Thursday saw US President Donald Trump welcome his Chinese equivalent, President Xi Jinping. It was the first time the two have met face to face: a blind date, if you like, albeit one with global ramifications. US markets were subdued ahead of the meeting before springing to life, while the FTSE 100 faltered in Thursday’s trading as investors grew anxious over the outcome of the confab. In company news, Unilever announced plans to sell its Flora and Stork brands, while ChemChina moved two steps closer to the completion of its record takeover of Swiss chemicals firm Syngenta.
The US missile attack on Syria has momentarily deflected the headlines away from Donald and Jinping’s first date. Still, it’s vital these two get along; the world’s most important diplomatic relationship is at stake. Previous summits between the economic powerhouses have been snugly managed, but seldom have affairs between the US and China been so complex and far-reaching. North Korea, trade and investment and the South China Sea will be among the talking points over the weekend at President Trump’s Mar-a-Lago resort in Florida.
Trump has created something of a political trap for himself. His election campaign was anchored largely on China bashing so he’s under pressure to deliver on his promises, notably turning the US-China trading relationship upside down. President Xi, one of China’s most respected and powerful leaders of modern times, will be keen to keep up appearances. His top priority will be to prevent a destabilising trade war. With the Communist Party Congress in October this year, Xi will also be wary of potential bust-ups that could threaten political stability back home.
Unilever pulls the lever
The multinational rejected a $143 billion shock takeover approach from Kraft Heinz back in February, a move that has given the Anglo-Dutch consumer goods group a much-needed wakeup call. Unilever – owner of many of the UK’s most recognised household brands – has now agreed to sell off Flora and Stork as well as launching a €5 billion share buyback. It’s also eyeing up substantially higher profit margins and further savings, while buttering up investors with a dividend hike of 12%. Initial market reaction was relatively muted, with the share price rising a meagre 1% to £39.78.
May and Hammond on the road
While the subtitle suggests a reunion of former Top Gear presenters, it actually refers to Theresa and Philip, not James and Richard. The UK Prime Minister was in the Middle East this week answering questions around Brexit, effectively conceding that the UK may have to carry on playing by a number of European Union rules past the 2019 ‘it’s over’ date. Elsewhere, the Chancellor was left deflated as the UK-India bilateral investment treaty lapsed last Friday, just days before the British finance minister arrived in New Delhi in an effort to secure better terms for the UK. The news highlights the challenges ahead for a post-Brexit UK in securing international trade deals.
Old habits clearly die hard. Jenson Button, the former Formula 1 racing driver, found himself disqualified from the Ironman Triathlon championships for speeding on his bike in a go-slow zone. The 2009 F1 World Champion had initially finished third in the 35-39 men’s category of the World 70.3 Ironman in California. Ironic, to say the least.