Indholdsfortegnelse for Issue 926 i MoneyWeek

I have lost count of the number of fund managers who have told me over the last decade they don’t pay attention to governments. In a globalised economy, political grandstanding just doesn’t matter, was their view. Well, it matters now. Scroll through my inbox and you’ll find more emails devoted to Brexit (see page 8), Trump, trade (see page 12) and a Corbyn government than you will on earnings forecasts. Politics has made a rather rude re-entry into the world of investing. So Brexit and Corbyn are sinking the UK stockmarket; fear of regulation is killing equities in the tech sector; and fear of tariffs ripping up supply chains is doing for everything else. From their peak in September the FAANGs have lost $1trn of market cap. Nasty. Elsewhere the…

Travel giant Tui was defrauded out of £39,466 by an unemployed man from Swansea who copied branch-employees’ passwords to book himself lavish holidays to Dubai and the Seychelles. Adam Griffiths, 28, documented his first-class flights and stay at Dubai’s seven-star Burj Al Arab hotel on Facebook. Griffiths said in court that he could only afford to repay £1 to the holiday firm. Michelin-star chef JP McMahon and others have urged British restaurants to stop serving “blood avocados”. The popular fruit is thought to earn an annual £150m for Knights Templar, a drug cartel in Mexico’s Michoacán region. The cartel has violently seized farms growing avocados in western Mexico. Sales of avocados, which are famously popular with millennials, have rocketed by 184% in the past five years.…

“To lose one central bank governor may be regarded as a misfortune,” say Tom Miller and Udith Sikand in a Gavekal Research note. But to lose a second, as India has, “looks like carelessness bordering on recklessness.” Central bank governor Urjit Patel has resigned after a dispute with Prime Minister Narendra Modi’s government over the bank’s independence. His predecessor also left before his term was due to end. Modi faces elections next year and “has repeatedly pressured the central bank to spur lending”, says Bloomberg. The government wanted the Reserve Bank of India (RBI) to relax curbs placed on weaker state-run banks, so they can lend more easily and “keep the economic engines firing”. But the RBI wants to nurse these banks back to health instead. The government has “trampled…

The pound hit a new 20-month low against the dollar this week as Prime Minister Theresa May postponed the Brexit vote (see page 8). After the 2016 referendum, sterling slumped to its lowest level in history against a basket of currencies. “While some may attempt to blame this all on Brexit, it’s really the continuation of a story going back decades,” says Ed Conway in The Times. Since the 1960s sterling has lost more of its value than any major currency in the world. Key episodes that triggered falls include major devaluations in 1949 and 1967; the 1976 crisis, when we had to call in the International Monetary Fund; the decline after we were forced out of the Exchange-Rate Mechanism in 1992, and the 2008 financial crisis.…

You wait ages for a ride-hailing app to hit the market, then two come along at once. After hinting for months that they intended to go public, Uber and Lyft, both based in San Francisco, have reportedly filed for an initial public offering (IPO) with America’s Securities and Exchange Commission. Uber is expected to be worth $120bn, while Lyft’s value should exceed the $15.1bn implied by its last funding round in June. Both firms have hitherto struggled to make a profit, but there is still vast scope for growth, according to analysts at wealth managers Raymond James. Like Amazon, ride-hailing firms should be capable of expanding sales by 13%-20% a year for a long time, they reckon.…

US semiconductor maker Qualcomm is claiming “an important victory” in its “sprawling legal battle” with Apple, says Tim Bradshaw in the Financial Times. A Chinese court has found Apple violated two Qualcomm patents and has therefore barred Apple’s Chinese subsidiaries from importing and selling seven iPhone models, including last year’s iPhone X. The ruling comes as the two companies “have become embroiled in a series of lawsuits during the past two years”, with Apple accusing Qualcomm of abusing its position in mobile chips. Qualcomm has retaliated with several allegations, notably breach of contract and patent infringement. Courts in Germany and America are unlikely to impose a similar ban, says Bloomberg, but “the ruling increases political risks for Apple, which is embroiled in a broader trade dispute between the US and…

Companies pay dividends to shareholders out of their profits. A dividend is entirely discretionary – unlike the interest payment on a bond, it doesn’t have to be paid and it can be cut or even scrapped altogether if deemed necessary. Directors decide what proportion of profits they will distribute: the amount varies depending on how well the company has done (ie, on how much the directors feel it can afford to pay out), but also on other, less tangible, factors. For example, directors tend not to be keen on cutting dividends because the market reaction is typically bad. Also, fast-growing firms tend to pay out a lower percentage of their profits than more mature firms, because they prefer to invest all or most of their profits in opportunities for future…

