The Sunday Times November 28, 2021 V2 3
T
rader Mac is not renowned for
caution. As a broker trading
shares at the spivvier end of the
stock market, optimism is his
biggest weapon. But, asked if
Friday’s tumble represented an
obvious buying opportunity, he
was unusually wary. “Mate, it’s
tin hat time. This one looks scary. Get
your booster jab and sit tight.”
When a friend who has conjured up
two Porsches and a beautiful home from
the financial markets gives you trading
advice, you should probably listen.
But, for every Mac sitting on his hands
as prices gyrate this week, there will be a
dozen more buying. Even as the
scientists and politicians look nervous,
you can guarantee traders will be
“buying the dips”. As Baron Rothschild
said back in the 18th century: buy when
there’s blood in the streets.
The optimists are not being irrational.
History — both recent and distant — tells
us that share prices eventually rise after
lurching downwards. Had you bought
shares in aeroplane engines maker Rolls-
Royce in pre-vaccine autumn 2020, you
would have tripled your money, even
after Friday’s 11 per cent tumble.
The FTSE 100 fell below 5,200 lastMarch; it closed on Friday at 7,044. If
you timed it right, you could be sitting
on a 35 per cent gain — and that’s
without dividends.
Through all the misery of the past 18
months, fortunes have been made.
While the coming weeks will see violent
market moves, there will be bargains to
be had — and investors know it. They
have seen times like this before — be it
through Covid, 9/11, the LTCM hedge
fund rout or the global financial crisis.
With Covid, traders (as opposed to
“investors”, who take the long view)
have developed a playbook. On bad
news days, sell travel, airlines and banks.
Buy home delivery and internet stocks.
So, within a hour or so of the market
opening on Friday, while most of the
FTSE 100 was in freefall, Ocado was
sprouting gains.
Those of a bearish bent are fretting
that Friday’s falls mark the start of a long
correction to frothy markets. With low
or even negative central bank interest
rates forcing investors out of bonds and
into equities, share prices have become
inflated, they warn.
But, if we are in for another dark
Covid winter, the Bank of England and
the US Federal Reserve are hardly likely
to start whacking up the cost of
borrowing. The lowering of interest rate
expectations after the emergence of
Omicron will keep cash in stock markets,
even if they do feel overvalued. There’s
nowhere else for it to go.
Besides, the prices being plumbed on
Friday were created on a day when halfof the market’s most experienced
practitioners were on holiday for
Thanksgiving.
Senior American managers chowing
down on the turkey with their in-laws
left the juniors back at the office to make
the calls — and they always err on the
side of caution.
Thin volumes of trading like you get in
public holiday weeks make for
exaggerated price moves.
So, there was a toxic mix of a shortage
of information about how serious
Omicron will be, and a lack of expertise
in the market about how to trade it.
After falling 10 per cent and more on
Friday, one investor argued, even airline
stocks such as British Airways owner IAG
are worth a punt. If the delta virus taught
us anything, he reasoned, it was that
travel restrictions do not stop the spread
of Covid mutations, and will eventually
be relaxed.
For every argument, there is a
counter. Travel bans will throw another
monkey wrench into the global supply-
chain machinery, pushing up inflation,
worrying central bankers and taking
money out of people’s pockets.
New lockdowns would hit jobs and
confidence, doubtless triggering more
splurges of public money, destabilising
economies.
We still do not have enough
information on Omicron to make big
bets either way, but for those playing the
long game, there is a case for ignoring
Trader Mac and seeing this as a time for
some cautious stock market shopping.Buy when there’s blood on
the streets – but cautiously
JIM
ARMITAGE
Business editorcampaign only months later to claw his
way back in. He scraped just enough
votes to rejoin as a non-executive
director in 2019, his dramatic return
prompting the entire board to resign.
The bust-up cost Dunkerton more than
£200 million off the value of his 18 per
cent stake but he was quickly
promoted to chief exec, where he
reigns today.
The owner of a private
jet used 30 times in one
month this summer,
says he has big plans to
make Superdry the most
sustainable fashion label
in the world by 2030.6 Sir Malcolm Walker has only ever
had three jobs — and he has been
sacked from two of them.
The Yorkshireman, who founded the
supermarket giant Iceland 51 years ago
with a £30 investment, was frozen out
of the business in 2001. This second
firing — the first being from Woolworths
when he was caught moonlighting at
his first Iceland store in 1971 — followed
a sharedealing scandal. Walker had sold
£13.4 million of shares weeks before his
new chief executive recruit Bill Grimsey
issued massive profit warnings that
wiped almost half the value off the
stock. Walker was exonerated in an
investigation into the scandal in 2004LORD OF ICELAND
6 The Saga group for older people’s
cruises and insurance sailed into
troubled waters last July following the
pandemic holiday slump, pushing boss
Euan Sutherland to set off a distress
flare in one man’s direction: Saga’s
former owner, Sir Roger De Haan.
