Indholdsfortegnelse for Issue 1288 i MoneyWeek

We used to look forward to Budgets. They often heralded major changes in taxation or economic policy. Today, they are tedious minor soap operas, with countless measures trailed – and deemed failed – before the speech even happens. It hardly mattered that this year the Office for Budget Responsibility’s analysis of how the changes will affect the public finances was mistakenly published before the chancellor’s speech. Until 2011, there were between ten and 20 tax measures in a Budget, as Sky’s Ed Conway points out on X. Since then this figure has climbed to well over 60, each raising piddling amounts. Governments have tended to leave the big taxes such as income tax and VAT alone, leading to many smaller, less lucrative changes. This year was no exception. With an…

South Africa is proving an unlikely emerging markets star. The FTSE/JSE Africa TOP 40 index has soared 36% this year. Investors have strong gold prices to thank for the gain. They have boosted local mining stocks such as Anglogold Ashanti (up 200% in 2025). Commodity firms account for more than a third of the MSCI South Africa index. Equities have risen for eight successive months, their best streak since 2013, says Khuleko Siwele on Bloomberg. And the rally has extended beyond miners. Banks, which pay high yields, have been catching a bid. Growing economic optimism is starting to lift more domestic-facing sectors like utilities. Just a few years ago South Africa was beset by “constant rolling power blackouts” and repeated corruption crises, say Monica Mark and Joseph Cotterill in the…

Japan ten-year government bond Yield to maturity, percent Sanae Takaichi, the new Japanese prime minister, has unveiled a ¥21.3trn (£103bn) stimulus plan, and it isn’t going down well with bond vigilantes. Yields on Japanese government bonds (JGBs) have risen to their highest levels since the global financial crisis, with investors questioning whether heavily indebted Japan can afford yet more spending. The yield spike has been also accompanied by a sell-off in the yen, prompting some to compare Takaichi to Liz Truss. Takaichi claims to admire Margaret Thatcher, but the Iron Lady would be “spinning in her grave” at Tokyo’s “fiscal incontinence”, says Albert Edwards of Société Générale. Rising JGB yields could turn off the “liquidity tap” that has helped keep borrowing costs low in many Western countries.…

Shares in online retailer Asos sank by almost a tenth last week after it revealed that revenue had fallen 15% in the year to 31 August, while the number of customers dropped 14%. Asos also posted a pre-tax loss of £281.6m, largely due to a one-off impairment charge after it mothballed its US warehouse in Georgia in an attempt to cut costs. Asos says it has “pulled back from chasing volume in favour of full-price, higher-margin sales”. The people still shopping with the retailer are “more loyal, spending more and sending less back”. Even though the overall sales drop was “much worse” than analysts expected, the company is right to say there that are grounds for optimism, say Panmure Gordon’s Anubhav Malhotra and Wayne Brown. In the past three years,…

David Lammy, the UK justice secretary, is planning to scrap jury trials for most crimes despite arguing during Covid that they are a “fundamental part of our democratic settlement”, says Charles Hymas in The Telegraph. Under leaked proposals, which will require new legislation, lone judges will preside over trials of offences meriting prison sentences of up to five years. These account for up to 75% of all cases and include defendants charged with burglary, GBH, fraud and some sexual offences. Magistrates’ powers will be increased by extending their remit from offences carrying a maximum of one to two years. The automatic right to appeal will also be lost. Lammy’s change in heart comes as courts across the UK “battle with a record backlog of nearly 80,000 cases”. However, the news…

You can’t blame BHP for having another crack at buying Anglo American, but its decision to walk away again so quickly raises big questions. It is widely acknowledged that there is a looming supply shortfall for copper, the metal at the heart both of a putative BHP-Anglo deal and of the much better Anglo-Teck Resources merger that investors prefer. Yet BHP and its peers remain reluctant to put up serious money to solve that. The copper bull case is simple. The world is using more electricity: it is replacing fossil fuels (eg, electric cars), it is meeting new demand (eg, emerging markets) and – at the margin – it is critical to new technologies (eg, data centres are a small but fast-growing share of consumption). In total, electricity will grow…

