The UK government would be wise to strengthen its relationship with the United States in the coming years, former British foreign secretary William Hague told a conference of investors and fund managers in London on Wednesday.
“China is not going to be the engine of economic growth for the UK economy,” Mr Hague told the Janus Henderson Investment Conference. “Nor is the EU. Looming over this is the United States.
"President-elect Trump likes the UK – good golf courses and he loves the royal family. So there’s every chance that the UK can win a ‘carve out’ from US tariffs, even if the European Union doesn’t.”
Geopolitical realignment was one of the main themes of the conference, which played host to around 200 finance professionals with around £1 trillion of assets under management, along with shifting demographics and the return of cost of capital as an issue for investors. “How do we invest depending on where the winds are blowing?” said Ali Dibadj, chief executive of Janus Henderson, adding that “this is an environment ripe for picking the wheat from the chaff.”
Iran a 'big issue'
Mr Hague pointed out that Mr Trump is at heart a dealmaker, and that this could well shape global events in the coming years. “Iran is going to be a big issue in 2025, because it has not been in as weak a position since the revolution,” he said. “Donald Trump could well do a deal with Iran.”
Mr Hague said there are three serious problems that the UK currently shares with the rest of Europe: lack of growth, Russia, and migration. He added that “no Western country can defend itself for more than a day without the technology of the United States”.
"The US holds all the cards,” he said. “We depend on the US for our security almost totally.”
Given that, and Donald Trump's possible insistence that Nato allies spend more on their own defence or face possible trade tariffs, at least some of the smart investment money in 2025 will once again be in defence companies.
“The opportunity is obviously with defence companies,” Julian McManus, portfolio manager of global equities with Janus Henderson told The National. “We think there are very attractively-valued defence companies like BAE Systems, which are going to see an acceleration in growth.”
In addition, Mr McManus said that because Donald Trump may also bring US tariffs to bear against China, “anything exposed to Chinese exports is going to have a lot of risk attached to it. Top of my list is ‘how do you navigate China risk with Trump driving policy?’, but at the same time there’s going to be opportunity as well," he said.
Commenting on China, Mr Hague said the “biggest geopolitical risk in the next five to 10 years is a crisis over Taiwan".
"Everybody is getting ready for the crisis over Taiwan, whatever form that takes, Mr Hague said. "The Chinese are utterly determined to have it and the whole world economy is incredibly dependent on it. In a crisis over Taiwan, Europe is on the side of the United States, and that determines what happens between now and then. Everybody has to allow for that in their decisions.”
'A year of change'
Meanwhile, because of the movements in interest rates expected this year, fixed income markets are becoming interesting again, according to Mr Dibadj, with some “really interesting pockets of value”.
“It’s definitely going to be a year of change,” Mr McManus told The National. “We’re going to see more volatility. It’s already showing up in fixed income markets as yields are backing up. I think it’s likely that you’re going to see some major policy pivots. That said, there’s going to be opportunity in there as well.”
As interest rates look to stay higher for longer, Mr McManus believes that investors will shift away from themes and move towards specific company valuations.
“We have to be sharper around what the returns are on offer to beat higher costs of capital," he told The National. "That means investors will have to be sharper around valuations than the last few years when rates have been relatively lower and investors could afford to be thematic – that focus shifts from the thematic to returns and fundamentals.”
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Fight card
Preliminaries:
Nouredine Samir (UAE) v Sheroz Kholmirzav (UZB); Lucas Porst (SWE) v Ellis Barboza (GBR); Mouhmad Amine Alharar (MAR) v Mohammed Mardi (UAE); Ibrahim Bilal (UAE) v Spyro Besiri (GRE); Aslamjan Ortikov (UZB) v Joshua Ridgwell (GBR)
Main card:
Carlos Prates (BRA) v Dmitry Valent (BLR); Bobirjon Tagiev (UZB) v Valentin Thibaut (FRA); Arthur Meyer (FRA) v Hicham Moujtahid (BEL); Ines Es Salehy (BEL) v Myriame Djedidi (FRA); Craig Coakley (IRE) v Deniz Demirkapu (TUR); Artem Avanesov (ARM) v Badreddine Attif (MAR); Abdulvosid Buranov (RUS) v Akram Hamidi (FRA)
Title card:
Intercontinental Lightweight: Ilyass Habibali (UAE) v Angel Marquez (ESP)
Intercontinental Middleweight: Amine El Moatassime (UAE) v Francesco Iadanza (ITA)
Asian Featherweight: Zakaria El Jamari (UAE) v Phillip Delarmino (PHI)
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How will Gen Alpha invest?
