May 20, 2024 • 15 mins
Your morning briefing, the business news you need in just 15 minutes.
On today's podcast:
(1) Iranian President Ebrahim Raisi has been killed in a helicopter crash in a mountainous area of the country. Rescuers on Monday found the helicopter that had been carrying the president and other officials including Foreign Minister Hossein Amirabdollahian, who also died, the semi-official Mehr news agency reported.
(2) The death of Iranian President Ebrahim Raisi in a helicopter crash raises the immediate question of who will succeed him in running the government.
(3) Israel's Prime Minister Benjamin Netanyahu is facing increasing pressure from the other two members of the country's war cabinet. Opposition leader Benny Gantz says he'll resign from the cabinet if Netanyahu doesn't adopt a new post-war strategy in Gaza.
(4) London still leads European cities in attracting foreign direct investment in financial services, with the UK's share of new projects reaching the highest level in a decade, a survey by Ernst & Young showed.
(5) Buyout firms splurged on low-margin British consumer companies, seduced by bargain prices and cheap money. Higher interest rates are upending that wager.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:02):
Bloomberg Audio Studios, podcasts, radio news. This is the Bloomberg
Daybak podcast, available every morning on Apple, Spotify or wherever
you listen. It's Monday, the twentieth of May. Here in London.
I'm Caroline Hepkin and.
Speaker 2 (00:18):
I'm Stephen Carroll.
Speaker 3 (00:19):
Coming up today, Iran's president and foreign minister are killed
in a helicopter crash. We look at who may take
over and what it could mean for the broaderm At.
Speaker 1 (00:27):
Least in other news, London still leads Europe in attracting
foreign direct investment into financial services.
Speaker 2 (00:34):
Plus private equities.
Speaker 3 (00:36):
Massive UK debt bind sparks warnings of danger.
Speaker 2 (00:40):
We have a special report.
Speaker 1 (00:41):
Let's start with a roundup of our top stories.
Speaker 3 (00:44):
Iran's President, Ibrahim Raisi, has been killed in a helicopter crash,
according to a number of Iranian news sources. The semi
official Mayor News agency reports that Foreign Minister Hussein Amir
Abdullahian has also died in the crash. The convoy consisted
of three helicopters. The wreckage was found on Sunday in
a mountainous area of the country, but dense fog hamper's
(01:05):
rescue efforts Bloomberg's Middle East edator Paul Wallace says questions
remain over what happens next.
Speaker 4 (01:11):
The government itself has not put out an official statement yet, saying,
for example, who now takes over, It's likely to be
the vice president, someone who's called Mohammad makhmer. In some ways,
a lot of what's gone on in Iran in the
last couple of years in terms of its foreign policy
were not down to Racey so much as the Supreme
(01:31):
media Ali Kamini. He obviously remains in position.
Speaker 3 (01:35):
Bloomberg's Paul Wallace speaking there, The news comes in the
middle of the Israel Hamas conflict in Gaza, with Hamas
supported by Iran and tensions with the US over around
backed too Thi's attacking ships in the Red Sea.
Speaker 1 (01:48):
Well Ibrahim ric age sixty three was an ultra conservative
cleric who was elected in twenty twenty one, following eight
years under the relative moderate Hassan Rahani. Raissi was seen
as a favorite to eventually succeed the Supreme leader, a
Ali Haamane, who is in his eighties. Richard Dalton is
a former British ambassador to Iran. He says that Raisi
(02:12):
was important but not irreplaceable.
Speaker 5 (02:15):
But a figure that was trusted by the Supreme Leader
Atola Kamene and by the other organs of power like
the judiciary and the Parliament could be appointed quite quickly
to take his.
Speaker 1 (02:30):
Place, Richard Dalton speaking there, Raisi entered office pledging to
end efforts to build trade ties with the West and
instead focused on developing links with China and Russia. But
Rayisi's time as president has been marked by economic problems
at home, including successive lows for the Iranian currency against
the US dollar. Also the most widespread and violent protests
(02:52):
in the country's recent history, triggered by the death of
a young woman held in police custody.
Speaker 3 (02:58):
Tidning is now Two of the three members of Israel's
war cabinets are continuing to put pressure and Prime Minister
Benjamin Netanyahu to change course under war in Gaza on Saturday,
opposition leader Benny Gantz said he'd quit the cabinet by
the eighth of June if the Israeli leader didn't make changes.
