Business&law news!

Is your bank using XP? – On April 8^th, Microsoft is set to cease providing support for the Windows XP software. While this move may have little impact on the individual users, a more curious problem relates to the XP’s importance for the financial infrastructure. Most notably, around 95% of the ATMs in the World run an appropriated version of XP, which means that their operators will either need to upgrade to a newer system or pay Microsoft for additional years of servicing. Whether the banks decide to pay for extended support or upgrade, the costs will be substantial – for example, the upgrade cost for a typical bank from the UK is expected to oscillate around £100 million.

Alibaba’s US IPO – Alibaba Group is an e-commerce business operating in the People’s Republic of China, encompassing business-to-business, customer-to-customer and business-to-customer online commerce platforms. Founded in 1999, it dominates the Chinese online shopping market, itself accounting for around 60% of all parcels shipped in the country. Valuating a business of this size is difficult, though estimates place its valuation somewhere around $120bn – in comparison, eBay, the most popular western customer-to-customer e-commerce business is valued at ‘mere’ $73bn. On the March 16^th, Alibaba has announced it will seek an initial public offering in the USA, after listing in Hong Kong was ruled out by regulatory issues. The IPO is expected to raise around $15bn – and possibly even in excess of $18bn, the largest IPO in the US history.

European M&A rankings, Q1 2014 – Interesting insight give us European M&A ranking in the first quarter of 2014. According to Thomson Reuters’ preliminary rankings for Q1 2014, the European market increased in value by more than 37 per cent on the first quarter of 2013, from $171.2bn to more than $234.7bn. In fact, this is definitely a big change. Another interesting thing is the position of US firms in the ranking, their domination is growing year by year. Each of the top 25 firms saw an uptick in total European M&A deal value in the first quarter of 2014. Freshfields, which led the table last year in Q1 2014 was replaced by Simpson Thatcher & Bartlett.    European M&A rankings, Q1 2014

U.S. and EU sanctions – Finally, there are economic sanctions imposed by the U.S. and the European Union on Russia after dreadful annexation of Crimea several days ago. Independently that sanctions are really satisfied or not, there are several economic and financial implications of these activities even though sanctions have so far focused on individuals. First of all, especially after the U.S. expanded sanctions to include businessmen linked to Putin two important rating agency, Standard & Poor’s and Fitch Ratings cut their outlook on Russia’s credit grade to negative from stable. Another insight give us Russia market where Russia’s Micex stock index has plunged 11.6 percent this year compared with a 4.8 percent decline for the MSCI Emerging Markets Index. Third crucial observation comes from the monetary analysis. The ruble is the second-worst performer against the dollar behind Argentina among 24 developing-market currencies tracked by Bloomberg, weakening 9 percent. It rose 0.4 percent today. According to Moscow-based VTB Russia will probably dip into a recession in the second and third quarters of this year as “domestic demand is set to halt on the uncertainty shock and tighter financial conditions,”. However, U.S. and EU sanctions could make a real impact if restrictions will be permanent, not only temporary. Investors and rating agencies are mostly basing their view not on what’s happened with sanctions so far but rather on what may happen. Currently, Russia seems to be prepared for some personal sanctions. Recently, after Visa and MasterCard stopped processing some Russian transactions in response to U.S. sanctions, Moscow says it could launch a homegrown payment system that could be ready in as little as six months, according to German Gref, chief of the country’s largest bank, Sberbank. This story shows that Russia officials know well that so far they are not in a big danger.