Is the Investment World Changing?

With the war in Ukraine continuing and inflation hitting over 6% (and likely to go higher), it seems a good time to review one’s investment strategy. My thoughts on this were prompted by watching the panel discussion at the Mello Trusts and Funds webinar on Tuesday. Some members argued that now is the time to move into commodities and out of the high growth technology stocks that have been such winners in the last few years. Is growth going to go out of fashion?

It’s certainly very clear that high inflation in basic commodities such as food (likely affected by the war in Ukraine who are a major producer) and oil/gas (also affected by the war and the associated sanctions on Russia) will have a big impact on consumers in the UK in the coming year. We are already seeing this in the shops and in on-line stores from my brief shopping experience yesterday.

As the Chancellor’s Spring Statement indicated yesterday, the UK is facing its biggest drop in living standards on record as wages fail to keep pace with rising prices. His measures to relieve this by raising the National Insurance threshold and cutting fuel duty will help a few people but not the retired or those not in work. The basic rate of income tax will fall slightly in 2024 in time for the next general election but the country will remain a high tax environment. Perhaps the Chancellor has decided he cannot protect people from the world economy which is undoubtedly true so he has just made a few gestures.

Economies might grow less rapidly or recessions hit as a result of these adverse economic winds, or we might see the dreaded “stagflation” return to the UK. But does this mean I should change focus on the types of companies I invest in?

I don’t think so and I shall repeat what Investment Manager of Smithson Investment Trust (SSON) said in their Annual Report which I was reading today: “One might then ask, if interest rates are so obviously on the rise, and this so obviously creates a more favourable environment for value companies rather than quality or growth companies, shouldn’t we adapt our strategy to buy the companies which stand to benefit? Well, no. Owning high quality companies with sustainable growth is a winning strategy over the long term, has been shown to work through several economic cycles, and is one which we know we can execute successfully. Whilst other managers may be able to run a value strategy, we believe it is inherently more difficult, as you cannot hold value companies for the long term if all you are doing is owning a poor quality company at a low price, which you hope will re-rate in the future. If this does happen (there is no guarantee), you then have to sell the company to find another such investment, and so on. This means that unlike our strategy, time is not your friend, because the longer you are holding the company and waiting for it to re-rate, the lower your annualised returns become, and if you’re particularly unlucky, the worse the company becomes. On the other hand, it matters less if it takes more time for the market to appreciate the value of the type of companies we hold in our strategy, because the highest quality companies are constantly getting better, or at the very least bigger, owing to their growth. So, once we have found the right companies, all we have to do is wait. We think that patience is one of our competitive advantages, because with the strategy we employ, it tends to pay off”.

Commodity companies go in an out of popularity as their profits depend on the commodity demand and prices. But the production of most commodities responds to price changes so in a year or two the boom is over and the bust follows as over-capacity has been created. Chasing these rotations requires a large amount of time and effort when I prefer to purchase companies that one can stick with for many years.  

The impact of high inflation does mean that one has to be careful in selecting companies with high margins and pricing power, i.e. the ability to raise selling prices when their costs rise. But that is a truism in all economic circumstances. Those are two factors that differentiate quality companies from the pedestrian ones.

Companies that have index-linked contracts with their customers might be worth looking at now that inflation is heading to 10%. That applies to many infrastructure investment companies for example and another sector is property companies who often have inflation linked rent reviews. I hold a few shares in Value and Indexed Property Income Trust (VIP) which is one such company.

Incidentally Smithson noted they had sold their holding in Abcam (ABC) which I also commented on negatively recently. They are concerned about the uncertain paybacks on the investments being made which I completely agree with.

Changing my investment strategy which has developed over the last twenty years and has made me an ISA millionaire does not seem to be wise. There was an interesting article published today in the Daily Telegraph on ISA millionaires of which there are apparently over 2000 in the country now according to HMRC. There may be more than that as Hargreaves Lansdown alone claim to have 973. See article here: https://www.telegraph.co.uk/investing/isas/meet-millionaires-made-fortune-using-isas/

The average age of ISA millionaires is apparently 71 and the article reports that the top three stocks favoured by these investors are pharmaceutical company AstraZeneca, insurer Aviva and oil giant BP. Popular funds include Artemis Income, Fidelity Global Special Situations and Fundsmith Equity. That tells you that you don’t need to be a speculator to become an ISA millionaire. You just have to invest the maximum possible every year in a diverse portfolio and stick with it.

