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As Jun 23 approaches, more and more of Britain’s citizens seem to be in favor of leaving the European Union. This is what the latest polls say and, unlike earlier surveys, the gap between those in favor of a Brexit and those against seems to be widening.
Industry and market watchers are also split over the pros and cons of such a move. However, some patterns seem to be emerging with economists of the opinion that the gains of exiting the EU seem to be unclear. On the other hand, British industry seems to be split down the middle.
Fresh Polls Say Brexit Chances Higher
Earlier polls were unclear about the final outcome. At that point, some polls showed that those in favor of leaving the EU maintained a lead over those in favor of staying within the economic bloc (read: Growing Brexit Debate Brings ETFs in Focus). In contrast, last Monday’s The Times/YouGov poll showed that those in favor of staying within the EU were 1% ahead of those in favor of exiting.
However, fresh results from the same poll released this Monday revealed a completely different picture. The new YouGov poll for the Times showed that those in favor of a Brexit had grown to 46% while those against such a move had fallen to 39%. Those undecided accounted for 11% of the sample population while 4% had decided not to vote.
The argument in favor of such a move has increasingly become political, tied to a desire for sovereignty and driven by the impact of higher levels of migration (read: 7 Ways to Trade the Brexit Vote). Meanwhile, those against such a move highlight the fear of uncertain times for the economy following such a decision. President Obama had gone so far as to say that the United Kingdom would have to return to the “back of the queue” to seal fresh trade pacts with the U.S.
Several Small Companies Favor Brexit
Government data has indicated time and again that small and midsized businesses constitute the lion’s share of the British industry. Nearly 99% of all the country’s businesses are small or midsized going by the definition that they should employ 250 or lesser individuals. In effect, they provide employment in excess of half of the private sector workforce.
A survey by the British Chambers of Commerce has shown that most of these companies were in favor of exiting the EU. Divisions still exist, but a feeling has emerged that smaller businesses incur heavy costs in order to conform to EU regulations. A study by Open Europe has indicated that several regulations specific to EU membership had cost the British economy $64 billion a year per 2014 prices. There is anticipation about the possible gains from an exit, but several economists and market watchers believe that small and midsized companies could absorb the impact of higher tariffs in the event of a Brexit.
Larger Companies in Favor of Staying with the EU
Larger businesses, on the other hand, are firmly against the idea of a Brexit. The Confederation of British Industry (CBI) has released a paper which states that the cost of exiting the EU will result in the loss of a million jobs as well as national income amounting to 100 billion pounds by 2020.
The arguments placed in favor of a Brexit are based primarily on the uncertainty and risks it poses. For instance, nearly 50% of Britain’s exports go to the EU while imports from the economic zone exceed exports. This raises serious questions about the value of a weaker pound in the event of leaving the EU (read: 4 European Funds in Focus on Brexit Possibility).
Several large companies have gone so far as to campaign against a Brexit. For instance, BT Group plc’s chairman Sir Michael Rake has written a letter stressing the importance of remaining within the EU to all employees. Ryanair Holdings plc (RYAAY - Free Report) has sent its customers email campaigning against a possible pro-Brexit vote.
5 British Stocks in Focus
In this event it is crucial to watch larger companies, which conduct a significant part of their business outside Britain. Many of them may opt to shift their offices and in some cases there operations from Britain.
BP plc (BP - Free Report) is one of the world's major energy companies that provides its customers fuel for transportation, energy for heat and light, retail services and petrochemical products. The stock has lost 0.6% over the last one month and gained 6.4% over the last three months.
British American Tobacco plc (BTI - Free Report) is a major producer and seller of tobacco products. The stock has lost 3.3% over the last one month and gained 7.9% over the last three months.
Unilever PLC (UL - Free Report) is engaged in manufacturing branded and packaged consumer goods, including food, detergents and personal care products. The stock has lost 2.8% over the last one month and 0.1% over the last three months.
HSBC Holdings plc (HSBC - Free Report) is a major global banking and financial services firm, with approximately $2.6 trillion in assets as of Mar 31, 2016. The stock has lost 1.5% over the last one month and 5.4% over the last three months.
Vodafone Group Plc (VOD - Free Report) is a major wireless communications operator and the second largest (behind China Mobile) carrier based on subscriber count. The stock has lost 6.4% over the last one month and 2.9% over the last three months.
