Tue, Jun 09, 2015 page15

• World Business Quick Take

  • Agencies
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  UNITED KINGDOM

  Moody’s raises EU issue

  An early referendum on the UK’s membership of the EU carries risks that could threaten its credit rating, according to Moody’s Investors Service. While a vote next year would reduce the period of uncertainty surrounding the issue, it also “increases the risk that the UK government will not manage to secure the changes that it is seeking, which in turn may negatively influence the government’s willingness to support remaining in the EU,” Moody’s said yesterday. “A withdrawal from the EU would have negative implications for the UK’s growth prospects and — in the absence of an alternative trade arrangement with the EU that at least partly replicates the current access to the EU’s single market — would likely put pressure on the UK’s sovereign rating.”

  MACROECONOMICS

  German trade surplus rises

  Germany’s trade surplus widened in April from the previous month as exports grew 1.9 percent, official data showed yesterday. At the same time imports fell by 1.3 percent, pushing the trade surplus up to 22.3 billion euros (US$24.8 billion) in April, according to seasonally adjusted figures published by the federal statistics office, Destatis. In unadjusted terms, the trade surplus contracted slightly from March to 22.1 billion euros. On a year-to-year comparison, exports from Europe’s top economy to non-European countries increased by nearly 12 percent in April, while imports grew about five percent. Its export and import flows with other European nations were also up, by 4.5 percent and 1.7 percent respectively, with the biggest jumps seen with non-eurozone members.

  ACQUISITIONS

  IRM increases Recall bid

  Iron Mountain Inc (IRM) increased its bid for Recall Holdings Ltd a second time, adding a cash component to a deal that would value the data storage company at A$3.4 billion (US$2.6 billion) including debt. The Boston-based company would offer US$0.50 in addition to 0.1722 Iron Mountain shares for each Recall share, it said in a statement yesterday. Recall investors would also have a choice of accepting A$8.50 per share in cash, subject to a cap of A$225 million, with preferential access to the cash pool for the first 5,000 shares owned by each shareholder. Recall had been seeking improved terms after a fall in Iron Mountain’s shares cut the value of its offer for the Atlanta-based company, people with knowledge of the matter said last week. Iron Mountain offered investors the same equity ratio, which was equal to about A$7.86 when the takeover was announced on April 28, after its original bid was rejected in December last year.

  STOCKS

  Japan wins investors

  While China’s world-beating stock market rally is generating headlines, some of the biggest Asia-focused hedge funds are looking further east for profits. Hutchin Hill, Indus Capital Partners and Oasis Management (Hong Kong) are among firms touting winning trades among Japanese power producers, makers of foods and beverages and semiconductor parts. A push by Japanese Prime Minister Shinzo Abe to improve corporate governance has made the market a favorite of hedge funds at the same time as fears that Chinese markets are entering bubble territory mount, following gains of as much as 150 percent in the country’s two best-performing stock market indices during the past year. “Global investors are increasingly viewing the country favorably,” Bank of America-Merrill Lynch Hong Kong-based analyst Ben Williams said.
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