Roger Lawson (Twitter: https://twitter.com/RogerWLawson  )

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Should Evraz Have Been Suspended?

The listing of shares in Evraz (EVR) have been suspended so all trading is barred. They were not suspended at the request of the company which is the more common circumstance but at the behest of the Financial Conduct Authority. The suggestion is that this was to protect investors pending clarification of the impact of the UK sanctions.

But the suspension of shares should in my view be an action of last resort. The suspension of shares is enormously damaging to investors because they are then locked in, and such suspensions can last a very long time. Investors may have borrowed cash to purchase the shares and then can’t get out.

Similar problems are affecting other Russia-linked firms such as Polymetal, Petropavlovsk and Raven Property as they are deleted from FTSE indexes and it is reported that brokers are refusing to trade their shares.

EVRAZ is a vertically integrated steel, mining and vanadium business with operations in Russia, the United States, Canada, the Czech Republic and Kazakhstan. EVRAZ is one of the top steel producers in the world based on crude steel production of 13.6 million tonnes in 2020. Picture above is of one of their steel mills from their annual report.

It is a UK registered company but Roman Abramovich owns 29% of the shares and allegedly has close links with Vladimir Putin, although he denies that. The BBC recently ran a programme which did a hatchet job on his reputation and alleged he acquired his wealth by fraud. Without going into the accuracy of those reports, it does seem to me that sanctions are being imposed on political grounds in an extra judicial process.

I think few people might question the imposition of sanctions on individuals who are linked to the Russian regime. But the problem is Evraz has a wide shareholder base. That includes many private shareholders. According to an Investors Chronicle article, they said AJ Bell had revealed that shares in Evraz and Polymetal were its two most bought shares over the past week. With both stocks plunging more than 80% year to date, this has led some to buy in as an opportunity to reap dividend payments potentially higher than the cost of the shares. However dividends have been suspended at Evraz.

The suspension of shares in Evraz might harm Abramovitch and his Russian friends but it will also damage the interests of other innocent people. This is not reasonable.

Evraz is clearly in a difficult financial position as the company will suffer from sanctions and all the non-executive directors have now resigned. Is that justification for halting trading in the shares? I am not convinced it is.

Companies can rightly, in my view, request suspension of their shares when past accounts are shown to be dubious – for example because of discovered frauds. This is to give time for the company to report what it knows and ensure all shareholders are aware of the issue before the listing is reinstated.

But simple doubts about the future prospects of the company should not be a sufficient justification for suspending a listing. I recall the example of Northern Rock where it got into financial difficulties and there was a run on the bank. It was running out of cash and there was a threat of nationalisation, but the shares were not suspended. It was only delisted when nationalisation took place.

It does seem to me that ShareSoc, which represents private shareholders, should take up this issue and request that the listing be reinstated as soon as possible. And the FCA should establish clear rules about when a listing should be suspended.

A suspended share listing can create enormous problems for investors. For example, if they have borrowed to buy the shares, or are trying to act as executor for an investor. Valuing the shares for probate is very difficult and there is no way to realise the value to pay IHT.

Mixing politics (the attack on all things Russian) with finance is a very bad idea.

For the avoidance of doubt, please note I have no interest in the shares of Evraz or any other Russian linked companies.

Roger Lawson (Twitter: https://twitter.com/RogerWLawson  )

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Is Location Important?

The issue of where a company chooses to locate itself came to mind on reading an FT article about the Financial Conduct Authority (FCA). They have moved to Stratford in East London when they were previously at Canary Wharf. It seems that some staff are unhappy.  Will the FCA really recruit high quality staff when based in Stratford? I doubt it.

This issue also arose when I spoke to DotDigital CEO Milan Patel after their results webinar last Friday. The discussion made it clear, as I thought, that all had not been well with their US business which is why forecasts had to be downgraded. DotDigital chose to set up their US headquarters in Manhattan, New York City and they are still there. To my mind that is the worst possible US location for a technology company. It would make recruitment difficult and expensive. It now seems they have staff mainly working from home.

I do get the impression that DotDigital have made the same mistakes as many British companies entering the USA, i.e. not understanding the culture, not spending enough on marketing, not talking in American rather than English, etc. But they are learning.

