Business | The Economist

Glencore, a Swiss-based commodities company, resolved various long-standing corruption allegations against it. In America it pleaded guilty to wide-ranging graft that the Justice Department described as “staggering”, involving hundreds of millions of dollars in bribes to officials in numerous countries, and to running a scheme to manipulate oil prices. In Britain it indicated it would plead guilty to bribery connected with oil operations in five African countries. And in Brazil it is paying a fine for corrupt payments to Petrobras, the state-controlled oil company. Gary Nagle, who took over as chief executive last year from Ivan Glasenberg, on whose watch the wrongdoing took place, stressed that Glencore has taken significant steps to enhance its ethics and compliance programme.

A surprise profit warning from Snap, the parent company of Snapchat, caused its share price to drop by more than 40%, and rattled investors in other tech companies, dragging down the stocks of Alphabet, Amazon, Apple and Meta among others. Snap blamed a range of issues, including high inflation. The latest earnings season revealed slower growth in online spending by advertisers across the whole tech sector.

Abercrombie & Fitch’s stock also swooned after it reported an unexpected quarterly loss. Like other retailers, a&f is battling higher logistics costs and a build-up in its inventory amid the supply-chain crunch, just as inflation bites and customers (already skinny at a&f) tighten their belts.

In Britain the share prices of leading oil-and-gas companies and electricity suppliers fell sharply ahead of an expected announcement of a windfall tax on the industry. The tax, a u-turn from the government, which has resisted the move for months, will be used to help households struggling with rocketing energy bills amid a cost-of-living crisis.

South Korea’s central bank raised its main interest rate by a quarter of a percentage point, to 1.75%. New Zealand upped its rate by half a point, to 2%.

Refuseniks

American banks and investors can no longer receive Russian bond payments, after the us Treasury Department let an exemption to its sanctions regime that had allowed them to process the payments expire. The move is intended to squeeze further Russia’s ability to make payments on its debt.

The rouble reached its highest level against the dollar in four years, and against the euro in five years. The Russian currency collapsed at the start of Russia’s invasion of Ukraine, but has strengthened on the back of government capital controls to make it the world’s best performer so far this year. It has been boosted by the central bank raising interest rates, Russian exporters being ordered to convert 80% of their foreign currency into roubles, and Russia demanding payment for its energy supplies in roubles.

The British government approved the sale of Chelsea football club to a consortium led by Todd Boehly, an American businessman who tried to buy the team in 2019. Roman Abramovich, a Russian oligarch who was involved in peace talks with Ukraine in March, gave up control of Chelsea when he was sanctioned. The government is insisting that he in no way benefits from the sale; the proceeds will be held in a bank account and go to charity.

The implementation of a landmark deal to introduce global standards for corporate tax, including a minimum tax rate of 15%, will be delayed by a year and not come into force until 2024, according to the secretary-general of the oecd, which brokered the pact. The agreement, which has been signed by more than 130 countries, faces resistance from Republicans in the American Senate and in some European countries.

The head of responsible investing at hsbc was suspended, after he suggested that politicians and central banks were overstating the financial risks from climate change as they try to “out-hyperbole the next guy”. A few days later the Bank of England published its biennial climate stress test and said that British banks could take a hit of 10-15% on their profits if they did not tackle the risks from global warming.

Despite the uncertain outlook for the world economy, Samsung Group announced a plan to invest 450trn won ($356bn) over the next five years in chipmaking and biopharmaceuticals, creating 80,000 jobs.

It’s a jungle out there

The outlook was not so rosy for Gorillas, a startup that promises to deliver groceries to your door within minutes, which is shedding half the jobs at its headquarters in Berlin to cut costs. The firm is also leaving four European markets to focus on Germany, Britain and other countries where it does most of its business. Gorillas raised $1bn in its latest fund-raising round, but the news on the vine is that it has run into stiff competition from rivals trying to ape its business.