Business this week
Jan 20th 2011
From The Economist print edition
From The Economist print edition
Steve Jobs (pictured right) worried investors in Apple by taking immediate medical leave, the chief executive’s second such absence in less than two years. Mr Jobs was diagnosed with cancer in 2003, though he did not reveal his condition for nine months, and had a liver transplant in 2009, which was reported three months after the operation. No reason was given for his taking leave this time. See article
Meanwhile, Apple posted another strong set of quarterly earnings. In the three months before Christmas it sold 16.2m iPhones, almost twice as many as a year earlier, and 7.3m iPads, around 20% more than had been expected. Sales of iPods were 7% lower, at 19.5m.
Higher gas bills, more expensive air fares and the rising cost of food, notably vegetables and cereals, were factors behind an unexpected jump in Britain’s inflation rate for December, to 3.7%, another consideration for the Bank of England as it ponders whether to raise interest rates this year. See article
In China the rate of inflation in December stood at 4.6%, lower than November’s 28-month high of 5.1% and easing some of the pressure on the government over politically sensitive price rises. China’s GDP grew by 9.8% in the fourth quarter from a year earlier, a more rapid pace than was expected. The economy expanded by 10.3% for the whole of 2010.
Brazil raised its benchmark interest rate, already the highest among big economies, by 50 basis points, to 11.25%, to combat surging inflation.
In an embarrassing turnaround Goldman Sachs said it would restrict participation in the investment vehicle it has set up to buy equity in privately held Facebook to its clients outside America. The large amount of publicity that the offer generated inside America could potentially have run foul of securities law. See article
BP and Rosneft struck a deal that sees BP increase its stake in Rosneft from 1.3% to 10.8% and the Russian state-owned energy firm take a 5% holding in BP. The pair also set up a venture to explore oil and gas deposits beneath Russia’s Arctic shelf. The agreement marks a step for BP in moving on from last year’s oil-spill disaster. However, some American politicians raised concerns about BP, which has many assets in America and supplies fuel to the military, working so closely with a Russian company. One congressman quipped that “BP once stood for British Petroleum…it now stands for Bolshoi Petroleum.” See article
The International Energy Agency raised its forecast of the world’s demand for oil this year and warned that economic recovery could be hampered by oil prices, which are at their highest level in more than two years. See article
Virgin America announced that it placed a firm order late last year for 60 Airbus A320 jets, including 30 A320 NEOs, tripling its fleet as it expands its routes in North America. It will be the first carrier to fly the more fuel-efficient NEO version of the A320. The order is another boost for Airbus, after a record purchase of jets from an Indian airliner, and vaults the European aircraft-maker ahead of Boeing for orders in 2010. Boeing got a lift, however, with the announcement during Hu Jintao’s visit to Washington that China would buy an extra 200 of its planes.
Cargill, America’s biggest privately held company, decided to spin off Mosaic, a leading producer of potash and phosphate, in which it holds a 64% stake. The transaction is valued at $24 billion and will cheer the charitable trusts that were established by the granddaughter of Cargill’s founder; they have long sought to gain value from the shares they hold. With food prices soaring, pushing up the demand for fertiliser, Mosaic may make an attractive takeover target for the likes of BHP Billiton.
A lawyer for one of the three executives sacked by Renault in an alleged case of industrial espionage said his client would challenge his dismissal through a tribunal. Michel Balthazard headed the carmaker’s pre-engineering projects team. Another of the sacked three launched a lawsuit against the carmaker. Renault has filed a complaint with the state prosecutor in Paris “against persons unknown” after the discovery of “misconduct detrimental to the company”, rumoured to be a leak (or sale) of its electric-car technology to another country.
At a press conference in London, a former banker at the Cayman Islands offices of Julius Baer, a Swiss bank, handed over a second batch of confidential data to Julian Assange, the founder of WikiLeaks, relating to 2,000 accounts. Rudolf Elmer was fired by Baer in 2002, and now says he wants to expose tax evasion. Later in the week a court in Switzerland fined Mr Elmer for breaching banking-secrecy laws in a prior disclosure of documents. He was arrested soon after leaving the court.