Indholdsfortegnelse for Issue 981 i MoneyWeek

“It’s quite possible that by the end of 2020 we’ll have forgotten Iran. Remember North Korea?” It’s the start of another year and once again politics looms large in the minds of investors. At this point in 2019, it was “hard Brexit” (not to mention the spectre of a Jeremy Corbyn-led Labour government). This year, it’s an escalation in the temperature of the conflict between Iran and the US. We look at what the latter could mean for markets and investors on page 4 (we also look at the political fallout on page 13 and delve into the workings of Iran’s economy on page 16). It’s worth remembering that geopolitics often doesn’t have the market impact that people fear. It’s easy to overreact, particularly when headline-writers have an incentive to…

A superstitious Chinese man who was taking his first trip by air has been ordered to pay £13,000 to budget airline Lucky Air after his pre-flight ritual damaged the plane, reports the BBC. While boarding, the 28-year-old threw a few one-yuan coins as good-luck offerings into the plane’s engine. The airline had to offload all passengers and ground the plane for safety checks. Audit firm RSM, whose clients include Sports Direct, announced that it had mis-stated its own figures by almost £10m over 2017 and 2018, reports the Daily Telegraph. CEO David Gwilliam, Chief Finance Officer Nigel Tristem and Chief Operating Officer Robert Ros have all stepped down.…

Michael Hasenstab made his name as one of “Wall Street’s most intrepid bond investors” with “large profitable bets in risky countries”, says Matt Wirz in The Wall Street Journal. The government-bond funds he runs at Franklin Templeton grew to almost $200bn in assets under management, following a strategy of “concentrating investments in a handful of countries that he surmised would offer the highest returns without defaulting”. But his approach “backfired badly” last year; in August, his funds lost $1.8bn in a single day on an investment in Argentine peso-denominated bonds after the embattled then-president Mauricio Macri announced that the country would default and the currency collapsed by 30% against the dollar. Since then, a chastened Hasenstab has become more defensive. He increased investments in safe-haven assets, says Sam Benstead on…

Shares Begbies Traynor, the UK’s largest insolvency practitioner by volume, derives two-thirds of its revenue from countercyclical activities. That makes it a valuable hedge against a weak economy, but a 29% jump in profits in the six months to the end of October shows that it doesn’t need a recession to perform well (88p). Anet 20% of households switched to British Gas in November thanks to a focus on cheaper tariffs, which may herald the start of a turnaround for owner Centrica. In any case, on a2020 price/earnings ratio of 9.5 the shares look so “beaten up” that the risk-reward ratio is favourable (90.5p). Premium chocolatier Hotel Chocolat is delivering “tasty growth” in its digital operations and is preparing to take a bite out of the huge US and Japanese…

• Sir Charles Dunstone, founder of Carphone Warehouse and executive chairman of TalkTalk, has shared in profits of £14.8m from start-up fund Freston Ventures, reports The Sunday Times. Dunstone started the fund with eight other partners, including his wife Celia. The “angel investment” fund has put money into startups such as Mod Pizza, pop-up mall operator Boxpark and burger chain Five Guys. Not all its punts have been successful, however –online estate agent Housesimple lost more than £22m in the two years to 2018. • Ex-Boeing CEO Dennis Muilenburg (pictured) may have been fired in December in the wake of the 737-MAX scandal, which saw 346 people killed by faulty planes, but he could end up with more than $60m to smooth his passage to his next job, reports CNN…

“I’ve never been any good with money. If it were left to me, I’d have none because I’ve spent it all on stuff, whether it’s vacations or toys. I have nothing to do with it. Idon’t handle it.” Musician and actor Harry Connick Jr. (pictured), quoted in The Times “I’m well known in certain circles, but I don’t think I’m famous. I’m not impressed by fame or money. To put it another way: what’s the thing I’m most pleased with about the business? Continuity – always being relevant.” Fashion designer Paul Smith, quoted in The Observer “The only function of economic forecasting is to make astrology look respectable.” J.K. Galbraith, quoted in The Economist “It is well enough that people of the nation do not understand our banking and monetary…

economist.com 1. Give out some praise. People don’t just come to work for the money. They like to feel they are making a valuable contribution. So give out praise every now and then. Be specific. This is particularly important for junior employees, who will feel anxious about their status. 2. Remember that you set the tone. A relaxed, open boss is likely to lead to a relaxed, open workplace. An angry boss who swears a lot sets a bad example. 3. The buck stops with you. If something has gone wrong, it may be that what is wanted has not been communicated well or that the task has been given to the wrong person. If things need fixing, you’re responsible for making it happen. 4. Listen to your staff. You…

