The performance of British companies, which rely on the majority of their sales from European markets, has worsened since the country voted to leave the EU in 2016, according to newly compiled figures.
A survey of the top 100 companies on the London Stock Exchange, which generates more than 50% of intra-EU sales, showed that their collective average price performance fell by 3.3%, according to MarketSatch FactSet studies .
For companies that generate less than 50% of EU sales, the difference was large – their collective average price performance jumped 47%. FactSet uses the current composition of the EU, which includes the UK
GSK, + 1.00%
ULVR, + 1.95%
and Reckitt Benckiser
RB, + 1.69%
extracting most of their sales outside the UK
Also the industry-specific FTSE 100 (TICKER: UK: UKX) analysis shows that consumers , the financial, telecommunications and utilities are most likely to be vulnerable to Brexit. This is because all these industries have 50% or more exposure to EU revenue and are lower than the FTSE 100 as a whole.
The data firm also searched for the term "Brexit" in conference transcripts of 67 FTSE 100 companies that made mid-year conference calls between 15 June and 14 September. Of these 67 companies 27 cited the term "Brexit" during the call, with the largest number being in the financial services and consumer industries. However, FactSet did not specify whether Brexit was cited as positive or negative by these companies.
John Butters, Senior Revenue Analyst at FactSet, states: "Looking at the FTSE 100 as a whole, we find that companies – regardless of industry – have more revenue exposure to the EU and the UK, have achieved less results after the Brexit vote. "" Medium to medium price delays that may reflect concerns about the market for harmful Brexit. This weakness may also reflect differences in economic growth expectations. ”
Next year, the US economy is expected to grow more slowly than the euro area, not to mention the US and China. "The combination of Brexit and general economic uncertainty is felt," he said.
Separately, State Street announced its latest Brexometer survey, which measures institutional investors' sentiment regarding Brexit developments.
The survey revealed that two-thirds of institutional investors believe the UK will leave the European Union without a deal on October 31, with a negative impact on global markets, with 31% expecting "serious consequences".
If the UK provides an agreement before the deadline, however, 71% of institutional investors expect it to have a positive impact on the markets.
Joerg Ambrosius, Head of Europe, Middle East and Africa on State Street, says: "It's no surprise that Brexit has a significant impact on global markets and while a confirmed solution is unlikely by the eleventh hour, the vast majority of our clients have considered the different scenarios for their investments and business models. “