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Speaker 1: This is Bloomberg Daybreak Europe for this Monday, the twenty

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Speaker 1: fourth of April in London.

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Speaker 2: Coming up today, lifting.

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Speaker 1: The lid credit Sweez's later at results show more massive

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Speaker 1: outflows and warn of investment bank losses to come, seeking

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Speaker 1: alternatives soon after whole talks with top financing business leaders

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Speaker 1: as the CBI's reputation lies in tatters.

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Speaker 2: Debating sovereignty.

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Speaker 1: Inflammatory comments from the Chinese ambassador to France create a

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Speaker 1: headache from Macron's Ukraine diplomacy.

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Speaker 3: South Korea pulled into the US China chip battle. The

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Speaker 3: BOE's former chief economist speaks on inflation and a call

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Speaker 3: to act on pensions. Those are the stories we're looking

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Speaker 3: at in today's papers, and I'm Leanne Gerns plus the.

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Speaker 2: Right move for the right price.

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Speaker 1: British home sellers become more cautious but asking for more money.

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Speaker 4: That's all straight ahead on Bloomberg Daybreak Europe. The Business

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Speaker 4: news you need to start your day in just one

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Speaker 4: fifteen minute podcast on Apple, Spotify, the Bloomberg Business App

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Speaker 4: and everywhere you get your podcasts.

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Speaker 1: Good morning, I'm Stephen Carroll. Here are the stories we're

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Speaker 1: following today. Sixty one point two billion Swiss franks were

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Speaker 1: pulled out of Credit Suite in the first quarter.

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Speaker 2: Of this year.

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Speaker 1: More worryingly, the bank says that while the cash bleed

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Speaker 1: has moderated, it has not yet reversed. The bank says

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Speaker 1: the outflows will likely lead to a substantial loss in

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Speaker 1: wealth management in the next quarter. Some of the details

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Speaker 1: from Credit Spece's latest results this morning here.

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Speaker 2: In the UK.

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Speaker 1: Meanwhile, the Prime Minister Richie Snak is holding talks with

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Speaker 1: major firms and investors as his government seeks to fill

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Speaker 1: the void created by the implosion of Britain's main business

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Speaker 1: lobby group, the CBI.

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Speaker 2: Bloomberg's Uwan pots has more.

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Speaker 5: More than two hundred high profile CEOs and business leaders

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Speaker 5: have been invited by the Prime Minister to the events

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Speaker 5: in London. So Next Office says this is for direct

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Speaker 5: and detailed discussions across key industries. Includes CEOs from Barclay's

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Speaker 5: and the Aggio's, senior government ministers and investors from tech,

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Speaker 5: manufacturing and other sectors. The conference will aim to fill

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Speaker 5: the void after the CBI suspended large parts of its

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Speaker 5: operations last week after dozens of companies quit following allegations

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Speaker 5: of serious sexual misconduct against staff members in London, Immune

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Speaker 5: Parts Blomberg day Break Europe.

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Speaker 1: European countries have reacted with fury after China's ambassador to

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Speaker 1: France questioned the independence of former Soviet states. Luchet told

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Speaker 1: the French Network as say that some quote ex Saviet

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Speaker 1: Union countries don't have effective status under international law. Poomberg,

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Speaker 1: Senior executive editor for Greater China, John lu believes it's

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Speaker 1: likely the ambassador misspoke.

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Speaker 6: China does not generally announce changes in policy in this fashion,

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Speaker 6: and so I think that's what makes it unlikely that

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Speaker 6: this was representative of Beijing and probably more an ambassador

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Speaker 6: choosing his words poorly.

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Speaker 1: John Ley also said the comments cause a headache for

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Speaker 1: French President Emmanuel Macron. He has been making a concerted

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Speaker 1: diplomatic effort to involve China in efforts to end the.

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Speaker 2: War in Ukraine. We'll back here.

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Speaker 1: In the UK, the growth and asking prices for houses

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Speaker 1: in Britain slow to the lowest level since the pandemic.

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Speaker 1: The latest data from Right Move point to a shortage

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Speaker 1: of new homes on the market, keeping prices higher.

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Speaker 2: Despite broader headwinds.

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Speaker 1: Average asking prices rose in April by one point seven

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Speaker 1: percent compared to a year ago, with growth flat in London,

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Speaker 1: but while right moves Housing index points to small growth,

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Speaker 1: nationwides shows the biggest falls since two thousand and nine,

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Speaker 1: and UK companies issued more profit warnings in the first

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Speaker 1: quarter than at any time since the pandemic first struck.

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Speaker 1: Bloomberg's Samuel Ettien reports.

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Speaker 7: EY counted seventy five companies warning shareholders times are tough.

