Tabla de contenidos para Issue 1308 en MoneyWeek

International law has always been a nebulous concept. Laws are based on an overarching authority backed by force, and there is no supranational global body in that position; the key international body, the UN, can do little beyond peacekeeping. It is a grim irony that the region of the world that has ventured furthest with supranationalism, the EU, can muster practically zero force. In lieu of genuine international law, the world has tended to muddle through with a hegemon willing to uphold international rules, even if it often fails to stick to them itself, before the cycle turns and an era of Great Power politics begins. “Populists of the left and right will both create a statist, spendthrift mess, further hitting growth” A rogue policeman This week we had a…

So much for the stiff upper lip. British investors took fright as the Iran war raged, withdrawing £1.4bn from equity funds in March, according to data from global funds network Calastone. The sell-off was “broad-based”, says Hugo Duncan for This is Money. European and Asian funds suffered withdrawals, but UK-focused funds were the hardest hit, with £592m in outflows. Only North American funds recorded modest inflows. The FTSE 100 finished March down almost 7%. Risk-aversion among UK investors isn’t a flash in the pan. March marked an unprecedented tenth consecutive month of negative equity-fund flows. March usually sees stock buying as it’s Isa season and investors race to use up their £20,000 allowance before the end of the tax year, says Steve Johnson in the Financial Times. This year was…

Natural diamond prices have tumbled more than 50% since 2022 to the lowest levels on record, says Torsten Slok of Apollo. There isn’t one market price for diamonds, as each varies by factors including colour and clarity, but a representative basket of the gemstones shows demand is plummeting. The market has been upended by artificial diamonds, which are chemically identical to the natural kind and can trade for 80% less for a 1.5 carat stone. “In the 20th century, diamonds were seen as a must-have luxury good,” says Mario Lagos for deVere Group. Now, demand is weakening. Demographic changes mean that fewer couples are getting married. Chinese marriage registrations dropped 20% in 2024.…

Italian finance occasionally “gets operatic”, says The Economist. Recent developments at the world’s oldest bank, Monte dei Paschi di Siena (MPS), “would light up La Scala”. A report by Italy’s parliament on the apparent suicide of one of its executives 13 years ago has suggested that he may in fact have been killed. The company has also suffered a “boardroom coup”. Last week, the board sacked CEO Luigi Lovaglio, who is under investigation on suspicion of market manipulation (which he denies), in favour of Fabrizio Palermo, who has no experience in retail banking. Lovaglio attempted to return by standing for the CEO’s spot at this week’s AGM. He prevailed. It seems “absurd” that MPS’s investors have been forced to choose between “a new CEO who has never run a mainstream…

Go, Japan’s most popular taxi-hailing service, is planning an initial public offering (IPO) this year on the Tokyo Stock Exchange that could raise between ¥50bn and ¥80bn (£233m and £373m), says Bloomberg. US bank Goldman Sachs invested ¥10bn (£46.6m) in 2023, valuing the company at ¥135bn (£629m), while Japanese internet group DeNA holds a 26% stake. The listing could provide a much-needed boost to Japan’s struggling IPO market, which this year experienced its most lacklustre first quarter since 2022 due to the attack on Iran. Go competes with US-based Uber Technologies, China’s Didi Global, and Sonyowned S.Ride.…

On Sunday, following failed peace talks with Iran, Donald Trump announced a blockade of maritime traffic entering and leaving Iranian ports, vowing to stop all traffic in the Strait of Hormuz. Thousands of extra US troops are being sent to the region. The oil price surged amid questions as to “why the US might cut off a trade route” it has spent weeks trying to force Iran to reopen, says Chantal Da Silva on NBC. At the same time, Trump said peace talks could resume this week and told Fox Business that the war was “very close to being over”. Wishful thinking, says Max Boot on the Council on Foreign Relations website. It took around 18 months for the US to negotiate the 2015 Joint Comprehensive Plan of Action, and…

It is an audacious bid. Through his hedge fund Pershing Square, Bill Ackman has offered $64bn for Universal Music, one of the largest music conglomerates in the world and a producer for artists including Taylor Swift. It is a complex deal involving both cash and shares and would move the company’s listing from Amsterdam to New York. It remains to be seen whether the deal is successful or not. The decision will probably rest with French billionaire Vincent Bolloré, who controls 18% of the company, and on its British chief executive Lucian Grainge, who is widely credited with managing the transition from analogue to digital music. Predictions markets are giving the bid a 37% chance of success by 30 June. It is far from the only recent media mega-deal. After…

