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Speaker 1: Bloomberg Audio Studios, podcasts, radio news.

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Speaker 2: This is the Bloomberg Debac podcast, available every morning on Apple,

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Speaker 2: Spotify or wherever you listen. It's Thursday, the twenty fifth

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Speaker 2: of April here in London. I'm Caroline Hepka and I'm

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Speaker 2: Tom m Kenzie.

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Speaker 3: Coming up today. Mining giant BHP confirms that it's made

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Speaker 3: a thirty one billion pound takeover offer for Anglo American

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Speaker 3: in what could be the biggest deal this year.

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Speaker 2: Fixed income trading helps to boost Deutsche Bank's earnings but

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Speaker 2: disappoints at BNP, Pariber and Barclay's Plus.

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Speaker 3: Defending TikTok on TikTok, the social media firm says it

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Speaker 3: will win its fight against a possible US band.

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Speaker 2: Let's start with a roundup of our top stories.

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Speaker 3: The world's largest mining company has made a takeover bid

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Speaker 3: for its UK rival Anglo American, BHP confirming it has

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Speaker 3: made an all share proposal to Anglo, valuing the smaller

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Speaker 3: mining company at thirty one point one million pounds. Bloomberg's

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Speaker 3: James Walcock has more it could.

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Speaker 4: Be the biggest shakeup in mining for a decade, and

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Speaker 4: copper is at the heart of it. Anglo American has

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Speaker 4: long been seen as an M and A target. The

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Speaker 4: thirty four billion dollar company owns big South American copper operations,

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Speaker 4: which are a key metal for electrification and renewable energy.

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Speaker 4: It's possible the BHP's bid for Anglo could prompt other

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Speaker 4: giants to make a move. Regardless if it happens, it

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Speaker 4: may be the largest M and A deal of the

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Speaker 4: year in London.

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Speaker 5: James Wilcock Bloomberg Radio.

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Speaker 2: Barclays has reported its latest set of results on a

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Speaker 2: big day for European earnings. Investment bank revenue and net

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Speaker 2: interest income met estimates at the British lender pre tax

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Speaker 2: profit beat forecast, coming in at two point two eight

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Speaker 2: billion pounds for the quarter.

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Speaker 6: Now.

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Speaker 2: Speaking exclusively to Bloomberg CEO CS Venkata Krishnan said that

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Speaker 2: the results are entirely in line with expectations. Venkat Krishnan

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Speaker 2: also shared his thoughts on the London IPO markets.

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Speaker 7: I think the equity market in the UK and equity

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Speaker 7: risk culture needs a shot in the arm to be frank.

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Speaker 7: I think that it's important for companies to list in

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Speaker 7: the UK, especially for life sciences technology companies, and it

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Speaker 7: needs many things which are slowly coming together. There's a

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Speaker 7: part of it which is regulation. There's a part of

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Speaker 7: it which is equity investment and people buying more stocks,

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Speaker 7: pension funds buying more stocks. And we think that some

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Speaker 7: of the initiatives, for instance, the public flotation of the

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Speaker 7: government's share of Netwest, should be important aspects of that.

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Speaker 2: Ben kat Krishnan was more upbeat though on the UK

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Speaker 2: political situation, saying that a great strength of the UK

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Speaker 2: is relatively little different in economic policy between Labor and

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Speaker 2: the Conservatives. Getting back though to the company story, Berkley

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Speaker 2: share price jumping as much as three percent this morning,

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Speaker 2: currently up by two point six.

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Speaker 5: Percent, okay.

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Speaker 3: Staying in the banking space, Deutsche Bank over in Germany

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Speaker 3: seeing a seven percent jump in earnings from fixed income

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Speaker 3: trading in.

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Speaker 5: The first quarter.

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Speaker 3: That is more than analysts had expected and better than

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Speaker 3: most of the bank's biggest US rivals. Income from an

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Speaker 3: advising on deals and stock and bond sales jump fifty

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Speaker 3: four percent. Is the investment bank made up for a

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Speaker 3: boost from interest rates fading. CFO James von Moltke hail's

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Speaker 3: strong momentum in the investment bank.

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Speaker 8: We're very pleased with the results. There thirteen percent up

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Speaker 8: year on year are fake business and also within that

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Speaker 8: the financing business doing very well, so we see very

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Speaker 8: strong momentum and client engagement there. We're also seeing resilience

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Speaker 8: and growth across the other three businesses, so it's nice

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Speaker 8: to have a shining star, but seeing resilience on the

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Speaker 8: more balance sheet sensitive businesses of our corporate bank and

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Speaker 8: private bank is encouraging.