He wants Natanya who to agree to a six point
plan with the return of hostages a top priority.
Speaker 6 (03:20):
I just understand that we are facing a very long campaign,
whether it's in Gaza, whether it's in other places. But
the hostages they don't have that much time.
Speaker 3 (03:31):
Israeli Work Cabinet member Benny Gantz speaking there. His proposals
also include demilitarizing Gaza and supporting efforts to normalize relations
with Saudi Arabia. Analysts say Natnia, who's governing coalition, is
likely to remain secure even if Gantz carries out his
threat to resign.
Speaker 1 (03:48):
Now, London still leads European cities when it comes to
securing foreign direct investment for new financial services projects, but
a new survey warns that Paris is likely to challenge
London's dominance in the years ahead. Bloomberg's Tea at Adebayo
has more.
Speaker 7 (04:03):
London has secured eighty one foreign financial projects last year.
A survey by Ernst and Young shows a seventy six
percent increase in investments compared to the previous year, with
the city accounting for a third of all financial FDI
in Europe. Although Brexit and poor equity market performance has
raised concerns about the UK's competitiveness, London secured more than
(04:26):
double the investment of second place Paris, but data shows
that investors still rank Paris ahead of London over a
three year horizon, with many on Wall Street touting the
French capital as Europe's next financial hub. In London tiwa
Adebayo Bloomberg Radio.
Speaker 3 (04:42):
The cast of buying a typical home in the UK
has reached a record high. The property website right Move
says demand has pushed up the average house price to
just over three hundred and seventy five thousand pounds. That's
an increase of zero point eight percent from last month.
Property sales also jumped by seventeen percent in the first
four months of the year when compared with the same
(05:02):
period in twenty twenty three.
Speaker 1 (05:04):
Staying here in the UK, the government is expected to
unveil a compensation package worth more than ten billion pounds.
Over the decades long contaminated blood scandal, thousands of people
died after contracting illnesses from contaminated, unscreened blood. Bloomberg's James
Wilcock has more.
Speaker 8 (05:22):
Between the nineteen seventies and nineteen nineties, some thirty thousand
people who were given blood transfusions in the UK contracted
HIV or hepatitis C more than forty years on. An inquiry,
reports to day on what has been described as the
biggest treatment disaster in NHS history. Bloomberg has told the
government intends to spend billions on compensation, reflecting what Defense
(05:44):
Secretary Grant Chaps called a shameful failure. It just makes
you angry inside to hear about all the different you know,
essentially lack of anybody taking responsibility, mismanagement. But the announcement
comes a basically difficult moment for the government. You have
barely any headroom yet want to cut taxes in the
(06:05):
autumn in London, James Orcock in their radio.
Speaker 1 (06:09):
Now to our top story this morning. Various Iranian news
sources say that Iran's president and foreign minister have both
been killed in a helicopter crash in the northwest of
the country. It comes at a time of turmoil in
the Middle East over the war in Gaza, which has
threatened to edge Iran at Israel into all out conflict.
(06:29):
Joining US now is our head of Middle East and
North Africa coverage, Stuart Livingston Wallas, Good morning, Stuart, thank
you for being with us. What is the latest then
that we are hearing about this crash?
Speaker 9 (06:39):
So it started sort of yesterday evening and it's been
a long night. So we know the helicopter I think
it was one of three traveling together, but we'd heard
that it had had I think what was initially reported
as a hard landing, and that was sort of yesterday evening,
and then I think it's just taken a great deal
of time to actually get to the site. It's in
a mountainous area. We've seen some of the the social
(07:00):
media videos being sent out from the site, and things
are very foggy. There was heavy rain and so on.
So they did send some helicopters into try and find
the site, but I just say they couldn't see anything
through the fog, so they had to go basically in
cars or four x fours and go and find the site.
And really that only happened in the last couple of hours.
And then the death has been confirmed by state media,
(07:21):
I suppose in the last hour or so. So it's
been a long long time since the initial reports and
then the confirmation that he is indeed dead.
Speaker 3 (07:29):
Now, Racey was an ultra conservative cleric, former Chief Justice
and had been the favorite to eventually succeed the Supreme
leader Iatala Hameni. How does this affect the hardline leadership
of Iran, which has faced protests over issues like the
economy and human rights.
Speaker 2 (07:47):
It has.
