Theresa May Takes Over as British Prime Minister; Boris Johnson is New Foreign Secretary; Brady: May is the Right Woman to Lead U.K. Out of

MEANS-BUSINESS-01

BUSINESS-01

New Foreign Secretary; Brady: May is the Right Woman to Lead U.K. Out of

EU; Cameron Urges U.K. to Stay Close to EU; Rallying Markets Ready for

Major IPO; Messaging App "Line" to Go Public; Retailers Profiting From

Pokemon Go; David Cameron's Legacy; Trump's VP Search Enters Final Phase;

Venezuelan Oil Output to Drop 10 Percent; Venezuela Drastically Short of

Medical Supplies - Part 1>

Foster, Jonathan Mann, Paula Newton>

Strategist, Morgan Stanley; Ingeborg Grassle, Member of The European

Parliament, Christian Democrats; Barbara Judge, Chair, Institute of

Directors>

her cabinet. Her first job is to negotiate Britain's exit from the EU.

Conservatives are confident that Theresa May, a once remainer, will do

great job exiting the EU. And she will make sure it is a success.

Financial markets across the world are celebrating the fact that monetary

policy across the world is likely to remain looser for longer. And that's

really sort of up ending up being the big winner as ironically of the

Brexit vote. David Cameron urged Theresa May to stay close to the European

Union even as European leaders want Britain to begin the process of

separation. What should Theresa May should know about negotiating with

Angela Merkel? Wall Street a late push to continue its record-setting

rally. The Dow Jones struggled for most of the day but finished with a

gain of nearly 25 points. Demand is expected to be strong for Japanese

messaging app "Line" when it goes public in New York and Tokyo this week.

It's expected to be the largest tech IPO in two years. Theresa May has

announced plans to curb excessive pay and put workers on company boards.

That's a major departure from the Conservative Party stance. Take a look

back at David Cameron's six years as Prime Minister. Nintendo's wildly

popular game played on smartphones is only about a week old and it's

already taking the world of tech. Because Pokemon Go is played by walking

around in the real world, and retailers are finding ways to profit. What

is Donald Trump looking for in a vice presidential candidate? What kind of

candidate would actually make him a stronger nominee? Venezuela's oil

output is at a 13-year low and set to get worse. The international energy

agency says an economic crisis is weighing on the country at a time when

the country desperately needs revenue. >

Union; Economy; Internet; Stock Markets; Venezuela; Oil; Theresa May; Boris

Johnson>

[16:00:00] ZAIN ASHER, CNN ANCHOR: Tonight it is official. Theresa May has now moved into number 10 Downing Street and she's wasted absolutely no time in appointing the ministers who will help Britain move out of the European Union.

Good evening from Atlanta. I'm Zain Asher. We will now know who will fill Theresa May's top cabinet posts. Let me break down some of the names for you. She's now named David Davis Secretary of State for exiting the EU or the so-called Brexit secretary. Phillip Hammond was appointed the chancellor of the exchequer or finance minister. He's replaces George Osborne who's resigned from government. Boris Johnson replaced Hammond as Foreign Secretary. The former London Mayor was one of the leading voices of the leave campaign. He wanted to push Britain to leave the EU. Theresa May is spending her first night at number 10 Downing Street after assuming the reins of a country very much in turmoil. In the British tradition the Queen formally asked May to form a new government. May now had a pretty daunting task ahead of her. Her decisions, how of course she handles leaving the EU, the Brexit, could reverberate for decades to come.

(BEGIN VIDEO CLIP)

THERESA MAY, BRITISH PRIME MINISTER: We're living through an important moment in our country's history. Following the referendum, we face a time of great national change and I know because we're Great Britain that we will rise to the challenge. As we leave the European Union we will forge a bold new positive role for ourselves in the world. And we'll make Britain a country that works not for a privileged few but for every one of us.

