1
00:00:02,759 --> 00:00:05,200
Speaker 1: Good morning. It's one day, the thirteenth of November here

2
00:00:05,200 --> 00:00:07,640
Speaker 1: in London. This is the BlueBag Daybreak podcast.

3
00:00:07,720 --> 00:00:10,799
Speaker 2: I'm Caroline Hepki and I'm Stephen Carroll. Coming up today,

4
00:00:10,920 --> 00:00:14,040
Speaker 2: Talks continue to secure the release of hostages held in

5
00:00:14,120 --> 00:00:16,840
Speaker 2: Gaza as the death toll on the ground rises.

6
00:00:17,400 --> 00:00:21,520
Speaker 1: UK house prices dramatically drop as boring costs rise and

7
00:00:21,600 --> 00:00:22,720
Speaker 1: buyers dry up.

8
00:00:23,239 --> 00:00:27,760
Speaker 2: Plus Britain's two hundred and sixty two billion pound trust problem,

9
00:00:27,840 --> 00:00:31,400
Speaker 2: a special report on a uniquely British investment challenge.

10
00:00:31,520 --> 00:00:33,680
Speaker 1: Let's start with a roundup of our top stories.

11
00:00:35,000 --> 00:00:37,720
Speaker 2: Senior officials in Israel and the United States say talks

12
00:00:37,760 --> 00:00:41,480
Speaker 2: about securing the release of Hamas held hostages are intensifying.

13
00:00:41,920 --> 00:00:44,720
Speaker 2: More than two hundred people were forcibly taken to Gaza

14
00:00:44,800 --> 00:00:48,720
Speaker 2: during the October seventh attack on Israel. Speaking to NBC's

15
00:00:48,760 --> 00:00:51,320
Speaker 2: Meet the Press, as Raeli Prime Minister Benjaminettania, who was

16
00:00:51,360 --> 00:00:54,840
Speaker 2: asked if a deal to secure their return may be possible,

17
00:00:55,000 --> 00:00:55,760
Speaker 2: There could.

18
00:00:55,520 --> 00:00:57,200
Speaker 3: Be, but I think the less I said about it,

19
00:00:57,200 --> 00:00:57,760
Speaker 3: the more I've.

20
00:00:57,640 --> 00:00:59,800
Speaker 4: Increased the chancels that it materializes.

21
00:01:00,040 --> 00:01:02,640
Speaker 3: And it's a result of pressure, military pressure.

22
00:01:03,600 --> 00:01:05,720
Speaker 2: Those comments from the Israeli leader were echoed over the

23
00:01:05,720 --> 00:01:09,440
Speaker 2: weekend by the White House's National Security Advisor, Jack Sullivan,

24
00:01:09,480 --> 00:01:12,040
Speaker 2: teld NBC News that a number of countries are involved

25
00:01:12,080 --> 00:01:12,720
Speaker 2: in the talks.

26
00:01:12,880 --> 00:01:17,640
Speaker 5: There are ongoing negotiations involving the Israelis, the cutteries, and

27
00:01:17,760 --> 00:01:21,360
Speaker 5: we the United States are actively engaged in this as well,

28
00:01:21,400 --> 00:01:23,960
Speaker 5: because we want to make sure that we bring home

29
00:01:24,400 --> 00:01:27,360
Speaker 5: those Americans who have been taken hostage, as well as

30
00:01:27,400 --> 00:01:28,720
Speaker 5: all of the other hostages.

31
00:01:29,400 --> 00:01:31,920
Speaker 2: Jack Sullivan's remarks came as President Biden spoke to the

32
00:01:31,920 --> 00:01:34,960
Speaker 2: Amir of Katar about efforts to secure the release of

33
00:01:35,000 --> 00:01:38,960
Speaker 2: additional hostages. The two leaders also discussed efforts to increase

34
00:01:39,000 --> 00:01:41,440
Speaker 2: the flow of humanitarian assistance to Gaza.

35
00:01:42,200 --> 00:01:45,720
Speaker 1: The hostage negotiations come as israel As military continues its

36
00:01:45,760 --> 00:01:49,840
Speaker 1: offensive against Hamas in Gaza, engaging in ground battles in

37
00:01:49,880 --> 00:01:54,240
Speaker 1: a northern refugee camp. The United Nations says that shelling

38
00:01:54,280 --> 00:01:57,920
Speaker 1: has increased around hospitals there, with several being directly hit.