• Each of the 635 partners at accountants KPMG will receive pay of more than £601,000 this year, 16% more than last year, reports Lucy Burton in The Daily Telegraph. The group’s chairman will get £2.1m. MPs have accused the firm of being “complicit” in outsourcer Carillion’s demise after a “long and complacent” tenure of “cursory” audits. KPMG was fined £3m for misconduct by the Financial Reporting Council after breaching standards in its relationship with Ted Baker, and faces investigations over its audits of Rolls-Royce and Conviviality. It increased the amount it has put aside for fines last year by 30% to £73m. • Footballer Luka Modric’s receipt of the “Ballon d’Or”, an annual award for the best player in the world, didn’t come with any prize money, but the…

“I know what it is like not to have money. My mother drilled into my head that if a woman has money she has options. I think that financial independence brings you happiness.” Model Caprice Bourret (pictured), quoted in The Sunday Telegraph “It’s quite simple. People have had enough of taxes.” French Socialist party grandee Ségolène Royal on the yellow-vest protests, quoted in The Sunday Times “It is extraordinary that it’s 2018 and we’re only just scratching the surface of that… I’m 42 and I’ve only just said, ‘Well, I want to be paid the same as the person I’m doing the same amount of work as’. And I’ve been in this industry for 30-odd years.” Actress Keeley Hawes on the gender pay gap, quoted in the Financial Times “The…

Slate.com People are increasingly wising up to the threat Amazon poses as a monopoly and exploiter of its blue-collar workers, says Shannon Palus. As a result, some have cancelled their accounts and are encouraging others to do the same. But this is easier said than done. More than 100 million people have paid up to Amazon’s Prime service, which provides good deals, prestige television and fast shipping for a monthly fee. Increasingly, that convenience may be becoming a necessity. Shopping is labour. For parents lacking child care, or low-paid workers having to work long hours, or the disabled or elderly who struggle to leave the house, Amazon saves on that labour, and on money. That’s time and money that can be put to good use elsewhere. Amazon has prospered by…

Activist investor Elliott Management has built up a stake in German pharmaceutical company Bayer, according to Reuters. It has owned shares in the company for over a year, during which time the stock has fallen by around 40%, so nobody can accuse Elliott of being short-termist, says Liam Proud on Breakingviews. It’s been a bad year for Bayer. The group completed its $63bn acquisition of Monsanto only to be hit by 9,000 lawsuits relating to its weedkiller. Elliott can push the company to sell or spin off the different divisions, but it wouldn’t be easy, as Germany’s union-elected board members can resist radical surgery. But the case for keeping the business together looks weak. Sometimes, patience is not a virtue.…

There are many ways to give money at Christmas, but one to avoid at all costs is gift vouchers. It’s an industry that’s worth £6bn a year, but they are a truly terrible purchase. Spending on all types of gift cards rose 6.6% in 2017, with digital cards and e-vouchers now making up 9.4% of the overall market, according to Tim Bowler on BBC News. But the problem is that a huge number of gift vouchers are never used: £300m is thrown away every year. Some are forgotten about, while others expire. Most have a two-year expiry date, meaning your money goes down the drain if unused. As many as 6.7 millions Britons have lost money on gift cards, either because they failed to spend them before the deadline or…

If you are preparing to submit your self-assessment tax return, and your tax liability is under £3,000, you might be able to spread this payment out through pay-as-you-earn (PAYE), says Paul Haywood-Schiefer of accountants Blick Rothenberg. There are some basic conditions that must be met in this case: you must file your return by 30 December; you must already pay tax through PAYE either as an employee or on a pension; and your income through PAYE must be sufficient to collect the tax without you paying more than 50% of your PAYE income in tax or paying twice as much tax as you normally do. If you do go down this route, when it comes to completing your tax return the following year, make sure you include the amount of…

“Lethargy is replacing energy” in the property market. These were the cheery words of a former chairman of the Royal Institution of Chartered Surveyors (Rics) in reaction to Halifax’s latest house-price index. In the three months to November, house prices were 0.3% higher than in the same three months a year earlier, with the average cost of a home now £224,578. This is down from the 1.5% annual growth recorded in October, and the lowest rate of growth since December 2012. But while this isn’t exactly a ringing endorsement of the state of the UK housing market, it’s important to look beyond the inevitably gloomy headlines. In the 12 months to September, the parts of the UK that saw the biggest drops in house prices were both in London –…

