Indholdsfortegnelse for Issue 1027 i MoneyWeek

“The good news is that things may not be anywhere near as bad as Rishi Sunak fears” Misery. Misery. If you listened to Chancellor Rishi Sunak’s Spending Review on Wednesday, that is pretty much all you would have heard (see page 16). The response to Covid-19 has cost a fortune. According to data from George Cooper at Equitile Investments, we have spent in the region of £1m per what statisticians call “quality-adjusted life years” (see moneyweek.com). That’s before we start on the less obvious costs (eg, crime and falling cancer referrals – see page 25). Our debt-to-GDP ratio is heading for 100% by 2025. We will borrow something in the region of £400bn this year. That’s 19% of GDP, the most ever during peacetime. The UK economy will end this…

Celine Dion has lost a $13m dispute with her former agent Rob Prinz, reports Dave Brooks on Billboard. Dion took Prinz to court, alleging he was “wildly overpaid” for negotiating a $489m touring contract in 2017, but Prinz’s lawyer said his commission fee, which will amount to as much as $13m by 2026, was clearly established in contract and oral agreements. The California Labor Commission ordered Dion to keep paying Prinz in full. She plans to appeal. Bargain hunters run the risk of being bamboozled this weekend as new research from Which? found that in 2019, nine out of ten “Black Friday” deals were nothing of the sort. Which? checked the prices of 219 products for six months before Black Friday 2019, and found only three were “at their cheapest…

Is the gold rally over? Gold hit a four-month low around $1,807 an ounce this week. The yellow metal remains up by 53% since August 2018 but is now trading 11% short of its peak this summer. The picture is similar in sterling terms, with gold 13% off its August high on around £1,352/oz. Gold is seen as a traditional safe haven. With positive vaccine news stoking optimism about 2021 investors are now keen to get exposure to the recovery rather than parking their wealth in an asset that pays no interest. Gold has not behaved much like a safe-haven this year, says Will Horner in The Wall Street Journal. “Rather than moving in the opposite direction to stocks” it has often rallied and fallen together with them. The reason…

Bitcoin, the world’s most famous cryptocurrency, is on a tear. The price has reached around $19,300 and is closing in on its 2017 all-time high of $19,600. One reason for the surge is that the currency is no longer the preserve of a few financial nerds. Digital-payments group Paypal says it will allow customers to buy and sell Bitcoin and other virtual currencies. But another reason is that bitcoin is increasingly seen as a safe haven, so it has flourished this year amid the turmoil triggered by the pandemic. As with gold, and in contrast to fiat money, it is not possible to reproduce it endlessly. Only 21 million bitcoins can be “mined” by computers. The market is also small and illiquid, so a bullish trend soon becomes apparent.…

Russian e-commerce group Ozon filed to go public in the US this week, says Max Seddon in the Financial Times. The firm is likely to be worth between $4.6bn to $5.6bn. It is aiming to raise between $750m and $1bn from its initial public offering (IPO) on the Nasdaq, far more than its initial target of $500m thanks to strong demand. Ozon is one of several players competing in Russia’s Rbs33.6trn (£330bn) retail market, which is set to grow to Rbs46.2trn (£454bn) by 2025. E-commerce in Russia has been “slow to take off” owing to long distances and logistical difficulties, despite 95 million internet users. But online sales jumped by an annual 51% in the first half of 2020 due to Covid-19.…

The “debt-laden” AA is likely to be taken back into private-equity ownership, says Julia Kollewe in The Guardian . The motoring group has indicated that it is inclined to recommend a £218m takeover proposal from TowerBrook Capital Partners and Warburg Pincus. The deal would involve the two private-equity groups paying 35p a share while investing £380m to help reduce its huge debt pile of £2.6bn, £913m of which is due to mature in the next 18 months. The deal would also see Rick Haythornthwaite, aformer chairman of British Gas owner Centrica, becoming AA’s chairman. The offer price of 35p, will “disappoint” shareholders given that it is pitched “only slightly above” the AA’s 33p-a-share price, says Kaye Wiggins and Daniel Thomas in the Financial Times. Still, it is a lot more…