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5 British Stocks to Watch as Brexit Vote Looms
As Jun 23 approaches, more and more of Britain’s citizens seem to be in favor of leaving the European Union. This is what the latest polls say and, unlike earlier surveys, the gap between those in favor of a Brexit and those against seems to be widening.
Industry and market watchers are also split over the pros and cons of such a move. However, some patterns seem to be emerging with economists of the opinion that the gains of exiting the EU seem to be unclear. On the other hand, British industry seems to be split down the middle.
Fresh Polls Say Brexit Chances Higher
Earlier polls were unclear about the final outcome. At that point, some polls showed that those in favor of leaving the EU maintained a lead over those in favor of staying within the economic bloc (read: Growing Brexit Debate Brings ETFs in Focus). In contrast, last Monday’s The Times/YouGov poll showed that those in favor of staying within the EU were 1% ahead of those in favor of exiting.
However, fresh results from the same poll released this Monday revealed a completely different picture. The new YouGov poll for the Times showed that those in favor of a Brexit had grown to 46% while those against such a move had fallen to 39%. Those undecided accounted for 11% of the sample population while 4% had decided not to vote.
The argument in favor of such a move has increasingly become political, tied to a desire for sovereignty and driven by the impact of higher levels of migration (read: 7 Ways to Trade the Brexit Vote). Meanwhile, those against such a move highlight the fear of uncertain times for the economy following such a decision. President Obama had gone so far as to say that the United Kingdom would have to return to the “back of the queue” to seal fresh trade pacts with the U.S.
Several Small Companies Favor Brexit
Government data has indicated time and again that small and midsized businesses constitute the lion’s share of the British industry. Nearly 99% of all the country’s businesses are small or midsized going by the definition that they should employ 250 or lesser individuals. In effect, they provide employment in excess of half of the private sector workforce.
A survey by the British Chambers of Commerce has shown that most of these companies were in favor of exiting the EU. Divisions still exist, but a feeling has emerged that smaller businesses incur heavy costs in order to conform to EU regulations. A study by Open Europe has indicated that several regulations specific to EU membership had cost the British economy $64 billion a year per 2014 prices. There is anticipation about the possible gains from an exit, but several economists and market watchers believe that small and midsized companies could absorb the impact of higher tariffs in the event of a Brexit.
Larger Companies in Favor of Staying with the EU
Larger businesses, on the other hand, are firmly against the idea of a Brexit. The Confederation of British Industry (CBI) has released a paper which states that the cost of exiting the EU will result in the loss of a million jobs as well as national income amounting to 100 billion pounds by 2020.
The arguments placed in favor of a Brexit are based primarily on the uncertainty and risks it poses. For instance, nearly 50% of Britain’s exports go to the EU while imports from the economic zone exceed exports. This raises serious questions about the value of a weaker pound in the event of leaving the EU (read: 4 European Funds in Focus on Brexit Possibility).
Several large companies have gone so far as to campaign against a Brexit. For instance, BT Group plc’s chairman Sir Michael Rake has written a letter stressing the importance of remaining within the EU to all employees. Ryanair Holdings plc (RYAAY - Free Report) has sent its customers email campaigning against a possible pro-Brexit vote.
5 British Stocks in Focus
In this event it is crucial to watch larger companies, which conduct a significant part of their business outside Britain. Many of them may opt to shift their offices and in some cases there operations from Britain.
BP plc (BP - Free Report) is one of the world's major energy companies that provides its customers fuel for transportation, energy for heat and light, retail services and petrochemical products. The stock has lost 0.6% over the last one month and gained 6.4% over the last three months.
British American Tobacco plc (BTI - Free Report) is a major producer and seller of tobacco products. The stock has lost 3.3% over the last one month and gained 7.9% over the last three months.
Unilever PLC (UL - Free Report) is engaged in manufacturing branded and packaged consumer goods, including food, detergents and personal care products. The stock has lost 2.8% over the last one month and 0.1% over the last three months.
HSBC Holdings plc (HSBC - Free Report) is a major global banking and financial services firm, with approximately $2.6 trillion in assets as of Mar 31, 2016. The stock has lost 1.5% over the last one month and 5.4% over the last three months.
Vodafone Group Plc (VOD - Free Report) is a major wireless communications operator and the second largest (behind China Mobile) carrier based on subscriber count. The stock has lost 6.4% over the last one month and 2.9% over the last three months.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>