Does it matter where the office is located if everyone is working from home to avoid catching Covid? I think it does. Not meeting colleagues regularly, if not everyday, is very important for motivation and for management to understand their concerns. I speak from experience of both managing remote teams and working in the USA. OK we can hold Zoom meetings but those are not quite the same as they are more formal events. They do not provide the opportunity for casual conversations.

Another webinar I attended today was a results presentation by Bango (BGO). At least I got my question answered this time which was: “The big loss in the associate was of some concern. Please explain the reason for that and its prospects”. The brief answer given was that the joint venture was still in the development phase and revenues were starting to come through. But a lot more explanation would have been preferable.

The stock market seems to have stabilised as the news from the Ukraine does not get much worse and I perceive glimmers of a possible peace settlement on the horizon – along the lines of what I suggested in a previous blog post. But I don’t think the comments of my M.P. Bob Neill about the pursuit of war crimes by Russia were helpful. They might have made for good politics for UK listeners but are not likely to encourage peace to break out.

With oil/gas prices at record levels this week should I have piled into their producers as others have done? I think not as I hate commodity businesses. Earnings are volatile and unpredictable. But there certainly will be a big focus by Governments to ensure countries are less reliant on imports of oil and gas. I have therefore been investing in alternative energy suppliers (wind farms, grid stabilisation, etc).

There are also possibilities in the defence sector where there will be an increase in expenditure no doubt as people come to realise that peace does rely on strong defences.

In the Ukraine they did have a big nuclear weapons arsenal which they inherited from the USSR after its break-up. But they gave them up after assurances by major powers (including Russia) of their security. What a mistake that was!

Roger Lawson (Twitter: https://twitter.com/RogerWLawson  )

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Ukraine – A More Balanced View

I attended a meeting of investors on Sunday and the main subject discussed was the war in Ukraine. Most attendees clearly had a gloomy prognosis for the outcome mainly because of a belief that Vladimir Putin was a lunatic who desired to restore the USSR, i.e. he would not stop at Ukraine but would thereafter move into Moldova, Estonia, Latvia, Lithuania, Romania et al.  This view is very much reflected in the Western media with concerns that the war could very rapidly develop into a nuclear one.

President Zelensky is clearly a masterful politician. He came from nowhere to win the election for President when historically he was simply a comedian who pretended to be President. There are few more unusual biographies. He also became a master of social media and has won the hearts and minds not just of Ukrainians but of most of the western world – the British do of course love underdogs. Meanwhile Putin has failed in terms of public relations by not putting his case well and has even publicly suggested that Ukraine should not be considered an independent country.

I take a somewhat different view to the popular consensus although I would not want this to be seen as an apology for the acts of the Russian military. As in any war it is unfortunately the civilians who are suffering the most. A peaceful solution needs to be found because if the war is escalated, with more sanctions being imposed on Russia, then the economic damage will be severe and widespread on both Russia and many European countries.

I think when looking at political conflicts which lead to war then it is best to look at the conflict from the point of view of the enemy when pursuing a solution.

Ukraine has historically been closely linked to Russia after being dominated by Poland. To quote from Wikipedia by the Treaty of Perpetual Peace [surely a wonderful name for a peace treaty], signed in 1686, the eastern portion of Ukraine (east of the Dnieper River) came under Russian rule. As a result a large proportion of the population (about 30%) speak Russian, particularly in the Eastern region and the Crimea. In fact President Zelensky was brought up in a Russian speaking family. In other words there are strong cultural ties with Russia. Ukraine was also a founding member of the USSR until that was dissolved in 1991.

Russia is clearly concerned about the encroachment of NATO and the EU eastwards that could both militarily and economically threaten Russia. Only Belarus, Moldova and Ukraine are not in the EU but Zelensky has indicated his desire to join. There is also the problem of the insurgency in the Donbas region which was long-standing before the latest events plus the takeover of the Crimea by Russia which Ukraine wants back. The longer the war goes on, the more difficult it will be to reach an amicable solution as attitudes harden on both sides and people look for revenge. As has been pointed out, Russia might be able to achieve a complete occupation of Ukraine but that might be followed by many years of constant insurrections and guerrilla warfare against them.

Russia has now offered to cease fighting on the following conditions: Ukraine changes its constitution to enshrine neutrality, acknowledges Crimea as Russian territory and recognises the rebel-held areas of Donetsk and Luhansk as independent territories.