The world of wellbeing contains several companies overpromoting themselves as wholesome, flying too close to the sun, then crashing. Beyond Meat (meat-free burgers) has collapsed from $240 to $74 in six months; WeWork nearly pulled off a$60bn listing before investors woke up to its fantastical claims. There are many firms doing pioneering and fascinating work into mental health and genome therapies, but most are either private, small parts of large corporations, or likely to become strapped for cash because such research and development eats money. One closed-ended investment trust stands out, however: Syncona Limited (LSE: SYNC), with a £1.3bn market cap. It concentrates on investing in and building up life-science companies. It is 28% owned by the respected Wellcome Trust. Performance last year was disappointing, but five-year numbers are good.…

■ Gold funds gave a dazzling performance in 2019, says Emma Agyemang in the Financial Times. Charteris Gold & Precious Metals, which oversees £16.3m in assets, returned 52%, the highest total return of more than 2,500 UK-based funds. Gold’s rise last year also propelled Ruffer Gold to number three in the table with a 44% overall return. UK mid-cap and smaller companies funds also performed well. Aberdeen Standard UK Smaller Companies came in second with a 46% return. Franklin UK Mid Cap was fourth, with 42%. Absolute return funds, which aim not to lose investors’ money, were, as so often, absolutely useless. The three worst-performing funds of 2019 were Garraway Absolute Equity, BMO Equity Market Neutral, and Oxeye Hedged Income reporting negative returns of 57%, 30%, and 22.5% respectively. The…

This has been a mixed month. Five of the seven longs, including all the UK companies, appreciated, with homebuilder Bellway now at 3,894p (from 3,439p). Storage space company Safestore rose from 777p to 785p; International Consolidated Airlines Group from 553p to 615p; builder Taylor Wimpey from 177p to 194p; and packaging and recycling firm DS Smith from 370p to 380p. However, the two foreign tips didn’t do so well, with carmaker Volkswagen treading water at €176 while drug firm Bausch Health Companies fell from $29.21 to $28.86. Overall, my long positions are making profits of £5,060. The bad news is that all my five short tips lost some ground thanks to the relentless rise in the US stockmarket over the past month. Streaming giant Netflix rose from $308 to $336,…

If you are self-employed, rent out a property or earn income from savings, investments and dividends, you need to fill out a tax return. The deadline for the 2018/2019 return is 31 January 2020. But with less than a month to go, over five million of us have yet to complete our forms, according to HMRC, even though a record 3,003 of us spent Christmas Day doing so. You’ll need to file your return online by the end of the month to avoid a penalty. If it is your first time filing online, you’ll need to register at gov.uk. It takes up to ten working days for HMRC to send you the reference and activation code you’ll need to log in, so register soon. Gather all your receipts before you…

While Boris Johnson (pictured) promised to hold a full budget within 100 days of his election victory, many of the details of next year’s state pension increases were unveiled last month. The budget will confirm the final figures, but the changes, which come into effect in April, are based on the “triple-lock” formula. This guarantees that state pensions will rise in line with the highest of inflation, average earnings, or 2.5%. Back in October, the date at which this assessment is made, earnings growth was running at around 4%. As a result, the full new state pension will be £175.20 a week, up from the current £168.60. Alternatively, for those who reached the state pension age before April 2016, and receive the basic state pension, the weekly payment is rising…

Reach (LSE: RCH) is a British print and digital publisher. Formerly called Trinity Mirror, it publishes national newspapers including the Daily Mirror and Daily Express and more than 200 regional papers, along with local news websites. It appears to be countering the decline in print media by growing its digital offerings, though print still contributes the majority of revenues. Profits are on the rise and debt has fallen sharply in the past year. A positive trading update in November prompted investors to pile in, driving the share price up by more than 100% in 12 months.…

