Table of contents for Issue 1263 in MoneyWeek

“I’m sorry, but I just can’t stand it any more”, said Elon Musk on his social-media platform X this week. “This massive, outrageous, pork-filled Congressional spending bill is a disgusting abomination.” Musk has first-hand knowledge of spendthrift politicians’ ingenuity when it comes to shielding their pet projects from the chainsaw. His cost-cutting stint in government came to an end last week, much to the relief of Tesla’s shareholders, who hope he will now focus properly on the stalling electric-vehicle maker (see page 22). He can hardly do much worse then he did with DOGE. Having trumpeted savings of $2trn before reaching Washington, he finished around $1.83trn short of his target. “No wonder the MSCI All Country ex-US index has hit its first record peak since 2007” Even less than meets…

Having struggled to finalise a listing in London, fast-fashion firm Shein, valued at £49bn two years ago, is now aiming to file a draft prospectus with Hong Kong’s stock exchange in the coming weeks instead, says Sarah Butler in The Guardian. If confirmed, the move “would scotch hopes of what would have been one of the biggest listings to hit the London Stock Exchange”. While the UK’s Financial Conduct Authority had already given the go-ahead for the listing, “unexpected delays” in securing the blessing of the China Securities Regulatory Commission seem to have forced Shein’s hand. Securing a listing by Shein in London in the first half of 2025 was always going to be “contentious”, says Alex Brummer in the Daily Mail, given the allegations (which the company denies) that…

Despite unexpectedly good quarterly earnings, Viking Holdings’ stock recently took a hit on fears of lower bookings thanks to economic uncertainty, says Barron’s. However, the sell-off presents a buying opportunity. The US cruise operator can ride the “silver tsunami” of recurring spending by the affluent baby-boomer generation. Viking boasts a healthy balance sheet and return on invested capital, while capacity expansion should drive profitable growth over the next three to five years. Analysts expect earnings per share to gain more than 30% this year and around 25% in 2026, eclipsing rivals’ progress. The stock is “attractively priced”.…

Karol Nawrocki, a historian standing for the nationalist opposition Law and Justice (PiS) party, has won Poland’s presidential run-off with a wafer-thin margin of 50.9% against 49.1% for the pro-EU Rafal Trazaskowski, who represented the Civic Platform party of prime minister Donald Tusk. Although the Polish president has relatively limited powers, they include the “right to veto legislation or refer bills to a constitutional court” stuffed with PiS-appointed judges, says the Financial Times. On Monday, Tusk announced an 11 June confidence vote, “which, since his coalition partners are unlikely to want to risk losing power, he ought to win”. “Voters have signed up to two and a half years of pandemonium,” says The Times. Nawrocki has made it “very clear” that he intends to follow the example of outgoing President…

● Wise has taken “time to grow into its name”, says Nicholas Megaw in the Financial Times. The fintech group has faced a “roller-coaster ride” since listing in 2021, but it is now worth £11.2bn – 36% more than when it went public. That may seem a small gain over four years, but it’s much better than other companies that went public during the pandemic. Wise’s “sagacious approach” of focusing on its international payments business rather than becoming a “super app” has led to annual cross-border volumes nearly tripling to about £145bn. There’s still room to grow in this area, even though progress in its platform business – which partners with other banks – has been slower. Recent deals are promising, but the company must avoid rapid growth leading to…

“I didn’t grow up poor. I went to private school. We had a very nice house, cars, a housekeeper. I wasn’t [singing] because I didn’t have a choice… I was just determined.” Pop star Beyoncé (pictured) on the secret of her success, quoted in The Sunday Times “I justify working at my age because I need the money. We have three children and seven grandchildren, and we’ve found that money is the one thing keeping us in touch with them.” Broadcaster and former Tory MP Gyles Brandreth, 77, quoted in The Times “The class war will find me on the side of the educated bourgeoisie.” John Maynard Keynes, quoted in The Guardian “In terms of political spending, I’m going to do a lot less in the future… I think I’ve done…

thefp.com Through a combination of “personal integrity and social-media savvy”, Kyla Scanlon, 28, is “making honest financial commentary cool”, says Shreeda Segan. “Gen Z’s favourite economist” has around 200,000 followers on TikTok, Instagram and X, and has been called a “force of nature”. People of Scanlon’s generation generally lean left, and so she might seem a “surprising folk hero given her nominally pro-capitalist views”. But Scanlon never “invalidates her generation’s negative feelings” about the system, instead offering theories for why they feel “alienated” from the contemporary economy and offering advice on how they can best “participate in and not feel victims” of that system. “I think things can be greater than they have been,” she says. “And I believe that improvement will come through abundance.” Scanlon’s vision is of a…