(END VIDEO CLIP)

ASHER: May is taking over at a historic moment in time. And even on her first day her to do list is already a mile-long. Her first and most obvious job is to negotiate Britain's exit from the EU. She will need to secure the best deal that maintains the U.K.'s influence in the region. She'll also attempt to hold U.K. together. Scotland could of course, hold another referendum to leave the U.K. And some in Northern Ireland are threatening to use the Brexit as an excuse to push unification with Ireland. And May must also sure up the economy reassuring investors Brexit will not trigger a recession in the U.K. CNN international diplomatic editor, Nic Robertson begins our coverage. He's joining us live outside the Houses of Parliament. So Nic, let's talk about the cabinet positions, because Boris Johnson now being foreign secretary. I mean help us get inside Theresa May's head. I mean, she must know this is quite a risky move because he is such a controversial figure.

NIC ROBERTSON, CNN INTERNATIONAL DIPLOMATIC EDITOR: And he's really well- known around the world. And he could go knocking on doors all around the world. And he'll be taken in as somebody who's known to those governments. This is a man who brings with him a lot of flamboyance, a lot of bluster. But who is also known as somebody who's got a relatively strong intellect. But look, I mean I think, let's take a part, let's have a look at what Theresa May's done here. She appointed Philip Hammond to the top job, if you will, the treasury, chancellor of the exchequer. Then Boris Johnson gets the next job. Now, Philip Hammond was a remainer. Boris Johnson was a leaver. Then she fills her own job with Angela Rudd. She herself was a remainer.

So what you can see Theresa May is doing here is sort of trying to unify the party. Bring together those separate elements. Give Boris Johnson a prime role in the government because that's what a lot of people who voted to leave the country voted for. They saw Boris Johnson campaigning for that. They believed in him and they supported that. And she's recognizing that Liam Fox, international trade, also someone who campaigned strongly for the leave campaign.

David Davis, he will negotiate with the European governments for Britain exiting from the European Union. Another person who was part of the leave campaign. u can see here she has given some of the key responsibilities in terms of exiting the European Union, in terms of foreign policies, in terms of international trade to keep people within the leave campaign. Because if she didn't, she would have been criticized, not just perhaps by some of her own MPs, but by people around the country. People would have felt cheated that what they voted for in the referendum wasn't being realized. So she in a swoop she answers those critics. And on the eve of her taking up office, that's what a lot of people around the country were expressing concern about. That people like Boris Johnson they thought weren't going to be in the government. Now he is. She's unifying, not only her party in these appointments, but she's trying to bring on board, the country, the electorate, if you will, and as well talk about a more compassionate conservatism.

[16:05:00] ASHER: But Nic, people are certainly surprised about this Boris Johnson appointment. Some people might ask, listen, is she more concerned about giving the Brexitiers a voice other than who was best for what job.

ROBERTSON: Her friends and allies who said this is a person who understands her responsibilities, who keeps a good on her word. Her word was Brexit means Brexit. That there will be no new election. So she's keeping good on her words here. She's putting in people who will follow through on that mandate from the British people to leave the European Union. I think certainly there will be criticism. Of course, which ever decisions she makes. Again, the people that know her do say to a person even those who have been very close in her campaign to become prime minister, that she will pick the best people for the job. And she knows she has a lot of different issues to balance here.

She had a message for the Scotts. And at least a possibility of a second referendum on independence. There was a Scottish first minister around here today essentially canvassing and campaigning here talking to different broadcasters. Her message, Theresa May's message was very clear. The bond is between England and Scotland and Northern Ireland and Wales, is a very, very important bond. Something that she said is important to her. The language that she used was very, very strong on that issue. So I think she's sending a clear message as well. Although she's had to do this in a relatively short space of time, we understand the sort of person that she is. She gets into the details. She knows what she's doing. And the country and her other MPs are taking it on faith at the moment. But she is certainly, certainly listening to what people have been saying around Britain about the likes of Boris Johnson falling by the wayside and a remain person leader could become prime minister. That and coming from other criticisms. So perhaps in that regard her room for maneuver wasn't so vast, Zain.

ASHER: Right, Nic Robertson live for us there. Appreciate it, thank you so much.

Earlier I spoke with Graham Brady, a conservative member of Parliament and the chairman of the 1922 Committee, a group of conservative MPs, instrumental in the picking of the conservative leader. He told me he's pleased that things are moving at such a quick pace.

