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.
PATENTS: MediaTek Inc said it would not comment on ongoing legal cases, but does not expect the legal action by Huawei to affect its business operations Smartphone integrated chips designer MediaTek Inc (聯發科) on Friday said that a lawsuit filed by Chinese smartphone brand Huawei Technologies Co (華為) over alleged patent infringements would have little impact on its operations. In an announcement posted on the Taiwan Stock Exchange, MediaTek said that it would not comment on an ongoing legal case. However, the company said that Huawei’s legal action would have little impact on its operations. MediaTek’s statement came after China-based PRIP Research said on Thursday that Huawei filed a lawsuit with a Chinese district court claiming that MediaTek infringed on its patents. The infringement mentioned in the lawsuit likely involved
Taipei is today suspending work, classes and its US$2.4 trillion stock market as Typhoon Gaemi approaches Taiwan with strong winds and heavy rain. The nation is not conducting securities, currency or fixed income trading, statements from its stock and currency exchanges said. Authorities had yesterday issued a warning that the storm could affect people on land and canceled some ship crossings and domestic flights. Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) expects its local chipmaking fabs to maintain normal production, the company said in an e-mailed statement. The main chipmaker for Apple Inc and Nvidia Corp said it has activated routine typhoon alert
GROWTH: TSMC increased its projected revenue growth for this year to more than 25 percent, citing stronger-than-expected demand for AI devices and smartphones The Taiwan Institute of Economic Research (TIER, 台灣經濟研究院) yesterday raised its forecast for Taiwan’s GDP growth this year from 3.29 percent to 3.85 percent, as exports and private investment recovered faster than it predicted three months ago. The Taipei-based think tank also expects that Taiwan would see a 8.19 percent increase in exports this year, better than the 7.55 percent it projected in April, as US technology giants spent more money on artificial intelligence (AI) infrastructure and development. “There will be more AI servers going forward, but it remains to be seen if the momentum would extend to personal computers, smartphones and
Catastrophic computer outages caused by a software update from one company have once again exposed the dangers of global technological dependence on a handful of players, experts said on Friday. A flawed update sent out by the little-known security firm CrowdStrike Holdings Inc brought airlines, TV stations and myriad other aspects of daily life to a standstill. The outages affected companies or individuals that use CrowdStrike on the Microsoft Inc’s Windows platform. When they applied the update, the incompatible software crashed computers into a frozen state known as the “blue screen of death.” “Today CrowdStrike has become a household name, but not in