Multi-asset brokerages could increase their volume via expected boom in UK corporate takeovers post Brexit
The low value of the Pound and the potential surge in Britain’s economy post-Brexit is attracting massive attention from investors in UK stock and corporate takeovers. Multi-asset retail brokerages could benefit.
An interesting surge toward UK stock is presenting a very good opportunity for multi-asset brokerages, in that investors from outside Britain are looking keenly at gaining equity in UK-based firms, and corporations from overseas are increasingly considering the takeover of British entities.
In the Square Mile this week, banks are preparing for a number of deals to take place, beginning in September in which companies from many regions of the world are looking to capitalize on the low value of the pound and the impending potential increase in ecomomic strength once the effects of the UK’s independence from the European Union have come to full effect.
Prime Minister Theresa May has stated that she intends to create a “proper industrial strategy that is capable of stepping in to defend important sectors against opportunist bids” however the brokerage sector and electronic venues are bullish.
Broker RBC Capital has a price target of 550p a share on BT. Traders reckon any bidder might have to pay a pound more than that – valuing it at around £65billion.
Mike van Dulken, head of research at Accendo Markets, said acquiring BT could make sense for a big buyer looking to benefit from the low pound and a steady income.
Mr. Van Dulken stated said it would be ‘a big old deal’ with any buyer having to take on BT’s £50bn-plus pension fund and its £7.6billion deficit.
Should multi-asset retail brokerages list corporate British stocks on their trading platforms, volatility and potential increases in volumes may ensue with regard to company stock, not just liquid currencies.