It turns out that Covid-19 vaccines are like the old joke about buses. You wait for ages and then three turn up at the same time. Over the last month, we have seen stunning results from Pfizer, Moderna and Oxford-AstraZeneca. Each vaccine is slightly different, in terms of effectiveness, and how quickly it can be rolled out, but there is now no question that we are close to a mass vaccination programme that should bring the virus under control. Six months ago plenty of experts were arguing it would take five years or more to get a working shot. In fact, it has been done in less than ayear. Don’t throw sand in the wheels But there’s a problem. Now that we are close to a vaccine, the arguments are…

The Covid-19 outbreak hasn’t had many helpful side effects – but one might be that it has reminded public companies of the value of a stockmarket listing. Several big names have had to ask shareholders for fresh funds to get through the disruption caused by coronavirus. Companies who have successfully raised money fast via rights issues (defined below) include aerospace giant Rolls-Royce, hospitality chain The Restaurant Group and estate agent Foxtons. “Covid-19 may have reminded companies of the value of listing” But what about investors? Does piling into a rights issue (assuming you can) make sense? The good news is that Duncan Lamont at investment manager Schroders has dug into more than 20 years of data to see what history can tell us. The bad news is that his findings…

Let’s return to good government Iain Martin The Times The report into government procurement spending during the pandemic by the National Audit Office is a “horror show for taxpayers”, says Iain Martin in The Times. This is “real money” that has been sprayed around, money “that will be paid for by the young, in future debt interest and higher taxes”. In the “scramble” for PPE supplies up until the end of July, 8,000 contracts worth £18bn were awarded, £10.5bn without any competition. In one case, a US jewellery designer with no relevant experience won a£250m contract for PPE at nearly double the market rate. “Some of what happened was understandable” – speed was of the essence, demand was outstripping supply, rules were jettisoned to get the job done. “At the…

aier.org “In the debate over coronavirus policy, there has been far too little focus on the costs of lockdown,” says the American Institute of Economic Research. Here are just a few of the costs we are ignoring. In June 2020, 40% of US adults were struggling with mental health or substance abuse. The percentage of people reporting suicidal thoughts or anxiety or depression was three to four times higher. In March alone, food banks gave out 20% more food than in an average month in the US and the rate of food insecurity has more than doubled from 2018 for households with children. Worldwide, about 86 million children may fall into poverty and the number of undernourished people is expected to rise. About 24 million children may drop out of…

“The Ant IPO was set to raise a world record $35bn” It is difficult to understand what Jack Ma was hoping to achieve when he spoke at a high-level financial summit in Shanghai on 24 October. The Alibaba founder was just about to preside over the initial public offering (IPO) of Ant, the giant payments, investing, lending and insurance platform that has become the world’s most valuable financial-technology firm. Yet Ma – who has long had a fraught relationship with China’s financial establishment – decided that this was a good time to launch an open attack, suggesting that old-fashioned regulators are stifling innovation and bluntly accusing banks of a “pawnshop mentality” that can’t meet the credit needs of today’s economy. Neither is capable of delivering the financial system that modern…

After decades of “docile investors and a near-total absence of hostile takeovers”, things are changing in Japan, say Leo Lewis and Kana Inagaki in the Financial Times. Intense competition between companies and activist investors is now increasingly common. Carlyle, one of the world’s biggest private-equity firms is “set for a tussle” with Japan’s most notorious activist investor family. The clash is due to Carlyle’s backing of a ¥37bn (£266m) management buyout of Japan Asia Group (JAG), a small green-energy and technology company. Carlyle is offering ¥600 per share, a 75% premium to JAG’s closing price last week. But analysts say the offer is 35% below JAG’s tangible book value. Activist investor Yoshiaki Murakami and his son-in-law recently acquired a stake in JAG. Murakami is notorious for using “greenmail” tactics. He…

