tv Street Signs CNBC February 16, 2016 4:00am-5:01am EST
good morning, everybody. welcome. you're now watching "street signs." i'm louisa bojesen. >> and i'm nancy hulgrave. these are your headlines. >> speculation mounting over an opec supply cut as four major oil ministers meet. crude prices rise sharply, supporting stocks in europe. >> and china's central bank throws its weight behind the industrial sector, pledging to support liquidity, but also pledging to scale back loans to zombie firms. >> investors are cheering anglo american's plan to ramp asset sales. the ceo telling cnbc that
commodity prices remain under pressure. >> it's far too early to call anything other than bouncing at the bottom. i think we're in the right place and the right conversation. >> shares in airbus take flight after ceo tells cnbc he's optimistic on asian orders from the singapore air show. >> there is some turmoil around the world, but globally, gdp is still healthy. if you take china, the projections are for air traffic growth two digits, so more than 10% a year for the next five years. good morning, everyone. welcome to "street signs." we are now in day three of this relief rally, which should give some confidence to all you nonbelievers out there predicting that this bull rally still has legs to run. nevertheless, the stoxx europe 600 is up about 0.4% here. we're getting a lot of confident
boosted by comments from central bankers. not just mario draghi yesterday, again, insisting they're leaving the door open to all options, hinting further stimulus could be on the way in march. we're also getting comments out of china, reassuring investors there. let's get a look at how the european markets are faring one by one here. we have some green arrows are across the board. modest gains at this stage. ftse 100 up about 0.4%. the french cac 40 higher by half a percent. the italian main market is trailing, but just barely in negative territory. we did see sharp gains in yesterday's session as the u.s. was closed. nevertheless, we finished up about 2% to 3% just in yesterday's trade. of course, as investors continue to digest earnings, they're also keeping a look at the oil price as well because this is the big topic of the day. we're seeing a bounce of about 3% in brent crude.
a similar story for wti. earlier we saw gains in the neighborhood of 5%. a lot of this is based on the meeting we're seeing in doha. officials from saudi arabia and other opec countries are meeting to discuss this damaging oil supply glut. the chinese central bank says it plans to cut loans to so-called zombie firms, those which have incurred long-term losses. this comes as beijing authorities have also pledged to offer financial support to the industrial sector in order to resolve overcapacity and inve inventorie inventories. for more on that, let's get to dan murphy live in singapore with more. hi, dan. >> great to speak with you. clearly this afternoon big news out of the pboc. china's central bank announcing a series of measures aimed at
more financial support to the nation's industrial sector. the pboc saying it does want to strengthen credit support by money supply and saying today that it's going to be using various tools to maintain adequate liquidity. this is interesting because we do know that there is already an agenda in place to clean up these so-called unproductive zombie firms over the next three years, at least according to existing reports. and this also follows on from additional reports that we've already seen just last month that chinese policymakers say they'll be using stock exchanges, property exchanges, and other capital markets to sell the assets of low-performing state-owned enterprises. so it's going to be particularly interesting to gauge the reaction to that when we see trade resume in asia. nevertheless, have a look at this. we saw green on screen in session today. some pockets of weakness, but
broad based gains. i wanted to cast your attention on shanghai. the index climbing 91 points. really following on from yesterday's 0.6% decline. so chinese investors really throwing caution to the wind. today we had some really positive news on lending. banks issuing 2.5 trillion, which is well above expectations. as a result, we saw bank shares in chinese trade well supported. ag bank, the boc, china construction bank all trading higher. very quickly, we also saw that 7.2% gain for the nikkei yesterday. a second day of gains in japan as well. the nikkei 225 finishing up 0.2% at 16,054. back to you. >> dan, thank you very much. good to see you this morning. dan murphy, still a relatively new face for us here on the show. first time yesterday. >> welcome, dan. >> exactly. we're just getting some flashes out. we've been talking about this meeting takes place between
various oil officials to talk about the oil supply glut we're seeing and whether they'll be stepping in to do something. it seems they have. the qatar energy minister, according to reuters, saying that they've just finished a successful meeting. they say they're acting as usual towards the security of oil supply, but they've agreed to freeze output at january levels. they say the agreement is contingent on other major producers following suit. so they want some of the other producers to follow in their footsteps. they think that'll stabilize the market. they say the decision was made by the qataris, the saudis, russia, and venezuela. they'll all be leading the effort together. >> significant because we have seen everyone pumping out record levels despite the fall in prices. but we're getting a freeze, not a cut, as many had hoped for. >> and we don't know how long it will go on for. david stubbs is with us from jpmorgan.
