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MoneyWeek Issue 1002

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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
R 90,36
R 2 149,51
51 Issues

in this issue

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

“Many households will emerge from the crisis with far more resilient balance sheets” You have to dig around a bit for good news at the moment. It isn’t in fashion. But here is some. In April, UK households paid off £5bn-worth of credit card debt and £2.4bn of personal loans (see page 26 for help on how to do this yourself). That’s the most on record. At the same time UK savings rates are on the rise: according to money management app Yolt, their users put 70% more into savings accounts in April than in February. They also put 63% more into various investments. Thanks to generous furlough schemes, the ability to take mortgage holidays (and so to focus on chipping away at higher-interest debt) and, of course, the full cancellation…

1 min.
loser of the week

Czech billionaire Petr Kellner’s push into China was meant to “turbo-charge” one of eastern Europe’s biggest fortunes, say Alexander Sazonov and Venus Feng on Bloomberg. Instead, Kellner’s fortune has dropped to $10bn, the steepest such drop seen this year among the richest eastern Europeans outside of Russia. In all, Kellner has seen his value drop by $2.5bn since January. It’s mostly due to a $1.5bn fall in the value of his stake in consumer lender Home Credit – he was forced to scrap a planned public listing for the company in November after investors demanded a lower valuation. Now the coronavirus outbreak has added to Kellner’s woes – China’s sluggish economy has resulted in consumer lending activity shrinking, following countrywide lockdown measures. That’s not great news for Home Credit, which…

1 min.
good week for

British holidaymakers will be “most welcome” in Portugal this summer despite the Covid-19 pandemic, says Tom Burridge on the BBC. Portuguese foreign minister Augusto Santos Silva said he hoped an air bridge between the UK and Portugal could be secured by the end of June, meaning arrivals will not have to self-isolate, adding that any travel quarantine “was an enemy of tourism”. Nearly 500,000 people logged on to watch the likes of Sandi Toksvig (pictured), Tori Amos and Stephen Fry at the first online Hay Festival, says the BBC. The 33rd edition of the literary event was free and was broadcast online over the past two weeks after it received donations of £350,000 that helped it go ahead in its digital format.…

1 min.
bad week for

Australia’s alcoholic drink producers have seen “dramatic volume declines” due to the coronavirus pandemic, says Rachel Arthur on Beverage Daily. April was the worst month on record for sales of beer, wine, and spirits, resulting in an A$8.5bn loss in business revenue. The closure of bars, clubs, and restaurants in April and May has resulted in “significant declines” for beverage producers, with home stocking-up in March not doing enough to offset overall figures. Thousands of Muscovites say they have been wrongfully fined by the smartphone app that the city requires quarantined patients to download, says Daria Litvinova in The Seattle Times. Authorities issued around 54,000 fines, adding up to $3m. The app – which pesters patients for selfies to prove they are at home – has nearly 70,000 registered users.…

2 min.
the bulls start to stampede

The global stock rally has “reached a tipping point”, writes John Authers on Bloomberg. The S&P 500 has bounced by more than a third since its March nadir, with the FTSE 100 advancing by almost 25% over the same time period. Many commentators have been perplexed by the strength of the comeback. The virus is still far from under control, a vaccine looks far off and global unemployment has risen to Depression-era levels. Yet bulls argue that the economy will be able to stage a swift recovery now that lockdowns are being lifted and point to the tidal wave of central-bank liquidity juicing market returns. Cyclicals join the party The rally has been spearheaded by technology and pharmaceuticals, but in recent weeks more cyclical businesses such as carmakers, retail and travel have been…

1 min.
oil rallies – but a full recovery is a long way off

US futures plunged below zero in April due to Covid-19’s destruction of demand and a US-Saudi price war. Yet oil then staged an 88% rally during May. Slowly reopening economies and the recent producers’ deal to cut output by ten million barrels per day in May and June – a deal that this week looked set to be extended – have stabilised the market. Brent crude continued its rally early this week, eclipsing $40 a barrel. The recovery still leaves the industry and the countries that depend on it in a difficult spot, says Ed Clowes in The Daily Telegraph. Many US shale drillers need prices above $50 to survive. Distressed debt in North American energy tops $190bn. Saudi Arabia has been forced to bring in tough austerity measures to balance the…