Indholdsfortegnelse for Issue 1265 i MoneyWeek

“The odds of the British economy shaking off more than a decade of torpor look low” “Of course size matters. Nobody wants a small glass of wine.” Nobody wants small stocks either, judging by the performance of Aim, London’s junior stock exchange for small growth companies, since its inception on 19 June 1995. The Aim All-Share index has slipped by around 30% since October 1996, while the blue-chip FTSE 100 index has gained 125%. Over the past five years, the stocks on the main market have climbed 60%; Aim’s are down a fifth. The market has also been affected by the broader worry over the City withering on the vine (see page 16). A shrinking market The number of companies trading on the market has fallen 60% from its peak…

“[An Army parade through Washington DC] is not Mr Trump’s only recent French import... The president and people around him are turning into avid consumers of French ideas, [touting] tariffs... national champions... price controls...and state ownership... the sort of... meddling that would be more familiar to Mitterrand than to his... contemporary, Ronald Reagan... The [pre-Reagan era seems] to be the time when, in populist MAGA eyes, America was great... US capitalists look back at the period... with less nostalgia... In the two decades to... 1980 the S&P 500 index [delivered] a paltry compound annual return of 3%, [mirroring] the past 20 disappointing years in corporate France. Since 2005... the CAC 40 index... has returned a piddling 3.5% a year... since 2005 the S&P 500 has [delivered] a compound return of…

Shares in aircraft-maker Boeing dropped 5% following last week’s crash of the Air India 787, says Matt Oliver in The Telegraph. So far, there has been no evidence that the crash was the fault of the manufacturer, especially since the Dreamliner previously had a “near-spotless” safety record. Still, “feverish speculation” about the company’s possible culpability has begun, underlining the reputational damage done by the “repeated safety scandals and accidents involving its jets”, including plane crashes in 2018 and 2019. The latest tragedy isn’t the first problem that Boeing’s CEO Kelly Ortberg has faced, says Bloomberg’s Julie Johnsson. He has already had to deal with “a cash crunch, debilitating labour unrest, a rush to overhaul the company’s safety operations, and a trade war wrought by Donald Trump against one of Boeing’s…

Paint maker Sherwin-Williams’s stock has risen 23% in the past 12 months, outperforming the S&P 500 index, says Barron’s. A tough US housing market hasn’t deterred homeowners from painting. The company has captured market share as competitors have fallen by the wayside, and its products, mostly made and sold in the US, provide some insulation from tariffs. Expected lower interest rates and a pick-up in home sales may bolster Sherwin’s earnings growth, with analysts predicting earnings per share will jump 11.6% in 2026. Sherwin is also investing in its digital capabilities and modernising its systems, which should boost margins.…

On Monday, Britain became the first country to secure a deal with Donald Trump to lift some of the tariffs he “unleashed on the world” on “Liberation Day” in April, says Michael Simmons in The Spectator. However, it still has to be passed by lawmakers on both sides of the Atlantic, and it is not a “wide-ranging free-trade agreement”, rather measures to mitigate those tariffs. We may now be better off than much of the world, and it’s “undeniably a Brexit win”, but we are still worse off than we were in January. “What’s also clear is that the White House is calling the shots” and will only agree to incremental steps “when it suits them”. Quite, says Jamie Blackett in The Telegraph. If Trump deliberately dropped the papers containing…

It is not exactly the snappiest name. The Private Intermittent Securities and Capital Exchange System – which, handily, can at least be shortened to Pisces – will create a new, lightly regulated platform for trading equities in the City. A private business will be allowed to sell some shares on one of the official platforms as and when it chooses, and investors can then trade them on if they wish to. In effect, it will allow private companies to use the plumbing of the stockmarket without the hassle and expense of a full-scale listing. The Financial Conduct Authority has finalised its rules for the market and the aim is for it to be up and running by the end of the year. It will only be open to sophisticated, high-net-worth…

