April 16th – The BESA Times


Thirty-Seventh Edition - Sunday, 16th April

Every week, a complete snapshot of what happened around the world in the past seven days

 

Notable Headlines

President Donald Trump ordered a missile attack on a Syrian airfield Thursday evening as a response to the use of chemical weapons by the president of Syria, Bashar al-Assad. Mr. Trump ordered a fifty-five tomahawk missiles attack after two meetings with top security advisers. The attack provoked great dissatisfaction by Trump’s supporters as it is not a “hands off” or “America first” approach to the geopolitical issues. Also, the attack caused a harsh response by Russia, which was notified of the attack before, and Assad, both claiming that the Syrian president did not use chemical weapons on its own people.


North Korea’s ambitious nuclear program still provokes great distress for the international community. As a consequence of the recent Korean test of a missile capable of carrying a nuclear weapon, president Trump demanded from his security advisers a variety of options to tackle the ongoing crisis, and sent an aircraft carrier to the very “sensitive” waters near the Korean peninsula. Even as an ally, China wants North Korea to abandon their Nuclear Program. Also, China says that the situation is on the “knife edge”, and warns both parties to refrain from any actions which could provoke irreversible damage. Today, North Korea celebrates the “Day of the sun”, which marks the 105th birthday of Kim Il-sung, the founder of the North Korea’s totalitarian system and the Juche ideology now enforced by his grandson. During the celebrations, the North Korean army rolled the new submarine-launched and long-range missiles through Pyongyang.


The rising geopolitical concerns fueled the demand for “safe havens”; low risk bonds, gold and the Japanese yen.


The ChemChina purchase of Syngenta took a step further on Wednesday, as the China’s Ministry of Commerce approved the $43 billion deal; the biggest foreign acquisition by a Chinese company ever. The approval from Beijing is the fourth authority approval for the deal this month as the U.S., Mexico and European Union approved the deal, demanding certain condition to be respected. The purchase of the Swiss agribusiness giant that produces seeds and agrichemicals is another episode of the Agribusiness consolidation which include the Bayer’s planned acquisition of Monsanto and the planned merger of DuPont and Dow Chemicals.


Tesla’s market capitalization surpassed the General Motor’s market capitalization, thus becoming the most valuable American car producer. Even though Tesla delivered 80.000 vehicles world-wide last year, while General motors delivered 10 million cars, the investors are confident about the upcoming, more affordable Tesla 3 model and are confident about Tesla becoming the leader in the electric-cars and energy storage market. However, Tesla will have to justify its valuation by becoming a mass-producer with cash-flows that can match those as of General Motors.


The crude pipeline from Made Island in Myanmar to PetroChina’s refinery in Yunnan Province began operations for the first time after it was finished in 2014. The line enables China to import oil from Africa and the Middle East more easily, and is a part of the “One Belt, One Road” infrastructure plan by the Chinese president Xi Jinping. Myanmar, meanwhile, agreed to lower the transit fees and may now get little benefits from the line, however, as the country in developing quickly, greater benefits deriving from greater domestic oil demand will be seen in the future.

 

What to remember of last week's news?

Ferdinand Piech, ex Volkswagen chairman who turned the group into the world’s largest carmaker, agreed to sell his stake in Porsche SE, which controls 57% of Volkswagen.


The new Pepsi advertisement was a complete failure. The advertisement depicted the reality TV star and model Kendall Jenner handing a Pepsi to a police officer to police officer during protests. The commercial was intended to appeal to the young, progressive generation, however, it provoked the opposite reaction as it allegedly trivialized police violence.


The Canadian engineering company SNC-Lavalin made a $2.08 billion bid to purchase UK design consultancy WS Atkins. The acquisition would help SNC-Lavalin to diversify from the gas and oil sector, which was hit by low prices.

 

Understand in Pictures...

Saturday passed without any new missiles being tested, however, the American and Chinese troops still navigate the seas around the Korean peninsula, and the situation is intense. Watch here

 

Did you know?

As one of the United Airlines flight passengers was violently dragged off the plane as he was randomly chosen to leave because of overbooking, the brand suffered a great blow as pictures and videos of the bleeding doctor spread through the internet. Even though United fell $1 billion in market capitalization on Tuesday, it quickly regained its original value as analyst suggest that the public animosity toward the company will last until the next airfare sale. Many perceive the scandal as a symbol of everything that’s wrong with air travel today; from ridiculous legroom to overbooking and carry-on fees.

 

What to expect for next week

All eyes are on Trump who is tackling three crisis zones at once. Even though he promised the “America first” approach, he has a traditional approach to managing Syria, ISIS and North Korea. Also, the first round of French elections is next Sunday, so we can expect an intense week of campaigning and markets distress.

 

WRITTEN BY JAN ERIK PERSOLIA

PLEASE DIRECT ANY INQUIRY TO AS.BESA@UNIBOCCONI.IT

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#DonaldTrump #China #Oil

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