Indholdsfortegnelse for 1080 i MoneyWeek

Earlier this year asset manager Standard Life Aberdeen renamed itself abrdn. This is a very silly name for many reasons. Not having vowels is silly. Not having a capital letter is silly (particularly at the beginning of sentences). But there is good news. The company is not as silly as it sounds (which is why I sit on the board of an investment trust it manages). It has a new advertising campaign on the go. And it’s pretty good. Instead of the vague inanities you get with most financial advertising (which suggest it all has something to do with teeth whitening and holidays) the firm has actually had a go at explaining what investing is – the financing of the companies that actually do the stuff that keep the economy…

The chief executive, chairman, and several other executives at Japan’s third-biggest bank Mizuho have resigned due to repeated failures of the company’s $4bn IT system, says the Financial Times. Mizuho has been buffeted by IT problems since the group was created via a three-way merger in 2002. Recent problems include interruptions to the ATM system, resulting in reprimands from Japan’s Financial Services Agency and the Ministry of Finance. Australian bank Westpac is set to pay out A$113m (£61m) in fines for poor treatment of customers, including the charging of dead people for financial advice, says BBC News. Australia’s corporate watchdog said one of six investigations into the bank found it had charged A$10m to more than 11,000 dead clients over ten years. Last year Westpac was fined A$1.3bn for Australia’s…

Going electric is getting pricier. Rising demand for electric vehicles (EVs) has propelled lithium carbonate prices in China up by 276% since the start of the year to $30,940 a tonne, report Zandi Shabalala and Pratima Desai for Reuters. The metal is a vital ingredient for the rechargeable batteries that go into phones and laptops. Roughly a third of the global output of lithium carbonate equivalent (LCE) is used to manufacture the lithium-ion batteries that power electric vehicles. Rising lithium prices alone will not sink the EV industry, says Al Root in Barron’s. At most they will add a few hundred dollars to the final retail price of a vehicle. Higher prices are needed to bring more supply online. A typical EV needs ten kilograms of lithium to power its…

America’s S&P 500 index has never been so heavily dominated by a handful of companies, says Andrew Lapthorne of Societe Generale. The S&P’s ten biggest stocks – which include the likes of Apple, Amazon, Microsoft and Google’s owner Alphabet – jointly account for almost 30% of the index’s market capitalisation, far above the historical average. That dominance is justified by the group’s superior earnings: they are expected “to generate almost one quarter of next year’s profits”. On a forward price/earnings (p/e) basis these firms trade at a near-60% “premium to an already expensive market”. That is the highest level since the tech bubble in 2000. The US bull market rests on adisturbingly small number of companies.…

Despite global stockmarkets’ resilience, 49% of the 43 companies that raised over $1bn in an initial public offering (IPO) this year are trading below their listing price, says the Financial Times. The “busted” IPOs include UK food delivery app Deliveroo, alternative-food manufacturer Oatly and Indian payments firm Paytm. The big IPOs’ underperformance has prompted concern that valuations ascribed to companies by large investors and leading underwriters may be too high. In 2019, 33% of large IPOs were below their issue price a year after they floated; 27% of those listed in 2020 “were in the red” after 12 months.…

JPMorgan is “racing to shore up its relationship with Beijing”, says Ben Martin in The Times. CEO Jamie Dimon (pictured) “raised eyebrows” last week when he said he would bet that JPMorgan, which entered China in 1921, the same year that the Chinese Communist Party (CCP)was founded, would outlast the CCP. After the remark made headlines, Dimon issued two “increasingly apologetic statements”, recanting his earlier remarks. No wonder he quickly apologised, says Lauren Hirsch in The New York Times. Not only are Chinese companies that trade their shares in the United States an increasingly “important source of revenue for banks”, but Chinese authorities are also “loosening rules to allow US banks to expand their businesses in China”. However, Beijing’s decision to crack down on tech companies, “including the ride-hailing giant…