Taxpayers vote with their feet Tej ParikhFinancial Times New York and California have “long propelled” the US economy, but both states have seen “by far” the biggest exodus of businesses in the past decade, says Tej Parikh. Beneficiaries include Texas and Florida. The most cited reasons are the “regulatory environment”, along with onerous reporting standards that raise costs, “crimp innovation and slow expansion”, while the availability of skilled workers is also a problem. Both states also have among the highest minimum wages and a “complex web” of high taxes. The individuals leaving, motivated mainly by job opportunities but also cheaper living costs, tend to be younger, wealthier and more highly educated. Out of 272 urban areas, Manhattan, San Jose, San Francisco and Brooklyn rank in the five most expensive places…

dacombe.substack.com Tony Blair’s government introduced a target of getting 50% of all school-leavers into university, says Martha Dacombe. This year, Labour abandoned that target at precisely the time it was hit. That is no coincidence. The transformation promised has arrived, but “as betrayal rather than breakthrough”. Instead of the promised dawn of a new era of social mobility, the expansion of university has resulted instead in a generation of graduates drowning in debt and increasingly disillusioned. Social scientist Peter Turchin’s concept of “elite overproduction” – of too many people educated for high-status positions that don’t exist in sufficient numbers – helps explain the dynamics. But “post-Blair British elite overproduction” has a “particular character”: a mismatch between what students were promised (high-status jobs, home ownership, financial security, career progression) with what…

It has been a busy year for large companies’ IT departments. Firms ranging from Marks & Spencer to Jaguar Land Rover (JLR) have seen their operations disrupted by cyberattacks. The incident at Jaguar is thought to have cost Tata (JLR’s owners) just under £2bn. While not a cyberattack, the outage at Amazon Web Services in October also brought swathes of the internet to a halt, demonstrating that “when a single upstream provider experiences issues, the impact doesn’t stay contained; it cascades across industries”, says Fadl Mantash, chief information security officer of global pay-tech company Tribe Payments. Such cases are just the “tip of the iceberg”, according to Jonathan Frost, director of global advisory for EMEA at BioCatch. No wonder, then, that companies providing cybersecurity and resilience services are in demand.…

Listed real estate investment trusts (Reits) are starting to get their mojo back. Nowhere is this more apparent than in the office sector. In the immediate years following the pandemic, office values across the UK struggled as investors tried to grapple with the future of work and the implications for office buildings. However, over the past 24 months, the return to offices has accelerated and supply is struggling to keep pace with demand. Total returns – ie, including rents and valuation – for the UK office sector were 2.7% in 2024, according to real-estate firm CBRE. That lags the overall return for UK commercial property at 7.7%, but there are growing signs of momentum. Take-up of office space across the UK reached 20.3 million square feet in the second quarter…

Australia’s most famous golfer credits his Finnish roots for instilling him with sisu – a term that encapsulates stubborn resilience, says The Wall Street Journal. He has needed it of late. Greg Norman’s promotion of LIV Golf – Saudi Arabia’s billion-dollar effort to lure many of the world’s best golfers away from the PGA Tour – has seen the former “world No.1 golfer” become “public enemy No.1” in some circles. Norman (pictured), 70, stands accused of helping to ignite “a civil war” in the sport. He claims “he even had to buy his own ticket to attend the 2024 Masters” at Augusta, where he was “tailed by an undercover official taking notes on his behaviour”. Famously known as “The Great White Shark” – a reference to his size, blond locks…

2023 Morgon, La Chanaise, Maison Piron, Beaujolais, France Dominique Piron’s ancestors have been making wine in Beaujolais since the reign of Louis XIII and, since he joined forces with his pioneering friend Julien Revillon, his portfolio has never been so dynamic nor so delicious. Last Thursday, the 20th, was Beaujolais Nouveau Day, and it was a good one by all accounts. This week, I present a masterclass on the gamay grape variety. 2024 Beaujolais Les Cadoles (£18.99, harrogatefinewinecompany.com; £17, hic-winemerchants.com) is the super-fresh, downright gluggable, red-apple-and-cherry-stone-fruited entry-level wine, and it reminds me of my introductions to Beaujolais back in the 1970s. 2023 Beaujolais-Villages (£18, ewwines.co.uk) is more terroir-driven, bitter and plummy, with a superb nose and sleek, cool palate. 2023 Fleurie (£24, hic-winemerchants.com) hails from pink granite soils, and it…