good morning. this would be good news, right? >> i'm not sure what we've got here. we've got a few countries planning to freeze, not cut, production at record levels for an undisclosed period of time. as long as other people do it. so i don't think it's the hugest announcement. there's been a lot of jawboning in recent months. there's always going to be another secret meeting, et cetera. i don't think they can make up for the fact that opec is fundamentally production. are the iranians going to stop production coming on? absolutely not. are the mexicans going to do it? you're going to see people worried about this lower oil price if you're in the oil world. there's no supply coordination sufficiently to deal with what is a tepid but growing demand environment. but you still have this huge excess supply and inventories are through the roof.
you need to cut supply. that's not going to happen. >> you raise the point of iran there and what does a freeze mean as they're just coming back online. they've said over and over again they want to get pumping straightaway. we don't know how much they'll be able to do in the first place. >> exactly. iran's not involved. i can't imagine they're going to be involved. so we're still pretty much where we are. i think the big picture with oil is we're obviouslily near the end of this bear market than the beginning. what matters is what economies and companies can expect sustainably over the next two to three years. i struggle to see an average price higher than the mid-40s. that's still a very low oil environment. it's still going to create the kind of tensions and turbulence we've seen in credit markets, in economies. that's not going away. >> just a couple hours ago, we were higher by almost 5% in the oil contracts. we're turning around a little bit now on the back of that
announcement. you said we're close to the end of the bear market in oil or in equities as well? >> i think in commodities in general. most commodity industries have been falling since 2011. iron ore lost almost all its value. copper as well. oil is just the latest one to collapse in the last 18 months. just mathematically, i think we're near the end than the beginning of the commodity bear market. but we're in the most painful phase where prices are so low it forces bankruptcies and defaults. >> how about equities? i spoke to robin griffiths from the ecu group yesterday who says first of all the bull market that we have seen has been twice as long as the traditional bull market. he thinks it we're in for a continuation of that through march or the end of march, and a massive correction coming. >> well, i wouldn't give such exact predictions at all. i do think that market psychology has been extremely damaged by what has happened throughout the last year, really. six to nine months going back to
last summer. i think that if you want to be fairly constructive about what's going on, i think there's a recognition we're in a slower growth world, not just in europe, which i think was clear to most people, but also the united states. growth expectations in the united states is at or below 2%. that doesn't require very high equity multiples. i think valuations will come off. i think you have to focus on earnings. >> well, given that line on earnings, to what extent have we already priced in bad news when it comes to the correlation with low oil prices? when we start talking about the consumer goods groups that have been reporting, some of the drinks makers, even the banks saying low oil does have its benefits. and this takes more time to trickle through to the real economy. do you think we'll start to see the benefits coming forward when it comes to the ek with ities side? >> you've already seen some of the benefits, but they've been taken in the form of savings and financial stability of consumer balance sheets rather than some kind of sugar high of them
rushing out and spending all the extra money. you could argue that's a good thing for the economy. it may not be the best thing for markets in the short term, but it's make a good thing for financial stability in the medium term. i certainly think this correlation with oil and equities is a sign that we are in a real painful, you know, location when it comes to those prices. and it's calling into doubt the business plans of major companies, that dividend streams look extremely vulnerable, not to mention all the pain that's already happened into large emerging markets. so some stabilization is required for risk sentiment to recover. >> okay. david, you're staying with us, which is a good thing. get your e-mails through early, your tweets as well. firstname.lastname@example.org. that's the e-mail address. i say get them through early, because sometimes there's a little delay.
it's a shame if we can't use it. nancy is on twitter @nancycnbc. or @louisa bojesen. just to mention that anglo american shares have been trading lower here this morning by almost 4%. they had been higher by some 6% initially at the open. so we're seeing a reversal there, nancy, with the anglo shares under pressure. >> that's right, louisa. investors trying to dissect the various elements of this earnings report. of course, anglo american has disappointed results when it comes to the top and bottom line when looking at the full year. 2015 revenues dropped to $23 billion, down from almost $3 billion just last year. and of course, a lot of discussion about exactly what the restructuring would look like. we're getting more details on that as well.