Born in Detroit in 1941, Reed Slatkin was converted to Scientology by his uncle asa teenager, studying with the religion’s founder L. Ron Hubbard and eventually becoming an ordained minister in 1975. He would later use his position within the Church to set up an unlicensed investment club, which ran from 1986 to 2001, with around 800 investors, including the actor Giovanni Ribisi (who ironically starred in the 2000 film Boiler Room about penny-stock fraud), contributing a total of $593m. Slatkin would also play an important role in co-founding the internet service provider Earthlink in 1994 with Sky Dayton. What was the scam? The Reed Slatkin Investment Club claimed that it was producing annual returns of around 24% a year (minus fees amounting to 10% of profits) through a combination…

The average person with an iPhone checks it 1,585 times per day. We just made that up, but did you doubt it? We check our smartphone to see what the weather will be, what the stockmarket is doing, what the latest headlines are. We check it in the lift or on the street to avoid eye contact with strangers. We check it to see who’s trying to contact us and what they’re saying. “Our number-one recommendation: unplug. Turn off and tune out” Can’t it wait? Unless you’re an emergency heart surgeon or you have the White House’s nuclear codes in your briefcase, messages are rarely that urgent. We can’t remember ever getting a message that couldn’t have waited at least 24 hours. The exceptions are messages from people cancelling meetings…

Wealthy Norwegians are being lured to Norway’s frozen north with the promise of tax cuts, reports The Sunday Times. Norwegians normally pay a 0.85% wealth tax on their assets around the world, but those who move to Bo – which is far above the Arctic Circle – will pay 0.35% from next year. Sture Pedersen, head of Bo’s local council, said: “We have the northern lights and... beautiful nature, but it’s not enough. We’re losing people every year. So… we’re lowering the wealth tax so that we can become a business-friendly region”. Tax lawyer Martin Wikborg is unconvinced: “Bo is a northern and remote municipality with long, cold and dark winters, and you must actually live there to obtain the favourable tax treatment… it does not compete with London”.…

It took just three days of 2020 for optimistic financial markets to run into “harsh reality”, says The Financial Times. Equities had made impressive gains in 2019, with the US S&P 500 index rising by more than a quarter and Britain’s FTSE 100 climbing by 12%. Investors were looking forward to more. But America’s assassination of Qasem Soleimani, a key Iranian general, prompted “a reassessment of risk” and sent investors scurrying into safe-haven assets. After Iran’s retaliatory strike on USairbases in Iraq on Wednesday there were growing fears that a series of tit-for-tat strikes could spin out of control, ultimately causing a war between Washington and Tehran. Markets reassess the outlook Oil prices rose 4% following the US attack, eclipsing $70 per barrel on Monday before falling back; a 1.5%…

Last year brought solid capital gains for stocks, but no relief for anybody who’d prefer to earn a decent, steady income. Interest rates on savings continue to dwindle. Yields on the safest government bonds around the world vanished: by August, all German government bonds traded on negative yields. And high-yield bonds continued to make a mockery of their name; in one – admittedly exceptional – example in May, the Japanese consumer lender Aiful sold a bond that pays just 0.99%. After a decade of low rates, there is no asset class that pays a fixed income and looks attractive – but perhaps emerging-market (EM) bonds look the least overpriced. The currency choice “Hard-currency EM bonds averaged around 9% per year” EM bonds come in two types. Hard-currency bonds are those…

Japanese prosecutors are outwardly furious that former Nissan boss Carlos Ghosn (pictured), who was awaiting trial on charges of financial misconduct, “skipped a $9m bail bond and popped up in Lebanon”, says Pete Sweeney for Breakingviews. But privately they are likely to celebrate that Ghosn’s escape brings to an end “a mutually embarrassing diplomatic affair”. The case has “stung” diplomatic relations between Japan and France, which see both Nissan and Renault “as important components of industrial strategy”. With Ghosn out of reach of Japan’s authorities the controversy can now be put to rest, and everyone “can get back to work”. Before his arrest Ghosn “was chairman of the world’s second-biggest carmaker – the Renault-Nissan-Mitsubishi alliance – and had helped rescue Nissan from failure in 1999”, says Jasper Jolly in The…