39
00:01:58,520 --> 00:02:02,680
Speaker 1: Tom Potoka is the chief surgeon for the International Committee

40
00:02:02,760 --> 00:02:07,040
Speaker 1: of the Red Cross in Gaza. He described the conditions there.

41
00:02:07,080 --> 00:02:12,240
Speaker 3: Still relentless, still bombardment every night, one very close half

42
00:02:12,280 --> 00:02:14,360
Speaker 3: past one this morning, that whistled over the top of

43
00:02:14,360 --> 00:02:19,040
Speaker 3: the building. We're in, still patients arriving, still inundated, with

44
00:02:20,760 --> 00:02:26,560
Speaker 3: internally displaced people, so not really getting any better.

45
00:02:28,000 --> 00:02:31,440
Speaker 1: Tom Pottercar's account in a video diary comes as the

46
00:02:31,480 --> 00:02:35,320
Speaker 1: Palestine Red Crescent Society so that Al Kudz Hospital in

47
00:02:35,360 --> 00:02:38,799
Speaker 1: Gaza City is no longer operational because of a lack

48
00:02:38,840 --> 00:02:42,840
Speaker 1: of fuel. Israel's military says that her Mass, designated a

49
00:02:42,960 --> 00:02:46,040
Speaker 1: terror organization by the US and EU has a command

50
00:02:46,160 --> 00:02:50,320
Speaker 1: center underneath the medical center, something the group has denied.

51
00:02:50,840 --> 00:02:53,519
Speaker 1: The Mass run Health Ministry says that more than eleven

52
00:02:53,639 --> 00:02:56,920
Speaker 1: thousand people have now been killed in the fighting in Gaza,

53
00:02:57,200 --> 00:02:58,960
Speaker 1: including thousands of children.

54
00:03:00,160 --> 00:03:03,520
Speaker 2: UK Prime Minister Hi Sunak is considering a cabinet reshuffle

55
00:03:03,560 --> 00:03:07,360
Speaker 2: after extremist groups clashed with police on Armistice Day. His

56
00:03:07,440 --> 00:03:09,680
Speaker 2: Home Secretary so while a Bravman has been blamed for

57
00:03:09,720 --> 00:03:13,839
Speaker 2: inciting the far right with her rhetoric against pro Palestine protests,

58
00:03:14,160 --> 00:03:17,040
Speaker 2: Defend Secretary Grant Shaps was asked if Bravman would still

59
00:03:17,080 --> 00:03:18,880
Speaker 2: be in a job next week, as you.

60
00:03:18,880 --> 00:03:21,240
Speaker 3: Know, and I know, well, a week's a long time

61
00:03:21,240 --> 00:03:23,480
Speaker 3: in politics, and I never made predictions about these things.

62
00:03:23,480 --> 00:03:24,840
Speaker 2: As I say, it's some tiny matter.

63
00:03:24,639 --> 00:03:25,360
Speaker 6: For the Prime Minister.

64
00:03:26,080 --> 00:03:28,720
Speaker 2: In addition to Shapps's comments, two Cabinet members have told

65
00:03:28,720 --> 00:03:32,160
Speaker 2: Bloomberg that Bravman's challenge to the Prime Minister's authority made

66
00:03:32,160 --> 00:03:33,679
Speaker 2: her position untenable.

67
00:03:34,800 --> 00:03:37,840
Speaker 1: Now, the leaders of the world's two superpowers meet this week,

68
00:03:37,960 --> 00:03:41,960
Speaker 1: and Bloomberg estimates an economic partnership where trillions of dollars

69
00:03:42,040 --> 00:03:45,080
Speaker 1: is on the line. Joe Biden and Shijingping are looking

70
00:03:45,120 --> 00:03:48,880
Speaker 1: to thaw their frosty relationship as both faced political and

71
00:03:48,960 --> 00:03:54,000
Speaker 1: economic headwinds. US Treasury Secretary Janet Yellen hosted China's Economics

72
00:03:54,000 --> 00:03:57,960
Speaker 1: are last week in preparation for she's visit. She says

73
00:03:58,000 --> 00:04:00,440
Speaker 1: the aim of the talks is to find a healthy

74
00:04:00,600 --> 00:04:02,040
Speaker 1: economic relationship.

75
00:04:02,440 --> 00:04:06,080
Speaker 6: We do not seek to decouple our economy from China's.

76
00:04:06,720 --> 00:04:09,800
Speaker 6: This would be damaging to both the US and China

77
00:04:10,320 --> 00:04:12,440
Speaker 6: and destabilizing for the world.

