Khalaf added that when considering the prospects for financials this week it is useful to consider how some of the big banks have performed since the Brexit vote. Using Bloomberg data Khalaf found Barclays has risen 28%, HSBC is up 55% and Standard Chartered has risen some 40%. On the other side of the coin, RBS shares are 2.2% down and Lloyds shares are a concerning 6.5% lower.
“Much of this comes down to the currency tailwinds enjoyed by those banks with international revenues, in particular HSBC, which is the largest single stock in the FTSE 100,” he said. “It’s stellar performance goes some way to explaining why the Footsie is close to a record high, seeing as it makes up over 7% of the index.”
By Friday afternoon, we will have a significantly clearer picture on the health of UK financials, which should provide a valuable clue on how to approach UK equities as an asset class as Brexit gets under way in earnest.