When traders buy shares or other assets, they sometimes borrow money to fund the purchase. The aim of doing this is to increase their potential returns. Assume a trader buys £100,000 of shares and borrows £40,000 to do so. The shares go up by £6,000, they sell the lot and repay the loan. They are left with £66,000, a gain of 10% on the total capital they personally invested (£60,000), even though the share price only went up by 6%. Of course, it works the other way as well: a 15% drop in the value of the shares would mean that the trader has lost 25% of their capital. The concept of using debt to fund part of an investment is known as gearing or leverage, but the specific practice…

“I can earn ten times as much as an actor as I can as a director! That put me off it for a while.” James McAvoy (pictured) on making his directorial debut, quoted in The Times “Success is a lousy teacher. It seduces smart people into thinking they can’t lose.” Bill Gates, quoted in The Times of India “He’s… the hottest bachelor of Palm Beach. He’s a gazillionaire.” An anonymous source on why golf champion Tiger Woods’ girlfriend, Vanessa Trump, won’t leave him following his arrest for driving under the influence, quoted in The New York Post “There’s class warfare, all right, but it’s my class, the rich class, that’s making war, and we’re winning.” Warren Buffett, quoted in The Guardian “More laws aren’t always the way to achieve things,…

theconversation.com Many of us have struggled under bad bosses and seen our co-workers become disengaged, says Imran Mir. “Unfortunately, this is not unusual.” In too many organisations, candidates for higher positions are judged according to whether they have confidence and charisma rather than by those traits that actually signal leadership potential. Studies have shown that people who show dominance and confidence tend to be perceived by management as more capable and ready for leadership, but other qualities matter far more. Those qualities include sound judgement, “emotional intelligence” – that is, showing empathy and building trust – and the ability to help others develop and create an environment where employees feel valued. Leaders who can do such things are better able to keep their teams performing at a high level. True,…

Saba Capital, the US activist targeting multiple investment trusts, says it will not accept any tender put forward by Edinburgh Worldwide’s current board, including one it proposed itself. Saba, which owns a 31% stake, succeeded in blocking a two-stage tender plan from the board last week, calling it “deeply flawed”, but has now rejected the board’s offer to implement an alternative plan that Saba had previously suggested. Instead, it wants investors in the Baillie Gifford-run trust to replace the board with Saba’s nominees at the annual meeting on 30 April. Chair Jonathan Simpson-Dent said it was “extraordinary” that Saba was blocking its own proposal and that the “contradiction” shows it “cannot be trusted to follow through on its own commitments”.…

Before investing, it’s worth auditing your current exposure. Enthusiastic buyers of emerging-market funds may well discover that they already have quite enough Chinese shares. As much as a quarter of many emerging-market trackers and funds are allocated to China. And for those nervous about conflict in the Taiwan strait, note that soaring semiconductor valuations have recently seen Taiwan’s share of the emerging-market sector balloon, in some cases to another fifth or more of many funds. By contrast, investors with a bias towards developed markets may be underweight China. China accounts for a mere 2.9% of the MSCI ACWI index (ranking behind the economic juggernaut that is Mark Carney’s Canada). Compare that with China’s 17% share of global GDP. There are sensible arguments for why Chinese markets shouldn’t take up that…

Landlords have a fortnight left to prepare for the first phase of the Renters’ Rights Act. The new laws significantly bolster tenants’ rights in privately rented homes. From 1 May, Section 21 notices will be abolished and landlords will be banned from evicting tenants without a valid legal reason. Instead they must now rely on a Section 8 claim, which only allows evictions on specific grounds – antisocial behaviour or serious rent arrears, for instance. Assured shorthold tenancies will be scrapped and become assured periodic tenancies instead. Fixed-term tenancies, such as a typical 12-month contract, will become rolling, or “periodic”. This will usually be monthly, unless the agreement sets out a shorter period, such as weekly or fortnightly. There will be no end date, but tenants can terminate the tenancy…

War? What war? Investors appear ready to move on from the Iran conflict, even as the Strait of Hormuz remains sealed. America’s technology-focused Nasdaq composite index has clocked up ten successive daily gains, its best winning streak since November 2021, say Jack Pitcher and Jared Mitovich in The Wall Street Journal. US stocks are back on the cusp of record highs, with the Nasdaq rocketing more than 13% since the start of April. “Blockbuster earnings” at Wall Street banks are one reason for the cheer, calming fears that the world’s largest economy is about to fall off a cliff. Another is a renewal of the tech trade. Intel’s stock, once “left for dead”, has rocketed 50% since the start of the month on news of chip deals with big tech.…