Does your business accept cryptocurrency as a form of payment? If not, you may be missing out to competitors that do offer this option: 49% of small and medium-sized enterprises (SMEs) in the UK are now happy to be paid in cryptocurrencies, according to marketing group VistaPrint. It cites demand from customers for more choice in how they pay for goods and services as the main reason for moving in this direction. Certainly, there are advantages to accepting cryptocurrency payments. It’s not just that more customers now want to pay this way; cryptocurrency payments also tend to carry fewer transaction fees and lower processing charges. You also avoid the potential for chargebacks – made by banks and credit-card providers when a customer disputes a transaction – which can be a…

The global economy is witnessing what might be described as a “reverse Berlin Wall” moment. For over a generation, asset owners have benefited from powerful structural tailwinds following the collapse of the Iron Curtain. The integration of Eastern Europe and, later, China into the global economy expanded the global labour pool, reduced production costs, and suppressed inflation. This shift, supported by the US-led international order (the Pax Americana), enabled governments to enjoy a peace dividend and greater fiscal flexibility. It also drove a long-term decline in interest rates and allowed the implementation of unconventional monetary policy, such as quantitative easing after the global financial crisis – further benefiting asset prices. While this may have been desirable from an economic point of view (optimising the ability of economies to pursue their…

Luxury cars, snorkelling gear and a Blue Peter badge are among the hundreds of gifts received by senior royal family members during formal engagements from 2020 to 2023, says Andrew Hough in The Times. For his coronation, King Charles received a £330,000 Rolls-Royce Cullinan Series II from Bahrain’s king and a leather folder from then-US president Joe Biden containing letters between Elizabeth II and President Eisenhower, along with other gifts, including a feather crown, two beaded chestpieces and two carved staffs from Amazonian indigenous leaders. The Prince and Princess of Wales (pictured) received toiletries from Ireland’s president, as well as Gaelic football jerseys and a bottle of whiskey. The published records do not include “unofficial” presents from the public or friends. Official gifts are not the royals’ personal property, cannot…

UK house prices are back near their record high of mid-2022, despite April’s rise in stamp duty, says Tom Howard in The Times. Nationwide reports that prices rose 0.5% in May, compared with the previous month, pushing the average home value to £273,427. That is a 3.5% year-on-year rise and takes prices to within “a few hundred pounds” of the record level reached during the lockdown era “race for space”. Changes in stamp duty in April caused prices to drop 0.6% that month. However, May’s rise suggests the April pullback may have been a “blip”, with Zoopla also reporting that estate agents are “busier... than at any point in the last four years”. Property should “largely shrug off the relatively subdued outlook for the wider economy” thanks to growing real…

In one of the biggest biotech acquisitions of 2025, French pharmaceutical group Sanofi is to buy US-based Blueprint Medicines for up to $9.5bn, a premium of 27% to Blueprint’s pre-deal price, say Michael Peel and Ian Johnston in the Financial Times. The hope is that the deal will boost Sanofi‘s drug pipeline, which suffered a blow after the recent failure of a high-profile treatment for chronic obstructive pulmonary disease (COPD) in late-stage trials. This is especially worrying as Sanofi depends heavily on immunology medicine Dupixent, which accounted for a third of sales last year and is due to go off patent in 2032. The deal will be funded from the proceeds of Sanofi’s sale of a 50% stake in its consumer-health business last year. The deal “marks the culmination of…

Pinkfong, the creator of the viral YouTube hit Baby Shark, has applied for an initial public offering (IPO) on South Korea’s junior Kosdaq index, says Korea Economic Daily. The listing will be composed entirely of new shares and could value Pinkfong at 700bn won (£376m), lower than the 1trn won (£537.2m) it was worth in 2021. Baby Shark started as part of a YouTube children’s song series in 2015, but took off during Covid, becoming the US platform’s most-watched video of all time with about 15.7 billion views. But Pinkfong’s other songs, such as Penguin Dance, have struggled to repeat the same success, amassing about 124 million views.…

