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First Move with Julia Chatterley
President Trump Wants To Meet The Whistleblower As Impeachment Calls Intensify; Teenage Clothing Brand Forever 21 Filing For Bankruptcy; Elon Musk Unveils The Rocket He Says Will Fly To Mars. Aired 9-10a ET
Aired September 30, 2019 - 09:00 ET
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[09:00:17]
JULIA CHATTERLEY, CNN INTERNATIONAL ANCHOR: Live from the New York Stock Exchange. I'm Julia Chatterley. This is FIRST MOVE. And here's your need
to know. Face-to-face: President Trump wants to meet the whistleblower as impeachment calls intensify. Nothing is forever. Teenage clothing brand
Forever 21 filing for bankruptcy. And a Starship Enterprise. Elon Musk unveils the rocket he says will fly to Mars. It's Monday, let's make a
move.
Welcome back to the show. We are back in action and rocketing towards the final quarter of the year. Yes, it's the last trading day of the month,
the last trading day of the quarter, too. No shortage of twists and turns as far as the news flow is concerned whether it's U.S.-China or the
impeachment crisis here in the United States over in D.C.
On the bright side, though, U.S. stock futures are higher at this moment. Let me give you a look at what we're seeing right now, helped along, I
think today by statements over the weekend from the U.S. Treasury saying that it isn't considering restricting Chinese firms who want to list on the
U.S. stock exchanges.
Peter Navarro, Trade Adviser to the White House went one step further on air this morning on CNBC Network said it's all fake news. I'll tell you
what though, U.S. stocks did they come under pressure on Friday. The NASDAQ losing some one percent as a result of these reports, U.S. listings
of big Chinese companies like Alibaba, jd.com, Baidu all coming under pressure. They are recovering here premarket to and I think overall, this
helps sentiment in Asia as well.
Let me give you a sense of why I think there was nervousness here. There are roughly 160 Chinese firms listed on the major three U.S. stock markets.
So we're talking $1.2 trillion worth of assets, perhaps even more. It is easy to understand why there was some nervousness here.
Look, we'll get more insight later on in the show. But I think the big takeaway for me here is this isn't happening anytime soon. Beijing also
want the decoupling of the two economies, the U.S. and China here, will be bad for everyone. I have to agree. What a backdrop though, for the trade
talks that's set to resume next week.
For now, a brief respite. Chinese markets are closed for the next seven days marking National Day, and it is 70 years since the founding of the
People's Republic. Perhaps some respite for Trump as well here on the trade war front at least. Plenty though to distract him at home.
The Impeachment Inquiry is where we begin the drivers, so let's get to it. President Trump ramping up attacks on the whistleblower here. The
President demanding to meet his accuser. He says incorrect information was passed to that person and illegally.
Meanwhile, the whistleblower's lawyer has serious concerns about their client's safety. Suzanne Malveaux joins us now. Suzanne, fantastic to
have you with us. Adam Schiff, the Chairman of the House Intelligence Committee saying that the whistleblower will appear before U.S. Congress.
What more do we know about this and when perhaps?
SUZANNE MALVEAUX, CNN U.S. CORRESPONDENT: Sure, Julia. The investigation is really going at lightning speed here. What you have is the House and
the Senate on recess, but certainly the House Intelligence Committee is working in earnest to make this happen, to happen as quickly as possible.
There was a conference call with Speaker Pelosi and the Democratic Caucus over the weekend, just yesterday, sharing what the plan is going to be
urging for members not to be partisan or political. She says this is not about whether or not you like Trump, but it is about the Constitution.
So Chairman Adam Schiff of the Intelligence Committee, essentially saying that these hearings will begin this week, and one of the deals that they
are still negotiating working on a tentative negotiation with the whistleblower to go before the Committee on some conditions here that that
whistleblower is protected, their identity as well as their safety.
Lawyers for the whistleblower sent a letter to both the Chair of the House and Senate Intelligence Committees, saying that they were concerned about
the safety of the whistleblower because of statements and tweets coming from the President over the weekend, saying that he wanted to meet face-to-
face, that there would be repercussions.
They also said there was a $50,000.00 bounty on the head of the whistleblower -- for the whistleblower's identity. So you can imagine
those talks still ongoing to make sure that that person is safe in participating in this.
Also what we're expecting from Chairman Schiff, a possible subpoena for documents for Rudy Giuliani, the President's attorney, very much, they
believe involved in this, as well as over the weekend, they also said that they were going to be taking a look at the former U.S. Ambassador to the
Ukraine for testimony as well as the Special Envoy to the Ukraine who just recently resigned and the Intelligence Committee's Inspector General, who
was the one who said that the whistleblower's complaint was urgent and credible, all of this beginning this week -- Julia.
[09:05:34]
CHATTERLEY: Yes, it's so complicated, but to your point, as well, for anyone wanting to raise their hand here and say there's things going on
that I'm worried about, fears around the safety of the whistleblower, I think front and center here.