78
00:04:13,760 --> 00:04:18,640
Speaker 1: Yellen's comments come after years where economic priorities have taken

79
00:04:18,760 --> 00:04:21,880
Speaker 1: second place to security concerns. The White House says that

80
00:04:21,960 --> 00:04:25,000
Speaker 1: its priority for the summit is to restart US China

81
00:04:25,200 --> 00:04:29,400
Speaker 1: military communications, which were severed last year in a dispute

82
00:04:29,480 --> 00:04:30,839
Speaker 1: about Taiwan.

83
00:04:31,440 --> 00:04:33,960
Speaker 2: Asking prices for homes in the UK saw their biggest

84
00:04:34,000 --> 00:04:36,880
Speaker 2: fall in the month of November since twenty eighteen. Bloombergs

85
00:04:36,880 --> 00:04:38,160
Speaker 2: tiwa Adabaio has more.

86
00:04:38,520 --> 00:04:41,719
Speaker 7: The property portal right Move says the average asking price

87
00:04:41,760 --> 00:04:44,400
Speaker 7: for a UK home dropped by one point seven percent,

88
00:04:44,839 --> 00:04:47,159
Speaker 7: the biggest discount scene at this time of year in

89
00:04:47,279 --> 00:04:51,400
Speaker 7: five years. That's slicing an average of six thousand pounds

90
00:04:51,400 --> 00:04:54,600
Speaker 7: of price tags, with the biggest falls seen in London

91
00:04:54,720 --> 00:04:58,320
Speaker 7: and the Southeast. The number of sales agreed was also

92
00:04:58,440 --> 00:05:02,640
Speaker 7: down by ten percent compared to pre pandemic levels. Landlords

93
00:05:02,640 --> 00:05:05,320
Speaker 7: are under pressured too, from the highest interest rates in

94
00:05:05,440 --> 00:05:09,880
Speaker 7: fifteen years. Data from Hampton's International shows buy to let

95
00:05:09,880 --> 00:05:13,200
Speaker 7: property deals slumping by more than a quarter this year

96
00:05:14,040 --> 00:05:16,800
Speaker 7: in London. Tiwa Adebayo Bloomberg Radio.

97
00:05:17,920 --> 00:05:20,800
Speaker 1: The people of Iceland are bracing for what could be

98
00:05:20,880 --> 00:05:25,240
Speaker 1: the most devastating volcanic eruption in fifty years. Authorities say

99
00:05:25,279 --> 00:05:28,960
Speaker 1: that there's a significant likelihood of magma reaching the surface

100
00:05:29,040 --> 00:05:33,320
Speaker 1: in the coming days. The town of Grindovik, home to

101
00:05:33,680 --> 00:05:36,839
Speaker 1: over three thy six hundred people, risks being wiped out

102
00:05:37,040 --> 00:05:41,320
Speaker 1: entirely by the blast. Experts say that an explosion spewing

103
00:05:41,440 --> 00:05:45,279
Speaker 1: volcanic ash cannot be ruled out in the event of

104
00:05:45,320 --> 00:05:48,840
Speaker 1: an eruption. Now, there is a fascinating read on the

105
00:05:48,839 --> 00:05:53,520
Speaker 1: Bloomberg Terminal over the weekend about Shijingping and his relationship

106
00:05:53,520 --> 00:05:57,359
Speaker 1: to a group of Iowans. Apparently, when he was quite young,

107
00:05:57,400 --> 00:05:59,760
Speaker 1: at kind of a young official, he spent a couple

108
00:05:59,800 --> 00:06:02,800
Speaker 1: of weeks on a kind of fact finding trip to

109
00:06:02,880 --> 00:06:06,320
Speaker 1: Iowa and created this or got this kind of bond

110
00:06:06,400 --> 00:06:10,920
Speaker 1: with local people who took him around to see agricultural towns,

111
00:06:11,000 --> 00:06:14,440
Speaker 1: the Iowa State University, in various different kind of businesses

112
00:06:14,440 --> 00:06:17,400
Speaker 1: to see how agriculture worked there. And he's kept in

113
00:06:17,480 --> 00:06:19,640
Speaker 1: touch with that same group the whole way long, and

114
00:06:19,640 --> 00:06:22,000
Speaker 1: apparently he's going to see them when he's visiting San Francisco.

