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The Financial Ironmonger Blog No 42/2019

The Financial Ironmonger Blog No 42/2019

Every week our guest blogger, David Oakes of Mosaic Money Management (aka The Financial Ironmonger), shares with us his take on some of the major UK and overseas macro and political events that shaped the previous week.

Please be reminded the value of investments, and the income from them, may fall or rise. The views expressed in this article are those of the author at the date of publication and not necessarily those of Chelverton Asset Management Limited or Mosaic Money Management. The contents of this article are not intended as investment or tax advice and will not be updated after publication unless otherwise stated.

–THE FINANCIAL IRONMONGER BLOG NO 42/2019–

Those hoping that the Brexit deal rehashed by Boris would finally get over the line yesterday were thwarted at the last minute, not least because the northern Irish DUP withdrew their support. The plan was to have a customs border in the Irish Sea, thus preserving the single market across both north and south, but this was a step closer to unification that was too much for them.

Eventually, it seems likely to happen anyway. GDP per head is twice as big in the south than the north, and the influx of Polish in the later has swelled the catholic population, which favours a united solution, but that is for another day. The government remains convinced that it will get its deal through parliament this week, since the default position is that the UK leaves with no deal on October 31st, an outcome no one wants.

Certain sections of the equity market, mainly those with a domestic focus, enjoyed strong gains during the week, as a deal became more likely. The Woodford Equity Income fund, which has been shuttered against redemptions since June, is understood to have been up more than 10% on the week; ironically the manager was fired on Tuesday, and the thing will now be liquidated, crystalizing large losses for some who had planned to ride it out. Sterling also staged a dramatic recovery, which will have hurt those hedge funds thought to be betting against it.

The UK market has been unloved since the referendum in 2016, and should a deal be passed, there could be a strong recovery not just at an index level, but in underlying economic activity. For some, it cannot come quick enough; the upmarket department store Fenwick saw sales fall 15.8% in the year to Jan 25th, and a profit of £2mn turn in to a loss of £44.2mn; painful.

For the next ten days, however, there is only one story in town, Brexit, and it could go either way.

–MORE ABOUT OUR GUEST BLOGGER, DAVID OAKES–

David joined Manchester stockbroker Henry Cooke, Lumsden in 1977 and after becoming a member of the London Stock Exchange in 1984 held a number of senior positions within the firm including Managing Director of the in-house fund management company and member of the Executive Committee.

After senior appointments at Cazenove Fund Management and latterly Mercater Capital Management, David joined Mosaic Money Management in 2013. He has successfully managed private client and fund portfolios for over thirty years and has particular expertise in providing a multi manager service to his loyal client base.

The Financial Ironmonger is a hat-tip to Ironmonger Lane, the location of Chelverton’s London office.