Investors should “indulge” in luxury-goods stocks, says James K. Glassman in Kiplinger’s Personal Finance. The sector’s sales hit $300bn in 2019, driven by strong growth in China. With increasingly wealthy emerging-market consumers coveting the cachet of luxury brands, there is plenty of growth ahead. One to consider is LVMH, which owns a portfolio of 75 labels ranging from jeweller Bulgari to champagne producer Moët & Chandon. Bulgari’s sales have doubled since LVMH acquired it in 2011, atestament to the group’s efficient management. LVMH has just bought Tiffany, one of the few luxury brands not based in Europe. The valuation is not too “high-end” at 25 times 2020 earnings.…

Keir Starmer has leapt into an early lead in the Labour leadership contest with the backing of 23 MPs, one more than the threshold required by next Monday, says Rob Merrick in The Independent. Rebecca Long-Bailey, the leading left-wing candidate, trails Starmer with the backing of seven MPs. Jess Phillips, Lisa Nandy and Emily Thornberry have the support of six, two and one MPs respectively. However, the level of support at Westminster may not be “the best guide” to who emerges as leader on 4 April, as Jeremy Corbyn’s “astonishing grassroots triumph in 2015 proved”. If these candidates are to help Labour gain back the support of its working-class voters, they need to find a way to appeal to the working classes in the north as well as the party’s…

The tense situation in the Middle East (see above) presents Boris Johnson with “his first major foreign-policy crisis” as prime minister, says the FT. He has a tricky balancing act to pull off: he is anxious to maintain relations with Trump so as to strike a post-Brexit trade deal, but he must also work closely with France and Germany to try to keep alive the nuclear deal that Tehran signed with world powers in 2015. Dominic Raab, the foreign secretary, went to the US this week to try to persuade Trump to “de-escalate” the situation. Johnson should be under no illusions about his influence, says The Observer. Trump did not even inform Britain of his intentions, despite the presence in Iraq of hundreds of British troops and thousands of UK…

Mark Carney, the outgoing governor of the Bank of England, blew almost £100,000 on his final “Governor’s Day” party for 2,500 bank staff and their families this year at the bank’s exclusive 32-acre sports ground in Roehampton, near Richmond Park in southwest London. The bank spent £96,188 on the bash, says the Daily Mail, with £45,852 going on food, £6,441 on drink and £29,916 on “family entertainment”. A further £1,969 went on equipment and £12,009 on “other” expenses. The bank said that “Governor’s Day is a long-held tradition that is open to all employees, including their families, with the aim of recognising their hard work and dedication”. The sports ground, which the bank has owned since 1907, is to be closed and leased out to commercial operators. Just 13% of…

aier.org Donald Trump seems to have developed a weird fixation on dishwashers, says America’s liberal commentariat. It’s all part of his nostalgia for a fictitious era in the past when everything was better, simpler and worked better. Yet on this issue, Trump is “absolutely right”, says Jeffrey Tucker. Dishwashers used to work. They cut the time spent on one chore that is still mostly done by women and the dishes would come out gleaming. No longer. Customers have started noticing. Sales have held up, perhaps because consumers assume they just need a new one. Yet surveys show that buyers hate their new machines. One in five homes have stopped using them. The reason? State interference. Regulations mean that new models scrimp on water and take longer to run and greener…

There is a common view that environmental improvement requires sacrifice of living standards, of pleasures we take for granted and of profits for businesses; that the path to salvation lies in discomfort, deprivation and denial. But entrepreneurs have set out to prove the puritans wrong by showing that profits can be made for investors, money saved for customers and the environment improved all at the same time. Taking on the puritans With this in mind, Jonathan Maxwell set up Sustainable Development Capital Limited (SDCL) in 2007, offering financial advice and energy-efficient investment. In late 2018, the SDCL Energy Efficiency Income Trust (LSE: SEIT) was launched, raising £100m to invest in a seed portfolio of assets and new projects. Maxwell was shrewd enough to recruit Tony Roper as chairman. Roper had…

Tobacco is bad for your health, but it has been good for investors’ portfolios. For decades, companies have been able to offset the gradual decline of smoking in Europe and North America with rising sales in emerging markets and price hikes in developed markets. The advent of e-cigarettes, meanwhile, has provided a new revenue stream and fuelled optimism over the future for cigarette companies after tobacco use dies out. The final straw? However, it now looks as though the cumulative impact of increased regulation such as indoor smoking bans and plain packaging has caused the decline in smoking in established markets to accelerate. There are also plenty more such changes set to buffet the industry, notably the recent increase in the minimum smoking age to 21 in the United States…