Speaker 9 (07:48):
I mean, I think in terms of the long term
implication with Iran, it doesn't really change the equation. So
there were really two favorites to take over from Hamone,
the supreme leader. One was obviously Racy, and the second
one was Harmony Son, who is, as you can guess,
also something of an ultraconservative. So it was a choice
between two very hard line figures. So in terms of
(08:09):
that future, if things transpire the way we anticipate them,
then you still end up with a hard line leadership
one way or another. Now, what potentially changes here is
in terms of just the balance of power within the
internal hard line camps, because you have the military in
the form what you have the army, but you also
have the IRGC, and then there are some potentially some
(08:30):
changes there. But you know, fundamentally, anyone's anticipating a major
change of policy direction as a result of Racey's death,
I don't think that's going to be the case in
the slightest.
Speaker 1 (08:38):
What then, does it mean for the conflict in the
Middle East? I mean, Iran does have a very you know,
opaque political system, as you say, restricted political structure. But
in terms of the external facing conflict within the Middle East,
Iran did laune a drone and missile attack against Israel
last month that was seen also as a counterattack Iran
(09:01):
and Israel and open conflict that has been a significant worry.
Speaker 9 (09:06):
Yeah, I mean again, I don't think it changes a
great deal because ultimately the final decision on what was
launched and where too was taken by Harmony, and obviously
he remains in office. When he's eventually replaced, potentially by
Son again, you should anticipate quite a similar sort of
set of circumstances in terms of that decision making. So
(09:27):
going forward, yes, Iran will continue to support its proxies
across the region. But at the same time, it really
depends what happens on the ground in Gaza.
Speaker 3 (09:37):
What practically does this mean for Iran at the moment,
What is the succession plan for the president and does
it mean that there will be further elections?
Speaker 9 (09:46):
It does, so we don't know exactly when they take place.
For now, the vice president takes over and then new
elections take place we presume in the next several months,
But of course those election process is absolutely different to
what you would anticipate in the Western democracy. So there
is an assembly of experts who basically decides who can
run and who can't. And as we saw in the
last election in twenty twenty one, you know fundamentally they
(10:09):
will only allow ultra conservative candidates to stand. So I
think in the twenty twenty one election, which is the
one Ricey won, it was something like six hundred candidates
came forward and I think only basically a dozen got
through that final vesting process, and there were no veteran politicians,
there were no moderates, there were nothing even resembling a
moderate in the final camp, as a consequence of which
(10:33):
you saw this record low turnout for the election. Basically,
there is a very large proportion of electorate in Iran
that has effectively given up on those elections ever really
offering them any sort of choice beyond one ultra conservative
over another.
Speaker 1 (10:45):
Okay, in terms of political reaction and response, Even over
the weekend, Chuck Schumann in the US was saying that
there was no evidence of foul play. Clearly, with the
kind of deep tensions within the Middle East, tehranne back
to her mass the Whofi's and Hesbula. This would be
a question that you would anticipate coming, right.
Speaker 9 (11:06):
Yeah, and I'm sure within Iran itself there would be
you know, furious conspiracy theories being spun. I think the
reality is that the most likely explanation is that they
were traveling on reasonably old equipment, because it is absolutely
true that Iran's been number sanctions for a very long
time and has really struggled to get the equipment needed
to maintain its helicopters. Now we don't know exactly what
(11:28):
he was traveling on, but the chances was a pretty
old piece of equipment. And then you layer in on
top of that that they were in a mountainous area,
that it was incredibly foggy, that there was heavy rain,
and on and on and on, and that does appear
to be the most likely explanation. Again, this is not
my air of expertise, but I can tell you that,
particularly in this part of the world, helicopters crashed quite
(11:49):
a bit. However, that will not necessarily stop those conspiracy
theories building up within Iran, particularly because he was one
of the favorites to take over from the Supreme Leader
Supreme Leaders in something like his mid eighties, so obviously
we don't know exactly how long it'll be before he
passes away, but you know when you're in your mid eighties, Chancellor,
(12:11):
it's going to happen in the next few years.
Speaker 3 (12:12):
Okay, Stuart, thank you very much for now that Stuart
Livingston Wallace there are head of Middle East and North
Africa coverage.
Speaker 2 (12:18):
Okay, We're going to turn to.