Very quickly, Suzanne, for an international viewer that's looking at this, do we need to illustrate the point that even if we see impeachment in the
House, there are not the numbers to impeach President Trump at this moment in the Senate.
So whatever happens, he will remain unless Republican senators shift their position here.
MALVEAUX: That's right, Julia. And when you look at the numbers here, you have the House, which can certainly impeach the President. It just takes
for a simple majority, the Democrats in charge, but the Republicans in charge of the Senate, they would go through the trial and actually remove
the President.
You would need all the Democrats, the independents and at least 20 Republicans to make that happen. And that would be a huge shift in the
Senate to actually remove him from office.
And so what you're looking at here are Democrats who are saying a couple of things, the leadership saying it is their constitutional duty to move
forward with impeachment -- Articles of Impeachment -- even if he's not removed in the Senate.
There are some other Democrats who are looking at it certainly at the political side of this, saying that look, at the very least by going
through this exercise, they will convince voters and show the American people that he is unfit for office and potentially that he would not win
the 2020 race that they would demonstrate that through this process. And so that is really what you're looking at.
CHATTERLEY: The risk is that it becomes just a huge distraction here. Suzanne, fantastic to have you with us. Thank you so much for joining
FIRST MOVE this morning.
All right, let's move on to our next driver. Nothing lasts forever, it seems, fast fashion retailer Forever 21 filing for bankruptcy. Clare
Sebastian joins as now. Another victim it seems to intense competition and the shift to e-commerce here, but Clare, just explain what Forever 21 is
and where they operate and what we've seen as a result of this filing.
CLARE SEBASTIAN, CNN BUSINESS CORRESPONDENT: Yes, Julia. This is a fast fashion retailer really. It caters to kind of teenagers and early 20s,
very cheap clothing and a couple of issues that affect Forever 21, which has made the shift in the retail industry even more acutely felt by them, I
don't know when the last time is that you've been to a Forever 21 store, but they are huge.
According to their website, the average size is 38,000 square foot which is really more akin to the size of a supermarket than a clothes retailer and
this is part of the problem for them. Their stores are enormous. They've been expanding since the financial crisis, just as other retailers were
starting to kind of downsize their physical footprint and shift more to online.
This has made the crisis with being able to pay their rents more acute as sales have been slowing. And they're also, you know, kind of the wrong end
of another shift in retail, and that is the shift away from fast fashion. People are really looking for something more sustainable nowadays. You see
this in terms of how, you know, even influencers operate online.
They're pushing people to be a bit more careful with constantly spending on cheap clothing and Forever 21 definitely on the wrong side of that, too,
Julia. So this is, you know, something that has been precipitating for a long time for this company.
They say they are going to be able to stay in business. They've managed to secure some financing to help them do that, but the pressure is on to prove
that they can, you know, they can downsize now and really get things back on track.
CHATTERLEY: You make such great points here, Clare. This is about far more than just more people buying things over the internet rather than
anything else.
The specific challenges for this brand, too, which you illustrate. It's also a problem for the mall operators hereto. And I do want to speak about
some of these guys, Simon Property Group, Brookfield Property Partners, one of the biggest tenants here is having a ripple effect.
They're shifting the changes that we see in the underlying retail environment having repercussions for others hereto.
SEBASTIAN: Absolutely, Julia. This is one of the biggest tenants and American malls. I think it's interesting if we talk about the size of
Forever 21, this is kind of a microcosm of what we see for America's malls as well. Just too much space too, many stores. Too much square footage
more than is needed now for today's shopper who of course is shifting online.
Simon Property Group has lost about a third of its value really in the last three years. Interestingly, a couple of years ago they actually teamed up
with another mall and stepped in to rescue a retailer, Aeropostale. It remains to be seen whether they're considering doing that again in the
future.
But I think that is a sign of just how much these mall owners need these stores. Forever 21, not an anchor tenant as such, but these malls have
been losing others. The likes of Sears, you know, we've seen other bankruptcies this year, Payless, Gymboree, this is something that just
keeps happening and the mall owners have really got to step up their game. It is experiences rather than just shopping that people want from these
malls.
CHATTERLEY: Absolutely. I want to circle to point, too. Clare Sebastian, thank you so much for that update there. And later on in the show, we'll
be speaking to the CEO of Majid Al Futtaim. The company owns many malls across the Middle East, across the E.U. and Asia, including Forever 21, as
well appearing in their malls. He'll be joining us live from Dubai at 9:30 a.m. Eastern Time. So stick around for that.
For now, to our next driver and raising a glass to its first day of trading. Beer maker AB InBev's Asia arm finally going public in Hong Kong.
It finished over four percent higher in the first day of trade.
Paul La Monica joins us now. Second time-ish lucky. They sold off the Australian business, came back to the market and it looks pretty successful
here.
PAUL LA MONICA, CNN BUSINESS REPORTER: Yes, you have to think that it's a success, Julia. The fact that they were able to get this offering out and
for it to go up a little bit.
