UK food retailers have had several difficult years of trading, but industry intentions are now clear and a consolidation of the sector is under way.
View of the Day
1. We expect the second half of 2018 to be stronger
The passing of the summer risk-off period could lead to improved investor sentiment. Other seasonal factors include potential increased consumer spending for events such as Singles Day in China (11 November) and Black Friday in the US (23 November), as well as major global holidays including Thanksgiving, Diwali and Christmas.
Markets have been a bit jumpy in October and, as ever, investors have looked for a suitable rationale, ranging from trade wars and slowing economic indicators, to higher interest rates.
In this case, the most likely cause was higher US interest rates, which was the reason behind the sell-off at the beginning of the year.
While the trade war between two great economic superpowers rapidly intensifies, it is sometimes instructive to turn to history to reflect on whether the US and China have learned lessons from their actions in the past.
Economic conflicts tend to be a consequence of protectionism; this is a phrase that holds true for Donald Trump’s latest antics.
Japan is a conservative country which places continuity and stability above change. This can frustrate overseas investors, who periodically get excited about Japan changing and buy the stock market, only to give up a year or two later, disappointed at the pace of reform.
Until a few years ago, very little happened in the world of venture capital trusts (VCTs) between May and January.
After a substantial run-up in 2017, China’s stock markets have experienced notable volatility in recent quarters.
The MSCI China Index was down roughly -9 per cent year-to-date (measured in US dollars) as of 30 September, while China’s mainland domestic A-shares were down nearly -20 per cent (measured in US dollars) for the same period.
1. Don’t let valuations outrun value
It is human nature to get carried away by hype.
The launch of the Alternative Investment Market (Aim) in 1995 was one move in a long line of attempts to expand the number of listings in the UK of higher-growth, but higher-risk, smaller companies through light-touch regulation aimed at make listing both cheap and easy.
There are two parts to any investment strategy, the long-term strategic positioning of a portfolio in pursuit of long-term objectives and the short-term tactical positioning, which tries to navigate the here and now. At Rowan Dartington, we espouse a wedding cake analogy, whereby 90 per cent of our portfolio strategy is determined by the ‘fruit’ part of the cake, or the asset allocation. This is why we meet and deliberate on a bi-monthly basis to make occasional changes to remain focused on the long-term.