Everybody has a sci-fi nerd or a dedicated film buff in their life. Propstore, which is based in Rickmansworth, Hertfordshire, with an office in California, is a great place to seek out a truly meaningful and original Christmas present for them. Propstore is primarily an auction house specialising in film and TV memorabilia, but it also has a “buy now” section on its website selling all manner of pop culture paraphernalia, from film props to story boards. Items are either in the US or already here in Britain – you can filter your search – and prices start from as little as £25 or less, depending on what’s on offer. Prices include VAT, but shipping is extra. Each item also comes with a certificate of authenticity. “Propstore is where you…

Legendary investor Warren Buffett is, as far as we know, not a regular reader of these pages. But in the news is word that he is following our advice and pulling out of stocks. His Berkshire Hathaway conglomerate’s cash pile has hit a record $381.7bn, the biggest corporate war chest in US history and an increase of about $200bn in the last three years. Berkshire has about a third of its money in cash. That is to say, it is “long stocks” on only two-thirds of its portfolio. Why? “We’d love to spend it,” Buffett has said, “but we won’t spend it unless we think we’re doing something that has very little risk and can make us a lot of money. We only swing at pitches we like. It isn’t…

“Markets appear to have their mojo back,” says The New York Times Dealbook. Shares on Wall Street wobbled at the end of last week, with even strong results from AI chip champion Nvidia failing to calm fears about frothy valuations. The sell-off seemed to be morphing into a bigger crash, with the Vix index (a measure of volatility known as the market’s “fear gauge”) spiking to its highest level since April’s tariff meltdown. Then the US Federal Reserve came to the rescue, with prominent policymakers lining up to brief US media that an interest-rate cut was back in play at the next meeting in December. On Monday the Nasdaq Composite index rose 2.69%, its best day since May. The Fed cut US rates to a range between 3.75% and 4%…

“Rarely has an earnings report from a single company been greeted with such nervous anticipation,” says Robbie Whelan in The Wall Street Journal. Since the start of the AI boom, Nvidia has been “regarded as a bellwether for both the health of the tech industry and the market as a whole”. This time the results certainly didn’t disappoint, with Nvidia reporting record sales and strong guidance last week. Quarterly revenue hit $57bn, a 62% increase on the same quarter last year. These results have helped soothe worries about an AI bubble that “have reverberated in markets for the last week”. Nvidia “reminded investors why it sits at the very centre of the AI revolution”, says Kate Leaman of AvaTrade. The “star of the show” was Nvidia’s data-centre segment, which delivered…

“Economic theory suggests large-scale government spending is more likely to boost than dampen inflation,” says Hudson Lockett on Breakingviews. Sanae Takaichi, Japan’s new prime minister, seems “determined to prove otherwise”. Last Friday, her cabinet approved a huge ¥21.3trn (£103bn) stimulus package designed to protect households from rising living costs. It included subsidies for fuel and electricity, cash handouts to families with children and lifting the threshold at which workers start paying income tax. However, the plan is likely to have the opposite effect to what Takaichi wants. The extra spending will require additional government bond issuance. This is likely to hit the yen, which had already fallen 6.7% since Takaichi’s election last month. A weak yen means more expensive imports, notably oil and gas, on which Japan is heavily reliant.…

Donald Trump’s attempt to hammer out a truce between Russia and Ukraine remains in the balance, but defence shares are already slipping at the prospect of the three years of bitter fighting finally coming to an end. It is not hard to understand why. Defence has been one of the few stars in a generally dismal European economy, with shares soaring on expectations that governments across the continent would spend a lot of money in the years ahead on rebuilding their armed forces. The big German defence contractors were the stand-out performers on the back of the huge increases in borrowing and spending, much of it directed to the military. Rheinmetall shares were up 170% over the last year, before the latest sell off. Yet with the European Union also…

