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The Beijing Billionaires

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The Beijing Billionaires

Wednesday, May 5th, 2021

For the last seven years the title of the city with the most billionaires has been held by New York, but this year a new name has taken over and that city is Beijing. 

According to the latest Forbes annual rich list, the Chinese capital added 33 billionaires last year, taking its total to 100 – one more than the Big Apple. 

China’s quick containment of the Covid virus allowed its economy to grow last year and the country’s technology firms continue to prosper, but what’s interesting about the list of billionaires is the wide variety of industries represented. It’s by no means all technology, software and e-commerce. 

Top of the list of China’s billionaires according to Forbes is Jack Ma, co-founder and former CEO of internet shopping giant Alibaba, with an estimated fortune of $65.6bn (£47bn). 

In second place is Ma Huateng, the founder and CEO of Tencent, Asia’s most valuable company and, according to Forbes, with an estimated wealth of $55.2bn (£39bn). 

Other sources such as the Bloomberg Billionaires Index suggest that both Jack Ma and Ma Huateng lag behind bottled water tycoon, Zhong Shanshan, who founded his company, Nongfu Spring, in 1996. Bloomberg suggests that the recent stock market listing of his company and a controlling stake in a vaccine maker have significantly boosted Zhong’s wealth. The Bloomberg Index credits him with a net worth of $58.7bn (£46bn) – and suggests that  Jack Ma has rather less wealth. 

You do not have to go far down the lists to find plenty of more traditional industries. 

Wang Wei is fifth on the Forbes list with a fortune estimated at $32.2bn (£23.8bn) thanks to delivering packages, and at 13th is Pang Kang, who is worth $24.9bn (£17.8bn) thanks to soy sauce – emphatically proving that you do not need the latest must-have app to make your fortune. 

The oldest person on the list is 86-year-old Xu Chuanhua, worth very nearly $2bn (£1.43bn) thanks to logistics and chemicals. The youngest – at 35 and 333rd overall in China – is Jihan Wu, worth $1.8bn (£1.29bn) thanks to cryptocurrency mining chips. The richest woman – and eighth overall – is Yang Huiyan, who is worth $28.5bn (£20.4bn) thanks to real estate. 

With China recovering rapidly from the pandemic and with a growth target in excess of 6% for this year, we can expect the number of Chinese billionaires to have risen again by this time next year.

May Market Commentary

Wednesday, May 5th, 2021


Some of the numbers in this month’s Bulletin are simply staggering. Whether it’s Amazon’s profits or the ‘investment’ (which could alternatively be considered ‘spending’, depending on your political viewpoint) announced by President Biden. 

There was a time where the ‘standard unit’ of currency we talked about was a million. Company profits and valuations were measured in millions: debt was in millions. If the pandemic has done one thing, it is to change our default unit of currency. Now we deal in billions – borrowing to deal with the pandemic is in billions, company profits – at least if you’re Amazon – are in billions and no self-respecting start-up seems to go anywhere near the stock market unless it’s worth at least a billion. 

After a billion, of course, comes a trillion. That’s a thousand billion. In April US President Joe Biden was dealing in trillions and, if Amazon profits keep rising, it surely cannot be long before the world has its first trillionaire. 

As you will see below, April was a relatively quiet month on the world’s stock markets. The FTSE did at one point go through the 7,000 barrier and although it ended the month just below that level  was one of the world’s better performers. It was certainly a good month in the US and the new President announced unprecedented levels of investment – or spending. 

The International Monetary Fund had started the month with an optimistic forecast, predicting that the UK will have growth of 5.3% this year and 5.1% next year. Forecasts for global growth were upgraded slightly, to 6% this year and 4.4% in 2022. 

The UK and Australia agreed the ‘vast majority’ of a trade deal as Australia stepped back from trade deals made with China. There was gloomy news for the Eurozone economy and a potential political earthquake started to seem possible in Germany. And finally, a record that we thought would never be beaten was comprehensively smashed. 

As always, let’s look at all the details…


As mentioned above, the IMF duly delivered its growth forecast for the UK. There were other, rather more anecdotal predictions of economic recovery this year. Bank of England deputy governor Ben Broadbent said the UK would see ‘very rapid growth’ over the next two quarters as people rush to spend the money they have saved during lockdown. Barclays boss Jes Staley went even further, saying that ‘we estimate the UK economy will grow at its fastest rate since 1948’ as the bank unveiled profits more than doubling to £2.4bn for the first three months of the year. 

That will certainly be the case if International Trade Secretary Liz Truss gets her way. April saw the announcement that the ‘vast majority’ of a trade deal with Australia has been agreed with the deal expected to be concluded by June. It is believed that this deal could be a springboard for the UK to join the CPTPP (the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, which includes countries such Mexico, Japan and Canada in addition to Australia) within the next 12 months. 

In the domestic economy it was the construction sector leading the recovery. Figures for February showed that the UK economy edged up 0.4% in the month, driven by a 1.6% rise in the construction sector with both new builds and repair and maintenance doing well. At the end of the month Nationwide reported that house prices were 7.1% higher than a year ago, with the average property now costing £238,831. One analyst said the housing market was ‘on the boil’ and a story on the BBC reported particularly strong demand for property on the south coast, and on the coast of Wales as people looked to move away from cities. 

