Innehållsförteckning för 1227 från MoneyWeek

“Electricity grids are under increasing strain from electric vehicles and data centres, so it would be easy to think of bitcoin mining as just one more source of electrical demand. But bitcoin miners only operate when power is cheap and abundant. Whenever it is scarce and hence expensive, miners curtails their electricity usage in a matter of seconds. Having a reliable buyer of energy that does not add to peak demand is ideal for encouraging the building of renewable generation. Miners also participate in demand-response programmes, allowing grid operators to stabilise the grid. The grid-stabilising behaviour of bitcoin miners puts them in direct competition with natural-gas ‘peaker’ plants, which kick in when demand is high. But a system with more renewable generation and bitcoin miners is far less carbon-intensive than…

Microsoft, BlackRock and MGX, an investment group backed by the government of the United Arab Emirates, have unveiled a new $30bn artificial-intelligence (AI) infrastructure fund to invest in data centres and related power infrastructure, mostly in the US, say Jack Pitcher and Connor Hart in The Wall Street Journal. The “exploding demand for AI” across the entire industry has led to a “frenzy” to build the supporting infrastructure. The hope is that by borrowing from investors like pension funds and insurance companies – who seek “steady, modest returns from private infrastructure investments”– the Global AI Infrastructure Investment Partnership will eventually deploy up to $100bn in total capital. The partners have been “vague” about some issues, such as the amount of the fund’s investment (if any) that will go to Microsoft’s…

France’s Gaztransport & Technigaz focuses on transporting and storing liquid natural gas (LNG), says Börse Online. It makes membrane containment systems that can be adapted to different tanker shapes. The membranes minimise evaporation and ensure that the gas withstands very low temperatures. The group is the runaway leader in this subsector, with a market share of almost 100%. It also runs a consultancy and services arm to help clients construct LNG tanks as well as deal with its membrane systems. Net income almost doubled in the first half and the order book looks robust. In future the firm may also benefit from the transport of liquid hydrogen. The shares yield 5.4%.…

Anura Kumara Dissanayake, the head of the traditionally “staunchly Marxist” Janatha Vimukthi Peramuna (JVP), has been elected as president of Sri Lanka, says Hannah Ellis-Petersen in The Guardian. It is a “significant political pivot” for the country, which has been ruled by a “rotation of the same few parties and families for decades”. Dissanayake won just 3.8% of the vote at the last election, but an ongoing economic crisis sparked widespread mistrust of the elites. Voters were drawn to Dissanayake’s promises of change, his attempts to make his party “more palatable” and his “anti-corruption and pro-poor messaging”. Sri Lanka has been through the worst economic crisis in its history, with inflation rates of 70% and severe shortages of essential goods, says Vidhura S. Tennekoon in The Conversation. An IMF stabilisation…

● The reunion tour of Oasis, which championed Burberry in the 1990s, is a “ray of hope” for the struggling luxury brand, says Andrea Felstead on Bloomberg. Frontman Liam Gallagher (pictured) has been seen wearing Burberry’s trademark check pattern, and the accord between the Gallaghers has spurred the #Britishcore TikTok trend. While Burberry’s new American boss Josh Schulman may ditch many elements of his predecessor Jonathan Akeroyd’s plan, “he should emphasise the British heritage further”. Burberry’s turnaround has “lacked buzz”, and a “return of Britpop could be just what it needs.” Liam’s son Lennon is already a face of the brand, “but Burberry should embrace Oasis fever even more” and outfitting Oasis for the tour would be a smart move. If this fails, a takeover looks likely. ● “One hopes…

Richard Buxton, retired fund manager “To reach net zero by 2050, which is only 26 years away, without some massive technological breakthrough is for the birds,” says Richard Buxton, who retired in June last year after 40 years as one of Britain’s best-known fund managers. “We are going to be relying on hydrocarbons for decades to come” and we need to think about this in a “nuanced” way. “After more than thirty years of growing concern over climate change, the world still derives 85% of its energy needs from hydrocarbons,” Buxton writes in Citywire. “Nuclear, solar, wind, et al – despite massive government subsidies – make up only 15% of the global energy mix.” Yet some of these hydrocarbon sources are much dirtier than others. China and India, the world’s…

