The CYBG Plc (ASX: CYB) share price is up another 8% today on promising news on Brexit discussions.
CYBG is one of the challenger banks in the UK, it operates Clydesdale Bank, Yorkshire Bank and Virgin Money UK. It was spun out of National Australia Bank Ltd (ASX: NAB).
CYBG’s Rocketing Share Price
Today the CYBG share price is up around 8% but in just the past week the CYBG share price has gone up around 33%. That’s a fast return for a bank!
PPI claims had caused a short term hit to earnings and the share price whilst Brexit uncertainty has been like a cloud on the UK economy with investors fearing the UK would crash out of the EU without a deal.
The UK would probably be able to settle down after a period, but the adjustment period would certainly be rocky.
UK media are reporting that a Brexit deal with the EU is imminent, although Prime Minister Boris Johnson has played down that prospect by saying there’s more work still to do.
The Guardian has said that a draft treaty may be published today that says the UK has made further concessions about customs and the Irish border, which is one of the sticking points. There could be a bad reaction in Ireland and Northern Ireland if there’s a ‘hard’ border between the two countries, yet the UK doesn’t want to maintain the open customs union with the EU. A catch 22.
The Irish leader has also said that talks were moving in the right direction, but gaps still remained.
What Would This Mean?
Two of the biggest worries about global growth is the US – China trade war and Brexit. If the UK issue can be solved then global investors would feel better about the situation.
I don’t think I want to buy CYBG shares at this price. The recovery is now priced in, yet a Brexit deal is definitely not guaranteed. I’d rather get my UK economy exposure through the exchange traded fund (ETF) BetaShares FTSE 100 ETF (ASX: F100).
Even better than the ETF, the growth shares in the free report below are achieving global growth for investors.
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