Inevitably there was some gloom amid the positive noises about the recovery, principally centring on Government borrowing. Measures taken to combat the pandemic have pushed government borrowing to its highest level since the end of the Second World War. Borrowing hit £303.1bn in the year to March – nearly £250bn higher than the previous year. The only consolation was that the figure is £24.3bn less than the £327.4bn expected by the Office for Budget Responsibility in its economic and fiscal outlook. 

What of jobs, the high street and – sadly – the companies still making significant redundancies? 

Defence giant Babcock announced that it would cut 1,000 jobs and Asda – thanks to us all baking at home – is to make 1,200 of its bakers redundant. At the end of the month it was reported that ‘time was running out’ to save 5,000 jobs at Liberty Steel, and the BBC reported that 1 in 7 shops is empty post-lockdown. 

More optimistically it was widely reported that shoppers had ‘rushed back’ to the national high street as it re-opened, with shoppers said to be making ‘revenge purchases’ – treating themselves to what they had always wanted as lockdown finally eased. As will be covered below in the US section, the high street has a huge amount of ground to make up and Hammerson – owner of Birmingham’s Bull Ring – will not be the only shopping centre owner to cut rents (by up to 30% in this case) in a bid for survival. Ominously, the month ended with online retailer Boohoo set to announce ‘soaring’ lockdown sales when it updates shareholders on May 5th. 

…But overall April was a positive month for the UK economy, and the FTSE-100 index of leading shares reflected it. The market rose 4% in the month to close at 6,970. The pound was virtually unchanged against the dollar in percentage terms, and closed April trading at $1.3817. 


The month did not get off to the best of starts in Europe as France began its third period of lockdown, with schools closing and people being banned from travelling more than 10km (just over six miles) ‘without good reason.’ 

German’s Commerzbank did little to lift the gloom when it announced a $3.3bn (£2.4bn) loss as it continued to deal with the impact of the pandemic. The bank has said it will cut up to 10,000 jobs and close ‘hundreds’ of branches as it looks to return to profitability this year. In contrast Ryanair got off relatively lightly, saying that last year’s losses will ‘only’ be £732m. 

The Purchasing Managers’ Index which came out in the middle of the month seemed to confirm that the pace of recovery was lagging in Europe with the service sector in Spain and Italy particularly slow to recover. This was confirmed at the end of the month when figures for the first quarter showed that the Eurozone economy had fallen back into recession, shrinking by 0.6% in the first three months of the year, having been hit by a renewed surge in infections and the consequent restrictions and lockdowns. 

In roughly five months’ time Germany will be going to the polls. Could we see the first Green Chancellor? Currently the Greens are leading in the polls, pledging to spend €500bn (£435bn) on a ‘socioecological transformation’ of the economy, which would see increased welfare payments and wealth taxes, a doubling of carbon taxes, a ban on short-haul flights and increased income taxes – plus a 30 hour working week and the right to work from home. The Green candidate to replace Angela Merkel would be 40 year old Annalena Baerbock. 

Meanwhile on the opposite end of the political spectrum the far-right Alternative fur Deutschland (AfD) appears close to embracing ‘Dexit.’ “We consider a withdrawal of Germany from the EU and the establishment of a new European Economic and Interest Community necessary” said the party. 

Away from the potential political upheaval April was a reasonably good month for Europe’s two leading stock markets. The German DAX index was up 1% to 15,136 while the French market was one of the month’s better performers, rising 3% to close April at 6,269. 


The ‘simply staggering’ numbers referred to in the introduction are, of course – despite the best efforts of Commerzbank – a reference to this section. More of Amazon’s profits and the President’s ‘once in a generation’ plans below…

The month got off to an excellent start on the jobs front as the US economy added 900,000 jobs and the recovery continued. The impressive numbers were largely driven by re-openings at restaurants, bars, construction sites and schools. There was more good news when US medical authorities gave fully vaccinated Americans the go-ahead to begin travelling again, both at home and abroad. 

As will be covered ahead, April brought a trade spat between China and Australia, but the US also had its share of international tension in the month. Three companies and four branches of China’s National Supercomputing Centre were added to the US blacklist, meaning companies cannot export technology to the groups without prior approval. Sanctions were also imposed on Russia for what the Biden administration described as ‘harmful foreign activities’ – cyberattacks to you and me. 

…And so we come to the numbers. As we all know, there have been winners and losers from lockdown. A surge in iPhone sales – especially in China – has seen Apple’s profits double since the beginning of the pandemic. Alphabet, the parent company of Google, saw net profit jump by 162% to a record $17.9bn (£13bn) in the three months to March as advertising revenue grew by a third. Facebook revenues for the first quarter leapt from $17.7bn (£12.8bn) a year ago to $26.1bn (£18.9bn) this year. Tesla made $438m (£317m) in the first quarter of the year, although this was dented somewhat by paying CEO Elon Musk $299m (£216m) – part of the controversial compensation package agreed in 2018. 