Keep in mind, though, that they did downsize the offering. It was originally expected to sell about $10 billion in stock, which would have
made it the biggest IPO of the year; instead, it is about $5 billion. It's the second biggest globally, behind Uber.
They also had to bring the price range down I think to make it more palatable to investors as well. But that aside, at least the stock did go
up, which is not something that can be said for a lot of unicorns in the U.S. that have been going public lately. The likes of Uber and Peloton and
SmileDirect Club which have really been more IPO no than IPO oh this year.
CHATTERLEY: Yes, it's interesting. For me, there are a couple of questions here. One, does this tie back to the broader questions that
we're asking about private market valuations versus public in a sort of rationalization? Or was this business well enough known that we don't have
to have those kinds of fears.
And the second thing is, this is good news for Hong Kong, too admit 17th weekend of protest that we just saw. Surely, they're still managing to get
listings done here.
LA MONICA: Yes, I think to just take that latter part first, definitely very encouraging news in light of the political instability in Hong Kong
right now that this offering was just able to get out in the first place.
As to the question of whether or not this shows that, you know, maybe there's an appetite for companies with no solid financials. And I think it
is worth noting that there's a big difference here between a large multinational conglomerate like AB InBev selling off a piece of its
business and these private companies that had been you know, given higher valuations probably than they deserve by Silicon Valley than going out and
having their day of reckoning on Wall Street.
So I'm not sure it's totally apples to apples. But yes, it is true that investors obviously like profitability and big brand names, companies like
Uber, they have the ladder, the brand name; the profitability, not so much and probably not anytime soon.
CHATTERLEY: I couldn't agree more. Apples to Asian pears in this case. No more questions, I've been told of. I've got to move on. Paul La
Monica, thank you so much for that.
All right. Let's move on. There's turbulence for Airbus coming back. The WTO expected to approve a record U.S. tariff here, retaliation for aircraft
subsidies. Anna Stewart joins us and Anna, you've been covering this story for a while. What can we expect in terms of the fine that we're looking
at, a record potentially from the WTO here?
ANNA STEWART, CNN REPORTER: Yes, okay, so the broadband for that number is expected between $5 billion and $8 billion. Most reports putting it at
$7.5 billion. We'll see whether that's correct.
Once we get the number of course, the next question is, will the U.S. administration immediately announce tariffs in new European goods, and what
will they include because they already drafted up a potential list on $25 billion, a much more substantial. That would include everything from
French wine, Italian cheese, cashmere, you name it.
I would expect any tariffs of course to have planes, plane parts front and center because this is about Airbus and Boeing as well, that dispute.
Of course, the CCO of Airbus recently told us though, that any tariffs that are on them will end up hurting America. Take a listen.
(BEGIN VIDEO CLIP)
CHRISTIAN SCHERER, CHIEF COMMERCIAL OFFICER, AIRBUS: Tariffs will be a hurdle for us in the beginning, then it will have ripple effects on the
supply chain. And I'd like to point out that 40 percent of what we procure comes from the United States.
So if Airbus is facing an impediment to doing business in the U.S., there will be an immediate negative effect on the U.S. aerospace industry, not to
mention the effect of higher aircraft prices and ticket prices affecting the consumer and therefore, the whole economic activity of this sector in
the United States.
(END VIDEO CLIP)
[09:15:00]
STEWART: He did go on to say that he thinks this is all posturing and that it will bring both sides to the negotiating table, he was looking at the
U.S. and China in their trade dispute. It doesn't look so good.
Of course, if the E.U. wants to retaliate and they've got the separate Boeing ruling, that won't come too early next year, so they won't know what
they can potentially tariff back in retaliation. It is a long running dispute, it could be heading up for negotiation, Julia. It could be
heading up for more tit-for-tat. We really don't know at this stage. But that number between $5 billion and $8 billion is expected shortly.
CHATTERLEY: Yes. And we are waiting to see that in eight months' time whether the WTO says that Boeing has been subsidized as well under and that
the E.U. can respond in kind. We'll see. Anna Stuart, thank you so much for that.
All right. Let me bring you up to speed now with some of the other stories that we're following around the world.
Dozens of world leaders including Russian President Vladimir Putin have been in Paris for the funeral, a former French President Jacques Chirac.
He died last week, aged 86. Far-right leader Marine Le Pen did not attend at the request of Chirac's family over the weekend.
Saudi Crown Prince Mohammad bin Salman denies ordering the killing of Jamal Khashoggi. As the leader of Saudi Arabia, he say he takes full
responsibility though. The "Washington Post" journalist was brutally murdered and dismembered inside the Saudi consulate in Turkey a year ago.
Here is what bin Salman told CBS News.
(BEGIN VIDEO CLIP)
NORAH O'DONNELL, CBS EVENING NEWS ANCHOR: Did you order the murder of Jamal Khashoggi?
MOHAMMAD BIN SALMAN AL SAUD, CROWN PRINCE OF SAUDI ARABIA (through translator): Absolutely not. This was a heinous crime. But I take full
responsibility as a leader in Saudi Arabia, especially since it was committed by individuals working for the Saudi government.
