The Economist (2022-01-08)

TheEconomistJanuary8th 2022 7
The world this week Business

Followinga three­monthtrial
a juryinSiliconValleyfound
ElizabethHolmesguiltyof
intentionallydeceiving
investorsinTheranos,a start­
upshefoundedthathadprom­
isedtorevolutionisemedicine
bydetectingdiseasefromjust
a fewdropsofblood.Thejury
wastoldthatMsHolmesknew
thatthefirm’scoretechnology
wasfaulty,andliedaboutits
prospects.AtTheranos’s
zenith,inherblackturtlenecks
givingatedtalk,MsHolmes
symbolisedtheself­assured
cultureoftechstartups.She
willbesentencedlater.

Erdogan’sfolly
Turkey’sannual inflation rate
soared in December to 36%, up
from 21% the previous month.
The country’s currency has
slumped, falling by 44%
against the dollar in 2021,
mostly as a result of Recep
Tayyip Erdogan’s unorthodox
economic policy of badgering
the central bank to cut interest
rates. All this has only fuelled
inflation in Turkey, which is
dependent on imported energy
and goods. The cost of trans­
port was up by 54% in Decem­
ber, year on year, and food and
drink by 44%. 

Toyotasold more cars in the
United States than General
Motorsin 2021, the first time
that gmhas lost the annual
crown of America’s biggest
carseller since the early 1930s.
The Detroit giant was hit par­
ticularly hard by the global
shortage of computer chips,
causing it to curtail production
sharply. Its Japanese rival had
stockpiled chips, leaving it
ready to take advantage of
rising demand for new cars
when pandemic restrictions
eased. Toyota says it does not
expect to be America’s king of
the roads in 2022. 

Teslawas also able to over­
come the crunch in chip sup­
plies, almost doubling its
deliveries of cars in 2021 in
part by ramping up production
in China of vehicles for the
Asian and European markets.
The electric­car maker’s good
news was somewhat overshad­

owedbythecriticismit re­

ceivedforopeninga show­

roominXinjiang.Onecivil­

rightsgroupsaidthatTesla

was“supportinggenocide”in

theChineseregion,wherethe

Uyghurpopulationisperse­

cutedbythegovernment.

Withinvestorsadjustingto

expectations of a faster pace of

interest­rate rises,stockmark-

etshad a wobbly week. Tech

stocks were hit hard; the Nas­

daq had its worst start to a new

year since 2008. Shares in

airlines and the wider travel

industry fared better as fears

receded that Omicron would

shut borders again. Last year

also saw a few frights in the

markets, but overall the s&p

500 was up by 27% over the 

months, the Nasdaq by 21%

and the Dow Jones Industrial

Average by 19%. In Europe the

Stoxx 600 ended December

22% higher than when it

opened in January. 

Applebecamethefirstcompa­

nytoreach$3trninmarket

capitalisation.Itwasa brief

moment,asitsvaluefellback

amidtheroutintechstocks.

Thecompany’ssharepricehas

morethantripledsincethe

depthsofthepandemicin

March2020.

Havingbeenbootedoffthe

NewYorkStockExchange

amidAmerica’sprohibitionon

investmentsincertainChi­

nesecompanies,China

Mobilemadeitsdebutonthe

Shanghaistockmarket,a sec­

ondarylistingtoHongKong,

whereitssharesalsotrade.Itis

oneofthebiggestevershare

offeringsinChina,whichmay

raisecloseto$9bnonceallthe

options are exercised. 

Meanwhile SenseTime’sstock

roared ahead following a

successful ipoon the Hong

Kong exchange. The Chinese

company develops facial­

recognition software. Last

month it was blacklisted by the

Biden administration because

its technology allegedly en­

ables human­rights abuses in

Xinjiang, a claim which Sense­

Time says is “unfounded”. The

blacklisting forced a short

delay to its ipo, which was

relaunched with the help of

several state­backed institu­

tions in China. 

Huaweisaidit expectslast

year’srevenuetotop$99bn,a

dropof30%from2020.The

Chinesemakeroftelecoms

equipmentdidnotgivedetails,

butthedeclineundoubtedly

reflectsAmericanandforeign

bansthatcutitsaccesstochips

usingAmericantechnology.

ThecrisisdeepenedatEver-

grande, asthedebt­laden

Chinesepropertydeveloper

confirmedit hadbeenordered

todemolish 39 buildingsona

man­madeislandthatit has

comparedtothePalmJumei­

rahinDubai.Thelocalau­

thorityinHainanprovince

saidEvergrandehadnotbeen

givenpermissiontobuildthe

properties.Tradinginits

shares was briefly suspended

in Hong Kong ahead of the

announcement. 

Dollardays

Warner Music snapped up the

rights to David Bowie’scata­

logue of songs, reportedly for

$250m. It is the latest deal for

the lucrative library of a rock

star’s melodies; last month

Bruce Springsteen sold the

rights to his tunes to Sony

Music for a reported $550m.

The buyers get a steady income

from licensing the tracks for

radio, and increasingly,

streaming services. 

Nasdaq composite

February 5th 1971=

Source: Refinitiv Datastream

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12,

8,

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