A poison pill is a strategy designed to protect a company from what the board considers to be an unwanted takeover approach. The defence usually works by threatening to flood the market with new shares under certain circumstances, making it far more costly or difficult for any predator to mount a successful bid. A classic poison pill involves handing existing shareholders more shares if one shareholder acquires more than a certain percentage of the stock. This may mean giving them the chance to buy a huge number of additional ordinary shares at a discount (either before or after a merger is completed); issuing preferred shares that convert into ordinary shares in the event of a takeover; or granting new shares with greater voting rights, meaning that even if a buyer…

“Now I haven’t got a job… [the other Beatles’ progeny have] loads of money because their dads are dead. James [McCartney]’s mum [Linda] is dead. Left him a lot of money. [But] my mum died skint with a whole desk-full of brown envelopes that she never opened because she spent all her money on her friends.” Drummer Zak Starkey (pictured), son of Ringo Starr, on being sacked twice by The Who, quoted in The Telegraph “Nobody spends someone else’s money as wisely as he spends his own.” Milton Friedman, quoted on X “[I co-wrote] Imagination hits like... Just an lllusion, which are my pension money. Everyone from Mariah Carey to Destiny’s Child has covered Just an Illusion, which was a top-ten hit all over Europe… Several other songs I’ve written…

spectator.co.uk The standard explanation for why charges for plastic bags reduce waste is economic, says Rory Sutherland. People were reluctant to pay 10p for a bag and so brought their own instead. But a charge would have been effective if it were only 1p. Charging any amount, however trifling, is sufficient to change the implicit assumptions about normal retail behaviour. There are many such ways in which you can achieve large changes in behaviour without imposing big economic penalties. This is to “follow the Donald Trump playbook” – an “underrated approach to legislation where you impose taxes not for their direct effect, but for their symbolic value”. Send a surprising signal and you can change behaviour by “unseating the unthinking assumptions people hold about the future”. You don’t have to…

US-listed lingerie retailer Victoria’s Secret is under growing pressure to overhaul its board and strategy, says The Wall Street Journal. Activist Barington Capital – which has acquired 1% of the stock – is calling for the company to refocus on its core bra business and find ways to unlock value in its beauty division, which it says could be worth the same as the entire firm. Current management, including CEO Hillary Super, lacks the experience and clarity needed to turn the business around, says Barington. Last month, Victoria’s Secret adopted a “poison pill” defence in an attempt to fend off Australian billionaire Brett Blundy, who has accused it of “continued mismanagement” and “disastrous board-level decisions”. Blundy owns a stake of almost 13%.…

Will the government’s reforms to trade union rights presage a new wave of confrontations with employers, as some small and medium-sized enterprises (SMEs) fear? The legislation includes a raft of measures that give employees new rights, such as the right to claim unfair dismissal from day one in a new job. But one particularly controversial area of the legislation is focused on trade unions, making it simpler for employees to secure representation in the workplace and to take collective action in the event of a dispute. The current rules on when employers have to recognise a trade union in their workplace – and therefore to engage with it over issues such as pay and conditions – are relatively tough. If an employer does not voluntarily recognise the union, the latter…

Our exchange-traded fund (ETF) seeks to capture the leading 120 technology companies globally. We equally weight eight key subthemes: social media; cloud computing; AI & robotics; cybersecurity; digital entertainment; blockchain; genomics and future cars. It is difficult to time the cycles of various areas of the tech sector, and every year there are different winners. By equally weighting the top-15 global leaders in each subtheme, we aim to avoid over-concentration in the US and the “Magnificent Seven”. This makes the ETF a truly global play and helps to reduce volatility and risk. Below we analyse three stocks in the ETF that have caught our attention. A streaming company set for success When it comes to digital entertainment, Netflix (Nasdaq: NFLX) continues to draw interest. The stock has gained 35% this…

Paul Coulter Bantam, £20 Paul Coulter, a historian and comedian, has expanded his popular Edinburgh Fringe show, Five Mistakes that Changed History into a book, giving us a history lesson that’s probably more entertaining than any you had at school. As its subtitle suggests, the volume offers a wry, accessible examination of pivotal missteps that altered the course of global events. We all make mistakes, but rarely do they alter the course of human history. Coulter looks at those that did, exploring the unexpected ramifications of Alexander the Great’s death and the near-catastrophe of Apollo 13, taking in everything from Cleopatra to the sinking of the Titanic along the way. While the book offers a broad survey of global history, a closer reading reveals a surprising depth of economic and…

