Brexit uncertainty lingers #finance
The stock market has recovered a little since the ‘Brexit’ vote but with Arm Holdings being taken over I have been wondering how much ‘investment’ is coming in from overseas as foreign companies take advantage of the reduced value of the pound sterling. Brexit uncertainty makes overseas investors nervous too, though.
Brexit uncertainty lingers on with big pharma tending to benefit and banking being seen as a bigger risk. There are a lot of unknowns, with many companies making statements regarding how exposed they are to these new risks. Premier foods has been rising this week and they say their exposure is limited. They are also looking at greater opportunities in the Far East through their JV with Nissin in Japan.
In times of uncertainty, people spend less and save more if they see trouble ahead so retailers are seeing sales either falling or static. Debenhams was beginning to make a recovery but are now languishing down below 60p again. I’ve never shopped there but considered it this week. I decided to check out the website of rival Next because I have a chance of parking there. Parking in town centres is a problem and retail parks have an advantage over the town centres that Debenhams and others favour.
Immupharma made progress this week with the share price once again climbing. It has attracted the attention of brokers too with some predicting a very attractive upside. I’m sure we will see the share price triple in the next couple of years too.
Having a diverse portfolio spreads risk but can’t protect against political risks that can devastate the market. Having a diverse portfolio did protect me a little with GlaxoSmithKline making good gains on the back of a drop in sterling. One mistake investors tend to make, is to sell once they have a decent return on a particular share. I am tempted to sell GSK, but is there a replacement that is a better option? GSK is still going up in price and they pay quarterly dividends, so why sell a winner?
It is hard to know what the economic policy will be with the new administration now Cameron and Osborne have gone. Will austerity be at least tempered with common sense? If the economy grows, then marketing spending could rise and ITV will see growth. The same will apply to the AA and to a lesser extent the retail sector. We are still bound by the Lisbon Treaty, otherwise, some QE to finance house building would have been a spectacular way to boost the economy.
That’s all for this week, if you would like to follow this blog, just enter your email address at the top of the sidebar or follow me on Twitter for updates. You can find links and photos on my Facebook page.