Indholdsfortegnelse for Issue 948 i MoneyWeek

US hospitals “have switched en masse from paper to digital records” in the past ten years, says Avi Salzman in Barron’s. That was excellent news for Cerner, one of the health IT firms that installed and maintained these systems, and the stock continues to look promising. It should now profit from a new shift. Medics have hitherto billed on a so-called “fee for service” basis, but the government increasingly wants to pay based on outcomes: hospitals have to prove that they are improving people’s lives. Cerner’s “population health management” system helps hospitals track patients’ behaviour and thus improve their long-term health. The group has just started paying a dividend.…

UK food-delivery platform Deliveroo has announced that Amazon has become a major investor in its business through a new $575m funding round, notes Sam Shead in Forbes. This increases the overall amount invested in Deliveroo to $1.53bn, giving it “a war chest to cement its position” at home and finance further growth. Amazon, meanwhile, is “buying its way back into the meal-delivery market”, which is expected to be worth $365bn by 2030, after its own service, Amazon Restaurants, “floundered”. Amazon’s investment in Deliveroo could well be the “amuse-bouche” for a broader tie-up, says Alex Webb on Bloomberg, and there are “a lot of reasons [why that] would make sense”. First, it’s a good idea for Amazon to maintain a foothold in the food-delivery markets as rival food platforms in Latin…

Europe’s cohesion “is under siege”, says Bloomberg. Populist groups anticipate “sizable gains” in this week’s European elections, “giving them more power than ever before” over the institutions at the heart of the EU. Although the “Brexit fiasco” has lessened the appeal of leaving the EU (60% of Europeans believe membership is a good thing), populists want to “undermine it from within”, halting the push for greater integration, curtailing the authority of Brussels and limiting the EU’s ability to insist on adherence to “democratic norms”. While it is true that Brussels is “prone to regulatory excess and plagued by a lack of popular legitimacy”, its flaws “pale in comparison to the dangers posed by its critics”. Left unchecked, the contagion of populism will “corrode Europe’s identity as a democratic union” and…

A “lurid” video showing Austria’s vice-chancellor and Freedom Party leader Heinz-Christian Strache “promising state contracts for cash” to a woman claiming to be a relative of a Russian oligarch has brought down the Austrian government, says Jonathan Tirone for Bloomberg. Strache was forced to resign. Chancellor Sebastian Kurz also fired the interior minister, Herbert Kickl. That was a “bridge too far” for the rest of the Freedom Party (FPO), and its ministers resigned en masse. With the coalition between that party and Kurz’s Austrian People’s Party now over, Kurz has agreed to call fresh elections in September. Ditching the far right may be a blessing in disguise for Kurz, however, says Valerie Hopkins in the FT. Even before the coalition was formed, the FPO earned intense criticism for signing a…

“The China-America spat on trade is a great opportunity for India,” reckons Rakesh Jhunjhunwala, the billionaire investor often described as India’s answer to US tycoon Warren Buffett. With the Indian government taking steps to make it easier to do business in the infamously bureaucratic nation, “I don’t see any reason why growth in India will not come back with a bang”, Jhunjhunwala tells Tanvir Gill of CNBC. India’s economy has been struggling with upheaval in the banking sector and weak investment, but reforms to the tax system alongside efforts to tackle corruption under Prime Minister Narendra Modi (pictured above, and who at the time of going to press looks likely to win re-election for another term), mean that things are gradually improving, he says. “The journey to limit crony capitalism:…

Nigel Farage, who earns a salary of £92,000 as an MEP, received gifts worth up to £450,000 from insurance tycoon Arron Banks in the year after the EU referendum, says Channel 4. The amount included £13,000 monthly rent on a £4.4m house in Chelsea; £50,000 for a car and driver; and £1,500 a month for a private office. Banks also paid for visits to the US and more than £100,000 for a party in Farage’s honour in Washington DC. None of the gifts were declared in the European Parliament’s register of interest – though it’s not clear whether he would have had to. However, Farage, who described himself as “skint” in 2017, has declared income from broadcast contracts worth between €590,000 and €790,000 since July 2014, reported The Times last…

piketty.blog.lemonde.fr Three years after the referendum on Brexit and scepticism about Europe is still strong, particularly among the most disadvantaged sections of society, says Thomas Piketty. The problem is deep and longstanding. In all referendums for the last 25 years the working classes have expressed their disapproval of the Europe presented to them. The richest and most privileged classes have supported it. Why this class division? Because the working classes are nationalist, xenophobic and perhaps even backwards – at least, according to those who are better off. But such attitudes are not confined to the lower classes and there is a simpler explanation: the EU, as built in recent decades, is based on competition between countries, on fiscal and social dumping in favour of the most mobile economic actors, and…