(BEGIN VIDEOTAPE)

GRAHAM BRADY, CHAIRMAN, 1922 COMMITTEE: I certainly wouldn't have predicted it a week ago. But it's been fairly clear the last few days what's going to happen. The British constitution has got many flaws. But it is quite good at dealing with things quickly. It's good at being corresponsive. And I think we've seen it really in its element in this change your prime minister.

ASHER: So you yourself were a Brexit supporter. So how comfortable are you that Theresa May was in fact, a remainer.

BRADY: I'm entirely comfortable with it. I've known Teresa for a long time. We entered the House of Commons together on the same time in 1997. I think she is a very serious, very capable woman. And I also think that she has absolute integrity. And when she says that we are committed to fulfilling the commitment that we made to see through the outcome of the referendum and to making sure that Brexit happens. And making sure that it is a great success. Then I feel very confident that Theresa May is the right woman to see that through.

ASHER: So one question about the leadership change. I'm in the U.S. and we've seen this anti-establishment wave pretty much across the word, from Donald Trump to Bernie Sanders to of course, Jeremy Corbin. The Brexit vote in itself was anti-establishment. Do you think that some members of the Conservative Party will be disappointed that they didn't get to have their democratic say?

BRADY: I'm sure some of the Conservative Party will be disappointed by that. But also I think Conservative Party members in this country are generally really very responsible, very steady, very serious people. And they can see that there is a real need for stability. There is a real need for control. And following the referendum when David Cameron announced immediately that he wows be leaving office. There was a danger that that left a period of drift and possibly a time that would be damaging to the economy as well. I think most Conservative Party members can see what we've been able to achieve is an important change done quickly, done efficiently.

ASHER: Theresa May has a huge task when it comes to negotiating Brexit. For somebody who hasn't held a major economic or foreign policy position within government, just explain to our viewers. How is the conservative party helping her prepare for such a mammoth undertaking?

[16:10:06] BRADY: well, Theresa now having been to the palace and become prime minister officially. She will immediately into the task of constructing a new government. She of course has access to many people both within Parliament who will become members of the government, taking on those big economic portfolios. But also a huge amount of advice and assistance from outside. So I think the fact that we've got somebody who is clearly serious, very competent, highly respected is steering. Being on the bridge of the ship, as you like. That is, I think a very good thing.

(END VIDEOTAPE)

ASHER: The markets have seen plenty of drama in the three weeks since that Brexit vote. Since a positive trade on June 23 when the referendum voting was still under way. The FTSE and the MSCI emerging markets index have both rallied. But the German DAX has slipped more than 3 percent. And the British pound is down more than 9 percent but it has been rallying a bit recently. Morgan Stanley's Chief Global Strategist, Ruchir Sharma, has $40 billion in assets under management. He joins us live now from our London Bureau. So Rashida, thank you so much for being with us. We've talked a lot in the global media about the losers of the Brexit vote. But who do you think will be the winners?

RUCHIR SHARMA, CHIEF GLOBAL STRATEGIST, MORGAN STANLEY: It's hard to say who the direct winners will be. But here's what's happening, which is that I think financial markets across the world are celebrating the fact that monetary policy across the world is likely to remain looser for longer. And that's really sort of up ending up being the big winner as ironically of the Brexit vote. Which is that the Brexit vote in some ways, as I've argued, has been a vote really against these themes of too much income and inequality and the growing backlash against immigration. But ironically the people who are benefiting the most just now are the owners of stocks and bonds across the world, because those prices have rallied significantly after the Brexit vote. And those happen to be very rich people who own the bulk of those assets.

ASHER: So this will make emerging market assets more attractive then, in your opinion.

SHARMA: Yes, it gives them break. As you know, emerging market assets have been under a lot of pressure. And a part of that pressure has been the fear that the Feds are going to increase interest rates and the liquidity is going to be withdrawn from some of those markets. And I think that the fact that now it seems that the Fed is really sort of out of play this year is going to help emerging markets for a while.

ASHER: But what will it mean for emerging markets who rely on the U.K. for trade for example. What will this Brexit vote mean for them?