While mobile-phone costs can take a big chunk out of the profitability of small businesses, there are several ways to reduce your bills. • Use price-comparison sites to shop around – the leading platforms have increased their coverage of small-business services in recent years, making it easier to use them to identify good deals. • Be prepared to look beyond the biggest providers. In research carried out earlier this year by Startups.co.uk, Virgin Media and Plusnet came out as significantly cheaper than the big three for small-business customers. • Don’t pay for what you don’t need. Small businesses routinely sign up for premium contracts they may not require; for example, if your staff are connected to Wi-Fi in the office most of the time, then they don’t need generous monthly…

Nostrum (LSE: NOG) explores and produces oil and gas in the Pre-Caspian Basin of western Kazakhstan. The company hit trouble earlier this year when it faced “unexpected challenges”, with water flowing into the wells along its gas-producing reservoir. Volatility in global oil prices has made matters worse. Nostrum announced plans last week to reduce the number of active drilling rigs from three to two. The past year has seen the share price slump by 63% as the group made a loss of $23.8m, while net debt has climbed above $1bn.…

The best sweetie 2015 Donnafugata, Ben Ryé, Passito di Pantelleria, Sicily (£76.70 and half bottle £41.10, Hedonism.co.uk ; £39.99, half bottle, ValvonaCrolla.co.uk , TheWineReserve.co.uk ; £39.95, half bottle, NYWines.co.uk ). My sweetie this year is this phenomenal Passito and it is, without doubt, the “Sicily’s d’Yquem”, for want of a better expression. I gave this awesome vintage a handsome 19.5/20 score in my tasting notes because the mandarin peel and wild honey palate is like nothing you will ever have experienced before. The ultimate festive sweet wine with enough oomph to tackle all desserts, including Christmas pudding and mince pies, this is a legendary creation. An epic Chablis 2016 Chablis, Grand Cru Valmur, Domaine Jean-Paul et Benoît Droin,…

Singer Cheryl Tweedy and L’Oréal have parted ways after nine years, says Dan Wootton in The Sun. The French cosmetics giant reportedly ended its partnership, worth a reported £4m, with its longest-serving “spokesmodel” after Karen Flavard-Jones left Garnier to become L’Oréal’s new boss. “After Karen was hired the writing was on the wall for Cheryl,” a “beauty industry source” told the paper. “At Garnier, she favoured classier celebrities like Holly Willoughby and Davina McCall.” The former Girls Aloud star began promoting the brand’s hair products, including its Elnett hairspray, in 2009 for an estimated £500,000 a year. “I have had an amazing experience,” Tweedy told Mail Online.…

“One of Wall Street’s most reliable fortune tellers is flashing ominous signals,” says CNN. All eyes have turned to the yield curve. Investors are fretting about whether it’s going to “invert,” which is seen as a harbinger of trouble. Since World War II, every recession has been preceded by an inverted yield curve. The yield curve plots the difference, or spread, between the yield on the ten-year US Treasury (government bond), and the yield on the two-year Treasury. It therefore shows how much it costs the US government to borrow money over ten years, compared to two years. In normal times, the interest rate on loans rises with the lending period, so the yield curve slopes upwards. The yield curve inverts when longterm interest rates fall below the level of…

“The cost of Brexit for the EU will be high: Britain’s economic output is not only the second-largest in the EU, it is also bigger than that of the 18 smallest EU members combined. But the longer-term problem is that Brexit will upset the political and ideological balance in the EU. The populations of Germany, Finland, the Netherlands, Austria and the United Kingdom together comprise 35% of the EU’s total, the share needed to block decisions. This figure will shrink to 26%. The likes of France, Italy, Greece and Spain will henceforth have a much larger share: 44%. This implies a swing in the balance of power towards countries who tend to be spendthrift or averse to economic liberalisation. The corollary is that talk of eurobonds, fiscal transfers and fiscal…

Three to buy Hollywood Bowl The Sunday Times There is a “quiet revolution” under way at your local bowling alley. Bookings can be made online, menu options are becoming more varied and you can even wear your own shoes. Hollywood Bowl runs 58 alleys in the UK. Warm summer weather and the World Cup made for a tough backdrop this year, but a drifting share price presents a buying opportunity. Modern families increasingly prize experiences over possessions, meaning that leisure operators are outperforming retail. 183.5p Telecom Plus Shares Telecom Plus, which trades under the name Utility Warehouse, is Britain’s biggest energy supplier outside the big six. It provides gas and electricity to more than 621,000 homes and businesses, as well as offering broadband, mobile and home insurance. The multiservice model…

