Business

Starbucks surprised markets by ditching Laxman Narasimhan as chief executive with immediate effect, replacing him with Brian Niccol, who has run Chipotle, a fast-food chain, since 2018. Mr Niccol will take up his new job next month, and become the fourth CEO at Starbucks within the past two years. Mr Narasimhan came under pressure to improve sales from Howard Schultz, an influential former CEO. Elliott Management, an activist hedge fund, had also sought changes. The company’s share price soared after the shake-up in management was announced.

Fasten your seat-belts

Elliott Management is also circling Southwest Airlines and has launched a proxy fight to replace ten of the carrier’s 15 directors. Elliott has built an 8% stake in the company and wants it to implement a plan to boost its share price, which has fallen by 25% over the past year. Southwest’s profit margins are below its rivals’ and it is contending with delivery delays of Boeing’s 737 MAX aircraft. The airline has adopted a poison-pill strategy to stop any investor amassing more than 12.5% of its shares.

One of the biggest-ever takeovers in the snacks industry was announced, when Mars agreed to buy Kellanova for $36bn. Mars, which is privately held, owns many chocolate brands, including Bounty, M&M’s and Snickers; food brands such as Ben’s rice and Dolmio sauces; and pet foods and health services, including Pedigree and Whiskas. Kellanova was spun out of Kellogg’s last year and produces its cereals outside America. It also holds the Pop Tarts and Pringles brands in its portfolio.

America’s annual inflation rate fell slightly in July to 2.9%, the first time it has been under 3% since March 2021. The core rate, which excludes energy and food prices, also cooled, to 3.2%. The easing of inflationary pressures makes it more likely that the Federal Reserve will cut interest rates in September. In Britain the rate of inflation rose in July for the first time this year, to 2.2%.

The International Energy Agency forecast that the global demand for oil will have risen by less than 1m barrels a day this year, far below last year’s growth of 2.1m b/d. America is still soaking up oil but in China demand contracted in June for a third consecutive month. In July China’s crude-oil imports sank to their lowest level since the draconian lockdowns of September 2022.

China’s direct investment liabilities, a measure of foreign capital flowing into the country, fell by $15bn in the second quarter, only the second time the figure has turned negative, according to official statistics. Foreign investment into China has fallen sharply since 2021, when it hit a record $344bn.

Sales of pure-electric and hybrid vehicles overtook those of conventional cars for the first time in China. According to the China Passenger Car Association, these new-energy vehicles accounted for 51% of total vehicle sales in July, up from 7% just three years ago.

A wheel Indian success story

The biggest initial public offering in India for more than two years took place when Ola Electric Mobility, which makes electric road scooters, raised 61bn rupees ($732m) on the Bombay stock exchange. Its share price rose by 20% on the first day of trading. Ola sold 330,000 scooters in its latest fiscal year, double that of the previous year.

Japan’s stockmarkets recovered most of their losses from the recent turmoil, which saw the Topix plunge by 12% in a day, its worst performance since 1987. Both the Topix and the Nikkei 225 indices are roughly back to where they were before the rout, but still below the record peaks they reached at the end of July. The S&P 500 and NASDAQ Composite have also rallied.

With inflation easing, the central bank of New Zealand lowered its key interest rate by a quarter of a percentage point, to 5.25%. It was the first cut to the rate since March 2020.

UBS made a net profit of $1.1bn in the second quarter, twice as much as analysts had forecast. Revenues from its investment bank rose by 38%, year on year, to $2.8bn. It was the Swiss bank’s first quarterly report since formally completing its acquisition of Credit Suisse in May, 15 months after the Swiss government asked it to rescue its rival.

AstraZeneca passed £200bn ($257bn) in stockmarket value, the only London-listed company to currently attain that benchmark. The drugs giant is now worth £30bn more than Shell, but its market capitalisation is dwarfed by that of Novo Nordisk, Europe’s most valuable company. It is now worth $600bn, boosted by demand for its diabetes and obesity drugs, Ozempic and Wegovy.