Sunday share tips: EasyJet, Randgold, Imperial Brands, AstraZeneca
Sell EasyJet shares due to the likely turbulence sparked by the Brexit vote, said the Sunday Times' Inside the City column. The budget airline was created by Stelios Haji-Ioannou in the wake of the 1992 European Union Treaty on Open Skies, one of the supposedly rare bits of Brussels red tape that did away with restrictive rules that favoured national carriers and opened up the market. With uncertainty about how it will operate once the UK leaves the EU, its shares flew 14% lower on Friday. On the day of the referendum result, EasyJet that it had been "preparing for this eventuality in the lead up to the referendum vote and has been working on a number of options that will allow it to continue flying in all of its markets".
AstraZeneca
10,292.00p
16:49 14/11/24
British American Tobacco
2,803.00p
16:49 14/11/24
easyJet
517.40p
16:44 14/11/24
Fresnillo
629.00p
16:38 14/11/24
FTSE 100
8,071.19
16:49 14/11/24
FTSE 350
4,459.02
16:38 14/11/24
FTSE All-Share
4,417.25
16:54 14/11/24
Gas, Water & Multiutilities
6,037.66
16:38 14/11/24
GSK
1,353.50p
16:40 14/11/24
Imperial Brands
2,352.00p
16:45 14/11/24
Mining
10,475.37
16:38 14/11/24
National Grid
973.20p
16:38 14/11/24
Pharmaceuticals & Biotechnology
19,794.96
16:38 14/11/24
Randgold Resources Ltd.
6,546.00p
17:00 28/12/18
Tobacco
32,562.08
16:38 14/11/24
Travel & Leisure
8,632.62
16:38 14/11/24
The best case for the company, the column said, was that the UK manages to remain inside the EU aviation market, but it would require a great feat of negotiation. Either way, with sterling worth less against the euro, overseas trips become pricier. And if the UK slips into recession, this will also hit demand. The company's dividend hike announced in May was predicated on management confidence of growing passenger numbers and profits in 2016. While the share are healthily priced after their fall, the journey ahead will not be a smooth one.
Investors should keep calm and head for safe haven stocks like precious metals and tobacco giants, insisted Questor in the Sunday Telegraph, after the Brexit vote sent stock markets tumbling. Good Investors who had sold as stocks hurtled south could have locked in losses before many blue-chip shares rebounded. Although the long-term investing outlook has dimmed, sending the pound and equities down driving for government bonds, hasty decisions are often regretted. There will be an impact on the City of London position as the uncertainty over the UK's future diverts some money elsewhere.
Bonds, both government and corporate, remain an appealing investment. Shares may make a tentative recovery now that the deed is done, but as the implications sink in, with a UK recession possible, it will not last long. Three times in recent months the column has advised selling the house-building sector and even with the shares now cheaper, the outlook is worse post-Brexit. Metals miners Randgold ad Fresnillo, as recommended last week, remain attractive, likewise gold-focused ETFs. For income and a good level of exposure to US dollar earnings, drugmakers AstraZeneca and GlaxoSmithKline, cigarette companies British American Tobacco and Imperial Brands, as well as National Grid.
Please note: Digital Look provides a round-up of news, tips and information that is impacting share prices and the market. Digital Look cannot take any responsibility for information provided by third parties. This is for your general information only and not intended to be relied upon by users in making an investment decision or any other decision. Please obtain a copy of the relevant publication and carry out your own research before considering acting on any of this information.