ALEX BRUMMER: Brexit talks can’t get caught up in fishing nets

The word of finance is puzzled. How is it that fishing, which accounts for just 0.1 per cent of the British economy and at most employs 24,000 people, has become the linchpin issue in the never-ending UK-EU trade talks?

There are all manner of explanations cited, including the UK’s maritime traditions, the impact on the union and Scotland in particular, and the unfairness of a regime in which 60 per cent of the haul from British waters accrues to foreign boats.

The reality is that the prolonged deadlock is affecting every sector of the UK economy. From insurance to outsourcing, from cloud computing to speciality chemicals, the FTSE and AIM markets have become prime waters for bottom fishing.

Fishing accounts for just 0.1 per cent of the British economy and at most employs 24,000 people yet it has become the linchpin issue in the never-ending UK-EU trade talks

In spite of a 300-year heritage and its role in Britain’s vital insurance market, RSA has already been all but snatched by overseas buyers. 

The security and outsourcing giant G4S is holding its nerve even though it is under siege from North American predators.

One suspects that were fishing et al to be resolved, and the roll out of the Pfizer vaccine to go smoothly, a FTSE rally would be triggered, which would expose most of would be buyers for what they are – debt-fuelled opportunists.

This is certainly recognised by Elementis chairman Andrew Duff and his executive team, which has now told the heavier trawlers from the US’s Minerals Technology to get lost three times, forcing the price up to 130p. 

This is still way below the 179p share price achieved in 2019, which illustrates the pandemic plundering very neatly.

Elementis is not a name which trips off the tongue in the Pig & Whistle. It is rebranded from Harrisons & Crosfield, which began life trading coffee and other food commodities 175 years ago and now provides vital industrial ingredients to personal care, coatings and talc users. Several of its products have green credentials including chemicals used in catalytic converters.

Investors are impatient and JO Hambro Capital Management complains about the Elementis debt build-up, which peaked at £385million last year and has been brought down to £346million this year. 

The irony is that its predator Minerals Technology has also been on a debt journey and would be adding to that burden were it to win control. 

Not that this worries get-rich-quick holders always looking for a cash exit. It takes determined boards to resist buyers waving dollar bills and claiming fabulous premiums. Elementis, so far, is showing the right stuff.

Clouded vision

Here is one for Business Secretary Alok Sharma and the UK’s tightened rules on overseas takeovers.

Aim-quoted IMI Mobile is a UK tech tiddler which has developed sought-after software which makes it easier for business users to connect to customers via the cloud.

Cloud applications are hot property at present as we saw when Salesforce bought Slack for £21billion last week.

Among the reasons why British tech firms never really mature is because there is always a US giant, in this case Cisco, ready to make the founders and backers rich.

That’s partly because the UK lacks the venture capital tradition of the US, where patient investors are willing to sit on their investment, or increase it, until substantial enterprises emerge. IMI Mobile has been a disappointing stock market performer and the premium offered by Cisco of 47.8 per cent superficially looks attractive.

Chairman John Allwood and founder-chief executive Jay Patel should at the very least put up a fight rather than surrendering after the first salvo.

Staying power

Airbnb is staging a remarkable comeback after being battered early this year by Covid. 

As vacation plans are revived, travellers are opting for single-occupancy homes in preference to hotels and bookings are surging.

The online lettings champion is to revive its postponed initial public offering this week, raising $3.09billion (£2.3billion) in new funds.

Shares are to be offered in the range $56-$60 each (up to £45 each) placing a value of $41.8billion (£31.4billion) on the group. That compares with its last private fundraising in April when it was valued at half that.

The boosted price reflects better performance and the surge in the value of tech stocks, which has helped drive the Nasdaq and Dow Jones to ever greater heights.

And everyone knows that should Airbnb fail to fulfil its promise, there will be a trillion-dollar Silicon Valley aristocrat there to pick the pieces.

This post first appeared on Dailymail.co.uk