it's planning to sell its iron ore division, and that means it's moving from 45 to 16 core assets as it scales down its operations. now, cap ex, another big focus, will be slashed by a quarter to below $3 billion this year. plus, the company's dividend has been suspended, and payouts will be resumed, quote, when appropriate. so some uncertainty there. in a first-on interview earlier, we began by asking the anglo american ceo about his decision to exit from the iron ore mine. >> we're talking to the team, talking to the government, looking into how we best do it. we've got a couple options, whether we do a sell down or, in fact, do a spin off. two of the options. there are a range of other potential options as well. but we have to make sure all of our stakeholders are in the conversation and we do it in the right way. >> there was always a theory that the bigger you were in iron
ore, the better your market position. that leaves you with one other core asset. you're talking about becoming cash flow positive. so do you think this business is still hold the line because the quality of that product you produce is high-quality product? >> we've been clear on the strategy. we've said diamonds, platinum, and copper will be our key focus. we still are committed to finish the project off, make sure it's cash positive, then we'll review our options in the next two to three years. i think we've been pretty consistent and clear on the strategy, and it's about focusing on consumer-based commodities and the great assets that underpin those commodities. for us, we're a much smaller player in iron ore. you've got the majors really driving production right across the board. so we have an oversupply market. a lot tougher in iron ore. we've got natural advantages in those commodities. >> back in december, we talked
about 85,000 job cuts. how many is the updated figure? >> well, it's very similar. what we have done is we said that we'd be down to around 135,000 by the end of 2015. we're actually down at 128,000. we will ends up with about 50,000 people in the core, but i have to remind you that 68,000 of the 78,000 reductions to go, go with assets. so they don't lose their jobs. we're talking about 10,000 in the restructuring of our assets and getting our costs down. so i have to make that point because people out there are listening to these stories. what we want them to know is they'll go with the assets. >> so some big restructuring happening from within anglo american. david stubbs is still with us from jpmorgan asset management. are we going to see more restructuring from within the miners? do you anticipate the worst is over so far? >> no, i don't think the worst is over. you've got to see a lot of restructuring and financial management. it amazing me that iron ore
price is down by about 75% since its peak, and now you sell the business, now you're selling your assets. what kind of financial planning is that when you're selling at the bottom of the worst bear market anyone is ever going to see? i'm not an expert in the financial choices each of these companies make, but it seems they're now selling pretty much under distress into a chronically oversupplied market, and i imagine they're not going to get a great price. >> but at the same time, how long can you keep bleeding money? it must be about salvages what's left or saying strategically in the long term this makes sense from a jobs perspective. >> absolutely. it might very well be the best of the bad options they have now, but i think this goes to -- and you see this across a number of companies -- about the scale of the misforecasting of markets and management hubris we saw in this industry. i think it's only going to continue in terms of its
restructuring because i don't foresee the underlying price of these commodities, be it iron ore, copper, gold, or oil either, rebounding to where they were a few years ago. that was a commodity bubble driven by first china's huge industrialization after no investment or supply in the '90s. now it's burst because of the supply in the 2000s. those things are not going away. >> coming into this earnings season, there was so much fear about what the dividend actions would look like. we have a suspension of a dividend here. we've had others. finally starting to see companies take action. that generally does not have a positive stock reaction. but is this what companies should be doing in this environment, waking up to a reality check here? >> exactly. if you're one of the companies that is going to survive, going to hurt but survive, then i would be cutting the dividend to zero right now, stockpiling cash, but looking after my
balance sheet. you're picking off companies as they default on their debt and have to give up on those assets. there will be smaller, higher cost players as this bear market rolls on, even if you get stabilization at low levels. it amazing me people didn't face up to this huge bust earlier and cut the dividends sooner. >> david, thank you very much. people are writing in saying good morning. >> good morning to the viewers. >> the qatar announcement of freezing output at january levels is said to be just an attack on iran, per david. the blue source says it's interesting to see how the market turns into the red zone as policy members push the markets. we have the draghi comments yesterday, right. it's all about what the central
bankers do next as well. >> central banks are still going to be one of the big players in market sentiment. since the actions just before the start of the year, which were significant but the market deemed them a disappointment, we've been expecting some further additional action the first half of this year. i think he wanted to go down straightaway, but those pesky germans probably stopped him. i think we expect a similar cut in the positive rate. something else on quantitative easing. maybe a bit more, a widening again of the things they can purchase. you look at peripheral spreads, the strength of the euro, the ecb is going to have none of that. it's going to try and reverse that quick. >> david, fantastic seeing you, as usual. david stubbs joining us live on the show from jpmorgan asset management. a >> and if we can get a quick check on oil prices.