■ Shares in listed infrastructure funds and utilities fell last week following Labour’s publication of its plans to nationalise energy providers and pay less than market value in the process, says Gavin Lumsden on Citywire’s Investment Trust Insider. Labour may reduce the level of compensation paid to shareholders to reflect what it calls the “asset stripping” and “profiteering” of the sector since privatisation in the 1980s. In response, shares in National Grid fell nearly 5%, while shares in energy supplier SSE fell just over 4%. Severn Trent’s stock declined by 1%. Shares in infrastructure funds also fell, with International Public Partnerships dropping 4%. ■ Foreign funds are shunning the Saudi stockmarket in the days leading up to its entry into the MSCI Emerging Markets (EM) index, says Steve Johnson in…

The charity, Age UK, does all sorts of good work. It provides a wealth of information and advice, and generally tries to make life better for the elderly. But apparently it also makes money by directing you to an equity-release advice service, Hub Financial, which is weighted towards products offered by Hub’s own parent company, Just, says The Daily Telegraph. “Reputable providers will provide a no-negative equity guarantee” Note that when people are sent to the advice service, they go through Age UK’s commercial arm, Age Co. This was formed in the wake of criticism from the Charity Commission in 2016, which pointed out that the charity was channelling people towards an energy tariff that wasn’t the cheapest option in the market; it emerged that it had formed a partnership…

A Grade II-listed former courthouse in Temple Cloud, Somerset, has been converted into an eight-bedroom family home, and is now on the market for £795,000. The property was built in the Victorian Gothic style in 1857 as a magistrates court and police station. Three of the original prison cells have been turned into bedrooms, complete with hatches that were used to pass food to prisoners. The property also retains a 40ft long Baronial courtroom with vaulted ceilings, which can be accessed via a glass bridge, as well as a stone staircase and trapdoor, through which prisoners were once led.…

The JPMorgan Emerging Markets Investment Trust seeks out high-quality businesses that can grow their earnings sustainably over the long term. We have 40 analysts around the world seeking companies that create value for shareholders and where corporate governance will not undermine that value creation. We take a medium- to long-term perspective of approximately five years, which we believe is far longer than the average investor’s; many of our picks have been part of the portfolio for over a decade. We have a bias towards companies with sustainable competitive advantages, consistent cash flow generation and strong management teams, and we want to buy them at sensible prices. “By 2022 there will be three billion internet users in emerging markets” The portfolio is positioned to benefit from the secular growth in emerging-market…

Almost 400 graduating students at Morehouse College in Atlanta in the US were pleasantly surprised this week when former student and billionaire tech investor Robert Smith (pictured) announced he would pay off the student debt of the entire class of 2019. Smith, who was receiving an honorary doctorate at the time, had already pledged £1.5m as a gift to the college. “This is my class, 2019,” he said. “And my family is making a grant to eliminate their student loans.” It is not yet known exactly how much his generosity could cost him, reports The Guardian, but it could be up to $40m. Student debt is becoming a political hot potato in the US, with the total outstanding estimated at around $1.5trn. Good week for: Jordan Adlard Rogers, a care…

Investors are gloomy about the prospect of a Brexit deal, but that means that the worst scenarios are already in the price, Jason Hollands of wealth manager Tilney tells The Times.UK investors have deserted their own stockmarket en masse since June 2016, with £11.47bn of net inflows into global equity funds, says Hugo Cox in the same paper. That has significantly increased their exposure to America and the dollar in particular. Meanwhile, it’s interesting to note that for all the Brexit fuss, the MSCI United Kingdom All Cap index has “been the least volatile of any stockmarket index in the world since 2016”, says Harry Brennan in The Daily Telegraph. The strong presence of multinationals such as Unilever on the London market has shielded investors. These firms make over 70%…

