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Trump’s First Year Cements M&A Boom, Will it Last?

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Despite a recent downdraft in the stock market, economic signs suggest that the nation has prospered since U.S. President Donald Trump was elected. His first year was marked by mega mergers and acquisitions, and renewed hopes for deregulation and tax relief. M&A deals totaled US$ 1.2 trillion in the year since Trump was elected in a stunning upset, which compelled former U.S. Secretary of State Hillary Clinton to pen the book, “What Happened.” The total number of deals also set a record. In sum, nearly 13,000 deals have been made between the election and the end of the 2017 calendar year. Business sentiment was clearly buoyed by Trump’s election, with investors and organizations cheering the business-friendly environment to come. Unemployment dropped to a low of 4.1% in 2017, before further falling to 3.7% in 2018. This has been described as “full employment.” The unemployment rate will only fall to a certain level because there are always employees looking for something new and leaving jobs they hold. The stock market has also done well under Trump. Not since the 1960’s was volatility as low as it was during the early part of his presidency. Even with the swoon over the last several weeks, the market is still up substantially since Trump’s election. Despite consistent pessimistic headlines on major financial news sites, Amazon is still moving ahead with its massive #2 headquarters, while Google is planning a gigantic development in his core home of Mountain View, California.

Yet, controversy swirls as former U.S. President Barack Obama declared, “When you hear how great the economy is doing right now, let’s just remember when this recovery started.” [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

Qatar Steps Up for Lebanon, Plans $500 Million Bond Purchase

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Qatar Sheikh Tamim bin Hamad Al Thani appeared at an Arab economic summit and it was revealed that Qatar plans to purchase US$ 500 million of Lebanese government bonds. Earlier, there was speculation Qatar was going to deposit US$ 1 billion in Banque du Liban (Bank of Lebanon), which was never confirmed by the bank.

Lebanese officials in January revealed the possibility of a debt restructuring. The International Monetary Fund calculated that public debt in Lebanon is at over 160% of gross domestic product this year and could raise to around 180% by 2023.[ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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Turkey Wealth Fund Could Provide Support to Credit Card Debt Market

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Recep Tayyip Erdoğan, the President of Turkey, has a new reform to jump start the consumer debt-laden economy, and it involves Turkey’s sovereign wealth fund. His strategy is to offer money to those facing overwhelming credit card debt. Ziraat Bank (Türkiye Cumhuriyeti Ziraat Bankası) will allow borrowers to apply for debt rescheduling and secure lower interest rates. Erdogan announced that “Any retail client from any bank can apply.” Credit card debt is a monstrous problem in the country. Consumer credit has exploded due to low rates, government assistance, and easy credit availability. Last summer, non-housing debt reached US$ 97 billion. Half of this is credit card debt. Over US$ 30 million is non-performing. The debt was accumulated in foreign currencies, because they used to provide the lowest interest rates. Unfortunately, as the Turkish lira’s exchange rate cratered, much of the debt became impossible to service. The lira is among the world’s weakest currencies. Erdogan expects a smooth transition, “They will pay off their debt with a loan from Ziraat, and will pay it back according to the level of their monthly earnings.” Ziraat Bank is managed by Turkey’s sovereign wealth fund, which is chaired by President Erdoğan.

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KIC Sells City of London Office to South African Investor

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Investec Structured Property Finance, part of Investec, provided a £107 million loan to a South African investor being represented by London-based Pembrey Asset Management Ltd to acquire an office in London at One Bartholomew Lane. The Korea Investment Corporation (KIC) is the ultimate owner of the office and is selling it through Hines UK, part of Hines. BNP Paribas Real Estate acted on behalf of Pembrey Asset Management and CBRE acted on behalf of Hines.

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