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Historical events and the markets

Enable’s IFA’s in Bishop’s Stortford know keeping up with the markets is a challenge but with some recent British company results some are considering it a good time to consider raising UK equities allocations in some portfolios.  A key factor of which such an argument is built on is the lower level the pound has settled at globally.  This automatically makes all sales made overseas by British companies more valuable when converted into home currency. The other side of the coin, in terms of the benefits a lower pound can bring is making UK goods and services more competitively priced relative to rival offerings from other countries, which helps lift market share.

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According to the November FTSE 350 ‘Profit Watch’ report from The Share Centre, the pound is trading at a 185 year low on a trade-weighted basis. Most forecasts have sterling staying lower than its pre-referendum level for a considerable time, and therefore overseas earnings are likely to make a bigger impact on company profits for some time to come. The  effect of this on company revenues has barely begun to hit home in results statements says the report due to the considerable time lag between making sales and company reporting. The Share Centre’s analysts say it will take a year or more to see the full effect.

In addition domestic economic indicators have remained relatively robust since the EU referendum, so even domestic facing companies which do not benefit from the weaker pound could deliver good numbers next few years. One good recent example comes from housebuilder Taylor Wimpey which saw its shares jump over 3% as it reported a healthy order book and upgraded profit forecasts. 

Enable’s IFA’s are always happy to talk through your investment strategies.


Issued by: Enable Independent Financial Life Planners • 
25c North Street, Bishops Stortford, Herts CM23 2LD • Telephone: 01279 755950 – Fax: 01279 657339
Enable Independent Financial Life Planners is a trading style of Enable Independent Limited is authorised and regulated by the Financial Conduct Authority.
It is important always to seek independent financial advice before making any decision regarding your finances. If you would like any assistance, please contact us.

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