For most of us the New Year heralds plans to get fit, eat better and generally be a better human. But have you thought about what you could do to improve your finances in 2020? There are a several simple steps that could make you significantly better off next New Year’s Eve. Firstly, this is agood time to reassess your investment portfolio. Gauge whether the spread between different asset classes still suits your appetite for risk and the time you intend to be invested. “The asset classes you choose to invest in will ultimately determine how your portfolio performs, usually more so than the specific investments you choose,” as Andy Bell, chief executive of AJ Bell, told the Daily Mail. While you are at it check what fees you are…

Families thinking about how to save and invest most efficiently during 2020 shouldn’t overlook pensions for children. Many people don’t realise that in addition to their own pension contribution allowances they can put money into someone else’s savings. And even if the recipient is a non-taxpayer, as most children are, they’re still entitled to tax relief on the contribution. Investing £3,600 ayear, the maximum allowed, on behalf of a child will cost you only £2,880. The provider you choose then claims an additional £720 from the taxman to top up your contribution. Setting up a pension for your children might seem odd, not least because there’s agood chance you won’t be around to see them cash it in. But HM Revenue & Customs said last year that 60,000 families have…

■ Good news for pension savers worried about charges – as all pension savers should be. Vanguard, the giant US asset management company, is set to launch the UK’s cheapest-ever pension fund. Vanguard has been promising a new pension product for more than two years. But the long wait appears to have been worth it. The group’s self-invested personal pension (Sipp) will carry an annual fee of just 0.15%, with charges capped at £375. That’s less than half the cost of similar Sipps elsewhere. Savers opening a Vanguard pension will have to pay additional charges on the underlying funds in which they invest, as well as transaction costs when buying and selling investments. But that’s true of other Sipps too and independent analysis suggests that for the typical saver, Vanguard’s…

Georgia Healthcare Group (LSE: GHG) is the biggest healthcare provider in the former Soviet republic of Georgia. It runs 50 hospitals and clinics along with 270 pharmacies, while 230,000 people are covered by its medical insurance arm. Revenues and profits are rising: they gained a respective 13% and 21% year-on-year in the nine months to the end of September. Georgia announced its first dividend in 2018. Investors seem to have taken fright recently, however, perhaps because higher interest rates in the country will increase the cost of debt. The stock is down by 40% in ayear.…

2019 Greywacke, Sauvignon Blanc, Marlborough, New Zealand £22.99, or £19.99 on a mix six deal, majestic.co.uk; £17.99, laithwaites.co.uk; £18.99, or £14.99 each for six or more bottles, nzhouseofwine.co.uk; £19.99, reduced to £14.99, northandsouthwines. co.uk; £17.99, reduced to £15.75, nywines.co.uk I remember, to this day, the perfume and vivacity of 1987 Cloudy Bay Sauvignon Blanc like it was yesterday. Iwas working in my very first job in the wine trade and this was the most sought-after bottle in the world, at the time. Founding winemaker Kevin Judd made 25 vintages of this pioneering wine, from its inaugural vintage in 1985. Today, he makes wine under his own brand, Greywacke, and it isinteresting that, three decades on, this newly released vintage is about a pound cheaper, and an awful lot classier, than…

Italian artist Maurizio Cattelan made headlines (most with puns) last month when he duct-taped a banana to a wall and then sold that “art installation” for $120,000. People queued up at the Perrotin gallery at Art Basel Miami Beach to take their picture with Comedian (as the banana was called). When it came to the turn of New York-based artist David Datuna, he peeled it off the wall and ate it. “Art performance by me. I love Maurizio Cattelan artwork and I really love this installation. It’s very delicious,” Datuna declared on Instagram. Luckily, Datuna “did not  destroy the art work”, Lucien Terras, a director at the gallery, told the Miami Herald. “The banana is the idea.” That’s right, says Jonathan Jones in The Guardian. In the tradition of Marcel…

£2.5bn The cost to the taxpayer since 2015 of detaining up to 8,000 people a year on cannabis offences, The Times revealed, using data provided by pressure group the TaxPayers’ Alliance. The figure includes policing, legal and probation costs. £1,813 The average annual cost of household energy bills, representing a 41% increase in the cost of gas and electricity compared with five years ago, a study by price comparison website Compare The Market has found. £405m The value of sales of meat-free alternatives in 2019, representing a rise of 18% on the year before – the highest rise of any supermarket category, according to market data company Nielsen. Sales of red meat, by comparison, fell the hardest – down £185m – largely driven by environmental and health concerns. 47 The…