Pharmaceuticals giant GSK has unveiled some “extremely exciting” results of early trials for a new cancer drug, says Emily Gosden in The Times. Mocertatug rezetecan, or “Mo-Rez” , succeeded in shrinking or eradicating tumours in 62% of ovarian cancer patients and 67% of endometrial cancer patients whose illness had recurred. These patients typically have only a 20%-30% five-year survival rate. The strong results persuaded GSK to launch five large-scale advanced global trials. GSK hopes Mo-Rez can reach the market in the next few years, with sales eventually peaking at £2bn a year. The decision to run simultaneous trials, each likely to cost tens of millions of dollars, mirrors tactics used by rivals such as AstraZeneca, which has raced ahead in oncology since GSK stepped back from the subsector in 2015,…

Six to buy Next The Times A difficult operating environment caused by the conflict in the Middle East could squeeze the retailer’s profit margins. But in the long term, the stock offers a favourable risk-reward opportunity. Next has a “solid” financial position and the flexibility to make acquisitions. International sales are increasing and earnings are set to rise 5% this year. Next is a “high-quality business” with a strong competitive position, and its shares are “fundamentally undervalued”. 13,560p Canadian Pacific Kansas City Barron’s After years of disappointment, Canadian Pacific Kansas City’s (CP) shares are poised to rise. Synergies from mergers, a rebound in rail traffic, and a healthier industrial economy all bode well. As one of the Big Six railroads in North America, CP operates a network across Canada, the…

● It’s a “shame” that Wise, one of the UK’s top fintechs, is “poised to tilt away from Britain’s stockmarket”, says Ben Martin in The Times. The payments company is set to move its main listing from London to New York within the next four weeks, “leaving it with only a secondary listing in the country where it was founded”. Last week’s quarterly results showed strong growth, with a 24% jump in income to £435m, sending the shares up 6.5% on the day. Good news, but it made for “an uncomfortable reminder of the tech success story that’s slipping through [London’s] fingers”. ● Vistry is “clearly keen to make swift progress in turning the ship around”, says Aarin Chiekrie of Hargreaves Lansdown. The housebuilder has appointed Adam Daniels as its…

US politics have become a “black swan” due to the “erratic” decisions of president Donald Trump, says Nassim Nicholas Taleb, the author and statistician who advises Universa Investments, a US fund that specialises in hedging against tail risks (which are often described as “black swans”). “His first administration did not allow us to predict his behaviour in the second, and his bellicosity is completely unexpected,” Taleb tells Nikkei Asia. ”Some people are wondering whether it’s him making decisions this time or some other people, because it’s totally uncorrelated to the previous administration.” The US government’s conduct has caused “excessive” damage to the US dollar’s status as a reserve currency. An increasing amount of foreign central banks’ reserves are going to gold and this trend will continue to grow. “Assume that…

ft.com/alphaville At the start of this month, Donald Trump announced the US was imposing a 100% tariff on imported pharmaceutical products, reversing a tendency to carve them out of trade wars, says Sam Lowe. “Except… it hasn’t really.” In reality, there are numerous caveats and exemptions at the level of individual products, companies and countries. The details are so complicated it’s not possible to say what the tariff is on any product unless you have access to confidential information. All you can really say is that the tariff will be hard to determine and probably less than 100%. But the tariff was never really the point. By threatening a high level of tariffs and then applying conditional exemptions, the US has created a mechanism for applying pressure on companies to…

● The Financial Reporting Council, the audit watchdog, is conducting an investigation into PricewaterhouseCoopers’ (PwC) review of Digital 9 Infrastructure’s (DGI9) accounts for the 2023 financial year. DGI9, which was audited by PwC from its listing in 2021 until it entered wind-down in January 2024, has taken huge write-downs after starting to sell assets. In 2024, the new board and manager InfraRed (which replaced original manager TriplePoint) cut net asset value (NAV) by more than 55%. Last year, a review of valuations in the 2023 report said there was a £111.5m overstatement in two investments. In February this year the board said its main asset, broadcasting platform Arqiva, is likely to be written down to zero. Separately, DGI9 has agreed to settle an earn-out from the 2024 sale of data-centre…