The Venezuelan government has stopped publishing official economic statistics, says Andreas Knobloch in Finanz und Wirtschaft. No wonder: the country is in a state of total collapse. According to the International Monetary Fund, the country’s hyperinflation is getting worse, with the annual pace of price rises expected to climb from 2018’s 1,000,000% to 10,000,000%. Falling oil prices have undermined export earnings. Shortages, sanctions, and pervasive corruption wiped 40% and 30% off national output in 2017 and 2018 respectively. Annual GDP has receded to levels last seen in the 2000s. The “downward spiral” is likely to endure until the political stalemate between the government and the opposition is resolved.…

Finablr has made a lacklustre debut on the London Stock Exchange. The Dubai-based payments and foreign-exchange platform, whose brands include Travelex Holdings, UAE Exchange and Xpress Money, was priced at 175p for its initial public offering (IPO), but promptly slipped below 160p. It had already had to trim its price from the 210p-260p range previously indicated. “Investors may have had their fill of fintech flotations in skittish global markets,” say Clara Denina and Abhinav Ramnarayan on Reuters. Finablr’s debut followed Nexi and Network International; the latter is another payments group based in the United Arab Emirates. It floated in London in April.…

Michael O’Leary is winding down his racing operations “in order to spend more time with his family”, says Alistair Osborne in The Times. But after Ryanair’s latest results, you have to wonder if he’d have done better to give up the airline and keep the horses. Ever since Ryanair’s dispute with the pilots’ union in September 2017, the airline has “been struggling to hit former heights”; the shares have halved from their peak. They slipped again early this week thanks to a 29% drop in full-year profits to €1.02bn after tax. Ryanair’s problem is that many of its costs, notably rising fuel prices, are “out of its hands”, while it is being forced to slash fares in order to maintain growth, says Ed Cropley for Breakingviews. Still, ancillary revenue was…

Saturday’s election in Australia (see right) proved embarrassing for bookmaker Sportsbet, which not only sustained huge losses on winning bets on the Liberal-National coalition, but also incorrectly paid out on a Labor victory two days early. Overall, it is reported to have lost a total of A$5.3m. By contrast, the two handicap bets I recommended, at 1.11 on Betfair and 4/6 on Bet365, both paid off, as did my recommended bets on the coalition candidates in Aston (Victoria) at 1/6, Kooyong (Victoria) at 1/5 and Casey (Victoria) at 2/5, as well as in Hughes (New South Wales) at 1/5. Indeed, not only did the coalition win in each of those constituencies, but the Liberal candidates managed to increase their share of the vote in Aston and Hughes. Even in Casey,…

In November last year, telecoms group Vodafone said that it would maintain its dividend for the financial year. Chief executive Nick Read faced down market scepticism, saying that he was cutting costs and looking at selling phone masts to raise funds. The market wasn’t convinced. Until last week, Vodafone was trading on a dividend yield (dividend per share as a percentage of the share price) of around 9%. That’s when it succumbed to the inevitable – it slashed (“rebased”, in corporate speak) its payout by 40%, as the cost of investing in next-generation technology (5G) continued to climb. “A very useful warning flag is the dividend yield itself” It’s not the only FTSE 100 stock whose dividend is at risk (see below). So is there any way to shield yourself…

Led by the US, Western governments have become increasingly worried about the rise of Huawei. The maker of everything from handsets to network infrastructure, the Chinese conglomerate has turned itself into one of the global giants of the industry. As control of information systems become a key battleground in geostrategic conflicts, Huawei is probably not to be trusted. It has already been blocked from building the next generation of mobile networks in the US, and in many other countries too. This week the conflict escalated with the decision by Google to restrict Huawei’s access to a range of its apps. Huawei will no longer have access to updates of the Android operating system and newer versions of its phones may not have apps such as Gmail, Google Maps, or YouTube.…

