Brexit presents opportunities?

By August 21, 2016News

There is no doubt that Brexit was a shock to many. However, there may be some opportunities that arise as a result of the decision.

Basically, companies with UK pound earnings are now cheaper than a few weeks ago. This is because the UK pound is weak against the A$ as a result of Brexit.

As time passes, I believe that the pound will recover. Therefore, those Australian listed companies will increase in value (in A$ terms) even if the companies themselves, do not increase in value. This is similar to when the A$ was strong against the US$. Significant rewards have been gained for investors in CSL, Amcor and Brambles who purchased these companies 18 months ago when the US$ was weak against the A$S.

The following is a list of direct shares that could benefit in the long term from Brexit.

  • CYBG PLC is a holding company that owns the Clydesdale and Yorkshire bank. You may already have a small holding of this share as a result of owning the NAB.
  • Wesfarmers has recently purchased Homebase, a DIY business that Wesfarmers is hoping to turn into the UK equivalent of Bunnings.
  • Henderson Group PLC (HGG) is a global investment company located in London.
  • Amcor, a paper and packaging company that has dealings in Europe and the UK.
  • Ramsay, a health company that has dealings in Europe and the UK.

Please let me know if you would like to take advantage of this possible opportunity.

This must be considered a long term approach. It will be two years, at least, before the UK is completely decoupled from the EU.

Turmoil = Opportunity