O'DONNELL: What does that mean that you take responsibility?
BIN SALMAN (through translator): When a crime is committed against a Saudi citizen by officials working for the Saudi government, as a leader I must
take responsibility. This was a mistake and I must take all actions to avoid such a thing in the future.
(END VIDEO CLIP)
CHATTERLEY: To Hong Kong now where protests turn violent on Sunday as the city prepares for more demonstrations on China's National Day.
Some protesters threw petrol bombs as local police deployed water cannon and tear gas. These latest clashes come ahead of the 70th Anniversary of
the founding of the People's Republic of China on Tuesday.
British Prime Minister Boris Johnson denies a claim he squeezed the thigh of a female journalist at a private lunch in 1999. This comes as the
U.K.'s Conservative Party meets for his annual conference and Mr. Johnson hopes to deliver Brexit by the end of October. No facial expressions
allowed.
We're going to take a break here on FIRST MOVE. Plenty more to come. Stay with us.
(COMMERCIAL BREAK)
[09:20:55]
CHATTERLEY: Welcome back to FIRST MOVE and a look once again at our top story. The impeachment crisis brewing in Washington, D.C. Our next guest
believes the odds of an impeachment in the House have climbed above 50 percent. Meanwhile, the probability of a China-U.S. trade deal has slipped
below 50 percent.
Greg Valliere joins me now. He is Chief U.S. strategist at AGF Investments. Greg, fantastic to have you on the show. Let's start with
impeachment first, a probability above 50 percent of A House impeachment. Explain why you believe that, and then I'll ask you why it could be an
exercise in futility here if the Senate isn't on board, too?
GREG VALLIERE, CHIEF U.S. STRATEGIST AGF INVESTMENTS: Well, I have to say, Julia, that the last three or four days have been devastating for the white
house because there's a new element to the story and that's a possible cover up.
You need 218 votes in the House and I think the Democrats have 215 to 216. I think when the vote comes probably right around Christmas, there will be
the 218 in the House to impeach or indict. The words are interchangeable. As you point out, the big story is in the Senate.
CHATTERLEY: And the big story there, it seems at least today is that there simply aren't enough Republicans that are going to turn against the
President to impeach him.
So I think for our international audience, they going, is this simply just a lot of sound and noise and distraction, actually, for the Democrats. And
the only way to remove the President is to win an election in 2020.
VALLIERE: Well, you're absolutely right in that there's a rhetorical issue here and that people hear the word impeachment and they think that means he
is out if the House impeaches.
The real story is would the Senate convict or acquit after a trial. I'm not even sure Mitch McConnell will allow a trial. But if there is one, I
still think the odds favor acquittal with Trump not being ousted if people want him gone, they've got to vote him out.
CHATTERLEY: What about the Senate then here? Is there anything that may come from the whistleblower's account that could change the minds here of
enough senators to make them go, you know what, actually the Republican Party, the country is better off without the President here.
VALLIERE: You know, it's not out of the question. I think as of this morning, maybe there's three, four or five Republicans who might consider
voting to convict. But I think we've got to see what the whistleblower has. Are there tapes? What about trust meetings with Vladimir Putin and
others? Is there really a cover up? A lot of talk about a cover up. Has there been obstruction of justice?
So there are issues that could all come together to make the Senate vote closer, but as of right now, I still think the smart bet is that he gets
acquitted in the Senate.
CHATTERLEY: You it's interesting, public sentiment, it seems has shifted with people looking at this and saying perhaps pushing for impeachment here
is a good idea. What's the risk? And given that you're talking probabilities, how high is the probability here that this backfires on the
Democrats, and it backfires on Joe Biden too, because the Republicans don't let the noise surrounding Ukraine die down?
VALLIERE: Well, Washington is a city that is addicted to the polls. And I do think that the polls will be pivotal in this entire story. Right now
over the weekend, the polls have gone up a little, people wanting maybe to at least have a hearing of all of these issues.
But I still think the country is averse to going through the trauma of a long drawn out trial. I don't think anyone wants to see that. Certainly
not the markets for all of next year.
So I think that the polls right now are still another reason why the Senate would probably vote to acquit.
CHATTERLEY: And very quickly, Greg, I have about 30 seconds, why slipping chances of the U.S.-China trade deal here now below 50 percent in your
mind?
[09:25:00]
VALLIERE: Two or three things very quickly. On Friday, the White House had an absurd leak that they might try to stop U.S. companies from
investing in China. But what a negative story that is.
Hong Kong if China has to crush the insurrection, that's not going to help the trade talks. But most importantly, the Chinese read the polls, and
they know that impeachment is now in the air. Might they want to wait until after the election and to see if Trump is still around?
If Trump is not around, I think the Chinese might think they could get a better deal with someone else.
CHATTERLEY: Yes, it's such a great point. Mr. Peter Navarro called that rumor fake news this morning on CNBC, but your broader point is very valid.
