Week in review – listen up
Investors seemed heartened by Hong Kong’s election result, while the UN reminded us that, like the territory’s protestors, the threat of climate change won’t go away.
Hong Kong district elections on Sunday, not usually a market-moving event, delivered a sharp reprimand to the territory’s governor and Beijing. The near-clean sweep for pro-democracy candidates on a record-high turnout was rewarded with a rally in the Hang Seng Index. It was another headache for the Chinese authorities, who had banked on ‘protest-fatigue’ among voters and a desire to return to normality. Meanwhile, the US passed a bill protecting the rights of protestors in Hong Kong, adding insult to injury for Beijing.
The vote doesn’t significantly affect the balance of power – district councils primarily deal with local issues like recycling and noise complaints. Nevertheless, it’s Hong Kong’s only fully democratic election and sends a powerful message to the government. Moreover, district councillors have an important say in selecting Hong Kong’s chief executive. The pro-democracy camp could now secure six seats in parliament, and 117 seats on the 1,200-member panel that appoints the city’s leader.
Despite the disruption, Chinese e-commerce company Alibaba raised US$11 billion in its blockbuster Hong Kong market debut. The technology titan secured an overwhelming endorsement from investors, with the shares surging over 6% on the opening day. It’s this year’s biggest stock market floatation, snatching the number one slot from ride-hailing app Uber, which raised US$8.1 billion in May.
Uber and out?
More crushing for Uber was Transport for London’s decision to revoke its London licence on safety concerns. This followed the discovery that the company’s systems allowed unauthorised drivers to upload their photographs to legitimate Uber driver accounts. Uber has three weeks to prove it’s ‘fit and proper’.
The FTSE All-Share Index ended 1.5% higher over the week to the close on Thursday.
The UN sounded another alert on climate change, warning that the window to prevent its worst effects is fast closing. For the tenth year running, the world has failed to meet emissions targets. “It is really the accumulation of bad news every year,” said Joeri Rogelj, climate change lecturer at Imperial College, London. “Every year that action is delayed, emissions reductions need to be steeper.”
Consumers hold the fort
The Ifo economic institute recorded an encouraging rise in German business sentiment in November. The German economy is expected to grow 0.2% in the fourth quarter of 2019, confounding earlier fears of recession. Strength in the consumer-driven domestic economy is helping offset the beleaguered manufacturing sector. However, Ifo cautioned that Germany is by no means out of danger. Meanwhile, Chancellor Merkel’s government has resisted calls for a stimulus package, and seems to be holding out for a US-China trade resolution.
The FTSE World Europe ex UK Index crept up 0.9% in the week to Thursday’s close.
Adding a sparkle
After some haggling, French luxury goods firm LVMH agreed to buy iconic New York jeweller Tiffany for over US$16 billion. The deal will double the size of LVMH’s jewellery and watches business, give it a US stronghold and consolidate its position as leading luxury brand. As for Tiffany, LVMH hopes to restore some of its lustre – despite various initiatives, including celebrity endorsements and Super Bowl TV advertising, Tiffany has struggled to lure younger customers.
The US S&P 500 Index rose 1.5% over the week to Thursday’s close.
We know that humans aren’t the only creatures to show a right-side preference. But, while 90% of people are right-handed, research shows that, in bottlenose dolphins, the right-sided bias is even stronger.
The finding was revealed in a study of crater-feeding. This is where dolphins swim close to the ocean floor, using echo-location to find prey, then dig their noses into the seabed to eat their catch. As they do this, they make a sharp turn. Almost invariably (99% of the 709 turns recorded), this turn was made to the left, thereby keeping the dolphin’s right side and right eye close to the ocean floor.
The question for scientists is how this right-side preference might benefit the dolphins. One possibility is that it makes it easier for the creature to swallow prey, as their food channel is wider on the right than on the left side.
Another suggestion is linked to brain processing. As in humans, sensory information from one side of the body is processed by the opposite side of the brain. If echo-location is processed on the left side of the dolphin’s brain, then it would be more efficient for information about food to be picked up by the right eye and ear.
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