The Economist - USA (2020-11-07)

10 The EconomistNovember 7th 2020
The world this week Business

Ina stunningturnofevents,

Chineseregulatorssuspended

theinitialpublicofferingin

ShanghaiofAntGroup, just

daysbeforethefintechfirm

wasduetofloatitssharesina

duallistingboththereandin

HongKong.It wasexpectedto

betheworld’smostvaluable

ipoever,potentiallyraising

$34bn.Anthadbeengiventhe

greenlightforthesale,but

China’sforeignministrysaid

thedecisionhadbeentaken“to

bettersafeguardcapitalmarket

stabilityandprotectinvestor

rights”.Ant’sonline-lending

businesswassaidtobea

concern;newruleswere

publishedforcingsuchlenders

tobacktheirloanswithmore

oftheirowncapital.Theshelv-

ingofAnt’sipoisa blowtoJack

Ma,itsfounder.

Using their initiative

Uber, Lyft and other companies

that work in the gig economy

won a big victory in California

when voters approved a mea-

sure that will allow them to

avoid reclassifying their driv-

ers as employees. The compa-

nies will not now have to com-

ply with a state law compelling

them to provide benefits like

sick pay to drivers, although

some have pledged to offer

more protections. Uber and its

allies spent $200m supporting

the measure, the most expen-

sive-ever campaign for a ballot

initiative in the state.

bmwhad a bumper third quar-

ter, driven by a surge in sales in

China, which were up by 31%

year on year. Sales in Europe

also rose, but the carmaker

warned that its business re-

mains volatile because of

covid-19. Its global deliveries

were still 12.5% lower in the

first nine months than in the

same period last year.

The euro area’sgdpexpanded

by 12.7% in the third quarter by

comparison with the previous

three months, bouncing back

from recession. Year on year,

however, the currency bloc’s

economy shrank by 4.3%.

America’seconomy also

pulled out of recession,

growing by 7.4% in the third

quarter, though year on year it

was down by 2.9%.

Turkey’sannual inflation rate

ticked up to 11.9% in October.

The lira, which has lost around

a third of its value against the

dollar this year, fell to another

new low.

The mayor of Londonreached

a financial agreement with the

British government that will

keep the city’s transport

system running for at least

another six months. The rev-

enue stream from London’s

Tube and buses has dwindled

during the pandemic. The

government had threatened to

take direct control of the net-

work. The mayor has agreed to

some cost savings, but he will

not have to extend the size of

the capital’s congestion-charg-

ing zone outside the centre.

More oil companies reported

their earnings, spotlighting the

impact that falling oil prices

and reduced demand are hav-

ing on the industry’s bottom

line. ExxonMobilposted its

third consecutive quarterly net

loss, this time of $680m. It

plans to cut 15% of its global

workforce next year. Saudi

Aramco, the world’s biggest oil

company, made a net profit of

$11.8bn, but that was 45% less

than in the same three months

lastyear.It stillintendstopay

outdividendstotalling

$18.8bn.Mostofthatwillgoto

theSaudigovernment,which

ownsthevastbulkofAramco’s

shares.

Dorsey’s hairy moment

A committee of the board at

Twitterthat reviewed the

company’s management struc-

ture “expressed its confidence”

in the current arrangements,

confirming that Jack Dorsey

will remain chief executive.

The committee was created

after Elliott, an activist hedge

fund, questioned Mr Dorsey’s

commitment to his job. Twit-

ter’s share price has risen

sharply this year, rewarding

Elliott and other investors,

though it was dented recently

by weak daily-user numbers.

BothLufthansa andAir

France-klmreported another

heavy quarterly loss. The

German and French-Dutch

airlines have received huge

state bail-outs during the

pandemic. Lufthansa said it

would restructure its business

further; Air France-klmis to

curtail its flight schedule for

the rest of the year. Ryanair

also made a loss as passenger

numbers plummeted. Michael

O’Leary, its combative boss,

blamed the first lockdowns in

Europe earlier this year, which

he said had “achieved

nothing”, and lambasted the

second lockdowns, many in

force this week, which he

thinks will achieve “even less”.

Berlin Brandenburg Airport

at last opened to passengers

after a decade of delays, six

missed openings and huge cost

overruns. The airport’s inaugu-

ral arrival flights were operated

by easyJet and Lufthansa. Even

the opening had a hitch. Bad

weather stopped a planned

parallel landing by the aircraft.

There was a sliver of hope for

the human race this week, with

the reported news that Wal-

mart has scrapped plans to use

robotsto check stock levels,

prices and misplaced items.

The retailer will instead retain

flesh-and-blood workers, who

have been found to be just as

adept at those tasks during the

pandemic.