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.
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”
TRANSFORMATION: Taiwan is now home to the largest Google hardware research and development center outside of the US, thanks to the nation’s economic policies President Tsai Ing-wen (蔡英文) yesterday attended an event marking the opening of Google’s second hardware research and development (R&D) office in Taiwan, which was held at New Taipei City’s Banciao District (板橋). This signals Taiwan’s transformation into the world’s largest Google hardware research and development center outside of the US, validating the nation’s economic policy in the past eight years, she said. The “five plus two” innovative industries policy, “six core strategic industries” initiative and infrastructure projects have grown the national industry and established resilient supply chains that withstood the COVID-19 pandemic, Tsai said. Taiwan has improved investment conditions of the domestic economy
Sales in the retail, and food and beverage sectors last month continued to rise, increasing 0.7 percent and 13.6 percent respectively from a year earlier, setting record highs for the month of March, the Ministry of Economic Affairs said yesterday. Sales in the wholesale sector also grew last month by 4.6 annually, mainly due to the business opportunities for emerging applications related to artificial intelligence (AI) and high-performance computing technologies, the ministry said in a report. The ministry forecast that retail, and food and beverage sales this month would retain their growth momentum as the former would benefit from Tomb Sweeping Day