Pope Leo XIV (pictured) has inherited a bank that is trying to shed its reputation for “mismanagement and secrecy that resulted in several public scandals surrounding investment losses, criminal probes and clandestine love affairs”, say Flavia Rotondi and Chiara Albanese on Bloomberg. Since 2014, the Vatican Bank, officially known as the Institute for Works of Religion, which is not part of the Holy See’s core budget, has published annual reports, adopted regulations to comply with international standards and closed many accounts. The bank manages €5.7bn, a “pittance compared with the trillions shuffled around” London or New York, but it aims to alleviate the Catholic Church’s financial pressures amid falling donations and rising costs. Last year, assets rose to a ten-year high, annual profits rose 7% to €32.8m and it proposed…

“Madrid is booming, and you can feel it in the air,” says Simon Nixon in his Wealth of Nations newsletter. The Ibex 35 stock index has soared 19% this year, outstripping the much-publicised rally on the German Dax. Spain was the fastest-growing major developed economy in the world last year, gaining 3.2% (the UK managed a sluggish 1.1%). Things have come a long way since the dark days of the eurozone debt crisis, when a “giant” property bubble imploded and frequent strikes and uncollected rubbish blighted daily life. Difficult but necessary labour-market reforms have restored national competitiveness, freeing up Spain’s “sophisticated commercial elite” to pilot a “remarkable" export recovery led by IT and consulting. The country also enjoys some of Europe’s cheapest electricity thanks to abundant renewable energy. Spain welcomes…

A “strong start” to the financial year has propelled Tesco’s shares to a ten-year high, says Ed Devlin in The Grocer. The supermarket’s sales rose 4.6% year on year to £16.4bn, bolstered by a “sharpening of prices” in recent years, as well as large increases in the sales of its premium own-label range. Robust online sales helped too. Tesco’s market share has now climbed to 28%, just below its medium-term target of 30%. Tesco left its profit guidance for the year unchanged at between £2.7bn and £3bn, though many analysts expect an upward revision later in the year if the current momentum continues. The fact that Tesco controls a bigger chunk of the market than it has since 2016 should be “reassuring” for investors, especially given the “cut-throat” nature of…

JBS moved its primary listing from Brazil to New York to open the world’s biggest meat-processing company to a broader pool of potential investors without incurring fees from investment banks, says The Wall Street Journal. The shares opened at $13.65 and closed nearly 2% higher. The $15bn company’s previous attempts to list in the US market were halted by post-Covid market conditions. JBS has been dogged by a corruption scandal involving bribery to gain favourable government funding, prompting some major US banks to avoid working with it. US lawmakers, environmental groups and shareholder-advisory firms have also raised concerns over the listing.…

● “No way could the Competition and Markets Authority (CMA) let sleeping dogs lie” after spotting soaring medicine prices and limited transparency in the veterinary industry, says Alistair Osborne in The Times. Yet the regulator’s “walkies around the sector” is proving so complex that it has extended the deadline for November’s final report for up to six months more. The sector is controlled by six major players holding 60% of the market, but “it’s slowly dawning on the CMA” that larger companies – such as IVC Evidensia, CVS and UK-listed Pets at Home – can better handle its proposed changes. Tougher rules could mean that smaller players are even more likely to be taken over by larger ones due to higher costs. This is “a classic case of the CMA…

