The Economist February 26th 2022 9
The world this week Business
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 shortselling 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 northwest 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 nuclearpower
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
selloff in Chinese tech stocks.
Meituan’s share price swooned
after regulators said they
wanted the fooddelivery
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 sixmonth 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 hydrogenpowered
flight”. An a380 superjumbo
will be fitted with liquid
hydrogen tanks and used for
test flights by middecade,
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 Porschesportscar
brand in an ipo. The German
carmaker is in talks with its
biggest shareholder, the hold
ing company that is owned bythe PorschePiëch family. A
stockmarket listing of Porsche
would provide vw with the
funds to accelerate its rollout
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
shortform 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 buyout of
Dell and a clash with Warren
Buffett over an oilcompany
takeover. His beef with
McDonald’s is its treatment of
pregnant pigs. Mr Icahn thinks
they should not be kept in
gestation crates. The fastfood
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.