Greg, fantastic to have you on as always. Greg Valliere there.
VALLIERE: Great, you bet.
CHATTERLEY: Thank you. All right. The outgoing head of the IMF, Christine Lagarde warning about the economic costs of the impeachment
distraction here in D.C., but she did have to say, steer clear of politics. Listen to what she had to say.
(BEGIN VIDEO CLIP)
CHRISTINE LEGARDE, OUTGOING MANAGING DIRECTOR OF INTERNATIONAL MONETARY FUND: You know, I lived through Watergate, and I was actually working on
the Hill as a little intern of a Member of the House Judiciary Committee, Bill Cohen. And I could see in those days, how much energy, focus,
brainpower was actually spent on the Watergate issues.
If this is going to be the same again, I can only imagine how much more energy, brainpower and focus there will be on those purely political
issues, which will be a complete distraction from focusing on the economy, producing values, the wellbeing of people.
I respect what is going on, and I have no opinion and no view because I'm not an American. But from an economic point of view, and from the global
economic point of view, it could very well create massive disruption, and I think it would undermine the U.S. leadership.
(END VIDEO CLIP)
CHATTERLEY: A great interview with Richard coming up this evening on "Quest Means Business." It's about her tenure at the IMF, and her new role
as President of the ECB, eight o'clock, London time. 3:00 p.m. Eastern, nine o'clock Frankfurt. Plenty more to come in the market open, next.
(COMMERCIAL BREAK)
[09:30:00]
CHATTERLEY: Welcome back to FIRST MOVE live from the New York Stock Exchange here and the opening bell for the first session of the week this
Monday.
A slightly higher open for U.S. markets. We were anticipating that taking back some of the losses that we saw in Friday's session helping us along
with that, that U.S. Treasury statement saying that there were no immediate plans to restrict access to Chinese companies listing here on the U.S.
markets when Pete Navarro was asked earlier on CNBC of any plans to delist Chinese companies that have already listed here in the United States. He
called it fake news.
But obviously that creating some caution on Friday. We'll talk about that more in the show. But China has warned decoupling the United States here
would harm both sides. It's a message that they've reiterated often here. High level talks on those trade deal or hopes for a trade deal set to
resume next week.
In the session today though, keep an eye on retailers. We were discussing earlier about Forever 21 filing for bankruptcy here in the United States, a
victim of among many things here, changing consumer tastes and a shift to e-commerce.
Forever 21 has a presence in malls owned by Majid Al Futtaim Group, which has a huge footprint across the Middle East, Africa and Asia with shopping
malls, cinemas and leisure facilities, too.
The company also boasts over three and a half thousand hotel rooms and the franchise for at least 280 Carrefour supermarkets and hypermarkets across
15 different countries.
And I'm glad to say, our next guest is the CEO, Alain G. Bejjani. Sir, fantastic to have you on the show. Thank you so much for joining us.
Unfortunately, Forever 21, an illustration, as I mentioned about some of the challenges that your business faces with the changing consumer taste, a
growing presence in e-commerce versus customers coming to shopping malls and shopping there. Talk to me about what you're seeing and how you're
dealing with that.
ALAIN G. BEJJANI, CEO, MAJID AL FUTTAIM HOLDING: Thank you for having me. Well, effectively, there is a change in channel that's becoming more and
more important and we are seeing that customers are favoring more experience over product and price. So we are going to see these kinds of
situations. This is not the first time that we have a global retailer that goes into this situation.
But in reality, the retail sector in the GCC is going to grow up to $308 billion between now and 2023, so there is still a lot of demand. But this
demand has to be underlined by a very strong customer experience. And of course, a great omni-channel experience as well.
CHATTERLEY: You know it is interesting when I look at -- if we look at specifically the retail part of your business, how much of that and what
proportion is driven by domestic spending versus tourism, which is also surely key?
BEJJANI: When you look at -- when you look at the region, most of it is domestic tourism driven and our business across the 15 countries, our brand
is primarily there to cater for the local customers.
This being said, markets like Dubai and the UAE primarily have a big tourism impact, that's for sure. But this does not -- it does not exceed
something like 15 to 20 percent depending on the locations.
CHATTERLEY: Because I think a lot of people, particularly if we're talking about the Middle East here, look at the noise level right now, the
escalation in tensions between the United States and Iran in particular here. I just wonder what kind of dampening effect that is also having on
consumer appetites and spending here versus the broader challenges that we've talked about, which is structural shifts here in retail.
BEJJANI: Consumer confidence had been impacted negatively in the past three to four years. I think currently the regional instability, the
volatility that we're seeing globally, the trade wars and so on are also taking a toll on consumer sentiment.
But we also have to remember that the Middle East at large is a very young population, more than 50 percent of the population is below 25 years old.
The internet penetration is very high. The mobile penetration is very high.
So modern lifestyle is something that every customer across the countries that we operate in want and wants more and more over time, too. We are
seeing a big shift towards modern trade and this is good news.
