It appears Brexit may soon go ahead, how can we profit from this decision?
What’s Happening With Brexit?
The Boris Johnson government has been desperately trying to get Brexit across the line by the end of October 2019.
He had managed to find a deal that was agreeable in Europe with EU leaders, so part two of the process was to get it approved by the UK parliament.
UK MPs approved the bill on its first hurdle through the political process by a vote of 329 to 299. But then straight away UK MPs rejected the timetable of the process because it was scheduled to go too fast.
So now the UK is asking the EU for an extension of the 31 October deadline so that it can be given the time to properly pass the necessary scrutiny.
I think it’s likely that the EU will agree to an extension because the UK parliament voted in favour. Mr Johnson doesn’t want a long extension, he’s talking about having an election to push things along, but he would need the back of parliament to do that too.
How Can We Profit From This?
There are few businesses on the ASX with a large UK presence. Ramsay Health Care (ASX: RHC) has some hospitals in the UK. Computershare (ASX: CPU) has a decent presence there.
It’s UK banking group CYBG (ASX: CYB) that is probably the best individual business to profit from Brexit progress. It operates the Yorkshire Bank, Clydesdale Bank and Virgin Money brands in the UK, so it’s quite linked to the UK economy. But its share price has gone up by 41.5% since 9 October 2019, so we’ve probably missed the boat on sentiment change here.
I think a better way to profit would be BetaShares FTSE 100 ETF (ASX: F100) which gives exposure to the 100 biggest shares listed on the London Stock Exchange like HSBC, BP, Royal Dutch Shell, Unilever, GlaxoSmithKline and Astrazeneca. I’d rather take a diverse approach than try to go for a single business like CYBG. The ETF is still cheap with investors still unsure about Brexit’s course.
But perhaps you don’t want to get involved with Brexit at all, which I can understand. I’d go for the reliable shares in the free report below in that case.
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