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MoneyWeek Issue 997

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MoneyWeek is a weekly magazine that enables you to become a better-informed, smarter investor and enjoy the rewards of managing your money with confidence. 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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United Kingdom
Dennis Publishing UK
SPECIAL: Get 40% OFF with code: JOY40
R 87,75
R 2 087,46
51 Issues

in this issue

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

First, a thank you. Last week I asked for ideas on replacing Temple Bar in our model investment trust portfolio. I put up a couple of ideas myself – with Dunedin Income Growth (yielding 5%) being the one I thought we might go with. But most of those who replied felt I was being a tad parochial. We have written here several times that Japanese dividends are likely to be more reliable than UK or US dividends over the next few years (thanks to the high levels of cash on Japanese balance sheets), so why not a Japanese Income fund – CC Japan Income & Growth (yielding 3.7%) being the obvious one? It’s an interesting idea – and if you hold a wider portfolio, a great one to look at.…

1 min.
loser of the week

It’s not looking good for cricket fans. Cricket Australia (CA), the sport’s national governing body, this week warned that it may lose hundreds of millions of dollars as tournaments are cancelled due to coronavirus, says the Australian Associated Press. Chief executive Kevin Roberts said the group is exploring all options to ensure an India tour next summer – a series played in a single city at a stadium with no spectators is one proposal. Meanwhile, in England leading sports advisory firm Oakwell Sports Advisory has recommended that the England and Wales Cricket Board borrow against its broadcast contract in order to turn itself into an “internal lending bank” to help its counties over the cash-flow problems caused by coronavirus, says Nick Hoult in The Daily Telegraph. The counties face overall losses…

1 min.
good week for

The US announced a $12.1m (£10m) economic development aid package for Greenland, a move “welcomed” by the government of the Danish territory, says the BBC. The US is competing with Russia and China for access to Greenland’s Arctic resources of mineral deposits. Last August, US president Donald Trump expressed an interest in buying the country – an idea dismissed by Denmark as“absurd”. Hedge fund manager Pierre Andurand, who specialises in oil, made a mint betting on US crude’s recent historic crash into negative territory, reports David Sheppard in the Financial Times. Andurand began betting against oil early in the year, saying he saw “little respite” for the industry until a vaccine is discovered for coronavirus. His core fund for Andurand Capital Management ended the first quarter up 63% on the year,…

1 min.
bad week for

An art thief has been captured on CCTV smashing his way into a museum to steal a £5m Vincent van Gogh painting while the building was shut to the public due to the coronavirus lockdown, says Adam Forrest in The Independent. The robber stole Van Gogh’s 1884 The Parsonage Garden at Nuenen in Spring from the Singer Laren Museum, just outside Amsterdam. No suspects have been arrested yet. Kanye West (pictured) finally made the Forbes billionaire list after criticising the magazine for not including him last year, says Teresa Roca in The Sun. However, he’s still not happy with his ranking – Forbes reckons West, 42, has a net worth of $1.3bn, but the rapper texted the magazine to say: “It’s not a billion. It’s $3.3bn since no one at Forbes…

2 min.
massive debt pile will be inflated away

Government debt is soaring to levels not seen since the “rubble and smoke of 1945” says The Economist. “As the economy falls into ruins,” the IMF forecasts that deficits in advanced economies will run at an average of 11% of GDP this year. That will propel the total stock of public debt in rich countries to an average of 122% of GDP by year’s end, with US debt set to break wartime records and Italian public debt likely to hit 155% of GDP (see page 12). The global debt mountain Global balance sheets are ill-prepared for recession. At over $255trn, the total debt of governments, households and corporations is equivalent to 322% of GDP, 40% higher than on the eve of the 2008 crisis according to data from the Institute of International…

2 min.
stockmarkets detach from reality

Stockmarkets appear to have “left economic reality behind”, says Sam Benstead in The Daily Telegraph. Data suggests that we are heading for a massive recession, yet British and US shares are up 15% and 25% respectively since March. Simon Macadam of Capital Economics notes that a global economic contraction of 0.5% in 2009 was enough to send pre-tax profits at the world’s non-financial corporations plunging by 45%. With a 3% global contraction expected this year, the earnings hit this time will be much worse. As of early this week, S&P 500 earnings for the first quarter were forecast to have shrunk by 16% year-on-year, with around a quarter of companies having reported as part of the ongoing earnings season, says Morgan Stanley. Yet markets seem to be looking past the current…