Beer and skittles

There’s nothing like a takeover bid to regenerate interest in the stock market.

While the move on one of Britain’s biggest brewers from Hong Kong’s richest family is not in the mega billions’ category – at £2.7 billion (£4.6 billion if you add in the debt) it is worth around one million pounds for each pub they own – it came from out of the blue and delivered a useful 50% uplift to shareholders, of which my wife is one.

Living, as we do, in rural Suffolk, it should come as no surprise that we own shares in this Bury St Edmunds based business or that I take a particular interest in this bid. While takeover activity has increased a little, with a cheaper pound making UK assets look that much more attractive to foreign buyers, this deal looks to be more of a property play, given Li Ka Shing’s property empire’s existing connections with our local brewer. The worsening situation in our former colony probably spurred things along too.

Otherwise, markets have experienced some nervous moments, principally as investors ponder the possible consequences of the lack of a trade deal between the US and China. The volatility experienced on Wall Street may yet persuade President Trump to adopt a more flexible approach, while the Fed looks fully prepared to continue monetary easing in order to keep the American economy bubbling along. It would not be a surprise if other central banks followed suit.

As for the continuing confusion over how or even if we might leave the European Union, it continues to be the currency that takes most of the strain. It seems unlikely that Prime Minister Johnson will achieve his aim of renegotiating the Withdrawal Agreement, despite the fact that Parliament has rejected the terms three times, while even a trade deal with the US is looking in doubt if a no-deal Brexit occurs. And, of course, the House of Commons intends to have its say on how we leave.

Given all these uncertainties, it is a wonder that investors are not heading for the hills in droves. But the alternatives do not look too attractive, with cash yielding next to nothing and government bonds providing historically low returns. As it happens, setbacks do seem to tempt bargain hunters out. While the skittles that these various outstanding problems represent remain vulnerable to a well-placed ball, we must all hope the autumn sees a resolution to at least some of them.

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