Keir Starmer’s flagship plan to increase the UK’s military capabilities was undermined within 24 hours by Nato’s insistence that the government spend 3.5% of GDP on defence, says Joe Barnes in The Telegraph. On Monday, Starmer unveiled his long-awaited 140-page Strategic Defence Review (SDR), which had 62 recommendations and a focus on AI, drones and cybertechnology. However, his promised rise in spending – from 2.3% to 2.5% of GDP by 2027 – “suggests something less than full-scale mobilisation”, says The Guardian, and he refused to commit to a deadline for his stated spending target of 3%, which is still shy of the Nato goal. Deterrence is a “layered process” and the SDR’s challenge was to work out how to fill the “chasm” between the ageing nuclear deterrent at the top,…

The S&P 500 has just notched up its strongest May since 1990, closing up 6% over the month. This contradicts the old adage of “sell in May and go away” which has been perennially popular with gloomsters and journalists short of ideas ever since it was coined by Yale Hirsch of the Stock Trader’s Almanac in 1950. Hirsch noticed that Wall Street’s performance in the six months to April was notably better than in the six months to October. Since then, the pattern has continued to work. Since 1950, the S&P’s return in the six months to the end of April has averaged 7%, calculates Saxo Bank, but just 1.8% in the six months to the end of October. However, this finding hardly supports selling in May. Rather, the lesson…

capx.co Every year, on the late May bank holiday, a competition is held on a “terrifyingly vertiginous” hill just outside Gloucester, says James Price. A wheel of double Gloucester cheese is set rolling down that hill, and the locals set off after it. It has to be seen to get a sense of how “bonecrunchingly bonkers” it is. Locals insist the tradition is hundreds of years old, but the wonder is that it has survived in the age of health and safety. So many were injured in the cheese roll of 1997 that there was pressure to cancel the event. The following year it was called off but, “wonderfully”, the locals “ignored the busybodies and did it anyway”. It has continued ever since and is more popular than ever. It…

Purchases of electric vehicles (EVs) are becoming increasingly popular, while more and more of us are opting to secure one using a salary-sacrifice plan to save money and take advantage of tax incentives. According to the British Vehicles and Leasing Association, salary-sacrifice schemes have seen year-on-year growth of 61%, enabling thousands of workers to secure an EV at a lower cost. But is salary sacrifice worth it? And will you actually save money on your new car? The short answer is yes. “Salary sacrifice is the most cost-efficient way to drive an EV,” says Oliver Boots, chief commercial officer at Octopus Electric Vehicles. There are two reasons for these savings. The first is the tax efficiency of salary sacrifice. Because monthly payments come out of your gross salary (before tax),…

SMEs in the UK could unlock £78bn of benefits by embracing AI, according to Microsoft. The technology giant says the potential for businesses to adopt AI is particularly exciting in Britain’s regional economies; it highlights West Yorkshire, Liverpool and Cardiff as three areas of the country that are currently underperforming. However, while there are steps that SMEs can take for themselves to secure these benefits – including experimenting with different types of AI within their businesses – Microsoft says more leadership is required to exploit the full potential of new technologies. It is calling for the creation of regional “AI champions” across the UK, spearheaded by regional mayors and local authority leaders. It wants leaders to launch AI adoption challenges, with advice, training and planning support available to SMEs. It…

Capitalism And Its Critics A Battle of Ideas In The Modern World John Cassidy Allen Lane, £35 The two decades following the fall of the Berlin Wall fostered an almost unchallenged hegemony for capitalism and the market economy. Yet recent years have witnessed a notable decline in the perceived triumphalism. Surveys such as the Edelman Trust Barometer, conducted pre-pandemic, reveal striking disillusionment: more than half of respondents in the UK and US, and a remarkable 69% in France, believe that “capitalism as it exists today does more harm than good in the world”. John Cassidy’s comprehensive new volume provides the compelling historical context. Cassidy argues that capitalism, from its very genesis in the organised financial systems of the 18th century, has been a fertile ground for dissent. His book masterfully…

