News & Politics

MoneyWeek Issue 996

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.

United Kingdom
Dennis Publishing UK
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R2 353,89
51 Issues

in this issue

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

“Get yourself into the House of Lords – and enjoy an index-linked £48,000 a year, tax free” Bad news. Last week we wrote about the dismal performance of Temple Bar, one of the constituents of our model investment trust portfolio. We also said that we weren’t dropping it (for now). Yes, the trust went into this crisis very well positioned for a surge in value stocks – but extremely badly positioned for a pandemic that favoured the business models of seemingly overpriced growth stocks. And yes, it is still down 46% in the last three months –double that of the average equity income trust. However, we have long had great respect for Temple Bar’s manager Alastair Mundy’s well-established contrarian approach (which is why we chose the trust in the first place)…

1 min.
recovery watch

New confirmed cases and deaths due to coronavirus are continuing to fall across western Europe, says Ian Shepherdson from Pantheon Macroeconomics. Cases in Spain have levelled off in recent days, which “bears watching because Spain has eased its lockdown more than other countries”. Deaths in the UK seem to be declining and confirmed case growth is no longer rising. In China, employees are getting back to work and hotels are back in operation. Alex Xu, CEO of GreenTree Hospitality, said 93% of its hotels are back in operation and occupancy exceeds 50%, up substantially from the low of 21.9% on 31 January. A “flattening and stabilisation” can be seen across several markets, suggesting the rate of spread of the virus is a little bit more controlled, said Robert Ford from…

1 min.
good week for

People won’t go without their French Fancies, especially not during lockdown. Premier Foods, the company behind Mr Kipling and Bisto, has revealed a surge in sales as shoppers scramble for cupboard essentials, says James Sillars in Sky News. Sales rose 15% during March and its manufacturing facilities are working at “maximum capacity” to meet demand. Clear skies and cool temperatures have helped UK solar energy to break its all-time peak generation record, says the Solar Trade Association. Apeak of 9.68GW was recorded by Sheffield Solar live PV generation tracker, surpassing the previous record of 9.55GW set on 13 May 2019. As the lockdown (which has led to reduced pollution levels) and good weather continue, more such records are expected to be broken.…

1 min.
bad week for

Clothing giant Primark has gone from making £650m in sales a month to nothing as the coronavirus has forced it to close in Europe and the US, says the BBC. The chain has no online or click-and-collect services, making store closures all the more damaging. Primark usually contributes about two-thirds of the profits of its parent company Associated British Foods. The US distributor of Corona beer has reduced production at its Mexican breweries in order to avoid an “irreversible impact” to its operations, says Reuters. Brewing was suspended due to the Covid-19 lockdown, but parent company Ab Inbev had already scrapped its 2020 outlook and reported a first quarter revenue loss of $285m. Distributor Constellation Brands said that the “unfortunate name” of the beer had not dampened sales, says Phoebe French…

4 min.
below zero: oil plunges into negative territory

American oil magnate John D. Rockefeller once said that “we are refining oil for the poor man and he must have it cheap and good”. But as the “Ghost of John D. Rockefeller” twitter account quipped this week, “I didn’t mean this” cheap. The plunge is due mostly to the technicalities of how oil is traded: using futures contracts. These are deals to buy and take delivery of oil, or sell it, at a certain point in the future. Futures cover various periods of time, from one month to several years. The price typically quoted is for the front-month, or current one, and this is where the collapse occurred. The price of US oil benchmark West Texas Intermediate (WTI) plunged by more than 300% on Monday, taking prices for delivery next month…

4 min.
could the covid-19 bear market be over already? don’t count on it

The uncertainty and panic surrounding the coronavirus crisis has led to rollercoaster stockmarkets. One question Iam frequently being asked is: “Have we reached the bottom yet?” It all depends on how quickly we can contain the virus, how quickly a cure and a vaccine can be found, and how quickly regular economic activity can be resumed. However, since I first started investing in emerging markets back in 1987, we have experienced a number of crises and bear markets, including the Asian financial crisis, the subprime-mortgage crisis and others. We have also witnessed and profited from the recoveries that followed. While this particular crisis is unique in the scale of the actions taken by governments around the world and their effect on economic activity, with respect to the reactions of global equity investors…