Category: Business / Finance

QUARTER-LITRE bottles of whisky whizz down a conveyor belt past Mukhtar Ali, a quality-control employee at Pakistan’s Murree Brewery, the only legal beer-and-spirit maker in this Islamic country. Nearby labourers pack Vat No.1, a cask-aged spirit, into boxes. An elderly man with a long beard tapes them up. Asked over the roar of imported German machinery if they have ever taken a sip of the amber liquid, each shakes his head. “It’s haram,” (meaning forbidden), says Mr Ali.

The 155-year-old institution causes some spluttering nonetheless. Founded for British troops of the Raj, it can sell only to the 3% of the 207m-strong population that is comprised of foreigners and non-Muslims. But many of its products end up in Muslim hands, as illustrated by the predilections of the former prime minister, Zulfiqar Ali Bhutto, who ordered a nationwide ban on alcohol in 1977. “He was the biggest consumer of Murree in…

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STAFF had routinely been directed to pore over their chairman’s speeches and learn from them. One which Ye Jianming, the 40-year-old founder of CEFC, delivered last autumn—“Only One Step From Midsummer to Harsh Winter”—was a historical tale meant to motivate the troops. In it he compared his firm’s swift rise to that of Hu Xueyan, a 19th-century merchant banker. Hu amassed a fortune trading in salt, tea, arms and silk through close ties to China’s imperial elites, then fell from grace and went bankrupt.

Mr Ye did not mean the lesson to be pertinent to his own situation. CEFC was then enjoying its own midsummer. As China’s largest private oil group, it had just won a 14.2% stake in Russia’s state-backed oil firm, Rosneft, paying $9.1bn for one of the most significant shares of the world’s largest listed oil firm by production. Industry analysts outside China had been scrambling to study CEFC since early 2017 when it joined national…

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AMERICA’s companies have been powering ahead for years. Amid growing profits, the recession that began in 2007 seems an increasingly distant memory. Yet the situation has a dark side: companies have binged on debt. For now, as the good times have coincided with a period of record-low interest rates, markets have been untroubled. But a shock could put corporate America into trouble.

No matter how it is measured, the debt load looks worrying. When calculated as a percentage of GDP, the total debt of America’s non-financial corporations reached 73.3% in the second quarter of 2017 (the latest available data). This is a record high. Measured against earnings before interest, tax, depreciation and amortisation (EBITDA), the net debt of non-financial companies in the S&P500 hit a ratio of 1.5 at of the end of 2016, a level not seen since 2003. And it remained nearly as high in 2017 (see chart).

To be sure, things are less worrying than they were before the financial crisis. According to a recent analysis by S&P Global Ratings, a…

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IT WAS only five months ago that President Donald Trump lauded Broadcom, a chipmaker, as “one of the really great, great companies” for announcing its plan to move its legal headquarters to America from Singapore. With such praise in the bank, the firm’s chief executive, Hock Tan, may have expected his subsequent offer for a rival, Qualcomm, to enjoy an easy ride. Its course has been anything but smooth. The $142bn bid, which would be the largest-ever tech deal, was rebuffed by Qualcomm’s management. Broadcom next turned to shareholders, asking them to elect its nominees to Qualcomm’s board at a meeting scheduled for March 6th.

Then, in a dramatic twist, the Committee on Foreign Investment into the United States (CFIUS), which oversees the national-security implications of foreign transactions, stepped in to delay the meeting while it conducts a review. It had been drawn in by Qualcomm, in what its furious suitor has branded a “desperate” attempt to prevent the vote. The panel’s surprise intervention suggests a more activist…

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AS COMPUTING power has grown, it has become easier to uncover information hidden inside datasets that seem totally unconnected. Some recent studies have used this approach to reveal business-related information flows. One linked the movements of 18th-century share prices with the arrival of ships bringing news. Another looked at the relationship between business activity and the movements of corporate jets. A third mined White House visitor logs for the names of executives and examined their companies’ subsequent stockmarket returns.

A paper in this vein published on March 5th pores over a dataset released by New York City’s government covering more than 1bn cab rides between 2009 and 2014. David Finer, a graduate student at University of Chicago’s Booth School of Business, analysed trips connecting the headquarters of big banks and the Federal Reserve Bank of New York. He extracted trips starting at commercial banks and at the New York Fed that converged on the same destination around…

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EVER since Julian Assange, founder of WikiLeaks, referred to Sweden as a “hornets’ nest of revolutionary feminism” and as a “Saudi Arabia of feminism”, Swedes have worn this as a badge of honour. Now its foreign ministry has an ambitious plan to increase gender equality on the internet.

Its precise target is Wikipedia, a user-generated online encyclopedia on which some 90% of the content is created by men. Of its biographies, 80% are about males. On International Women’s Day on March 8th (as The Economist went to press) the Swedes were hosting “WikiGap” edit-a-thons and seminars in 54 of its embassies, from Abuja to Vilnius, in partnership with Wikimedia, the foundation behind the platform. The hope was that participants would write more entries about notable women.

“Knowledge is power,” explains Margot Wallström, the foreign minister, and because these days knowledge and information come from the “clearly unbalanced” internet, this is a…

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MARCH 8th, International Women’s Day, always brings a flood of reports about gender inequalities in everything from health outcomes to pay and promotion. But one gap is gradually narrowing: that in wealth. As money managers seek to attract and serve rich women, and as those women express their values through their portfolios, the impact will be felt within the investment industry and beyond.

According to the Boston Consulting Group, between 2010 and 2015 private wealth held by women grew from $34trn to $51trn. Women’s wealth also rose as a share of all private wealth, though less spectacularly, from 28% to 30%. By 2020 they are expected to hold $72trn, 32% of the total. And most of the private wealth that changes hands in the coming decades is likely to go to women.

One reason for women’s growing wealth is that far more of them are in well-paid work than before. In America, women’s rate of participation in the labour market rose from 34% in 1950 to 57% in 2016. Another is that women are…

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LOOKING back from the vantage point of 2025*, economic historians are starting to write their analyses of the Trump slump. It seemed to appear from nowhere with the economy growing at around the trend rate (2.3% in 2017) and the stockmarket booming. The abrupt change came in March 2018 when President Donald Trump decided to impose tariffs on steel and aluminium imports. Both China and the European Union (EU) retaliated in kind without trying to escalate the tensions. It might have ended there.

But unfortunately, the president’s more mainstream advisers like Gary Cohn had been sidelined by a more aggressive group that saw the trade deficit as the key measure of economic progress. In this mercantilist view, any American deficit was proof of cheating. Unfortunately, the president had also enthusiastically passed a tax-cutting programme which resulted in demand sucking more imports into the country. The trade deficit widened rather than declined. So in late 2018, just before the mid-term Congressional elections, an enraged President passed a general…

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