115
00:06:22,080 --> 00:06:24,000
Speaker 2: Yeah, they've been invited to a reception and dinner on

116
00:06:24,040 --> 00:06:27,520
Speaker 2: the sidelines of the APEC meeting, which this was ANICE

117
00:06:27,600 --> 00:06:29,640
Speaker 2: reunion for them as well. There's some great detail on

118
00:06:29,680 --> 00:06:31,520
Speaker 2: the story about like I'm sleeping in one of the

119
00:06:31,600 --> 00:06:34,760
Speaker 2: child children's bedrooms that were Star Treks themed. Yes at

120
00:06:34,760 --> 00:06:37,480
Speaker 2: the time, this is the mid eighties, so look, a

121
00:06:37,600 --> 00:06:40,000
Speaker 2: very interesting aspect of this story is, of course we're

122
00:06:40,000 --> 00:06:42,560
Speaker 2: thinking very much about US China relations in the week

123
00:06:42,560 --> 00:06:43,400
Speaker 2: of that important meeting.

124
00:06:43,480 --> 00:06:45,719
Speaker 1: I think it's totally fascinating that, you know, the personal

125
00:06:45,920 --> 00:06:48,039
Speaker 1: is politics, and one of them joke that they still

126
00:06:48,040 --> 00:06:51,320
Speaker 1: couldn't quite understand the I ones. That is why this

127
00:06:51,560 --> 00:06:54,920
Speaker 1: now all powerful sort of Chinese leader is still so

128
00:06:55,040 --> 00:06:57,400
Speaker 1: friendly with them. But of course very very open to

129
00:06:57,440 --> 00:07:00,640
Speaker 1: the meeting. Yet it was a really very testing piece

130
00:07:00,680 --> 00:07:01,000
Speaker 1: over the.

131
00:07:00,920 --> 00:07:04,640
Speaker 2: Weekend this as President Biden has been discussing the urgent

132
00:07:04,720 --> 00:07:07,960
Speaker 2: need to secure the release of Hamas held hostages in

133
00:07:08,000 --> 00:07:12,520
Speaker 2: Gaza as Israel's military continues their offensive, including ground battles

134
00:07:12,680 --> 00:07:15,360
Speaker 2: in Gaza. The US President, as we've been saying, meeting

135
00:07:15,360 --> 00:07:17,720
Speaker 2: face to face with China's Chujing Ping in San Francisco

136
00:07:17,800 --> 00:07:20,040
Speaker 2: on Wednesday of this week, joining US Now to discuss

137
00:07:20,040 --> 00:07:23,200
Speaker 2: Blinbrog's EMA and news director Razdin Matheson Ras, Good morning

138
00:07:23,240 --> 00:07:25,720
Speaker 2: to you on the first of all, on the issue

139
00:07:25,760 --> 00:07:28,320
Speaker 2: of the hostages in Gaza. What do we know about

140
00:07:28,360 --> 00:07:30,080
Speaker 2: the latest and the attempts at negotiation.

141
00:07:30,560 --> 00:07:32,000
Speaker 8: Well, as you was saying, we know that the US

142
00:07:32,120 --> 00:07:34,880
Speaker 8: President Joe Biden spoke with Ya Mirror of Qatar, and

143
00:07:34,960 --> 00:07:38,280
Speaker 8: Qatar has been real key player in all of this

144
00:07:38,440 --> 00:07:42,680
Speaker 8: a conduit in the conversations around the hostages, not just

145
00:07:42,760 --> 00:07:46,120
Speaker 8: in this war, but also in other issues in recent times,

146
00:07:46,160 --> 00:07:50,080
Speaker 8: including the war between Russia and Ukraine, and so Kata's

147
00:07:50,200 --> 00:07:53,640
Speaker 8: increasingly seeing itself as an intermediary in all of these

148
00:07:53,680 --> 00:07:55,840
Speaker 8: and able to be seen as a good faith actor

149
00:07:55,880 --> 00:07:59,240
Speaker 8: on all sides, which is really important in these conversations.

150
00:07:59,240 --> 00:08:01,800
Speaker 8: But they're extraly delicate. So what we know is they

151
00:08:01,840 --> 00:08:05,040
Speaker 8: seem to be inching forward, but only inching. We're getting

152
00:08:05,080 --> 00:08:07,680
Speaker 8: a lot of caution from Israel that they're not yet

153
00:08:07,720 --> 00:08:11,040
Speaker 8: near a deal, because it's very difficult for Israel to agree,

154
00:08:11,080 --> 00:08:15,800
Speaker 8: for example, to hand back some Hummas prisoners to Gaza

155
00:08:16,160 --> 00:08:20,600
Speaker 8: in exchange for the Israeli nationals. Hammas, meanwhile, seems to

156
00:08:20,600 --> 00:08:25,040
Speaker 8: be okay to maybe release foreign hostages who hold US

157
00:08:25,160 --> 00:08:29,800
Speaker 8: passports Australian passports, but less willing to release Israeli nationals.

