January kicked off in a rather calm manner; the markets took a little breather as people gradually returned from the holiday season. However, things were going to heat up fast.
Driven by greed
Carlos Ghosn, the former CEO of Nissan, fled from Japan to Beirut “to escape injustice” regarding charges of financial misconduct and misuse of corporate resources for personal gain. Meanwhile, Volkswagen got hit with Canada’s highest-ever environmental fine due to disguising regular pollution levels during vehicle testing.
What happened in Davos should not stay in Davos
The World Economic Forum held its annual meeting in Davos. Greta Thunberg and Donald Trump faced off again; after boasting about the economic revival in the U.S. and his extraordinary relationship with China, Trump headed back home to deal with the “world’s greatest witch hunt”, a.k.a. his impeachment trial.
The climate change with its risks was the meeting’s most critical issue. From a purely economical view, things looked optimistic at least on the short term. Out of all tech topics at hand, AI was the most discussed one; while the benefits are clear, fears of misuse still prevail.
Davos featured great speeches and discussions. The world needs them to be brought to reality.
Kone provides a lift
On the acquisition side, Kone put an offer of 17bn Euros to the table for competitor Thyssengrupp’s elevator business. The shareholders, pressured by labor unions, should decide by the end of February if Finland’s most valuable corporate transaction will actually happen. Even if the initial offer is accepted, there are several hurdles to overcome.
Hit by a virus
The most significant factor in January’s economic climate was undoubtedly the coronavirus. As the amount of the infected grew and the geographical spread extended, also the financial indicators dimmed.
The international travel surged at all fronts. The Chinese tourists cancelled their trips at an increasing pace. International airlines – such as Finnair, whose strategy relies heavily on Asian travel – could only watch their stock take a plunge. Companies with business relations to China reorganized their operations vehemently.
China has shut down entire cities but as of yet, the virus has showed no signs of weakening. At the beginning of February, the global economy is looking at a big task of recovery and rebuild.