A futures contract is an agreement to buy or sell something at a pre-arranged price on a pre-arranged date (known as the delivery date). Futures were developed for agricultural goods such as grain and later for other commodities such as oil, gas and metals. Since the 1970s, financial futures have been widely used for trading in stocks, bonds, currencies and other assets. Futures may be physically settled (by delivering the asset in exchange for payment) or cash settled (meaning that one party to the contract must make a payment to the other party that reflects the difference between the contract price and the current price of the asset). Physical delivery is common with commodities, while financial futures are almost always cash settled. Futures contracts are traded on exchanges such as…

“I got on a drug called Zurzuvae… and it really helped. So if anybody’s having postpartum [depression]: Zurzuvae. I’m not paid by them, but they could maybe throw me something.” Jennifer Lawrence (pictured) interviewed in The New York Times “Rachel Reeves [is] one of life’s triers, but never cut out for this particular office at this particular time... Most workplaces, including newspapers, contain staff who are out of their depth but survive because the boss is too embarrassed to fire them. They just tend not to be the second-highest person in the organisation.” Columnist Janan Ganesh in the Financial Times “So long as the UK takes 30 years to do a nine-month project, it’s uninvestable.” South African investor Jonathan Oppenheimer on the long delays to upgrades for an 18-mile stretch…

capx.co We’ve changed, says Madsen Pirie. The British used to be the people who didn’t complain. “Is everything OK?” the waiter would ask, and we’d say “Oh, fine”, even when it wasn’t. But the “British stiff upper lip notwithstanding”, complaining has a social function. When we complain and other people nod their heads in agreement, we establish a rapport, even with strangers. That makes it a valuable social currency. We can form connection with others simply by complaining about the weather, which, handily, is always there. Similarly, the “national pastime” of queueing provides fertile ground for complaints and hence connection. We “share grievances to establish a sense of community with others”. It is the “verbal equivalent of a handshake”. Little surprise, then, that whining has now “embedded itself into our…

US activist Saba Capital continued its move into alternative-assets trusts by taking a 5% stake in private-equity trust Pantheon International. Founder Boaz Weinstein wants the trust – which invests in private-equity funds and directly into unlisted firms – to increase share buybacks to “nudge the discount tighter”, he told the Sohn London Investment Conference. Pantheon should stop investing in new funds or buying into existing funds on the secondaries market and use the cash for buybacks. “Better than buying secondary funds at [a] 15% [discount], they could buy themselves at 30%.” It should also consider selling an existing holding in “a private equity fund that people really want at a 10% discount, at a 15% discount, take that cash and buy back their stock”.…

The easiest way to invest in companies benefiting from the boom in the cybersecurity sector is through an exchange-traded fund (ETF) tracking a broad portfolio of cybersecurity firms, such as the WisdomTree Cybersecurity Ucits ETF (LSE: WCBR). WidsomTree has built a portfolio of 25 firms by asking experts who have worked at a range of organisations, including the US National Security Agency, to find companies that will benefit from what it sees as eight key themes, ranging from cloud security to cybersecurity education. The largest holding is Crowdstrike, which accounts for 7% of the ETF, with the top ten accounting for half the fund. It has a total expense ratio (TER) of 0.45%. The third-largest company in WisdomTree’s portfolio is Akamai Technologies (Nasdaq: AKAM). Although its core business used to…

While investors’ attention has been focused on Europe’s rearmament, the Indo-Pacific region is starting to undergo an equally significant military transformation. Japan has embarked on its largest increase in defence spending since 1945, while South Korea, India and others are also boosting budgets. At the centre of this regional build-up sits Australia, a key US ally and logistical hub for its Indo-Pacific strategy. The country is investing heavily in submarines, patrol vessels and base infrastructure to strengthen its own defences and support allied operations, while also being home to one of the world’s few pure-play defence-drone companies. The following three Australian companies highlight the growing investment case for Indo-Pacific defence stocks as regional governments rearm and modernise. “Australia, Japan, South Korea and India are key players in the regional defence…