158
00:08:29,800 --> 00:08:32,680
Speaker 8: So it's inching forward maybe, but not yet signs of

159
00:08:32,679 --> 00:08:33,040
Speaker 8: a deal.

160
00:08:33,640 --> 00:08:37,040
Speaker 1: Meanwhile, the ground war continues, it sees more casualties. There

161
00:08:37,080 --> 00:08:40,480
Speaker 1: is also more pressure increasing on Israel. Israel says Hamas

162
00:08:40,559 --> 00:08:44,560
Speaker 1: is using hospitals as command centers, but the fighting is

163
00:08:44,600 --> 00:08:46,960
Speaker 1: certainly becoming what do we know about the fighting.

164
00:08:47,280 --> 00:08:50,480
Speaker 8: Well, we know the fighting's really intense around these hospitals

165
00:08:50,520 --> 00:08:53,480
Speaker 8: in the north of Gaza. There's several key hospitals in

166
00:08:53,520 --> 00:08:56,000
Speaker 8: the area. We know a lot of people moved into

167
00:08:56,040 --> 00:08:59,560
Speaker 8: the hospital grounds to seek shelter when the war broke out.

168
00:09:00,000 --> 00:09:02,760
Speaker 8: We know that the international aid agencies say that some

169
00:09:02,800 --> 00:09:06,040
Speaker 8: of those hospitals have now run out of fuel and

170
00:09:06,080 --> 00:09:09,920
Speaker 8: they're struggling to maintain contacts. So certainly a focus of

171
00:09:09,960 --> 00:09:14,000
Speaker 8: the humanitarian disaster inside Gaza. But also, as you say,

172
00:09:14,200 --> 00:09:18,160
Speaker 8: Israel says that Hamas uses these hospitals as staging points

173
00:09:18,160 --> 00:09:21,319
Speaker 8: for their attacks. That's where some of their command center's ars,

174
00:09:21,360 --> 00:09:24,800
Speaker 8: where the tunnels fan out. So it's extremely tricky because

175
00:09:24,920 --> 00:09:27,400
Speaker 8: Israel says, well, these are places we need to attack

176
00:09:27,960 --> 00:09:31,480
Speaker 8: because Hamas is using them and essentially using the people

177
00:09:31,880 --> 00:09:35,720
Speaker 8: of Gas. Are there for protection. International agencies and others

178
00:09:35,720 --> 00:09:39,480
Speaker 8: and doctors say well that's possibly the case. Harmas denies it,

179
00:09:39,520 --> 00:09:42,040
Speaker 8: of course, but there's also a lot of civilians in

180
00:09:42,080 --> 00:09:45,040
Speaker 8: the area, so it's extremely tricky and we can see

181
00:09:45,080 --> 00:09:48,080
Speaker 8: warnings that the casualties may increase obviously as the fighting

182
00:09:48,080 --> 00:09:49,040
Speaker 8: in those areas does.

183
00:09:50,040 --> 00:09:52,480
Speaker 2: When we think taking a step back of the events

184
00:09:52,480 --> 00:09:54,760
Speaker 2: directly occurring in the Middle East and thinking about the

185
00:09:54,800 --> 00:09:57,360
Speaker 2: international diplomacy behind all of this as well. We have

186
00:09:57,440 --> 00:10:01,679
Speaker 2: that meeting between Joe Biden and shooting being happening this week.

187
00:10:01,760 --> 00:10:04,520
Speaker 2: What is China's place and all of this. It's attitude

188
00:10:04,520 --> 00:10:05,600
Speaker 2: to the events in the Middle.

