As the dust settles on the EU referendum vote, the future of the United Kingdom and its domesticated companies becomes an ambiguous affair. Perhaps most notably, predictions of a complete capitulation of UK shares did not materialise, although it is too early to know the exact implications of the vote. However, given the large depreciation in GBPUSD, which is moving from 1.49 to this morning 1.32, are there any immediate winners from this?
With such a huge weakening in sterling, our exports are becoming cheaper and more attractive. Indeed, this is important for companies that are domiciled in the UK but make a significant amount of their revenue from the US, colloquially known as dollar earners. A classic example of this is GlaxoSmithKline – the pharmaceutical giant which has a large presence in the US. Importantly, to confirm this, its share performance since the Friday after the referendum vote has been nothing but impressive: higher from a low of 1360p to 1611p today, a move of some 18.5%.
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