Speaker 3 (12:19):
A different story now here in the UK, where private
equity firms took over British businesses and droves after the
Brexit vote. A suppressed valuations and the new buyers piled
large amounts of debt on those companies in the process.
Speaker 2 (12:31):
But in a higher rate environment.
Speaker 3 (12:33):
This is now starting to bite the Bank of England
and politicians are worried that this increased dependency on debt
over recent years creates risks for systemically important employers in Britain.
Joining us now to discuss is our corporate finance reporter
Aban av ramnarayan Abana. Good morning to you. Great to
have you with us on the program. Why did private
equity companies target the UK in particular in recent years?
Speaker 10 (12:56):
Many private equity funds are based in the US and
of course there's a cultural film reality with the UK,
and the UK has an investor friendly setup, so it
was always attractive for US private equity firms in particular,
but this was supercharged after the Brexit vote because valuations
fell in the UK on the London Stock Exchange, as
(13:17):
did the Sterling currency. So this created what people started
calling the Brexit discount and made the UK a very
attractive place for private equity companies.
Speaker 1 (13:26):
And so there's been a lot of debt piled on
some well known names here in the UK like Morrison's
and Asda Pizza Express. Madam Tasaul's policymakers are really quite
worried about this. Now, what do you think might happen?
Speaker 10 (13:40):
That's a really good question at the moment. The Bank
of England is looking very closely at this issue. They're
looking at whether or not there's any systemic risk attached
to all the debt that's been added to UKPLC as
it were, And I think the Labor Government has been
making some noises about increasing tax on certain types of
(14:00):
private equity gains. But I do think it's a tricky
one both for policymakers and for politicians because, especially after Brexit,
attracting investment in the UK has been has proven a challenge.
I mean, just look at the lack of IPOs on
the London Stock Exchange, while you know Amsterdam is able
to attract IPOs. So I think they're going to have
(14:20):
to thread that needle of making sure there isn't too
much debt in the system while also not scaring away
private equity investors they need them.
Speaker 3 (14:31):
This is Bloomberg Daybreak Europe, your morning brief on the
stories making news from London to Wall Streets and beyond.
Speaker 1 (14:38):
Look for us on your podcast feed every morning, on Apple, Spotify,
and anywhere else you get your podcasts.
Speaker 3 (14:44):
You can also listen live each morning on London DAB Radio,
the Bloomberg Business app, and Bloomberg dot Com.
Speaker 1 (14:49):
Our flagship New York station is also available on your
Amazon Alexa devices. Just say Alexa play Bloomberg eleven thirty.
I'm Caroline Hetcare and
Speaker 3 (14:58):
I'm Stephen Carroll again tomorrow morning for all the news
you need to start your day right here on Bloomberg
Daybreak Europe.
Bloomberg Audio Studios, podcasts, radio news. This is the Bloomberg
Daybak podcast, available every morning on Apple, Spotify or wherever
you listen. It's Monday, the twentieth of May. Here in London.
I'm Caroline Hepkin and.
Speaker 2 (00:18):
I'm Stephen Carroll.
Speaker 3 (00:19):
Coming up today, Iran's president and foreign minister are killed
in a helicopter crash. We look at who may take
over and what it could mean for the broaderm At.
Speaker 1 (00:27):
Least in other news, London still leads Europe in attracting
foreign direct investment into financial services.
Speaker 2 (00:34):
Plus private equities.
Speaker 3 (00:36):
Massive UK debt bind sparks warnings of danger.
Speaker 2 (00:40):
We have a special report.
Speaker 1 (00:41):
Let's start with a roundup of our top stories.
Speaker 3 (00:44):
Iran's President, Ibrahim Raisi, has been killed in a helicopter crash,
according to a number of Iranian news sources. The semi
official Mayor News agency reports that Foreign Minister Hussein Amir
Abdullahian has also died in the crash. The convoy consisted
of three helicopters. The wreckage was found on Sunday in
a mountainous area of the country, but dense fog hamper's
(01:05):
rescue efforts Bloomberg's Middle East edator Paul Wallace says questions
remain over what happens next.
Speaker 4 (01:11):
The government itself has not put out an official statement yet, saying,
for example, who now takes over, It's likely to be
the vice president, someone who's called Mohammad makhmer. In some ways,
a lot of what's gone on in Iran in the
last couple of years in terms of its foreign policy
were not down to Racey so much as the Supreme
(01:31):
media Ali Kamini. He obviously remains in position.
