Charlotte Street Partners



Abroad thoughts from home

Written by Adam Shaw, associate partner
Edited by Kevin Pringle, partner
3 July 2020

Good morning,

I’m often told that I don’t look it, but I am half Hong Kong Chinese. My maternal grandparents arrived in the UK on a boat from Hong Kong in the 1950s and settled in Newcastle, where they married and had my mum, aunt and uncle.
A bittersweet anecdote concerns their wedding photos. The shop of the photographer they hired for the day was broken into the following night and the negatives destroyed. Fortunately, a local press photographer had turned up to capture some photos outside the church – so rare was a Chinese wedding in Newcastle at the time – and he was able to give them a couple of pictures he had snapped. So, at least they had something.
Sadly, I never met my mum’s parents ­– they both passed away several years before I was born­.
Which is perhaps part of the reason why I never felt particularly close to my Chinese heritage. I wasn’t ashamed of it or anything, quite the opposite.
However, growing up on the southside of Glasgow, not speaking Cantonese or around much in the way of Chinese family, meant that it felt like a less prominent aspect of my life. It was always there, but slightly distant – occasionally coming into sharper focus at my mum’s annual Chinese New Year parties (when I readily accepted red lucky money envelopes from family friends) or during trips to Hong Kong to visit relatives.
However, it’s felt closer than ever in recent months due to the situation in the former British colony. There is so much wrong and tragedy in the world and it’s easy to feel numb to it when watching or reading the news. But I feel a particular and quiet anger about what’s currently happening on that small peninsula in the South China Sea.
The well-documented new security law came into effect this week. It contains 66 articles and represents a fundamental overhaul of the legal system, introducing new “crimes” punishable by severe penalties – life in prison, in some cases – and with deliberately broad and malleable wording.
It outlaws the provocation of “hatred” towards the Central People’s Government (Article 29). Trials can now be held in secret (Article 41). Judges will be hand-picked by the chief executive, who is answerable to Beijing (Article 44). A new security office funded and controlled by Beijing will be established (Article 48), and immune from inspection or investigation by Hong Kong law enforcement (Article 60). It is also extra-territorial in scope as it covers offences committed outside the region (Articles 37 and 38).
These all represent an erosion of the freedoms that helped make Hong Kong great.
I’ve often questioned the stance of the UK government in recent years, but the Foreign Office offer of residency for British National Overseas Passport holders and their dependents – potentially three million Hong Kong residents – is a welcome and commendable one that will make a difference for individuals, even if it’s unlikely to make China think twice.


People arriving in England from countries including France, Spain, Germany and Italy will no longer have to quarantine for 14 days, the Department for Transport has confirmed. A full list of about 60 countries covered by the new rules, which come into effect on 10 July, will be published later today. However, reciprocal arrangements with the countries included have not been guaranteed, meaning British holidaymakers may need to quarantine on arrival at their destination. The announcement only covers England at this stage as the devolved administrations will set out their own rules at a later date.
Ghislaine Maxwell, an associate of convicted paedophile the late Jeffrey Epstein, has been charged with six offences relating to the recruitment, grooming and abuse of Epstein’s victims. Maxwell, who was arrested by the FBI in New Hampshire yesterday, denies any knowledge of the sexual abuse perpetrated by Epstein. In a press conference, Audrey Strauss, the acting US attorney for the Southern District of New York, said she would “welcome” a testimony from the Duke of York, who had a well-documented relationship with Epstein.
Boris Johnson will warn that the UK is “not out of the woods yet” and urge people to be cautious as bars and restaurants reopen in England this weekend. At a press conference scheduled for later today, the prime minister will urge people to support the “heroic effort” put in by businesses all over the country and threaten tough lockdown measures if people breaking the rules prompts a second spike of the coronavirus. A new poll for Sky News showed that 83% of people would support another shutdown in that eventuality.