The start of a hot new cold war David Dodwell South China Morning Post Donald Trump may dismiss climate change, but a heated meeting of the eight-member Arctic Council makes it clear that the “transformation being wrought by global warming… has the makings of a very hot new cold war”, says David Dodwell. Since Peter the Great, the 20 million sq km of icy wastes have been the “lonely preserve” of Russia. Four other countries – Canada, the US, Norway and Denmark – lay claim to land in the Arctic, but “few paid it much attention”. Until now. In 2010 four ships plied the North Sea Route. In 2013, more than 71 used it, and numbers are rising fast. The route cuts the 48-day sea journey from Asia to Europe…

capx.co The “green belt” has become a sacred cow second only to the NHS in the British political imagination, says Eamonn Ives. It is synonymous with rolling hills, verdant forests and precious habitats. Parts of it conform to that image – several thousand hectares are designated Sites of Special Scientific Interest, for example. Yet much of it is devoted to agriculture, which decimates biodiversity and drenches the land in chemicals. Some of it is concrete wasteland. So a bold call by Liz Truss, chief secretary to the treasury, to build one million houses on the green belt is welcome. Counterintuitively, that might be good not just for the housing market, but for the environment too. Urbanisation can provide scope for more biodiversity than that of “unspoilt” land. Housebuilder Barratt, for…

The last few months have been a disappointment for the end-of-the-world crowd. Some Remainers will be dismayed by the stability of sterling and the acceleration of economic growth in the UK to 0.5% in the first quarter. Brexiters are disappointed by the pick-up in European growth to 0.4%, with unemployment at a ten-year low and even Italy out of recession. Meanwhile, the recovery in equity markets this year suggests that investors are losing interest in politics and focusing on corporate factors instead. “Don’t let politics get in the way of a good investment” However, there is a long way to go. Sam Morse, the manager of the £1bn Fidelity European Values (LSE: FEV) trust since 2010, points to strong residual negative sentiment towards Europe. Fund flows into EU equities are…

British banks have been in the news for all the wrong reasons. Last week we saw queues outside Metro Bank, while it recently emerged that the Bank of England tried to prevent the prosecution of executives at Barclays for not disclosing the funding the bank received from Qatar during the financial crisis. Stock returns have also been disappointing, with HSBC, Barclays, RBS, Lloyds and Standard Chartered all lagging the stockmarket over the last decade. However, look beyond the headlines and you will see that the major listed British banks have been grappling successfully with the legacy of the financial crisis, putting their houses in order in advance of any economic downturn, fending off competition from challenger banks, and getting down to the important task of growing revenues and profits. Recovering…

This landmark 1920s property on the Monterey coast was designed by the architect George Washington Smith in the style of a Spanish palace. It has a grand reception room with 180-degree views of Pebble Beach and the Pacific Ocean, and the luxurious interiors include carved wooden ceilings and marble tiled floors. The house has six bedrooms and is set in 2.8 acres of gardens that include a large courtyard with a fountain, an ocean-front lyceum, a penthouse apartment and a caretaker’s cottage. But can you guess the asking price? Answer on the side of this box.…

The first half of Avon Rubber’s financial year, which ended in March, saw a decline in revenue and a sharper decline in profit compared to the same period a year before. The company described the six-month period as “transformational”. This term is often used as a euphemism for drastic change forced on companies by events they did not foresee. Avon’s transformation is less hurried and more certain, despite the end of a massive contract last year. That contract had made Avon Rubber the sole supplier to the US Department of Defence (DoD) of the M50 general protection mask for ten years. The M50 is a gas mask that protects military personnel from chemical and biological hazards. “The firm boasts unrivalled expertise in two markets” The agreement of the M50 contract…

Spirax-Sarco Engineering (LSE: SPX) makes commercial and industrial steam and fluid systems including pumps, valves and piping. Based in Cheltenham, it operates in over 40 countries, with most of its revenue coming from overseas. It is steadily expanding, both organically and through takeovers, the latest of which was of France’s Thermocoax for £139m. Despite slowing growth in key markets and currency fluctuations, sales rose to over £1bn for the first time in 2018. The share price has been rising for almost 20 years, and has gained 50% in the last 12 months.…

American insurance salesman Gordon McCormick set up Equity Funding Corporation of America (EFCA) in 1960. The idea was that people would buy a mutual fund and then borrow against the fund to pay the premiums of the life-insurance policy. Provided the mutual fund’s returns outperformed the interest payments on the loan, people would be protected in the event of death and have money left over. Six months after EFCA was set up McCormick was removed in a boardroom coup, leaving Stanley Goldblum (pictured) in charge. In 1964 EFCA was floated on the stock exchange. What was the scam? Initially, EFCA started exaggerating revenues to attract new investors. When it began acquiring insurance companies of its own, it also started to sell fictitious policies to reinsurers (companies that buy insurance policies…