A “reckoning is coming” for US Treasuries, which are no longer the safe haven that they used to be, says veteran US bond manager Jeffrey Gundlach. “There’s an awareness now that the long-term treasury bond is not a legitimate flight-to-quality asset. It’s not responding to lower interest rates.” Investors should favour shorter maturities in light of rising federal debt, since longer-dated bonds are vulnerable to weak demand, Gundlach tells Bloomberg. “The interest expense for the United States is untenable if we continue running a $2.1trn budget deficit and we continue to have sticky interest rates.” Lower demand from foreign buyers poses a growing risk. “It’s not inconceivable that some of the $25trn [foreign net investment in the US] that came in just a couple – not even two decades –…

conversableeconomist.com Macroeconomics is at times compared unfavourably with weather forecasting, says Timothy Taylor. But weather forecasts have become more accurate over time. Can economists claim the same? Perhaps not, but economics, like all social sciences, has to deal not with “fascinating but personality-free subjects”, as in the natural sciences, but with “ever-shifting combinations of people, institutions and events”. Economics, like other “mature sciences”, operates with an established theoretical framework – that of “New Keynesianism” – within which researchers agree about standards of evidence, so that knowledge can accumulate and be refined over time. That framework provides practical knowledge for addressing real-world problems, and is drawn upon by, for example, pretty much every central bank in the rich world. In other words, economics applies the scientific method, and that is valid…

■ Tetragon Financial is to sell a small part of its 81.5% interest in infrastructure investor Equitix to Hunter Point Capital, which specialises in taking minority stakes in alternative asset managers. Hunter Point will buy a 14.6% stake in a deal that values Equitix at £1.3bn. Tetragon paid £160m for 85% of Equitix a decade ago; as of April, the firm was its largest holding, at 27.6% of its portfolio, with a carrying value of $993m, so the price implies a further uplift of around 45%. Nonvoting shares in Tetragon, a specialist alternative assets trust controlled by its founders, have risen 11% over the past week, but still trade on a discount to NAV of 55%. ■ PRS Reit – an investor in build-to-rent housing – has received a takeover…

SMEs that are working to become more sustainable have already started to reap commercial benefits, state-backed research concludes. The Willow Review, an inquiry launched last year to look at how to help more SMEs address sustainability challenges, found compelling financial drivers for seizing the initiative. The inquiry found that among SMEs embracing sustainability practices, two-thirds have seen operational costs fall, more than half are attracting new customers, and a third are seeing improved customer loyalty. However, the review also concluded that while many SMEs accepted the case for addressing sustainability, many were struggling to do so. It warned firms were struggling with the complexity of sustainability practices and were hindered by a lack of time, funding and practical advice. The inquiry called on the government to provide more support to…

Apple, a company that pulled itself back from the brink of bankruptcy to become one of the world’s most valuable enterprises, appears to have hit a patch of turbulence. Its shares have slipped by a fifth this year, owing largely to escalating trade tensions between the US and China. President Donald Trump’s threats of punitive tariffs on iPhones, should production not return to the US, loom large. Yet, as Patrick McGee argues, this predicament is a predictable consequence of Apple’s deepening entanglement with Beijing. Until the mid-1990s, Apple produced most of its products itself in the US. Facing financial distress, the company embraced outsourcing, a strategy that simultaneously improved margins and product quality. Initial forays into countries such as Mexico and Singapore soon gave way to the undeniable allure of…

“Global oil markets have just become a lot more flammable,” says The Economist. On 13 June, two years of heightened Middle East tension finally boiled over into a full-scale Iran-Israel war (see page 10). With Iran on the ropes, there is a growing risk that its leadership will resort to “desperate measures”. Tehran might close the Strait of Hormuz, the narrow channel through which 30% of global seaborne crude and 20% of liquid natural gas is conveyed. Worse, many of the Gulf’s largest oil-production sites are within range of Iranian missiles. Such retaliation could send prices soaring above $120 a barrel, according to estimates by bank JPMorgan Chase. Oil prices surged as much as 12% following the first Israeli air strikes to trade at around $72 a barrel this week.…

The FTSE 100’s “most consistent money-making machine” has done it again, says Rober Lea in The Times. Shares in Halma, a conglomerate focusing on safety, environmental protection and healthcare, are near all-time highs. Despite fears earlier this year that the group’s 50 companies, which operate autonomously from each other, would be hit by US president Donald Trump’s tariffs, the latest results show that there is “nothing to worry about”. Sales rose 11% and profits 16% in the year to 31 March 2025. Halma has now enjoyed “a 22nd consecutive year of profitable growth and a 46th successive year of rising dividends”. The latest set of earning figures certainly seem “stellar across the board”, says Stephen Wright of The Motley Fool. Still, the results only cover the period until 31 March,…

