Indholdsfortegnelse for 1209 i MoneyWeek

“[Copper] is the most compelling trade I have ever seen in my 30-plus years [in commodity markets]. You look at the demand story, it’s got green [capital expenditure]... AI can’t happen without the energy demand, and the constraint on the electricity grid is going to be copper... So [we have] unprecedented demand growth against unprecedented weakness in supply growth because we have not been investing [in new mines]... Many of our clients... say it is the highest conviction trade they’ve ever seen... in 2022 and 2023... The Chinese property market started to sink... and [now] demand for copper so far this year is up 6% year on year despite an incredibly weak property market in China... What has shifted... is confidence from investors in metals that you can buy these…

Shares in US retailer Walmart, deemed a “bellwether” for the US consumer, have reached an all-time peak, propelling its market value above $500bn, says Alexandra White in the Financial Times. The bounce is due to an unexpectedly positive quarterly report. The company boasted revenues of $161.5bn, while net income jumped to $5.1bn thanks to “lower markdowns and better inventory management”. And the firm’s outlook remains “rosy” owing to “stubborn inflation” prompting wealthier consumers”to visit the store. Walmart certainly seems to be “benefiting from more affluent households trading down”, a trend that has left rivals with a more “middle-market” strategy “exposed”, says Hargreaves Lansdown’s Sophie Lund-Yates. But it is also looking to the future, expanding its offering of goods in the hope that “as inflation eases, customers will also be more…

Politics & economics Nickel prices jumped almost 7% on Friday as violence in New Caledonia disrupted production in the French overseas territory, the world’s third-biggest supplier of the mineral, says Mark Burton on Bloomberg. French president Emmanuel Macron declared a state of emergency and sent 1,000 police to the islands after a week of violent protests by pro-independence groups left at least six dead. The price surge coincided with an International Energy Agency report predicting “robust demand” for minerals critical for the clean-energy transition, including nickel, says Lukanyo Mnyanda in the Financial Times. The protests erupted after the French National Assembly proposed granting voting rights to French residents who have lived in the territory for ten years, potentially diluting the power of the indigenous Kanak electorate who comprise 41% of…

At the time of writing, rumours were circulating that Rishi Sunak was about to declare a date for the UK general election. While we await news, let’s take a look at what’s happening Stateside. With £16.8m matched on Betfair, the odds on Donald Trump continue to shorten – to 1.91 (52.3%), with Joe Biden at 2.66 (37.6%). Robert Kennedy and Michelle Obama are at 40 (2.5%) and 50 (2%) respectively, while Gavin Newson and Kamala Harris are at 60 (1.7%) and 85 (1.2%). As I’ve said over the past few years, I think that the odds available on Biden and Harris underestimate their chances, although the usual disclaimers apply. One interesting market is on who will come out on top in the first presidential debate, scheduled for 10 June. In…

It now looks almost certain that the Royal Mail will be sold off to the Czech billionaire Daniel Kretínský. But what will happen to what was once, a long time ago, the other half of the old Post Office – BT? Last week, the telecoms giant delivered its most upbeat results for years. The new CEO, Allison Kirkby, who took over from Philip Jansen in February, may have had to own up to a fall in profits over the year, but revenues are rising, and she was able to push the dividend up substantially while also promising significant cost cuts. The stockmarket liked what it heard, with the shares rising by 13% on the day the figures were revealed. A mountain to climb That is a significant change in sentiment.…

A futures contract is an agreement to buy or sell something at a pre-arranged price on a pre-arranged date (known as the delivery date). Futures were developed for agricultural goods such as grain and later for other commodities such as oil, gas and metals. Since the 1970s, financial futures have been widely used for trading in stocks, bonds, currencies and other assets. Futures may be physically settled (by delivering the asset in exchange for payment) or cash settled (meaning that one party to the contract must make a payment to the other party that reflects the difference between the contract price and the current price of the asset). Physical delivery is common with commodities, while financial futures are almost always cash settled. Futures contracts are traded on exchanges such as…

