Blogs
Business this week
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The vigorous shareholder activism during this year's round of annual general meetings continued apace, as significant minorities of investors voted against the pay packages for executive at some big financial companies, including Barclays,Credit Suisse and NYSE/Euronext.The non-binding revolts have caught companies off guard. Aviva, a British insurner, bowed to pressure and withdrew the pay rise for its chief executive.
Chesapeake Energy,America's second-biggest producer o natural gas, split the jobs of chairman and chief executive. Investors were angry that Aubrey McClendon, who holds both positions , had borrowed hundreds of millions of dollars to buy personal stakes in the company's wells.
Energy Transfer Partners, a company based in Dallas,agreed to buy Sunoco,one of America's biggest petrolstation operators,for &5.3billion.The deal gives ETP access to Sunoco's vastpipeline network. This is its third such acquisition in 18months , as it expands its business beyond delivering natural gas(the price of which has dropped because of a glut in the American market) to distributing oil.
Microsoft took its biggest step yet into digital books by acquiring a 17.6% stake in Barnes & Noble's Nook e-reader business. The pair will develop a Nook app for Microsoft's Windows 8 operating system and share revenue from e-book sales. The deal values Nook and related items at $1.7 billiion. How much of a challenge the alliance will be to Amazon's Kindle and Apple's iBooks remains to be seen.
Mervyn King,the governor of the Bank of England, admitted he should have "shouted from the rooftops" about the risks that were building up in the financial system before the crash in 2008. The central bank, which has been hesitan to admit to its failings in the run-up to the crisis , is to take over many of the responsibilites for regulating banks from the Financial Services Authority next year.
Samsung reported another excellent set of quarterly results. Net profits rose by 82% to 5.1 trillion korean won ($4.5 billion). Samsung's strong performance was driven mostly by smartphones; some observes say it sells more of them than Apple does.
As it struggles to claw back some of the ground it has lost to Apple, Samsung and others, Research In Motion unveiled an experimental prototype of its new BlackBerry 10 smartphone. Its concept is closer to the iPhone and Android-operated devices, since it has a touchscreen and is more app-friendly.
Australia's central bank cut its benchmark interest rate by half a percentage point, to 3.75%. With in flationary pressures easing in the country, the Reserve Bank of Australia's primary concern now is slowing global growth,especially in China, Australia's biggest trading partner, which the RBA thinks "is likely to remain at a more measured and sustainable pace in the future".
America's economy grew at an annualised rate of 2.2% in the first quarter, which disappointed the markets. The mediocre figure was explained in part by a 5.6% decrease in government spending and investment. A study out this week from Fitch Ratings and Oxford Economics suggests that stimulus spending in America in response to the fiscal crisis increased aggregate GDP by more than 4%, which say the researchers, implies"that the US might still be mired in a recession " without the intervention.
The unemployment rate in the euro zone continued to creep up again in March, to 10.9%. Spain had the highest rate (24.%),followed by Greece(21.7%). In both countries a woeful 51% of people under 25 were jobless.
The owner of the Hong Kong stock exchange confirmed that it was interested in making a bid for the London Metal Exchange. Established in1877, the LME operates the last "open outcry" trading pit in Europe, where orders for contracts are shouted out . Bourses i n New York and Chicago are also expected to submit offers for the business.
P.F.Chang's , America's biggest chain of Chinese restaurants, decided to go private, opting for a palatable $11 billion buy-out from Centerbridge partners. The chain is struggling to match the growth it notched up at its plush diners and casual bistors during the years after it firstopened for business in 1993.
Strewth!
The consumption of beer in Australia has fallen to a 65-year low, according to offical figures. The average Aussie drinks just 4.23 letres (7.5 pints) of the amber nectar a year. The consumption of wine and spirits has soared.