Luuk Van Middelaar, translated by Liz Waters Agenda Publishing (£25) British politicians may feel they’ve spent the last few years in perpetual crisis mode, but those in Brussels have had bigger troubles, including the fallout from Brexit, the euro crisis, the situation in Ukraine, and the refugee crisis. This book, from a former speechwriter for the European Council president, looks at some of the key challenges that the EU has faced over the past decade. The author attempts to be as objective as possible, but he clearly has little time for what he sees as selfish objections to granting greater powers to European institutions in areas such as fiscal policy and asylum and immigration. And when he looks at the fight between the functionalist (technocrats), federalist (integrationists) and confederationist (nationalists)…

• From her £8,000-a-week German spa, the Lanserhof Tegernsee health retreat in Bavaria, Victoria Beckham posted a picture on social media of her latest beauty miracle – a £4 bottle of “moon water”, which works wonders on your skin, says Amanda Platell in the Daily Mail. “So I am here at Lanserhof in Germany, and they’ve just given me this water, which is a special water,” the former Spice Girl (pictured) gushed on Instagram. “It is collected locally, here in Munich, but only on a full moon,” supposedly giving it magic powers. “Now I know why my mum had such lovely skin – our uncovered, corrugated-iron outside water tank was exposed to the moon all year round,” says Platell. • If Jeremy Corbyn wins the next general election, it won’t…

$80 The proposed fare for flying from New York’s JFK Airport to Manhattan in an air taxi unveiled last week by German start-up Lilium. The journey will take six minutes instead of an hour at present. Morgan Stanley estimates the air taxi market will be worth $1.5trn by 2040. £2.75m The price of a limited-edition Aston Martin DB5 modelled after the gadget-laden one driven by James Bond in Goldfinger. The car will feature a revolving number plate, rear smoke screens, retractable bullet-proof shield, and “simulated” machine guns that pop out of the indicator lights. £476 The price of some tickets on the black market to this week’s Chelsea Flower Show. A woodland garden co-designed by the Duchess of Cambridge is thought to be behind the popularity of this year’s sell-out…

“Here be dragons,” says Christopher Beddor on Breakingviews. The White House’s move against Huawei, the world’s second-biggest smartphone maker, “takes the trade war into uncharted territory”. The US president has added Huawei to an export blacklist on national security grounds. The order prompted Google to ban the firm from accessing some features on its Android operating system. The move follows prolonged attempts by American officials to persuade allies, including Britain, to bar Huawei from involvement in their 5G networks and potentially stokes “a new tech cold war”. Stocks were unnerved at the thought. Domestic Chinese equities slipped by 4% in three days; America’s S&P 500 has lost 3% from its record high. Huawei has doubled its global share of the smartphone market in the last two years, says Jim Armitage…

“US political gridlock [is good news]. Stocks dislike active government because legislation shifts the rules, creating winners, losers and unintended consequences — and discourages risk-taking. Gridlock renders a do-little government. Inactivity gives executives more clarity to manoeuvre — like an obstacle course with stationary obstacles versus one comprised of big, sharp, painful, fast-moving ones. Which would you prefer? Central to this gridlock is last November’s US midterm elections. Every four-year cycle the midterms create gridlock, a little or a lot... Hence, US presidents jam all big legislation into their first two years. That legislative flurry stokes uncertainty — hurting stocks [in] presidential years one and two. Then, midterms bring gridlock for years three and four. US stocks have traditionally celebrated gridlock by rising in 91% of all third years since…

Three to buy Avast Shares This Czech Republic-based technology security provider already protects 435 million people worldwide, with a focus on desktop users. Messaging app WhatsApp recently became the latest “big-name brand” to fall victim to hackers, so there is growing opportunity in the smartphone sector as well as scope to “upsell” premium services to existing users. On 13 times 2019 earnings, the stock is on a 40% discount to FTSE 250 peer Sophos. 298.75p Paragon Banking Group The Sunday Times “What a time to be a banker.” Low interest rates, tougher regulation and rising competition are “squeezing profit margins on all sides”. Yet Paragon, a “challenger” bank, is managing to grow its lending book and net interest margin nonetheless. Almost 90% of new mortgages go to professional buy-to-let investors,…

