For more than 70 years, the Korean peninsula was at war. The two countries have been bitter rivals in the way they are governed and the way they operate. During the Korean war, the Northern side took on a path of communism while the southern side became capitalists. South Korea flourished and became one of the world’s largest economies. Its companies such as Samsung, Hyundai, and LG are some of the world’s best-known companies. On the other hand, North Korean communism failed. It became a poor country. Last week, the leaders of the two countries met, with the goal of ending the war. The meeting came as the Northern leader prepared to meet with the bitter enemy, the United States. This will probably be the biggest meeting after Ronald Reagan met with Russia’s Gorbachev.
During the weekend, the meeting was at the back of the minds of all investors. This is because North Korea agreed to end its nuclear programs as it seeks to be integrated into the world system. Kim Jong Un also said that he would close all the nuclear weapons developing cites. Investors took all the developments with a grain of salt. Many wondered whether Kim Jong Un was serious about this or whether he was just buying time.
Another major news during the weekend was on Mergers and Acquisitions. Following the US tax cuts, many companies have been in a consolidation mode. Over the weekend, it was announced that T-Mobile had concluded talks to merge with Sprint, another US courier. T-Mobile will pay $26 billion for the company. This will leave the US with three major wireless couriers. The other two are Verizon and AT&T.
Walmart was also on the news during the weekend. The company announced plans to scale back its UK and Brazil business while expanding in India. It will sell its stake in ASDA to Sainsbury. The company announced a $20 billion deal to buy India’s e-commerce giant, Flipkart. Other deals announced during the weekend were the $8.4 billion by Prologis to buy DCT Industrial Trust, and the $1.8 billion investment to former Baidu Financial arm.
During the weekend, Mike Pompeo, the new Secretary of the State took a trip to the Middle East. This was his first trip as the Secretary and comes a few weeks after he travelled to North Korea for a meeting with Kim Jong Un. During the meeting, the secretary called for the countries to form a strong team to fend off Iran. This comes a few weeks before a major deadline on the Iran deal is reached. Last week, France and Germany’s president came to Washington to talk to the president about staying in the deal. A US exit from the deal will make it difficult for Iran to remain in the deal, leading to a nuclear escalation. An exit may mean higher oil prices. However, the increasing US oil rigs could mean more supply which may affect the prices. The country is now producing more than 10.5 million barrels per day.