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Speaker 7: Sixteen of those were from tech and telecoms companies. That's

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Speaker 7: triple last year's number. The report warns of recession like

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Speaker 7: condition with economic uncertainty, supply chain disruptions, and high borrowing

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Speaker 7: costs all being common woes and the alarm bells matter.

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Speaker 7: One in five companies delist within a year of their

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Speaker 7: third warning in London. Samuel Ettian, Bloomberg Day Break Europe.

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Speaker 1: So to some of our top stories on the program

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Speaker 1: this morning. Did you get a surprise at three o'clock

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Speaker 1: yesterday afternoon when your phone went off with the test

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Speaker 1: of the emergency alert system.

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Speaker 2: Here in the UK? Not everyone got the message.

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Speaker 1: It seems I didn't because I was on a flight,

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Speaker 1: but there are some networks reporting that in fact they

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Speaker 1: didn't receive the emergency messes, and it is something the

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Speaker 1: government is now reviewing. As part of that test, some

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Speaker 1: notifications also arrived before the expected time. This had been

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Speaker 1: well flagged in advance that this test was going to happen,

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Speaker 1: because it's not a regular alert you get on your phone,

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Speaker 1: as many of us experienced. It's actually a much louder

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Speaker 1: one that can be quite a surprise if you're not

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Speaker 1: expecting it. But it appears the system didn't go exactly

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Speaker 1: as planned anyway. That is something that will be interesting

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Speaker 1: to dig into as well. Another story that caught my

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Speaker 1: eye this morning is from the US, but about the

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Speaker 1: most popular shows on the internet. The most popular stream show,

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Speaker 1: according to new data, was Stranger Things last year. The

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Speaker 1: second was NCIS, which is the show that's been on

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Speaker 1: CBS since two thousand and three. It has spent more

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Speaker 1: time in the top ten of the Nielsen rankings than

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Speaker 1: any other program, and it's been on that top ten

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Speaker 1: list for more than one hundred weeks since March of

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Speaker 1: twenty twenty. So this is part of the new balance

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Speaker 1: of data that we get that includes some streaming services

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Speaker 1: and also traditional television as well that self reported figures

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Speaker 1: we should say, from Netflix as well. Interesting to see

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Speaker 1: that Netflix accounts, according to these figures, we've between seven

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Speaker 1: and eight percent of TV viewing every month. That is

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Speaker 1: the biggest of all the streaming services, but I suppose

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Speaker 1: doesn't actually account for that much of the overall picture.

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Speaker 1: The service though, does account for between seventy and eighty

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Speaker 1: percent of the ten most watch shows in the US

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Speaker 1: every week, so the most popular shows do appear to

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Speaker 1: be largely appearing on the Netflix streaming platform. So some

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Speaker 1: of the other stories that we have picked out for

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Speaker 1: you this morning, let's get back though to the big

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Speaker 1: headlines that we've gotten from Credit Sweez reporting its earnings

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Speaker 1: a focus. Of course, someone's been happening to deposit outflows.

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Speaker 1: That massive number the net number from Credit Swee so

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Speaker 1: net outflows are looking at from the wealth manager division

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Speaker 1: just over forty seven billion francs. The overall net outflows

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Speaker 1: sixty one point two billion francs for the first month

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Speaker 1: of the year, so covering that period before the emergency

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Speaker 1: takeover from UBS, but also about ten days afterwards as well.

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Speaker 2: Well.

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Speaker 1: Of course, this is the start of a busy week

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Speaker 1: of bank earnings here in Europe. UBS, the bank that's

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Speaker 1: taking over Credit Sueez report tomorrow as well. Let's dig

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Speaker 1: into some of the details then with Boomberg's senior Asia

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Speaker 1: finance correspondent to Ambrie Chowdry, and thank you very much

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Speaker 1: for with us today on the program. What are the

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Speaker 1: headlines then we should be paying attention to from these

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Speaker 1: Credit Sweeze earnings.

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Speaker 8: The most crucial number that everyone's been watching out for

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Speaker 8: the first quarter net asset outflows, which is around sixty

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Speaker 8: one billion Swiss francs. They're saying that outflows have moderated

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Speaker 8: but not reversed. And the headlines also say that there

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Speaker 8: will be a big loss in wealth management in second

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Speaker 8: quarter twenty twenty three. And lastly, the other one I

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Speaker 8: just picked up is that their operating expenses are up

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Speaker 8: thirty percent, which is also not great. Just to put

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Speaker 8: it in context, you know, there's been basically outflows at

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Speaker 8: Credit Suite for quite a while now. It was around

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Speaker 8: one hundred billion in the previous reported results, so it's

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Speaker 8: not you know, it's not bad if you look at

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Speaker 8: the sixty one billion, but it's as I said before,

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Speaker 8: it's not great. They've been trying to win the confidence

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Speaker 8: of clients after seeing a record amount of money leave

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Speaker 8: in the last few quarters. Yet from all these numbers,

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Speaker 8: what we can see is that, you know, these efforts

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Speaker 8: are probably almost largely voided by the crisis of confidence

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Speaker 8: the bank suffered last month and which led to the

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Speaker 8: takeover by UBS. As we saw, in normal circumstances, we'd

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Speaker 8: be looking to see whether Credit SUITEE had kept up

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Speaker 8: with US competitors in things like trading and investment banking,

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Speaker 8: as well as how active it's wealth management clients are.

