Afghanistan, Iraq and Syria?

WELL THE escalation of the Syria crisis is pretty disconcerting. Last week, I was in a hotel room watching the coverage of victims of the chemical attack. This week, now back at home, I am watching coverage of potential military action by the US, UK and other European nations. Tomorrow, MPs will debate the plausibility of a military strike after being recalled to parliament by Cameron (still without any concrete evidence of who the perpetrators really are). 

I and most British electorates are not the only ones worried about our involvement in another bloody war. It seems that there is strong agitation in the markets yesterday and today. As expected, oil prices rose to a two year high while energy companies including Exxon Mobil and Chevron enjoyed a rally in their share prices. Oil consuming companies (several European airlines, for example) suffered a loss. S&P 500 have also dropped to an eight week low while markets in Abu Dhabi, Saudi Arabia and Kuwait dropped by 3%. Other agitation signs point to the fact that global funds have withdrawn $44 billion from stock and bond funds of emerging markets in this tense and uncertain time. Meanwhile, the Turkish Lira has dropped to a record low and the Israeli Shekel weakened by 1.1%.  

In general, a military strike on Syria is highly likely to affect their oil production and supply, driving up global oil prices. Secondly, a mess in Syria could spill into its neighbours, impacting on their economy (namely oil/other energy production and supply). Such aggressive foreign policy by the UK, US and Europe could also spur on a risk of terrorism affecting global markets and economic stability. 

I don't like hearing Cameron et al speak but tomorrow I feel is an important day for us all.

JH

In the next post: I will be discussing big IPOs to come and M&A targets.