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Issue 947

There's a reason MoneyWeek is Britain's best-selling financial magazine. We exist to help you ground your portfolio so that it keeps your money safe during rough patches and growing in the good times. We don't just look at how to maximise your returns and limit your losses, we also like to look at how you can keep more of the money you've made. Week-in, week-out we'll guide you through the financial world as it changes, alerting you to all the opportunities to profit and dangers to avoid, as they appear. Income strategies, rising-star companies, the best funds and trusts, clever ways to preserve your wealth during market turmoil... you will get the best ideas from the sharpest financial minds and investing professionals in Britain.

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51 Issues


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from the editor-in-chief...

Uber’s flotation was a car crash (©Getty Images) “Investors’ tolerance of extreme valuations is falling, implying lower returns ahead” Uber loses £3bn a year. It isn’t entirely clear how those losses will turn into profits (see page 12). Its revenue growth has been slowing. The level of disclosure in its “enormous and vague” pre-listing prospectus was, as Rett Wallace of Triton puts it, “woeful”. So, given these ropey fundamentals, what is the company worth? The short answer is not as much as Morgan Stanley reckoned it was before Uber hit the market last week, and not as much as investors felt happy paying for it before it floated. The shares fell by 18% in the first two days of trading and, according to Bloomberg, most…

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losers of the week

A German passport can fetch up to €10,000 on the black market. That’s why 20 German social-media “influencers”have become victims of an elaborate holiday fraud that relieved them of their passports, says The Times. They were offered an all-expenses-paid five-star holiday to Turkey by Constantino Tour, an entirely fictitious travel company. They were flown to the coastal city of Antalya and met by a tour guide who took their passports. They were then bundled onto a tour bus and driven to a remote town two hours away, where they were dropped off, with no hotel rooms booked and no flights back. Instagrammer and reality TV star Natalia Osada (pictured) said: “I can hardly believe that there are people like that in the world.” Good week for: …

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trump tweet triggers trade tit-for-tat

Xi Jinping and Donald Trump: clashing narratives (©Getty Images) Xi Jinping “had a great deal, almost completed, & you backed out” (sic.), tweeted Donald Trump after Washington more than doubled duties on $200bn of Chinese imports at the end of last week. On Monday the US president tweeted that “China should not retaliate – will only get worse”. But two hours later Beijing announced $60bn of its own tariffs on imports of American goods ranging from foodstuffs and chemicals to toothpaste, effective from 1 June.The new tariffs wiped more than $1trn off global stocks on Monday. The MSCI All World index, covering both developed and emerging markets, has slipped by 5% from its 2019 peak in early May, while emerging-market stocks have lost a tenth. The White…

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the fallout from the trade war: what next for asia?

Vietnam’s clothing sector could profit at China’s expense (©Getty Images) The impact of the US-China trade war on the rest of Asia has been modest so far, says Gareth Leather of London research consultancy Capital Economics. Exports to mainland China from Korea and Taiwan (which often supply intermediate goods that are processed and shipped on to the US) are sharply down since last year, yet that has been largely offset by stronger direct demand from US firms seeking alternative suppliers. Malaysia, Singapore, Thailand and the Philippines have probably lost a modest 0.1%- 0.2% of GDP from the disruption. For less open economies such as India and Indonesia the trade war has been “negligible”. Trade disruption typically strengthens the dollar and weakens the Chinese renminbi as investors turn…

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can south africa turn the corner?

Cyril Ramaphosa: the real fight starts now (©Getty Images) “In most countries, a 57% majority would be a thumping victory,” writes Ed Cropley on Breakingviews. But for the African National Congress (ANC) it is “a warning that the public cares less about the party’s role in defeating white rule a generation ago and more about running the $370bn economy properly”.South Africa’s ruling party triumphed in last week’s general election despite receiving one of its lowest vote shares since the end of apartheid in 1994. Once a darling of emerging-market investors, South Africa became mired in endless corruption scandals during President Jacob Zuma’s time in power from 2009 to 2018.He has bequeathed his business-friendly successor Cyril Ramaphosa a struggling economy that cannot even keep the lights on after…

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“Sometimes... the crude lesson is drawn... that the only way of saving the planet is by giving up on growth. Not many sensible people say this explicitly, but many activists do, and it is not far below the surface even in some... heavyweight reports. One cites a 15% increase in global per capita use of materials since 1980 as one of the factors behind environmental degradation. It is, however, clear that you can have economic growth and do right by the planet. The UK’s expert committee on climate change, in a recent report, noted that there has been a 44% reduction in Britain’s greenhouse gas emissions since 1990, alongside a 75% increase in real GDP. Economic growth and reduced emissions have gone hand in hand... in the first 15…