March of the tech titans: Compared to newcomers like Just Eat, the Silicon Valley giants don't look overvalued at all, says ALEX BRUMMER

By ALEX BRUMMER FOR THE DAILY MAIL

Updated:

The biggest winners from the pandemic have proved to be companies with the greatest tech know-how.

It goes without saying that the astonishing recovery on Wall Street since the March market meltdown is largely due to the Silicon Valley giants.

The shares of these behemoths now account for 31 per cent of the £25trillion market value of America's 1,000 biggest quoted firms. On a micro-scale, this phenomenon also is evident in Europe.

Tech titans: The shares of the Silicon Valley behemoths now account for 31 per cent of the £25trillion market value of America¿s 1,000 biggest quoted firms

Tech titans: The shares of the Silicon Valley behemoths now account for 31 per cent of the £25trillion market value of America's 1,000 biggest quoted firms

The soaraway value of Ocado is a case in point and it would be nice to think that a bit of the stardust will cling to Marks & Spencer when its food deal with the online grocery tech group shortly comes to fruition.

In the fast fashion sector Asos is among the winners. The update on its sales and profits forecast for the current financial year sent the shares back into orbit.

The online group, which caters for shoppers in their 20s, has benefited from heightened demand in lockdown and lower levels of returns. Profits could come in as high as £150million for the full year.

Similarly, newly merged Dutch-based Just Eat Takeaway is also on a good run. Half-year sales climbed 44 per cent to £919million and the ambitions to move into the US market with the absorption of Grubhub are said to be on track. 

The big regret is that since the £7billion merger Just Eat is now quoted in Amsterdam rather than London.

Competition in the home food delivery sector is intense but Just Eat Takeaway with its bold investment plan, aims to be a winner. Investors seem to believe the story with the shares selling at bonkers levels.

A serious issue for investors in these digital Covid-19 winners is how durable will the model be, if the fashion fades for working and living from home.

Judging from crowd scenes in UK food outlets since Rishi Sunak introduced his 'eat out for Britain' this summer, the pent-up desire for a return to getting out of the house for breakfast, lunch or dinner is strong. 

As was the case in the dotcom boom of 1999-2000, one suspects that there is a little too much optimism around prospects for some of the innovators.

What is frightening, in terms of oligopoly power, is that, in comparison with neophytes such as Just Eat Takeaway, stocks in the Silicon Valley giants don't look overvalued at all.

Birthday boy

George Soros looks to have lost none of his sharpness on his 90th birthday.

The man who 'broke the Bank of England' when the UK was bounced out of the exchange rate mechanism (the precursor of the euro) in 1993 is disparaging of Europe's response to the pandemic.

He argues that the EU is vulnerable to enemies both inside and out. Inside, he argues the EU is an 'incomplete union' and recovery plans are doomed because of the mean-spirited attitude of the frugal five – the Netherlands, Austria, Sweden, Denmark and Finland.

The scaling back of Covid-19 funding and ambitions on climate change and defence co-operation are creating great difficulties for the struggling nations of southern Europe. 

Soros proposes the launch of a £1trillion European perpetual bond at low interest rates to ensure the EU prospers and survives.

He says that a robust EU is more necessary than ever given the external threats of China and President Putin's Russia.

Soros is fearful of the swing to authoritarianism in his native Hungary, which opposes many of the values for which the EU was created. 

And he also worries that Italy may be heading out of the eurozone and the EU as it swings to the right.

His despair over the EU doubtless will be viewed with surprise on Downing Street given his previous Europhile views.

Soros has learned from John Maynard Keynes. When the facts change, he changes his mind.

Fishy fable

When we think of research and development tax breaks the mind immediately leaps to big pharma and high tech firms. But even the most traditional of industries can take advantage.

Cumbria-based Harbourside Products has sparked a revolution in the smoked fish and terrines industry by investing £200,000 in equipment to slice and prepare salmon.

All this has been achieved with an R&D grant of £164,836 from the Government. The result is 60 jobs saved and a big order from Italy. Pass the canapes please.

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