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Original title: The Brexit deal reached “World’s worst” British stock market can be removed?
After years of growth lagging behind most stock indices, the UK stock market may rise in the shadow of Brexit and be boosted by the post-epidemic recovery.
Since the 2016 Brexit referendum, the UK stock market has been one of the worst performing stock indices in terms of pounds or dollars.
But since Christmas Eve, Britain has made a historic breakthrough in the Brexit negotiations. Although 16 million people in the UK have been diagnosed with the new crown and new mutant strains have emerged, they still cannot resist the optimistic capital market expectations for Brexit: as progress on the Brexit deal has accelerated, the British stock market has rallied against the trend.
Oddo BHF strategist Sylvain Goyon said that the “end” of Brexit may allow people to rediscover the “value” of the FTSE 100 index, and most of the stocks that make up the FTSE 100 belong to industries that are more sensitive. to economic recovery. Among them, materials, energy and finance account for about 40% of the index.
It should be noted that the exporting companies of the FTSE 100 index represent a large proportion, which will benefit from the index in the context of the zero-tariff, zero-quota free trade agreement between the United Kingdom and the European Union.
Also, the current valuation of the UK FTSE 100 index is quite cheap. Therefore, the UK stock market is expected to be “rediscovered” from a fundamentals or value investing perspective.
Goldman sachsStrategist Sharon Bell also said on Friday that they remain bullish on the UK stock market, which is too cheap compared to other assets and other major stock indices. Bell also claimed that the prices of most UK sectors are “significantly discounted” compared to similar sectors in the EU and US.
In terms of industries, real estate and banks, the industries most seriously dragged down by the Brexit negotiations may rebound first, while heavyweights like major financial and energy stocks will also be boosted in value transactions.
Additionally, Bell also said that because large stocks are less Brexit sensitive than small stocks, the FTSE 250 index may perform better than the FTSE 100 index.
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