There was not much in the platform of Germany’s new coalition government, composed of the Social Democrats, Greens and Free Democrats, to re-energise an economy that, for all its formidable strengths, has started to look very 20th century. But there’s one eye-catching pledge – to legalise cannabis, and hence take global leadership in what promises to be a major industry over the next 50 years. The coalition is committed to permitting the sale of cannabis in licensed stores or cafes, much like tobacco. (The drug has been legal since 2017 for medical purposes, and, as in the UK, the police haven’t shown much interest in enforcing prohibition.) That no longer sounds as controversial as it once would have, but it is still significant. As the first major country to legalise…

Investors often assume that you should buy the emerging-market countries with the fastest growth to get the best returns. In reality, this is only true in the most unhelpful way. If you could predict which markets would grow fastest in future, you would probably do very well. Between 1976 and 2020, a theoretical strategy of investing each year in the two quintiles of countries with the highest growth over the next five years would have beaten those with the weakest growth by eight percentage points, according to research by Elroy Dimson,Paul Marsh and Mike Staunton of London Business School. (A quintile is one-fifth – so in other words, the overall comparison here is between the top 40% and bottom 40% of emerging markets sorted by growth.) “Countries with weaker past…

An inconspicuous recent announcement by Regional Reit (LSE: RGL) caught my eye. The real-estate investment trust was buying a £236m portfolio of 31 assets, comprising more than 1.6 million square feet in 27 office assets with 192 tenants, two industrial units with three tenants, three residential assets with 12 tenants and a drive-through restaurant. A Reit on the rise RGL has been a dull investment since its launch in 2015. At 90p, its shares trade half-way between its early 2020 high of 120p and its October 2020 low of 60p. They stand at a 9% discount to net asset value (NAV), which is now slightly below the 100p at launch, but offer a dividend yield of 7%. RGL invests in property, predominantly offices, outside the M25. Rent collection last year…

Old inflation models are newly fitting Jeremy Warner The Daily Telegraph For much of the post-war period, the “Phillips curve” was the “lodestar of interest-rate setters everywhere”, says Jeremy Warner. It held that “the lower the rate of unemployment, the higher the likely rate of inflation, and vice versa”. But then came globalisation and the mass movement of goods and people. After 2004, EU migrants flocked to Britain; labour supply was no longer fixed and the Phillips curve flattened, making itself “all but irrelevant to interest-rate policy”. Now, however, a Brexit-induced exodus of workers combined with a spate of early retirements has led to a shrinking workforce in the face of a post-Covid-19 proliferation of jobs. From July to September wages rose an average of 5.8%. The Bank of England…

Vladimir Putin once said that the “nation that leads in artificial intelligence will be the ruler of the world”. He’s right, says Javier Arroyo, and Britain should worry, as it is lagging. Thirty-five per cent of business leaders believe there will be a shortage in the skills required to work in AI in the next two years, according to a study by Microsoft. And although 93% of US and UK organisations list AI as a business priority and have projects already planned or in production, more than half admit they don’t have the right mix of skills in-house to bring their strategies to life. The problems start in the classroom – there’s a “massive disconnect” between the maths taught in schools and the skills that tomorrow’s workforce will need. The…

It has been adismal two years for pubs and restaurants. They were closed for long periods in 2020 and early 2021, and when they did reopen they faced various restrictions that were only gradually phased out. Then in the summer the “pingdemic” caused staff shortages before supply-chain difficulties dampened autumn trading. To add insult to injury, the emergence of the new Omicron variant has led to calls for more restrictions, including masks in restaurants and possibly even closures and lockdowns, to be reintroduced. Shareholders in pub chain JD Wetherspoon (LSE: JDW) have experienced aparticularly bumpy ride. After doubling between March 2016 and March 2020, the share price plunged by 60% during the first wave of the crisis. It then staged a partial rebound as restrictions were lifted only to fall…

