See what effect Brexit has had on the stock market. Every month, KPMG’s bespoke FTSE indices measure investors’ real appetite for UK stocks in the wake of the Brexit vote.
The KPMG UK50 includes the largest listed firms from the FTSE 100 and 250 that derive more than 70% of their revenues from the UK.
The KPMG Non-UK50 is made up of the UK’s largest listed firms that derive more than 70% of revenues from abroad.
Commenting on the data, Yael Selfin, Chief Economist KPMG in the UK, said:
Autumn saw an overall weak performance for KPMG FTSE indices, with KPMG UK50 index marginally outperforming the KPMG non-UK50 since 1st September. Stronger pound, on the back of expectations of an imminent rise in UK interest rates, hampered the performance of internationally focused companies, although a recovery in oil prices helped bolster a large constituency of our KPMG non-UK50 index.
However, once the exchange rate effect is taken into account, both KPMG indices were outperformed by the FTSE All World index since the EU referendum, highlighting that investors seem to value prospects of companies listed in the UK, even if the majority of their business is overseas, less highly than prospects for overall quoted companies worldwide.
Looking forwards, the narrowing of performance between our two FTSE indices could continue if the pound strengthen, putting downward pressure on the KPMG non-UK50 index, and if a breakthrough in Brexit talks materialises this winter, triggering more positive sentiment for the KPMG UK50 index.