Making money: what the experts think
Vrroooom
Vintage Aston Martin models have often made great investments for their owners. Now ordinary punters can grab a slice of the action. The owners of the British sports car-maker – an Italian private equity fund and a group of Kuwaiti investors – have announced plans to float a tranche of the company’s shares in London, valuing it at between £4bn and £5bn, said Peter Campbell in the FT. CEO Andy Palmer described the float as “a monumental moment”. It’s certainly that, said Alex Brummer in the Daily Mail. It says something about “the durability and prestige” of the Aston Martin marque that it has survived no fewer than seven bankruptcies. And the time looks ripe to float. “The appetite for investment in luxury cars is demonstrated by Ferrari, which is now valued on the Nasdaq at £19bn and is producing the highest returns on capital in the whole automotive sector.”
Pounding the pound
Sterling sank to its lowest level against the euro in almost a year as traders reacted to Prime Minister Theresa May’s observation that a no-deal Brexit “wouldn’t be the end of the world”, said Jasper Jolly in City AM. The pound fell as low as s1.10 before recovering slightly, but traders see no end to the pressure ahead. If Britain does crash out of the EU next March, Bank of America Merrill Lynch analysts predict the pound could hit a low of just $1.10 against the US dollar from a current position of about $1.28 – a truly precipitous fall.
Spread ‘em
Bank of America Merrill Lynch also warns that an acrimonious breakdown of talks could prompt central banks and sovereign wealth funds “to sell up to £100bn of UK bonds”, said Ambrose Evans-pritchard in The Daily Telegraph, and “precipitate a balance of payments crisis”. Fortunately, most analysts still think that outcome is unlikely. Indeed, as Andrew Milligan of Aberdeen Standard Investments told The Sunday Times, a “good deal” may even cause sterling to jump above $1.40. Laith Khalaf of Hargreaves Lansdown advises investors facing this uncertainty “not to try to be too clever”. The best defence remains a diversified portfolio. “As long as you are well spread, part of your portfolio will benefit whatever outcomes we experience.”