It was Amazon’s figures, though, that really caught the eye, and illustrated just how much of a shift we have made to shopping online – and how much damage the pandemic must have done to high streets and shopping malls around the world. 

Although the profits were not as large as Alphabet’s, every aspect of Amazon’s business from video streaming to grocery delivery, has done well during the pandemic. Revenue for the January to March period rose from $75bn (£54bn) last year to $108.5bn (£78bn) this year, with profits of $8.1bn (£5.86bn) – more than treble what it was in the same period last year. City AM did the maths and reported that Amazon made $13,000 (£9,400) per second in sales during the quarter. 

With figures showing that the US economy grew at an annualised rate of 6.4% in the first quarter, one analyst said that Amazon could be on the verge of a ‘golden age.’ 

All the company figures, though, were dwarfed by the President’s announcement of a $4tn (trillion) “once in a generation investment in America itself.” Joe Biden unveiled the American Jobs Plan and the American Families Plan which would, he said, be paid for by rises in corporation tax and by taxes on the ‘wealthiest 1%.’ The plans were met with fierce opposition by the Republicans but, with the Democrats holding the balance of power in both the Senate and Congress, they are likely to ultimately get the go-ahead. 

With the economy accelerating, companies posting record profits and the President announcing that level of investment it was no surprise that April was a good month for US stock markets. The Dow Jones index rose 3% to 33,875 while the more broadly based S&P 500 index was up 5% to end the month at 4,181. 

Far East 

China was one of the very few countries to see its economy grow in 2020. As the major Western economies all contracted, China reported growth of 2.3%. It was therefore no surprise when the Forbes annual rich list revealed that Beijing had overtaken New York as the city with the most billionaires, adding 33 last year to take its total to a nice, round 100. 

…And there could be more next year, as figures showed the Chinese economy up 18.3% on a year-on-year basis in the first quarter as it continued to recover from the pandemic. 

That said, the Chinese regulators are flexing their muscles and no-one – not even Jack Ma, boss of Alibaba and generally reckoned to be China’s richest man – is outside their reach. The regulators slapped a huge fine on Alibaba – equivalent to just over £2bn – saying the company had ‘abused its dominant market position’ for several years. The company accepted the fine, and duly vowed to change its ways. Meanwhile in Hong Kong Jimmy Lai, billionaire owner of the Apple Daily tabloid, was sentenced to 14 months in jail for his part in the pro-democracy protests. 

Away from China, Samsung pushed its profits to the highest level since the pandemic began. First quarter profits were the best since 2018 at $6.4bn (£4.6bn) on the back of strong mobile sales. There was also strong demand for TVs and home appliances – just as in the UK, if you’re going to be trapped at home, you have to spend the money on something…

On the political front tensions between Australia and China continued to escalate. The Australian government used new powers to rip up deals made between the state of Victoria and China as part of China’s Belt and Road initiative. The government said it was backing out of the agreements to ‘protect Australia’s national interest.’ The Chinese government called the move ‘provocative.’ 

Of the region’s stock markets South Korea had the best month – the market there rising 3% to 3,148. Hong Kong’s Hang Seng index rose 1% to 28,675, while China’s Shanghai Composite index managed a gain of just five points, closing the month at 3,447. The Japanese market was down 1% at 28,813. 

Emerging Markets 

The main story in the Emerging Markets section of the Bulletin was, of course, the surge in Covid cases in India. 

The middle of the month had seen huge crowds gather to bathe in the Ganges during the Kumbh Mela religious festival, even as a second wave of the virus swept through the country. We will all have seen the tragic scenes from India on various news bulletins, and the month ended with the daily number of cases passing 400,000 for the first time as the second wave worsened. 

Meanwhile in Russia thousands of people joined unauthorised rallies to protest against the continuing detention of jailed opposition leader Alexei Navalny, amid demands that he receive proper medical care. Navalny finally ended his hunger strike and was described as a ‘gaunt skeleton’ for his latest court appearance. Unsurprisingly, the verdict did not go in his favour.  

It was a relatively quiet month for the three major stock markets we cover in this section. The Indian market drifted down 1% to end the month at 48,782: Russia’s stock market managed to gain just two points in the month to close at 3,544, while the market in Brazil rose 2%, to close April at 118,894. 

And finally…

Last month’s ‘And finally…’ was not one of the best. For some reason the world seemed to be in a disappointingly sensible place in March. Fortunately the natural order of things was restored in April. 

Having recently written that pet food pouches were expected to be in short supply we must, sadly, start the month with even worse news. There is a shortage of garden gnomes. With garden centres being open during lockdown there has, apparently, been a ‘massive upswing’ in sales of garden gnomes. Well, yes, when you’ve only been able to talk to your household for three months, a new face might be appealing.

The situation has not been helped by a shortage of raw materials which – inevitably, has been made worse by our old friend, the Suez Canal blockage. 