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Speaker 3: For Malka added, hecs optimism and growth coming back to Europe.

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Speaker 3: Shares in Deutsche Bank of rally by almost fifty percent

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Speaker 3: over the past year so far on the session, they're

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Speaker 3: down just one point three percent so far.

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Speaker 2: BNP parabus share price set up this morning two point

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Speaker 2: one percent right now. Income from fixed income, currencies and

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Speaker 2: commodity trading at BNP parabars slump by twenty percent year

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Speaker 2: on year. That's worse than had been expected, the disappointment

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Speaker 2: taking the shine off the stronger performance in other parts

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Speaker 2: of the French lenders Investment bank. Overall, BNP parwabus or

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Speaker 2: net income and revenue come in ahead of estmates in

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Speaker 2: the first.

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Speaker 3: Quarter, shares in Meta dropping by sixteen percent, around sixteen

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Speaker 3: percent in after hours trading after the social media Chant

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Speaker 3: said it plans to spend billions of dollars more than

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Speaker 3: expected this year. The parent company of Facebook and Instagram

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Speaker 3: says investments in artificial intelligence will increase and meaningfully, with

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Speaker 3: capital expenditure of up to forty billion dollars this year.

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Speaker 3: CEO Mark Zuckerberg is warning investors that it could take

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Speaker 3: time for the AI bets to pay off, as.

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Speaker 9: We're scaling capex and energy expenses for AI. We all

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Speaker 9: continue for focusing on operating the rest of our company efficiently,

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Speaker 9: but realistically, even with shifting many of our existing resources

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Speaker 9: to focus on AI, will still grow our investment envelope

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Speaker 9: meaningfully before we make much revenue from some of the

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Speaker 9: new product.

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Speaker 3: Mark Zuckerberg's comments on spending, along with a warning that

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Speaker 3: sales growth would be slower then expected in the second quarter,

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Speaker 3: overshadowed the first quarter numbers. Revenue increased by twenty seven

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Speaker 3: percent to thirty six billion US dollars, while profits more

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Speaker 3: than double to twelve point four billion US dollars.

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Speaker 2: Okay, so lots of earnings news, but there are some

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Speaker 2: other stories to think about. The US has been secretly

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Speaker 2: sending Ukraine its long range Army tactical missile systems or

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Speaker 2: known as attackers, for sure. They've been doing that since February.

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Speaker 2: President Joe Biden signed a new aid bill to provide

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Speaker 2: Ukraine with sixty one billion dollars in military aid last night,

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Speaker 2: which was expected to include this ordinance. However, the State

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Speaker 2: Department and spokesman Verdant Patel said that the US leader

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Speaker 2: had privately already given the green light for the ballistic

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Speaker 2: missiles to be sent.

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Speaker 10: The United States provided Ukraine with long range attackers at

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Speaker 10: the President's direction. He quietly directed his National security team

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Speaker 10: to send attackers to Ukraine for use inside Ukrainian sovereign

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Speaker 10: territory in February. They started moving as part of the

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Speaker 10: military aid package we announced on March twelfth, and those

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Speaker 10: missiles arrived in Ukraine this month.

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Speaker 2: The US had avoided sending the missiles that Patel spoke

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Speaker 2: of until now because the Biden administration considered that it

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Speaker 2: would be seen as escalatory by the Kremlin. The missiles

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Speaker 2: can hit targets over a range of three hundred kilometers.

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Speaker 2: The New York Times reports that they used for the

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Speaker 2: first They were used for the first time in recent

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Speaker 2: days to strike an airfield in Crimea.

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Speaker 3: And Russia has vetoed a UN Security Council resolution on

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Speaker 3: not deploying nuclear weapons in space. China abstained. The proposal

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Speaker 3: would have reconfirmed a global commitment that dates back to

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Speaker 3: nineteen sixty seven, which bans nuclear weapons in orbits. The

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Speaker 3: vote comes just months after the US told allies that

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Speaker 3: Russia could deploy a real or mock warhead into space

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Speaker 3: as early as this year. The gremlins alleged ambition underscores

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Speaker 3: what security experts in Washington say is growing competition between

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Speaker 3: the US, Russia, and China to develop anti satellite weapons.

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Speaker 2: In a moment, we're going to be bringing you more

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Speaker 2: on the mining story, this mega deal potentially we've got

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Speaker 2: more details of it this morning. But before we get

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Speaker 2: to that, there's a piece I bet you're going to

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Speaker 2: be interested in this, Tom. Look, I always try to

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Speaker 2: bring you something a bit lighter, something a bit more fun,

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Speaker 2: which is all about how you choose your football team.