Not all businesses have suffered during the Covid-19 pandemic. If yours is in a strong financial position, now might be the time to seek a better deal from your bank. It may be possible to renegotiate the terms of finance you already have in place or to arrange new credit for investment at highly preferential terms. Small business-finance specialists report that banks are anxious to increase their lending. Beyond the state-backed lending schemes, most banks have done little new business this year. Mergers have slowed to a trickle and even strong businesses have delayed plans. The banks have helped existing borrowers work through pandemic-related problems, but much of this work has been completed. During the crisis a decade ago, banks largely stopped lending to smaller businesses. But this time most…

Given that CEOs play a large role in determining a company’s strategy and operations, it’s no wonder that the appointment of a new CEO can have a significant impact on a firm’s share price. It can cause a rise in the stock price if the market thinks that the new CEO will improve the company’s performance. It can also cause the share price to fall if the market thinks the newcomer will either fail to live up to their predecessor or that the departure of the previous CEO suggests undisclosed problems. However, a2012 study by James M. Citrin of consultancy Spencer Stuart suggests that the initial reaction may not be that accurate, and may provide a poor guide to the subsequent performance of the firm’s share price. Between 2004 and…

Pre-tax profits for Royal Mail (LSE: RMG) fell to just £17m in the half-year to October. But the company is going through a major restructuring owing to the impact of the pandemic, says Alan Oscroft on The Motley Fool. The group’s revenue from parcels exceeded the sum from letters for the first time, climbing by 33% year-on-year. Total group sales rose by 9.8%. The boost in parcel revenue is due to the rise in online shopping during the pandemic. The trend was already gathering momentum before Covid-19, but it has accelerated since. The shares have gained 27% in the past year.…

Meyer Blinder was born in New York in 1921. He worked in his parents’ sweets shop and then as a travelling salesman, later serving in the US Army during World War II. After the war he started various companies, including a coffee vending firm that was eventually sold for enough money to enable him to retire. In 1970, however, he set up the brokerage firm Blinder, Robinson and Company in Westbury, New York before moving it to Denver, Colorado eight years later. At its peak it was the largest penny stock brokerage in the US, and the tenth-largest broker overall, employing 3,000 people in 80 offices in America and other countries. What was the scam? Blinder, Robinson and Company was known for its “three call” method, where brokers would build…

Going… A hand-drawn costume design for the batsuit worn by Michael Keaton in Tim Burton’s Batman (1989) is expected to fetch up to £8,000 as part of the Prop Store’s huge auction of film memorabilia in London, beginning on Tuesday. Drawn by Oscar-nominated costume designer Bob Ringwood, the artwork has also been signed by Batman’s co-creator, Bob Kane. A painted sketch of Danny DeVito’s The Penguin for 1992’s Batman Returns, also by Ringwood, is valued at up to £6,000, while The Joker’s purple Fedora, worn by Jack Nicholson in the 1989 Batman film, is expected to sell for up to £30,000. The two-day sale’s roughly 900 iconic props and costumes should make over £4m in total. Gone… A copy of 1939’s Detective Comics No. 27 set a new record-high price…

A hedge fund based in Sydney collapsed after suffering a cyber attack which used a fake Zoom invitation to con the company into paying the hackers A$8.7m (£4.7m), say Angus Grigg and Jemima Whyte on the Australian Financial Review. It’s the latest in a series of attacks by criminal gangs against Australian fund managers. Levitas Capital, which had managed A$75m, was forced to close after its largest client withdrew its money following the attack in September. Criminals gained access to Levitas co-founder Michael Fagan’s computer with the fake Zoom invite. They then sent fake invoices, worth nearly A$9m in total, from his email account to the fund’s trustee and administrators. Though there were apparently “many red flags” around the transactions that should have been spotted, the transfers were mistakenly approved…

“Bored already”, says Alistair Osborne in The Times. Equity markets were overjoyed when positive news of Pfizer’s Covid-19 vaccine trials broke earlier this month. But a similar update from AstraZeneca this week (see page 10) brought little more than a shrug. Global stockmarkets didn’t leap, but they have continued to trade close to recent highs. The MSCI World Index is up by 10% since the start of the month, with America’s S&P 500 up by 9%. The FTSE 100 has been a standout performer, gaining 15% in November, although British blue chips are still down by 15% for the year to date. Bulls have gone rampaging through bitcoin and oil markets (see pages 7 and 17). Caught between Covid-19 and a cure Never mind the market reaction, says Craig Erlam…

