Advertisement

  • News
  • Columns
  • Interviews
  • BW Communities
  • BW TV
  • Subscribe to Print
BW Businessworld

Clock Is Ticking

Photo Credit :

Greece risks running out of cash by April 20 unless it secures fresh aid, a source familiar with the matter said, leaving it little time to convince skeptical creditors that it is committed to economic reform. After talks with European Union leaders, including German chancellor Angela Merkel, Athens said it will present a package of reforms to its euro zone partners on 30 March in the hope of unlocking aid and avoiding a messy default. Merkel did not reveal details from her meetings with Greek Prime Minister Alexis Tsipras, but she did tell members of her Conservative Party at a closed-door meeting in parliament that Greece needs to work with the European Central Bank, the International Monetary Fund and the European Commission to unlock the cash injection it needs. “Time is short,” she said, according to party allies.

Call Connected
Hutchison Whampoa, a company which bled money in its 3G telecoms business for years, will create Britain’s largest mobile network after agreeing to a £10.3-billion deal to acquire O2 from Spain’s Telefónica. In its largest overseas deal, Hutchison will combine O2 with its Three mobile group to bring together 31 million customers, or about 41 per cent of the UK wireless market. Hutchison is controlled by Hong Kong billionaire Li Ka-shing, who has overseen an aggressive push into UK infrastructure with a range of acquisitions in ports, rail and real estate. The two groups said the deal would be subject to regulatory approvals that might take up to a year. Hutchison could licence the O2 brand in the UK to run alongside or instead of Three in the future, according to sources. However, the sources added that a final decision had not been made.

No Stopping
The Organisation of Petroleum Exporting Countries (OPEC) will not take sole responsibility for propping up oil prices, Saudi Arabia’s oil minister said, signalling that the world’s top petroleum exporter is determined to ride out a market slump that has roughly halved prices since last June. Last November, OPEC kingpin Saudi Arabia persuaded members to keep production unchanged to defend market share. The move accelerated an already sharp oil price drop from peaks last year of more than $100 a barrel, that was precipitated by an oversupply of crude and weakening demand.
 
Cheesy Bite
Kraft Foods Group, the maker of Velveeta cheese and Oscar Mayer meats, will merge with ketchup maker H.J. Heinz, owned by 3G Capital and Berkshire Hathaway, to form North America’s third-largest food and beverage company. The combined company, to be led by Heinz chief executive Bernardo Hees, will have revenues of about $28 billion, the companies said in a statement. Kraft has been battling sluggish demand for packaged food products in the US. The combined company is expected to save about $1.5 billion annually by the end of 2017, the companies said. Kraft shareholders will own a 49 per cent stake in the combined company and Heinz shareholders 51 per cent.
 
Under Scanner
Deutsche Bank is under investigation in New York state for rigging the London InterBank Offered Rate (Libor). Germany’s largest bank is suspected of having participated with other banks in a “vast manipulation of Libor”. The probe is led by Benjamin Lawsky, superintendent of financial services in New York state. The Lawsky probe comes amid a long-running crackdown by regulators investigating rigging by large banks of the Libor, an interbank average rate used to peg millions of interest rate-sensitive contracts and loans around the world.
 
Homing In
New US single-family home sales surged in February to their highest level in seven years despite harsh winter weather, in a hopeful sign for the housing market. The Commerce Department said sales jumped 7.8 per cent to a seasonally adjusted annual rate of 539,000 units, the highest level since February 2008. January’s sales pace was revised up to 500,000 units from the previously reported 481,000 units. Economists had forecast new home sales falling to a 465,000-unit pace in February. New home sales are counted at the signing of contracts. February’s gains came despite cold and snowy weather slamming large parts of the country.

Net Rage
The US’s biggest cable and Internet companies have sued to block the federal government’s new Net neutrality rules. In February, the Federal Communications Commission (FCC)passed a historic measure to more strictly regulate the Internet. The new rules stop Internet providers from blocking websites or charging extra for “internet fast lanes”.But broadband companies say they weren’t doing that anyway. Now the US Telecom Association is asking a federal appellate court in Washington to review the FCC’s new rules. The industry group —  which includes AT&T, Verizon and CenturyLink as well as many other smaller broadband providers — calls the rules “arbitrary, capricious and an abuse of direction” in its court filing.

Real Help
Nasdaq OMX has agreed to provide New York-based startup Noble Markets with its X-stream trading system (used by more than 30 exchanges and marketplaces worldwide) to power a marketplace for trading Bitcoins and related digital currency assets. The agreement follows other Wall Street initiatives that could pave the way for financial institutions to own and trade digital currencies, including the NYSE’s recent investment in Bitcoin exchange Coinbase. Coinbase opened a regulated exchange in the US for trading the virtual currency earlier this year. Launched in 2009, bitcoins let people conduct transactions over the Internet. The virtual currency has come under regulators’ scrutiny in the US and Europe, following a series of high-profile scandals such as the bankruptcy of Tokyo-based bitcoin exchange Mt Gox.
 
(This story was published in BW | Businessworld Issue Dated 20-03-2015)