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Speaker 2: And this comes because the bluey big opinion on is

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Speaker 2: Howard juy Ewan, who's been in UK for six years.

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Speaker 2: This long piece about what is it one of the

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Speaker 2: questions that you ask, how do you pick your football team?

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Speaker 2: If you haven't grown up with one. Do you follow

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Speaker 2: the same men's and women's side, or do you does

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Speaker 2: that matter loyty to one club or not. He's asked

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Speaker 2: like a million questions. He's also asked listeners and viewers

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Speaker 2: to run readers to write in to tell him, well,

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Speaker 2: how did you choose your side?

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Speaker 3: It's very easy, I mean, this is one choice, isn't

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Speaker 3: there Arsenal obviously the women's team, which are currently top

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Speaker 3: of the league and outperform all of their rivals, and

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Speaker 3: of course the men's team also, by the way, talk

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Speaker 3: of the league. So it's an obvious choice. I don't

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Speaker 3: see what the dilemma is.

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Speaker 5: They get word.

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Speaker 2: Yeah, you have to tell them exactly.

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Speaker 10: No.

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Speaker 2: It's a really lovely piece about cultural.

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Speaker 3: Phenomen It's a social lubricant, being able to talk. I'm

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Speaker 3: frankly a bit of a fair weather sports, but it

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Speaker 3: does help in certain social situations to be able to

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Speaker 3: dig into the back pocket for a bit of a

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Speaker 3: chat about football. Yes, and if you don't have that

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Speaker 3: sometimes you can be kind of left out in the

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Speaker 3: social cold.

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Speaker 5: Yeah, I get that.

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Speaker 2: It was mentioning. Yeah, okay, so a fun read then

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Speaker 2: for you on the Bloomberg Terminal this morning, and let's

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Speaker 2: also get to let's get to our top story then,

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Speaker 2: as I mentioned, the mining story, are we in for

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Speaker 2: a big shake up in the industry? The price of

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Speaker 2: copper has been sawing this year. BHP has confirmed that

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Speaker 2: it made an all shared proposal to Anglo American, valuing

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Speaker 2: the smallest slightly smaller mining company at thirty one point

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Speaker 2: one billion pounds. Joining us now is Bloomberg's Commodities reporter Martin.

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Speaker 2: Richie Martin, thanks for getting back on the radio with

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Speaker 2: us this morning. Now that we have that figure, what

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Speaker 2: do we know then about the deal?

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Speaker 11: The top line is this is all about copper. BHP

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Speaker 11: is going to become if this deal goes ahead successfully,

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Speaker 11: it's going to become the world's biggest copper manor passing

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Speaker 11: other companies like codel Co and Chile and Freeport. And

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Speaker 11: that's because the miners are expecting a big wave of

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Speaker 11: demand for copper. And we've seen over the past few

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Speaker 11: years a number of quite big transactions and a lot

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Speaker 11: of talk about how they want to gain exposure to copper.

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Speaker 11: But this is the first really big deal in the sector.

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Speaker 11: Angle has some other bits and pieces. It has metallurgical

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Speaker 11: coal business. It produces diamonds, it produces some potash that's

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Speaker 11: made in fertilizer, and it's got iron ore. But at

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Speaker 11: the core of it is the copper. And this is

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Speaker 11: not just the biggest deal in mining this year, but

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Speaker 11: probably one of the biggest M and D transactions we'll

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Speaker 11: see all year.

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Speaker 3: Martin, what's your assessment of the likelihood of this of

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Speaker 3: this deal going through and what it means more broadly

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Speaker 3: for the sector?

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Speaker 11: Then, So, obviously with any major deal, you look at

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Speaker 11: who the rivals might be, where there be any other

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Speaker 11: companies that could could put in competitive bids. Now, those

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Speaker 11: likely candidates in the mining space are are Glencore, Rio

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Speaker 11: Tinto and Valley. So people are saying, you know, they

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Speaker 11: could make bids, but I would just point to a

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Speaker 11: couple of things that those those companies all of our

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Speaker 11: own reasons not to make a bid. Rio Tinto has

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Speaker 11: invested a lot in building its own copper minds, for

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Speaker 11: example huge mine in Mongolia. It's it has said it

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Speaker 11: prefers that approach to making big deals. Glencore is trying

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Speaker 11: to take over Canadian company tech Resources to get it's

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Speaker 11: it's copper and zinc assets, and then Valley is actually

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Speaker 11: trying to demerge its metals business, so they're all tied

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Speaker 11: up in their own kind of strategy towards metals, which

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Speaker 11: has kind of left the door open for behp I

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Speaker 11: guests to try and swallow up Angler at this smaller arrival.