really not reacting very much. we're seeing brent and wti both in the neighborhood of 2% and 3% higher. some stabilization here when it comes to the increase in oil prices following that announcement. mean while, so much coming up here on "street signs," including the biggest names in music. well, they descended on los angeles for the 58th annual grammy awards. we'll tell you why taylor swift and kendrick lamar won't be feeling, quote, bad blood, any time soon.
of 60 cents per share for 2015 and the current year 2016. but orange delivered little n s news, saying talks with its smaller rival would likely take several weeks. there was a lot of anticipation we'd get more news on that merger, but that's not the case. meanwhile over in italy, italia unveiled its new investment plan to 2018, saying it plans to spend 12 billion euro, in its home market. this comes after reporting a 20% drop in 2015 core earnings. that was on the back of 1 billion euro's worth of one-off charges and a 26% slump in brazilian sales. joining us for more insights on the sector, director at equinox business consulting. dave, pleasure to have you with us around the set. let's talk about orange specifically. there was a lot of anticipation we would get final announcement on this deal. not so. this has been going on for about two years now. so first, walk us through what is holding up this deal? and is there a possibility it
may not be struck? >> i think the head of orange said it's still 50/50 as to whether it's go-ahead. and it has been going on for about two years. originally orange were looking at doing a deal, then they pulled out because they didn't think they could get it to work. then the french government scuffled a takeover by another player in the french market about a year ago. i think one of the problems is, it's not a straightforward acquisitional merger. there's so many parties at play here. you've got the french government, who at the moment earn about 23% of orange and have made very strong noises. they don't want their stake dropping below 20% because they'd lose directors. anyone taking stock in return is going to be limited. then you have the fact that the other two players are going to
take a share of the assets. so it's more like a carve-out than a merger. >> as we were speaking here, we're getting flashes from the orange ceo, speaking after earnings, reiterating about a 50% chance the deal will go through, but more importantly saying the deal would not necessarily lead to market repair. so this gets that even if the deal goes through, it's not the panacea for the market. that suggests the government might want to see more done as well. >> absolutely. when joining the market in france three or four years ago, they came in as a low-cost supplier. they were able to do that because people let them share the networks. actually, they were providing services on the back of orange. if you like, that cannibalized the market. great for the consumer, but what it meant there was very little investment going into the networks. and that's one of the reasons, if it does go through, it will see price rises to fund the
investments. many parts in rural france struggle for coverage at the moment. >> what's the french market like at the moment? >> well, i mean, if this deal goes ahead and there was no split, then orange and the combining company would have about 51%. they've got about 39%, 38% at the moment. interesting what orange have said is they would sell off enough assets to the other two players to bring it back down to 41%. so you're doing all of this to gain 2% market share. unlike the u.k., where there should be four providers, will the french government let it drop to three. >> full disclosure, this next question is out of personal interest. the end to roaming charges. how is that going to change the environment? >> that may be one of the things that concern us, as i mentioned.
the revenues in france dropped already. all mobile companies across europe make a big chunk of their money from roaming. when that ended in 2017, yes, they can push tariffs up, which is what they've done before. it's certainly going to cause a drop in revenues. if you look at most mobile operators, particularly those in the continent because obviously the lack of border, easier movement, a much higher proportion of the their roaming revenues come from roaming than u.k.-based companies. >> i can't wait for the end to roaming charges. you come home and you're surprised by a bill of a billion dollars. sorry, you were about to say something. >> just saying, i think the other challenge they've got is whether the decision gets referred to european commission. the only telecom still that's gone to them so far got rejected because the eu government tends to come down more on the side of
the consumer than perhaps what the government might like. >> dave, we've got to go. thank you very much. director at equinox business. also, vodafone and pay liberty have struck a deal, creating the second biggest mobile and cable business in the netherlands. both companies hope the merger would save around 280 million euros in annual costs. >> well, let's get another check on european markets before we go to break. we have seen green pretty much across the board with the german main markets slipping into negative territory. remember, we're in day three of a pretty decent relief rally, losing steam at the moment. if we can take a look at how markets have been doing the last week, we'll take a look a bit later. again, it's been a sharp ride, sharp losses last week still have not been recovered. meanwhile, the latest check on sterling dollar as we get closer to the inflation data due.