“The loss of $224bn in dividend income from around the world in 2020 is nothing to celebrate, but we have been encouraged by how resilient payouts have been in many parts of the world, especially in Asia, the US, Japan and emerging markets. This resilience is partly because companies seek to cushion investors from the disruption to their operations, but it’s also because payout ratios (the portion of profits distributed) have been comfortable in many parts of the world. The UK, Australia and parts of Europe have proved to be more vulnerable in part because payout ratios there were already too high... What’s more, two fifths of the world’s dividends have historically been paid by defensive sectors that are proving relatively insulated from the crisis.” Jane Shoemake, investment director for…

Three to buy Hammerson Interactive Investor Shares in this real-estate investment trust have slid sharply in recent years. Hammerson’s retail property portfolio has done it no favours in the pandemic, with 2020 rents set to fall by roughly 30%. Yet the vaccine means a brighter 2021, with analysts pencilling in £100m in net profit. Management is disposing of assets, enabling it to pay down debt. A “tentatively restored” scrip dividend is a bit of a “gimmick” but it does signal a commitment to future payouts. A speculative “buy”. 26p Renewi Shares This waste-to-product business operates in a resilient niche, as shown by solid sales in the first half. Created from the 2017 merger of Britain’s Shanks Group and Dutch firm Van Gansewinkel, the recycling company has been dogged by elevated…

• Rupert Murdoch (pictured) may be almost 90, but as executive chairman of News Corp and co-chairman of Fox Corporation he “remains king to a powerful court prepared to go to war on his behalf”, says Christopher Williams in The Sunday Telegraph. So it’s no wonder he seems to be “empire-building again”, with News Corp emerging as a top contender to acquire publisher Simon & Schuster. Murdoch aims to combine the business with his own HarperCollins. Book sales rose by 4% to hit an “all-time record” of £6.3bn in 2019. • Finding cheap airline stocks after the sector’s sharp bounce on both sides of the Atlantic is easier said than done, says Jon Sindreu in The Wall Street Journal. Although airlines are still trading at a “significant discount” compared with…

Joe Biden’s victory over Donald Trump was greeted with “relief” in Europe and the foreign ministers of several countries, most notably Germany (Chancellor Angela Merkel, pictured), hope that there will be a “reset” in relations between the US and EU, says The Independent. There is general agreement that the last four years have been disastrous for US-EU relations, with disagreements over trade, defence, China and Iran’s nuclear programme. Biden by contrast has already indicated that he believes it is “urgently necessary” to “repair” the transatlantic relationship. Still, Europe should not get too excited as it’s clear that many of the “structural tensions” in the alliance are “bigger than Trump”, says the Financial Times. European officials are looking forward to more collaboration on “world health and global warming”, but they are…

• Adam Frisby (pictured), the founder of the In The Style fashion website, “is expected to crystallise a multimillion-pound fortune through a £100m stockmarket listing”, says The Sunday Times. The 33-year-old from Manchester started the business, which helps shoppers “to emulate celebrity style on a budget”, six years ago from his bedroom. He grew the brand by collaborating with reality TV stars, such as Love Island’s Dani Dyer. In The Style posted sales of £17m and a pretax loss of £1.6m in the year to March 2019. The listing is planned for the first half of 2021. • The boss of Lloyds Bank, Antonio Horta-Osorio, could receive a huge windfall just ashe prepares to leave the lender next July, says The Mail on Sunday. Horta-Osorio has been awarded 1.4 million…

When a listed company wants to raise more money, one of the options open to it is a rights issue. This involves the company going to its existing shareholders and offering them the opportunity – the right –to buy new shares in proportion to their existing holding. So for example, the recent rights issue by Rolls-Royce saw its shareholders offered the rights to buy ten shares for every three they already owned. If a shareholder takes up their rights, then he or she will end up owning the same proportion of the company as they did before the rights issue. If they decide to pass up on the chance to buy, they can sell the right to do so on to other investors, although their existing holding will end up…