This appears to be a reasonable basis for a settlement that would halt the damaging fighting and cease the escalation. If all military forces were withdrawn by Russia from the rest of Ukraine and Ukraine itself committed to the above (including no applications to join the EU and NATO), then a modus vivendi could be achieved.

Many people suggest that Putin might be removed as sanctions bite and his economy collapses or the war goes against Russia. But that seems very unlikely to me. Opposition to Putin in Russia is quite small and exaggerated by western media. Putin re-established Russia politically and economically after the collapse of the USSR so many people respect him for that. The war in Ukraine will not undermine the regime in Russia unless it broadens into a much wider conflict with bigger military losses which seems unlikely to me. NATO is not likely to get involved and quite rightly because to do so would simply damage western European countries even worse as Russia retaliated by halting exports of gas and oil. Sanctions on Russia will not halt the fighting alone and will take too long to have an impact – they can only encourage Putin to reach some kind of settlement.

A settlement that gives time for countries like Germany and Italy to wean themselves off Russian gas is a better solution. There are many worse options.

Here’s a good quotation from the book by Barton Biggs I mentioned in a previous blog post:

“ Disregard the ranting and raving of the self-proclaimed elite thinkers and alleged experts on wars, economies, politics, and, above all, the stock market” and “History doesn’t evolve in a slow and orderly way; often it leaps forward in disorderly, chaotic jumps. People with wealth should assume that somewhere in the near or far future there will be another time of cholera when the Four Horsemen will ride again and the barbarians expectedly will be at their gate”.

So far as Ukrainians are concerned, those circumstances have already arrived.

Roger Lawson (Twitter: https://twitter.com/RogerWLawson  )

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An Exciting Week for Investors

Last week was certainly an exciting week for stock market investors. The FTSE 100 index fell sharply on Thursday but recovered to rise almost 4% on Friday. The US S&P 500 showed a similar pattern. This was no doubt from the initial reaction to the Russian invasion of Ukraine with an initial panic followed by a more considered response.

Sanctions against Russia might have some impacts particularly on oil/gas prices but Russia is not the only producer.

I thought it interesting to look at the Ukrainian and Russian stock markets. Yes Ukraine has more than one but all trading was suspended by their regulator on Thursday. Moscow’s stock market was hit by a big collapse with the RTS index falling by 38% on Thursday and the rouble plunged to a low against the dollar. But there was a significant recovery on Friday. The bounce back on Friday in the markets seems to be based on some relief than sanctions were not as extreme as feared.

But there is a call to exclude Russians from the Swift international payment network. I recall reading a note some years ago that explained how interbank settlements still took place during the Second World War between the combatants. It would seem unwise to block access to Swift which would be damaging not just to Russia particularly as there are alternative payment networks that are already in place or could soon be created.

There is a book that was recommended by Jonathan Davis at a Mello event last week entitled “Wealth, War and Wisdom” by Barton Biggs which covers how the turning points of World War II intersected with market performance. I have ordered a copy to read and may write a review of it later. In my experience big political events have a big short-term impact as investors hunker down and cease buying or selling until the picture is clearer. With no trading prices rapidly fall. But markets can soon recover as soon as the long-term picture is clearer. It is best not to take hurried decisions about your shareholdings in such circumstances.

As it stands the Ukrainian army is apparently putting up a better fight than was expected although the fog of war is clouding the picture with reporting of military activity being mainly anecdotal. I recall looking at the comparative armed forces numbers of Russia and Ukraine a week ago and the 190,000 Russian troops surrounding Ukraine did not seem enough to ensure a quick victory even if Russia had more heavy equipment to hand. Russia does not seem to have captured the main communication centres, the TV and Radio stations or the heads of Government which is the typical prerequisite for a coup d’état. Even if Russia manages to install a puppet government it could be a long-drawn out conflict and Ukraine is a big country. As Russia and the US learned in Afghanistan, it’s easier to get into a country than to get out. Establishing long-term regime change is very difficult when most of the population opposes you. That is particularly so when there are lots of weapons in the hands of the population which is apparently now so in the Ukraine with many volunteers willing to fight. They may be short of ammunition in due course so the question to ask is how they might get resupplied? We may simply end up with another proxy war with Russia and the West fighting a guerrilla war in Ukraine by supporting local militias with very negative impacts on the local civilian population.

The outlook is bleak unless there is some desire for a political settlement that meets the aspirations of both Russia and Ukraine which does not seem impossible to me.