“Being rich is… not the endgame – [it] is being able to do the things you want to do in life. And if you haven’t established what that is, all the money in the world is not going to make you happy.” Dragons’ Den investor Deborah Meaden (pictured), quoted in the Financial Times “In the past few years, the business has brought the old adage to mind that [its] work may be both good and original, but what is good is not original and what is original is not good.” Columnist Alexander Larman on tech giant Apple, in The Spectator “My children, without exception, have wonderful careers without a fortune. We are fine.” US filmmaker Francis Ford Coppola insists that putting $120m of his own money into his science-fiction epic…

capx.co Clarkson’s Farm, a reality TV show starring Jeremy Clarkson, now in its third season, has “evolved from a show about the vagaries of farming into one of the most potent rallying cries for planning reform ever aired”, says Henry Hill. Clarkson is filmed doing what farmers are supposed to do: diversifying his business, cooperating with neighbours, investing in the community. But a “malignant coalition” of planning officers, councillors and do-gooders has “thwarted him at every turn”. The latest season saw Clarkson launch an appeal, and he won. The council was routed. Clarkson can carry on with his restaurant. But the show provides a reminder of “how totally absurd the current planning regime is”, and “how urgent remains the cause of reform”. Instead of clear rules around which businesses can…

People collect art for all sorts of reasons, as Sarah Ryan, founder of New Blood Art, says on page 32. That also goes for other types of collectables. Wine, whisky, coins or classic cars, every collector knows why they do what they do – even if their spouses sometimes struggle to see the attraction. Excitable newspaper editors and investment report writers will sometimes refer to collectables as “investments of passion” and “objects of desire”, with all the quasi-religious, pseudo-sexual associations of longing and suffering those words conjure up. Never ones to get carried away with our emotions, we at MoneyWeek have chosen the entirely sober term, “alternative investments”. But it is certainly true that, for a great many collectors, love plays a big part. What other reasons might there be…

The listed infrastructure investment-trust sector offers some extraordinary bargains. Infrastructure investment trusts are trading at an average discount to net asset value (NAV) of 22%. Renewable-energy infrastructure investment trusts are trading at an average discount of closer to 30%. The reason for these discounts is uncertainty. NAVs are based on estimated cash flows from the assets these trusts own, discounted back at an appropriate rate. Discount rates are tied to interest rates and the higher the discount rate, the lower the present value of future cash flows, and vice versa. However, these values are open to interpretation, and at present the market doesn’t appear to believe the values the trusts are reporting – hence the wide discounts to NAV across the board. In some cases, I think the market is…

● The Financial Conduct Authority (FCA) is warning pension savers to steer clear of investment advisers marketing high-risk contracts for difference (CFDs) as retirement savings plans. The City regulator announced this month that it has charged three individuals with fraud over their involvement in such a scheme, through which savers are thought to have lost more than £8m. CFDs are high-risk products that involve bets on the price of an asset, but make no sense as a pension investment for the vast majority of savers. ● Flaws in the regulation introduced to abolish the lifetime allowance (LTA) on pension savings could mean some savers lose out, independent financial advisers are warning. The government announced last year that it would no longer impose tax charges on very large pension funds, but…

After 17 years – or, as he put it in a letter to staff, 119 dog years – James Watt is standing down as CEO of Scottish brewer and pubs operator Brewdog, says James Beeson in The Grocer, handing over the reins to chief operating officer James Arrow. His achievements at the helm “hardly need restating”. Watt (pictured), now 41, a former trawler captain, founded the brewery with Martin Dickie, who worked in the brewing industry, from a garage in Aberdeenshire in 2007. The pair have turned the start-up into a “beer behemoth”, with annual revenues exceeding £300m, 3,000 employees, breweries on three continents, and 130 bars around the world. That “extraordinary success” owes much to a “shrewd realisation” that punk, once a subculture, could be turned into a “lucrative…

An Introduction to Companies, Stocks and Making Money from Investing Edward W. Ryan Harriman House, £15.99 Many of us will have come across financial terms that we don’t understand, or aren’t quite sure about. Others, including a surprising number of those who actually work in the industry, may grasp the gist, but struggle with the details, or find them difficult to explain. These difficulties with jargon are compounded by the fact that many books on investment tend to have a very narrow focus, or assume prior knowledge. The World’s Simplest Guide to the Stock Market is an attempt to bridge this divide. It provides a broad overview of the world of financial markets and investment. The book is divided into three sections. The opening chapters look at how companies operate,…