April looks like it was a good month for our learned friends. Marks and Spencer has begun legal action against Aldi, arguing that their Cuthbert the Caterpillar cake infringes its Colin the Caterpillar trademark. They duly lodged an intellectual property claim in the High Court – and a very expensive Queen’s Counsel will shortly be arguing the merits of a cake being intellectual property. No doubt other barristers will be queuing up for a slice of the action…

You may remember Spanish civil servant Joaquin Garcia, who failed to turn up for work – but was still paid – for six years, and was only caught after becoming eligible for a long service award.  There was a record you thought would never be beaten. But April brought news of a – sadly unnamed – Italian hospital employee who appears to have skipped work in the southern city of Catanzaro for 15 years. He was paid €538,000 (£464,000) in the time he was not working, and is now being investigated for fraud – along with six managers.

…And that’s it for this month. Except for the news that fund manager Standard Life Aberdeen is having a re-brand. Having no doubt paid design and brand consultants plenty, they are to re-emerge as abrdn. The almost vowel-less re-brand (the A is apparently from Standard) is described to be ‘modern’ and ‘dynamic.’ 

Of course it will – and not for one minute will we be left behind. We’ll be back this time next month, with our modern and dynamic MRKT CMMNTRY.


What are Freeports?

Wednesday, April 7th, 2021

Many people will have heard Chancellor Rishi Sunak announce the creation of eight freeports in his Budget speech. The freeports – which are due to become operational later this year – will be at East Midlands Airport, Teesside, the Humber, the Solent, Plymouth, Liverpool City Region, Felixstowe and Harwich, and the Thames. 

But what is a freeport? How will the rules governing them be different? And will they really benefit the UK economy? 

Rishi Sunak mentioned freeports in his first Budget speech, so it was always likely that he would introduce them this year: he’ll be hoping they can play their part in revitalising the UK economy, regenerating areas in need of investment and, in the long run, contributing towards the bill for Covid-19. 

What are freeports? 

Freeports are usually located around ports or airports: the UK had seven between 1984 and 2012, including Southampton, Liverpool and the Port of Tilbury. Goods arriving in a freeport are not subject to the usual tariffs that are levied on imports: these only become payable if the goods leave the freeport and are moved elsewhere in the UK. If the goods are shipped back overseas, no tariffs are payable. 

Each of the new freeports can be up to 45km (27 miles) across – so they’ll cover significant geographical areas. 

How will the rules governing them be different? 

As the Chancellor set out in his Budget, the new generation of freeports will have different rules – including tax breaks and relaxed planning requirements – to make it easier and cheaper to do business. Employers will also pay reduced national insurance for new staff they take on.

In addition, companies will pay less tax on existing buildings and receive tax concessions when they buy new buildings. Clearly the Chancellor wants to do as much as possible to encourage companies to invest in the freeports. 

Will they really benefit the UK economy? 

Supporters of freeports say they help increase manufacturing and encourage jobs and investment in areas that might otherwise struggle to attract them. When the idea of freeports was first mooted, construction group Mace suggested they could create 150,000 jobs and add £9bn a year to the UK economy. This would be a key part of the Government’s proposed ‘levelling up’ agenda, helping rebalance economic growth around the country. 

Opponents of freeports are less enthusiastic. They argue that they don’t boost overall economic activity, but simply shift it from one area to another – with the taxpayer footing the bill through the tax subsidies and concessions the freeports enjoy. 

The Government, though, is committed to freeports. There are around 80 freeports in the European Union and – with the UK in theory having more flexibility now it is no longer bound by European law – the UK freeports could expect to win a lot of business. That’s certainly what the Chancellor will be hoping. 


The Net Zero Innovation Portfolio

Wednesday, April 7th, 2021

Most of the headlines in Rishi Sunak’s recent Budget were made by the tax rises, both for individuals and companies, and by the inevitable bill for the pandemic. 

There was a strong ‘green’ theme running through the Budget. This was shown through the National Infrastructure Bank being established in Leeds, and the Bank of England’s remit being revised to reflect the Government’s stated commitment to move to ‘net zero’ by 2050. In addition, the Chancellor confirmed details of a new Net Zero Innovation Portfolio. What is it? And what will it mean for the UK’s green economy? 

Let us start, though, by answering an even more basic question. What is ‘net zero?’ The term refers to the balance between the amount of greenhouse gas produced and the amount removed from the atmosphere. We reach ‘net zero’ when the amount we add does not exceed the amount taken away. 

The UK is now committed to reaching net zero by 2050 – with the ban on the sale of new petrol and diesel cars from 2030 perhaps the most high profile commitment to  this. 

The Net Zero Innovation Portfolio is another step in this direction, providing funding for low carbon technologies and systems. Alongside it, the Chancellor announced separate funding to support Scotland’s transition away from oil and gas. “If we want a better future,” said the Chancellor, “We have to do things that have never been done before.” Sustainable businesses would have a “key role” to play in his “investment-led recovery.” 

The Prime Minister had put it rather more colourfully the week before, declaring that the UK would become, “the Saudi Arabia of wind.” 

There are, of course, sceptics. Critics point to the huge amount of construction going on in developing economies such as China and India, arguing that the UK’s commitment to net zero will make little practical difference and could come at a huge cost. China, they argue, plans to build 200 airports over the next 15 years. India is investing $6.4bn (£4.6bn) in 32 mining projects as it looks to boost coal output. 

In the West, though, the drive to net zero seems unstoppable – and is a core part of the UK Government’s industrial strategy. The Net Zero Innovation Fund is another step in this direction as it looks to put the UK at the forefront of global markets for clean technology. 