“I think every part of life has probably got a bit of fat that needs trimming, abit of dead wood. It’s awful that the culture sector has been decimated, but I think some things needed to go. Too often, the audience for culture is just the people making it – theatres with whole audiences of actors, or exhibitions only put on to impress other curators. With Covid-19, it’s been like turning a computer off and on again, and seeing which files reappear. Some of them we don’t really give a damn about. What’s interesting is what might not re-emerge.” Artist Grayson Perry (pictured), quoted in The Arts Society magazine “Enough to make you happy for me, but not enough to make you jealous of me.” Skin, lead singer of Skunk…

unherd.com In Latin America, countries locked down swiftly and strictly in response to the coronavirus, says Luke Taylor. More than six months of house arrest have destroyed livelihoods and businesses, threatening to reverse a decade of poverty reduction, and caused a spike in domestic violence and depression. They also failed to contain the virus’s spread. Proponents and critics of lockdowns alike “cherry pick” figures from Sweden and across Europe to make their case, but Latin America “offers perhaps the starkest lesson: lockdowns are not only devastating to economies and lives, but used alone, they are an ineffective tool”. The biggest failure was misusing lockdowns indefinitely as a tool to fight the virus rather than to buy time to draw up a more sustainable strategy. The only South American success story…

Alibaba (NYSE: BABA) is often viewed as the Chinese equivalent of eBay, although even its traditional services are much broader: it operates multiple business-to-business, business-to-consumer and consumer-to-consumer platforms including the eponymous Alibaba, AliExpress and Taobao. A sprawling series of other business and investments include logistics, online travel booking, ticket selling and online streaming for events, cloud computing and AI, health and even investments in physical supermarkets and the South China Morning Post newspaper (making it more like Amazon and Alphabet in its enthusiasm for entering new areas). Alibaba also controls Lazada, an Amazon-like ecommerce platform in southeast Asia. The Alipay payments business is closely connected with Alibaba, but operated by Ant, a separate business that also offers loans, investment products, insurance and other financial services. This group (and in particularly…

As the NHS has focused its efforts on fighting Covid-19, waiting lists for everything from hip replacements to cancer treatments have lengthened considerably. As a result, many people are choosing to avoid the queues and opt for private treatment instead. “As leading doctors warn mass cancellations of NHS operations in England are inevitable this winter after waiting times reached the highest levels on record this summer, data shows a rise in the number of people self-funding treatment or investing in private health insurance,” says Jessica Murray in The Guardian. “There is no need to pay for treatments in one go, but beware of payment plans” Compare the Market has reported a 40% increase in year-on-year private health-insurance sales from April to October this year. At the same time, private hospitals…

• This year’s Small Business Saturday takes place on 5 December. Since many people say Covid-19 has encouraged them to support smaller and independent businesses, the day offers a huge opportunity to capitalise on this goodwill. The annual campaign, which encourages people to trade with small and medium-sized enterprises (SMEs), has a long record of success; last year’s Small Business Saturday is estimated to have swelled small firms’ coffers by £800m. The initiative is open to all small businesses. Independent retailers trading on the high street are just the tip of the iceberg. Companies ranging from small professional-services firms to online traders are all taking part. Find out how to use the day to promote your business at smallbusinesssaturdayuk.com. • The number of companies claiming research and development (R&D) tax…

The bullish overall market mood over the past fortnight has boosted my long tips, with four out the five appreciating. Media group and broadcaster ITV has climbed from 89p to 95p and homebuilder Bellway has risen from 2,831p to 3,112p. Train and bus operator National Express has gone from 218p to 240p and pub group Mitchells & Butlers from 218p to 238p. However, cruise operator Carnival Corporation not only fell from $19.25 to $18.18, but also briefly dipped below $15, which is the price at which I suggested that you set your stop-loss, so you would have sold it at a loss of £300. Sadly, some short tips have also gained, eating into my net profits. Online insurance broker eHealth increased from $74 to $75.19, online furniture retailer Wayfair jumped…