welcome to "street signs." i'm nancy hulgrave. >> hi, everybody. i'm louisa bojesen. these are your headlines today. >> crude prices paring earlier gains as oil ministers agree to freeze output at january levels. >> china's central bank throwing its weight behind the industrial sector, this time pledging to support liquidity. it's also promising to scale back loans to zombie firms. >> anglo american shares give back gains after a massive full-year loss. the ceo tells cnbc commodity prices remain under pressure. >> it's far too early to call anything other than bouncing at the bottom. i think we're in the right place, and we're in the right conversation. >> and shares in airbus taking
flight after the chief executive told cnbc he's optimistic on asian orders at the singapore air show. >> there is some turmoil around the world, but globally, the gdp is still healthy. if you take china, the projections are for air traffic growth two digits, to more than 10% a year for the next five years. >> welcome back to "street signs." as promised, we're getting that u.k. inflation data and the latest check for the month of january. it was down 0.8% on a monthly basis. that was slightly worst than forecasted. we were looking at a forecast for about a negative to 0.7% read on the month on an annual basis. january consumer inflation up about 0.3%. again, if we can look at the forecast there, i believe they were calling for closer to 0.4% increase. as you can see there, sterling dollar relatively unchanged from
where we were at the start of the show. of course, the inflation picture continuing to be a major element of the boe's future rate hike timeli timeline. in the last meeting, we had a lot of people talking about whether they'd be easing before they hiked. definitely we'll keep an eye to this inflation data. we've got core cpi at a negative 1% on the monthly basis. that's up 1.2% annually. but that negative 1% is roughly in line, i think, with some forecasts, but on annual basis, just shy of that 3% some were looking for. >> house prices for 2015, guess how much the jump was? 7.9% year on year, 2015. >> just when you think they can't go higher. and that's the entire u.k. not just the hot market. >> exactly. >> some signs of softness, though, when you look at the
ultra high end. getting ready for changes in the budget. >> the u.s. futures implied open. we're looking at a stronger up mied open. dow jones industrial average being called up some 230 points. the u.s. was off for holiday yesterday. coming back with a vengeance perhaps. you' european markets this morning, a little higher. the ftse mib not quite making it there. oil, we've been focusing a lot on that this morning. we've had some type of an agreement. >> that's right. we were looking at this agreement of leaders meeting in qatar and the qatar energy minister. they have agreed to freeze output at january levels. so again, there was some expectation, some hope that we would see an actual cut. but that's not the word at this stage. simply freezing production at january levels. again, this is the first major
announcement we've seen on levels for quite some time since the dramatic dropoff. it's believed that russia, qatar, venezuela are all going to join in the agreement. but iran is still the big question mark here. we know as they are just coming back online after the sanctions have been lifted, iran is keen to get pumping at levels. they want to get that oil out of the ground. it is not expected they would sign on to any kind of freeze or limit so far. as we know, russia, qatar, and venezuela are the parties joining in. >> just looking at the price reaction. we dropped a little bit. >> at the start of the morning, we were up about 5%. down to three. >> exactly. let's put oil to the side for a second. let's talk about what's going on in the air. all eyes on the skies for asia's largest aviation event. it officially took off today. get it, took off? >> too easy. >> sri caught up with some of the biggest hitters and filed
this report. >> conversation we just had with the qatar airways ceo. he was telling me that the collapse in the price of oil is not necessarily the big benefit that it's perceived to be. something of a double-edged sword. yes, jet fuel prices are the lowest they've been in almost 12 years, but let's not forget that a lot of people, business travelers especially, in the oil industry, the gas industry, and mining for that matter, are not traveling anymore. not as much as they used to. that's putting on immense pressure, and it's expected to put more pressure on yields, on the front end. this is what he had to say. >> i think we're in an air travel recession, definitely. definitely in the air travel we have a recession. now what's going to happen is airlines will start competing even more fiercely. this is why we always find new
markets for our expansion. we have recently announced auckland. we are soon going to operate to santiago. we are going to operate to new destinations within our region and the far east. so we are looking at new ways where we have less competition and where we can then have a decent yield coming out of our airplanes. >> we also heard from the management team over at airbus. let's not forget that despite the headwinds that we're seeing in the global economy, slower growth from china, slowing growth from the emerging markets, airbus and their rival boeing are in it for the long haul. they're very much playing a long game here. let's remind ourselves that passenger growth, air traffic is going to double over the next 20 years. that's what they have their sights set on. let's hear from the ceo of airbus. >> last year we got 1,018 net
orders, meaning that for a r third consecutive year, we have booked to bill, which is well above one, because we delivered 635 aircraft. yes, there is some turmoil around the world, but globally, the gdp is still healthy. if you take china, the projections are for air traffic growth two digits, so more than 10% a year for the next five years. so the market is there, i believe. >> so there you have it. there is confidence, but there also is a quite large element of uncertainty, especially coming from the future of jet fuel prices, volatility in the global oil market. that's set to continue. that makes hedging policy that much more challenging. of course, that's the headwind coming from the global fx volatility that the international aviation sector has to deal with as well. >> and some of those headwinds sri is talking about also playing a key role here when we talk about the future of car demand and car sales here in europe rose over 6% in january.