Chancellor Rachel Reeves and pensions minister Torsten Bell are embracing their inner Vito Corleone, says Tom Selby for Money Marketing. They have already coaxed defined-contribution pension schemes into agreeing to invest at least 5% of assets into UK private assets (such as infrastructure and start-ups) by 2030 in a bid to boost long-term investment. Now it turns out that this is an offer that asset managers “can’t refuse”. The commissar would like a word Last week the Treasury announced it will use the forthcoming pension schemes bill to create a “reserve power” allowing it to “set binding asset allocation targets” for pension investment in UK private assets. Reeves wants to use Australian and Canadian-style “megafunds” to drive fresh investment into Britain, say George Parker and Mary McDougall in the Financial…

“Australia and Canada… are [both] modern, dynamic, well-governed economies…yet global investors are structurally underweight these markets… Canada… neighbours the USA, where investors buy the S&P 500 en masse, which has no exposure to Canada… Australia is another forgotten market. When investors select Asia, they often overlook Australia and New Zealand… [yet] these forgotten markets have done very well over the years. Canada and Australia are ahead of the US since 1999… They both took off in the 2000s, peaked around 2010, and have tailed off since, in a mirror image of the US market. It stands to reason that if the US stalls, our forgotten markets will be better placed… There is also the commodity sector, where both Canada and Australia are major players. They also have strong banks, which…

Five to buy Entain The Times Despite the departure of two CEOs in less than 18 months, Entain’s efforts to bolster its operational performance by refining products and focusing on customers have started to bear fruit, with an increase in net gaming revenue. The gambling group expects to deliver adjusted earnings in line with forecasts of £1.1bn this year. While it faces strong competition, Entain has a chance to grow its market share in the US. With uncertainty about management behind it “and a turnaround underway”, Entain is “worthy of a punt”. Its shares are “good value”. 752p Persimmon The Telegraph The housebuilder’s long-term prospects are “upbeat” thanks to lower interest rates and higher wage growth. Demand is likely to keep outstripping supply, which implies higher volumes and selling prices.…

In the run-up to the last general election, Rachel Reeves was sold by Labour’s media supporters as a super-smart economist with a plan to restore growth to the British economy. She had the ideas and experience, not least at the Bank of England, to make a real impact. Less than a year later, however, she is clearly damaged goods. Her first Budget was a catastrophe, hammering businesses with a steep rise in employment taxes that destroyed jobs, pushing through changes to the non-dom regime that have driven entrepreneurs out of the country in record numbers, and leaving far too little fiscal headroom to allow for any leeway on spending. The prime minister has already had to step in and reverse her cuts to the winter fuel allowance, humiliating his chancellor…

It pays to keep it in the family Adrian Wooldridge Bloomberg Italian capitalism is a “family affair”, says Adrian Wooldridge. Giorgio Armani, Dolce & Gabbana, Prada, Ferrari; all are family companies. Such firms are associated with “unique and often fatal problems, notably dysfunctional children and family feuds”, and would fare better as public companies that could “attract more money, talent and management expertise”, it has long been thought. Yet the Antinoris have been making wine since 1385. Gucci and Ferrari are two of the world’s most successful brands. The Observatory, which publishes an annual report on the state of Italian family businesses, finds that family firms have outperformed non-family firms by “almost every measure – turnover, return of investment and productivity”. This is largely down to a “management revolution”, which…

worksinprogress.co In 2013, GE Hitachi Nuclear Energy applied to build three nuclear reactors in Wales, says Alex Chalmers. The design had been employed in four Japanese reactors, which had survived earthquakes of a greater magnitude than any that have ever hit the UK, without posing any threat to the public. But the UK regulator was not satisfied. After four and a half-years of scrutiny, it demanded various design changes – the result of which was an additional and redundant ventilation system and a cut in radiation exposure during routine operation that amounted to a yearly reduction by the amount we all ingest every time we eat a banana. This example is typical of regulation in the industry, which, for historical reasons, assumes that there is no safe dose of radiation,…

It is 50 years since Vietnam was reunited after a 25-year war that devastated the country. For the next 15 years, the communist regime made a bad situation worse by encouraging their opponents – the skilled, the educated and the ethnically Chinese – to flee, mostly in small boats. Between 200,000 and 400,000 refugees are thought to have died at sea. However, in the late 1980s, the government performed a sharp U-turn and turned Vietnam into a very capitalist country under autocratic rule. Since then, GDP per capita has risen from $270 a year to $4,300 in an economy that has grown from $6.3bn to $430bn, notes Tod Davis of brokers Deutsche Numis. Wider signs of social progress are equally impressive: the population has increased from 44 million to 100…

