Do you recently started a multi strategy hedge fund -- Yes
theme is gonna lead Chinese money leaves in China where -- most of that money
going. We are sending out precisely the time did the events fall. -- -- for --
-- soul's soul were setting up plus why me it's more based start. Asset
allocation rather down you know purely -- -- Drummond a formula which expects
the other private equity companies another big investors doing the same sort of
thing. Our I've given you my community are many many early. Chinese flows are --
the world for our you know -- -- seizing mustn't pocket change and thanks for
talking with us -- naked.
25% of America's -- don't graduate from high school on time or drop out
altogether the tech pioneers at. Think the solution lies in computer games. Our
reporter Michael a -- caught up with cofounder Alan Gershon sarwar mastered how
to explain how. We partner with foundations government agencies nonprofits and
universities to take the best research on how off the power deems digital deems
-- -- experiences. Can tackle the biggest challenge as a society education and
workforce development health.
Who used to work at Activision so responsible some of the big big titles of the
gaming world the last few years then -- -- if these guys that made those games.
Into this project -- interesting has a lot of the breaking designers are having
kids they've had a lot of success -- want to make another first person -- they
want to harness that Kraft. To empower -- And so it's fascinating to bring them
together with a leading -- scientists -- the subject matter experts. And
figuring out how to craft new solutions to these very very serious challenge --
here are people that say that playing computer games all the time is detrimental
to. Basic skills like conversation what's your take on that increasingly -- --
building design whoops wearer to a built in your digital game you have to do
real -- Activities so we're working on the civic engagement -- -- FaceBook -