that was largely led by fiat, which saw sales jump 13.7% just last month. however, we have to talk about volkswagen. sales there lagged behind. an increase of only 0.8% in january. that was for the vw brand. of course, as last year's emissions cheating scandal continued to weigh on the company. however, overall they did see strength in its luxury groups. when we look at the various countries across europe, italy grew the fastest of the major european car markets. we've seen month after month here italy and spain continuing to play catch up with some of the more developed markets. meanwhile, european autos opened higher across the board with fiat leading the way but since have pared those gains. interestingly enough, volkswagen the only major automaker there in the green. perhaps investors are somewhat relieved that the sales performance were not worse. louisa?
>> nancy, coming up here on "street signs," the biggest names in music descended on los angeles for the 58th annual grammy awards. we're recap the night's biggest winners after this. the flu virus hits big. with aches, chills, and fever, there's no such thing as a little flu. and it needs a big solution: an antiviral. so when the flu hits, call your doctor right away and up the ante with antiviral tamiflu. prescription tamiflu is an antiviral that attacks the flu virus at its source and helps stop it from spreading in the body. tamiflu is fda approved to treat the flu in people two weeks of age and older whose flu symptoms started within the last two days. before taking tamiflu, tell your doctor if you're pregnant, nursing, have serious health conditions, or take other medicines. if you develop an allergic reaction,
a severe rash, or signs of unusual behavior, stop taking tamiflu and call your doctor immediately. children and adolescents in particular may be at an increased risk of seizures, confusion, or abnormal behavior. the most common side effects are mild to moderate nausea and vomiting. anti-flu? go antiviral with tamiflu.
welcome back to "street signs." let's give you a check on oil prices because just as this show got under way, we got word from the saudi, russian energy ministers that four countries have agreed to freeze oil production at january levels. so we're talking about russia, saudi, qatar, and venezuela, who's also attending that meeting. so agreeing to a freeze at january levels, perhaps not going as far as a cut, as many were hoping for.
nevertheless, the first major announcement we've had. brent and wti both up higher by about 2.9%. starting at the start of the session when we had word of this meeting taking place, we had gains of 5%. so stabilizing a bit. >> but they are saying the four countries are ready to freeze if others join the move. if others join. >> not a done deal. we have to get the others to the table. the other big key question, iran, which is keen to get production going. >> just about to ramp up production. well, enigas has seen its full-year net profit rise to just over 412 million euros. the spanish energy firm said it was targeting a 2% annual growth rate over the next few years. the executive chairman at enagas joins us on the phone from madrid. good to have you with us this morning. let's assume that quite a few of our viewers maybe don't know the business of enagas.