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Speaker 6: Yeah.

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Speaker 2: Absolutely, it's a really interesting story and one that will

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Speaker 2: follow closely. Thank you so much for the update, Martin

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Speaker 2: Richie Bloomberg's Commodities Reporter. Then the BHP proposal for Anglo

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Speaker 2: American Anglo Americans share price currently up more than twelve percent.

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Speaker 2: We've also got to dig into the bank earnings from

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Speaker 2: the European lenders. Deutsche Banks first quarter fixed income commodity

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Speaker 2: revenue rising seven percent BNP Paribar are worse than expected

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Speaker 2: twenty percent slump in Fick trading, Barkley's investment banking revenue

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Speaker 2: meeting expectations. Join us now, man who knows far March

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Speaker 2: far more about this than me. Bloomberg's EMEA head of

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Speaker 2: Finance and Investing, Tom Metcalf, really massively busy morning for you, Tom,

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Speaker 2: So thanks for sparing us some time. What of those

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Speaker 2: three interests you most I suppose.

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Speaker 5: Yeah, You've had three big, big European banks come through.

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Speaker 5: Look we're in London. I think Barkleys is maybe the most.

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Speaker 6: Interesting story here at in a particular share price where

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Speaker 6: you know, often the first thing I look at for

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Speaker 6: bark is how do those fixed rate traders do?

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Speaker 5: And in the past that's really underpinned the results.

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Speaker 6: This time around they sort of disappointed, but they were

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Speaker 6: sort of you know, helped by the actuaries trade and

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Speaker 6: doing very well and perhaps more importantly at the moment,

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Speaker 6: the UK Bank this outlook on NIM, you know, being

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Speaker 6: a real support here and effectively what Barkleys has done

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Speaker 6: had they had a strategy update in February and they've

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Speaker 6: absolutely hit right on the nail what they said they'd do,

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Speaker 6: which I think for shareholders is a real kind of boon.

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Speaker 6: You know, they want to see just that steady delivery.

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Speaker 6: You know, me beeing a journist, I love the volatility

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Speaker 6: and the excitement not offered by trading. But actually I

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Speaker 6: think what today shows is Barkley maybe becoming a bit

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Speaker 6: more boring, but for shareholders that is what they really

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Speaker 6: want going forward.

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Speaker 3: Is Deutsche Bank becoming more boring or is that in

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Speaker 3: terms of the trading part of that business. They've got

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Speaker 3: ad exposure to fixed income. How did that come together

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Speaker 3: for Deutsche Bank OP in Germany.

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Speaker 6: Yes, very similar structure to Barkley's big investment bank and

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Speaker 6: fixing was a huge part of that. And I think

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Speaker 6: it's fascinating because their fixed traders did really well. They

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Speaker 6: were up seven percent, which is basically in line with

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Speaker 6: some of the best Wall Street banks. So before the

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Speaker 6: shares started trading, I was like, probably dotcha bank shares

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Speaker 6: are going to be up. They actually fell and I

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Speaker 6: think are maybe flat, which again goes maybe back to

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Speaker 6: this point of this. You know, very volatile earnings. The

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Speaker 6: investment bank is just not valued as highly as say

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Speaker 6: that more stable recurring revenue. But yeah, those two I

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Speaker 6: always think of as a pair, Deutsche Bank and Barcleay's.

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Speaker 6: They kind of both European banks, a big investment bank

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Speaker 6: or big trading presences, and sometimes they moving lockstep. But

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Speaker 6: today it looks like Barkleay's maybe has a slight edge.

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Speaker 2: Okay. Other interesting stories, I mean loane loss provisions or

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Speaker 2: bonuses or buy backs, I mean those are always interesting

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Speaker 2: stories too.

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Speaker 6: Yeah, and you had I think it was a CFO

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Speaker 6: saying they're a little bit worried over in Frankfurt when

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Speaker 6: they look at the UK and there's this bonus cap

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Speaker 6: which has been removed, allowing you know, some banks to

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Speaker 6: take advantage of that. So right now in the UK

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Speaker 6: there was a rule, it was a EU rule you

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Speaker 6: could only have effectively twice the bonus of your salary.

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Speaker 6: Where you compare that to New York where bonuses can

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Speaker 6: be many multiples, so you might get a smaller fixed bit,

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Speaker 6: but your bonus can really jump and effecting in the

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Speaker 6: UK that's now been rolled back post Brexit. It's a

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Speaker 6: very very difficult thing to sort of implement in terms

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Speaker 6: of a change. So if you can imagine everyone's on contracts,

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Speaker 6: how many people are going to want to sort of

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Speaker 6: move away from a very high fixed pay into bonuses.

