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Brexit could see £346bn wiped off value of UK's biggest companies, analysts warn

Published 22/06/2016

A Brexit vote would send the London market into a nosedive, according to investment bank UBS
A Brexit vote would send the London market into a nosedive, according to investment bank UBS

More than £346 billion could be wiped off the value of the UK's biggest companies if Britain votes to leave the EU, analysts have warned.

A Brexit vote would send the London market into a nosedive, plummeting to levels of between 4,900 and 5,500, according to investment bank UBS.

It would be the first time the market has dropped through the 5,000 threshold since it came under pressure during the eurozone debt crisis five years ago, while a slide to 4,900 would be the biggest fall in its history.

In a note, the bank said: "Following the risk-rally of the last few days, we believe there is significant room for downside in the event of a Leave vote.

"We estimate percentage moves in the mid-teens for UK and EU equities but materially smaller moves for the S&P 500 and EM equities.

"While the pound may come under significant pressure, the euro may be more stable. Risk currencies (Swiss Franc and Japanese Yen) would benefit, but policy responses could limit the degree of strength quickly."

However, the bank found that a vote to remain could spur the London market towards a near 9% rise, as UK and European stocks embark on a "significant relief rally".

The FTSE 100 dropped below the 6000 mark for the first time in nearly four months on Tuesday June 14 as the polls signalled that Britain may vote to leave the EU.

However, more than £47 billion was put onto the value of the UK's blue-chip firms on Monday, as investors snapped up financial stocks amid easing concerns over a British exit from the European Union.

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