● Taxpayers could face a higher annual bill owing to changes in how the personal allowance is applied. At present, it can be allocated in whichever way is most tax-beneficial for you. No tax is due on income below the threshold, and most people deduct it from their income first. If you have savings and dividend income, “it sometimes makes sense to set the personal allowance against those other income sources”, says Charlotte Gifford in The Daily Telegraph. HMRC usually does this automatically. But from April 2027 the personal allowance must be allocated against employment, trading or pension income first. This means the state “will be able to push more of taxpayers’ income into higher rates of tax on dividends, property income and savings”. This could add up to £182…

When Michal Strnad (pictured) sold shares in his defence firm in an initial public offering (IPO) at the start of this year, he doubled his money overnight, says Andrea Dudik on Bloomberg. In the process, the 33-year-old owner of Czechoslovak Group (CSG) became the richest person in the country and region, with a net worth of $33.7bn. That may be some way short of Elon Musk, says Tamara Kanuchova in The European Correspondent – but Strnad was second only to that American tech billionaire as the individual who increased their net worth by the most in the first few weeks of the year. The IPO of his firm on the Amsterdam stock exchange was the “largest ever in the history of the defence sector”, raising €3.8bn. The success is partly…

2022 Ceritas, Trout Gulch Chardonnay, Santa Cruz Mountains, California £80, hedonism.co.uk I absolutely adore the spectacular cabernets from Spottswoode. These are not typical weighty, oak-soaked Napa Valley cabs, but finely crafted wines with a degree of finesse only found in the greatest wines from Bordeaux, in the most venerated vintages. So, when I tasted 2021 Spottswoode Lyndenhurst Cabernet (£58.33, per bottle in bond, farrvintners. com) and I noted this wine was every bit as fine as the “Grand Vin” in years gone by, I realised, immediately, the importance and irresistibility of this extraordinary creation. And then I tasted 2021 Spottswoode Estate Cabernet (£187.50 per bottle in bond, farrvintners.com, uncorked.co.uk; £260, hedonism.co.uk), it was blindingly obvious I was in the presence of perfection. And next, a surprise, 2022 Spottswoode Estate Cabernet…

The Wealth Habit Small Changes That Will Make You Rich Ken and Mary OkoroaforQuercus, £16.99 Wealth accumulation at the simplest level is a two-step process. Firstly, you need to make sure that you are consistently earning more than you spend. Secondly, you need to invest the difference. It doesn’t matter how good you are at the second part if you are still struggling with the first. Even those earning what most of us would consider comfortable, or even large, salaries can miss this essential point. As personal-finance gurus Ken and Mary Okoroafor point out in The Wealth Habit, about 20% of those with incomes of more than $150,000 (£115,000) are living pay cheque to pay cheque. The authors have therefore provided a compendium of financial advice designed to help the…

“The effects of war in the Middle East are spreading. The Philippines has declared a state of emergency. Pakistan is on a four-day week. The UN has warned of 45 million additional people facing acute hunger. And the secondary effects are not confined to energy and food. They are generating independent crises across three additional tracks. First, in Iran the regime is using the war as justification for eliminating organised opposition. Second, the system of allies that has held since 1949 is fracturing from the inside and the allies are hedging. Hedges, once built, do not get dismantled when the crisis passes. Third, the cascade reaches every kitchen table through higher fuel prices and the effects worsen every week the war continues. The secondary effects have crossed a threshold. They…

Energy giant BP faces “an exceptionally unruly” annual general meeting (AGM) later this month, says Jeevan Vasagar in The Observer. This is due to a “snowballing” revolt among investors over BP’s move back towards oil and gas, and away from renewables; the decision to exclude a resolution on climate targets filed by Dutch shareholder activist group Follow This has made shareholders especially cross. Several major shareholders, such as Legal & General Investment Management, are now seeking to remove BP’s chair Albert Manifold over the issue. They have been joined by proxy adviser Glass Lewis, who helps influence how many investors, including passive funds, will vote. Ejecting Manifold would be “very bad” for BP’s share price, says Lex in the Financial Times. He has only been in his post for six…

With stakes in a range of biotechnology companies, Switzerland’s BB Biotech offers investors a diversified play on the sector, says WirtschaftsWoche. Christian Koch, who has been in charge of the group’s investment strategy since the start of last year, is an expert in computer-assisted drug design, and has been applying AI to the analysis of potential investments. The portfolio has also been skewed increasingly towards the mid-cap segment of the market, where big takeover premiums are common. Last year, five of the portfolio’s investments became acquisition targets; pharma giants struggling with impending patent expiries need new drugs for their pipelines. The stock yields 5%.…

