Maggie Pagano’s predictions for 2018

As Nils Bohr, the Nobel laureate, said so wisely: “Prediction is difficult especially if it’s about the future.”  So take my five forecasts and thoughts for 2018 with a pinch of salt. If any of them prove correct, however, I will take a modest bow.

1.  China and African mining boom: China wants to be the world’s biggest producer of electric cars, and is considering setting a deadline for when petrol and diesel powered cars will be phased out. It has three reasons for doing so. First, China is one of the world’s biggest polluters, with about a third of its own air pollution coming from combustion engines. Second, Beijing wants to cut down on its massive oil imports as the leadership views this reliance on unreliable overseas relationships as a strategic vulnerability. Third, its car industry is already huge but has been slow to lead the way in manufacturing EV but wants to stay ahead of the game. If China is to be a world EV player, it needs more of the raw materials such as graphite, manganese and cobalt to make lithium batteries. These resources are all abundant in Africa, particularly in Zimbabwe. So expect more big Chinese mining deals and rising commodity prices.

2. Tech goes medical: One of the big tech giants, Apple, Facebook, Amazon or Google makes a play for one of the big pharma companies like GSK. They have the personal data on most of the world’s population, and now they want the medical devices and drugs to supply them. Amazon is already dabbling in pharmacy, and both Apple and Google are quietly building up their life sciences businesses. Expect some jolly M&A battles.

3. Spencer in the hot-seat: London Stock Exchange chairman, Donald Brydon, needs to do something clever to save his Glaswegian skin. So Brydon, under fire from one of his biggest shareholders after losing his CEO, Xavier Rolet, makes a call to Michael Spencer, chief executive of Nex, the electronic markets platform and post-trade business. Brydon offers to buy Nex, and Spencer lands the LSE hot seat and continues his brilliant deal-making prowess. Who knows, maybe he gets the knighthood which was withheld following the Libor scandal.

4. Germany and Napoleon: A weakened Angela Merkel wakes up to the fact that Emanuel Macron’s plans for the EU are too Napoleonic for her Lutheran taste. Merkel realises the only way to stop Macron’s desire for further monetary and fiscal integration is to have the UK by her side. Three at the top table is better than two. Merkel puts a plan to the EU to persuade Europe’s leaders to offer a new deal to the UK, which includes an emergency brake on immigration, to keep us on side in and safely within European community. Such a deal paves the way for EU reform: a proper two-speed Anglo-Nordic Europe with those countries outside the euro area, and those within. Greece can finally opt to come out of the euro.

5. Davis goes for May: David Davis makes his pitch for the leadership to unseat Theresa May. He hopes to avoid a messy battle, more of a late-night coup in which May gracefully decides to retire Anthony Eden style on grounds of exhaustion. Davis is encouraged to do so by his growing supporters from both the convergers and divergers within the Remain and Brexit camps.  Whether Davis is successful, I leave for the Fates to decide.

Happy New Year.