Not a Good Start

The incumbent accusing his predecessor of wire-tapping his former headquarters and North Korea test-firing four ballistic missiles. Not exactly the morning to wake up to for the markets. Indeed, after a mixed session in Asia things quickly turned red in Europe and the US, marred by heightened geopolitical risk.

The ‘new-and-improved’ travel ban signed off by US President Donald Trump late in the afternoon – Iraq was not featured in the list and it does not affect people who have dual citizenship, or have been issued a visa or green-card – did little to change the day’s trend. The administration said the new order was needed to address urgent security threats, and it also suspended the US Refugee Admissions Program for 4 months.

The United Kingdom also felt it should contribute to the day’s negative news flow, so a panel from the House of Lords went on record saying the government risks bringing on “the worst of all worlds” if it pursues a piecemeal approach to post-Brexit immigration rules. This was in response to news last week the UK government is considering a sectoral approach in deciding who would qualify for work visas after Brexit. Maybe those pesky EU immigrants are useful after all…

Standard Life Buys Aberdeen

Scotland’s largest insurer announced it would acquire Aberdeen Asset Management for around £3.8 billion. The deal – which has the support of top shareholders in Aberdeen – will see the creation of the UK’s largest active money manager, with some 660 billion pounds under management.

Standard Life will retain two-thirds of the newly-formed company in an all-share deal, and Aberdeen shareholders will receive 0.757 shares in the new company for every 1 share they held, or around 3 for every 4. The deal is expected to bring some £200 million in cost savings within 3 years. Both CEO declined to comment on possible job cuts.

Shares in Aberdeen were up just above 4.8% on the day, while Standard Life was slightly higher at around 5.6%.