■ Last year Vanguard introduced a pilot programme allowing investors in five funds to vote on company proposals to give them a say in governing some of the US’s largest companies. But nearly half chose to let the $9.7trn US asset manager vote for them, says the Financial Times. The new policy was partly prompted by a backlash against environmental, social, and governance (ESG) initiatives in the US; some other index investment providers adopted similar measures. Yet data from Vanguard shows that nearly 25% of the 40,000 retail investors in their programme voted in line with ESG shareholder proposals, while 30% backed the recommendations of company boards. The largest number of investors voted in line with Vanguard’s recommendations. “The next time Republicans complain about non-representative corporate democracies, the asset managers…

cityam.com Chancellor Rachel Reeves’ efforts to strike a more upbeat tone in this week’s party conference speech may reflect the scolding she received from Andy Haldane, former chief economist of the Bank of England, says Paul Ormerod. Haldane has said that, just after the election, there was “a sense of refresh, a sense of renewal, a confidence about the UK”. But Reeves’ claimed discovery of a £22bn black hole in the country’s finances was both “unnecessary and unhelpful”. By creating a sense of “fear and foreboding”, says Haldane, Reeves risks undermining the economic recovery that was underway. It might sound odd to suggest that a speech by Reeves might doom the economy, but the idea that “narrative, mood or sentiment” affect how economies perform has been advocated by John Maynard…

People often think about finding professional advice when it comes to their money. But whose should you listen to? With money coaches, financial planners, financial advisers and wealth managers all keen to take your money in return for help it can be hard to know who to turn to. “People often start by asking their friends and family for recommendations,” says Sarah Coles, head of personal finance at Hargreaves Lansdown. “It’s also worth checking their expertise matches the things you want help with. Their qualifications are a useful indication, along with how they describe their services on their website.” The two best-known options are financial advisers and wealth managers. “A financial adviser tends to consider your finances in the round, while a wealth manager will focus on investments,” says Coles.…

Nearly eighteen months after Jeremy Hunt abolished the lifetime allowance (LTA) for pension savers, financial advisers complain they are still waiting for the final version of the relevant regulation. And while some specialists have advised clients on the verge of retirement to wait for the rules to be sure they are cashing in their savings without risking a tax charge, the delays are mounting up. The good news is that HM Revenue & Customs has just published an update promising to introduce the regulation “as soon as parliamentary time allows”. That provides some reassurance that Labour isn’t planning to reverse the abolition of the LTA – which previously required savers with funds worth more than around £1m to pay swingeing tax charges on the excess – despite speculation it would…

Like Apple, fashion retailer Nike has long been “masterful at making product breakthroughs and engineering cultural movements”, say Kim Bhasin and Lily Meier in Bloomberg Businessweek. It revives a classic design, customers go wild for it, and the company monitors product flow carefully, putting enough out to keep the product circulating but still scarce. Last year the firm posted record sales of $50bn. Nike’s 48-year success story has, however, been put into question by “the man who made Nike uncool”, say Bhasin and Meier – none other than the outgoing CEO John Donahoe (pictured). Donahoe, now 64, a veteran technology executive and consultant, became boss in 2020, picked by the board of directors to transform the company’s digital strategy. He was an outsider who knew nothing about Nike or its…

2023 Winbirri, Bacchus, Norfolk, England £114, for six bottles, winbirri.com and about £21, Waitrose Norfolk and Suffolk stores, jarrolds.co.uk, theenglishwinecollection.co.uk Winbirri won the Decanter World Wine Awards, World’s Best Single Varietal White Wine 2017, with its 2015 Bacchus. I remember previewing the 2016 vintage in my old column in the Daily Mail in October 2017. It was a cracker and, dare I say it, a tiny bit finer than the famous 2015 vintage. Time has ticked by, and I am thrilled to report that bacchus in the UK is a proper category of wines worthy of respect, with genuine fans. Winbirri’s new release is its finest to date. It joins serried ranks of elite bacchi, including those from wineries such as Castlewood; Camel Valley; Hidden Spring; Hoffmann and Rathbone; Knightor;…