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Speaker 6: But as time goes on, I'm expecting that to sort

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Speaker 6: of effectively rolled out, and that is potentially a bit

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Speaker 6: of a competitive advantage.

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Speaker 5: I say, bit of.

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Speaker 6: But it's interesting that Deutsche Bank chose to sort of

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Speaker 6: raise this and you know it's one of those classic

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Speaker 6: messaging you know, by an executive and hey, regulators take

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Speaker 6: notice of this, Well, you think it's a bit of

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Speaker 6: a problem. Is there anything you can do to kind

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Speaker 6: of help us out to.

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Speaker 3: Tech now and a disappointing Honey's report from Meta has

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Speaker 3: tech investors on edge the Facebook owner's outlook for a

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Speaker 3: week of sales, and it was the outlook rather than

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Speaker 3: the quarterly results themselves. It was the outlook plus the

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Speaker 3: higher costs forecast, underlining the questions about the impact of AI.

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Speaker 3: Shot horror to investors. You actually have to spend to

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Speaker 3: make that aime to the fore and it's expensive. Let's

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Speaker 3: bring in Bloomberg's tech editor here in London, Olivia Solan.

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Speaker 3: Olivia kind of talked to us about the investor reaction

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Speaker 3: to this. Why are they so surprised it costs forty

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Speaker 3: thousand dollars for a GPU from video? We know they're

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Speaker 3: buying thousands of these.

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Speaker 1: I think everyone just got so excited about AI. There's

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Speaker 1: been so much hype over the last year, ever since

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Speaker 1: Chatchibt was unleashed on the world, and so I think

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Speaker 1: perhaps people have been expecting more immediate returns on that investment.

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Speaker 1: But yes, as you say, it's very expensive to hire

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Speaker 1: the engineers to build these models, to kind of get

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Speaker 1: all the infrastructure the data centers the chips to do

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Speaker 1: the training and so and then figure out how to

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Speaker 1: put this into their business.

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Speaker 6: You know.

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Speaker 1: So I guess we're specifically talking about generative AI rather

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Speaker 1: than AIRE more broadly, because Meta and others have been

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Speaker 1: using that very effectively for years.

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Speaker 2: Yeah, we also get earnings out today, Microsoft at Alphabet

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Speaker 2: and Intel out of the USCC this evening. Thinking about

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Speaker 2: that nine pm London time, how do you think that

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Speaker 2: that is going to play out, because actually the kind

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Speaker 2: of disappointment around Meta had such a widespread impact on

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Speaker 2: shares yesterday.

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Speaker 5: Yeah.

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Speaker 1: Well, I think Microsoft probably has the biggest head start

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Speaker 1: in terms of rolling out a generative AI tools across

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Speaker 1: it's paid for products. Alphabet is kind of playing catch up.

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Speaker 1: We know it's been a leader in AI in AI

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Speaker 1: breakthroughs for like other types of machine learning, but for

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Speaker 1: generative AI, it's sort of been kind of trying to

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Speaker 1: play catch up. And so it has announced a bunch

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Speaker 1: of ways that it's rolling these kind of generative AI

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Speaker 1: tools throughout its products. But I don't think we're going

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Speaker 1: to see the kind of gains from that quite yet.

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Speaker 3: Yeah, and then there was the controversy around its Gemini

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Speaker 3: model as well, and the fallout from that you've been

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Speaker 3: writing about about how some executives at least are.

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Speaker 5: Not ready for AI.

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Speaker 3: Really really interesting piece we're checking out on the terminal

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Speaker 3: and on Bloomberg dot com. What's behind that?

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Speaker 6: Right?

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Speaker 1: This was a survey of chief information officers, so it

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Speaker 1: people within I think seven hundred companies, and the general

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Speaker 1: sense was, as you know, as we're kind of seem

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Speaker 1: to be learning that most companies haven't really figured out

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Speaker 1: how to make money from AI, and they need at

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Speaker 1: least a couple more years to really integrate AI tools

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Speaker 1: into their products and services. Some of the main kind

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Speaker 1: of concerns are how long it takes to implement, security concerns,

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Speaker 1: potential biases and AI systems, and of course intellectual property issues.

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Speaker 12: This is Bloomberg Daybreak Europe, your morning brief on the

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Speaker 12: stories making news from London to Wall Street and beyond.

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Speaker 5: I'm Stephen Carroll.

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Speaker 12: Join us again tomorrow morning for all the news you

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Speaker 12: need to start your day, right here on Bloomberg day

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Speaker 12: Break Europe.

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Speaker 6: Mm hmm