189
00:10:05,360 --> 00:10:07,840
Speaker 8: East, Well, China has been very cautious about it, not

190
00:10:07,880 --> 00:10:10,360
Speaker 8: really wanting to get drawn into it. We know from

191
00:10:10,400 --> 00:10:12,560
Speaker 8: the comments so far they say that the lives of

192
00:10:12,600 --> 00:10:17,559
Speaker 8: everybody in this matter Israelis and Palestinians equally. They've supported

193
00:10:17,840 --> 00:10:20,600
Speaker 8: the cause from Arab nations for a cease fire, but

194
00:10:20,720 --> 00:10:23,280
Speaker 8: certainly a sense of not really wanting to get drawn

195
00:10:23,320 --> 00:10:25,679
Speaker 8: in frankly, to a fight that they see is not

196
00:10:25,720 --> 00:10:29,040
Speaker 8: really in their interest. What will be interesting from the

197
00:10:29,080 --> 00:10:32,400
Speaker 8: meeting between Joe Biden and Sieging Ping is that the

198
00:10:32,520 --> 00:10:34,960
Speaker 8: US President will no doubt use that to lean on

199
00:10:35,000 --> 00:10:37,800
Speaker 8: Sieging Ping to use his leverage in turn with Iran

200
00:10:37,960 --> 00:10:41,280
Speaker 8: and to say can you please convey messages again to

201
00:10:41,360 --> 00:10:44,840
Speaker 8: Tehran not to allow this conflict to spiral and extend.

202
00:10:45,760 --> 00:10:47,959
Speaker 8: You know, the US believes that China has a fair

203
00:10:48,000 --> 00:10:51,680
Speaker 8: amount of leverage with Iran. It's possibly not as strong

204
00:10:51,720 --> 00:10:54,000
Speaker 8: as the US might think it is, but certainly you'll

205
00:10:54,000 --> 00:10:56,280
Speaker 8: get that message very much from Joe Biden during that

206
00:10:56,360 --> 00:10:57,120
Speaker 8: meeting this week.

207
00:10:58,120 --> 00:11:01,080
Speaker 1: The US China relationship, of course, has been frosty on

208
00:11:01,120 --> 00:11:05,319
Speaker 1: a kind of bigger take has does this show a

209
00:11:05,440 --> 00:11:06,480
Speaker 1: kind of thawing at all.

210
00:11:06,760 --> 00:11:09,080
Speaker 8: Well, it's been a really big build up to this meeting.

211
00:11:09,600 --> 00:11:13,080
Speaker 8: It's been months and months and months of careful diplomacy,

212
00:11:13,160 --> 00:11:16,880
Speaker 8: of shuttling back and forth between US and Chinese officials,

213
00:11:17,160 --> 00:11:21,439
Speaker 8: increasing in seniority, meeting each other, pointing towards this meeting.

214
00:11:21,920 --> 00:11:24,679
Speaker 8: And certainly it's not going to be a magic fix

215
00:11:24,880 --> 00:11:27,440
Speaker 8: for their relationship, but the main thing is it helps

216
00:11:27,480 --> 00:11:30,559
Speaker 8: them put a flaw under the relationship so at least

217
00:11:30,640 --> 00:11:33,280
Speaker 8: prevents it from getting worse in a way. And they've

218
00:11:33,280 --> 00:11:36,320
Speaker 8: both got an interest in having this meeting happen. Seaging

219
00:11:36,400 --> 00:11:39,160
Speaker 8: Ping needs his economy to improve, so it needs the

220
00:11:39,240 --> 00:11:42,320
Speaker 8: US to take the pressure off. For the US also

221
00:11:42,720 --> 00:11:45,320
Speaker 8: doesn't really need tensions with China being so high at

222
00:11:45,320 --> 00:11:48,280
Speaker 8: the moment, with so many other problems around the world,

223
00:11:48,679 --> 00:11:50,120
Speaker 8: so it's probably not going to lead to a lot

224
00:11:50,160 --> 00:11:52,960
Speaker 8: of tangibles. But the fact that it's happening in itself

225
00:11:53,040 --> 00:11:53,800
Speaker 8: is quite notable.

226
00:11:54,000 --> 00:11:56,400
Speaker 2: Okay, Rosin Matson, right, Yemian News director, thank you very

227
00:11:56,480 --> 00:11:57,600
Speaker 2: much for joining us this morning.

228
00:11:58,480 --> 00:12:01,080
Speaker 1: Now we turn our attention masters here in the UK,

229
00:12:01,240 --> 00:12:05,080
Speaker 1: when interest rates were low, this sector boomed. Now the

230
00:12:05,120 --> 00:12:09,600
Speaker 1: pressure is piling on the UK's investment trust sector. There

231
00:12:09,600 --> 00:12:12,360
Speaker 1: could be a reckoning coming for it. It's worth two

232
00:12:12,440 --> 00:12:15,960
Speaker 1: hundred and sixty two billion pounds. The average UK trust

233
00:12:16,000 --> 00:12:19,520
Speaker 1: is now trading at a sixteen percent discount to asset value.