The 350 wealthiest individuals and families in Britain that make up this year’s Sunday Times Rich List are worth a combined £795.36bn – a sum bigger than Poland’s economy, says the paper’s Robert Watts. But it appears “Britain’s billionaire boom has come to an end”. The number of UK-based billionaires fell to 171 from 177 last year as their wealth declined amid higher borrowing costs, anaemic economic growth, and persistent inflation. Others have left the country, vexed at the government’s plans to scrap the non-domiciled tax status. Gopi Hinduja (pictured) and his family, who control the Indian conglomerate Hinduja Group, once again topped the list. Their wealth rose to £37.2bn – the largest fortune ever recorded by The Sunday Times. Prime minister Rishi Sunak and Akshata Murty saw their family’s…

The Philippines is something of “an afterthought for investors” in Asia, says The Economist. Local politics is often ugly and the infrastructure is unreliable, but GDP growth has been impressive, averaging 6% a year since 2012. The country of 115 million is in a “demographic sweet spot”. Half of the population is still rural, leaving plenty of scope for growth as urbanisation occurs. While many of its neighbours fear the prospect of a Trump presidency and new tariffs, the Philippines looks unusually “Trump-proof”. Tariffs wouldn’t affect remittances from its two million citizens who work abroad, contributing 9% of GDP with the cash they send home to their families. Nor would tariffs dampen tourism, a sector in which this balmy, hospitable country enjoys “enormous untapped potential”. The local PSEi stock index…

In early 2021, struggling US video-game retailer GameStop became the poster child for the “meme-stock” craze, whereby ordinary investors coordinated online to bid up valuations of faddish shares. At the apex GameStop’s price had risen by 1,600% in a month, but it has trended down over the past three years. On 13 May, however, Keith Gill, a popular trader known as “Roaring Kitty”, posted a drawing of a man leaning forward in a chair on social media site X. Many took it as a reference to GameStop, propelling the share price up fourfold in days before it fell back. This rally is much smaller than 2021’s, but, as Katie Martin puts it in the Financial Times, it shows “there are still plenty of idiots mucking around” in stockmarkets.…

Last week the government announced that the proposed £3.5bn purchase of Royal Mail by Czech billionaire Daniel Křetínský will be subject to a national security review, say Alex Ralph and Ali Mitib in The Times. The move comes after the board of International Distributions Services (IDS), which owns Royal Mail, said that it was “minded” to accept the offer from Křetínský’s investment firm EP Group. While the non-binding 370p a share offer is higher than his first 320p bid last month, a possible foreign takeover of the 508-year-old postal service has caused concern among MPs, unions and campaigners. “Almost every aspect” of Křetínský’s fresh offer is “unsatisfactory”, says Nils Pratley in The Guardian. While the 73% premium to the pre-bid share price of 214p may seem “huge”, it isn’t that…

● Jeremy Hunt should “pull the plug” on a big retail sale of NatWest’s shares, says Nils Pratley in The Guardian. The state has reduced its stake in NatWest from 84% to under 27% over the years; 11% has been sold during the past five months. Shares have been “dribbled” into the market (and bought by institutional investors) so as not to disturb the price and achieve full value. “Why mess with this winning formula?” Brokers have suggested that a 10% discount would be required to entice punters. So with an estimated £3bn offer, the Treasury could be giving away £300m of value compared with the market price. That would waste public money. It is best to stick to the “trading plan”. ● “If the proof of the pudding is…

There will be a “massive supply shortage” of cocoa beans this year and next, says Pierre Andurand, the hedge-fund manager who placed a high-profile bet on the commodity in early March, shortly before cocoa futures spiked to a record of $12,000 per tonne. Cocoa production may fall by around 17% relative to last year, due to a combination of bad weather, climate change, a shortage of fertiliser, and an outbreak of plant diseases in Ghana and the Côte d’Ivoire, which together account for about 60% of global output. “We’re in a situation where we might actually run out of inventories completely,” Andurand tells Bloomberg. The inventory-to-grinding ratio – the stocks of cocoa beans relative to expected demand from processors – is likely to end the season at about 21% this…

snowdon.substack.com The restaurant critic William Sitwell is “mad as hell and is not going to take it any more”, says Christopher Snowdon. A study that showed that people with a body mass index (BMI) of between 30 and 35 are 38% more likely to be off work for a week with illness than someone of a healthy weight, and the severely obese twice as likely, had Sitwell rattling off a column for The Telegraph calling for authoritarian measures to force people to be healthier. Thirty-eight per cent is roughly how much more sick leave women take than men. People aged 50-64 are around twice as likely to take sick leave than people aged 16-24. Yet society has managed to employ women and the middle-aged without the economy collapsing. Besides, sick…