SHARMA: Well you know, U.K. has really become a very marginal player. I think the whole of Europe and U.K. have really been very marginal contributors to global growth. So therefore I think the impact of the global economy of Britain possibly even entering a recession is extremely small. The world today really is a G-2 world. Which is that two economies really matter for the global economy are U.S. and China. That's how the world has changed. U.K. and Europe have hardly contributed to global growth this decade. So therefore anything that happens to them doesn't really have a major impact on the rest of the world.

ASHER: And given the Brexit vote, Ruchir, you think were in this climate of de-globalization as it were. And if we are what will that mean for the future?

SHARMA: That's something I cover a lot in my new book. You know, the fact that we are in a phase of de-globalization. If you look at the entire world today you're seeing a rise in protectionist measures across the world in the so-called AC area, which is after the crisis. And then we also have a collapse in global capital flows, and even migrant flows have peaked. The number of people moving from the emerging world or the developed world that flow has peaked and in fact now is ebbing. So I think that were in a world where it sort of feeds on itself. Which is that we've seen de- globalization partly because this is the weakest economic recovery and postwar history. But because we have seen a backlash take place against trade and migrants that's likely to lead to possibly even lower growth in some of these countries, but as backlash is building. So that's the sort of vicious feedback loop in which some countries are likely to get caught and affect the global economy.

ASHER: So de-globalization thanks to the antiestablishment movement that has been sweeping the world. Ruchir Sharma, we have to leave it there, thank so much for being well us, appreciate that.

SHARMA: Thank you.

ASHER: And in the final Prime Minister's questions, David Cameron urged Theresa May to stay close to the European Union even as European leaders want Britain to begin the process of separation. Earlier I spoke to Ingeborg Grassle, a member of the European Parliament for Germany and asked her what Theresa May should know about negotiating with Angela Merkel.

[16:15:12] (BEGIN VIDEOTAPE)

INGEBORG GRASSLE, MEMBER OF THE EUROPEAN PARLIAMENT, CHRISTIAN DEMOCRATS: You know, I think they are quite similar. They're very calm. They are not worrying it all. I think they are bound to reside. They want to come to good results Angela Merkel is interested in to let's survive the partner. That's what we need, we want to have Great Britain as close as possible to the European Union. And I think Angela Merkel knows that for that Mrs. May need some successes.

ASHER: That's interesting because David Cameron said something very, very similar. He also told Theresa May that the U.K. should try and be close to the European Union for all the benefits of trade, cooperation and security. In your opinion is all of that really possible without freedom of movement. Angela Merkel herself has said that there will be no cherry picking in all of this.

GRASSLE: This will not be possible without freedom of movement. You know, we have tools for everything and there are four tools U.K. can choose. I wonder if we can invent a fifth. But you know, I think the U.K. should start an honest debate on immigration. We see there are roundabout 6 million foreigners in Great Britain, four from the Commonwealth and 2 million from the European Union. It is not fair to blame the European Union for everything that's going wrong in the U.K.

And this is a huge task Mrs. May will have to come to a more honest and more fair perspective also for her own citizens. And I'm very unhappy about the Brexit. Germans are very unhappy about the Brexit. We want to have good relations with the U.K., but this cannot mean that we throw away what we have, the internal market. And we cannot organize the next wave of Brexit's, exits, Chexits, whatever, the Dutch. You know we need to keep the European Union together.

ASHER: You mention that Germans are very unhappy about the Brexit. Germany has elections next year. Do you think that the Brexit vote will impact whether or not Angela Merkel stays in power?

GRASSLE: I think that the values that Angela Merkel has will be very useful for Great Britain but as well for Germany. The reputation she has with the German voters. It has improved since the Brexit. We see that it's the utmost importance to keep the European Union together and everybody counts on her. All the responsibility is now on her shoulders. That's why I think this will help her regain a very strong position within the German voters.

ASHER: and one thing that Angela Merkel has to figure out is really how a Brexit is going to impact the EU economy as a whole. There are a number of European companies that have great exposure to the U.K., German companies as well, to be fair. Do you think those companies should have a say in how Brexit negotiations are handled? Because it will impact them.