Money in Art David Trigg Heni Publishing, £19.99 Money and art have long been in a complicated relationship, as former governor of the Bank of England Mark Carney observes in his foreword to this book. Many artists have tended to the view that money is a symbol of all that is wrong with the world, yet both art and money depend on other people’s perceptions for their value. Many artists have also, of course, long been in the position lamented by Karl Marx’s mother: better at critiquing capital than acquiring it. Modern artists seem to have had a change of heart, becoming adept at exploiting commerce for private gain and even incorporating currency itself into their works. Apart from a brief introductory chapter, David Trigg’s book focuses on artworks by…

Contestants competing for $5m on Beast Games, a new game show created for Amazon Prime Video by Jimmy Donaldson (pictured), a 26-year-old better known as MrBeast on YouTube, claim to have received physical injuries, emotional distress and sexual harassment. That has led Hollywood executives to feel “they have little to fear from social-media upstarts”, says The Economist. They shouldn’t be so confident. US viewers now spend more time watching YouTube on their TVs than any other source of content, according to Nielsen, a data company. In Britain, at least 15,000 YouTube users employ people to work on their channels, which are becoming slicker due to the increasing sophistication of tools, such as 4K cameras, drones standing in for helicopters and translation software. Those tools are also become cheaper. Over the…

“Life in one of the world’s priciest countries” is becoming even more expensive, say Heidi Taksdal Skjeseth and Ott Ummelas on Bloomberg. The Norwegian krone has been the worst performer among the G10 group of top traded currencies this year. In a country that imports most of its goods from abroad, that spells inflation. The krone is down 18% against the euro and 20% against the dollar since the start of 2022, but “no one is entirely sure why”. The central bank has kept money tight to defend the currency – hurting local business in the process – but it just continues to tumble. Preoccupied by the krone, the Norges Bank is one of a diminishing number of central banks still resisting pressure to cut interest rates, says Francesco Pesole…

Jerome Powell’s bumper interest-rate cut in the US has turbocharged gold prices, with the metal breaking through $2,600/oz for the first time to hit new record highs. In sterling terms, gold climbed above £1,960/oz, also making a new record. Lower interest rates increase the yellow metal’s appeal relative to bonds, gold’s chief rival as a “safe-haven” asset for investors to store wealth. “Robust” global central bank purchases and global political instability have also contributed to gold’s 27% gain so far this year, say Yvonne Yue Li and Jack Wittels on Bloomberg. The rally has been so vigorous that the market looks “in need of consolidation”, say Saxo Bank’s analysts. Hedge funds haven’t been this bullish on gold since 2020.…

The chilly spring and wet summer have hampered progress at many retailers, says Emma Taggart in The Times. John Lewis, Primark and Inditex, Zara’s parent company, have all highlighted the impact of the weather on consumption. But last week, Next, which has a reputation for “under-promising and over-delivering”, announced it had “bucked the downbeat trend” by increasing its first-half profits, while sales rose 8% compared with the same period last year. It also raised its profit forecasts for the whole year for a second time in two months, predicting that it will make £995m in pre-tax profits. The stock has gained almost 30% this year. Next may have “materially exceeded” its expectations in the first six months of the year, but it may still be forced to close stores after…

Tokyo Metro, one of two tube operators serving Japan’s capital, aims to raise ¥319.6bn (£1.6bn) in its initial public offering (IPO) on the Tokyo Stock Exchange next month, says Bloomberg. This would be Japan’s largest listing since SoftBank’s $21bn IPO in 2018. The company plans to offer 290.5 million shares at ¥1,100 (£5.75) each, valuing Tokyo Metro at about ¥639.1bn (£3.3bn). Tokyo Metro projects a dividend of ¥40 (21p) for the 2025 financial year, implying a yield of 3.6%. Japan’s Ministry of Finance currently holds a 53.42% stake in Tokyo Metro, with the Tokyo Metropolitan Government owning the rest. Tokyo Metro operates nine train lines, serving 6.52 million passengers a day.…

The rise of Kamala Harris on the betting markets reversed a little this week. But with £71.35m matched on Betfair, she is still the (slight) favourite at 1.95 (51.3%) to win the White House, compared with 2.1 (47.6%) for Donald Trump. The best odds on Harris are 17/20 on SpreadEx; the best value for those betting on Trump is 11/10 (47.6%) with Sporting Index, although, as I’ve said before, I wouldn’t recommend betting on him at these odds. With the election fast approaching, both the bookies and betting exchanges are offering more side bets. One attractive punt is Ladbrokes 1/8 (88.8%) on Harris getting more votes nationally than Hillary Clinton did in 2016. For one thing, the size of the electorate is larger, with the number of registered voters climbing…

