Brexit and the UK consumer with Investec UK Alpha
Managing Director, Darius McDermott, discusses Brexit uncertainty and choppy outlook for 2019 with...
Following the Brexit vote, what kind of UK equities are you more likely to buy?¹
Following the referendum’s Brexit outcome, we put the UK stock market in the spotlight in our July poll and asked FundCalibre visitors what kind of UK equity they were more likely to buy.
After an initial slump across the market, large-cap stocks (meaning the UK’s largest listed companies) recovered quickly and in fact finished the week after Brexit 5% above where they were on the day of the vote*. Our poll participants clearly took note, as 37%** said they were more likely to invest in large companies.
Small and medium-sized companies unfortunately fared worse, with Brexit forecast to reduce Britain’s economic growth. Many of the UK’s smaller companies are far more reliant on the domestic economy and people worry that these companies may now struggle to generate returns. On the other hand, some investors saw buying opportunities where prices had fallen. Our poll participants reflected these mixed views, with 27%** saying they would buy small-to-medium sized companies.
Just 21%** of participants said they would buy UK equity income stocks, although this could be due to falling dividends within the UK as much as Brexit results. And finally, 15%** of participants opted to steer clear altogether in the short-term, saying they wouldn’t buy any UK equities for now.
*Google Finance, FTSE 100, 23/06/2016–01/07/2016
**Results based on feedback from 79 FundCalibre visitors from 01/07/16 – 29/07/16