We are likely to see the further development of offshore wind farms, of battery technology to store clean energy, and carbon capture, so that as much carbon as possible is captured and – according to the Government’s briefing paper – returned to under the North Sea. 

Welcome to the National Infrastructure Bank

Wednesday, April 7th, 2021

One of the most eye-catching announcements in Rishi Sunak’s recent Budget was the creation of  the National Infrastructure Bank, which – as part of the Government’s commitment to economic ‘levelling-up’ across the UK – will be based in Leeds. 

What is the new bank? Why is it being introduced? And what impact might it have on both the regional and national economies? 

The Bank is part of the Government’s stated aim to reach ‘net zero’ by 2050, part of what the Chancellor described as a “green industrial revolution.” 

Launched with £12bn of capital, the Bank is aiming to attract a further £40bn of private investment into green projects. According to UK Government documents, “the Bank will provide leadership in the development of new technologies.” The Bank will also be able to issue £10bn worth of guarantees, as well as having the ability to “draw capital from the Treasury and borrow from private markets.” 

Initially it looks as though much of the Bank’s lending will be to local authorities. It appears that one of the key aims of the Bank – as with the Budget’s freeports initiative – will be to regenerate areas that have previously suffered from a lack of investment. The Government’s initial briefing notes talk of ‘high value and strategic projects of at least £5m.’ The National Infrastructure Bank won’t be lending you and me money to put solar panels on our roof…

These are clearly early days – at the moment the Bank is little more than another headline. But it has been broadly welcomed: this was certainly true in Leeds, with the council seeing the Bank as confirmation of the city as the biggest financial hub outside London – and another feather in the region’s cap following Channel 4’s recent move to Leeds. 

There have, inevitably, been one or two dissenting voices. Mark Robinson, chief executive of procurement authority Scape said, “There is a pressing need for [the Bank] to move at speed to create the best conditions for local economic growth and sustainable inward investment.” 

In other words, if the economy is going to bounce back from the pandemic, then the Chancellor’s ‘green industrial revolution’ – and the Bank behind it – needs to get to work, quickly and effectively. 

In theory, it should be able to do this. According to figures produced by the Office for Budget Responsibility, the Bank will initially provide less than half the funding previously provided by the European Investment Bank (EIB). The Government’s intention is that the Bank will provide ‘more targeted’ support than the EIB and, with the UK no longer bound by European rules and the Government keen to press ahead with the ‘green industrial revolution,’ we may see the National Infrastructure Bank expand rapidly. 

Major pension funds commit to net zero carbon by 2050

Thursday, April 1st, 2021

A new Net Zero Investment Framework has been launched by the Institutional Investors Group on Climate Change (IIGCC) which outlines a commitment to net zero carbon emissions by 2050. The framework aims to encourage investors to develop an investment strategy that achieves net zero, and the framework is already being put into practical use.

At the time of writing, 36 investors collectively managing assets of over £6.1trillion have adopted the framework. Among these investors are a significant number of pension schemes: Scottish Widows, the Environment Agency Pension Fund, Royal London, National Grid UK Pension Scheme, the Church of England Pensions Board, Brunel Pension Partnership, Northern Local Government Pension Scheme, Lloyds Banking Group Pensions Trustees Limited and Nest. 

The investment framework is designed to deliver on the Paris Agreement goal of keeping global warming well below 2 degrees celsius, compared to pre-industrial levels, preferably below 1.5degrees. It’s built upon three specific types of target which will be used to measure success. These are portfolio level targets for decarbonisation and investment in climate solutions, timebound portfolio coverage targets for companies and assets to meet net zero or aligned criteria, and engagement coverage threshold ensuring intensive engagement to drive the transition. 

UK Pensions Minister, Guy Opperman, had this to say about the framework: “Bringing climate change to the top of the agenda and ensuring that Britain’s pension investments act on managing climate change risk will not only help the UK reach net zero, but ensure a brighter future for all.”

“In the run up to COP26 (the UN Climate Change Conference) more countries than ever are signing up for net zero. This creates huge opportunities, but also risks, for institutional investors such as pension schemes. That is why we’re the first major economy to legislate to require pension schemes to set targets to manage their own climate risks.”

“I therefore welcome both the ambition and hugely practical guidance contained in this framework, which will help even more institutional investors aim for net zero.” 


Does an increase to capital gains tax look likely?

Wednesday, March 17th, 2021

While Rishi Sunak’s spring budget introduced a variety of new initiatives and updates to multiple taxes, one suspected change was missing from the big red book. Analysts had posited that a capital gains tax hike would be a likely inclusion in Sunak’s budget, expecting it to be brought more in line with income tax and sitting at around 25%.

While, for now, capital gains tax remains at its pre-covid rate of 20%, we cannot assume that’s where it will remain. Government debt is at an all-time high, and there is speculation that an increase to CGT is one technique that may be used to address this debt. In 2020 the government’s tax adviser recommended that CGT be overhauled. This proposal suggested that a significantly higher number of people would be liable to pay the duty than currently do.