I have slightly mixed feelings about the successful campaign to change the rules on how costs are reported for investment trusts (see page 18). The sector has been treated harshly by the old rules, but there’s a risk of creating the impression that the way costs are calculated for trusts is entirely wrong. That’s mostly not true. The real flaw lies in how investors have been encouraged to compare different funds in a very simplistic way. Costs are important in investment – unlike returns, they are under your control – but you need to compare like with like. If you are buying a tracker – ie, an exchange traded fund (ETF) or an index fund – you can readily compare the ongoing cost figure (OCF) between any two funds. You…

Last week, the government and the Financial Conduct Authority, the City regulator, jointly declared that investment trusts will now be excluded from European regulations affecting how their charges are reported. This move has been a long time coming. Campaigners have been arguing for years that the rules are being applied incorrectly and, as a result, are doing untold harm to the investment-trust sector. The regulations, known as Priips, had two major drawbacks. They forced investment companies to add corporate costs on top of their management charges in a reported “ongoing charge fee” as if they were paid directly by the shareholder. This in turn pushed up the figure investment managers had to report to clients when it came to the expense of managing their portfolios. Priips were designed to clarify…

Let uni tuition fees rise Editorial The Economist The government should raise the cap on university tuition fees in England, says The Economist. In the last academic year, 40% of British universities ran deficits owing to tighter immigration rules on the numbers of foreign students, who pay higher fees than native ones, and the dwindling value of tuition fees. The cap of £9,000 was put in place 12 years ago and has been raised only once since then to £9,250. Accounting for inflation, it’s now worth less than £6,500 in 2012 money. There have been calls to go back to “the old days of free tuition, courtesy of the taxpayer”, but England’s student-finance regime works well. Graduates earn more than non-graduates and they only start paying their debts…

bloomberg.com/opinion The next great culture war in Britain has started – between the new Roundheads and Cavaliers, says Adrian Wooldridge. Keir Starmer increasingly resembles Oliver Cromwell – “banning this and abolishing that, warning and scolding, glowering over the country like a giant killjoy”. The Tories, on the other hand, are “feeling their way towards becoming the Party of Merrie England”. Starmer “never appears in public without adding to the sum of human misery”. He says things will get worse before they get better (see column, right). He is planning to ban smoking outside pubs, stop us eating greasy food and ban takeaways in the vicinity of schools. The well-off will be taxed more, country-dwellers will have to put up with vast new housing estates. There is some justification for all…

● “Popping to your local shop could be costing you as much as £832” more a year than going to the supermarket, says Madeleine Ross in The Telegraph. Data collected by consumers’ group Which on 42 items from Morrisons Daily, Tesco Express and Sainsbury’s Local showed they cost far more than if you bought the same things in the supermarkets. Morrisons’ customers would pay 21% more – £16 on average a week – for shopping at Morrisons Daily rather than a larger Morrisons. For Sainsbury’s and Tesco the difference was 14% and 10% respectively. ● The number of people paying tax on their savings will almost double in the two years to the end of the 2024-2025 tax year, a Freedom of Information request by AJ Bell reveals. Almost 2.1…

● Good news and bad for pensioners. Now we have September’s data, we know the state pension will rise by around £460 next April, or around £350 if you’re on the old basic state pension. That appears to be enough to compensate you for the loss of winter fuel payments later this year, which would have been paid at £200 or £300 if the government had not decided to abolish the benefit for all but the worst-off pensioners. However, bear in mind that adjusting for inflation, the state pension is only going up by around £210 next April, or £100 if you’re on the old benefit. So, in real terms, pensioners will still be worse off. ● With most final salary pension schemes in surplus, a growing number of employers…