Specialist knowledge is essential and established, reputable merchants can offer insights for investment portfolios Fine wine trading has been subdued in the past 12 to 18 months amid macroeconomic uncertainty and higher interest rates. Prices have fallen on the secondary market following a period of strong gains, especially for blue-chip Burgundy and Champagne, according to data from Liv-ex, a global marketplace for the trade. Its Liv-ex Fine Wine 100 index, which tracks prices on some of the world’s most collectable wines, dropped 15% in the 12 months to 30 April. The broader-based Liv-ex 1000 fell 15.6%. However, both indices were still up by nearly 43% and 60% respectively over ten years. Despite the current malaise, buyers are still turning up. Sotheby’s sold a record $159m of wine and spirits at…

We collect art for all sorts of reasons – and seemingly for no reason at all. There was no reasonable justification for me spending my entire first month’s modest teaching salary on a painting by an unknown Serbian artist, but I’m glad I did. Not because it’s gone up in value, but because I love it. It reminds me who I am, who I was and what I value in life. Art collections evolve over time and can serve as deeply personal and meaningful reflections of a collector’s life. Art can also be an investment. Am I sorry I didn’t buy a canvas by an almost unknown “sort of street artist” (called Banksy) when I was persuaded instead to go on a skiing trip in 2004? Yes, I am. My…

Elliott Advisors “once seized an Argentine warship to apply pressure for a payout to bondholders”, says The Times. But now the activist investor is in retreat. It may have made up to £200m recently from cutting its stake in Scottish Mortgage Investment Trust (SMT) to under 5%. It only disclosed its 5% stake in SMT in March. Analysts think the reduction was due to a purchase of 35 million SMT shares by the trust itself two days earlier, part of SMT’s £1bn share-buyback programme announced in March to rebuild its share price. Elliott’s “peaceful withdrawal” suggests it hasn’t had to “flex its muscles” in the usual way activists do. It had previously suggested that SMT sell some of its unlisted investments, which duly occurred.…

It’s the retirement age increase that no-one seems to know about. No, not the increase in the state retirement age for women, which has prompted a campaign for compensation for those who say they weren’t given enough information about the changes. Rather, this is the government’s plan to increase the age at which you can access your private pension savings. From 6 April 2028, this will rise from 55 to 57. For anyone in their forties and fifties, this is a change with potential to cause real problems. Ever since the pension-freedom reforms of 2015, the rules on access to pension savings have been straightforward. Once you reach your 55th birthday you can begin dipping into your private pension. Millions of people have made plans accordingly. They may not expect…

Choosing a broker or a bank is neither fun nor easy. We can spend ages comparing fees, but that doesn’t tell us how good the service is. We can search for online reviews, but unhappy customers are more likely to leave reviews than satisfied ones, so these may be skewed. It’s no wonder that many of us stick with the same provider for years even if we’re not satisfied, because we can’t face the hassle of finding a new one. That’s why we asked MoneyWeek readers to tell us their experiences of the firms they use, so that we could see which ones you rate most highly and help other readers decide what should be on their shortlist. More than 2,000 of you answered our survey, giving us your views…

A room with a view “It’s easy to forget just what stunning views can be found in our own backyard,” says Graham Falk in The Scotsman. Luxury boutique hotel The Torridon in Wester Ross “provides a timely reminder of the secluded beauty that only Scotland can offer”. There are a number of rooms from which to choose, from the “simplicity of the Stables” to the “peace and quiet of a luxury Boathouse”. Each “[oozes] with class and undeniable beauty”. The Beinn Eighe suite comes with a crafted wooden bath, providing the opportunity for a soak while admiring the “simply spectacular view” of the Torridon mountains. Restaurant 1887 also “[feels] very much at home in its glorious surroundings” and the tasting menu is “outstanding”. It is “packed to the brim with…