This being said we'll have to overcome a negative consumer sentiment in the region. We hope that in the coming year, we would see more clarity and the
current tensions between Iran and the rest of the world will actually come to basically some kind of a solution.
[09:35:10]
CHATTERLEY: I think many would agree with you, sir. I want to talk about the good news here, which is the growth regions and you point to Saudi
Arabia, you point to opportunities in in Egypt. I want to start with the first one and talk about what you're doing in in Saudi Arabia in particular
and the shift that we've seen in the last year with access now to cinemas because I know this is something where you're ramping up investment. Talk
us through what you're doing there.
BEJJANI: Absolutely. So Saudi Arabia has been on this path of liberalization opening up the country. And I think we just heard in the
past few days, the new tourism, sorry, the new visa program that will boost inbound tourism into Saudi Arabia, that's very important.
So we have been -- we have been in Saudi Arabia for more than a decade in different businesses, but the latest I would say addition is VOX Cinema.
So we introduced our cinemas into Saudi Arabia with the lifting of the ban a year and a half ago.
And today we are leading the Saudi cinema sector, and we're also developing local content, and this is something that has been extremely well received
by the population. In addition, of course, with the liberalization of the woman condition, and basically bringing and making some historical
decisions that aren't anywhere else in the world, I would say the basics of what it should be.
So we are very happy that Saudi Arabia is still a great story that needs to be told. I think there is more and more efforts that are being put in
order to drive this narrative.
Cinemas in Saudi Arabia are doing fantastically well. There is a lot of runway for that and we are extremely engaged on that side. But if we look
also across the region, Egypt is another great story. Egypt is developing well. It is growing well in the past year and a half after difficult times
it went through.
I think the reforms in both Egypt and Saudi Arabia were extremely welcomed, and they have been dealing with some structural issues to a large extent.
We hope to see more of that. And we're seeing that the Egyptian population is responding very well.
And I think Saudi Arabia is going to go better and better, unless something I would say, something on the geopolitics comes and changes the
characteristic.
CHATTERLEY: Yes, it's great to hear about the growth stories in addition to the challenges here. Sir, fantastic to have you on FIRST MOVE this
morning. And please come back and talk to us again. Alain G. Bejjani there, the CEO of Majid Al Futtaim Group. All right, we're going to take a
quick break here on FIRST MOVE. Plenty more to come. Stay with us.
(COMMERCIAL BREAK)
[09:40:54]
CHATTERLEY: Welcome back to FIRST MOVE. The Trump administration says there are no current plans to delist Chinese companies that trade on U.S.
exchanges. Three major Chinese stocks listed in New York -- Alibaba, jd.com and Baidu rebounding this morning. As you can see after plunging on
Friday where report said that the White House was considering action to limit U.S. investment in China. Trump Trade adviser, Pete Navarro is now
slamming those reports as fake news.
And more than 160 companies listed on the U.S. exchanges are Chinese with upwards of $1 trillion worth of market cap. So talk of delisting put the
markets on edge clearly, and understandably.
But my next guest says nothing imminent. So let's understand what's going on. Leland Miller is the expert on China's financial system. He is the
CEO of China Beige Book. I tell you what, you're a lot more of an expert than that, quite frankly. But we'll move on.
Talk me through what is fact from fiction here because for those reasons, people were cautious, but we need to what's going on here or not going on
more importantly.
LELAND MILLER, CEO, CHINA BEIGE BOOK: Well, as the U.S. and China have a trade war and have broader tensions that are devolving. Right now, the
White House is evaluating all different types of things, what will happen in a best case scenario, worst case scenario. Some of those are being
conflated right now into being one big nuclear option against China.
So you're talking about the idea of delisting Chinese companies if they don't adhere to certain regulatory standards. And then separately, you're
talking about whether U.S. pension money, for instance, should be prohibited from being sent abroad to Chinese companies, because you don't
know what they're being dumped into.
These are all questions that it's fair to evaluate. Some are very big deals and some are not so big deals, and it's all being sort of pushed into
Trump White House looking to go crazy on China.
And so I think it's worth sort of carving these things into what's really going on.
CHATTERLEY: Just bad reporting, quite frankly, because we need to understand here, and we've talked about it on this show a number of times.
If you're simply looking at U.S. investors of whatever kind, investing in Chinese companies, you want to know that those companies are following the
same kind of financial systems, rules, regulations that U.S. companies are, otherwise you could be investing and your money is at risk.
These are fair questions to be asking at this stage. That's very different from saying whoever is listed on these exchanges is certainly going to be
thrown off.
MILLER: That's exactly right. So if you're a Walmart, you have to subject yourself to audits by Peekaboo. It's the public company accounting
oversight board, and you have to adhere to certain regulatory standards.
Now, if you're a Chinese firm on one of these U.S. exchanges, theoretically you have to do that. But what's happened over the past decade almost is
you've had China simply say, no, no, we're not going to let you look at our books and U.S. administrations have said well, okay, well, we want Chinese
money. We want Chinese -- we want Chinese capital. We want Chinese companies on our exchanges. We're just going to look the other way.