James Fisher and Sons (LSE: FSJ) is a British provider of marine-engineering services. Offerings range from marine cranes to submarine rescue services. Shares in the company have slipped after it warned of a significant decrease in annual profits; project delays and cancellations reduced sales by 17% year-on-year in the first nine months of 2020. The group is now expecting a profit of between £35m and £40m compared to the previous estimate of £49m, ahefty decline from £66.3m from the year before. The stock has slipped by 47% in 12 months.…

2018 Sancerre Blanc, Cuvée Marcel Henri, Domaine Chotard, Loire, France £25.95, bbr.com I am always on the hunt for elite sauvignon blanc, but this is not as easy a task as it ought to be, given there are oceans of examples out there. Most leave me feeling unfulfilled, lacking in drive on the nose, mid-palate traction and drama on the finish. These traits were commonplace 20 or 30 years ago when great terroir did its job and winemaking was less scripted, but today, with selected yeasts, modern viticulture and less rigorous site selection, sauvignon is grown on any patch of dirt going and production by rote eliminates individuality. No one wants to drink vinonymous wines. When I sound the trumpets, I mean it, and so this wine is a genuine…

Rugby School in Warwickshire raised £775,000 last week from a sale of rare books. A second edition of Shakespeare’s Comedies, Histories, & Tragedies (1632) fetched the most with Forum Auctions in London – £48,000 before fees. And a fourth folio from 1685 fetched £38,000. The school’s head, Peter Green, said the decision to sell had been made to help preserve the books and raise money. Not everyone agreed. “It’s terrible. I would never dream now of leaving anything to that school because they would just flog it,” A. N. Wilson, the writer and a former pupil, told the Daily Mail ahead of the sale. Professor Michael Dobson, director of the Birmingham University Shakespeare Institute, agreed: “[The books] are likely to go into a private collection and be treated as investments…

• “Has there ever been a more selfless guide to humanity than the saintly Nigella Lawson?” wonders Virginia Blackburn in the Daily Express. Having taught the nation how to make mashed avocado (you mash it), Lawson (pictured) has now addressed an even more burning question: how to butter toast. First you spread unsalted butter on the toast straight out of the toaster. Then you add a second layer and some sea salt. Delia Smith did much the same years ago when she showed us how to boil an egg. And Pippa Middleton has advised us on carving a chicken and stargazing. “As you gaze at… the vastness of space, you might also want to reflect on the vastness of the bank accounts these words of wisdom are contributing to… Meanwhile,…

We are on our way back to the US after nine months under lockdown in the Calchaquí Valley in Argentina. Our first stop was the local capital city, Salta. It seemed odd to walk on pavement, to hear so much noise and to see so many people, all with their faces covered. Masks are obligatory here. “This is not the time to think. This is the time to do as you’re told” Do masks make any difference? Apparently not. A new randomised controlled trial from researchers in Denmark has shown that even surgical masks did not protect the wearers against infection. “You need to wear them anyway,” concluded The New York Times. Why? Because Christians wear crosses. Jews wear yarmulkes. Sikhs wear turbans. And in the feds’ new religion, the…

Wrexham Football Club is looking at a £2m investment after it was bought by Hollywood stars Ryan Reynolds (pictured) and Rob McElhenney, says BBC Sport. The club has been owned by fans since 2011, but members of the Wrexham Supporters Trust voted overwhelmingly in favour of the takeover by the pair. The actors have told trust members they plan to turn Wrexham into a“global force” and plan to attend matches when work allows. The British entertainment industry is set for a windfall as Netflix announced it plans to boost its spending on UK TV shows by 50% to $1bn, says Mark Sweney in The Guardian. The streaming company, which makes shows like The Crown and Sex Education in the UK, has made the UK its “most important international production hub”,…

With vaccines on the way it may not be too long before shoppers return to city centres. The best way to play Europe’s retail rebound is with Sweden’s H&M, says Der Aktionaer. It had to close around 1,000 of its 5,000 worldwide outlets during the pandemic, but that figure has now fallen to 200, and retailers are exempt from new Covid-19-induced restrictions in Europe. The group has been cutting costs and beefing up its online operation, which now accounts for 26% of overall sales. H&M was back in the black in the third quarter of 2020, and analysts are pencilling in a sixfold jump in earnings per share in 2021. Chartists, meanwhile, note that the stock has broken out of its summer trading range.…