Devices such as smartphones, tablets, or wearables and technologies including streaming, navigation and gaming are all possible thanks to global networks and the chips that connect devices to them. Without them, our devices are expensive paperweights. Faster data speeds, lower latency (the delay in getting data to its destination across a network) and more connected devices are driving new and improved applications, along with greater data creation and consumption. They are also fuelling the need to expand and ultimately upgrade existing networks. The Digital Infrastructure and Connectivity UCITS ETF provides exposure to the companies facilitating today’s digital infrastructure. It features technologies such as 4G and 5G mobile-network connectivity, gigabit broadband, and the next generation of connective systems. The key subsectors in the ETF include data centres, networking equipment and related…

No longer the tipple of niche drinkers, whisky has become the hot new thing. Distilleries are falling over themselves to capitalise on the fashion for old fashioneds, a cocktail made popular by Don Draper in Mad Men, and for cocktail-making in general. In the 15 weeks to 7 November, sales of mixed drinks soared by 45% at pub chain Wetherspoons compared with the same period in 2020, driven by a younger crowd, perhaps embracing discoveries made when bars were shut last year. And they haven’t been slow to recognise the potential gains that can be made in whisky collecting. While the market did slip last year, rare whiskies have outpaced other collectables by some margin over the past decade, rising by 478%, according to the Knight Frank Whisky index, compiled…

US supermarket giant Walmart has stolen a march on arch-rival Amazon by deploying airborne drones to deliver packages to customers in a small rural town, says Danny Fortson in The Sunday Times. Following a $2.75bn (£2.1bn) deal with drone start-up Zipline (which is backed by Bill Gates) last week, Walmart celebrated its move towards fully automated e-commerce by flying pharmaceutical deliveries more than 50 miles to Pea Ridge in rural Arkansas. Amazon has been trying to develop the technology itself for years – first unveiling an early prototype for US TV audiences in 2013 – but Walmart has opted to use third-party expertise instead. It appears to be paying off – Zipline’s fixed-wing drones are already widely used in the developing world, “where needs are more urgent and restrictions less…

The Omicron variant of Covid-19 is “a cause for concern, not a cause for panic”, according to US president Joe Biden. Markets disagree. The FTSE 100 tumbled by 3.6% last Friday, its worst day since June 2020. This week the index rounded out its worst month in over a year. Traders dusted off the old lockdown playbook, selling travel and leisure stocks and crowding into tech. The CBOE VIX volatility index, the US stockmarket’s “fear gauge”, recorded its biggest gain in ten months. Investors fly in the dark With little information about the new variant, traders began to overreact to any crumbs of news: markets rallied at the start of the week on anecdotal reports that Omicron only causes mild symptoms, only to retreat the following day after the boss…

“As BRICs turns 20, the race is on to explain why the thesis developed by Jim O’Neill – the British economist who coined the acronym that stands for Brazil, Russia, India and China – did not pan out. [O’Neill envisaged] a future in which these mega-population economies would eclipse [developed economies]... The 2008 financial crisis was rough on developing economies... And it is not like the four BRICs have, generally speaking, been endowed with... reform-minded leadership... Blame the magazine-cover curse... everyone knows that super glowing cover stories scream sell!... by the time the conventional wisdom catches up, the magic is already over. [There is also] the human tendency to read one’s own press [and] grow complacent... You just knew the jig was up when the BRICs started holding summits drenched…

Six to buy Grainger Investors’ Chronicle Newcastle-based Grainger has been a residential landlord for over a century. Results for the 12 months to 30 September showed that it had added 1,300 new properties to its portfolio; 91.5% of them have already been let. Overall occupancy fell during the pandemic, but has recovered to 95%. The group is set to switch to real-estate investment trust (Reit) status, which would eliminate capital-gains tax liabilities incurred on asset sales and boost earnings. A forecast book value of 310p a share for the year to 30 September 2022 suggests that the market “continues to doubt the structural growth story. We don’t”. 313p CentralNic Shares Internet-services firm CentralNic provides businesses with the tools needed to “thrive online”: website registry services, distributions and consultancy. Online marketing…