The government has been forced to shelve its Chagos Islands deal after the US dropped its support for the agreement, says Olivia Lee in The Guardian. As part of the deal, the UK was to cede sovereignty of the islands to Mauritius and lease the island of Diego Garcia, home to a joint UK-US military base, for 99 years. Donald Trump initially described the agreement as “very strong and powerful”, but his position now “appears to have changed”. This latest U-turn by the government is “not merely farcical”, but a “self-inflicted humiliation” that Labour can “ill afford”, says The Sunday Times. Ministers repeatedly argued that the deal was “absolutely vital” for national security and, indeed, there are good reasons for securing the long-term future of the islands. However, the way…

Another week brings another wild ride in the Middle East. Markets are still taking the swings far more calmly than almost anybody would have expected a few weeks ago. There’s more volatility below the headlines when you look at which sectors are doing well or poorly, but the fact that global stocks are broadly unchanged since America and Israel first attacked Iran seems quite increasingly hard to understand. One possibility is that investors remain optimistic that the crisis will pass and everything will go back to the way it was before. That is plausible, but becomes less likely the longer the disruption goes on. The second is that many people suspect that this is an inflexion point, geopolitically and economically, but feel that the long-term implications are still unclear. If…

Living the life of Riley on benefits Michael SimmonsThe Spectator A family of four on universal credit (UC) can enjoy a day out at a host of attractions for a fraction of what the rest of us pay, says Michael Simmons: £4 instead of £111 at the Tower of London, with a half-price lunch thrown in. As inflation and potentially a recession bite, it is clear who will be protected: welfare recipients. UC has been raised by 6.2% and further inflation-busting rises are promised. Added to this is the “layering” effect of discounts for broadband, council tax, utilities, public transport, leisure centres and even holidays – all paid for by those who work. The rot started with “Help for Households” under Boris Johnson. Today, not a week goes by without…

conversableeconomist.com The GDP of North Korea was about $26bn in 2024, roughly equal to the sales of the Kraft Heinz company, says Timothy Taylor. That works out to a GDP per capita of about $1,000 a year. But how do we know that? Not from statistics from the government of North Korea, which doesn’t release any. The figures come from a report by the central bank of South Korea. But how can one study an economy when government statistics are unavailable or unreliable? The answer lies in “forensic economics”, which relies instead on data derived from satellites, or “mirror statistics” derived from trade partners, and other sources of information. Perhaps the most famous example is the 2014 Nasa photograph showing North Korea at night bathed in darkness, while neighbouring South…

Investment trusts are the ideal vehicle to build long-term wealth. A real-world example recently posted on LinkedIn by investment manager John Moore makes this point well. The portfolio was set up in 1999 and initially held Gartmore Shared Junior Zero Div (7.3% by value), English & Scottish Investors (18.4%), Finsbury Trust (18.2%), Law Debenture (19.8%), Majedie Investments (17.7%) and Scottish Mortgage (18.5%). You will notice that some of these no longer exist, while others have changed significantly. English & Scottish Investors has undergone several reinventions. It became Gartmore Global Trust in 2002 and Henderson Global Trust in 2011. It was merged into Henderson International Income Trust in 2016 and this was then merged with JPMorgan Global Growth & Income (LSE: JGGI) in 2025. Tracing returns back over multiple decades and…

For the last decade, it has been easy – and highly profitable – to allocate the marginal pound in your portfolio to the largest American technology companies. However, it now looks as if the “easy money” has already been made in this trade and investors should consider where growth will come from over the next decade, not the last one. For investors considering opportunities away from the US, Europe is beginning to step back into the spotlight. Contrary to popular belief, European equities are not a legacy trade. Although the continent’s large-cap indices lean heavily on traditional sectors, its small- and mid-cap segments – which comprise more than 2,000 companies – are awash with innovative businesses, which often command a dominant share of their sectors while being virtually unknown to…

It is easy to succumb to “island time” in the Maldives and forget what day it is. The luxury Conrad Maldives Rangali Island resort takes that concept one step further. It operates on its own “island time” – one hour ahead of Malé, the capital of the Maldives, and five hours ahead of Britain. The result? More daylight to savour and I made every sun-soaked minute count from the serenity of my a villa built over the water. The Maldives has no shortage of idyllic resorts, with more than 1,000 islands scattered across the Indian Ocean. But nothing truly prepares you for seeing the villas at the Conrad. The Sunset Water Villa pool stretches from the room’s deck towards the turquoise sea, creating the illusion that you are floating above…