234
00:12:19,520 --> 00:12:22,480
Speaker 1: That's the most since the global financial crisis. Johnning's now

235
00:12:22,480 --> 00:12:26,080
Speaker 1: to discuss is Bloomberg's cross asset markets, reported Justina Lee,

236
00:12:26,320 --> 00:12:28,720
Speaker 1: just in the Good Morning. I mean, first, just explain,

237
00:12:28,920 --> 00:12:32,600
Speaker 1: I suppose exactly what an investment trust is. What makes

238
00:12:32,640 --> 00:12:35,720
Speaker 1: it different from a mutual fund in ETF. You know,

239
00:12:36,160 --> 00:12:38,240
Speaker 1: they're quite they're quite widely used in the UK.

240
00:12:40,120 --> 00:12:43,960
Speaker 4: Yeah, exactly. The biggest difference between them and a mutual

241
00:12:44,000 --> 00:12:47,040
Speaker 4: funder a ETF is how they raise the cash in

242
00:12:47,080 --> 00:12:50,719
Speaker 4: the first place. What happens with investment trust is that

243
00:12:50,800 --> 00:12:54,000
Speaker 4: when they want to raise money, they actually start by

244
00:12:54,080 --> 00:12:56,800
Speaker 4: doing an IPO, so they get listed on a stock

245
00:12:56,880 --> 00:13:00,840
Speaker 4: exchange and then they take money from investors. At that

246
00:13:01,040 --> 00:13:03,760
Speaker 4: step and then they invest in, you know, whatever they're

247
00:13:03,760 --> 00:13:08,319
Speaker 4: supposed to invest in. And the purpose of that is that,

248
00:13:08,640 --> 00:13:11,280
Speaker 4: you know, when you want to cash out of an

249
00:13:11,320 --> 00:13:15,120
Speaker 4: investment trust, you actually sell your shares and so it

250
00:13:15,120 --> 00:13:20,080
Speaker 4: doesn't actually affect you know, the investments itself, and so

251
00:13:20,960 --> 00:13:24,160
Speaker 4: the perk is supposed to be that it lets the

252
00:13:24,200 --> 00:13:28,240
Speaker 4: investment managers kind of think about everything in the long

253
00:13:28,360 --> 00:13:31,480
Speaker 4: term because they don't need to worry about the direct

254
00:13:31,559 --> 00:13:34,760
Speaker 4: effect of redemptions. They're not the ones giving you cash

255
00:13:34,880 --> 00:13:39,000
Speaker 4: directly when you redeem. But the flip side of that

256
00:13:39,240 --> 00:13:42,520
Speaker 4: is it means that the trust, when trades in the

257
00:13:42,559 --> 00:13:45,480
Speaker 4: stock exchange, it can trade at a discount to the

258
00:13:45,559 --> 00:13:50,080
Speaker 4: net asset value of the underlying holdings of that trust.

259
00:13:50,240 --> 00:13:52,280
Speaker 4: And that is exactly what we're seeing right now.

260
00:13:52,920 --> 00:13:55,319
Speaker 2: To see why are these trusts so big in the.

261
00:13:55,360 --> 00:13:59,079
Speaker 4: UK, Well, some people would say that it's partly a

262
00:13:59,240 --> 00:14:02,400
Speaker 4: historical work. I mean, the first investment trust in the

263
00:14:02,400 --> 00:14:05,840
Speaker 4: whole world was actually established in the UK to buy

264
00:14:05,880 --> 00:14:09,160
Speaker 4: government bonds, and that was back in eighteen sixty eight.

265
00:14:09,880 --> 00:14:12,959
Speaker 4: But part of it is also a reflection of the

266
00:14:13,000 --> 00:14:16,520
Speaker 4: macro environment we've been until recent years. I mean since

267
00:14:16,559 --> 00:14:20,400
Speaker 4: the global financial crisis, yields have been at zero, and

268
00:14:20,480 --> 00:14:23,480
Speaker 4: so you know, when people were looking for yields, they

269
00:14:23,640 --> 00:14:27,480
Speaker 4: kind of really wanted something higher. And one kind of

270
00:14:27,680 --> 00:14:30,440
Speaker 4: benefit of these trusts is that they were able to

271
00:14:30,720 --> 00:14:34,760
Speaker 4: retain income every year, which means they don't have to

272
00:14:34,800 --> 00:14:37,560
Speaker 4: pay out all of their dividends. And so because of that,

273
00:14:37,640 --> 00:14:41,160
Speaker 4: they were able to smooth out the dividend payout. And

274
00:14:41,200 --> 00:14:44,200
Speaker 4: so there were many trusts who even in the zero

275
00:14:44,280 --> 00:14:48,600
Speaker 4: rate years, could give you dividend increases year after year.

