The result is in, and the people have spoken. We will now leave the EU, unless of course there is some more re-negotiation or other fudge which would probably require some U-turns by politicians. They are of course adept at finessing such manoeuvres so don’t be surprised if the outcome is not quite as simple as it might first appear.
The pound has already fallen substantially (I am writing this just before the stock market opened). Is that a disaster? Not quite because it will actually be beneficial for major exporters and for those large FTSE-100 companies that are global businesses and earn much of their profit overseas. That’s at least so in the short term although there is a risk to long term trade if we cannot negotiate good trade deals.
Those companies (such as Whitbread whose AGM I attended a couple of days ago) who are mainly focussed on UK customers may be little affected unless the UK goes into recession and household income is reduced or taxes rise. The threat by the Chancellor to bring in an emergency budget would be seriously damaging to the economy, but probably also to his and Dave’s chances of staying in power.
The key surely is for the Government not to rush into invoking Article 50 which triggers the 2 year countdown to exit.
It is of course possible that stock market traders may simply panic, particularly the international holders of UK stocks which are now the majority, as they may not understand the finer points of what might happen. In that case there should be some bargains to pick up. In these kinds of circumstances it’s a good idea to be flexible in temper and see what arises.
Interesting to read the press reports of the Tesco AGM yesterday. It seems that shareholders were not impressed by moving it to Excel in East London. The travel disruption in London because of the storms was a major problem which I suffered from also. I was heading to a meeting at the London Stock Exchange to discuss AIM, but we arrived an hour late having to divert via the DL:R, taxi and walking. The way back to Chislehurst was no better with trains cancelled or delayed. But it’s certainly true that Excel is not the ideal location for AGMs (I only recall attending one there before which was Barclays). ShareSoc recommends that AGMs be held in convenient locations in central London (the City or West End) as that maximises attendance and assists those shareholders who wish to attend.
Roger Lawson
Have you considered recommending AGMs to be held in the afternoon? From my point of view I’d find it much easier to attend a London-based AGM in the afternoon.
On the question of the impact of Brexit, did anyone ask Whitbread what fraction of their employees are EU migrants? Tight visa restrictions could make it much harder for them to find staff.
We have not considered that recommendation re AGMs specifically but it’s not a bad idea – certainly seemed popular at Whitbread. It would of course save companies from having to provide lunch although some shareholders might complain about that. Whitbread provided “lunch” even though the AGM started at 2.0 – sandwiches both before and after the meeting.
Nobody asked Whitbread what fraction of employees are migrants. A future Brexit might reduce the supply of cheap labour and there are good and bad points associated with that.
Roger Lawson