Roger Lawson (Twitter: https://twitter.com/RogerWLawson  )

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Another Bad Day for Small Cap Shares

It looks like it’s going to be another bad day for small cap shares and even the FTSE-100 index is down by 2.8% at the time of writing – but that might have been affected by mega miner BHP going ex-dividend today.

This is what the Chairman of Abrdn UK Smaller Companies Growth Trust (AUSC) had to say in their half-yearly results statement this morning:

“The Board has noted the fall in the share price and the NAV per share since the end of the period, each by more than 19%. This is evidence of the significant and severe rotation that we have seen in the market where investors have been moving out of quality and growth stocks and into value. This is an established phase in the market cycle and, while it makes for grim reading, the Portfolio Managers do not believe that they should try to become timing experts to try to time the change in market sentiment. Past experience leads them to conclude that this phase in the cycle should not be long lasting and that this will, over the longer term, come to be seen as a blip. The Board understands the premise and supports the stance that the Portfolio Managers have taken and I hope that we will be able to confirm this to have been the case when we report on the full year results in the summer”.

They could be right and let us hope so as I hold some shares in the company although I was selling some of them late last year as it seemed that some of their holdings were becoming over-valued.

But some of the abrupt market falls on fears of war in the Ukraine are now providing some buying opportunities.

Anyone who has studied the complex political history of Ukraine will realise that it is rather simplistic for western powers to claim that Russia is simply invading the country in an aggressive show of military power. Ukraine has had close links with Russia since the time of the Cossacks in the 16th century. The Cossacks served Russia in the Napoleonic wars and in the first world war. Ukraine was part of the USSR from 1922 until its breakup in 1991 and a significant proportion of the population speak Russian in the Eastern side of the country.  

The notion that Ukraine is not a country in its own right, but a historical part of Russia as Putin has claimed, is not totally unrealistic or unreasonable. One can also understand that Russia might be concerned about the expansion of Nato to include Ukraine when Russia would prefer to have Ukraine as a “buffer” state on its borders.

Peace won’t break out until both sides choose to take less extreme stances in my view.

For those who wish to listen to some great music about the Cossacks from the film Taras Bulba, here is composer and conductor Franz Waxman in a recording: https://www.youtube.com/watch?v=CovY06K3NnY

Roger Lawson (Twitter: https://twitter.com/RogerWLawson  )

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Baronsmead VCT AGM and P.J. O’Rourke Obituary

This afternoon the Baronsmead Venture Trust (BVT) is holding its Annual General Meeting. I made some very negative comments about corporate governance at this company in a previous blog post – see  https://roliscon.blog/2021/12/24/baronsmead-vct-more-corporate-governance-issue/ . But the good news is that long-standing Chairman Peter Lawrence is stepping down in March according to a recent RNS announcement. And about time too, one might say.

Unfortunately I will be unable to attend the AGM as it is only being held as a physical meeting so will be unable to raise the other issues mentioned in my blog post. I hope somebody else will.

The bad news yesterday was the death of wit and comic writer P.J. O’Rourke from lung cancer at the age of 74. A writer on a wide range of subjects including politics and economics and it’s not many writers who can make those topics amusing. He wrote a digest and analysis of Adam Smith’s book “The Wealth of Nations” which I commented on previously and he wrote on the war in Iraq and on motoring stories in such books as “Give War a Chance” and Holidays in Hell” which are also worth reading.

A sad loss to the world indeed and it always makes one feel depressed when someone younger than you dies – but his lifestyle certainly did not encourage an extended career.

There are lengthier obituaries in the national media which you can find on the web and which shows how influential and popular he was.

Roger Lawson (Twitter: https://twitter.com/RogerWLawson  )

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New Book Published – A Journal of the Coronavirus Year

This is a war story, but it is not a story of heroic deeds. It is how an ordinary family faced the Covid-19 epidemic that killed millions of people in 2020 and 2021. The battles were fought in hospitals and other medical facilities but the fear of infection spread panic among the population and Governments took aggressive steps, often misguided, to try and control the pandemic.

This journal was commenced in March 2020 after the Government advised the author to stay at home and not associate with anyone at all as he came into the category of someone who was especially vulnerable to the coronavirus. It provides an interesting record of events in the following eighteen months as recorded at the time, and his reactions to them, in what was a particularly historic period in more than one way.