Speaker 3 (01:35):
Bloomberg's Paul Wallace speaking there, The news comes in the
middle of the Israel Hamas conflict in Gaza, with Hamas
supported by Iran and tensions with the US over around
backed too Thi's attacking ships in the Red Sea.
Speaker 1 (01:48):
Well Ibrahim ric age sixty three was an ultra conservative
cleric who was elected in twenty twenty one, following eight
years under the relative moderate Hassan Rahani. Raissi was seen
as a favorite to eventually succeed the Supreme leader, a
Ali Haamane, who is in his eighties. Richard Dalton is
a former British ambassador to Iran. He says that Raisi
(02:12):
was important but not irreplaceable.
Speaker 5 (02:15):
But a figure that was trusted by the Supreme Leader
Atola Kamene and by the other organs of power like
the judiciary and the Parliament could be appointed quite quickly
to take his.
Speaker 1 (02:30):
Place, Richard Dalton speaking there, Raisi entered office pledging to
end efforts to build trade ties with the West and
instead focused on developing links with China and Russia. But
Rayisi's time as president has been marked by economic problems
at home, including successive lows for the Iranian currency against
the US dollar. Also the most widespread and violent protests
(02:52):
in the country's recent history, triggered by the death of
a young woman held in police custody.
Speaker 3 (02:58):
Tidning is now Two of the three members of Israel's
war cabinets are continuing to put pressure and Prime Minister
Benjamin Netanyahu to change course under war in Gaza on Saturday,
opposition leader Benny Gantz said he'd quit the cabinet by
the eighth of June if the Israeli leader didn't make changes.
He wants Natanya who to agree to a six point
plan with the return of hostages a top priority.
Speaker 6 (03:20):
I just understand that we are facing a very long campaign,
whether it's in Gaza, whether it's in other places. But
the hostages they don't have that much time.
Speaker 3 (03:31):
Israeli Work Cabinet member Benny Gantz speaking there. His proposals
also include demilitarizing Gaza and supporting efforts to normalize relations
with Saudi Arabia. Analysts say Natnia, who's governing coalition, is
likely to remain secure even if Gantz carries out his
threat to resign.
Speaker 1 (03:48):
Now, London still leads European cities when it comes to
securing foreign direct investment for new financial services projects, but
a new survey warns that Paris is likely to challenge
London's dominance in the years ahead. Bloomberg's Tea at Adebayo
has more.
Speaker 7 (04:03):
London has secured eighty one foreign financial projects last year.
A survey by Ernst and Young shows a seventy six
percent increase in investments compared to the previous year, with
the city accounting for a third of all financial FDI
in Europe. Although Brexit and poor equity market performance has
raised concerns about the UK's competitiveness, London secured more than
(04:26):
double the investment of second place Paris, but data shows
that investors still rank Paris ahead of London over a
three year horizon, with many on Wall Street touting the
French capital as Europe's next financial hub. In London tiwa
Adebayo Bloomberg Radio.
Speaker 3 (04:42):
The cast of buying a typical home in the UK
has reached a record high. The property website right Move
says demand has pushed up the average house price to
just over three hundred and seventy five thousand pounds. That's
an increase of zero point eight percent from last month.
Property sales also jumped by seventeen percent in the first
four months of the year when compared with the same
(05:02):
period in twenty twenty three.
Speaker 1 (05:04):
Staying here in the UK, the government is expected to
unveil a compensation package worth more than ten billion pounds.
Over the decades long contaminated blood scandal, thousands of people
died after contracting illnesses from contaminated, unscreened blood. Bloomberg's James
Wilcock has more.
Speaker 8 (05:22):
Between the nineteen seventies and nineteen nineties, some thirty thousand
people who were given blood transfusions in the UK contracted
HIV or hepatitis C more than forty years on. An inquiry,
reports to day on what has been described as the
biggest treatment disaster in NHS history. Bloomberg has told the
government intends to spend billions on compensation, reflecting what Defense
(05:44):
Secretary Grant Chaps called a shameful failure. It just makes
you angry inside to hear about all the different you know,
essentially lack of anybody taking responsibility, mismanagement. But the announcement
comes a basically difficult moment for the government. You have
barely any headroom yet want to cut taxes in the
(06:05):
autumn in London, James Orcock in their radio.
