The Scottish Mail on Sunday


- by Joanne Hart IN­VEST­MENTS EDI­TOR

ANOTHER week­end in June, another headache for the Govern­ment and another quandary for in­vestors.

Loom­ing Brexit talks had al­ready cast un­cer­tainty over the UK econ­omy. Now, with Theresa May fall­ing dra­mat­i­cally short of the big vic­tory she sought, prospects are even harder to pre­dict.

Against this back­drop, the stock mar­ket might have been ex­pected to show se­ri­ous signs of worry. In­stead, the re­sponse to last week’s drama has been rel­a­tively san­guine.

The FTSE100 in­dex of Bri­tain’s big­gest quoted firms closed 1.04 per cent higher on Fri­day at 7,527.33, while the FTSE250 edged ahead by 0.13 per cent.

Con­trast this with the day af­ter the EU ref­er­en­dum last June, when the Foot­sie closed 3.1 per cent lower, the FTSE250 in­dex was down just over 7 per cent and ster­ling slumped. Per­haps traders are get­ting im­mune to shock vot­ing re­sults here. Per­haps they have faith in the econ­omy’s re­silience. Or per­haps they are re­flect­ing on what hap­pened next, this time a year ago.

Within a week of the Brexit vote, the FTSE100 was bounc­ing back. Packed full of multi­na­tional com­pa­nies, traders took the view that the in­dex would ben­e­fit from the pound’s weak­ness.

And so it has proved. UK goods and ser­vices are now cheaper for for­eign­ers, while busi­nesses with a big pres­ence in the US ben­e­fit from the dol­lar’s strength against the pound.

The FTSE 250 in­cludes more do­mes­ti­cally fo­cused firms and it was still in neg­a­tive ter­ri­tory a week af­ter the ref­er­en­dum. But it soon re­bounded too. To­day, it is 13 per cent higher than last June, while the Foot­sie is about 18 per cent ahead.

For ner­vous in­vestors, the data of­fers re­as­sur­ance. It can also help to guide in­vest­ment de­ci­sions, as West­min­ster wades through a sea of un­cer­tainty.

Now is not the time to panic. A long view on shares is in­vari­ably the best path to take, par­tic­u­larly with wellestab­lished div­i­dend pay­ers that have a large over­seas pres­ence. Here, Midas looks at three such stocks – Unilever, Reckitt Benckiser and Di­a­geo – and also at some builders and re­tail­ers that could come up trumps in th­ese un­cer­tain times.

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