WEBVTT - SAP Gains, VW Falls, Wise Drops

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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 take a look at some of the stocks

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<v Speaker 3>on the move today in Europe. PM Lazy burdened with

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<v Speaker 3>Stephen Carroll and were joined by Bloomberg reporter Chloe Melee. Chloe,

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<v Speaker 3>I want to start with SAP. This seems to be

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<v Speaker 3>the standout share in Europe this morning of six point

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<v Speaker 3>four percent. Why are investors reacting this way to the results?

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<v Speaker 1>Yeah, it's quite quite positive earnings from SAP. So the

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<v Speaker 1>cloud revenue came in stronger than expected, and a big

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<v Speaker 1>reason for that is that SAP is essentially ending the

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<v Speaker 1>support for the older software and next year, which is

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<v Speaker 1>meant that the migration of customers to the cloud instead

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<v Speaker 1>has been accelerating as a result, and so there's better

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<v Speaker 1>cloud sales have really reassured investors that have been very

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<v Speaker 1>worried recently about this potential AI disruption and the AI

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<v Speaker 1>threat on SAP's businessiness. It's also quite reassuring given that

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<v Speaker 1>there had been also recent concerns in addition to those

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<v Speaker 1>AI concerns about customers potentially delaying projects because of this

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<v Speaker 1>geopolitical uncertainty of course, so overall this points to a

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<v Speaker 1>much more resilient a picture for SAP. One analyst in particular,

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<v Speaker 1>I said that cloud growth was a really good sign,

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<v Speaker 1>but that SAP still has a lot of catching up

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<v Speaker 1>to do on AI. It's been really trying to invest

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<v Speaker 1>in its own AI tools, but customers have questioned the

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<v Speaker 1>value and the quality of those, so that's really going

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<v Speaker 1>to be what SAP needs to work on to sort

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<v Speaker 1>of sustain that enthusiasm around this cloud business.

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<v Speaker 2>Okay, well, from the cloud to cars. Volkswagen has come

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<v Speaker 2>out with a new numbers this morning and the outlooks

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<v Speaker 2>not great.

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<v Speaker 1>No, it's not so cut a sales outlook this morning

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<v Speaker 1>because of the persistent weakness in the Chinese market. So

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<v Speaker 1>there's a lot of competition that Volkswagen and other European

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<v Speaker 1>manufacturers are facing from those local Chinese car makers in China,

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<v Speaker 1>but then also in Europe because those Chinese car makers

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<v Speaker 1>are also expanding in that European market. So the CEO

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<v Speaker 1>of Volksbagen is currently under a lot of pressure to

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<v Speaker 1>try and streamline that business. There's a big restructuring plan

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<v Speaker 1>that we've been talking about over the last few weeks,

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<v Speaker 1>which includes job cuts, changes to the model lineup, and

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<v Speaker 1>then also potential factory closures. The question, of course now

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<v Speaker 1>is when those efforts might start to pay off and

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<v Speaker 1>if there'll be really enough to turn around the business.

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<v Speaker 1>So the shares are down this morning, but actually not massively.

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<v Speaker 1>Perhaps some of that weakness was already appriced in ahead

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<v Speaker 1>of the earnings next week. We have so many earnings

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<v Speaker 1>from the car makers. We've got a BMW, Mercedes, Porschees,

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<v Speaker 1>the Lances, all of this company, so that will give

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<v Speaker 1>us a much clearer, more complete picture of that weakness

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<v Speaker 1>in China and in the impact on the industry.

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<v Speaker 3>And just finally Coree. Why shares down eight point six

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<v Speaker 3>percent as things stand tell us more?

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<v Speaker 1>Yeah, So that is because the US banking regulator has

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<v Speaker 1>rejected wiser application to become a national trust bank. So

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<v Speaker 1>that's a big setback for Wise because the company strategy

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<v Speaker 1>has been really hinging on this expansion in the US market.

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<v Speaker 1>The main concern that the regulator mentioned was the anti

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<v Speaker 1>money laundering compliance program from Wise. If we remember we

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<v Speaker 1>had news earlier this year about wis being under investigation

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<v Speaker 1>in Europe because of some accounts allegedly being used for

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<v Speaker 1>money laundering. And then the US Banking Regulator also cited

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<v Speaker 1>another case, a US specific case, where Wise had to

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<v Speaker 1>pay a four point two million dollar penalty and correct

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<v Speaker 1>some aspects of its anti money laundering protections in the US.

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<v Speaker 1>So this is quite the setback. Of course, it doesn't

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<v Speaker 1>mean that Wise cannot apply again. It will apply again.

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<v Speaker 1>It said that it will, but of course there might

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<v Speaker 1>be some delay there, and they might delay this strategy

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<v Speaker 1>of really expanding in the US market.

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