Economies around the world, especially those that are in economic ties with Europe, expect a change in strategies and policies as the United Kingdom decided for the Brexit. The Australian Companies' strong performance in the European Union market shows that they were able to fend off the ups and downs of the European economy brought by uncertainties in the effect of the United Kingdom's decision.
The European Union secured the trade within its members and has allowed each nation's citizens to freely live and work in any of the member nations. The United Kingdom became part of the union in 1973 under the European Economic Community. In June 2016, a referendum was initiated to let the people decide whether the United Kingdom needs to remain under the European Union or not. The result showed that nearly 52 percent of the voters wanted to leave the union.
The International Monetary Fund warned of the negative effects of the Brexit. Economic experts believe that Brexit will contribute a large effect on the United Kingdom's economy.
The heightened risk of the effect of the Brexit brought down global equities. It, however, created a window of opportunity for those who can see through its doom. Australian stocks made some significant exposure in the United Kingdom.
The pressure on the Brexit presented a long-term trade opportunity for many ASX-listed companies that have operations in the United Kingdom. The National Australian Bank is the owner of the Yorkshire and Clydesdale banks in Northern England. The company shows 100 percent of profit growth in Britain.
The Henderson Group Plc, an ASX and London Stock Exchange-listed company closed to $4.48 this week from $5 last week before recovering at a small price. The company has shown excellent ratings for more than three and five years.
Recently, the United State and the United Kingdom agreed to impose certain measures to ensure that there is no disruption in the trading and the post-Brexit clearing activities. Mark Carney, governor of the Bank of England, said that the United States and the United Kingdom have special responsibilities to keep their markets resilient, efficient and open. He also said that Market participants can be confident that the clearing and trading of derivatives between the two nations will maintain the high standards of today when the United Kingdom leaves the European Union.
The European authorities are also working towards countering the possible disruptions to clearing and derivatives trading as a result of Brexit.