Mark Chahwan, co-founder and chief executive of robo-advisory firm Sarwa, forecasts that Generation Alpha (born between 2010 and 2024) will start investing in their teenage years and therefore benefit from compound interest.
“Technology and education should be the main drivers to make this happen, whether it’s investing in a few clicks or their schools/parents stepping up their personal finance education skills,” he adds.
Mr Chahwan says younger generations have a higher capacity to take on risk, but for some their appetite can be more cautious because they are investing for the first time. “Schools still do not teach personal finance and stock market investing, so a lot of the learning journey can feel daunting and intimidating,” he says.
He advises millennials to not always start with an aggressive portfolio even if they can afford to take risks. “We always advise to work your way up to your risk capacity, that way you experience volatility and get used to it. Given the higher risk capacity for the younger generations, stocks are a favourite,” says Mr Chahwan.
Highlighting the role technology has played in encouraging millennials and Gen Z to invest, he says: “They were often excluded, but with lower account minimums ... a customer with $1,000 [Dh3,672] in their account has their money working for them just as hard as the portfolio of a high get-worth individual.”
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Mohammed bin Zayed Majlis
The specs
Engine: 2.0-litre 4-cyl, 48V hybrid
Transmission: eight-speed automatic
Power: 325bhp
Torque: 450Nm
Price: Dh359,000
On sale: now
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Defence review at a glance
• Increase defence spending to 2.5% of GDP by 2027 but given “turbulent times it may be necessary to go faster”
• Prioritise a shift towards working with AI and autonomous systems
• Invest in the resilience of military space systems.
• Number of active reserves should be increased by 20%
• More F-35 fighter jets required in the next decade
• New “hybrid Navy” with AUKUS submarines and autonomous vessels
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Analysis
Maros Sefcovic is juggling multiple international trade agreement files, but his message was clear when he spoke to The National on Wednesday.
The EU-UAE bilateral trade deal will be finalised soon, he said. It is in everyone’s interests to do so. Both sides want to move quickly and are in alignment. He said the UAE is a very important partner for the EU. It’s full speed ahead - and with some lofty ambitions - on the road to a free trade agreement.
We also talked about US-EU tariffs. He answered that both sides need to talk more and more often, but he is prepared to defend Europe's position and said diplomacy should be a guiding principle through the current moment.
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Naga
The specs
Engine: Four electric motors, one at each wheel
Power: 579hp
Torque: 859Nm
Transmission: Single-speed automatic
Price: From Dh825,900
On sale: Now
Mohammed bin Zayed Majlis
if you go
The flights
Emirates flies to Delhi with fares starting from around Dh760 return, while Etihad fares cost about Dh783 return. From Delhi, there are connecting flights to Lucknow.
Where to stay
It is advisable to stay in Lucknow and make a day trip to Kannauj. A stay at the Lebua Lucknow hotel, a traditional Lucknowi mansion, is recommended. Prices start from Dh300 per night (excluding taxes).
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Explained
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What is the Supreme Petroleum Council?
The Abu Dhabi Supreme Petroleum Council was established in 1988 and is the highest governing body in Abu Dhabi’s oil and gas industry. The council formulates, oversees and executes the emirate’s petroleum-related policies. It also approves the allocation of capital spending across state-owned Adnoc’s upstream, downstream and midstream operations and functions as the company’s board of directors. The SPC’s mandate is also required for auctioning oil and gas concessions in Abu Dhabi and for awarding blocks to international oil companies. The council is chaired by Sheikh Khalifa, the President and Ruler of Abu Dhabi while Sheikh Mohamed bin Zayed, Abu Dhabi’s Crown Prince and Deputy Supreme Commander of the Armed Forces, is the vice chairman.
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SPECS
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The specs
Engine: 8.0-litre, quad-turbo 16-cylinder
Transmission: 7-speed auto
0-100kmh 2.3 seconds
0-200kmh 5.5 seconds
0-300kmh 11.6 seconds
Power: 1500hp
Torque: 1600Nm
Price: Dh13,400,000
On sale: now
The burning issue
The internal combustion engine is facing a watershed moment – major manufacturer Volvo is to stop producing petroleum-powered vehicles by 2021 and countries in Europe, including the UK, have vowed to ban their sale before 2040. The National takes a look at the story of one of the most successful technologies of the last 100 years and how it has impacted life in the UAE.
Read part three: the age of the electric vehicle begins
Read part two: how climate change drove the race for an alternative
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