• Reliance Industries has denied that it wants to take over BT, says Ben Marlow in The Daily Telegraph. BT is in play thanks to the market’s “failure... to properly value a British company”: the stock is down by 50% in five years. BT’s plan to upgrade 25 million homes and firms to full-fibre broadband by 2026 will be hugely expensive, but “as more fibre is rolled out, the costs for repairs go down, margins will expand [and] dividends get bigger”. Buying BT shares seems more sensible than throwing money at vastly overvalued new “challenger networks”. • Shares in Macau casino operators Wynn Macau and MGM China have plunged, says Jacky Wong in The Wall Street Journal . The chairman of the city’s biggest junket operator, Suncity, was being detained…

Following a “ham-fisted” reshuffle back in May, Labour leader Keir Starmer has decided to have another try, says Heather Stewart in The Guardian. He announced a “radical” shake-up of the shadow cabinet this week, with “few posts left untouched”. He has promoted “rising stars”, such as Wes Streeting and Bridget Phillipson, and brought back former cabinet minister Yvette Cooper, generally regarded as one of Labour’s most effective performers, as shadow home secretary. The change indicates a focus on those who “can deliver a punchy media performance” and are “reassuring to Conservative-Labour switchers”. Starmer’s new team should give Labour in parliament a fresh lease of life and “remind the government that there is actually a serious alternative to the Conservatives”, says Tom Harris in The Daily Telegraph. And Starmer is right…

• Trevor Milton (pictured), founder of Nikola, sold 11.7 million shares, worth $131m, in the US electric lorry maker last week, says Bloomberg. The former chairman has off-loaded a total of $284m worth since August. In July, Milton pleaded not guilty to charges of having misled investors over aspects of the business, including the development of prototype vehicles, before posting a $100m bail in the US. The share price has fallen by around 85% since June 2020. • The boss of Virgin Money UK, David Duffy, who is driving through an overhaul of Britain’s sixth-largest bank – involving branch closures, job cuts and a return to profit – has seen his pay package more than double to £2.7m, says The Times. After receiving £1.35m last year, Duffy’s total pay for…

“Emerging market” is a very broad term used to describe countries that are becoming wealthier and more economically advanced, but are not yet classed as developed economies. It was originally coined by Antoine van Agtmael, then an economist at the World Bank, in 1981 as a way of drawing investors’ attention to a set of promising fast-growing stockmarkets such as Brazil, India and South Korea, and was quickly embraced by the investment industry. The definition of an emerging market is not solely related to a country’s level of economic development. Index compilers also take into account the size and liquidity of local financial markets, or issues of accessibility, transparency and stability for foreign investors. Some of these criteria may be subjective, and firms may come to different conclusions. For example,…

Berry Global, which makes plastics used in fast-food containers and nappies, is under pressure from activist investor Ancora Holdings to consider a sale, says Cara Lombardo in The Wall Street Journal. Ancora owns 1% of the group and thinks it could be sold for $100 a share; it currently costs $66. Berry announced last week that it would buy back $50m of its shares as part of a previously announced repurchase programme that foresees further eventual buybacks of $350m, a move Ancora called “an insult”. Ancora urged the firm to consider increasing buybacks to $1bn and to use sale-leasebacks (where the company selling an asset leases it back from the buyer) for its real estate. It also insists that it is ready to try to replace directors.…

“I’ve made a lot of money out of the way I look. I choose to use that; I did, and I do, commodify myself. But we objectify young women, whether they’ve made a decision to commodify themselves or not, and that makes me very angry.” Actress Keira Knightley (pictured), quoted in The Sunday Telegraph “Failing to keep my financial affairs in order, which resulted in a discrepancy in my tax costing me more than £100,000 in 2015 — was probably the most painful experience of my life because it cleaned me out. I’d been doing my own accounts. The moral of the story? Get a good accountant!” Strictly Come Dancing contestant Robin Windsor on his biggest mistake, quoted in The Sunday Times “The fact is that artists don’t like dealing…

