The Economist February 26th 2022 9
The world this weekBusiness
Russia’s invasion of Ukraine
shook stockmarketsthat were
already unsettled by the crisis.
The day before the attack the
s&p500 had already hit its
lowest level in eight months,
taking it down by almost 12%
since the beginning of the year.
Before the assault the nasdaq
was also down from the start of
January, by 17%. The Moscow
Exchange suspended trading
when the invasion began.
When trading resumed the
Moex index of Russia’s leading
companies plunged by 45%
before pulling back some of its
losses. The central bank
brought in emergency support
for Russian banks and banned
the short-selling of shares.
Oil pricessurged as investors
weighed up the risk of Russia’s
military intervention to the
flow of energy supplies. Brent
crude passed $100 a barrel for
the first time since 2014. Many
Western oil firms are also
assessing what effect sanc-
tions will have on their consid-
erable assets in Russia. The
price of natural gassoared in
what is an already tight mar-
ket. The main indicator for gas
futures in north-west Europe
was up by 30% in early trading.
America held its biggest auc-
tion to date of rights to develop
offshore- windfields. The sale
covered half a million acres in
shallow waters off the coasts of
New Jersey and New York’s
Long Island in an area of sea
known as the New York Bight.
The wind turbines could even-
tually power 2m homes.
The French government said it
would inject €2.1bn ($2.4bn)
into edfto tide over the util-
ity’s finances as it deals with
outages at its nuclear-power
plants. edfreckons it could
take a €13bn net hit to its profit
this year because of reduced
output from nuclear produc-
tion and the government’s
insistence that it bear some of
the costs of increases to house-
hold electricity bills.The resurgence in commodity
prices in 2021 pushed revenues
up by 42% at Rio Tinto, help-
ing the mining company turn
an annual net profit of $21bn
and return a staggering $16.8bn
to shareholders in dividends
for the year. Rio’s annual
report reiterated its commit-
ment to change its workplace
culture following an external
investigation into claims of
bullying, and sexual and racial
harassment. It will implement
all of the investigation’s
recommendations.Fresh concerns about China’s
regulatory crackdown on the
tech industrycaused another
sell-off in Chinese tech stocks.
Meituan’s share price swooned
after regulators said they
wanted the food-delivery
platform to reduce its fees to
restaurants. Tencent was
forced to deny that it was once
again the target of another big
clampdown. And reports
emerged that the authorities
were recommencing their
inquiries into Jack Ma’s Ant
Group. The Hang Seng TechIndex of technology compa-
nies listed in Hong Kong fell to
its lowest level since its
creation in 2020.Last year China’s regulators
also brought in tough new
restrictions on the private-
tutoring business, including
a ban on foreign investment in
the sector. This week New
Oriental, the largest online-
tutoring company, reported an
$876m six-month net loss, as
its income plunged.Airbus signed an agreement
with cfmInternational, a
venture between General
Electric and Safran, a French
aerospace firm, to develop a
combustion engine for aircraft
fuelled by hydrogen. The com-
pany said it was its most sig-
nificant step yet “to usher in a
new era of hydrogen-powered
flight”. An a380 super-jumbo
will be fitted with liquid
hydrogen tanks and used for
test flights by mid-decade,
with an aim of the first zero-
emission commercial aircraft
entering service by 2035.Volkswagen announced that it
is in advanced discussions to
float its Porschesports-car
brand in an ipo. The German
carmaker is in talks with its
biggest shareholder, the hold-
ing company that is owned bythe Porsche-Piëch family. A
stockmarket listing of Porsche
would provide vw with the
funds to accelerate its roll-out
of electric vehicles and battery
technology.Meta made its Reels platform
available to all users on Face-
book worldwide, upping its
rivalry with TikTok over
short-form video content.
Mark Zuckerberg’s comment
that Facebook is encountering
stiff competition from TikTok
for attention on social media
was a factor behind a 26% fall
in Meta’s share price on Febru-
ary 3rd. It has fallen by another
16.5% since then.Carl Icahnlaunched a fight
with McDonald’sby nominat-
ing two directors to its board
in a dispute over animal rights.
The activist investor is a veter-
an of boardroom battles, in-
cluding an unsuccessful at-
tempt to block a buy-out of
Dell and a clash with Warren
Buffett over an oil-company
takeover. His beef with
McDonald’s is its treatment of
pregnant pigs. Mr Icahn thinks
they should not be kept in
gestation crates. The fast-food
chain says it expects these to
be phased out. Until then Mr
Icahn could uncomfortably
hog the limelight with calls for
an abrupt end to the practice.