To get a better insight into trading activity around one of the UK’s biggest political decisions, we have dissected the top bought and sold shares, sectors and funds – both before and after the Referendum – to see how investor sentiment changed.
There had been much speculation prior to the vote about which sectors and companies would be most adversely affected should it be a vote to leave and this was undoubtedly played out on the Friday morning immediately after.
Shares
In the month prior to the vote, four of the top five bought companies were from the most widely held companies at The Share Centre, demonstrating that investors were sticking with what they knew and not preparing to take a risk. After the vote, and as expected for a Brexit decision, the top sold list was made up of companies from within sectors deemed to be most affected and at risk.
Interestingly, Glencore’s presence could be down to some profit taking from investors given that if they had invested at the beginning of the year and sold out before the Referendum, they would have nearly doubled their money!
Results day was the busiest trading day in The Share Centre’s history and even though a number of companies were heavily sold in the immediate aftermath, savvy investors were on hand to jump on buying opportunities. Indeed by early afternoon, we had seen 56% of trades as buys and 44% of trades as sells, with the top traded stocks being the large blue-chips within the financial and housebuilding sectors.
Given the initial extreme market volatility witnessed, a significant number of stop loss limits were triggered and we created a Brexit checklist to provide investors with further information about how to navigate volatility in uncertain times.
Sectors
It is interesting to note the huge change in the top traded sectors before and after the Referendum. The data suggests that beforehand, our investors were buying into weakness in both the oil price and commodities, as well as seeking out gold as a safe haven in the event of a Brexit vote. It also indicates that there were a number of investors who were fearful of the vote, preferring to sell out of the sectors most likely to be impacted and therefore protecting some of their hard earned gains.
In the immediate aftermath, the story was very different. In respect of purchases, both the banking and construction & materials sectors were sought, reflecting and reiterating again that investors were looking for value opportunities following the strong sell off. Travel & leisure was also seen as a potential investment opportunity given the strong sell off around the likes of EasyJet & TUI.
Funds
Prior to the vote, it was evident that aside from the perceived safety and protection afforded by Woodford and Fundsmith, investors believed the Japanese reforms still had further to go and that gold would act as a safety net in the event of extreme market volatility. These themes appear to have continued post Brexit.
In respect of funds sold, there isn’t necessarily a theme given that the investment holding period is always generally much longer and therefore a variety of reasons could be put forward as suggestions why.
Undoubtedly, the very strong sell off within the UK mid-cap arena and concern around the UK property market can be attributed to two of the constituents. Whilst for those who invested in a gold fund focused on gold mining companies since the start of the year have seen exceptional growth and may have therefore been locking in some profit.
Source: The Share Centre
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