Business Briefs from the Economist
Problems intensify for Valeant
Shares in Valeant, a troubled drugs company, fell by half after it warned of a potential default on some of its $30 billion debt-pile and slashed its outlook. The company came under pressure last year when, among other things, it jacked up the price of two treatments for heart disease. Prosecutors and the Securities and Exchange Commission are looking into a variety of its business practices. On Monday, share prices rose 9 percent as it announced plans to search for a new chief executive.
The Bank of Japan left its benchmark interest rate on hold at -0.1 percent. Haruhiko Kuroda, the central bank's governor, defended negative interest rates as a useful tool in the battle against deflation, and even suggested that the rate could be brought down to -0.5 percent if the economy faced headwinds from a financial crisis. At its policy meeting, the Federal Reserve took a cautious view about when it might next raise rates, saying a decision would be based on "realized and expected economic conditions."
Mario Draghi's remark that he did "not anticipate" making a cut to interest rates again sent markets into a tizzy. The president of the European Central Bank expressed his opinion after introducing a bigger-than-expected package of stimulus measures on March 10, such as reducing its deposit rate to -0.4 percent and raising the amount of bonds it buys each month in its quantitative-easing program from $66 billion to $88 billion.
Anheuser-Busch InBev issued $15 billion worth of bonds, the proceeds of which will help fund its acquisition of SABMiller. The expansion of the ECB's bond-buying program caused a rush of euro-denominated offers this week as companies sought to take advantage of super-low interest rates.
Oil markets reacted positively to the International Energy Agency's comment that prices "may have bottomed out." A few days later the Qatari oil ministry said that a preliminary agreement between most big oil producers to freeze output had "put a floor under the price."
The London Stock Exchange and Deutsche Börse formally announced their intention to merge, which would boost their businesses in derivatives, clearinghouses and other financial services. The combined company will be based in London, but the LSE's chief executive, Xavier Rolet, will step down to make way for Carsten Kengeter, the German bourse's CEO. ICE, the owner of the New York Stock Exchange, is still pondering whether to make a counter bid for the LSE.
Atiur Rahman resigned as the governor of Bangladesh's central bank following the electronic theft of $101 million from the country's official account at the Federal Reserve Bank of New York, which holds the deposits of many of the world's central banks. It is one of the biggest cyber-heists to date and came to light via press reports in the Philippines, where the criminals who appropriated the money are thought to be based.
Campari, an Italian drinks company, agreed to buy the maker of Grand Marnier in a deal valued at $761 million. Campari, best known for its red-colored bottled spirit, also owns the Cinzano, Wild Turkey and Skyy Vodka brands. It is taking an initial 28.8 percent stake in Grand Marnier from the family that controls the company with a view to buying the remaining shares.
Global Politics from the Economist
Putin yanking most Russians from Syria
In a surprise move, Vladimir Putin announced that he was withdrawing the bulk of Russian forces from Syria, six months after he sent them there to support his beleaguered ally, Bashar Assad. The same day, U.N.-chaired peace talks aimed at bringing an end to the five-year war began in Geneva. A cease-fire that came into force three weeks ago has largely held.
Gunmen attacked three hotels in Grand Bassam, a seaside town in Ivory Coast. The attack, which left 18 people dead, was claimed by Al-Qaida's north Africa branch.
South Africa's deputy finance minister, Mcebisi Jonas, claimed that he was offered the job of finance minister by members of the Gupta family, who have close ties to President Jacob Zuma. The Guptas, who own a wide range of businesses, have denied this.
An audit of Nigeria's state-owned oil company found that in 2014 it failed to pay $16 billion in oil receipts to the national government.
The U.S. loosened restrictions on travel to, and transactions with, Cuba ahead of President Obama's visit. Americans will now be permitted to go to Cuba on their own, rather than as part of an organization for educational purposes.