Speaker 1 (06:09):
Now to our top story this morning. Various Iranian news
sources say that Iran's president and foreign minister have both
been killed in a helicopter crash in the northwest of
the country. It comes at a time of turmoil in
the Middle East over the war in Gaza, which has
threatened to edge Iran at Israel into all out conflict.
(06:29):
Joining US now is our head of Middle East and
North Africa coverage, Stuart Livingston Wallas, Good morning, Stuart, thank
you for being with us. What is the latest then
that we are hearing about this crash?
Speaker 9 (06:39):
So it started sort of yesterday evening and it's been
a long night. So we know the helicopter I think
it was one of three traveling together, but we'd heard
that it had had I think what was initially reported
as a hard landing, and that was sort of yesterday evening,
and then I think it's just taken a great deal
of time to actually get to the site. It's in
a mountainous area. We've seen some of the the social
(07:00):
media videos being sent out from the site, and things
are very foggy. There was heavy rain and so on.
So they did send some helicopters into try and find
the site, but I just say they couldn't see anything
through the fog, so they had to go basically in
cars or four x fours and go and find the site.
And really that only happened in the last couple of hours.
And then the death has been confirmed by state media,
(07:21):
I suppose in the last hour or so. So it's
been a long long time since the initial reports and
then the confirmation that he is indeed dead.
Speaker 3 (07:29):
Now, Racey was an ultra conservative cleric, former Chief Justice
and had been the favorite to eventually succeed the Supreme
leader Iatala Hameni. How does this affect the hardline leadership
of Iran, which has faced protests over issues like the
economy and human rights.
Speaker 2 (07:47):
It has.
Speaker 9 (07:48):
I mean, I think in terms of the long term
implication with Iran, it doesn't really change the equation. So
there were really two favorites to take over from Hamone,
the supreme leader. One was obviously Racy, and the second
one was Harmony Son, who is, as you can guess,
also something of an ultraconservative. So it was a choice
between two very hard line figures. So in terms of
(08:09):
that future, if things transpire the way we anticipate them,
then you still end up with a hard line leadership
one way or another. Now, what potentially changes here is
in terms of just the balance of power within the
internal hard line camps, because you have the military in
the form what you have the army, but you also
have the IRGC, and then there are some potentially some
(08:30):
changes there. But you know, fundamentally, anyone's anticipating a major
change of policy direction as a result of Racey's death,
I don't think that's going to be the case in
the slightest.
Speaker 1 (08:38):
What then, does it mean for the conflict in the
Middle East? I mean, Iran does have a very you know,
opaque political system, as you say, restricted political structure. But
in terms of the external facing conflict within the Middle East,
Iran did laune a drone and missile attack against Israel
last month that was seen also as a counterattack Iran
(09:01):
and Israel and open conflict that has been a significant worry.
Speaker 9 (09:06):
Yeah, I mean again, I don't think it changes a
great deal because ultimately the final decision on what was
launched and where too was taken by Harmony, and obviously
he remains in office. When he's eventually replaced, potentially by
Son again, you should anticipate quite a similar sort of
set of circumstances in terms of that decision making. So
(09:27):
going forward, yes, Iran will continue to support its proxies
across the region. But at the same time, it really
depends what happens on the ground in Gaza.
Speaker 3 (09:37):
What practically does this mean for Iran at the moment,
What is the succession plan for the president and does
it mean that there will be further elections?
Speaker 9 (09:46):
It does, so we don't know exactly when they take place.
For now, the vice president takes over and then new
elections take place we presume in the next several months,
But of course those election process is absolutely different to
what you would anticipate in the Western democracy. So there
is an assembly of experts who basically decides who can
run and who can't. And as we saw in the
last election in twenty twenty one, you know fundamentally they
(10:09):
will only allow ultra conservative candidates to stand. So I
think in the twenty twenty one election, which is the
one Ricey won, it was something like six hundred candidates
came forward and I think only basically a dozen got
through that final vesting process, and there were no veteran politicians,
there were no moderates, there were nothing even resembling a
moderate in the final camp, as a consequence of which
(10:33):
you saw this record low turnout for the election. Basically,
there is a very large proportion of electorate in Iran
that has effectively given up on those elections ever really
offering them any sort of choice beyond one ultra conservative
over another.