Five to buy Marks & Spencer The TelegraphMarks & Spencer’s (M&S) share price has fallen 10% since the cyberattack in April, and the underperformance against peers provides an “opportunity to buy [a] high-quality business”. Although the breach is expected to hit operating profits by £300m this year, insurance payments could reduce this figure, and the incident is likely to have been a one-off event. Earnings are expected to surge 29% next year. M&S’s solid fundamentals, upbeat long-term prospects and “relatively attractive” valuation all bode well. 371p Workspace Investors’ ChronicleWorkspace’s full-year occupancy levels declined as the provider of offices struggled to keep bigger clients. Yet the company aims to restore the number of lost occupants, arguing that it has a significant opportunity in London given its 12% market share and large…

The Trump administration increasingly seems convinced that the US dollar’s status as the world’s reserve currency is a burden, not the “exorbitant privilege” that it is often said to be. Key economic advisers such as Stephen Miran believe that the persistent strength of the dollar has driven the deindustralisation of the American economy by making exports less competitive. Economists can legitimately debate this. There could even be a smidgen of truth in it, although blaming the rest of the world conveniently ignores poor decisions willingly made by US corporations and politicians. However, treating the dollar’s unique status and strength as yet another example of America being ripped off ignores some obvious benefits. These include higher margins and lower inflation, but even more important is the impact on markets. The role…

The drone economy takes off EditorialThe Economist In March, Chinese firm EHang became the first “evtol” (electric vertical take-off and landing) aircraft licenced to carry commercial passengers, says The Economist. Beijing’s active promotion of evtols and drones reflects its ambition to develop a “low-altitude economy” (at around 1,000 metres). By the end of last year, 2.2 million civilian drones were operating in China, delivering 2.7 million packages, not including meals. Among other things, drones deliver post to remote areas, spray pesticides, extinguish fires and transport medical tests. Beijing’s enthusiasm is particularly “striking” given how closely airspace is guarded on security grounds, but functionaries and institutions are “getting the message”. Degree courses have been launched and local governments are pitching for business. Officials promise access to subsidies, skilled workers and a…

capx.co The idea that trade and interdependence help guarantee peace between nations is now seen as a “fallacy”, says Ben Chu. The idea was advanced in 1910 to explain why the great European powers, despite all the sabre-rattling, would never go to war. The idea seemed to make sense – it was not in the economic interests of states interlinked by trade to go to war with each other. And yet, of course, they did. But the idea should not be completely discarded. The evidence of the years since the World War II is that “globalisation and positive-sum economic thinking have indeed done a “remarkable job of averting conflict between major powers”. Global economic integration does not guarantee peace, but economic and political fragmentation is likely to “deliver a world…

Primary Health Properties (LSE: PHP) is one of the most consistent, predictable and reliable companies on the London market. It is a real estate investment trust (Reit) that invests in primary healthcare premises such as doctors’ surgeries, with 495 in the UK and 21 in Ireland. These are let on long term leases, with an average of about ten years unexpired, and roughly 90% of income is funded directly or indirectly by the government. Occupancy is over 99%. Rents are effectively upward-only or indexed. Total assets of £2.8bn are financed 48% by debt and 53% by share capital. The average cost is 3.4%, comfortably under the revenue return of the portfolio of 5.25%. The cost of debt is fixed or hedged out for just under six years. Rising earnings have…

Diageo (LSE: DGE) has been a horrible investment to own over the past five years. Since topping out at just over 4,000p in the first quarter of 2022, the shares have slumped by more than 50%. On a total return basis, Diageo has underperformed the FTSE All-Share by nearly 25% per year over the past three years. However, the underlying story is nowhere near as downbeat. During the pandemic, a significant amount of demand was pulled forward, and although sales have since moderated, they are returning to a long-term trend of growth. At the same time, the company has moved upmarket. Last year, it established the Diageo Luxury Group, which will oversee 15 visitor experiences, as well as the London-based fine wine and spirits retailer Justerini & Brooks and the…

