Sat, May 19, 2012 - Page 10 News List

World Business Quick Take

Agencies

JAPAN

Economic assessment raised

The government raised its assessment of the economy for the first time in nine months as the recovery from last year’s earthquake and tsunami disaster gains momentum. The Cabinet Office said in a report yesterday that reconstruction, rising consumer spending and exports were lifting its economy to a moderate recovery. It warned about uncertainties in the global economy, such as slowing growth in China and weak recoveries in Europe and the US. The report said corporate spending plunged after the earthquake last year, but the slide was now ending.

FINANCE

Banks must raise US$566bn

Fitch Ratings said on Thursday that the world’s 29 biggest banks together might have to raise US$566 billion by the end of 2018 to meet new international requirements for holding cushions against risk. In the report, Fitch said that having to raise that much capital could crimp the banks’ ability to increase dividends or buy back their own shares. The so-called Basel III rules for banks to increase capital reserves are designed to prevent another global financial crisis. The 29 banks, in 12 countries, were designated “global systemically important financial institutions” in November last year by the Financial Stability Board, an international regulators’ group. That means they are deemed so big and connected to other firms that a failure of one could bring down the financial system. They have a total US$47 trillion in assets, according to Fitch.

PHARMACEUTICALS

GSK persists with HGS bid

GlaxoSmithKline (GSK) said it was persisting with its hostile bid to take over US company Human Genome Sciences (HGS) despite the target’s new “poison pill” defense. In a statement issued after the market closed on Thursday, GSK said it believed its US$13 per share offer represents full value for HGS, its partner in developing new drug treatments. Rockville, Maryland-based HGS on Thursday announced its defensive move, which will dilute holdings if anyone attempts to acquire 15 percent or more of its stock without board approval. GSK’s offer closes on June 7.

FINANCE

LSE annual profits surge

London Stock Exchange Group (LSE) said yesterday that annual net profits surged, as the group was boosted by rising revenues and a string of acquisitions, despite the uncertain economic backdrop. Earnings after taxation rocketed to £522 million (US$823 million) in the group’s financial year to the end of March, compared with £151.6 million last time around, the LSE said in a results statement. Total revenues climbed 10 percent to £679.89 million, added the group, which operates the London Stock Exchange and Italy’s Borsa Italiana. It also hiked the annual shareholder dividend by 6 percent to £0.283 per share.

RETAIL

Wal-Mart beats expectations

Wal-Mart Stores Inc’s profit and sales surpassed expectations as more people shopped at its US stores and spent more, pushing shares up more than 4 percent despite probes into possible bribery. The first-quarter results, including a 10.1 percent increase in profit, showed that Wal-Mart’s US recovery was on track and efforts were progressing to cut costs and lower prices in markets such as China. Wal-Mart earned US$3.74 billion, or US$1.09 per share, up from US$3.40 billion or US$0.97 a share a year ago. Sales rose 8.6 percent to US$112.27 billion, ahead of analysts’ forecast of US$110.54 billion.

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