Employees often believe that the human-resources department is there to help and advocate for them in tricky situations, says Joanna York. This is a misconception. The most obvious functions of an HR department are hiring, firing and getting people paid. A good one helps the company achieve its ambitions by managing people well. But it can be a mistake to turn to HR for help in a conflict. So what should you do if you have a difficult workplace issue? It’s better to foster good relationships with line managers and avoid HR altogether if possible – all they will contribute is “an additional layer of complication”. That said, things are changing. HR teams are increasingly charged with upholding ethical and legal standards, and treating people on all sides of an…

Many renewable-energy technology companies are not publicly listed. Ordinary investors do, though, have access to the big oil explorers, who are investing large sums of money in renewables while selling off their legacy fossil-fuel businesses. For example, Royal Dutch Shell (LSE: RDSB) recently spent a large sum of money on a majority stake in the Emerald floating wind project, which aims to generate 1.3 gigawatts from floating wind farms situated between 35 and 60 kilometres off the coast of Ireland. Thanks in part to its pariah status with investors focused on environmental, social and governance (ESG) concerns, Shell trades at 6.8 times 2022 earnings, with a dividend yield of 4.5%, but it should be rerated as it embraces renewables. Another oil company actively positioning itself for a future dominated by…

Does a tearaway toddler need a pension? Is it time to start saving for a newborn grandchild’s house deposit? There are tax wrappers designed to stash funds for a child’s future, but with parents already contending with the cost of raising children (£232,000 per child by the age of 21 according to the Centre for Economics and Business Research, and that doesn’t include any school or university fees) it can be difficult to know what to prioritise. One of the most popular options are junior individual savings accounts (Jisas), which recently celebrated their tenth birthday. These childhood nest eggs lock money away until your offspring turns 18. Only a parent or guardian can open one, but anyone can pay in, up to atotal limit of £9,000 per tax year. As…

One commodity followed very closely by many traders is copper. This is because “Dr Copper” is seen as an important leading indicator for the strength of the global economy, with a fall suggesting a recession and a downturn in the stockmarket. The idea is that copper is required for a wide array of industrial and consumer goods and is also used in construction. So if the price is rising it suggests that firms are buying it in anticipation of increasing output (or building more houses). If the price is falling, this could be an indication that demand is about to dwindle. Economists have found evidence of arelationship between economic growth and copper consumption. A 2013 study by Vishal Chandr Jaunky covering 16 countries between 1966 and 2010, including the US,…

Softcat (LSE: SCT) is an IT-infrastructure provider. In its latest update the company revealed that the return to the office had underpinned demand for its services. For the three months to 31 October it delivered year-on-year growth in sales and pre-tax profits. This came after a strong set of results for the full year to 31 July, also driven by strong public-sector demand and the overall corporate recovery, says City AM. In that period gross profits rose by 17% year-on-year to £276.4m and revenue was up by 7.4% to £1.16bn. The shares have gained 65% over the last 12 months.…

Inigo Philbrick was born in 1987 in Redding, Connecticut. The son of a museum director and a writer, he studied art and design at Goldsmiths, University of London. After completing his studies in 2010 he began working at the White Cube art gallery run by Jay Joplin and his sales abilities saw him rise from intern to the position of director of secondary market sales. In 2013 he opened his own gallery with seed money from Joplin, specialising in selling contemporary art to clients who were interested in art as an investment. What was the scam? Clients would pay Philbrick large sums in exchange for a share of artworks in the hope that they would be resold quickly at a profit. After he had sold stakes in the art, using…

Going… In 1948, Ernest Hemingway was in a hotel bar in Stresa, northern Italy, swapping war stories with a young Italian named Arnaldo Zamperetti. Zamperetti’s sister, Ornella, would be entering the Miss Italy competition the next evening, and Hemingway bet the bar tab, plus his favourite billiard cue, that she would win. Zamperetti disagreed, betting that model Fulvia Franco would win due to politics. (Franco hailed from Trieste, a city declared a free territory after the war by the Allies, and one Italy was keen to reclaim.) Franco did win, and Hemingway surrendered the cue, with a note: “To my young friend Arnaldo, in honour of his very beautiful sister Ornella.” The cue will be auctioned with a reserve price of €35,000 at auction house Art La Rosa in Catania,…