Fortnite was the highest-earning video game of 2019, despite a 25% fall in revenue from 2018. The first-person-shooter brought in $1.8bn. The total revenue of “free to play” games – which make money by selling in-game items to players – rose by 6% to $87.1bn, says Digital Trends. Scottish singer Lewis Capaldi (pictured) was the UK’s biggest-selling musician of 2019, reports the BBC. His single Someone You Love was streamed (played online) 228 million times and his album sold 640,000 copies across all formats, with 250,000 physical copies – either CD or vinyl –sold. The UK charts are now calculated as a combination of streaming, downloading and physical sales, with 600 streams being equivalent to one download.…

Russia decried the killing of Soleimani, but Moscow could prove a key winner from the fallout, says Robyn Dixon in The Washington Post. Higher oil prices would be a boon for the country’s energy sector. Russia is the world’s second-biggest oil exporter and the top exporter of natural gas. “Bad news for oil consumers is good news for emerging market producers such as Russia,” says Lex in the Financial Times. The country is already “something of a comeback kid among emerging markets”. The stockmarket rose by 39% last year. Stocks in energy companies, which make up over half of the market’s capitalisation, delivered double-digit returns in 2019. But valuations remain cheap: UBS is forecasting a “hefty 14% dividend yield” from energy firm Lukoil. That said, concern about climate change is…

When a company, government or other organisation wants to borrow money by issuing bonds, their bonds will usually be assigned a credit rating. This gives the investor an idea of how likely they are to get their money back on time and in full. These ratings are issued by credit-rating agencies such as Standard & Poor’s, Moody’s and Fitch. When determining a rating, the agency will look at several factors that may influence the likelihood of the bond being repaid. These include the profitability of the issuer, its past credit record and any assets the debt might be secured against (if a debt is secured against property that can be seized and sold, then it’s likely to be safer than a debt with no collateral). For bonds issued by countries,…

The “public crash and burn” of WeWork may have changed the way other start-ups enter the initial public offering (IPO) market in 2020, says Emily Bary in MarketWatc. WeWo k called off its flotation just six weeks after filing. Eccentric CEO Adam Neumann was ousted, the company’s proposed valuation fell by over half, and the turmoil prompted Japanese conglomerate SoftBank, WeWork’s largest investor, to take control of the loss-making group. The “WeWork effect” means companies will concentrate less on revenue growth and focus instead on profitability and corporate governance, says Phil Haslett off EquityZen, a marketplace for pre-IPO employee shares. The distinction between “real tech” and “tech-enabled” businesses – such as Uber, Peloton, and WeWork – will be ky. Butwhile the spotlight was on “laggards like the ride-hailing companies and…

After all the drama of the last few years, British politics looks like it will be relatively quiet this year. But betting opportunities remain. A total of £1.64m has been matched on the next Labour leader, for example. Keir Starmer (pictured) is the favourite with odds of 1.84 (54.3%), with Rebecca Long-Bailey in second place with 4.1 (24.3%). Lisa Nandy and Jess Phillips trail the leaders at 6.4 (15.6%) and 15 (6.6%) respectively. Clive Lewis at 130 (0.7%) and Emily Thornberry at 180 (0.5%) make up the field. Jeremy Corbyn’s shock victory in 2015 shows that it’s a bad idea to write off any candidate – you could have got 33/1 (2.9%) on him winning even after he had secured enough nominations to get onto the final ballot. That said,…

Over the last couple of decades, the green parties have positioned themselves as part of the radical left and the enemies of big business. Most corporate bosses and investors would probably rather see hard-left socialists in power than radical environmentalists. At least socialists are in favour of a productive economy, even if they don’t have much idea how to create one. But maybe that view is out of date. Austria’s blue-green pact In Austria, the conservative People’s Party chancellor, Sebastian Kurz, has just formed a coalition with the greens after breaking with his allies on the populist right. In Germany the greens are now the fastest rising political force, overtaking the Social Democrats as the main opposition party. It won’t be long before they replace the SPD in a coalition…