The good news keeps coming on the vaccine front, says Lex in the Financial Times – this time with positive results from AstraZeneca. The overall tally was “underwhelming”: the treatment’s average efficacy of 70% was “significantly less” than the figure achieved by the BioNTech/Pfizer and Moderna vaccines. But the best results, of 90% efficacy, were achieved for participants who only received half of the first of two doses. This suggests that “more people can get a shot with the same amount of vaccine”. AstraZeneca has already agreed deals with drugmakers in Russia, Brazil and India to produce up to three billion doses. Despite this apparent success, the market has punished AstraZeneca, with the drug giant’s shares falling by 3.8% when the news was announced, says Nils Pratley in The Guardian.…

To “meritocratic, straight-talking Scots”, Boris Johnson is the worst kind of English toff: “entitled… capricious and fundamentally unserious”, says Chris Deerin in the Financial Times. Even before it emerged that Johnson had described devolution as a “disaster”, a poll found that just 19% of Scots approved of his handling of the pandemic. Support for Scottish independence is now the “majority position in Scotland” (around 60%) and Johnson’s comments are a boon for the independence movement. Nicola Sturgeon will go into next May’s Holyrood election seeking a fourth consecutive SNP term in power and says that victory will provide a mandate to call a second referendum. Despite the UK government’s opposition, she may get her wish. The PM raised “fresh questions” on Saturday in a speech to the virtual Scottish Conservative…

Donald Trump may have essentially thrown in the towel by allowing the transition to the Biden administration to commence (see left), but some punters evidently still think that something could turn up. With more than £1bn matched on Betfair, you can still get 1.03 on Biden. Even if Betfair waits until Biden is actually inaugurated before settling the market, 3% for less than two months is far better than you could get from any bank, though I’d follow my rule about avoiding ultra-short-odds bets and not put any more money on it. Instead, you should turn you attention to the French presidential election, which is due to take place over two rounds in April 2022, less than 18 months away. With £9,376 matched, the current incumbent Emmanuel Macron is  favourite…

Health secretary Matt Hancock has been “grilled” over his staff’s spending of almost £50,000 of taxpayers’ money on takeaways during the pandemic, says the Daily Mail. Hancock said the civil servants had been working “18-hour days” and that ordering from Bongbong’s Manila Kanteen, in east London, was “possibly the best value food you can get”. Nine orders made by the Department of Health and Social Care in April to the “hipster” Filipino restaurant came to £43,348.96 at an average of £4,817 per order. In March, the department spent £4,179.72 at the restaurant, which calls customers “Bongerz”, on deliveries to its offices five miles away in Victoria, central London, according to an investigation by the paper and the pressure group TaxPayers’ Alliance. It found £5.6bn had “been frittered away on luxuries,…

Hedge-fund manager Bill Ackman is upbeat on prospects for markets in 2021, with interest rates staying low and infrastructure spending on the cards. But he’s worried about short-term volatility as coronavirus takes its toll on the US population. “We think the next couple of months unfortunately are going to be tragic and very difficult for the globe and for our country [the US] in particular,” he warned his investors earlier this month. So he has revisited a winning strategy from earlier this year, putting on a new trade that will pay out if fears over corporate solvency increase. In February, Ackman’s Pershing Square hedge fund, accessible via London-listed Pershing Square Holdings (LSE: PSH), bought credit default swaps (a derivative that pays out if a bond defaults) on several bond indices.…

ft.com/alphaville “The pandemic has led to the disappearance of inflation – at least if you look at official statistics,” says Claire Jones. But official measures may be underestimating the degree to which prices for the average consumer are rising. The pandemic changed our spending habits. That matters because inflation is calculated using a basket of goods and services said to represent the spending patterns of the typical consumer. Yet inflation indices around the world have not been recalculated since lockdowns began, meaning official measures will be overestimating the benefit to the average consumer of cheap plane tickets and underestimating the impact of rises in food prices. The disparity globally may be big, according to research from the International Monetary Fund, which attempts a truer measure based on card payments. It…