You might recall that only 18 months ago the world had so much oil, its price fell below zero. In April 2020, US crude ended up at minus $37 a barrel. That, as CNN Business put it, is “the equivalent of getting paid by your local Starbucks to take coffee off its hands”. “Governments are so covered in greenwash they look like giant vegetables” Since then, governments and private firms, so covered in greenwash that they look like giant vegetables, have worked tirelessly to lower supplies of the dreadful fossil fuel. There are subsidies for electric cars, for windmills and solar panels – and penalties for producing oil. In England, new houses will have to be equipped with a charging station for electric vehicles. Internal combustion engines are to be…

Australia’s superfood fans are facing an “avo-lanche”, says The Sunday Times. Blockbuster harvests from maturing trees have resulted in a glut hitting the market, with prices falling to a record-low average of A$1 (54p) per avocado. Growers are now struggling to sell their produce and have resorted to feeding spare crops to pigs. Pop-star Rihanna (pictured) has been made a national hero of Barbados, stealing the limelight from Prince Charles at a ceremony that removed Queen Elizabeth II as the country’s head of state on Tuesday, says The Times. The singer and businesswoman – with an estimated $1.7bn fortune – was born in Saint Michael and raised in the capital, Bridgetown.…

US medical-devices and healthcare giant Abbott Laboratories has done well out of the pandemic, says WirtschaftsWoche. It makes Covid-19 tests, which help explain why the group is on track for record sales and net income of $42bn and $6.5bn respectively in 2021. But Abbott also has plenty of other irons in the fire. Demand for its pacemakers and stents has jumped as health systems tackle the pandemic-induced backlog of operations. A new manufacturing facility in Indiana will help it maintain its lead in the technology required to operate on heart valves, while it has just produced a heart implant that should reduce the risk of strokes. The group has paid a dividend ever since 1924.…

Jack Dorsey has stepped down as CEO of the social media giant he founded 15 years ago for the second time, says Tom Howard in The Times. (He first left in 2008.) Parag Agrawal, who was Twitter’s chief technology officer, will take over. Twitter’s shares gained 11% when rumours of the move first emerged and before trading was halted. However, after the news was confirmed they then fell back. While Dorsey will remain on the board of directors for now, he will make a complete break with the business in May. Jack Dorsey’s decision to step down isn’t that surprising since “simultaneous leadership of $38bn social-media company Twitter and $98bn fintech Square was always a stretch”, says Lex in the Financial Times. It is no surprise that under Dorsey’s “part-time”…

Last week’s tragedy, in which 27 people died in a small boat while crossing the Channel, forces us to “look at things which make us uneasy”, says Camilla Cavendish in the Financial Times. Across the world, war and climate change are “fraying” the UN Refugee Convention; “governments from Poland to the US are under pressure to show voters that they are choosing who comes, and integrating them without overwhelming local infrastructure”. Britain is a “big-hearted nation”. There was “barely a murmur” when the government offered nearly three million Hong Kongers a “chance to settle” in the UK, nor when it said it would accept 20,000 Afghans. Yet, for a government that left the EU to end free movement, these boats “expose the final lie of a government which promised to…

Next May voters in England, Scotland and Wales will go to the polls in local elections. Few markets have appeared yet, but one that is available is for the election of mayor of South Yorkshire, where incumbent Dan Jarvis (pictured) is standing down. With £4,162 matched on Smarkets, Labour’s candidate is the favourite to win at 1.19 (84%), with the Yorkshire Party in second place at 8.6 (11.6%). The Conservatives are at 12 (8.3%) and the Liberal Democrats 42 (2.3%). Labour is due to select a candidate early next year, but it should be the firm favourite to retain control given that Jarvis won the 2018 election with 47% of first preferences, more than 30 percentage points ahead of the Conservative candidate in second place, and nearly three-quarters of the…