No Way Out Brexit: From the Backstop to Boris Tim Shipman William Collins, £26 The two years from the aftermath of the 2017 general election to Theresa May relinquishing the office of prime minister may seem like a strange choice of subject matter. The Covid pandemic and the cost-of-living crisis, not to mention the turmoil of the Johnson, Truss and now Sunak governments, has pushed the debate over Brexit out of our minds. Indeed, the fact that Tim Shipman’s book on the May era has been released just weeks before his next book suggests that the publishers view it as little more than an appetiser. A real page-turner This is a pity, as the book is actually an engrossing account of the Brexit wars. Beginning in late 2017, May started…

“Dozens of Democratic lawmakers signed a letter to US president Joe Biden, pleading with him to act on high grocery prices that have been slow to fall as inflation has come down,” says Fox News. The premise of the letter is, of course, preposterous. Biden plants no wheat. He is not about to set up a food factory. There is no way for him to lower food prices honestly. But that didn’t stop the children’s crusade in Congress. Senator Elizabeth Warren has called on Biden to “exercise your executive authority to take additional action to address rising food prices”. Democrats asked him to “prosecute actors in the agricultural and food sectors for price fixing and other anticompetitive behaviour” and create a joint task force to investigate the manipulation of food…

“After a decade of stunning performance” on Wall Street, global investors are feeling uneasy about the dominance of US stocks in their portfolios, says Sharon Bell in the Financial Times. European equities could offer better value. The energy shock has made the last few years a tricky period for European markets, opening a large trans-Atlantic valuation gap. US shares trade on a price/earnings ratio of over 21, compared with 14 in Europe and around 12 in the UK. European stocks have at least managed to hold their own this year, says Bastien Bouchaud in Les Echos. The Euro Stoxx 50 index has gained nearly 12% so far in 2024, just a smidge behind the S&P 500. Inflation has cooled faster on the “old continent” than in the US, with the…

Shares in easyJet fell by 7% last week after the budget airline posted a first-half loss that was slightly larger than expected and announced the departure of CEO Johan Lundgren, says Karen Gilchrist on CNBC. Pre-tax losses came in at £350m for the six months to 31 March 2024. Lundgren claims that the company has “positive momentum” coming into the summer travel season, with consumers still inclined to spend on holidays, “particularly to classic European destinations such as Spain, Portugal and Turkey”. The fact that Lundgren is being replaced at the top by finance boss Kenton Jarvis implies “a smooth passing of the baton and no change to corporate strategy”, says AJ Bell’s Russ Mould. Combined with the management’s confidence that the company is on track to meet its medium-term…

Slovakia’s prime minister Robert Fico (pictured) “escaped death by just a hair” last week when he was shot several times in “the first major assassination attempt on a European political leader for more than 20 years”, says The Times. Fico’s condition is now stable, but the attack has exposed an “increasingly febrile and polarised political climate in Slovakia” – a member of Nato and the EU – and across Europe. The authorities have said the suspect did not belong to any political groups, but online supporters of the populist PM are accusing the opposition of “inciting violence against him”, and some opposition figures have been offered police protection after receiving threats. Fico is an “extraordinarily divisive figure”, says The Economist. His second stint in office between 2012 and 2018 ended…

I’m always cautious about using single-country funds for investing in emerging markets because many of them are heavily concentrated in few companies or sectors. Regional or global emerging-market funds are often a better way to get a well-diversified portfolio. However, India is an exception, since it’s an unusually deep market. The MSCI India index – which is broader than older benchmarks such as the Nifty or the Sensex – has just 36% in its top ten holdings, which makes it less concentrated than the FTSE100 (50%). Sector diversification is good: financials are around 25%, with a range of others (consumer discretionary, energy, technology and industrials) around the 10% mark. The FTSE India holds more stocks (228 versus 136) and the weights of many of the larger holdings are a bit…

