Business review from the Economist

Defying U.S., Britain to buy Huawei 5G gear

The British government reportedly gave the go ahead for Huawei to supply equipment for Britain’s 5G networks. The decision comes after the U.S. urged its allies not to use telecoms hardware made by Huawei, which Washington believes to be a security threat. Huawei will provide antennas and other transmission equipment for Britain’s 5G infrastructure, but it is banned from more sensitive parts of the networks that handle customer data.

 

Kraft Heinz announced that Bernardo Hees would step down in June as chief executive, an abrupt move amid a mountain of problems at the food giant, including a $15.4 billion write-down. The new CEO is Miguel Patricio, who has worked for 20 years in senior jobs at Anheuser-Busch InBev. His appointment is backed by 3G Capital, an investment group that brought about the mergers which created both Kraft Heinz and AB InBev.

 

Boeing reported a quarterly net profit of $2.2 billion. Revenue from its commercial-aircraft division was $1 billion lower than in the same quarter a year ago, which the aerospace company said reflected a fall in deliveries of the 737 Max aircraft, which was grounded in March. Boeing ditched its profit forecast for 2019, as it works to sort out problems with the Max.

 

Nissan issued its second profit warning this year, in part because of “the impact of recent corporate issues on sales.” The Japanese carmaker sacked Carlos Ghosn as its boss in November amid allegations of financial wrongdoing, which he denies.

 

Facebook set aside $3 billion to cover a potential fine from the Federal Trade Commission for violating an agreement that promised it would not collect personal data and share it without permission.

 

The S&P 500 index hit a new high. Stock markets have broadly recovered from their drubbing in 2018. The S&P 500 has registered its best start to a year since 1987. Shares in tech companies fared particularly badly last year, but the Nasdaq has also reached a new record.

 

UBS described the first quarter as “challenging,” as earnings at its core wealth-management business and its investment bank declined significantly. Still, the Swiss bank made an overall net profit of $1.1 billion.

 

Impeded by restructuring costs and extra capital requirements, Deutsche Bank and Commerzbank abandoned their plan to merge.

 

South Korea’s economy unexpectedly shrank in the first quarter, by 0.3% compared with the previous three months, the worst performance since the financial crisis. Korean exports have fallen sharply.

 

Britain’s competition regulator blocked the merger of J. Sainsbury and Asda, a subsidiary of Walmart, which would have created the country’s biggest supermarket chain. The regulator found that the deal would have led to higher prices.

Global Politics from The Economist

Suicide bombers kill hundreds in Sri Lanka

Jihadists in Sri Lanka suicide-bombed three churches and three hotels on Easter Sunday, killing more than 350 people. Islamic State militants claimed responsibility. The Sri Lankan authorities blamed a little-known local group, which they say may have had external help. The government received detailed warnings, but does not seem to have acted on them. The president asked his chief of staff and head of police to resign.

 

Joko Widodo won re-election as president of Indonesia, beating Prabowo Subianto, a former general who also ran against him in 2014. Now as then, Prabowo has refused to concede defeat, saying the election was rigged.

 

A court in Hong Kong sentenced eight activists for their role in the prodemocracy “Umbrella Movement” of 2014. The harshest punishments, of 16 months in jail, were imposed on two academics.

 

Myanmar’s highest court upheld the conviction of two journalists from Reuters for breaking the law on state secrets. The journalists say they were framed by the security services for revealing a massacre of civilians by the army.

 

Saudi Arabia executed 37 people on charges of terrorism, including one who was crucified. Most of those killed were from the Shia minority. Human-rights groups accused the government of holding sham trials and using the death penalty to stamp out dissent.

 

The world’s largest drone-delivery network was launched in Ghana. Zipline, a U.S. startup, will distribute vaccines and other medical supplies by operating 600 drone flights a day.