GRASSLE: Of course, these companies will do a lot of lobby work. German companies have over 300,000 working places in the U.K. The U.K. for us is a very important trading partner, but U.K. is spending a lot of Germany as well. That's why it has to be a relationship on mutual respect and also on mutual utility.

(END VIDEOTAPE)

ASHER: It's time for a quick break here on QUEST MEANS BUSINESS. As you can see behind me U.S. markets are trying to extend the record rally, and they did ever so slightly. Worldwide markets also getting ready for what is expected to be the biggest tech IPO in two years. That's after the break.

(COMMERCIAL BREAK)

[16:21:07] ASHER: Wall Street a late push to continue its record-setting rally. The Dow Jones struggled for most of the day but finished with a gain of nearly 25 points, so pretty much flat. CNN's Paul La Monica joins us live now from New York. So Paul, what happened? Because yesterday we saw these dramatic record-setting gains. And now we still get a record- setting gain as well but stocks lost momentum. What happened here?

PAUL R. LA MONICA, CNN MONEY CORRESPONDENT: Yes, I think too many investors are maybe taking a needed break before the flood of corporate earnings begins tomorrow. We've got J.P. Morgan Chase. So that is going to be a key one to watch, Delta airlines also. And then there are a lot of earnings next week. And I think that's really what investors are really going to be focused on. Brexit is amazingly a story that, I don't know if you want to say it's tied up in a bow so to speak, but it is largely the concerns I think are now in the rearview mirror. Because at least we know what happened and Theresa May is the Prime Minister already, which a lot of people didn't think was going to happen this quickly. So investors now have to move onto their next obsession, which is going to be corporate earnings.

ASHER: Speaking of the next obsession, we did about five minutes ago I understand, get Yum Brands. What are investors going to be looking for as a sort through the earnings, I understand there were some concerns about slow growth in China.

LA MONICA: Yes, that has been a concern for a while. There have been some food safety issues. Yum still now has plans to spin off the China business. But China is starting to rebound. China sales were up in the most recent quarter and the company did report earnings that beat forecasts. They raise their outlook as well. So now I think investors are going to be looking more closely at the domestic business. How are KFC, Pizza Hut, and Taco Bell doing in the U.S.? There have been some concerns about a slow down there. Maybe, dare I say some brand confusion with KFC, because I believe that last checked they had four different actors playing Colonel Sanders in their somewhat odd ad campaign lately. So that's going to be something I think to watch. Can this new ad campaign revitalize KFC?

And something else to watch will of course be J.P. Morgan tomorrow when we get their earnings. Hopefully he will have you back on the show to discuss that. Paul La Monica live for us there, thank you so much, appreciate it.

LA MONICA: Thank you.

Demand is expected to be strong for Japanese messaging app "Line" when it goes public in New York and Tokyo this week. It's expected to be the largest tech IPO in two years. But questions remain about Line's music growth and whether he can use it IPO cash to expand outside of Asia. Here's our Maggie Lake with more.

(BEGIN VIDEOTAPE)

MAGGIE LAKE, CNN ANCHOR (voice-over): it's take off time for "Line," the most popular messaging service in Japan is going public in a deal worth over $1 billion.

KATHLEEN SMITH, RENAISSANCE CAPITAL, IPO ETF MANAGER: The "Line" IPO will be the biggest IPO so far this year. And in terms of technology IPOs "Line" will be the biggest one since the Ali Baba IPO of the fall 2014.

LAKE: demand from investors has been so great that Line was able to price at the top of its IPO range. Despite the uncertainty over Brexit and this year's dearth of public offerings, investors appear ready to show some love to Line.

SMITH: Messaging apps are a fast growing industry. And I think that investors recognize that they can be popular in the U.S. and they can be popular in many other countries. A lot of the interest is coming from retail investors in Japan and institutional investors here in the U.S.

LAKE: One big positive, Line are ready makes money from mobile games and animated stickers featuring its popular cartoon characters. But to really boost profits Line wants users to order goods and services through its app. A goal that all messaging apps are working toward.

SHELLY PALMER, MANAGING DIRECTOR, LANDMARK/SHELLYPALMER: WHATSAPP, WeChat and Line have really good roadmaps as to how they can be this center of your life. How you can get movie times or tickets. How you can order food. How you can speak to one another. How you can order an Uber without leaving the messaging app. It's a really, really interesting approach to doing life electronically and it's taking shape nicely. And that's what I think this IPOs about.

