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.
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) last week recorded an increase in the number of shareholders to the highest in almost eight months, despite its share price falling 3.38 percent from the previous week, Taiwan Stock Exchange data released on Saturday showed. As of Friday, TSMC had 1.88 million shareholders, the most since the week of April 25 and an increase of 31,870 from the previous week, the data showed. The number of shareholders jumped despite a drop of NT$50 (US$1.59), or 3.38 percent, in TSMC’s share price from a week earlier to NT$1,430, as investors took profits from their earlier gains
In a high-security Shenzhen laboratory, Chinese scientists have built what Washington has spent years trying to prevent: a prototype of a machine capable of producing the cutting-edge semiconductor chips that power artificial intelligence (AI), smartphones and weapons central to Western military dominance, Reuters has learned. Completed early this year and undergoing testing, the prototype fills nearly an entire factory floor. It was built by a team of former engineers from Dutch semiconductor giant ASML who reverse-engineered the company’s extreme ultraviolet lithography (EUV) machines, according to two people with knowledge of the project. EUV machines sit at the heart of a technological Cold
Taiwan’s long-term economic competitiveness will hinge not only on national champions like Taiwan Semiconductor Manufacturing Co. (TSMC, 台積電) but also on the widespread adoption of artificial intelligence (AI) and other emerging technologies, a US-based scholar has said. At a lecture in Taipei on Tuesday, Jeffrey Ding, assistant professor of political science at the George Washington University and author of "Technology and the Rise of Great Powers," argued that historical experience shows that general-purpose technologies (GPTs) — such as electricity, computers and now AI — shape long-term economic advantages through their diffusion across the broader economy. "What really matters is not who pioneers
TAIWAN VALUE CHAIN: Foxtron is to fully own Luxgen following the transaction and it plans to launch a new electric model, the Foxtron Bria, in Taiwan next year Yulon Motor Co (裕隆汽車) yesterday said that its board of directors approved the disposal of its electric vehicle (EV) unit, Luxgen Motor Co (納智捷汽車), to Foxtron Vehicle Technologies Co (鴻華先進) for NT$787.6 million (US$24.98 million). Foxtron, a half-half joint venture between Yulon affiliate Hua-Chuang Automobile Information Technical Center Co (華創車電) and Hon Hai Precision Industry Co (鴻海精密), expects to wrap up the deal in the first quarter of next year. Foxtron would fully own Luxgen following the transaction, including five car distributing companies, outlets and all employees. The deal is subject to the approval of the Fair Trade Commission, Foxtron said. “Foxtron will be
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