Capital gains tax is a tax on the profit made when an asset is sold or ‘disposed of’ after increasing in value. Disposing of an asset includes sale, gift giving or a transfer to somebody else, swapping it or receiving compensation for it – an insurance payout for a lost or destroyed asset for example. The tax is on the gain received, not the total value received. For example, a painting purchased for £5,000 and sold for £25,000 demonstrates a gain of £20,000. It is on that £20,000 that the tax would be payable. You do, however, only have to pay CGT on overall gains above the tax-free allowance which currently sits at £12,300 or £6,150 for trusts.

In February of 2021, HMRC’s published tax receipts data showed that CGT receipts were the highest they had ever been at £10.4bn, which may be an indicator that people were attempting to solidify their capital gains ahead of a predicted CGT increase. Whether that increase is to be expected in the near future is uncertain; we may find out at the chancellor’s next budget.

If you’re interested in how a change to the capital gains tax rate could affect you and your assets, it’s advisable to seek professional advice. If you have any questions surrounding the potential impact on your personal finances or the topic in general, don’t hesitate to get in touch. 

Can Investing in one Company make you a Millionaire?

Wednesday, February 3rd, 2021

We all know that investments can rise and fall in value. That a prudent investor spreads their risk across different sectors and across different markets. And we all remember our very first financial adviser, our Grandma, who told us not to put all our eggs in one basket. 

But between Christmas and New Year there was a story on the BBC about the soaring share price of electric car maker Tesla which has created what it described as an ‘army of millionaires’ – the so-called ‘Teslanaires.’ 

Shares in Elon Musk’s company soared more than 700% in 2020, making Tesla the world’s most valuable car company, Elon Musk the world’s richest man (overtaking Jeff Bezos of Amazon) and making many investors in the company millionaires. 

But as the article rightly points out, it has been a bumpy road for Tesla. In May of last year Elon Musk wiped $14bn (£10.2bn) off the company’s value when he carelessly tweeted that, in his opinion, the Tesla share price was too high. 

We all need to remember that for every Tesla there is a Sirius. Sirius Minerals was a mining company, granted the right to mine potash in the North Yorkshire Moors near Whitby. Many local investors, swayed by stories of the potential returns, invested heavily, putting their life savings and pension lump sums into the company. But the shares steadily dropped, the company was eventually taken over with the shares trading at 5.5p and the local investors were left facing heavy losses. 

Yes, shares like Apple, Nike and Starbucks may have produced spectacular returns for investors on their way to becoming household names, but many, many companies have gone in the opposite direction. April 2019 saw Debenhams go into administration and what could have been safer than the British high street? Surely people will always need to shop, they will always need new clothes… But that was before the pandemic when 2020 was the worst year for high street job losses and store closures in 25 years. 

There will always be winners and losers in investing and the good news stories, the ‘Teslanaires,’ will always receive plenty of publicity. After all, ‘Investor takes sensible long term decision with their financial adviser’ is hardly a headline story. 

But for our clients, it is the best course of action and always will be. A carefully constructed portfolio, in line with your financial planning goals and consistently monitored by your financial adviser: it may not make the headlines, but it will certainly let you sleep at night.

Will we ever go back to the office full time?

Wednesday, February 3rd, 2021

For many people, the pattern of working life was well-established. They got up on a Monday morning, ate some breakfast and travelled into work. They exchanged news around the proverbial water-cooler, sat in meetings and came home again in the evening. Rinse and repeat.

Then, on March 23rd last year, the UK went into lockdown. Suddenly, millions were working from home. 

Commentators were quick to proclaim ‘the end of the office.’ Studies quickly emerged showing that people were actually more productive working from home. No-one missed the daily commute and lunch eaten in the garden in April and May was a lot more fun than trekking to the nearest deli.

Even more importantly, Millennials and Generation Z, the demographic cohorts that were making up more and more of the workforce, were getting what they wanted;  flexible working and a much-improved work/life balance. 

Company after company announced that working from home would continue indefinitely. Finance directors looked at income and expenditure statements and wondered if they really needed that expensive building with all the desks and chairs and the giant jar of coffee every fortnight.

We’re now in lockdown 3. For those who have only been part of the workforce for a few years, a significant portion of their working life may have been spent working from home. And yet it does appear that the proclamation ‘the death of the office’ may have been a bit premature. Even introverts are reported to be missing the chat around the water-cooler. 

Many people are finding that they simply cannot work from home effectively in the long-term, as they juggle the competing demands of work, childcare and a relationship. 

There are also increasing worries that working from home is making us less creative.  

Steve Jobs famously said that offices were about creativity and collaboration: that much of Apple’s success came from chance meetings in the office. As many of us have noticed, chance meetings do not happen on Zoom. 

So as the vaccine is rolled-out, many people are missing the office, but don’t bet against its disappearance just yet…

January Market Commentary

Wednesday, January 6th, 2021


2020 has been a year like no other, and yet – as we will see below – the majority of world stock markets have enjoyed a good year. It was also a good year for Joe Biden, who defeated Donald Trump in November’s Presidential election, and for supporters of Brexit. 

Finally, some 4½ years after the Referendum a deal was agreed with the European Union, and the UK’s transition period ended on December 31st. 

