Cut through the Brexit-chatter and look at the numbers.
Here are the Leaders and losers post-Brexit vote.
- Flight to safety (Gold)
- Domestic dividend dash (utility providers, real estate owners)
- Financials with international / UK exposure / earnings
- Industrials with UK / EU exposure earnings and expansion plans
Here are the top performing companies since Thursday’s close – before the Brexit news swamped the world’s markets.
Yes, the market is volatile.
Yes, it will be difficult to get commitments from UK/EU entities and finalise pending agreements. No one is willing to hire or make binding commitments without knowing Brexit-lite or Brexit-full. That’s why companies with UK operations have been hit the hardest, look at NAB’s recent spin-off Clydesdale Bank down -25% since the news.
Is this going to impact global growth forecasts? Yes.
- Will the UK enter a recession? Probably
- Will the market fall further? Maybe.
- Ask yourself; ‘will this take us back to the stone-age?’ No.
You’re not going to switch off the water and power in your home, nor are you going to throw away your slew of tech products.
We’re still pushing forward, your neighbour will still renovate because interest rates are low, your kids still want the newest gadget and you’ll still buy groceries to put food on the table each night. For each of those transactions there is a business to make a profit.
This is the logic of cool-hand investors who have spoken out in the past few days, and they’re not alone. Look no further than the share prices of the ASX Top 100 companies telling us the same stories (table above).
Check back with us as we update these tables and dissect the leading market themes in the market updates.
Christopher is head of equites at Spring Financial Group. Christopher has over 10 years' experience managing equities desks with thousands of retail clients and responsibility for maintaining and servicing retail and wholesale relationships.