The Kent tycoon inherited the Saga
group from his father in 1984 and ran
the over-50s travel empire for 20 years.
As the majority owner of Saga in 2004,
De Haan sold the business for
£1.3 billion to private equity firm
Charterhouse.
But as Saga’s shares tumbled after
the “bad decisions” of the new owners,
De Haan stepped back in last year with a
£100 million investment offer to help
Sutherland rebrand and appeal once
again to older customers. His
generosity came at a price— a stake of
close to 20 per cent and the title of non-
executive chairman marking his return
to the family business.NEVER-ENDING SAGA
6 Julian Dunkerton’s comeback to
Superdry, the fashion group he
helped found, was not easy. In
2014, Dunkerton handed over
the chief executive reins to
former Co-op executive Euan
Sutherland — yes, him again —
and left the company he
co-founded four years
later, apparently to focus
on his other businesses
and charitable
organisations.
Blaming management
for flagging sales and a
65 per cent collapse in the
shares, Dunkerton launched aIF THE CLOTHES FIT...
and rejoined Iceland, then called The
Big Food Group, as chief executive in- He reclaimed full ownership of
Iceland in 2020 in a £115 million buyout
of South African partner Brait’s 63 per
cent stake in the business.
Bad karma rises in
green energy tussle
Dale Vince, the new-age
traveller turned green-energy
entrepreneur, has launched a
furious attack on the
directors of a rival renewable
power company that he has
been trying to buy.
Vince’s firm Ecotricity
owns 27 per cent of
competitor Good Energy and
has repeatedly tried to
acquire the Aim-listed
company this year.
Over the summer, Vince
offered 340p a share for the
company, and in September,
increased his bid to 400p — a
price valuing the business at
about £66.5 million. But
Ecotricity’s approaches were
rebuffed by Good Energy,
which said they were
“opportunistic” and
undervalued the group. The
shares are now just 275p.
Vince said: “I speak as the
largest shareholder in GoodEnergy. I have seen a serious
destruction of value to
Ecotricity’s shareholding in
Good Energy, along with all
other shareholders.”
The latest chapter in the
fracas between the two
companies erupted after
Good Energy told investors
on Thursday that it was
planning to sell its wind farms
and other generation assets,
and instead focus on services
for electric vehicles. This
would include its Zap-Map
platform for electric cars.
Vince said the moves made
“no sense” and that he should
have been told when he was
trying to take over the
company. “We will be
considering what steps are
now available to both prevent
this value-destroying disposal
... and to hold the directors
of Good Energy properly to
account,” he added.
Good Energy did not
respond to requests for
comment.Jim Armitage
and Robert WattsHammerson nears
£140m mall sell-off
Hammerson is closing in on a
sale of the Silverburn
shopping centre near
Glasgow, in a sign that the
retail property sector might
be recovering.
Bullring owner
Hammerson, led by chief
executive Rita-Rose Gagné, is
understood to be in advanced
talks with private equity firm
Henderson Park, in a deal
that is expected to value
Silverburn at between
£130 million and £140 million.
The centre is held in a
50:50 joint venture between
Hammerson and Canadian
pension giant CPP, which
jointly acquired Silverburn
for £300 million in 2009.
Henderson Park is said to
be seeking full ownership of
the centre, which counts
Sports Direct, Next and JD
Sports among its tenants.
The firm, led by former
Goldman Sachs banker Nick
Weber, unsuccessfully bid for
the Trafford Centre last year.
Henderson Park is said to be
partnering with European
real estate investor Eurofund
in its bid for Silverburn.
There are early signs of a
return to life in the shopping
centre market after a dismal
few years in which values
have broadly halved.
Property giant Landsec is
understood to be in exclusive
talks to buy a 25 per cent
stake in Bluewater in Kent,
one of the country’s premier
shopping centres, adding to
its 30 per cent holding.
Hammerson, which needs
to tackle debts of £1.9 billion,
is understood to be prepared
to sell its French assets, but it
is keen to keep hold of its
stake in Value Retail, which
owns Bicester Village.
Hammerson said focusing
on a core group of centres
was central to its strategy and
conversations are ongoing on
several assets.Sam Chambers
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BPBLACK FRIDAY FALLERS