Those who dislike luxury stocks cite similar criticisms to those who dislike the clothes many of them make. They are too expensive, fashionable one minute and out of style the next. For European investors, however, they are difficult to ignore. Some of Europe’s most valuable companies are luxury giants – and recent challenges have taken a chunk out of share prices. The last few years have been a roller-coaster for the sector. In 2020, the personal luxury-goods market dropped by 22% as the pandemic struck. It then rebounded by 29% in 2021, as pent-up demand was released and households went on a shopping spree with their excess savings. The following two years saw incredible growth rates: 21% and 10% respectively. For context, the sector’s organic annual growth rate is typically…

● What’s the most expensive property in the world? A British beach hut, says to Jamie Boys in The Mail on Sunday. “Experts say these candy-coloured huts can be the most expensive property in the UK – if not the world – by square foot (a staggering thought given that they have no loo and you can’t stay in one overnight).” A beach hut on Mudeford Sandbank in Christchurch, Dorset, sold for £485,000 last year. That works out at £2,255.81 per sq ft. The average price in Knightsbridge, London is £1,557 per sq ft. The UK average is £300 per sq ft. ● A change to the Nectar app means you can now protect your hard-earned points from criminals. “Customers can choose to freeze spending on Nectar points in the…

● Firms routinely leave excess cash sitting in the same bank account for year after year. But with interest rates now falling in the UK (and savings providers repositioning their approach to the market) it has never been more important to make sure your money is earning a decent amount of interest. That doesn’t have to mean locking it up for an extended term, though fixed-rate notice accounts can protect you from falling rates if you know the company won’t need access to the money for some time. The best easy-access accounts, from providers including Shawbrook, Tide and Hampshire Trust Bank, all currently pay more than 4% annual interest. ● With the cyber attack on Marks & Spencer fresh in people’s minds, many SMEs are thinking about whether to take…

Diana Kidisyuk, an 11-year-old born in Ukraine, made her way to the Dubai office of the Guinness World Records last year to pick up her official certificates, says Vassiliki Bakogianni for the Guinness World Records website. She had broken two world records – the most subscribers for an individual female on YouTube (more than 122 million) and the most views for an individual female on YouTube (more than 102 billion). Her “fun, educational videos” focus on music, role play and “unboxing” – being filmed unpacking consumer products – and are loved by children all around the world. She has recently stepped back from video production to focus on school and hobbies (doodling and roller skating). The Kids Diana Show is the sixth-most-followed channel on YouTube, behind Mr Beast (who stages…

£54, reduced to £48 each by the case, thefinestbubble.com; £235 in bond per six bottles, farrvintners.com among many others To celebrate English Wine Week, (21-29 June), I have found five epic, world-class sparkling wines so you can raise multiple glasses. Domaine Evremond is a thrilling partnership between lifelong friends Pierre-Emmanuel Taittinger (of Champagne fame) and Patrick McGrath MW (UK wine legend). Their shared dream was to craft an exceptional sparkling wine in the wilds of Kent. Ten years in the making, the results are even more beautiful and resonant than I could have imagined. The stakes were high, and these visionary gentlemen confounded the critics, smashing it with their first release. I cannot recommend it enough. The 2017 Nyetimber Blanc de Blancs (£58, coming soon) is a new, 100% chardonnay…

Jonathan Allen and Amie Parnes William Morrow, £25 Playwright Mike Bartlett’s 2022 work, The 47th, envisioned a hypothetical US presidential contest between Kamala Harris and Donald Trump following then-president Joe Biden’s resignation. Its portrayal of widespread civic unrest may have been overly bleak, but it presciently outlined a scenario akin to last year’s political upheaval. Jonathan Allen and Amie Parnes’s Fight delves into the four tumultuous months that followed Biden’s disastrous performance in a late-June debate, which ultimately led to his vice-president becoming the Democratic nominee. The authors touch upon the Trump campaign, but the core of their narrative explores the intense internal struggle waged by Biden’s family and loyal aides. Their objective: to retain the incumbent president on the ticket despite relentless pressure to remove him from congressional leaders,…