Going… A number of exceptionally rare and valuable blue diamonds have come up for auction in recent weeks. On 8 December in New York, Bonhams will be continuing the trend by offering for sale a fancy vivid blue diamond ring. It is “arguably one of the most coveted gemstones in the world”, says the auction house. The diamond is a “captivating” pear-shaped stone weighing 3.13 carats. “This gemstone is remarkably rare in size, clarity and colour and boasts impeccable provenance [coming from a ‘distinguished’ private collection],” says Caroline Morrissey, director and head of jewellery in the US at Bonhams. It is expected to fetch $3.5m to $5.5m. Gone… Earlier this month, Christie’s in Geneva sold the Mellon Blue diamond (pictured), which at one time belonged to the American horticulturalist, philanthropist…

“Next month marks four years since real estate giant Evergrande first defaulted on its debt – an event many hastily called China's ‘Lehman moment’… China has, for now, navigated its property crisis without it metastasising into the systemic financial meltdown that many once feared… but the aftershocks… still cast a long shadow over its economy… Housing demand has yet to escape the downward spiral. Inventories of unsold homes are at record levels and still growing… Beijing has shown little appetite to reflate home prices. To the leadership, the housing bust… was a necessary correction to an economy warped by property speculation and excessive leverage… Breaking [China's] addiction to real estate has triggered a wealth effect in reverse. Restoring confidence will be no easy feat when the single most important asset…

● Unilever’s transformation continues apace, with Lipton’s tea and Magnum ice cream already having been “sacrificed”, says Alex Brummer in the Daily Mail. CEO Fernando Fernandez intends to focus on global food brands such as Hellmann’s and Knorr, as well as the fast-growing personal care and beauty business. “If products don’t cut through in the US and India, their days may be numbered.” So favourites such as Marmite, Colman’s and Bovril are likely to be put up for sale. The best outcome would be a deal with a UK trade buyer. “Allowing private equity to get their hands on these much-loved assets would be sabotage.” ● Carl Cowling has done the right thing in stepping down as CEO of WH Smith after the £30m profit “over-statement” debacle that wiped 42%…

Conventional wisdom about the US is becoming very pessimistic, says Nouriel Roubini, the economist known as “Dr Doom” for almost two decades because of his persistently bearish forecasts. Donald Trump’s “liberation day” tariffs led many economists to argue American exceptionalism is over and the economy faces stagflation, a declining stock market and a weaker dollar. Yet “market discipline, reasonable advisers” and the independence of the central bank “provided guardrails on the worst policies”, writes Roubini in the Financial Times. When markets slumped, Trump “was forced to blink and negotiate more reasonable trade deals”. Thus the harm was minimised. The US is seeing a few quarters of a lower growth and a modest rise in inflation rather than a stagflationary recession. “By next year, growth will recover as monetary easing and…

adamsmith.org/blog For all the fuss about “ultra-processed food”, which is supposedly killing us, it’s long been incredibly difficult to pin down just what the stuff actually is, says Tim Worstall. As soon as a definition is offered, it is retracted when it turns out that it applies to tofu. This very fact is a clue that we’re not talking about anything scientific here, but a political fashion. The latest declaration from Chris van Tulleken, a leading advocate, confirms this. Ultraprocessed foods, he claims, does not refer to specific products, but to our whole diet because we are eating foods that have been produced for profit. Which is the kind of thing you’d expect to hear from a teenager. Profit is the value added in a process – the amount by…

● Murray Income has chosen Artemis as its new manager to replace Aberdeen, following a strategic review launched in July. The UK trust, which has £960m in net assets, has badly trailed the FTSE All-Share index over five years, while the £5.3bn Artemis Income open-ended fund run by the Artemis UK equity income team has performed well. The change is set to take place in early 2026. ● Gresham House Energy Storage is to buy a battery-energy storage development in Elland, West Yorkshire, next to an operational site that it already owns. Elland 2 will be a 100MW system – the largest in the fund’s portfolio so far – with an initial two-hour duration that may be extended in future. The deal is conditional on the project receiving a Gate…