• The restructuring plan unveiled by WPP CEO Mark Read consists of “hundreds of words of jargon and twaddle”, says Jim Armitage in the Evening Standard. And it’s hardly ambitious. Cutting 3,500 jobs will only save £275m a year, which is “trifling in a business that’s lost £6bn of its stockmarket value since September”. Similarly, the planned simplification “isn’t that different to moves already in train”. Read not only needs to be “radical” but also find a way to improve WPP’s “patchy” record on “winning and retaining clients”. • Superdry’s shares fell by a third after another profit warning suggested earnings would fall to £55m, down from £97m in 2017-2018. Expectations “were already low” for Superdry but this latest warning suggests the business has“really lost its way”, says AJ Bell’s…

We were promised a big Brexit vote this week, and that’s what we got – just not the one we were expecting (see below). Yet whether or not Theresa May is still prime minister by the time you read this, it doesn’t make a huge difference to the three main potential Brexit outcomes facing Britain: we could get a massaged version of May’s deal; we might face a second referendum or a general election, both of which would probably mean delaying the 29 March deadline for Brexit; or we face some sort of “no-deal” Brexit. The question for investors is this: what do these outcomes mean for your money, and what is already priced into markets? We know May’s deal would be a relief for markets for now – it…

Want to know where to invest for the next seven to 20 years? Buy emerging market equities, says DoubleLine’s Jeffrey Gundlach. It’s been a grim year for most asset classes – including emerging markets – yet overall they have managed to outperform global indices, notes Gundlach. On top of that, as measured by the cyclically-adjusted price/earnings ratio (CAPE – which looks at earnings in the context of the long-term economic cycle), emerging markets are trading at less than half the valuation of US stocks. Based on that alone, says Zero Hedge, Gundlach reckons that emerging markets “could outperform US stocks by 100%”. But just remember – this is long term, so you’ll need to be patient. Gundlach is not bullish on the short term by any means. Europe’s economic growth…

Mike Betts, the boss of Motability Operations, the business that leases cars to disabled drivers on behalf of the charity Motability, is to leave the company, but not before receiving a £2.2m bonus on top of his £1.7m salary, reports The Guardian. A report by the National Audit Office (NAO) said remuneration at the company was “generous” and linked to performance targets that were “easily exceeded”. Since 2008, five executives have shared long-term incentives of £15.3m, says the NAO, “on the basis of achieving performance targets set below levels that were already being achieved on their introduction”. The NAO also points out that the company is an “effective monopoly”, operating in a “protected environment” and benefiting from government tax breaks. It has generated £1.05bn of “unplanned profit” since 2008 and…

Project-Syndicate.org The catastrophe in Venezuela is deepening, says Ricardo Hausmann. Inflation is set to pass the 1,000,000% mark this month. Output of the country’s key export, oil, was down 37% year on year in October. A day’s work at the median wage will buy you just 1.7 eggs; a kilo of meat costs almost a month’s wages. The resulting refugee crisis is of Syrian proportions. Venezuelans have been laying the groundwork for change. Political parties, trade unions, universities, NGOs and the Catholic church have come together in an initiative called Venezuela Libre. 10 January marks the end of President Maduro’s term. The elections for a second term were a sham. The way ahead is for the international community to refuse to recognise Maduro after 10 January, recognise the National Assembly’s…

• One of the longest-running mysteries of financial markets is surrendering its secrets, says Chris Flood in the Financial Times. The true scale of trading activity across Europe’s $783bn exchange-traded fund (ETF) sector has long been a subject of speculation and debate, but strict disclosure requirements introduced in January have now made it possible to make a far more accurate assumption about the size of the market. In 2018, the value of reported ETF trading quadrupled to roughly $2trn relative to last year, when the visible liquidity was limited to about $500bn. ETF providers believe more new investors will now be drawn to low-cost tracker funds, as they can make a more realistic assessment of liquidity conditions (how easy it is to buy and sell investments). • Shares in CatCo…

• Thousands of people are “needlessly” paying inheritance tax (IHT) bills every year because a “widely used tax loophole has been all but forgotten,” says Harry Brennan in The Daily Telegraph. We all have a personal IHT band of £325,000 that we can pass on before IHT at 40% is due. Over a decade ago, if couples wanted to pass more than that amount to each other, they would set up IHT-exempt discretionary trusts that allowed people to ring fence up to £325,000 to pass on to their spouse free of tax on their death. In 2007 a new rule allowed spouses to transfer unused allowances when one partner dies, meaning the trusts were forgotten about. “However, widowed spouses who remarry can still use it to give themselves an additional…

