BU S INE S SMONDAY, FEBRUARY 20, 2017

LONDON: World stock markets eased back onFriday as a Trump-fuelled surge fizzled out, butLondon gained in an end-of-week flurry ofexcitement prompted by a Kraft Heinz bid forUnilever.

“After a five-day running streak markets arelooking a bit tired,” said Jasper Lawler at LondonCapital Group, adding that losses were light sofar and “no justification for alarm”.

Wall Street fell, as did Paris, while Frankfurtended the day unchanged with strong Allianzresults helping the Dax index off its earlier lows.But London posted closing gains as Unilevershares surged, topping the day’s winners, afterthe Kraft bid which the Dutch company rejected.

Dutch-British giant Unilever, whose main list-

ing is in London, saw its stock rise by 13.6 percentby the close. Kraft Heinz said it had made an offerto Unilever to merge both companies, creating aleading consumer goods company. But Unileverturned down the bid, saying the $143 billion offer“fundamentally undervalues” the company, andthat it saw no basis for further talks.

Kraft may be backKraft, however, promised to continue trying.

Mike van Dulken at Accendo Markets saidUnilever’s initial thumbs-down was par for thecourse in takeover negotiations. “If someone isthat interested, they’ll be back with a betteroffer. Which Kraft may well do,” he said. He said a30 percent premium over the targets’ last share

price has been the average in takeovers inrecent years, which compares with the 18 per-cent that Kraft has brought to the table.

The Unilever stock surge helped Londonrecoup early losses, as did renewed sterling weak-ness after news of a fresh drop in British retailsales. A weaker pound boosts the earnings out-look for British exporters which are heavily repre-sented in the FTSE 100 benchmark index. Butelsewhere investors kept taking profits, capping arally fuelled by US President Donald Trump’sannouncement of a “phenomenal” tax plan, asuncertainty crept in over his ability to deliver.

Remarks by Trump during a Thursday newsconference clearly had investors rattled. “Theweek will be finishing with investors weighing

up the likelihood of another Trump Twitterrampage or press conference,” said MichaelHewson at CMC Markets.

Honeymoon over? “Whilst these create great headlines for

the media it does little to improve stabilityin the markets, and many will be wonder-ing whether the honeymoon period is overalready.” There remained a lot of uncertain-ty, particularly with Trump’s first weeks inoffice engulfed in controversies, mostrecently over his relationship with Russia,dealers said. “The current political land-scape is unlikely to change soon, nor willthe debates surrounding tax, fiscal and Fedpolicies,” said Oanda analyst Stephen Innes.“As such we should expect the markets to

come under renewed pressure and to beseverely tested in the weeks to come.” Thedollar recovered, underpinned by Fed chiefJanet Yellen’s comments this week toCongress that the economy continued toimprove, leaving open the chance of aMarch rate hike.

Elsewhere in forex markets, the rublegave up some of its spectacular recentgains after Russia’s Economy MinisterMaxim Oreshkin said that authoritiesexpected the ruble to begin weakeningsoon, but would react if the currency con-tinues to strengthen.

But at current levels the greenback isstill 10 percent lower against the ruble thanit was three months ago, and 23 percentlower than a year ago. —AFP

London stocks get Unilever fizz as Trump rally fades

Heinz ketchup bottles are displayed on the shelf of a market in Barre, Vt. US foodgiant Kraft Heinz Co says its offer to buy Europe’s Unilever was rejected, but that it isstill pursuing the deal. — AP