“Blue chips have done well recently, but historically small- and mid-caps have produced better returns” Capital Gearing Trust is an investment company focused on capital preservation, seeking to grow shareholders’ real wealth through a diversified portfolio of bonds, equities and a little gold. Since 2000 the company’s net asset value (NAV) per share has grown at an annualised pace of 8.3% with low volatility and limited drawdowns. A significant portion of our equity holdings consist of other investment trusts, which naturally raises the question of why an investment trust invests in other investment trusts? Who is the poacher and who is the gamekeeper in this arrangement? The share price of many investments trusts trades at a discount to the NAV per share. Several factors influence that discount, and this variability…

“Do not feed the Lions.” But don’t worry: the sign that greeted us as we arrived for three nights at The Nest, a luxury “glamping site” located between Stamford and Peterborough, is tongue-in-cheek. The sheep grazing in the nearby meadow are the closest you will come to finding the “kings of the jungle” here. However, by the end of the trip, my companions and I agreed that despite the lack of big cats, The Nest did an excellent job of bringing the Maasai Mara to Cambridgeshire. Cosy lodges with wood-fired stoves and board games Accommodation at The Nest consists of three lodges, called Pinkfoot, Cuckoo and Teal. We selected Teal, but all are very similar, with each consisting of a huge canvas tent (which can be unzipped and rolled up…

The US Federal Reserve has started “with a bang”, say Tiffany Wilding and Allison Boxer of Pimco. The American central bank last week cut interest rates for the first time since 2020, serving up a bumper 50-basis-point reduction rather than the more usual 25-point increment. Historically, the Fed usually cuts by 0.5% only when the economy is about to tip into a bad recession. Fed chair Jerome Powell says that this time is different, says Aaron Back in The Wall Street Journal. Powell told a press conference that the “US economy is basically fine”. He just wants to “maintain the strength that we currently see”. Why such deep rate cuts then? Because the “neutral rate” – the rate at which interest rates are neither expanding nor contracting economic activity –…

Shares in Intel jumped by 8% last week following reports that chipmaker Qualcomm had approached its struggling rival about a potential takeover, says the Financial Times. A deal is “far from certain” and no formal offer has been made, but a tie-up would eclipse Microsoft’s $69bn acquisition of Activision as the biggest technology deal on record. Intel’s share price has halved this year, putting the company on the defensive. Such a deal would be a “massive coup” for Qualcomm, which re-entered the desktop-processor market this year as a part of Microsoft’s artificial intelligence (AI) PC strategy after “years of dominance in mobile processors”, say Richard Lawler and Sean Hollister in The Verge. By contrast, Intel is “arguably in its weakest position in years”, with the company recently announcing big cuts,…

Five to buy Burberry The Telegraph Even though the shares are at 15-year lows, investors should give Burberry’s new CEO Joshua Schulman “time to try and steady the firm’s slumping fortunes”. Dividend cancellations, the ejection from the FTSE 100, and lacklustre demand in China have tarnished Burberry’s luxury image. Schulman’s experience at Jimmy Choo and Coach bodes well for a turnaround; he may cater to the rapidly growing Indian and Middle Eastern markets and focus on high-margin products such as perfumes. It’s “possible that the darkest hour is just before the dawn”. 587p International Airlines Group The Times Shares in International Airlines Group (IAG) are now 33% below their pre-Covid levels, but they have rebounded 30% in the past six months thanks to surging demand for travel. Despite higher costs…

It did not take long for the new government to be plunged into sleaze allegations. Prime minister Keir Starmer has accepted tens of thousands of pounds of free gifts, including free glasses, suits, boxes at Arsenal games, Taylor Swift tickets, and, perhaps most extraordinarily of all, free clothing for his wife. Most dual-earning couples well into the top tax bracket can easily afford their own glasses, but not, it seems, the Starmers. Chancellor Rachel Reeves, despite preaching austerity for everyone else, has accepted free clothes, which were then oddly described as “office expenses” on her official declarations. Education secretary Bridget Phillipson accepted a £14,000 donation from Waheed Alli, a Labour peer, to pay for, among other things, a birthday party. The list goes on and on. The Labour cabinet has…

Many high-profile investment trusts have managed to raise their dividend every year for decades regardless of dividend cuts by companies. The main reason for this is that trusts, unlike open-ended investment funds, don’t have to distribute all the dividends they get each year. They can hold back up to 15% to build up a revenue reserve, which they can then draw on to maintain their own dividends in years when company payouts fall. This can be useful for investors who prefer a steady income from their funds. You could do a similar thing with your own portfolio, by putting aside 10% or 15% of your dividend income to be drawn on only during market crises. However, avoiding dipping into that requires discipline, while having it out of reach inside an…