Another week, another damning report into the quality of financial advice given to people considering transferring out of a final-salary pension scheme. Less than half the transfer cases it looked at resulted in advice that was suitable for clients, says the Financial Conduct Authority (FCA), the City regulator. Too often, advisors are recommending transfers to savers who would be much better off staying put. Of the 154 transfers the FCA looked at across 18 firms, 74 were considered suitable (48%), while 45 were thought to be unsuitable, and 35 unclear. Around 100,000 people a year are transferring out of final-salary schemes, moving an average of more than £250,000 with each switch, according to the FCA’s data. Under rules designed to protect consumers, anyone wanting to transfer a fund worth more…

This property is set in 741 acres of Tuscan countryside and includes an old village dominated by a grand, restored manor house, a farm and a winery. The manor house has fresco-vaulted ceilings, polished tiled floors, large open fireplaces and an old aviary on the top floor offering 360 degree views. There are 42 acres of vineyards and the fully functioning winery is set up for agritourism, complete with offices and a large dining hall seating 200 with a commercial-grade kitchen. Some of the estate’s buildings require further restoration. But can you guess the asking price? Answer on the side of this box. €7.8m Italy Sotheby’s International Realty +39 055 075 1888.…

When it comes to funds, I would recommend the BlackRock Latin America Investment Trust (LSE: BRLA). This trust is heavily skewed towards Brazil, which accounts for 73% of holdings. That suits us since the majority of China’s Latin America trade and investment is focused on Brazil. The country is rich in the agricultural, mineral and energy assets that China wants to import, while its atrocious infrastructure means that there are plenty of projects for China to develop. I have interviewed this trust’s manager, Will Landers, who – despite his British-sounding name – is a Brazilian, several times and have always been impressed by his understanding of the region. The trust’s biggest holdings include Brazilian iron-ore miner Vale, oil firm Petrobras, and various local banks that should all benefit from China’s…

Nine in ten small and medium-sized enterprises (SMEs) are getting a poor deal from their mobile providers, according to new research from the price-comparison site BillMonitor. It accuses the big three providers, EE, Vodafone and O2, of operating a “Wild West” market, in which the average small business could cut its costs by as much as 49% by shopping around for a better deal. That’s worth more than £24,000 a year to the bigger businesses included in the research. BillMonitor’s study focused primarily on the different prices charged by the three big providers for similar services. It suggests that the same SME customer would typically pay an average of 16.3% more for mobile-phone contracts with the most expensive of the three providers than with the cheapest. EE comes out worst…

Despite the intense uncertainty created by Brexit, the UK stockmarket still offers opportunities for long-term capital growth. The volatility in global markets over the past few months has had the greatest impact on growth shares, notably some of the UK’s best and most expensively-valued companies. We seek out high-quality businesses that boast low levels of debt and strong management teams. Now some of the promising growth stocks that fit the bill have been unjustly marked down or are being overlooked by rattled investors. Here are three “hidden growth” stocks. Prudential’s Asian motor Sometimes highly successful and fast-growing businesses are tucked away in larger companies. As a result, the overall entity can trade at a discount to its underlying value. For instance, Prudential’s (LSE: PRU) Asian subsidiary, its largest in terms…

The Signs Were There The Clues for Investors that a Company is Heading For a Fall Tim Steer Profile Books (£14.99) Investors generally spend most of their time looking for companies that are doing well – or at least better than expected. But spotting signs that a firm is in trouble is also a useful skill, especially if you own its shares. This book by former Artemis fund manager Tim Steer looks at the red flags that suggest not only that a firm is in trouble, but also that the management is trying to hide the fact with some creative accounting. The book is divided into ten chapters, each of which is focused on a particular theme. Each theme is then illustrated with two or three case studies. For example,…

According to an old Russian joke, the Soviet leader Brezhnev once invited his elderly mother to his summer house. After showing her around his dacha, including his collection of fancy Western cars, he noticed she had grown increasingly worried as the tour went on. “What’s wrong?” asked Brezhnev, puzzled. “But Lyonya,” she replied, “what will you do if the Communists come back?” I was reminded of the joke while reading about the opulent lifestyle of one Alejandro Andrade, who had been a bodyguard of Venezuela’s socialist revolutionary, Hugo Chávez, before rising to powerful positions in his government. Andrade has recently been convicted of taking bribes as Venezuela’s treasurer in a money-laundering scheme that made him a billionaire, reports Nicholas Casey in The New York Times. Stunning array of bribes Venezuela…