276
00:14:50,200 --> 00:14:53,720
Speaker 4: And kind of another benefit was that they could invest

277
00:14:53,760 --> 00:14:56,520
Speaker 4: in i liquid assets and so you could get kind

278
00:14:56,560 --> 00:14:59,720
Speaker 4: of income from kind of quirkier things such as like

279
00:15:00,280 --> 00:15:03,360
Speaker 4: you know, student dorms or kind of renewable energy and

280
00:15:04,440 --> 00:15:05,600
Speaker 4: generation and all that.

281
00:15:06,920 --> 00:15:09,840
Speaker 1: So then they're on depression. Now, I mean, how bad

282
00:15:09,960 --> 00:15:10,240
Speaker 1: is it?

283
00:15:12,040 --> 00:15:14,720
Speaker 4: Yeah? Exactly, I mean everyone knows that now you can,

284
00:15:14,880 --> 00:15:17,440
Speaker 4: you know, go out and buy even UK government bonds

285
00:15:17,480 --> 00:15:20,040
Speaker 4: for five percent, and so suddenly a lot of these

286
00:15:20,120 --> 00:15:23,640
Speaker 4: trusts we're are looking a lot less attractive. I mean,

287
00:15:23,680 --> 00:15:27,040
Speaker 4: one good example is, for instance, like the Hypnosis Trust,

288
00:15:27,360 --> 00:15:29,200
Speaker 4: which a lot of people might have heard of because

289
00:15:29,200 --> 00:15:32,200
Speaker 4: they bought a lot of music royalties from you know,

290
00:15:32,760 --> 00:15:36,240
Speaker 4: red hot chili peppers or fifty cent and that was

291
00:15:36,280 --> 00:15:39,560
Speaker 4: because they were paying out, you know, dividends from the

292
00:15:39,800 --> 00:15:43,480
Speaker 4: streaming rights. But now you know, people don't want that

293
00:15:43,520 --> 00:15:46,080
Speaker 4: anymore when they can just go out and buy really

294
00:15:46,160 --> 00:15:49,800
Speaker 4: safe government bonds. And another example is, you know, there

295
00:15:49,800 --> 00:15:51,880
Speaker 4: are a lot of trust that buy a liquid assets

296
00:15:52,040 --> 00:15:53,960
Speaker 4: and now a lot of people are worried about, you know,

297
00:15:54,040 --> 00:15:56,440
Speaker 4: are they really worth what you tell us they're worth

298
00:15:56,600 --> 00:15:59,560
Speaker 4: because interest rates are going up and so we're seeing

299
00:15:59,600 --> 00:16:03,240
Speaker 4: you know, discounts and also even a lot of trust closing,

300
00:16:03,400 --> 00:16:04,560
Speaker 4: including hypnosis.

301
00:16:04,600 --> 00:16:09,120
Speaker 2: Actually, this is Bloomberg Daybreak Europe, your morning brief on

302
00:16:09,200 --> 00:16:12,360
Speaker 2: the stories making news from London to Wall Street and beyond.

303
00:16:12,640 --> 00:16:15,840
Speaker 1: Look for us on your podcast feed every morning, on Apple,

304
00:16:15,960 --> 00:16:18,680
Speaker 1: Spotify and anywhere else you get your podcasts.

305
00:16:18,720 --> 00:16:21,760
Speaker 2: You can also listen live each morning on London Dab Radio,

306
00:16:21,760 --> 00:16:24,479
Speaker 2: the Bloomberg Business app, and Bloomberg dot Com.

307
00:16:24,520 --> 00:16:27,280
Speaker 1: Our flagship New York station is also available on your

308
00:16:27,320 --> 00:16:32,040
Speaker 1: Amazon Alexa devices. Just say Alexa play Bloomberg eleven thirty.

309
00:16:32,280 --> 00:16:33,560
Speaker 1: I'm Caroline Hepka and.

310
00:16:33,520 --> 00:16:36,160
Speaker 2: I'm Stephen Carroll. Join us again tomorrow morning for all

311
00:16:36,200 --> 00:16:38,600
Speaker 2: the news you need to start your day right here

312
00:16:38,680 --> 00:16:39,680
Speaker 2: on Bloomberg day Break.

313
00:16:39,720 --> 00:16:44,160
Speaker 1: Europe