Banks and housebuilders push FTSE 100 past 6000 as Brexit fears ease

Discussion in 'Market News' started by Lily, Jun 17, 2016.

  1. Lily

    Lily Forum Member

    Aug 29, 2015
    Likes Received:
    Investors in calmer mood after recent volatility as campaigning suspended

    Banking shares are leading the way as the UK market continues its rebound from four month lows.

    With campaigning for the EU referendum suspended in the wake of the tragic death of MP Jo Cox, investors are in a calmer mood.

    A late surge in share prices yesterday continued in international markets overnight and has spilled over into a second day here. Banks and housebuilders, two sectors with most to lose from a ‘Leave’ vote, are back in favour.

    The cessation of referendum hostilities...may have tipped the balance back in favour of the ‘Remain’ campaign, but it will be hard work keeping early gains without a big swing in the opinion polls.

    The positive trading seen at the beginning of the year has continued with a boost in recent weeks from the UEFA Euro 2016 Tournament. Market data shows demand for Atheleisure remains strong and while we leave forecasts unchanged at the moment, risk appears firmly on the upside. JD remains an undervalued (2017 estimated PE 16.5 times), exciting European roll-out story.

    The completion now opens the way for UBM to consolidate its shares (8 for 9) and pay out £245m in special dividends. It also opens the way for further acquisitions in the Events space, with UBM’s leverage of 1.1 times net debt/EBITDA at the end of 2016 providing nearly £200m of headroom (at 2 times leverage).

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