[16:25:09] LAKE: There are negatives. Line could have trouble growing outside key Asian markets. And despite his 200 million active users, the number of new people signing up has slowed.

PALMER: Is flat user growth an issue? Could be. It could be or it could be just a blip in the radar screen until the next cool thing, the next cool feature comes out and everybody goes I've got to have that aura got to use that.

LAKE: One thing is certain, a successful IPO will be a crucial test for the markets.

SMITH: there are hundreds of very highly value tech companies that are sitting in the pipeline that are expected to come out into the IPO market. Who were, Airbnb, we believe that Spotify is going to be lined up to come out. So this will be an important bellwether.

LAKE: A lot is on the line as this popular app makes his public debut. Maggie Lake, CNN Money, New York.

(END VIDEOTAPE)

ASHER: All right, from the real world of financial markets you just saw their, to the virtual world of Pokemon Go. Nintendo's wildly popular game played on smartphones is only about a week old and it's already taking the world of tech. A lot of people are talking about this. Because Pokemon Go is played by walking around in the real world, retailers are finding ways to profit. Nick Parker hits the streets of New York to find out.

(BEGIN VIDEOTAPE)

NICK PARKER, CNN CORRESPONDENT: created in a dazzling array of colors and flavors, these artisanal doughnuts are already a hit with sweet tooth New Yorkers. For now, the company behind them is on a real sugar high as word is out that this door is a Pokemon Go hotspot known as a gym.

PARKER (on camera): Just outside the store a battle for supremacy of the gym is raging on the streets of the lower East side.

UNIDENTIFIED MALE: I'm going to wait till they finish and then destroy their gym.

PARKER (voice-over): A flashpoint for rival teams.

UNIDENTIFIED MALE: This is what the gym looks like.

PARKER: Gym's allow users to train and bulk up the Pokemon characters that they catch in the augmented reality world.

UNIDENTIFIED FEMALE: We're not even from here. Were from Long Island. We were taking the train here to go to the city and then we saw all the pokey stops and we just got off the train. Like some places have signs, Pokemon related and it kind of makes you want to go in there.

PARKER: I mean, Mark Israel created a whole new product after discovering that all four of his stores were gyms or pokey spots. He designed what he calls a pokey seed to capture the imagination of new customers.

MARK ISRAEL, OWNER, DOUGHNUT PLANT: We found out Friday when the game came out. And by Saturday morning we had the pokey seed out. As soon as we finished it, we took a picture of it and put it on the social media. And people started coming down to the shop before we even brought it out.

PARKER: He's charging a 20 cents premium on pokey seed and says overall business is up by an estimated 15 percent. Marketing experts say businesses could further profit from Pokemon if Nintendo opens up its platform and allows stores to become partners.

TROY OSINOFF, ONLINE MARKETING EXPERT: they can see their customers walking through and taking advantage of these different Pokemon stops if they were able to rent out or buy Pokemon locations.

UNIDENTIFIED FEMALE: Would you like your receipt?

UNIDENTIFIED FEMALE: Not today.

PARKER (on camera): It seems the time has arrived where were going to taste one of these.

ISRAEL: Cheers.

PARKER: Cheers. Pokey seed.

ISRAEL: Salute.

PARKER (voice-over): Now it's about keeping pace with demand. A challenge likely shared by other small businesses suddenly caught up in the global Pokemon phenomenon. Nick Parker, CNN, New York.

(END VIDEOTAPE)

ASHER: Most European stocks slipped on Wednesday there first lost in five sessions. Investors are waiting for a monetary policy decision by the Bank of England. And is set to come on Thursday. You see some of the market slipping there. Is this the beginning of the end for the super jumbo? Airbus is slashing production on its A380 aircraft after struggling to find new commerce. It says it will only build 20 of the twin deck jets next year. There are currently about 193 of them and use around the world, with about 126 more orders from airlines lined up. That's way below the 1200 Airbus said it expected when the aircraft was first introduced back in 2005.

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