While the developed world’s stockmarkets have been getting excited about prospects for a post-Covid-19 world, emerging-market stocks have rebounded too in recent weeks. The benchmark MSCI Emerging Markets (EM) Index has gained 8% so far this month; India and Brazil have climbed by 7% and 16% respectively. Countries such as India, Brazil, Turkey and South Africa might now benefit from a series of tailwinds. Their Covid-19 infection rates – even without a vaccine – are already declining, which leaves their economies in better shape to expand as the developing world also stabilises. Many local stockmarkets are also cheap (especially Russia and Brazil in relative terms) and may be direct beneficiaries of a sudden turnaround in commodity prices. A skew towards east Asia Prospects are thus beginning to look a tad…

The transition period that began when the UK left the EU on 31 January ends on 31 December, irrespective of whether a trade deal is agreed, with new rules applying from 1 January. These rules are already largely in place, deal or no deal, so it is crucial to prepare for them. An agreement with the EU won’t change the processes through which the UK and the EU will trade from 1 January. At stake are the tariffs that will be payable on imports and exports of goods. Whatever tariffs we end up with, UK businesses will still have to get to grips with a new system as they deal with customers, suppliers and other groups in the EU. Check your staff’s status Services-sector companies don’t have to shift goods.…

This has been a dismal year for the cruise ship industry. Not only was it shut down as soon as Covid-19 became a major problem, but the second wave of the virus has dashed hopes that sailing would be allowed to resume in the autumn. Most companies have not only cancelled all their remaining cruises this year, but they have also indicated that there will be few (if any) sailings taking place in the first three months of 2021, with some trips in the late spring also called into question. Given this horrible backdrop, it’s not surprising that shares in Miami-based Norwegian Cruise Line Holdings (NYSE: NCLH), the third-largest cruise line in the world, have been crushed. At one point in March they were down by 85% from the start…

We see light at the end of the tunnel following the Covid-19 pandemic. While there are still significant hurdles to face before “normal” life can resume, we are optimistic that the long-term outlook for the UK is one of sustained growth. In the short term, growth may be uneven as markets across the globe begin to find their feet. British stocks are well placed to benefit from this wider recovery, although residual Brexit headwinds remain. We believe that many of the key drivers and themes that have accelerated over the past year, such as online retail and home improvement, will remain in place. We therefore remain focused on the long term, seeking out companies with strong balance sheets, consistent cash generation and resilient business models. Housebuilders have solid foundations “Dunelm’s…

“The sale of more than 100 million albums helped build a $600m fortune – much of it reinvested in entrepreneurial efforts” “Amid the rising Covid-19 death toll and the aftermath of an ugly presidential election, Dolly Parton is one of the few subjects that Americans can still agree on,” says the Financial Times. “Red state or blue, country or rock, believer or agnostic” – the “warm-hearted chanteuse” crosses the most divisive lines. So it’s perhaps unsurprising that news of her contribution to ending the pandemic has been “met with paroxysms of joy online”. One Twitter user suggested anew word, “dollypartoning”: shorthand for finding out that someone you already like is an even better person than you thought. Parton’s timely $1m donation to Vanderbilt University Medical Centre in Nashville at the…

€1.6m The record-high price fetched at auction by New Kim, a female racing pigeon from Belgium. She was sold to an anonymous Chinese buyer operating under the pseudonym Super Duper. The same buyer is believed to have paid €1.3m last year for male pigeon Armando, dubbed the Lewis Hamilton of pigeon racing. £8,070 How much the average British musician can expect to earn this year, according to BBC News, after industry body UK Music reported pay has taken a 65% hit in 2020 due to the cancellation of live performances and closure of recording studios. 50,000 The “going rate” in Kenyan shillings (£350) to have a baby girl stolen from its mother on the streets of the capital, Nairobi, according to an investigation by the BBC. A baby boy costs…