Speaker 1 (10:45):
Okay, in terms of political reaction and response, Even over
the weekend, Chuck Schumann in the US was saying that
there was no evidence of foul play. Clearly, with the
kind of deep tensions within the Middle East, tehranne back
to her mass the Whofi's and Hesbula. This would be
a question that you would anticipate coming, right.
Speaker 9 (11:06):
Yeah, and I'm sure within Iran itself there would be
you know, furious conspiracy theories being spun. I think the
reality is that the most likely explanation is that they
were traveling on reasonably old equipment, because it is absolutely
true that Iran's been number sanctions for a very long
time and has really struggled to get the equipment needed
to maintain its helicopters. Now we don't know exactly what
(11:28):
he was traveling on, but the chances was a pretty
old piece of equipment. And then you layer in on
top of that that they were in a mountainous area,
that it was incredibly foggy, that there was heavy rain,
and on and on and on, and that does appear
to be the most likely explanation. Again, this is not
my air of expertise, but I can tell you that,
particularly in this part of the world, helicopters crashed quite
(11:49):
a bit. However, that will not necessarily stop those conspiracy
theories building up within Iran, particularly because he was one
of the favorites to take over from the Supreme Leader
Supreme Leaders in something like his mid eighties, so obviously
we don't know exactly how long it'll be before he
passes away, but you know when you're in your mid eighties, Chancellor,
(12:11):
it's going to happen in the next few years.
Speaker 3 (12:12):
Okay, Stuart, thank you very much for now that Stuart
Livingston Wallace there are head of Middle East and North
Africa coverage.
Speaker 2 (12:18):
Okay, We're going to turn to.
Speaker 3 (12:19):
A different story now here in the UK, where private
equity firms took over British businesses and droves after the
Brexit vote. A suppressed valuations and the new buyers piled
large amounts of debt on those companies in the process.
Speaker 2 (12:31):
But in a higher rate environment.
Speaker 3 (12:33):
This is now starting to bite the Bank of England
and politicians are worried that this increased dependency on debt
over recent years creates risks for systemically important employers in Britain.
Joining us now to discuss is our corporate finance reporter
Aban av ramnarayan Abana. Good morning to you. Great to
have you with us on the program. Why did private
equity companies target the UK in particular in recent years?
Speaker 10 (12:56):
Many private equity funds are based in the US and
of course there's a cultural film reality with the UK,
and the UK has an investor friendly setup, so it
was always attractive for US private equity firms in particular,
but this was supercharged after the Brexit vote because valuations
fell in the UK on the London Stock Exchange, as
(13:17):
did the Sterling currency. So this created what people started
calling the Brexit discount and made the UK a very
attractive place for private equity companies.
Speaker 1 (13:26):
And so there's been a lot of debt piled on
some well known names here in the UK like Morrison's
and Asda Pizza Express. Madam Tasaul's policymakers are really quite
worried about this. Now, what do you think might happen?
Speaker 10 (13:40):
That's a really good question at the moment. The Bank
of England is looking very closely at this issue. They're
looking at whether or not there's any systemic risk attached
to all the debt that's been added to UKPLC as
it were, And I think the Labor Government has been
making some noises about increasing tax on certain types of
(14:00):
private equity gains. But I do think it's a tricky
one both for policymakers and for politicians because, especially after Brexit,
attracting investment in the UK has been has proven a challenge.
I mean, just look at the lack of IPOs on
the London Stock Exchange, while you know Amsterdam is able
to attract IPOs. So I think they're going to have
(14:20):
to thread that needle of making sure there isn't too
much debt in the system while also not scaring away
private equity investors they need them.
Speaker 3 (14:31):
This is Bloomberg Daybreak Europe, your morning brief on the
stories making news from London to Wall Streets and beyond.
Speaker 1 (14:38):
Look for us on your podcast feed every morning, on Apple, Spotify,
and anywhere else you get your podcasts.
Speaker 3 (14:44):
You can also listen live each morning on London DAB Radio,
the Bloomberg Business app, and Bloomberg dot Com.
Speaker 1 (14:49):
Our flagship New York station is also available on your
Amazon Alexa devices. Just say Alexa play Bloomberg eleven thirty.
I'm Caroline Hetcare and
Speaker 3 (14:58):
I'm Stephen Carroll again tomorrow morning for all the news
you need to start your day right here on Bloomberg
Daybreak Europe.
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