NHS bosses could be in for pay boosts, says Laura Donnelly in The Daily Telegraph. Gordon Messenger, a former vice chief of the defence staff, has been appointed by Sajid Javid, the health secretary, to consider whether higher pay could be used to attract the “best leaders”. Chris Hopson, CEO of NHS Providers, which represents hospitals, says those in the most difficult jobs should be offered rates comparable to those running school academies, who are paid up to £450,000, compared with £300,000 for the highest-paid NHS bosses. Meanwhile, staff shortages are also proving costly, with agencies offering cash or luxury holidays for doctors who refer their colleagues for locum work, says Kat Lay in The Times. One clinical director at a hospital told the Royal College of Anaesthetists that it…

“Turkey’s alarming currency plunge this year has shown how things can sometimes go horribly wrong in the emerging market [EM] world”, says veteran bond and currency investor Paul McNamara in the Financial Times. The lira dropped by more than 20% against the US dollar in November (and 45% this year) despite economic fundamentals that are “in many respects the best for years”. While Turkey is the most extreme example of investors fleeing EMs, it’s not alone: the JPMorgan Emerging Market Currency index is down 9% this year. EMs have struggled in 2021 due to three factors. The strong US dollar tends to lead to outflows from foreign investors. Covid-19 vaccines have been slow to arrive, so vaccination rates are low and infections a major problem. Third and “most intractable” is…

■ Vanguard, the world’s second-largest fund manager with $7.5trn in assets under management, is planning to launch an actively managed fund in China “just as economic and policy changes have roiled markets” there, say Evie Liu and Reshma Kapadia in Barron’s. The Vanguard China Select Stock Fund is to launch early next year and will invest in stocks listed in mainland China and Hong Kong, as well as in US-listed shares of Chinese companies. It is the first fund of its kind for the asset manager, which until now had never offered a foreign single-country fund. Vanguard said it believes exposure to China is key to a globally diversified portfolio, adding it was hoping to provide “risk-tolerant investors with a ‘targeted approach to exposure in the region’”. But many investors…

A thousand years ago, according to legend, King Canute set his throne on the shore and commanded the tide to halt to give a lesson to his courtiers on the limits of his power, says Mervyn King. Today’s central bankers would do well to heed the lesson. They are attached to a “King Canute theory of inflation” – that inflation is driven by expectations, and expectations are driven by what the central bank says. This is why central banks are assuring us that the current bout of inflation is transitory. All their models work on this King Canute assumption – that interest rates or QE will be set at such a level to ensure that inflation returns to target, and the target is what determines expectations. Those who take a…

Japan might be said to have invented stakeholder capitalism. Its companies have long proclaimed an allegiance to the “five joys”: employees, customers, suppliers, society and last of all, shareholders. The relatively poor returns from Japanese stocks in recent decades stem largely from this disdainful attitude toward equity owners. By contrast, US companies put shareholders’ interests first and delivered far superior returns. But now that the US is leaning towards stakeholder capitalism, Japan is moving in the opposite direction. After Japan’s bubble economy collapsed in the early 1990s, many industries suffered from chronic excess capacity. A key problem was that the country lacked a market for corporate control. Foreign activist investors, such as the New York-based hedge fund Steel Partners, which in 2007 tried to take control of brewer Sapporo, were…

Almost one in ten people who have reached retirement age are still repaying their mortgage, according to the Great British Retirement Survey. That figure is likely to rise. People are only getting onto the housing ladder in their 30s or 40s and lenders are increasingly offering very long-term deals. Kensington Mortgages has just launched a 40-year home loan. Mortgage borrowers need to plan their retirement carefully. Interactive Investor says that a 30-year old earning £27,500, a little above the average, is on track for a pension worth around £190,000 if they pay 8% of salary into a workplace scheme until the age of 68. But if they are repaying a mortgage until age 75, once in retirement they would need an annual income (on average) of around £19,000 from that…

