By Rob Davies
The FTSE and sterling may be falling but there are some winners emerging in the fallout from the UK’s decision to leave the EU. Gold investors, hedge funds, multinational corporations and property-buying oligarchs all stand to gain.
The price of gold usually rises in times of economic crisis because bullion is seen as a safe-haven asset.
Gold dipped as low as $1,255 in the lead-up to the EU referendum, when a remain win was widely predicted. In the aftermath of the leave vote it has risen nearly 6%in dollar terms, to $1,329 as of noon on Monday.
That spells good news for gold miners, who suddenly find that every ounce they produce is worth more.
Shares in Randgold Resources have risen more than 24%, from £64.38 the night before the poll to £79.80 on Monday afternoon. Fellow gold miner Fresnillo is up 21% over the same period to £15.
Dollar earners and defensive stocks
Any company that earns more money in dollars – or euros for that matter – than it does in pounds, stands to gain.This means that huge global multinational companies such as Unilever and Reckitt Benckiser are relatively protected from the turmoil. The two firms have seen stock market rises of 4.5% and 3% respectively since Thursday’s close.
Drinks companies also stand to gain, with Diageo selling huge volumes of Scotch and Guinness to overseas buyers. It has gained 5% since the vote.
Pharmaceuticals companies are among the biggest dollar earners and this is reflected in their share prices. GlaxoSmithKline has risen 5% since Thursday’s close, while AstraZeneca has climbed nearly 7%.
Pharmaceuticals are also doing well because they are seen as defensive stocks, places to put your money in times of turmoil. The economy may suffer, but people will still spend money on medicine.
The same is true of tobacco, and there have been rises for British American Tobacco, up more than 4%, and Imperial Brands, 3.5% higher. They also earn a large proportion of their earnings in dollars.