Drop in value of UK firms af­ter vote

The Scotsman - - Brexit - By CLAIRE HAYHURST

The im­pact of the Brexit vote re­duced the value of UK com­pa­nies by 16 per cent, ac­cord­ing to new anal­y­sis.

Re­searchers at the Uni­ver­sity of Bris­tol used stock mar­ket data for 297 UK firms and book­mak­ers’ Brexit odds dur­ing the ref­er­en­dum cam­paign to es­ti­mate the fi­nan­cial im­pact.

They say their study is the first of its kind show­ing the di­rect im­pact of po­lit­i­cal un­cer­tainty re­lated to Brexit on all ma­jor British com­pa­nies.

The find­ings, pub­lished in the Jour­nal of Bank­ing and Fi­nance, showed that com­pa­nies with a UK fo­cus were most af­fected.

Multi­na­tional com­pa­nies proved to be more re­silient due to op­er­at­ing across a di­verse set of coun­tries, which pro­vides more sta­bil­ity, ac­cord­ing to the study.

In the im­me­di­ate af­ter­math of the ref­er­en­dum, prices of com­pa­nies in the bot­tom quar­ter of the in­ter­na­tion­al­i­sa­tion rank­ing dropped by 21 per cent on av­er­age while those in the top quar­ter fell by 8 per cent, it found. Of com­pa­nies an­a­lysed, those in the fi­nan­cial sec­tor and con­sumer-ori­en­tated sec­tors such as house­builders, re­tail, travel and leisure firms were hard­est hit. Larger and the fastest­grow­ing firms are more af­fected, re­searchers said.

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