The UK has become the first Western country to license a vaccine against Covid-19, opening the way for mass immunisation with the Pfizer/BioNTech vaccine to begin distribution next week for those most at risk. The first doses of the vaccine will arrive in the coming days, said the company. The UK has bought forty million doses of the vaccine, which has been shown to have 95% efficacy in its final trials.
With fewer than four weeks before talks are due to end, the familiar issues of fishing rights, legal and regulatory concerns and fair competition still continue to make consensus impossible to reach between the UK and EU. Businesses that export to the EU are braced for high tariffs on their goods as talks come to a head at the end of this month.
A bill threatening to delist Chinese companies from American exchanges that do not comply with US accounting laws received bilateral support this week in Congress. The new legislation is part of a broader push by the US to take a more assertive stance towards Beijing.
As the festive season approaches, the noise which has relentlessly bombarded markets has quietened slightly this week. A muted market response to the news of Pfizer’s vaccine beginning imminent roll-out in the UK exemplifies the extent to which a vaccine roll-out is already baked into asset prices. Valuations remain at elevated levels across the asset classes but bottom-up analysis continues to provide pockets of opportunity.
As investors, we spend the vast majority of our time conducting detailed analysis on individual holdings and trends, poring over balance sheets and company news to identify the ideas which will earn their way into portfolios. As long-term investors, this is our preferred strategy to grow wealth, rather than attempting to frequently trade off the back of short-term noise as markets fluctuate up and down.
Now more than ever this discipline is important as we ensure that we maintain conviction in our current holdings and identify undervalued businesses whilst others pile into last month’s hottest stocks. A value conscious strategy seems the sensible approach given the market backdrop in which many commentators are arguing that valuations have overheated.
Despite the macro backdrop, we are encouraged that our analysts continue to identify new potential ideas based on bottom-up analysis of individual companies. The disjointed nature of the market rally has overlooked a number of businesses which are now priced at attractive valuations and have strong runways for earnings growth, providing the twin engines necessary to drive returns.
Quote of the week
"The pizza helped" Anonymous source at EU/UK negotiations
It is, as yet, unclear whether EU negotiators ordering pizza to fuel late night Brexit negotiations was to incite a sudden bout of Europhilia in their opposite numbers, but it certainly had an air of desperation to it. The ordering of greasy carbohydrates to fuel an all-nighter is a familiar sight across university campuses the world over, but, as with all late-night pizza and Red Bull fuelled cramming sessions, the results don’t tend to be pretty. In exam prep as in Brexit talks, little and often will always conquer a lot and little; let’s just hope in the case of a Brexit deal, the results are first class.Source: uk.reuters.com
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