The Economist - USA (2022-01-29)

Eradicatingtermites

Resident weevil

I

n 1994theownersofa pairof1920stim­

ber­frame bungalows in Saunton, Devon,

spotted what looked like white ants craw­

ling  around  their  properties.  They  turned

out  to  be  termites—millions  of  them,

thriving in the south­west’s temperate cli­

mate and well­draining soil. Four years lat­

er,  when  the  Building  Research  Establish­

ment  (bre),  a  laboratory  paid  by  the  gov­

ernment to eradicate the pests, got to work,

termites  could  be  seen  wriggling  in  the

flower­beds.  No  soil  or  wood  could  leave

the  site,  for  fear  of  spreading  the  infesta­

tion.  The  owners  had  feared  their  homes

would  have  to  be  demolished;  now  they

risked being stuck with them indefinitely.

One of the benefits of being an island is

that it helps with keeping out pests. But as

globalisation  sends  people  and  goods

whizzing around the globe, the likelihood

of  an  unwelcome  arrival  grows.  The  bre

traced  the  Devon  termites  back  to  south­

west France. Wine crates were the probable

courier, says Ed Suttie of the bre, who has

led the eradication programme since 2003.

Sometimes,  all  that  can  be  done  with

non­native pests is to accept that they will

become  endemic.  But  termites  are  highly

destructive, causing vast damage in North

America,  Australia  and  warmer  parts  of

continental  Europe.  A  counsel  of  despair

was unacceptable. And so the bre worked

with  government  ministries  to  design  an

eradication programme. The first attempt,

in 1998, failed because the bait was insuffi­

ciently  tempting.  Another  the  following

year,  which  used  aged,  untreated  wood

from Scots pines to lure the termites out of

their nest, was more successful. After nib­

bling on the timber, which was laced with a

chemical  that  stopped  the  termites  from

maturing, they carried both timber and the

chemical home.

But in 2009, just as the bre was about to

announce  that  it  had  eradicated  the  ter­

mites, it spotted signs that they had been at

the  timber  again.  Only  in  2021,  when  ten

years  had  passed  without  any  evidence  of

their presence, was it able to declare victo­

ry. Restrictions on renovation work on the

bungalows were lifted late last year. 

The exterminators were lucky, in sever­

al ways. Chillier weather than the termites

were  used  to  meant  they  hibernated  for

longer  and  reproduced  more  slowly.  (Mr

Suttie  thinks  they  arrived  decades  before

being  noticed.)  European  termite  species

are in any case less destructive than those

foundinNorthAmericaorAustralia.And

theDevoncolonyneverreachedthepoint

ofseekingtoestablisha newone—adevel­

opmentalstageinwhichmanyofthein­

sectsgrowwingsandtakeflight.If thathad

happened, the infestation would have

beenimpossibletocontain.

Britainwillprobablybevisitedbyter­

mitesagain.Mostofthecountryistoocold

anddampforthemtothrive—butasthe

Devoncolonyshows,notall.Andsobreis

teachingsurveyors,architectsandworkers

in thetimber industry how to spot the

signsbeforetermiteshavea chancetoset­

tlein.Bettertogetridofunwantedguests

straightawaythanhavetospenddecades

onanothereviction. n

It has taken more than two decades to

get rid of an imported pest

The Economist January 29th 2022 Britain 23

TheCityofLondon

Punishment

beating

A

rmyourselfwitha hammer,andma­

ny problems look nail­shaped. And so

regulators imagine a world in which mar­

ket failures can be fixed by tweaking rules.

A recent flurry of activity by the Financial

Conduct Authority (fca) prompted by Lon­

don’s dwindling share of the global stock­

market is a case in point. 

Since  December  3rd  boards  wishing  to

list  their  firms  on  the  London  Stock  Ex­

change (lse) can do so while retaining out­

sized  voting  rights.  Early  investors  can

hang on to more of their shares rather than

being  forced  to  sell.  Rules  that,  in  effect,

barred  special­purpose  acquisition  com­

panies, a listing route that took Wall Street

by storm in late 2020, have been relaxed. 

The lsehas cheered on the changes and

is urging more. In a proposal leaked to the

Wall Street Journal on  January  15th,  it

pitched  the  creation  of  a  new  bourse  on

which  private  companies’  shares  could

trade publicly on pre­specified days. Firms

could then raise capital without complying

with the burdensome regulation associat­

ed with listing on public markets.

The reforms capped a stellar 2021 for the

lse. During the year 122 companies chose it

to  list  on,  and  the  £16.8bn  ($22.5bn)  they

raised was more than the total for any year

since 2007. Despite the exchange’s reputa­

tion  as  one  for  “old  economy”  stocks—

miners, banks, insurers and the like—39%

of that capital was for tech or consumer in­

ternet  firms.  They  included  Darktrace,  a

cyber­security  firm,  Oxford  Nanopore,  a

genomics  innovator,  and  Wise,  a  fintech

star. Each hit a multi­billion pound valua­

tion on its opening day as its shares soared.

Wise,thenworth£8.8bn,wasthelargest

techfirmevertohavejoinedthelse.

Butscratch thesurfaceandthelse’s

performancelookslessimpressive.That

bumperyearwasagainstthebackdropofa

globalboomfor initialpublicofferings,

just4%ofwhichtookplaceonthelse, ac­

cordingtoDealogic,a dataprovider.Inits

mid­2000sheyday,thebourseaccounted

for20%oftheworld’sipos.Andmorewor­

ryinglyfor its future,the most exciting

firmstocometomarkethavebeentakinga

beatingeversince(seechart).

Techstocksaroundtheworldhavesuf­

fereda brutalstartto 2022 (seefinancesec­

tion).Thecombinedthreatsofpersistent

inflationandhigherinterestratesmean

thatriskierassetsarefallingoutoffavour.

Sharesofhigh­growthfirms,whichderive

theirvaluefromuncertainearningsinthe

distant future, have fallen particularly

sharply.Buttheclobberingofthosethatre­

centlylistedinLondonstartedearlierand

hasbeenmuchworse.The NasdaqTech

100 indexoflargeAmericantechfirmshas

dropped18%fromapeak inNovember.

Wisehasslippedby47%,andDarktraceby

64%,fromtheirpeaksinSeptember.

Theirhammeringhasnotbeendownto

poor business performance. Both firms

haveupgradedtheirsalesforecaststwice

inrecentmonths.Wisenowexpectsrev­

enuegrowthof30%this financialyear;

Darktraceexpectsbetween42%and44%.

Tech bosses and venture capitalists

havebeenleftwithanuncomfortablesus­

picionthattheCity’sequityinvestorssim­

plyaren’tinterestedinthekindofinnova­

tivefirmstheyaretryingtobuild.“I’vehad

scepticismfromfundmanagersonwheth­

ersellingsoftwareforsubscriptionscan

actuallymakemoney,”saysHusseinKanji

ofHoxtonVentures,a venture­capitalfirm.

“Thatwasa reasonablequestionin2001,

butnowit’slike‘wherehaveyoubeenfor

thelast 20 years?’”Aslongasitcontinues

tobeasked,Britain’sstockexchangewill

remainunappealingfortechfirmsthatare

consideringlisting—nomatterhowmuch

rulesarerelaxed. n

Britain’s newly listed tech firms are

being shunned by investors

Rolling up the welcome mat

Share prices, September 30th 2021=100

Source:RefinitivDatastream

120

100

80

60

40

2021 2022

OctSep Nov Dec Jan

Oxford Nanopore

Darktrace

Wise

NASDAQ 100 Tech