i see your full-year net profit up by 1% a. you do storage of underground natural gas. talk to us about the market for gas in spain. >> well, the energy gas demand in spain for the last year was very good, 4.5% increase. it's the first time after the beginning of the crisis in 2007, 2008 that it is a positive impact in our energy market. it is one of the explanations that our results in the year 2015 were better than we expected. we have a net profit growing about 1.5% and a dividend rise about 5%. for the next years, we are expecting an increase of the natural gas demand in spain,
about 3% to 4% every year. >> i noted that gas demand had been falling for at least the last, what, five, six years, something like that. so what's driving the demand again? why are we seeing this reversal? >> well, the reversal, there are many sources. one of them is italy, the increase of the gdp of the country. that means the increase of the natural gas demand for industries. that perhaps is the half of this increase. another source of increase of the demand is the evolution of the natural gas for production of electricity, and this year, 2015, was the first good year from this point of view. and finally, the total number of clients, of individuals, that
are using in spain experienced growth last year. this means the 4.5%, despite the warm weather in the country. >> and to the extent that the industrial demand for natural gas gives us some idea where the growth is the coming, can you give us a better idea of your outlook when it comes to demand, not just for the next year but going beyond? >> well, the outlook of the economy in spain right uh no is good, i think. in the last year, 2015, our gdp increase was perhaps double of the average european union. and we are expecting especially in the gas dominion that it will be room for expansion of natural gas. not only of spain. if the agreements from paris are in a good way, meaning that part
of this room could be occupied by the natural gas. this from the point of view of production of electricity. but the main source of production in spain is really the positive evolution of the economy. >> okay. well, thank you. that's the executive chairman at enagas joining us. >> now, one very familiar face was a big winner at last night's grammy awards, but several major stars took home hardware for the first time. nbc's mark barger has the detailing. >> reporter: taylor swift got the grammys started monday night. >> taylor swift. >> reporter: and then added to her collection. three awards, including album of the year, for "1989." >> i want to thank the fans for the last ten years. >> reporter: fans of rapper kendrick lamar got to celebrate.
his show-stopping performance and five grammys, including best rap album. >> we will live forever. believe that. >> reporter: honors for record of the year went to mark ronson and bruno mars for "upton funk." >> we wouldn't be up here if it wasn't for the people dancing in this song. thank you so much. of. >> reporter: the night's first-time winners included ed sheeran and meghan trainor. >> i'm a mess. >> reporter: justin bieber also won his first grammy. best dance recording. and alabama shakes won best rock performance. audio issues marred a performance by adele, but not tributes to lost legends. including b.b. king, eagles'
lead singer glen frye, and glam rock icon david bowie. lady gaga's tribute medley. >> well, i wanted to give you some breaking lines. they're talking about accusations that russia's planes have bombed a hospital in syria, and the russian spokesman there saying they categorically reject any of those accusations. >> and just to add on to that, the u.s., they haven't identified who's behind the strikes officially either, nor has the u.n. although, they're condemning the latest round of attacks. >> a lot of uncertainty. we had that cease-fire deal, calling into question what that will look like and whether it will materialize.
>> very smart viewers writing in on this, this morning. one viewer saying that, may i recall that the regime destabilization is not the path on peace and stability in the country. what happened to iraq after saddam hussein was deposed. it's a longer e-mail. by all means, keep your comments coming through. hadley has just stepped on set with us. >> i think it just speaks to the bigger issue that you have too many countries involved in syria right now. whether they are involved or not involved, the bigger question is who's going to lead this process in terms of another cease-fire. you have to remember, of course, that vladimir putin seems to be egging on the assad regime to assure there's no cease-fire. as we go forward, it remains to be seen whether or not the gulf countries, particularly saudi
arabia, will get involved. that makes things a bit more combustible. >> how do you do a cease-fire when you have like all these groups and also the west saying we need a cease-fire within a week. you've got 40 groups to get together to agree to a cease-fire within a week. >> good luck with that. >> and all of this coming, of course, as the u.s. presidential b election heats up, which is another factor at play. we've just been looking at the rush here to south carolina. for one candidate in particular, that's jeb bush, it is now all hands on deck. his strategy now comes down to rolling out his brother and former president george w. for a rally in south carolina. both george w. and his father, george h. bush, have previously won in florida. here's the latest from the campaign trail. >> reporter: jeb bush got some help on the campaign trail in south carolina from his brother, former president george w. bush, with choice words for gop front runner donald trump. >> and in my experience, the strongest person usually isn't the loudest one in the room.