And what's happening right now is people looking at this issue and saying, why in the world? Are we getting these Chinese companies many of which are
fraudulent, many of which are good companies, but many of which are fraudulent. Why are we allowing potential U.S. investors and pensions to
be susceptible to just going down this black hole, despite the fact that it looks like they have the imprimatur of the SEC and the U.S. administration.
So it's a problem.
CHATTERLEY: How far away from actual policy on any of these things do you think we are?
MILLER: Well, there have been a number of bills that have gone through Congress. They're, being talked about a lot right now on Capitol Hill that
could put something like this into play on delisting side in the not distant future.
But then you have long face-its and then you have time for a negotiation period, then you have time for the enforcement to start. This would be
years before Chinese companies would actually feel the true compulsion to move.
Now that doesn't mean that China right now isn't sweating and looking to do secondary listings in Hong Kong in order to hedge their bets, but none of
this stuff is eminent.
The other side of this whether you prohibit pension money from being invested abroad, much bigger deal that is not imminent at all. It could if
you saw the second Trump term and things devolved and trade deal is off, you could go to a separate land. Right now, none of these things are going
to happen.
[09:45:16]
CHATTERLEY: You said China is sweating. Chinese companies sweating or China itself sweating? Beijing sweating? Because I can't help but feel
that the Chinese government here would be like, you know what, we've just opened a big tech exchange in Shanghai. Hong Kong is the option;
admittedly, there's a bit of turmoil there right now. But AB InBev's Asia unit proved you could still list there. They'd welcome those companies
back with open arms, surely.
MILLER: Yes, some of them. So if you're Alibaba, they want to list in Hong Kong and they'll be able to do it. People want to invest in those
companies.
All of these companies, though, you've got a lot of companies that can do this. You're talking about hundreds of companies.
CHATTERLEY: Yes.
MILLER: Chinese companies that would be subject to having to delist and do the expensive process of figuring out how to list somewhere else, and
basically, the champions wouldn't have a hard time with this, but a lot of the middle end companies, which is most of them would have a pretty
difficult time.
CHATTERLEY: Because it means money.
MILLER: Lots of money.
CHATTERLEY: You've got to have people willing to give you money as well. And that's perhaps not such an easy question. Trade deal prospects? Hurt
by this?
MILLER: No, because I think what everyone is realizing right now is the Trump administration wants a deal. They don't -- they want -- they would
like at least a baby deal going into the end of the year.
But right now, the Chinese are shut down for national day, you're not having the back and forth. But the amusing thing about this was we were
talking to clients on Friday, and everyone was saying, has China -- you know, China will be shut down? Is this an escalation?
No, because what's happening behind the scenes is actually a lot of interaction between the two sides trying to get to some sort of smaller
deal and a ramp up a Ag purchases, and possibly pull back on tariffs, pause on tariffs, all kinds of new stuff. So this is going in a very different
direction behind the scenes.
CHATTERLEY: When the ultimate China hawk, Pete Navarro goes on air on a morning like this to say it's fake news. To me, that tells you something,
too.
MILLER: I think they got some pushback on this.
CHATTERLEY: Yes. Always great to have you on the show.
MILLER: A pleasure.
CHATTERLEY: Leland Miller, CEO of China Beige Book International. And you have a great report out, which we will get you back on to discuss, but
we've dealt with that for now.
All right. Well, there's not been an apparent light bulb moment just yet on the U.S.-China trade deal. But I do want to talk to you about
electricity.
When the lights go out, most of us simply flick a switch to restore power, but an American engineer has invented something that will make this process
even faster.
Behold, the digital breaker as John Defterios reports on this week's "Global Energy Challenge." Listen in.
(BEGIN VIDEOTAPE)
TEXT: The Global Energy Challenge.
JOHN DEFTERIOS, CNN BUSINESS EMERGING MARKETS EDITOR: On this edition of "The Global Energy Challenge," how an American company's invention can help
modernize our old power systems.
DEFTERIOS (voice over): More than a century ago, Thomas Edison received the first patent for the circuit breaker, which was later improved by
Granville Woods. Now, Adam Power in North Carolina has radically upgraded the technology for a digital age.
(BEGIN VIDEO CLIP)
RYAN KENNEDY, CEO, ADAM POWER: If there's a problem on this 30-amp circuit breaker, it will trip open and then to reclose it, you've got to go
manually reclose it. It's just like a light switch.
Here, this is what's coming next. A circuit breaker that you can remotely control through software. And you can actually shed, load and manage the
energy in your facility all remotely, preprogrammed. If we have a short circuit in the field like actually at the location. Because of this art
flash, it means an explosion of electrical plasma.
A solid circuit breaker like this actually opens the circuit about 3,000 times faster than circuit breakers do today. And that speed is key to
ensuring that you can actually stop that arc, stop that short circuit before it actually propagates into the system.