America’s AI startup boom Editorial The Economist An “array of data” suggests that Americans are rediscovering their “go-getting spirit”, says The Economist. Applications to form businesses hit a record high of 5.5 million last year and the monthly average is around 80% higher than in the pre-Covid decade. Since Covid, mature firms have lost one job for every four created by start-ups. There has been a “particularly sharp” increase in applications involving artificial intelligence (AI), carrying “echoes” of the 1990s when “the internet took off”. Entrepreneurs, assisted by remote working and a tight job market (if their idea fails, they can fall back on paid work), are creating AI-powered tools to “interact with customers, prepare taxes, sift through court records and more”. A “striking feature” of the boom is that…

unherd.com With EU elections less than a month away, imagine how baffled pro-EU, anti-Brexiteers must be, says Thomas Fazi. For years they’ve painted Brussels as a “beacon of progressivism, peace and democracy”, as opposed to the “far-right, racist and economically suicidal project” of Brexit. Yet it is the EU that is about to swing to the right, as several European governments already have. Britain, on the other hand, is almost certain to vote in a centre-left party in less than a year. Anti-immigrant unrest is prompting several EU governments to contemplate a Rwanda-style asylum system. The police have broken up peaceful assemblies and protests. Germany is mired in economic stagnation. And as for the EU’s peace project, all European governments are now “on a war footing”. EU authorities have even…

As with fine wine, storing your collection in the right conditions is vital. In the long term, whisky should be kept vertical (unlike wine) Hand a whisky lover a time machine, and they might well set the dials for 1993, when Oddbins began selling an Islay single malt matured for 29 years in sherry casks. The price of Black Bowmore – £110 a bottle – was considered pretty steep at the time, but not any more. Track down that first edition today and it’ll set you back £25,000. No longer is whisky collecting a niche hobby purely pursued by earnest enthusiasts. Buoyed by a series of headline-grabbing sales – culminating in the £2.2m paid at Sotheby’s in November last year for a bottle of The Macallan 1926 Valerio Adami edition…

■ Exchange-traded funds (ETFs) focused on China and environmental and social governance (ESG) factors are closing down due to a political backlash and geopolitical tension, says the Financial Times. In the first quarter of 2024, 13 US-listed China ETFs closed, surpassing the previous record of five in both 2020 and 2023. Globally, 18 China ETFs closed in the quarter, more than half of the previous year’s record of 34. Meanwhile, 30 ESG ETFs folded in the first quarter, exceeding the 72 closures in 2023. US politicians have accused BlackRock and MSCI of fuelling China’s military advancement and facilitating its human-rights abuses when they offered China and emerging-market ETFs (the latter are dominated by China). Poor performance is another factor: the CSI 300 index fell by 9.9% in the past year.…

Could a groundbreaking deal involving the Debenhams pension scheme pave the way for improved pension benefits for thousands of other savers? Members of the Debenhams scheme had been braced for lower pensions than they had expected following the retailers’ collapse. While the scheme was transferred to the Pension Protection Fund (PPF), the state’s lifeboat arrangement, the PPF only funds pension payments up to certain caps. Now, however, the PPF has secured a deal with a private pension provider, Clara, which is taking on responsibility for the scheme. It will pay Debenhams scheme members’ entitlements in full; it is even making back-payments to retired members who have already missed out on some benefits. It’s the first time that the pension scheme of a failed business has transferred out of the PPF…

19.95, tanners-wines.co.uk; £20.95, reduced to £19.50 each by the case, leaandsandeman.co.uk The sun is finally out, and who’s brave enough to bet that it won’t be another glorious summer, given that climate change is hotting things up at an uncomfortable pace these days? If you want to bathe your palate in the ultimate cleansing, refreshing, and palate-titillating wine, you have come to the right place. As you know, I love absolutes, so here is a doozie. This year’s En Rama release of the legendary Manzanilla, La Gitana, is the finest I have ever tasted! En Rama sherries are made from “free run” juice and only use natural yeasts for fermentation. This means they are the most honest, elemental, and sharply tangy of all styles of bone-dry sherry. They are bottled…

Left-Wing Visions of a Free Trade World Marc-William Palen Princeton University Press, £30 The past two decades have seen a backlash against globalisation in the developed world. The right complains about the destabilising effect of mass immigration; the left worries that deindustrialisation has led to falling real wages for native workers, increasing inequality. US president Joe Biden recently raised tariffs on Chinese goods, showing how mainstream these concerns have become. But it was not always this way. Marc-William Palen’s book shows that in the 19th and early 20th centuries, many on the left were champions of global free trade. Some on the political left supported it in the belief that it would boost the living standards of the urban working class by ensuring a supply of cheap food. Later the…