As always, let us look at all the detail. We have also added an extra section this month, looking at the performance of the major world stock markets over the whole of 2020. 


The main news in the UK was, of course, the eventual deal with the European Union. We have covered this in our final Brexit section below. 

Away from the Brexit negotiations, the UK went into stricter new tiers at the beginning of the month just as the Pfizer vaccine was approved for use. But, with infections continuing to rise, there was little doubt that we were heading for even harsher lockdown measures. 

Quite what this will do to the beleaguered UK high street is anyone’s guess. Lockdown measures were reported to have ‘battered’ footfall in the run-up to Christmas, and December saw Bonmarché collapse into administration while Primark reported that the pandemic had wiped £430m off its balance sheet. 

Figures for Boxing Day suggested that footfall on one of the busiest shopping days of the year was down 60%, and 2020 was reported to be the worst year for retail job losses for 25 years. With the furlough scheme gradually coming to an end the news on job losses can only get worse. 

In the wider economy the UK’s unemployment rate rose to 4.8% in the three months to September, up from 4.5% in the previous month, with the Office for National Statistics reporting a record 314,000 redundancies in the period. 

Growth for the third quarter was revised upwards to 16%, but worryingly growth almost stalled in October, with the ONS reporting that the economy grew by just 0.4% in the month. Government borrowing soared in November to £31.6bn – the highest November figure ever recorded. Inflation fell to just 0.3% in November as lower prices for food and clothing drove the figure down from 0.7% in the previous month. 

Was there any good news? Yes – there was plenty of optimism amid the gloom as the Pfizer vaccine started to be rolled out. Three-quarters of small firms said that they were likely to hire staff next year and City AM reported a Lloyds Bank survey as saying that business confidence was at a nine-month high. Consumer confidence also jumped sharply on news of the vaccine. 

So much for surveys and ‘confidence.’ Let’s end the year with some tangible good news. Start-up company Britishvolt announced that it had chosen Blyth in the North East as the site of the UK’s first ever battery ‘gigaplant.’ The project will cost £2.7bn and will employ 3,000 people at the plant, which will produce lithium ion batteries for electric vehicles. It is expected that a further 5,000 jobs will be created in the supply chain. 

Although – as we report below – it had a poor year, the FTSE-100 index of leading shares did reasonably well in December, ending the month up 3% at 6,461. The pound was up 2% against the dollar at $1.3672 and was up by 3% for the year as a whole. 

Brexit & Trade 

There were plenty of newspaper headlines but – as we had always expected – a deal between the UK and the EU was agreed and the EU/UK Trade and Cooperation Agreement was passed by 521 votes to 73 in the Commons. It duly received Royal Assent and became law, with the UK’s transition period with the EU ending at 11pm on December 31st. 

There will, of course, be teething problems. Whether you think the deal is a good thing or a bad thing almost certainly depends on how you voted in the Referendum. For all the sound and fury since then, we doubt that many people have changed their minds. 

The UK signed a free trade deal with Turkey at the end of the month, and there will unquestionably be more deals signed this year. 

…But it seems appropriate to leave the final word on Brexit to Boris Johnson, the man who will go down in history as the Prime Minister who took the UK out of the European Union. Here’s what the PM had to say: 

‘People used to insist that you couldn’t have both: you couldn’t have unfettered free trade with the EU, we were assured, without conforming to EU laws. You couldn’t have your cake and eat it. Maybe it would be unduly provocative to say this is a cake-ist treaty; but it is certainly from the patisserie department.’

With that insightful – and calorie-laden – analysis, and after more than 50 appearances, it is time to say goodbye to the Brexit section of the bulletin. 


Like the UK, Europe spent much of December introducing various new degrees of lockdown. Italy announced a Christmas and New Year lockdown – and will presumably have a wary eye on the Chinese New Year on February 12th, which did so much to spread the virus in the North of the country last year. Germany introduced a raft of new restrictions and Spain said that it would keep a register of those people who refused to be vaccinated against Covid-19. 

Tesla’s plans for a new ‘gigafactory’ in Germany have been beset by objections from environmentalists. Preparations once again came to a halt in December, as campaigners won a court injunction, arguing that the site will endanger local species of snakes and lizards. 

More optimistically, Ryanair has agreed to buy a further 75 new Boeing 737 aircraft, bringing the total number of jets it has ordered to 210 – a major vote of confidence in the future of the aviation and holiday industries. The total value of the deal is $22bn (£16bn). 

It was also reported that the EU was on the brink of a ‘major investment deal’ with China, which will give EU firms better access to the Chinese market. Talks on the deal started in 2014 – which really illustrates how quickly the Brexit negotiations were concluded. 

December was a reasonably good month for the two major European markets we cover in the bulletin. The German DAX index rose 3% to close the month at 13,719 while the French stock market was up just 1% at 5,551. 


Two weeks from writing this, the US will have a new President: Joe Biden will be inaugurated as the 46th President on January 20th, beginning a four year term with Kamala Harris as his Vice-President. 

So far his administration includes many of the stalwarts of the Obama and Clinton years, with Biden naming Janet Yellen – former Chair of the Federal Reserve – as his new Treasury Secretary. 