Donald Trump says he doesn’t believe in global warming. “I have a gut,” he said, “and my gut tells me more sometimes than anybody else’s brain can ever tell me.” It must be nice to have such a well-informed digestive tract. Still, on this issue at least, we suspect Trump’s instinct is correct, at least insofar as it leads to a policy. “We can’t know whether our efforts would pay off or do more harm than good” Is the earth heating up? We don’t know. Most scientists appear to think so. A few dissent. But let’s guess the majority is correct. Is, then, carbon dioxide from burning fossil fuels the cause of that warming? Again, we don’t know. There’s no way to know for sure. You can’t do a controlled…

Harry Redknapp has been crowned “King of the Jungle” after winning the reality television show I’m A Celebrity… Get Me Out Of Here! The 71-year-old former Tottenham Hotspur manager (pictured) is planning to spend his £500,000 appearance fee on an “extra special Christmas”, says the Daily Star. His earnings will keep growing, says The Sun. Redknapp is expected to rake in even more cash from book deals, endorsements and television shows, including ITV series Match Fit. Cash-strapped Christmas shoppers at branches of Walmart in Atlanta and Nashville were surprised to have their reserved items paid for for them. Actor and director Tyler Perry donated more than $400,000 to pay off all “layaway” goods at two Walmart branches. Singer Kid Rock called Perry’s payment a “great idea” and followed suit with…

With the US economy expected to slow, it’s important to own companies able to tap into new sources of growth, says Barbara Miller of fund manager Federated Kaufmann in Fortune. Enter Constellation Brands, a global drinks giant with brands spanning wine, beer and distilled spirits. It is the world’s largest premium wine seller with over 100 brands, including Robert Mondavi. Constellation is growing its share of the US beer market with Mexican brands such as Corona and Modelo, and is now exploiting the momentum of the nascent cannabis sector, which looks immune to the economic cycle, with a $4bn stake in Canadian pot group Canopy Growth. The shares also yield 1.5%.…

In January, outsourcing giant Interserve was placed under special monitoring by ministers. While it insisted at the time that it wasn’t about to become the next Carillion, says James Moore in The Independent, Interserve is now “in rather urgent talks with its lenders about turning a substantial chunk of its £600m-plus debt pile into shares”. As a result, “punch-drunk investors” facing massive dilution have seen the shares slump by 50% in a week. They have lost 90% since January. By describing the decision to “virtually wipe out shareholders” as a “positive step”, CEO Debbie White seems to have “inhaled too many fumes in the cleaning contractor’s cupboard,” says Christopher Williams in The Daily Telegraph. Of course, Interserve’s problems started when her predecessor Adrian Ringrose “built up its debt pile with…

As MoneyWeek went to press, Theresa May faced a vote of no confidence in her leadership. Support for May has been draining this week after she delayed Tuesday’s “meaningful” vote on her Brexit deal in parliament when it became clear it faced certain defeat. If she wins the confidence vote (which requires backing from 159 Tory MPs), she will stay in office and cannot be challenged for another year. If she loses, a leadership contest could take up to six weeks, which May has warned, risks delaying or even stopping Brexit, say George Parker, Henry Mance and Laura Hughes in the Financial Times. Brexiteers believe May’s handling of Brexit, particularly the Northern Ireland backstop, has been disastrous, and are “willing to see Britain leave without a formal deal on 29…

There are lots of reasons to be nervy about investing in the UK right now. The ever-shifting nature of Brexit is one issue; the potential for a Jeremy Corbyn government and the policies that might accompany it are another not entirely unconnected factor. But there’s an argument to suggest that a lot of this uncertainty is being priced in just now. The overall dividend yield on the FTSE All-Share index, at around 4.5%, is now floating around its highest level since the financial crisis. The big question, of course, is – will these dividends be paid? “Dividend cover in the FTSE 100 has improved” One measure to look at is dividend cover (see below). Cover for FTSE 100 stocks has improved in recent years, notes Laurence Fletcher in the Financial…

Almost every month sees another of the giants of the Dax – Germany’s blue-chip stock index – come under attack. The latest is the chemicals conglomerate Bayer – activist investor Elliott has bought a significant stake in the business. A famously pugnacious hedge fund, Elliott is well known in the markets for taking big stakes in companies and then fighting hard to shake them up. Elliott hasn’t yet said what it would like Bayer to do, but there is speculation it will press for a split between its consumer and healthcare business (see page 18. Bayer is far from alone. Deutsche Bank’s shares have fallen by more than 80% since the financial crisis and it has been forced to retreat from investment banking, where it had hoped to be a…