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Speaker 8: But clearly the bank's turmoil over the last year or so,

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Speaker 8: especially over the last month after UBS took them out,

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Speaker 8: means these comparisons no longer make sense. I guess the

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Speaker 8: value of today's numbers will be more to get an

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Speaker 8: idea of what UBS will be left with at the

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Speaker 8: end of the day when the deal closes.

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Speaker 1: Yeah, of course, a very unusual set of results for

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Speaker 1: many reasons, some of them that you've had line there, Ambreen,

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Speaker 1: And of course these numbers for any other bank would

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Speaker 1: be really shocking. But because of course we're looking at

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Speaker 1: a quite an unusual situation here where this bank days

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Speaker 1: are already numbered. There's not going to be an earnings

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Speaker 1: call with analysts for example with more details. This really

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Speaker 1: is a very particular snapshot in time of what we're

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Speaker 1: getting from Credit Suites.

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Speaker 8: Yes, that's right. You know, last month UBS agreed to

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Speaker 8: buy its much smaller local rival, Credit Suite in this

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Speaker 8: emergency government back rescue, which has caused it. As you've

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Speaker 8: we've all seen a lot of controversy in Switzerland and

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Speaker 8: elsewhere after Credit Suite essentially lost the confidence of investors,

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Speaker 8: clients and other banks following a string of scandals, losses,

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Speaker 8: client outflows over the past few years. However, for you

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Speaker 8: know UBS, what this means is that the combination of

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Speaker 8: the two major banks has the potential to create a

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Speaker 8: wealth management giant of powerhouse as such with some five

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Speaker 8: trillion in invested assets. That is, if the outflows at

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Speaker 8: UBS are contained, I suppose of the next coming quarters.

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Speaker 8: But you know, time will tell what happens over the

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Speaker 8: next twelve months. If they managed to you know, stem

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Speaker 8: the outflows as such, of the four ubs takes them

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Speaker 8: out formally.

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Speaker 1: Indeed, and of course we'll get results from UBS tomorrow.

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Speaker 1: So what shall we be looking out for when we

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Speaker 1: hear from UBS?

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Speaker 8: So the key questions for UBS will be, you know,

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Speaker 8: the plan to cut jobs, because if you combine the

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Speaker 8: head count at UBS in credit suite, it's well over

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Speaker 8: one hundred thousand, and there will be a lot of

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Speaker 8: overlapping areas such as wealth management and investment banking, so

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Speaker 8: they're they're looking at ways to cut those costs and

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Speaker 8: unfortunately that'll mean you know, tens of thousands of job cuts,

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Speaker 8: which bloom Big News and others have already reported. So

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Speaker 8: any sort of clarity on the strate thinking and what

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Speaker 8: the plans are for to shrink assets, cut jobs, and

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Speaker 8: also we should keep an eye out on possible senior

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Speaker 8: management changes at UBS additional ones. So around two weeks

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Speaker 8: ago they replaced their CEO, Ralph Hammers with a former

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Speaker 8: UBS veteran surgery on Motty, so it's quite possible that

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Speaker 8: he may be bringing people he's worked with previously, so

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Speaker 8: ahead of the formal close of the takeover, we may

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Speaker 8: see some management upheaval at UBS as the new CEO brings,

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Speaker 8: you know, possibly his own people.

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Speaker 1: In plenty to watch out for then in those results

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Speaker 1: from Ubs tomorrow, Bloomberg's senior Asia Finance correspondent to Amber

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Speaker 1: and Chadury, thank you very much.

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Speaker 2: For joining us with that this morning.

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Speaker 1: Up next, South Korea gets pulled into the US China

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Speaker 1: chip battle. UK inflation set to fall rapidly according to

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Speaker 1: the BOEES former chief economist, and a call to action

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Speaker 1: on pensions.

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Speaker 4: Now review on blue Bird Daybreak Europe. The news you

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Speaker 4: need to know from today's papers.