(END VIDEO CLIP)
DEFTERIOS (voice over): These efficiencies and safety features are key to multiple source energy distribution.
(BEGIN VIDEO CLIP)
KENNEDY: If you put something like solar onto the same source as your utility or energy storage or another renewable source, they have to sync
up. Which means if they don't, then you can have a fire. It is going to blow up.
What a solid state circuit breaker can do is you can bring, you know, any number of renewables or feeds into the same source, the same electrical
panel.
(END VIDEO CLIP)
DEFTERIOS (voice over): A city landmark, the Duke Energy Center, a pilot scheme is underway. Residential and commercial buildings account for 40
percent of America's energy consumption.
The Adam switch's ability to gather data could help reduce this.
DEFTERIOS (on camera): More FIRST MOVE, next.
ANNOUNCER: The Global Energy Challenge in association with BP.
(END VIDEOTAPE)
(COMMERCIAL BREAK)
[09:51:50]
CHATTERLEY: Welcome back. And a look at today's "Boardroom Brief." Africa's top smartphone maker, Transsion made its market debut in Shanghai
soaring as much as 96 percent before closing up 64 percent, so it gave back a little bit. Transsion sells nearly half of all mobile phones sold in
Africa. The IPO is the second largest for Shanghai's NASDAQ-style star market. We were just talking about that.
Bob Iger says Disney is moving aggressively into the busy streaming market and argues there's nothing out there like his $7.00 a month streaming
service. Christiane Amanpour put him on the spot and asked him, why bother?
(BEGIN VIDEO CLIP)
CHRISTIANE AMANPOUR, CNN INTERNATIONAL ANCHOR: So Disney Plus, the streaming device is set to launch in November and there's plenty other out
there, right? There's NBC Universal, there's Netflix, obviously and Amazon. Some people might say the field is a bit crowded, you may be a bit
late to this, what do you hope for Disney Plus? And what do you say to you know, your chances there now?
BOB IGER, CEO, DISNEY: Well, it's a really interesting time in the media business today when people are accessing media or consuming media in many
different ways than they used to, buying it and watching it.
And it's important, as I mentioned earlier, I talked earlier about being relevant. It is important to be relevant to be front and center in terms
of modern relevant platforms, and basically the most advanced ways for people to access their content. So this is clearly a bold move. I mean,
an aggressive move in that direction.
We have the benefit of these phenomenal brands at the company, Disney, Pixar, Marvel, Star Wars; now, National Geographic through our acquisition
of 21st Century Fox. And so what we're doing is we're creating a service to the United States. It will be for $6.99 a month called Disney Plus that
will feature those five brands, and both library products made by all of those brands from the past and original products made by those creative
engines or brands. There's nothing like it out there.
(END VIDEO CLIP)
CHATTERLEY: And you can watch the full interview on "Amanpour" today at 6:00 p.m. London time, 7:00 p.m. in Berlin.
Now, shoot for the stars and you may land on Mars. Elon Musk's plan to colonize Mars maybe closer to reality. He told our Rachel Crane, it could
even be as soon as next year.
(BEGIN VIDEO CLIP)
ELON MUSK, CEO, SPACEX: If the development continues to improve exponentially, then I think we could -- we could be sending people to orbit
before the end of next year. You know, within a year, approximately.
RACHEL CRANE, CNN BUSINESS INNOVATION AND SPACE CORRESPONDENT: But SpaceX hasn't put a human in space yet. How are you guys going to do this in a
year?
MUSK: Well, we will be putting people into orbit soon. We will be transporting astronauts for NASA in probably, I don't know three or four
months to the Space Station.
CRANE: Yes, on that point. NASA Administrator Jim Bridenstine tweeted yesterday saying that he was very excited about the event today but he also
said quote, "Commercial crew is years behind schedule and it's time to deliver." Did you take that --
MUSK: This is a commercial crew SOS.
CRANE: It is a commercial --
MUSK: Oh, okay.
CRANE: Interchangeable. No, but how do you respond to that? And did you take that as a dig?
[09:55:06]
MUSK: Well, I mean, first of all everything in aerospace is light years behind, okay. It is really a question of relatively speaking which one is
more late, so the hardware for the -- how to board demonstration for Crew Dragon, it will be there in October. The hardware for the first crew
flight will be there in November.
And so most of the work that is required from now through flight of NASA astronauts is a long series of safety reviews, so it's not really hardware
related. And it's really going as fast as we can make it go.
If there's some way just to make it go faster, I would make it go faster.
(END VIDEO CLIP)
CHATTERLEY: That was quite cute. Musk says the starship rocket will cost a lot less than initially expected. But for those of you dreaming to go to
the Red Planet, your air ticket will still set you back $200,000.00. Get in line behind me, my friends.
All right, that's it for the show. I'm Julia Chatterley. You've been watching FIRST MOVE. Time to go make yours. I'll see you tomorrow.
(COMMERCIAL BREAK)
[10:00:00]
END