It focuses to some extent on the impacts on the stock market and the economy in which the author had a particular interest as an active private investor, but also covers how his family and others survived the epidemic and the way life changed as a result for many people. And it gives some insights in how the author became an active and successful investor by adding some biographical notes including the successes and failures in his life in the last 70 years and other events that will be of interest to readers.

For more information and to purchase a copy go to: https://www.roliscon.com/journal-coronavirus-year.html

Roger Lawson (Twitter: https://twitter.com/RogerWLawson  )

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Why People Hate the BBC

There is an active campaign to “defund the BBC”, i.e. strip it of its license fee. Having watched a programme they broadcast on the 25th of January one can understand why. The programme was entitled “The Decade the Rich Won” and its key proposition was that the effect of QE following the banking crisis of 2008 was to make the rich richer while the poor suffered.

This joint BBC/Open University production pretended to be a documentary of the financial crisis and subsequent events. It included a number of interviews with major personalities involved such as Mervyn King, Alastair Darling, Nick Clegg, George Osborne and Guy Hands but also a few nonentities. It appeared to have been carefully edited to present a slanted view of history and in effect an attack on capitalism.

The purpose of QE was to increase economic activity by providing more liquidity to banks and this is what it did. As Mervyn King said it prevented a great depression as we had in the 1930s. Guy Hands said it was the right decision but it had unintended consequences. The problem was it inflated asset values as money was pumped into the economy.

That of course meant that those who owned assets such as buildings or company shares became wealthier. But it is wrong to suggest that just benefited the rich and hedge fund managers as the programme implied. In reality anyone with a pension scheme or who owned a house tended to benefit, i.e. a large percentage of the population. And those who did not at least had their employment protected by the economy being supported rather than being allowed to decline with job losses following.

There was a clear attack on the big banks and their owners although nobody mentioned that the owners of banks such as RBS and others suffered from full or part nationalisation (i.e. confiscation of their assets).

There was no discussion about what else the Government and Bank of England could have done instead.

This programme was a polemic against the bankers and asset owners of all kinds. It was likely to encourage a very distorted view of history as opposed to being an unbiased analysis of the financial difficulties of the era covered.

It looked like a left-wing socialist manifesto in essence by implying the rich toffs escaped the economic crisis while everyone else suffered. That’s not the reality.

Roger Lawson (Twitter: https://twitter.com/RogerWLawson  )

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Paul Myners Obituary and BHP Unification Meetings

Lord Myners has died at the age of 73. He had a big hand in the rescue of the banks in the financial crisis of 2008 as a Treasury Minister in the Labour Government after becoming the socialists’ favourite capitalist. He was also responsible for the Myners Report into institutional investment which had some influence on corporate governance and institutional stewardship in the UK.

I met him a few times and he had a very persuasive personality but as the comments from Lord Rose below indicate he was not always straightforward. That included evasive answers in Parliament. For example, this comment on the nationalisation of Northern Rock: “The essential intention in taking Northern Rock into temporary public ownership was to stabilise the banking system and to reassure people that a deposit placed with a British bank is a safe deposit”. His forceful actions during the banking crisis which resulted in the effective nationalisation of big UK banks were not appreciated by many.

Stuart Rose made extensive comments in an adulatory article in the FT on his work with Myners during the attempted takeover of M&S including this: “The climax of the takeover battle, following the shareholder presentations and the massively attended annual meeting at The Royal Festival Hall, was the final board meeting. Paul’s sure-handed chairing saved the day. Using a combination of wisdom, wit, guile, persuasion and patience we saw off Green’s opportunistic approach”.

BHP Meetings

I watched the General Meetings of BHP Plc (BHP) today where there was a vote for unification of the Australian and UK companies. BHP will retain a UK listing but it will only be a “standard” listing so will no longer be in the FSTE-100. AGMs will only be held in Australia although on-line access will be provided.

This prompted a question regarding future “engagement” with the board from a shareholder who expressed concerns that hybrid AGMs reduced interaction with the directors and made follow-up questions difficult. He was certainly right in that regard. On-line access is not nearly as good as being physically present and clearly most investors will not find it practical to fly to Australia to attend in person. This is one of the few downsides of the unification, but it otherwise makes sense. The result of the voting is still awaited at the time of writing.

Postscript: There was overwhelming support for the unification by both Ltd and Plc shareholders.

Roger Lawson (Twitter: https://twitter.com/RogerWLawson  )

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