Is the Trump effect beginning to work already, even before he takes over as the next US President? On Japan, Donald Trump revealed that SoftBank (TYO:9984) of Japan will be investing $50 billion in the United States, which will create 50,000 jobs. Most of this investment will be made through the $100 billion investment fund that has been recently set up with Saudi Arabia.
Republican Trump has always been an advocate of friendlier policies towards businesses and made it one of the key election issues. He has spoken of reducing the corporate tax rate to 15 percent. Trump has been speaking of creating more jobs in the US, especially in the manufacturing sector that has been hit by globalization and recession. He has even criticized Apple as the company makes most of their products outside the country.
Is a Sprint-T-Mobile Merger on the Cards?
SoftBank, which has its headquarters in Tokyo, is not a household name in the US, but the business has vast holdings. For instance, the Japanese business holds majority stake in Sprint, which had plans of merging with business rival T-Mobile. However, the Obama administration had thwarted their attempts.
This rekindles the possibility of a Sprint-T-Mobile merger, according to wireless analysts, because Son really wanted this merger to go through. The stock of both Sprint and T-Mobile went up after the announcement. The Sprint (NYSE:S) share went up by as much as 7 percent, hitting a 52-week high, while T-Mobile was up by 1.8 percent. However, most of these gains were lost through profit-taking by the end of the day.
Trump Meets Masayoshi Son in New York
The SoftBank development happened after the Japanese billionaire and company CEO, Masayoshi Son, met the President-elect at New York’s Trump Tower recently. The two leaders met and discussed for 45 minutes. In a Twitter comment, Trump claims that Son said he would never have made the investment if Hillary had won the Presidential race. Later speaking to reporters, Son said, he likes Trump “very much”.
No specific investment details were announced, though. He, however, suggested that SoftBank (TYO:9984) will target the technology sector.
This is the second high-value deal Trump has struck since winning the election. Last week, he announced that Carrier will receive $7 million worth of tax incentives for keeping jobs in the state of Indiana. The company had wanted to move production to neighboring Mexico in 2017, which would have cost the US 2,100 jobs.