Small and medium-sized individual mining companies offer a leveraged bet on a metal’s price, writes Andrew Van Sickle, but the 33% decline in First Quantum’s stock when the Cobre Panama mine closed is a stark reminder of the downside of this approach: if key projects go wrong, you could lose a great deal of money. Temper risk by considering the big names in copper extraction, such as Anglo American (LSE: AAL) and Antofagasta (LSE: ANTO), both of which are listed on the blue-chip FTSE 100 index. Alternatively, diversify further by opting for a group of miners through exchange-traded funds such as the Global X Copper Miners UCITS ETF (LSE: COPG), which holds shares in an array of miners, including Antofagasta and Freeport-McMoRan. A second option is the Sprott Copper Miners…

● More than £22bn has been withdrawn from Britain’s ten most popular investment funds since the start of 2024, writes Ruth Jackson-Kirby. The shift marks a big move away from the big-name “star” fund managers such as Terry Smith and Nick Train. Managers are struggling to produce consistently high returns, so “investors appear to be choosing cheaper tracker funds that passively follow market indexes”, says Ali Hussain in The Sunday Times. Roughly £23bn has been invested in tracker funds since January 2024. The total amount invested in these funds has reached £367bn, a rise of £105bn since 2015. ● “If you earn more than £200,000, you may have had your finances snooped on by His Majesty’s taxman,” says Charlotte Gifford in The Telegraph. High earners and those whose assets are…

● The average SME in the UK is now owed £42,000 in overdue invoices, accounting software company Sage reveals. Some 44% of invoices issues by small businesses are settled late, according to research from the think-tank CEBR, commissioned by Sage. The data underlines the challenge faced by many SMEs. While the government has promised to take action on late payments, progress is slow. That leaves the emphasis on businesses themselves to invest in payments systems and finance functions. ● Did you know that you can now apply to Companies House to remove your home address from publicly available documents? Directors of SMEs registered with Companies House are required to provide their address, which is then typically available on the authority’s online database. But under new privacy rules introduced in recent…

Uruguay’s former president, José Mujica (pictured), an icon of the Latin American left who was dubbed the “world’s poorest president”, died last month at the age of 89, says Ciara Nugent in the Financial Times. Mujica took up arms in the 1960s as part of the Che Guevarainfluenced Tupamaros group and fought against Uruguay’s democratically elected but repressive government, which eventually became a military dictatorship. He spent more than a decade in prison, where he was tortured and spent long periods in solitary confinement. After Uruguay returned to democracy in 1985, Mujica entered politics and was elected to Congress in 1994. He served as president from 2010 to 2015. The period of incarceration gave Mujica plenty of time to think and he “emerged a changed man”, says The Economist. Although…

2023 Alkina, Kin Grenache, Barossa Valley, South Australia £26, swig.co.uk Every January, when I publish my Burgundy En Primeur Report, I only feature wines I deem to possess incredible rapport qualité prix (which I shorten to QP). These wines represent stunning quality and accuracy combined with fair pricing. But I have never, nor will I ever need to use the term in my annual 100 Best Australian Wines Report. This is because epic-level QP is ingrained in every wine in this tome, and there are no fewer than 271 of them in the 2025 edition. This week, I want to draw your attention to a pair of wines that seem to outgun all others in terms of cosmic quality and remarkable affordability. Alkina’s Kin range brings forensic winemaking and exacting…

The Humble Investor How To Find A Winning Edge In A Surprising World Daniel Rasmussen Harriman House, £29.99 Hedge-fund manager Daniel Rasmussen offers a timely and vigorous defence of traditional investment strategies, particularly value investing, in an era increasingly captivated by fast-growing tech stocks and alternative assets. For decades, leading up to the 2008 financial crisis, value investing – the disciplined practice of acquiring equities trading at modest multiples of their earnings or net assets – was widely considered the most reliable route to investment success. Since then, however, this approach has seen a period of considerable underperformance, and been overshadowed by the spectacular ascent of fast-growing technology giants, while more established companies have languished. Indeed, publicly listed equities themselves have begun to feel somewhat passé, with the allure of…