West Africa breaks with the franc Editorial Financial Times This year, eight west African countries will ditch the Colonies Françaises d’Afrique (CFA) franc in favour of a new currency, says David Pilling. They will “no longer have to keep half their reserves in France or have a French emissary occupying a seat on their central bank”. But if there is symbolism in the move, there is “also risk”. Although the new currency, the eco, will remain pegged to the euro and guaranteed by France, it will take a dramatic event – a commodity shock or political crisis – to test France’s resolve. In the absence of such resolve, “fiscal and monetary discipline by African states alone will preserve the peg”. Commentators look “warily at neighbouring countries, where high inflation, devaluation…

fee.org The mainstream sentiment is that we are heading for disaster, says Tyler Brandt. Pundits clamour about the decline of democracy, climate catastrophe and failing capitalism. Yet the data tells a different story – one of “human flourishing and progress”. Extreme poverty rates, for example, are falling and continue to fall. From 1990 to 2015, the global extreme poverty rate fell from 36% to 10%. In 2018, it fell to 8.6%. More than 137,000 people escape extreme poverty every day. At the same time, the ranks of the global middle class have expanded. September 2018 marked the first time in human history when more than 50% of the global population was considered middle class. Its numbers grew 92% from 2009 to 2018. Global life expectancy is on the rise, increasing…

Activist shareholder Western Gate Private Investments has accused London-listed drinks group Stock Spirits of being “unwilling to return cash to patient investors” after the company dismissed its proposal for a special dividend, says Gurpreet Narwan in The Times. Western Gate complained that an increase in executive pay to €3.5m over the past 12 months despite a decline in the share price of 15% in the last five years was evidence that the company is run “for the board” rather than for shareholders. Stock Spirits pays out just 60.5% of its earnings as dividends, compared with an average of 71.3% for the sector.…

Last year I was much more successful than in 2018. While this was partly a result of selecting strong performers, some it was due to following the rules Ihad set myself – especially taking losses and letting winners run. Still, there is always room for improvement, so here are four New Year’s resolutions for 2020. 1.Balance shorts and longs Last year, Itipped more longs than shorts. But with valuations now at record levels and the bull market more than a decade old, it’s likely there will be amarket correction before too long, so I should ensure that the number of open short and long tips don’t get out of balance. 2. Adjust stop-losses more often Letting my winning tips run has proved lucrative since my profits came largely from a…

Married or civil-partnered couples who are separating should be aware of the private residence relief (PRR) “cliff-edge trap”, says the Tax Tips and Advice newsletter. Individuals are entitled to an exemption from capital-gains tax (CGT) if they sell their main private residence at a profit. Couples, however, only get one house between them. PRR currently applies to the last 18 months of your ownership of a property. But from 6 April 2020 that time span falls to nine months. “In the real world” that may not be enough for a couple splitting up to agree what to do with the family home and finalise a sale. That implies that if one partner stays in their previous home, the spouse moving out could end up with CGT to pay if they…

This year marks the 25th anniversary of the introduction of venture capital trusts (VCTs). The idea was to encourage investors to support young and innovative businesses in exchange for generous tax concessions. Since 1996, VCTs have raised £8.4bn and helped thousands of private companies grow – from GO Outdoors, Secret Escapes, Everyman Cinemas and Five Guys to Zoopla, the first VCT-backed £1bn company. When you invest in a VCT you receive up to 30% tax relief. So on a £10,000 investment you could get back £3,000. All returns, typically paid through dividends, are tax-free. The annual allowance of £200,000 is both generous and straightforward. There is a catch, though. VCTs are not open all year round. Demand for the popular ones far outstrips supply and they sell out quickly. So…

• “We salute Ricky Gervais,” says The Sun. The British comedian (pictured, with partner Jane Fallon) hosted the Golden Globes awards on Sunday in LA, and the “frozen grins” in the audience “said it all”. The “hypocritical A-list have never had a kicking like it”. Gervais hit the nail on the head when he said,”If you win, come up, accept your little award... and f**k off.” For too long, politically correct film actors have lectured people on how to live lives more like theirs. “They tell us to cut back – as they fly around... in private jets... They tell us how to vote [always] cluelessly backing the left, safe in the knowledge no forced redistribution could ever really dent their vast wealth.” • Cartoonist Gerald Scarfe is hoping to…