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Speaker 1: Bloomberg Xian Gerins is here with the details of all

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Speaker 1: of those stories. Lean good morning to you. Let's start

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Speaker 1: with the Financial Times. US urges South Korea not to

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Speaker 1: fill China shortfalls if Beijing bans microan chips.

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Speaker 3: Yes, indeed, Stevens, So another battle appears to be coming

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Speaker 3: onto the scene, and the US has made the request

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Speaker 3: to the South Korean president. Now this comes as he

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Speaker 3: does travel to Washington today for a state visit.

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Speaker 9: America is asking South.

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Speaker 3: Korea to urge Samson Electronics and skhex to resist boosting

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Speaker 3: chip sales to China. Now that's if Beijing bans Idaho

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Speaker 3: based Micron technology. So basically, China's launched a national security

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Speaker 3: review into the.

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Speaker 9: Technology from the US. This was one of the three.

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Speaker 3: Dominant players in the GLOE global memory chip sector, with

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Speaker 3: South Korea, Samson Electronics and Skhinex. Now it's unclear if

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Speaker 3: the cyberspace Administration of China will take any action after

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Speaker 3: this probe into the American company has been completed. This

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Speaker 3: is all according to the Financial Times, and stakes are

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Speaker 3: high actually for Micron, as mainland China and Hong Kong

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Speaker 3: generate twenty five percent of its thirty point eight billion

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Speaker 3: dollars in revenue last year.

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Speaker 9: Those figures still according.

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Speaker 3: To the FT, so it seems to be a battle

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Speaker 3: over the chip market that's coming to light.

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Speaker 9: Cher Stephen Okay.

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Speaker 2: Well, interesting to see the latest development on that story.

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Speaker 1: Let's go to The Guardian next lean The headline there,

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Speaker 1: UK inflation will fall rapidly, says x Bank of England economists.

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Speaker 3: Yes, indeed, so Andy hal Dane says, it's pretty much

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Speaker 3: nailed on that inflation would have in the next six months,

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Speaker 3: hitting a target set in January by the Hime Minister.

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Speaker 3: Rishie sunaik I thought this was a pretty optimistic outlook actually,

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Speaker 3: And the former chief economist of the GOOE is also

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Speaker 3: saying interest rate setters should now consider pausing future increases

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Speaker 3: in borrowing costs. So he's saying the Bank of England

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Speaker 3: should pause raising those interest rates at their next meeting,

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Speaker 3: which is coming in very shortly, and that is because

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Speaker 3: he was speaking to Sky News and he warned that

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Speaker 3: the increases in the bank's key interest rates Stephen have

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Speaker 3: not actually resulted in higher costs for many borrowers. It's

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Speaker 3: actually not hit they pocket yet because lots of people

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Speaker 3: have fixed mortgages.

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Speaker 9: Currently at the moment, they haven't come to an end.

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Speaker 3: And he says, if we keep increasing these interest rates,

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Speaker 3: it's all going to hit at once and.

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Speaker 9: Almost create a perfect storm.

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Speaker 3: And if you do remember, the BOS raised interest rates

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Speaker 3: from zero point one percent that was in late twenty

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Speaker 3: twenty one to four point two five percent at the

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Speaker 3: end of March. And this is in that effort to

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Speaker 3: dampen inflation, which did ease slightly in February, but not

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Speaker 3: below that ten percent level.

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Speaker 9: Lots of economists were actually expecting.

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Speaker 1: It to okay, So that's an interesting take on that story.

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Speaker 1: Then in the Guardian, let's then go leand to the

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Speaker 1: Times and Opinion our schoolhich has the headline we must

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Speaker 1: act now to prevent a real pensions crisis developing in future.

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Speaker 3: Yes, indeed, and this is an opinion article from Paul Johnson,

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Speaker 3: who is the director of the Institute for Physical Studies Now,

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Speaker 3: he says, we need to avoid a sleepwalking into a

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Speaker 3: future of low pensions and we just need to start

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Speaker 3: acting now when it comes to reform of the pension system.

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Speaker 3: And this is really to help people going into the future.

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Speaker 9: He says.

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Speaker 3: This is why, in association with the Aberdeen Financial Fairness Trust,

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Speaker 3: the Institute of Fiscal Studies are embarking on a significant

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Speaker 3: new review of the pension systems. So people in their sixties,

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Speaker 3: he says, typically underestimate they life expectancy, and he argues

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Speaker 3: this may be one reason why people are reluctant to

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Speaker 3: purchase annuities now. An annuity covers your savings in an

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Speaker 3: annual pension, giving you a guaranteed income for life for.

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Speaker 9: A certain period. But he says this is not stopping.

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Speaker 3: Really interesting article, definitely worth going in and having a read.

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Speaker 4: M m

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Speaker 5: Hmm