• T-Mobile shares gyrated wildly this week after the head of the US telecoms watchdog said he would support the $26bn merger with Sprint, only for reports to suggest that the Department of Justice would block it. But there is “little reason” to stop the deal since “the competition concerns that effectively killed off a planned merger of the two in 2014 don’t look so relevant now”, say Jennifer Saba and Gina Chon for Breakingviews. The tie-up would also promote“super-fast internet that can act as a backbone for internet-controlled objects such as driverless cars”, an important US strategic goal. • Holidays in the Thomas Cook boardroom “should have long ago been cancelled”, says James Moore in The Independent. The tour operator has announced a “thumping” pre-tax loss of £1.46bn for…

Vodafone may have cut its dividend, but several other big FTSE payers have a question mark hanging over their dividends, notes The Daily Telegraph. Utility groups Centrica and SSE are both under pressure (without even considering the threat of potential nationalisation). Meanwhile, Vodafone’s fellow telecoms group BT is also under scrutiny – its dividend has been maintained for now, and as a result it yields more than 7%. But its plans to build its 5G network will be expensive, and as Phil Oakley notes in Investors Chronicle, its dividend payout is almost entirely uncovered by free cash flow, meaning that it “had to borrow $1.4bn to pay its dividend”, which cannot be sustained in the long run. So what are the best options for diversifying your dividends? You could build…

• Actors in Game of Thrones, the fantasy TV series that came to an end last week, won’t have to rush straight into the next project to keep the wolf from the door. By the time the eighth and final series had wrapped up, those playing the main characters – including Emilia Clarke as Daenerys Targaryen, Kit Harington as Jon Snow, and Lena Headey (pictured) as Cersei Lannister – were on a reported £1.2m an episode. Headey was on screen for a total of 25 minutes in the final series, meaning her performance cost $144,000 a minute, says the Evening Standard. • The director general of the BBC is paid “considerably less” than the heads of other media firms, says the National Audit Office, despite overseeing more staff. The director…

“She’s way better than me in the talent department. But she doesn’t have the same drive, and… I feel social media plagues her and makes her feel like: ‘People are going to give me things because I’m her daughter.’… She grew up with money, and I didn’t. So everything is going to be different. But what can I do?” Pop star Madonna (pictured) on her daughter Lourdes’s poor work ethic, quoted in Vogue “It’s like Louis XIV smoked crystal meth and decorated the apartment.” Former White House spin doctor Anthony Scaramucci on Donald Trump’s taste in interior design, quoted in The Mail on Sunday “I went in there like un sauvage. I still say you don’t need to know mathematics to be the finance minister. You just need to be…

conversableeconomist. blogspot.com Economists tend to assume firms will figure out how to get the right workers they need for the job. What if that is wrong? wonders Timothy Taylor. Only about a third of firms monitor whether their hiring practices lead to good employees, according to the Harvard Business Review, and they spend a huge amount on the process – an average of $4,129 per job in the US, and many times that amount for managerial roles. So it would make sense to get it right. What works? First, think about promoting and filling positions from within. If you persuade someone to leave their current employer by offering them more money, what you get is a worker more interested in the money than in work challenges and career opportunities. Second,…

Shares in tech incubator Allied Minds rose 15% with the news that activist investor Crystal Amber had built up a 4.2% stake, says Lucy White in the Daily Mail. The company, which invests in early stage businesses, has been struggling in recent months. In April it told shareholders that its cash levels had shrunk, prompting it to put investing in new firms on hold for now. Crystal Amber will “put a cat among the pigeons” though, as it intends to call a shareholder vote to oust all the members of Allied Minds’ board. It also wants to wind up the company and sell its remaining assets in order to return cash to shareholders. Despite the company’s recent share-price bounce, the price is still down 90% from its August 2015 high…

HSBC (LSE: HSBA) is the largest UK bank by market capitalisation, and one of the largest banks in the world. The fact that it derives 85% of its revenues from outside Britain means that it should be insulated from any downturn in the UK economy and should also benefit from growth in emerging markets, especially in Asia. Despite this, it still trades at only 11.2 times 2020 earnings and yields an attractive 6%. One British bank that should also benefit from growth in emerging markets, but is trading at a much bigger discount than HSBC, is Standard Chartered (LSE: STAN). Around 90% of Standard Chartered’s revenues come from the Middle East, Africa and Asia, giving it exposure to some of the fastest-growing parts of the global economy. Its increasing profitability…