The big challenge for the new team will be getting America back to work. The economy added 245,000 jobs in November, below many economists’ expectations. The jobless rate did fall from 6.9% to 6.7%, but it was believed to be because many people stopped looking for work over the holiday season. Worryingly, some key virus relief programmes, including some unemployment benefits, are now due to expire. 

In company news Airbnb made its debut on the stock market and saw its value exceed $100bn (£73bn) while Uber announced it was selling its self-driving cars and flying taxi divisions for the rather novel business idea of ‘concentrating on profits.’ 

The month ended with a deal finally being reached to approve a $900bn (£657bn) Covid stimulus package – and with continuing warnings of a cyber-attack on the US government. The New York Stock Exchange announced that it would de-list three Chinese telecoms giants due to supposed links to the Chinese military. 

With or without the Chinese companies Wall Street enjoyed a good month. The Dow Jones index closed above 30,000 – ending the month up 3% at 30,606. The more broadly-based S&P500 index was up 4% at 3,756. 

Far East 

December started with a report that China was escalating its ‘tit-for-tat’ trade war with the US, introducing tough new laws restricting the export of products – notably military technologies – that might harm China’s national security. 

As we have seen above, the US took action against three Chinese telecoms companies at the end of the month. From January 20th though, China will have a new administration to deal with: US intelligence officers are already saying that Chinese agents are stepping up their attempts to influence ‘Team Biden.’ 

Continuing the cloak and dagger theme, the Chinese authorities maintained their crackdown on fintech companies and – as we write on the morning of January 4th – there are concerns over the whereabouts of Jack Ma, billionaire co-founder of the Alibaba Group, who hasn’t been seen in public since he criticised the regime back in October. 

Events were rather more peaceful across the China Sea, with the Japanese government announcing a further Covid stimulus for the economy. The additional spending – amounting to 73.6tn yen (£530bn) will include subsidies for green investment and spending on digitalisation and is aimed at pulling the country out of its Covid-induced economic slump. 

There was certainly no slump on the region’s stock markets in December. China’s Shanghai Composite index rose 2% to 3,473: the Hong Kong market was up 3% to 27,231 and Japan’s Nikkei Dow rose 4% to 27,444. The South Korean market spoiled our neat arithmetic progression by having an excellent month, rising 11% to close December at 2,873. 

Emerging Markets 

There was good news for India in the month, with an article in City AM stating that ‘India will be the big winner of the new world order.’ The writer suggested that the more China pressures India – witness the recent skirmishes in the  disputed border region – the more India will ally itself with the US, and reap the consequent economic benefits. 

We shall see… In the short term December was a good month for the Indian stock market, which rose 8% to close at 47,751. The Brazilian index went one point better, rising 9% to 119,017 while the Russian market was up 6% to 3,289. 

World Stock Markets in 2020 

No doubt if someone had said to you on January 1st ‘there’ll be a global pandemic and the world will still be battling it on December 31st’ you may have been confident of all the world’s stock markets falling. 

That is very far from the case: with the world’s central banks pumping money into global economies some markets have had very good years. Leading the way is the South Korean market, which is up 31% this year. Elsewhere in the Far East Japan rose by 16% and China’s Shanghai Composite index rose 14%: the only major market in the region to fall was Hong Kong, which dropped by 3%. 

In Europe the German DAX index rose by 4% in 2020, but the French market was down 7%. Sadly the UK’s FTSE-100 index was down by 14% – the worst performance of all the markets we cover in the bulletin, and the worst year for the FTSE since the financial crisis. 

In the US the Dow Jones index was up 7%, while the S&P500 index rose by 16%. We don’t report on it in the bulletin, but the Nasdaq index – the US’ index of tech stocks – was up by an eye-watering 42% in 2020. 

India led the way in our Emerging Markets section, with the stock market up by 16% in the year: the Russian market rose 8% and the Brazilian index was up by 3%. 

And Finally…

2020 – despite all the serious headlines – was a good year for the ‘And finally’ section of the bulletin. December certainly lived up to the year’s high standards, and began with Australian teenager Jessica Collins. Jess grew up on a mango farm in Queensland and – frustrated by how many mangoes go to waste – turned 1,400 unwanted fruits into a dress for a school project. 

Clearly Jess won’t have any time for video games, which is a shame as Kentucky Fried Chicken have launched a games console which will also warm up your chicken. “The chicken chamber will keep the contents hot, ready to eat during intense gaming sessions,” said KFC. And no, it is not April 1st. 

…But will Earth survive until April 1st? It appears that our planet has failed the interview and will not be admitted to the Galactic Federation. 

According to professor and retired Israeli general Haim Eshed – and reports in several papers – there is a Galactic Federation of alien species among the stars. But they don’t want us humans to be part of their club , as we’re ‘not ready.’ The aliens won’t make this known publicly as they are worried that we’ll ‘freak out.’ They have, however, contacted President Trump who may be on the verge of revealing their existence. 

We’d better wish you a Happy New Year while we still can. With the aliens’ permission, we will be back at the start of February: in the meantime our very best wishes go to all our clients for a happy, healthy and prosperous 2021.