WEBVTT - Novo Plunges, Santander Drops, LSEG Dips

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<v Speaker 1>Bloomberg Audio Studios, podcasts, radio news.

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<v Speaker 2>The Stock Movers Report, your roundup of companies making moves

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<v Speaker 2>in the stock market, harnessing the power of Bloomberg Data.

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<v Speaker 3>Now let's have a look at some of the individual

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<v Speaker 3>stocks on the move today here in Europe. I'm Caroline

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<v Speaker 3>Hepget and I'm joined by Bloomberg reporta Chloe Malay. So

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<v Speaker 3>we have a major route I think you have to

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<v Speaker 3>call it that for Nova Nordisks Shares. Why Yeah, and

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<v Speaker 3>a very very tough morning for Novo. So the reason

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<v Speaker 3>why is because it expects a very steep drop in

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<v Speaker 3>sales in twenty twenty six, and that is because it's

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<v Speaker 3>facing a lot of pricing pressure. So there's two main

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<v Speaker 3>reasons behind that.

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<v Speaker 1>There's, first of all, pricing pressure coming from the Trump

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<v Speaker 1>Administration's efforts to cap the price of drugs in the US.

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<v Speaker 1>And then there's also pricing pressure coming from a growing

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<v Speaker 1>price war between all of the companies that operate in

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<v Speaker 1>that obesity space. So that includes of course Nova's biggest rival,

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<v Speaker 1>Elay Lilly, but then also all of the smaller companies

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<v Speaker 1>that are selling those cheaper copycat versions of weight loss drugs.

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<v Speaker 1>So there's a lot of pricing pressure for Nova, and

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<v Speaker 1>it's really feeling that hit. And twenty twenty five had

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<v Speaker 1>already been a very difficult year for the company. There

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<v Speaker 1>had been leadership changes that had really rattled investors quite

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<v Speaker 1>a bit. Of course, that competition that I've just mentioned,

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<v Speaker 1>and also quite a few setbacks in terms of drug trials,

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<v Speaker 1>and so the results today were really an opportunity for

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<v Speaker 1>Nova to reassure the market, but instead they've painted a

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<v Speaker 1>very bleak picture of what can be expected for this year.

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<v Speaker 1>One bright spot maybe the obesity bill that Nova is launched.

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<v Speaker 1>Apparently that has been quite a strong launch, so we'll

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<v Speaker 1>see if that's actually enough to offset all of those

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<v Speaker 1>other challenges.

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<v Speaker 3>Yeah, I read in the Dow Jones apparently there are

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<v Speaker 3>one hundred and seventy thousand people on that tree and

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<v Speaker 3>in the first four weeks. So yeah, that report of

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<v Speaker 3>the pill, you know, being taken up swiftly. But as

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<v Speaker 3>you say, pricing pressures, I think you've made that really

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<v Speaker 3>clear in lots of different areas for Nova nor Disk.

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<v Speaker 3>Bloomberg's been speaking to the CEO about it. Also. What

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<v Speaker 3>about the bank earnings though, take us through Santander, a

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<v Speaker 3>big deal for the business is they've really head to

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<v Speaker 3>North America.

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<v Speaker 1>Yeah, yeah, they really do. So they are buying a

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<v Speaker 1>Webster Financial in a twelve billion dollar deal, so really

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<v Speaker 1>really big acquisition. And so this marks an expansion in

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<v Speaker 1>the US for Santander, and that is part of the

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<v Speaker 1>company's broader strategy of wanting to expand in growth markets

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<v Speaker 1>and maybe cutting back a little bit more from the

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<v Speaker 1>exposure that it has to Europe and shows. We're actually

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<v Speaker 1>down this morning with Alis saying that the deal might

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<v Speaker 1>not be super well received because shareholders would have maybe

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<v Speaker 1>preferred more shareholder returns rather than rather than the deal.

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<v Speaker 1>And there's also some questions about how tricky the integration

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<v Speaker 1>is going to be for those two companies, given that

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<v Speaker 1>Santander has to integrate both Webster and TSB as well,

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<v Speaker 1>which had brought back in July at the same time.

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<v Speaker 1>So any successful integration will be really key and perhaps

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<v Speaker 1>once that transition period is over, will be able to

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<v Speaker 1>see the benefits a little more clearly. It's quite an

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<v Speaker 1>interesting move for Santandier because it's now one of the

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<v Speaker 1>very few European banks to gain that foothold and want

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<v Speaker 1>to grow that foothold in the US. You know, BBVA

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<v Speaker 1>sold as US operations, BNP exited the US retail market,

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<v Speaker 1>so it's definitely kind of doing something that is kind

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<v Speaker 1>of against the grain a little bit.

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<v Speaker 3>Yes, that's interesting. So that on banks. Then what about

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<v Speaker 3>the continuation of the AI disruption trade because it is

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<v Speaker 3>affecting a number of names, including LSEG in Europe.

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<v Speaker 1>Yeah, so that is definitely continuing today after the massive

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<v Speaker 1>sell off in those software and financial services stocks that

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<v Speaker 1>we saw yesterday, after of course, Anthropic announced this new

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<v Speaker 1>AI tour to automate legal work, and investors saw that

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<v Speaker 1>as another sign that AI might be a major disruptor

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<v Speaker 1>to those software companies, and so they rush to limit

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<v Speaker 1>their exposure to any company that might be seen as

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<v Speaker 1>an AI loser, and LSEG is seen as one of those,

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<v Speaker 1>you know, provides software data analytics tools to financial professionals

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<v Speaker 1>like research analysts or traders, and the worry is that

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<v Speaker 1>AA tools might actually be able to do this faster

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<v Speaker 1>and cheaper, and so that is really dragging down those

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<v Speaker 1>shares in LSEG. This morning, JPMorgan analysts did say that

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<v Speaker 1>software and it services stocks were being sentenced before trial

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<v Speaker 1>by investors and part of This might perhaps be a

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<v Speaker 1>little bit of an overreaction, but there has been growing

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<v Speaker 1>concerns and it looks like what was perhaps more more

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<v Speaker 1>intangible worry is now become a lot more a lot

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<v Speaker 1>more tangible for investors.

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