>> reporter: for his part, the billionaire dismissed jeb bush's campaign. >> his brother came today, trying to make it competitive. i don't think it's going to happen. >> reporter: earlier in the day at a news conference, trump repeated his attacks aimed at another rival, ted cruz. >> he doesn't even have the right to serve as president or even run as president. he was born in canada. so i will bring that lawsuit if he doesn't apologize. >> reporter: senator cruz dismissed trump and suggested the suit was a sign of desperation. >> this is the most rattled identify ever seen donald. >> reporter: on the democratic side, former secretary of state hillary clinton focused on saturday's caucus in nevada, in hopes to rebound after her loss in new hampshire to bernie sanders, who she believes is only concerned with wall street. >> i'm not a single-issue candidate because this is not a single-issue country. >> reporter: bernie sanders brushed off that charge and took his campaign to michigan. he met with families affected by the water crisis in flint. >> i've just come from a meeting which was one of the more difficult meetings that i have
ever attended. >> reporter: analysts believe the flint water crisis is an issue that resonates with african-american voters across the country. >> well, hadley is still with us around the set here. hadley, just days away now before south carolina. the next big test here on the campaign trail. the rhetoric, especially on the republican side, appears to be getting nastier. now you have jeb bush bringing out his brother. you have to whether or not the strategy is a win given that so many of the attacks on jeb bush has been related to his family. >> the big question there is who is the most popular republican in south carolina. guess who that is. it's george w. bush. according to a poll conducted just a couple months ago, she's still the most popular by over 80%. of course, mr. trump is not even really close if you look at the real average. he's about 33% or 36%. but you have to remember, of course, for jeb bush, this is really calling out the big guns. he's making a last-ditch effort
here to appeal to republicans in a state where his family has been traditionally popular. and it doesn't seem to be working just yet. >> and now we have this big debate, of course, over who, in fact, is the most conservative. a lot of that has been brought on by the sad death of antonin scalia passing. now the republicans sparring over who's a real conservative. is that something we'll continue to see. >> absolutely, yes. i think the foreign policy debate is going to continue as well. we still don't know what the outcome in syria is going to be. that's up for grabs as well in terms of who is going to take the lead on that issue. >> hadley, thank you very much. hadley gamble joining us with a closer look, especially at what's going on stateside. let's pull it back to the u.k. for a moment. the british prime minister, david cameron, will travel to brussels today to meet with eu officials. he's chosen not to address the
eu parliament. how closely are you looking at the prospect of a potential brexit when putting your macro science together at the moment? >> it's something we look at separately for the u.k. in our view, the main scenario is we will finds a deal between the eu and u.k. so for now, it's not something that is put into our forecast. but it is a big risk, and the longer it goes on, the bigger the impact on the economy it's likely to be. >> because you wonder kind of not just what the exact on the economy will be but also the impact on businesses. we had these surveys out yesterday saying german and u.k. companies at the moment are thinking twice about continuing to do business if we were to see a brexit. but you're not putting that as one of the main scenarios in your model yet. >> not yet, but i would say for investments especially it is a big risk. we have seen that, for instance,
the crisis in ukraine had a big impact on investment and inventories in the euro area. we could see the same. so it is very likely to have an impact on growth. from a political perspective, it's a big risk because this is more the core of the euro area, whereas greece was a smaller country for the u.n. >> and you can say it's just one more risk that the ecb in particular does not want to have to think about because they're still dealing with this low oil price, what it means for the inflationary pressures to the downside. but you say they're not necessarily focused on the financial market turbulence we've seen in the recent week. still keeping the eye on inflation. to what extent does it impact the market picture? >> we heard draghi speaking yesterday. he did mention the market turmoil, especially the decline in the bank stocks has been something they're focusing on. what they'll look at mow is whether this will have an impact on the transmission mechanism. in that case, they will act. we do believe they will
introduce a two-tier system in the euro area, as we know from bank of japan and in denmark. this will indirectly support banks because they'll have to pay a lower cost. >> okay. we've got to go for now. we're coming back ones other side of the break with you again as well. maybe for a quick comment on the german data. oil, of course, still on the go. >> really coming off sharp gains. nearly 5% earlier in the session. after we got word on a freeze on january levels, paring gains there. we'll be back with breaking data in just a minute. stay with us.
good morning. happening now, the world's largest oil producers meeting in doha and agreeing to freeze output. >> breaking overnight, a rally in asia. chinese stocks turn in their best day in more than three months and now u.s. equity futures are soaring. >> and new this morning, a deal reportedly in the works for home security company avt. it's tuesday and "worldwide exchange" begins right now. good morning and welcome to "worldwide exchange" on cnbc. it is tuesday, february