My long tips have fared well in the last four weeks, with five out of seven appreciating. Media group ITV went up from 106p to 108p, housebuilder DR Horton increased from $90.22 to $99 and construction firm Morgan Sindall advanced from 2,267p to 2,370p. Mobile phone-company Airtel Africa climbed from 110p to 122p, while spread-betting specialist Plus500 rose from 1,256p to 1,289p. However, Rathbone Brothers slipped from 1,987p to 1,860p and supermarket J Sainsbury dropped from 294p to 280p. My longs are now making an overall net profit of £3,665. Both my short tips moved in my favour. Cinema chain AMC declined from $37 to $36.84, while remote-medicine specialist Teladoc decreased from $150 to $105 as several analysts slashed their forecasts for the loss-making company. My two short tips are…

Package-holiday specialist On the Beach (LSE: OTB) has been battered by the pandemic and the new Covid-19 variant has sent its shares down further. The company has warned of poor trading in the second half of its financial year to 30 September. It extended its off-sale period to 31 August, so customers couldn’t book holidays, says the Motley Fool. The uncertain outlook and ever-changing restrictions meant it was worried it would have to cancel many holidays, forfeiting customers’ goodwill. December’s full-year results will be “dreadful”. The stock has slid by 42% in a year.…

The best Burgundy 2019 Pernand-Vergelesses, Domaine Pavelot, Burgundy, France (£29.55, reduced to £26.25 by the case, Haynes Hanson & Clark, 020-7584 7927, hhandc.co .uk) Prices for white Burgundy climb as every year passes and allocations seemingly shrink at an alarming rate, so it is so life-affirming to find a hugely impressive chardonnay from a fabulous domaine, and it is priced so keenly I nearly dropped my glass when I tasted it. I was cruising through a line-up of posh white Burgundies, and this wine jumped out at me with its magical aroma and silky-smooth palate. Under this sits the dramatic minerality of the village of Pernand, and there is even an echo of Corton-Charlemagne, such is the grandeur in this cosmic wine. The best sweetie 2018 Coteaux du Layon, 1er…

Yamazaki 25 commands an almost religious fervour in the hearts and minds of collectors of ultra-premium whisky, says Brad Japhe on Bloomberg. To tamper with the recipe would be to invite opprobrium from its fans. But that is exactly what Suntory, its Japanese distiller, did. The brand’s chief producer, Shinji Fukuyo, sent shockwaves through the community when he declared earlier this year that the 25-year-old malt would be incorporating elements of American as well as Japanese mizunara oak. Suntory denied it had anything to do with dwindling stock of sherry casks. It was, he said, to align the expression of the whisky with its younger 12- and 18-year-old siblings. Out went the dark fruit notes. In came the sandalwood and spiced honey. A bottle costs around £1,500. However, the price…

• As a working mum of two, I really feel for Labour MP Stella Creasy (pictured), who wasn’t allowed to bring her baby into the Commons chamber, says Saira Khan in the Sunday Mirror. But for me, bringing babies into work would have been the last thing on my mind. Nor would I have breastfed in front of my colleagues. “Not because of embarrassment, but… for those… who may feel uncomfortable seeing my breast out and a baby suckling while discussing a profit statement.” The Commons really isn’t the right environment for a baby. Besides, Creasy already enjoys maternity leave on full pay, an on-site nursery, £30,000 for a locum to cover constituency work for six months, and a baby-leave proxy-vote while away. Creasy’s stand “just makes a mockery of…

$330m The cost of Nasa’s “Double Asteroid Redirection Test” (Dart) mission to smash a rocket into the Dimorphos asteroid at 15,000mph to see if it could be knocked off course had it been heading for Earth. Dart lifted off last week to begin its ten-month journey. £189,700 The biggest debt amassed by a single student in England, according to the Student Loan Company, following a Freedom of Information request. Graduates who attained their degrees in 2020 took out an average of £45,060 in loans. $30m The value of “The World’s Fair Necklace”, the most expensive piece of jewellery offered by New York luxury jeweller Tiffany & Co in its 184 years. Modelled on one that appeared at the 1939 World’s Fair, the necklace took two years to make and features…