World briefs from the Economist

  • Updated: March 31, 2014 - 4:39 PM
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King Digital Entertainment CEO and founder Riccardo Zacconio, second from left, high-fived with company co-founder Lars Markgren.

Photo: Richard Drew • Associated Press,

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Global business

King Digital priced its IPO on the New York Stock Exchange at $22.50, the midpoint of the range of prices at which it had considered selling its shares. But with worries that it may not be able to repeat the success of its “Candy Crush Saga” mobile game, King’s share price fell hard on the first day of trading, closing at $19. It was the biggest opening flop in 20 years of an IPO that hoped to raise at least $500 million.

Facebook made its second big acquisition this year, forking out $2 billion to buy Oculus VR, which makes virtual-reality headsets for video games. Sony and Microsoft are testing their own virtual-reality gaming hardware for consumers, but Facebook will be more interested in the technology that could be added to its social network in the future, so that, for example, friends could meet up in virtual online rooms.

House prices in American cities rose by 13.2 percent in January compared with the same month in 2013, according to the S&P/Case-Shiller index of 20 metropolitan areas. This was the slowest rate of growth since August. House prices rose the most in Las Vegas, by 24.9 percent, though they are still 45 percent lower there than their peak in August 2006.

Standard & Poor’s cut its rating on Brazil’s government bonds to just above junk status because of the economy’s weak outlook. The finance ministry insisted that Brazil still has “strong fundamentals” and pointed out that last year’s 2.3 percent growth in GDP was among the strongest in the G-20.

In remarks that were taken as a significant softening of his opposition to quantitative easing in the eurozone, Jens Weidmann, the president of Germany’s central bank, suggested that QE was now not out of the question. Weidmann has been one of the most vocal critics of the ECB directly buying government and private bonds, but with the specter of deflation looming, Europe’s central bankers are thinking again about turning to unconventional policies.

In the latest round of bank stress tests, the Federal Reserve rejected Citigroup’s capital plans as inadequate for the second time in three years, as well as those of four smaller banks. Citi was at the heart of the financial crisis, but has emerged as a leaner bank. The Fed’s decision means it cannot offer higher dividends and share buybacks to investors.

The British Treasury sold more of its shares in Lloyds Banking Group, reducing the government’s stake to 24.9 percent. Lloyds was bailed out in 2008 along with Royal Bank of Scotland (which is still a long way from having its government-held shares sold on the market).

Rupert Murdoch, who is 83, shored up his succession plans for his media empire by promoting his sons. Lachlan, the eldest, was appointed co-chairman of both 21st Century Fox and News Corp. James, the younger son, was also given more responsibilities as co-chief operating officer of 21st Century Fox.

Political economy

A senior Russian minister predicted that up to $70 billion could flow out of the country this quarter, as investors fret about the effect of sanctions that may be imposed for annexing Crimea. The chief executive of Sberbank, Russia’s biggest financial company, warned that there would be a real risk of recession if outflows reach $100 billion. Russian stock markets and the ruble have fallen sharply over the past month.

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