The dodgy money in the art market William Rich The Wall Street Journal A multibillion-dollar fraud in which a Sotheby’s subsidiary was unknowingly involved in 2014 highlights the appeal of the art business for money launderers, says William Rich. With $64bn in annual sales, subjective pricing “creates an ideal environment” for criminals to legitimise funds or get money across borders. Art sales are famed for their secrecy. Super-rich buyers often remain anonymous, sometimes for legitimate reasons. Galleries and auction houses collect “basic information” about clients, but vetting is “usually far less intense than for similar-sized bank transactions”. Although art-industry insiders insist that money laundering is rare, its “vulnerability” alone makes action desirable. The Bank Secrecy Act, which establishes standards for anti-money-laundering controls, record-keeping and reporting of suspicious activity, should be…

StumblingAndMumbling.typepad.com It’s hard to believe now, but only three years ago the country was not divided into Brexiters and Remainers, says Chris Dillow. The very idea of such a split would have seemed absurd. Yes, there were a few fanatical Brexiters, but most of us gave the matter no thought. This fact should change how we think about Labour party policy. When Labour proposed recently to give customers a say on executive pay or to expand worker ownership, the commentariat got to work questioning whether such policies would work. That’s reasonable, of course, but it misses a Big Fact – that the proposals are not so much technocratic fixes as efforts to change the political culture. Brexit was off the agenda until David Cameron decided to hold a referendum on…

The value of having independent non-executive directors to oversee the management, strategy and governance of investment trusts has been demonstrated by the JP Morgan Global Growth & Income Trust (LSE: JPGI), once called the “poster child for investment trusts”. Two years ago, the trust, then called the JP Morgan Overseas Trust, was a £200m fund with a good investment record but languishing on a discount to net asset value (NAV, the value of the underlying portfolio) of 15%. The trust had been steadily shrinking owing to share buybacks, and became too small for the bigger wealth managers to invest in. Modest strategy change When faced with persistently poor performance or an investment strategy that no longer appeals, directors have a range of options. They can, with shareholder approval, change the…

Although it might not make for the most interesting-shaped present under the Christmas tree, money is a great present. Whether you choose to invest some cash, top up someone’s savings, or follow the lead of a wise man and give gold, it can be the gift that keeps on giving. An easy option is to buy Premium Bonds from the government-backed National Savings & Investments as a gift. The bonds don’t earn interest, but they are entered into a monthly prize draw to win up to £1m tax-free. The prize-fund rate is currently 1.4%, meaning if you are as lucky as the average person you should win enough prizes to equate to a 1.4% annual return. If you want to buy Premium Bonds as a gift, you can only do…

It’s not always easy to decide when to start drawing your pension. Last month saw the completion of a 20-year project to equalise the age at which men and women may start receiving their state pension; the government now plans to raise this age from 65 to 66 by October 2020 and to 67 by 2028. But with both state and private pensions, the longer you leave it to take your benefits, the higher the income you’ll be entitled to. On state pensions, the deal is straightforward. For every nine weeks that you leave it to begin claiming your pension, you get 1% more income; over a year, that’s worth 5.8% extra pension, or £479 extra at current pension levels. If you don’t need the money that could be tempting,…

Lifetime individual saving accounts (Lisa) have hardly been a roaring success. In the 2017-2018 tax year, 166,000 Lisas were opened, according to data from HM Revenue & Customs. This is well down on its forecast of 220,000. In addition, the average contribution was £3,114 per account, £400 lower than expected. The Lisa has an annual investment cap of £4,000, which you can invest in cash or shares, and the government will top up your annual contributions with a 25% bonus – up to £1,000 a year. The money must then be used to fund the purchase of a first home, or you have to wait until age 60 to cash it in, effectively turning the Lisa into a pension-planning vehicle. The scheme’s dual purpose appears to be hampering the marketing…

The seaside home of singer Frank Sinatra is on the market for almost $13 m, says Hattie Gladwell in Metro. Sinatra and his fourth wife, Barbara, had the house built in 1990; the guests they entertained here included Dick Van Dyke and Gregory Peck. The 5,800-sq-ft property comes with seven bedrooms, nine bathrooms, indoor and outdoor bars, a sauna, a leopard-print wall, and 40ft of beachfront land. “On spring-summer weekends, this was the happiest place on earth to hang out,” says Leonard Rabinowitz, listing agent and friend of the Sinatras. “The ideal buyer would be someone that will appreciate the greatness and the legend”.…

