Good morning!

Brexit impact

This is probably the most important issue of the moment, determining what shares are worth, so I will continue to focus closely on what is happening. Here is a link to search for companies mentioning "referendum" in their RNSs. It's very useful - take a look.

I'm increasingly coming round to the view that most sectors are gradually getting back to business as usual, post Brexit. That's not to say it won't have some impact, but evidence is mounting that we're not heading for any imminent catastrophe.

An example - one of America's largest banks, Well Fargo, has just agreed to buy an 11-storey London office building for c.£300m. That's surely a good endorsement of their perception of London remaining a major international finance centre. Also, of course the weakness of sterling just made everything a good deal cheaper for American (and other overseas) buyers.

In a similar vein, an update from British Land (LON:BLND) yesterday was reasonably reassuring. There's an article in The Times today, pointing out that BLND has very low leverage now - LTV of only about 30%, its properties are 99% let on longish leases (so fixed rents), and the shares are at a deep discount to NAV. So the market is perhaps pricing-in too much of a downturn? Who knows, time will tell. I'm tempted to dabble though, as the discount to NAV should reduce if confidence returns.


Sterling is doing exactly what floating exchange rates are supposed to do - i.e. when a country has some kind of economic shock, then its currency devalues. That makes it more competitive, and attracts inward investment, which enables the economy to recover. Although it also pushes inflation upwards, due to the higher cost of imported goods.

So if the currency devalues too much, then it can trigger a vicious circle of hyper-inflation, and collapse of the currency. So a controlled devaluation is good, whereas a massive & disorderly devaluation is bad. A bit of inflation also helps inflate away Govt & consumer debt of course, which is handy.

We've seen the fall in sterling attracting inward investment this week, not only with the property purchase mentioned above, but also with the arguably opportunistic Japanese takeover bid for ARM Holdings (LON:ARM) - again it's the devaluation of sterling which made it more …

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