Wed, Jan 13, 2016 - Page 15 News List

World Business Quick Take

Agencies

DERIVATIVES

Clearinghouses to be rated

The financial health of the firms that form the backbone of the US$630 trillion derivatives market are being assessed for the first time. Moody’s Investors Service last week announced a new methodology for assigning credit ratings to the clearinghouses that guarantee derivative and security trades. The agency previously only graded the clearinghouses’ parent companies. Clearinghouses are meant to lessen the damage when a bank or investor becomes unable to make good their trades because they have gone bankrupt. They collect margin to cushion any future loss, monitor positions daily and require losses to be made up so that risk does not build.

CHINA

Vehicle sales growth slows

Industrywide vehicle sales rose at the slowest pace in three years even after a fourth-quarter tax cut by the government, as businesses put off purchases with the slowing economy and turmoil in the stock market battered consumer confidence. Wholesale deliveries of passenger and commercial vehicles climbed 4.7 percent to 24.6 million units last year, the smallest rate of increase since 2012, according to the China Association of Automobile Manufacturers. By comparison, US sales of new cars and light trucks rose 5.7 percent to 17.5 million, according to Autodata Corp. Automakers appealed for government support after the slowest economic growth in a quarter century combined with registration curbs in major cities to slow vehicle sales. At one point, Ford Motor Co suggested that the industry might see a fall in deliveries for the year, before the government’s tax cut on Oct. 1 revived demand.

RETAIL

Metro expects profit boost

German retail and distribution giant Metro yesterday said that it expects to have achieved a “significant” increase in quarterly profits, thanks to “very good” Christmas business and gains from the sale of its cash-and-carry business in Vietnam. Metro, which runs its business year from October to September, said in a statement that “we can look back on a very good Christmas business, particularly in our domestic market, Germany… We remain confident for financial year 2015-16, despite the difficult environment, and expect positive development thanks to the range of measures introduced in our sales lines. We retain our original forecast,” chief executive Olaf Koch said. Metro said it had completed the sale of its Vietnam unit at the end of last month. The proceeds were expected to boost underlying or operating profit by “more than 400 million euros” (US$435 million), which would be included in the first-quarter accounts.

FAST FOOD

Critics slam McDonald’s

A group of McDonald’s Corp’s critics urged the EU to rein in alleged antitrust abuses by the world’s largest restaurant chain in a complaint just weeks after regulators added the company to a growing list of US firms facing a clampdown on tax loopholes. McDonald’s was accused by a coalition of Italian consumer groups and European and US trade unions of distorting competition and harming franchisees and consumers. McDonald’s “hurts everyone: franchisees, consumers, and workers,” said Scott Courtney, an official at the Service Employees International Union, which backs the antitrust complaint filed with the European Commission on Monday. The accusation adds to an EU probe opened last month into suspicions the company unfairly exploited a pact with Luxembourg to avoid tax for more than half a decade.

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