Almost a million savers could face punitive tax charges on their pension contributions because they have unwittingly triggered a substantial reduction in their annual contributions allowance. Between April 2015 and September 2018, 980,000 people made flexible withdrawals from their pension fund, according to pension provider Just Group. They may now fall foul of the money purchase annual allowance (MPAA). This rule reduces the normal £40,000 annual allowance on pension contributions by a factor of ten. If you go over £4,000, you are taxed at your highest rate of income tax on the excess. The MPAA was introduced alongside the pension freedom reforms of April 2015 to prevent people making withdrawals from their savings only to immediately reinvest this money to claim extra tax relief. However, it is now catching people…

Buy-to-let investors in the UK have suffered a dismal few years. The government’s determination to make the sector less appealing to investors has seemingly worked. As we pointed out in last week’s issue, the number of landlords in the UK has fallen by 120,000 in the past three years, according to figures from estate agent Hamptons International. Nevertheless, these landlords are leaving the sector with fairly significant profits. The average landlord in England and Wales sold their buy-to-let property in 2018 for £79,770 more than they paid for it (before tax), having owned it for nearly ten years on average. Last year, 85% of landlords sold their property for more than they paid for it, with 15% making a loss. As you might expect, those selling property in London made…

Most companies brief analysts from brokers and investment banks on the day they publish results. They are not allowed to say anything significant that has not previously been published, but inevitably in the course of these briefings the executives pass on information that adds colour to the story. Some companies are enlightened enough to invite private investors or allow them to participate remotely. Avon publishes a webcast comprising the audio of the meeting along with the slides presented by the directors. Towards the end of the webcast following the results in May, chief executive Paul McDonald responded to a question about the products Avon is developing. He said the products it is bringing to market under new contracts in 2019 – principally the M53A1 mask system (a derivation of the…

William Hill (LSE: WMH) is a UK bookmaker that operates online and on the high street with 2,400 shops. The government crackdown on fixed-odds betting terminals (FOBT) and the introduction of a £2 maximum FOBT stake caused a £722m loss in 2018 as William Hill took an exceptional charge of £883m. FOBT restrictions are set to dent profits by £70m-£100m a year. Revenue rose by 2% in the 17 weeks to 30 April, though that included sales from recent acquisition Mr Green, a Swedish bookmaker. The share price has halved in a year.…

I am rather ashamed that I haven’t written up this wine before in MoneyWeek because it has been a masterful creation for many years. In 2015 it eclipsed the amazing 2014 which I, personally, didn’t think possible. While the ’14 was controlled, calm, classy and complex, the 2015 vintage, which includes 5% mourvèdre and 1% viognier in its makeup, is more densely packed and profound. Only two-thirds of the normal crop was harvested in this vintage and, while the cellar might not be as full as usual, the bottles are certainly stuffed with even more flavour than ever. Fifteen per cent new oak is used here and so the dramatic, mountainside fruit is allowed to express itself fully in this commanding, spicy, aromatically enchanting wine. Talking of viognier, 2018 Tamboerskloof…

The Victorians Twelve Titans Who Forged Britain Jacob Rees-Mogg WH Allen (£20) Conservative MP Jacob Rees-Mogg, well known for his traditional views on contemporary issues, here attempts to provide “a reassuring narrative of past British greatness through the lives of 11 men and one woman”, says Kim Wagner in The Observer. These “titans” include the “usual suspects” – Palmerston, Pugin, Gladstone and Disraeli – who are “entirely defined by the fact that they were first and foremost Victorians whose every thought and action was representative of what the author takes to be particular ‘Victorian’ virtues”. This claims to be a work of history, but it is more self-promotion, says AN Wilson in The Times. Rees-Mogg’s determination to draw parallels with the present means that “Peel’s decision to abolish the corn…

The nice thing about Donald Trump is that he is “honest”. Even when he is lying. He’s a performance artist for whom truth and lies are more or less the same thing. It’s the show that is true – the ratings, the base, the gross revenues. In order for a show to have wide appeal, in politics as in professional wrestling, the theme has to be simple: good versus evil, black versus white, us versus them. Truth, nuance and ambiguity have no place in it. Dig down into the details, and the story gets messed up. But why bother? “We know of no instance when people have been made better off by decree” Even people who call themselves conservatives have stopped digging. They are now willing to let the feds…