Some companies tend to keep a low profile because they sell to other businesses rather than the general public. That means investors sometimes overlook them too. In the case of Britain’s Renishaw, that would be a great shame. The company makes high-precision measuring and calibration equipment. One of its laser precision-measuring systems used in the manufacture of machine tools, for instance, is accurate to one-half of a millionth of a metre in length and boasts a measuring distance of up to 80 metres. A wide range of industries Machine-tool manufacture is just one of the industries served by Renishaw. Others include aerospace, automotive, energy, electronics, construction, resources, healthcare and scientific research. In aerospace, Rolls-Royce is a long-standing customer. Renishaw systems are used both in the manufacture of high-precision fan blades…

• What does your business do? Quantexa helps companies connect the dots in their data. By bringing together disparate data sets and enriching internal data with external sources, Quantexa can produce insights to allow for better-informed decisions. • What’s been your company’s greatest achievement so far? In two-and-a-half years, we have grown to more than 130 staff with offices in the UK, US, Belgium, Canada, Singapore and Australia, and have built a client list of more than ten international tier-one organisations, including HSBC and Shell. • What has been your biggest challenge? Dealing with the rate of growth while staying laser-focused on customer delivery has stretched the management team. Our skills are customer-facing, but also technical. We employ over 100 data scientists, and there is competition to recruit and retain…

Nanoco (LSE: NANO) is a Manchester-based tech company developing the future of nanotechnology. It is working on quantum dots (tiny semiconductor particles) to improve everything from bio-imaging to the colours of LCD displays on your computer, TV or smartphone. “We’ve worked really hard to keep all costs within the business down,” chief executive Dr Michael Edelman said after announcing a £2m rise in the group’s cash position in the first and second quarter. Nanoco grew its revenues 150% last year and the stock has gained 50% in 12 months.…

Breaking Bad is a TV series that ran for five series from January 2008 to September 2013. It charts the life of Walter White, a mild-mannered chemistry teacher whose world is turned upside down when he is diagnosed with lung cancer. In an effort to cover the cost of treatment and secure his family’s financial future, he joins forces with former pupil and small-time drug dealer Jesse Pinkman to manufacture methamphetamine. Over time, White becomes a ruthless drug lord, teaming up with drug cartels to expand his market. The key moment Early on, White attempts to make meth for the first time in a camper van he has bought for the purpose. Initially, Pinkman scoffs at his partner’s insistence on using proper procedures, with precise measurements and proper equipment, favouring…

Russia Without Putin Money, Power and the Myths of the New Cold War Tony Wood Verso Books (£20) Former US secretary of state Dean Acheson said in 1962 that Britain had lost an empire and “not yet found a role”. Tony Wood argues that the same applies to modern Russia. His thesis is that the contemporary view of Russia as dominated by a group of tightly knit oligarchs trying to recreate the Soviet Union lacks subtlety. The truth is that Russia has no coherent vision for its future. Wood argues that, until the invasion of Georgia in 2008, Russia was willing to become part of the international system, and was even open to working with the US against terrorism. Indeed, Putin was initially praised for his pro-market economic reforms (with…

• I am loving that, after so many years dedicated to supporting her husband, the US’s former first lady, Michelle Obama (pictured), is enjoying her own moment in the spotlight, says Karren Brady in The Sun on Sunday. Her autobiography, Becoming, was part of the biggest publishing deal in history, worth $65m. Despite being published less than a month ago, it has already sold a whopping 1.4 million copies and is now on its sixth print run. Her book tour has sold out stadium-sized venues in America and her appearance at London’s South-bank Centre last week was the hottest show in town. Tickets were being sold on the black market for £7,000. It turns out that as well as being a style icon, with enviably toned upper arms, Michelle is…

VES400 The price in sovereign bolivars ($0.76 using the official exchange rate) of a cup of coffee in Venezuela, according to Bloomberg. Over the past 12 months, the price of coffee has risen by 285,614% due to runaway inflation in the South American nation. $48,143 The price of a diamond-paved and white gold Cartier Love Bracelet in Shanghai. The Chinese city has overtaken Hong Kong as Asia’s priciest for luxury goods and services, according to Bank Julius Baer & Co’s annual Wealth Report Asia. The same bracelet costs $41,818 in Kuala Lumpur. €500 The maximum fine dog owners in La Rioja, Spain, face if they fail to walk their dogs at least twice a day under new legislation approved by the regional assembly. £46.8m The amount stolen in the 722…