Henry Keswick maintains that shares in Jardine Matheson have outperformed those in Berkshire Hathaway, the stock widely considered about the best long-term investment on the planet. Well, it depends where you start, but Jardine shares have multiplied 10 times in 12 years, never mind the dividends.

By Jardine’s standards, Warren Buffet’s venture is something of an upstart, since Sir Henry’s family company is now in its eighth generation, with one of his nephews at the helm. This week Jardine did what the Keswicks like doing best, thumbing its corporate nose at governance. It’s downgrading the group listings in London from premium to plain rather than comply with new rules on the influence of controlling shareholders.

The fact that Jardines is family controlled is a powerful reason why us shareholders bought in the first place (alas, not long enough ago). The Keswicks look after the business as if they own it, because they do. If that upsets the governance brigade, well, tough.

Over 30 years ago, a midnight manoeuvre to issue and immediately swap shares in Hongkong Land, then an associate company, stymied a takeover attempt by Li Ka Shing, prompting Nicholas Sibley, then managing director of Jardine Fleming, to brag: “The empire strikes back.” In 1994, the press conference called to announced Jardine’s flit from the Hongkong Stock Exchange attracted hundreds of journalists and a dozen tv cameras – but no Keswicks. Charles Powell was put up to catch the flak from the hacks.

In practice, the listing downgrade will make no difference. As the ultimate “buy and forget” investment, the market is thin,  which is why few analysts cover it.

The authorities deserve some sympathy. Where the Keswicks nurture their empire, newer families have treated their premium listings as piggy banks to be raided, and the loss of Jardines is less damaging to London than a repeat of scandals like ENRC and Bumi. As with DMGT, another successful family-controlled business (thrown out of the FTSE indices for non-compliance) it pays to pick your gene pool with care.

Intu misses out

John Whittaker is a huge fan of what used to be called Capital Shopping Centres. He controls 20 per cent of the equity, or nearly 25 per cent counting his holding in convertible loan stock. Even by his standards £600m it’s quite a bet.

So far, it hasn’t paid off. The shares missed the property boom, and stand 30 per cent cheaper than they were four years ago. Financial engineering has damaged net asset value, and an unchanged dividend is barely covered. The directors are upbeat, but there’s a sort-out going on in shopping centres, with the mega-malls like Westfield thriving at the expense of the rest. It’s not clear whether the likes of Merry Hill fall in the first or second category.

A year ago, the shares were highlighted here because of Mr Whittaker’s (non-exec) involvement, given his formidable record at Peel Holdings. That was despite a re-brand to Intu Properties (as in “go Intu our shopping centres”). It seems the curse of the silly name-change has struck again, after all.

Not so smart

Hi there! This is your smart meter speaking. Please don’t turn on the dishwasher right now, because it will cost you £30. Just wait a couple of hours, will you?

This is already no joke for what’s left of Britain’s heavy industry. Between 4 and 6pm in midwinter, Tony Pedder of Sheffield Forgemasters reckons it can cost £27 to boil a kettle. His workers huddle in one room to keep warm while they wait for the demand peak to pass and thus avoid the “congestion charge” imposed by the company’s supplier.

While surcharging at the peak makes obvious economic sense in terms of efficient use of expensive plant, it would make far more sense to impose a marginal inconvenience on consumers than to impose swingeing costs on industry. This requires smart meters which tell you the instantaneous cost of the current kilowatt hour. Unfortunately, the electricity suppliers are in such bad odour with domestic customers that we’d view any attempt to impose them as a plot for further price gouging. And we’d probably be right.

This is my column from Saturday’s FT

Advertisements