Business and economy

The chancellor, Rishi Sunak, has reportedly told Tory MPs not to expect big tax cuts to boost the economy and that he will instead put jobs at the heart of his set-piece economic statement scheduled for next week. The “mini-budget” is set to mark a shift in the coronavirus strategy, moving from a support phase to a stimulus one, where it encourages households and companies to spend as normally as possible. (£)
Casual Dining Group, parent company of Café Rouge, Bella Italia and Las Iguanas, has gone into administration. As a result, 91 restaurants will close immediately and 1,900 of the group’s 6,000 employees will lose their jobs. The administrators, Alix Partners, are seeking offers for all, or parts, of the remaining business. In a statement, the company said it had already received “multiple offers” which it hoped to pursue.
Fuller Smith & Turner, operator of the Fullers chain of pubs, has delayed its final results for the second time in just over a week, saying its auditors, Grant Thornton, require “additional time to complete the formalities of the audit process”. The company said it would announce a new date for the results “shortly”.

Columns of note

In The Atlantic, pollster Stanley Greenberg sets out for the case for why the 2020 US presidential election is unlikely be a repeat of 2016, when the Democratic candidate’s polling lead evaporated on election night and Donald Trump secured a shock victory. He highlights that Joe Biden’s lead is far more robust than that of Hillary Clinton four years ago and the political landscape has fundamentally changed. Greenberg contends that rather than worry themselves that their candidate will lose in the same manner of 2016, Democrats should build on this lead and “work for the greatest possible rejection of a widely distrusted U.S. president and the political party that enables him”.
Writing in the Financial Times, Janan Ganesh argues that the UK’s real age divide is not between millennials and boomers, but among millennials themselves. He highlights that the cohort often badged as millennials is actually two groups, with 1988 as the “serviceable fault line”. Those born before generally entered work before the global financial crisis with all the benefits that entailed; those born after struggled in the aftermath – shaping their prospects forever.

Cartoon source: The Telegraph


What happened yesterday?

All major indices made gains yesterday on the back of strong US employment figures – 4.8 million jobs were added in June, beating expectations for 3 million – prompting optimism that the world’s biggest economy is on the road to recovery from the coronavirus pandemic.
This was in spite of continued fears about the coronavirus and geopolitical tensions over China’s new security law in Hong Kong.
On Wall Street, the S&P 500 was up 0.45% to 3,130.01, the Dow Jones Industrial Average rose 0.36% to 25,827.36, and the Nasdaq climbed 0.52% to 10,207.63.
In London, the FTSE 100 gained 1.34% to 6240.36 and the FTSE 250 rose 1.04% to 17,376.86.
Airlines had a good day following reports that countries deemed low risk will be exempt from the UK’s quarantine from Monday.
International Airlines Group, parent company of British Airways, was biggest gainer on the main index, rising 5.7%. Easyjet performed well too, ending the session up 2.18%.
Associated British Foods also made gains, rising 4.15%, after it reported that full-year profits at subsidiary company Primark would fall from £913m to between £300m and £350m, but that trading at its reopened stores had been “encouraging”.
At the other end of the table, packaging company DS Smith was down 6.9%, despite reporting a five per cent increase in profits. The company said its business supporting e-commerce firms during the pandemic had performed strongly, but that demand from industrial clients had fallen sharply and that it would not be paying a dividend as a result.
On the currency markets, the pound fell 0.04% against the dollar to $1.2465 but rose 0.05% against the euro to €1.1087.

What’s happening today?

Fuller Smith & Turner

Calculus Vct, Capital Gearing, Marks & Spencer

UK Economic announcements
(00:01) GFK Consumer Confidence
(09:30) PMI Services

Int. Economic announcements
(07:00) Current Account (GER)
(07:00) Balance of Trade (GER)
(07:00) Industrial Production (GER)
(08:55) PMI Composite (GER)
(08:55) PMI Services (GER)
(09:00) PMI Composite (EU)
(09:00) PMI Services (EU)
(15:30) Crude Oil Inventories (US)

Source: Financial Times

did you know

The fuzzy soles on Converse All Star shoes is an example of “tariff engineering”. It allows them to be classified as a slipper for trade purposes, lowering the US import tariff from 37.5% to three per cent.

Parliamentary highlights

House of Commons

No business scheduled

House of Lords 

No business scheduled

Scottish Parliament 

In recess until 10 August (with the exception of 30 July and 6 August 2020, on which dates business may be programmed by the bureau)

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