SKF, the world’s largest manufacturer of bearings, plans to break itself up and spin off its automotive business, which is less profitable than its industrial division, following pressure from activist investor Cevian Capital to boost its share price, says the Financial Times. It follows in the footsteps of other industrial firms like Maersk and General Electric, which have slimmed down in recent years. SKF’s shares surged 10% on the news. Cevian, which holds an 8% stake in SKF, supports the break-up and predicts increased profitability for both divisions. The split is expected to be completed in the first half of 2026. SKF plans to distribute shares in the automotive unit, which will have a separate listing in Stockholm, to existing shareholders.…

“I look for jobs I can engage with. It’s not always the size of the part. I mean, sometimes it’s just to pay a bill.” Actor Sanjeev Bhaskar (pictured), quoted in The Guardian “That’s cost me £150m.” Boxer Tyson Fury, who was expected to fight Anthony Joshua next, on Joshua’s defeat by Daniel Dubois at Wembley Stadium, quoted in The Times “When I came to write [my] second book… I had about £200 left… I couldn’t pay the rent and my wife and I were living in a horrible, mouse-infested flat with a new baby. I thought: ‘OK. I need a job that’s more stable than this.’ So I downloaded the application forms for law school. Then I got the offer to write a regular… sports column. I thought: ‘Wow I’ve been…

spectator.co.uk Keir Starmer coasted his way into No. 10, says Stephen Daisley. But it turns out that the last five years of Tory government weren’t the only gifts to have been lavished on the PM. In April he declared £18,000 worth of clothing from Labour peer Lord Alli, but failed to declare £5,000 in clothing for his wife. It is, “as the kids say, not a good look”. Scandals early on in a government’s lifespan are “essentially consequence-free”. But they do hint at what might lie further down the road. Tony Blair was only six months into his premiership when his government was mired in its first major sleaze row, the Bernie Ecclestone affair. It was a first sign of Blair’s “proximity to millionaires”, penchant for “sofa government”, laxness about…

Do you have a stakeholder pension plan? If so, it is almost certainly out of date, and transferring your retirement savings elsewhere could save you money and boost your investment returns. Stakeholder pensions were launched in 2001 when the government decided it wanted to tackle rip-off pension charges. Providers were not allowed to levy annual charges of more than 1.5% a year, falling to 1% after the stakeholder pension had been up and running for ten years. That represented a good deal at the time, given that providers had been routinely charging significantly more on traditional personal pensions. Millions of savers signed up for the low-cost schemes during the 2000s, and many stakeholder plans allowed monthly contributions of a little as £20. Charges have fallen Today, however, stakeholder schemes no…

There is a growing global market for cross-border payments, in which new companies are taking business away from traditional banks and foreign-exchange brokers who lack the resources to cope with increasing compliance requirements. Finseta (Aim: FIN) is a good example of one such company. It provides multi-currency accounts for businesses and high net-worth individuals (HNWIs) all over the world. The firm removes the complexity of international payments by managing currency risk, payment and electronic account services. Finseta has a market value of £22m and achieved a turnover of £9.65m in 2023, up fourfold from 2021. A worldwide footprint Finseta does not compete in the low-value, high-volume retail market, but instead provides bespoke services to corporate and HNWI customers making high-value compliance-intensive transactions. The company serves 1,400 customers in over 150…

The Porsche 911 S/T is the German carmaker’s 60th anniversary present to itself and its fans, say James Taylor and Yousuf Ashraf in Evo. The name comes from the classic S/T competition package that was sold for the 911 between 1969 and 1972. That combined the engine from 911 S, which was the biggest 911 of the time, with parts from the 911 T, the lightest 911 up until then. The new S/T shares a “loosely similar philosophy”. It has taken the “relatively light” 911 GT3 Touring and added the 518bhp naturally-aspirated 4.0-litre flat-six engine from the 911 GT3 RS, “but, uniquely, [it has combined] it with a manual gearbox”. The result is the lightest 992-generation 911, with a kerb weight of 1,380kg. Unlike the original S/T, however, this isn’t…