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MoneyWeek

MoneyWeek

Issue 987

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.

Country:
United Kingdom
Language:
English
Publisher:
Dennis Publishing UK
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51 Issues

In this issue

3 min.
from the editor-in-chief...

“The UK’s productivity problem stems from a reliance on cheap labour” Regular readers might have noticed that I have been taking some time off. For the last six weeks or so I have barely glanced at the papers – an odd feeling for someone who has read almost all of the UK dailies pretty much every weekday and all the weekend papers (bar a few redtops) every Saturday and Sunday for over 20 years. What have I missed? When I asked this question on Twitter I was told that nothing had changed. Not so. The exciting fact that we have actually (sort of) left the European Union aside, I do see some interesting changes in the conversations going on in the UK at least. The UK’s productivity problem The most interesting might be…

1 min.
loser of the week

The decision by Uefa, European football’s governing body, to ban Manchester City from the Champions League for two seasons could cost the club up to £200m asa result of the loss of broadcasting and ticketing revenues, prize money and sponsorship, say Murad Ahmed and Arash Massoudi in the Financial Times. That, in turn, could prompt the club’s “superstar” players, such as Raheem Sterling, to leave, along with its “much-admired” manager, Pep Guardiola (pictured). The club has also been handed a €30m fine as part of its punishment for breaking financial fair play (FFP) rules that limit a club’s spending relative to how much it earns. Uefa’s Club Financial Control Body (CFCB) found that Man City had falsely inflated its sponsorship revenues by having its owner, Sheikh Mansour bin Zayed al-Nahyan…

1 min.
good week for:

The European Central Bank’s €189bn Corporate Sector Purchasing Programme (whereby the eurozone central bank prints money to buy corporate debt) has helped to lower the yields on European corporate debt. That’s worked out great for luxury brand LVMH, owned by France’s richest man, Bernard Arnault, says Marcus Ashworth on Bloomberg. In a bond issue this month to raise funds for its $16bn purchase of US jeweller Tiffany, two of the five euro-dominated maturities were funded at negative yields – in other words, some investors paid LVMH to lend it money. Amazon founder Jeff Bezos, who is the world’s richest person with a $130bn fortune, has pledged $10bn to set up the Bezos Earth Fund. The issuing of the grants aimed at tackling climate change will start this summer, Bezos said.…

1 min.
bad week for:

“Cabin fever” has taken on a new meaning since the coronavirus outbreak resulted in the quarantine of 3,700 people aboard the Diamond Princess after 170 tested positive for the virus. Long referred to as “floating Petri dishes”, cruise ships have a reputation for aiding the rapid exchange of germs and illness, says Yvette Tan on the BBC. Another 3,600 and 1,450 passengers were quarantined in ships in Hong Kong and Cambodia respectively upon news of the outbreak. The Boy Scouts of America has filed for Chapter 11 bankruptcy protection in the state of Delaware, listing liabilities of between $100m and $500m and estimated assets of $1bn to $10bn, CNN reports. The youth organisation is facing hundreds of sexual abuse lawsuits.…

2 min.
easy money dulls effect of coronavirus

China’s battle with the coronavirus has begun to resemble a “Mao-style” mass mobilisation, say Raymond Zhong and Paul Mozur in The New York Times. “Battalions” of Communist Party representatives, “uniformed volunteers” and local “busybodies” are carrying out “one of the biggest social control campaigns in history”. With housing complexes sealed off and train stations policing movement, at “least 760 million people” are now thought to be living under some form of residential lockdown. With many factories and businesses unable to function, production in the world’s second-largest economy is coming under increasing strain (see box below). The twin bubbles grow bigger Suggestions that the spread of Covid-19 is slowing have cheered stockmarkets. Global equities have continued to rally and are now above their January highs, notes Rupert Thompson of Kingswood. China’s CSI 300…

1 min.
is china heading for a secret recession?

Could the Covid-19 shutdown have put China on course for a “secret recession”? asks Tom Rees in The Daily Telegraph. Freya Beamish of Pantheon Macroeconomics predicts an “unprecedented” 0.9% quarter-on-quarter GDP fall. GDP expanded by 6.1% last year, but there are persistent questions about the official figures. The true impact of this outbreak will “be a closely guarded state secret”. “It is hard enough to understand China’s economy and its global ramifications at the best of times,” says Ambrose Evans-Pritchard in The Daily Telegraph. Those banking on a stimulus-led rebound later this year must first wait for the outbreak to be contained. Meaningful fiscal stimulus is impossible so long as the spending channels are blocked by health curfews and factory closures. “It is hard to overstate” the economic impact of the…