March 19th - The BESA Times


Source: Photograph: Alexander Zemlianichenko/AP

Forty-ninth Edition - Monday, 19th

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

 

There has been uproar and chaos in the White House ever since the new administration settled in. The rumors of unrest were followed by reports of vacant positions and then further emphasized with high ranking officials being sacked. However, it must be noted that the private sector has kept up its pace through all of this. The high values in January that were present in the equity market seem to be absent, while an average increase with respect to previous years or similar periods of chaos can be noted. OECD predictions are also looking optimistic with growth expectations in US. With the economy keeping the strengthening trend, the Federal Reserve will in most likelihood upgrade its view on US and lift the interest rate by 0.25%. The market and consumer belief however doesn’t translate well with the bosses of US. Although they believe that people will keep supporting the growing economy with the help of tax cuts and new policies, they can’t help but worry about the international policies taken by President Trump. With the aggressive “America First” tendencies in international trade deals, Trump has recently lost trust of many old allies and caused a possible backlash that may in the mid and long run incur costs to American producers and consumers. Not taking any chances, companies have already started strengthening their international ties and communications to better absorb the effect of a possible fallout between governments. This has been dubbed by some media outlets, “The economy learning to distance itself from the government.”


Source: https://www.ft.com/content/8316031e-2905-11e8-b27e-cc62a39d57a0, Financial Times

Brexit has caused a lot of commotion within and out of EU. Pound saw a decline and investors’ trust lowered as UK and EU talks on a post Brexit trade deal seemed vague. Both parties struggled to meet deadlines and public expectations, yet an agreement seemed to be in the far future. Now the repercussions of this ambiguity start showing as Unilever, Britain’s third biggest and one of the oldest ongoing companies, moved their headquarters to Rotterdam, Netherlands. With these news, they have also announced the company will no longer exist as two separate legal entities and merge into one single board. The company governance is also changing into a less divided, simpler model to allow more agility in changing market environments, said the CEO Paul Polman. Although the company board has refused any connections, it sure seems like the company would choose the security of enjoying EU’s single market rather than trust in UK’s discussions with EU.


The political crisis between Russia and UK is growing with both sides expelling 23 high ranking bureaucrats and is moving to further separate ties by sanctions. New sanctions against Russia were put in place very recently (right after the joint statement with Germany, France and the UK against Russia and the assassination crisis), however the sanctions were linked to the 2016 election meddling within the US and not the recent event. So further sanctions may easily be on their way. As a retaliation, Russia answered with 23 bureaucrats sent back, the embassy in St. Petersburg to be closed and the cultural interaction group, the British Council, to be shut down within Russia. The last part with cultural interaction repercussions was the only place where Russia did more than merely match the sanctions established by UK. However, a similar addition to the sanctions by the UK seems unlikely according to British news sources.

 

Understand in Pictures

bc news

The situation in Eastern Ghouta gets worse by the minute and doctors are trying their best even though they are severely understaffed and undersupplied. The new push from the Syrian government just keeps worsening with not enough international intervention. The area is seeing record emigration as thousands leave their home without a destination in mind, just to live another day.

 

What to remember of last week's news?

The possible fallout from the breaking news of the ex-Russian Spy that has been assassinated on UK soil last week has developed. So, a quick reminder of what happened and an observation on what may be the economic implications of these events is in order. The attack that took place in plane sight of civilians, in a public park, has been dubbed the first attack involving a military grade nerve agent within the UK since World War II. The victims Sergei Skripal and his daughter Yulia, are now in critical condition, but are alive in a hospital. The suspected morale and perpetuator of this attack has been thought to be Russia making a statement on double spies that have given away secrets of the Russian intelligence agency, and the evidence that came out during the investigation has strengthened these views. After the investigation, the strong position that has been taken by Theresa May on Russia’s involvement has now been supported and officially recognized by Germany, France and the US. All these major economic countries taking a strong stance against Russia will bring further politic and economic repercussions. It would be wise to watch out for any sudden changes in some markets where Russia is a big player.


 

Did you know

The brewing and craft beer making market has been growing in the recent years. So much that companies like Kingfisher that are almost monopolists of “high-end” beer in India are now being challenged by upcoming producers that dream big. If you are a devout follower of cooking/food discovery Youtube shows, the name Bira 91 may be familiar to you. There are limited opportunities in India (ex. Delhi and Mumbai) for high end consumption products. Despite this, Bira 91 has their eyes on the prize. With their design and product variety, they seem to target international market of quality beer and their voice is already being heard in the US. The global market for craft beer was 38.2 billion dollars in 2016 and estimated by Forbes to reach 94.9 billion by 2023. This presents an attractive opportunity for Bira 91 - a newcomer in this industry full of stagnating giants.

 

Our Homemade Article

Xi Jinping's China by Ruggero Calamai

 

What to expect for next week

If you are living in a German city that suffers from air pollution and has a green party in charge, you might want to check if your car is not a 6th generation diesel. A ban on these cars is on its way! Owners should be selling the old cars and buying a new one while the second-hand prices are still somewhere decent.

Lastly, the market is waiting for further sanctions from Germany, France and the US against Russia. How will Russia retaliate to those sanctions? Only time will tell.

 

WRITTEN BY ANIL CAN KACAR

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

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#DonaldTrump #Brexit #Russia #UnitedKingdom #Syria

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