Corbyn a Bigger Threat to Telcos than Brexit

Morningstar equity analysts are more concerned about the future of British politics than the impact of Brexit when it comes to telecoms stocks

Allan C. Nichols, CFA 14 December, 2018 | 7:28AM

Jeremy Corbyn leader of the Labour Party is a bigger threat to stock markets than Brexit

On a macro basis, the big overhang on the UK market has been Brexit. So far, the main effect on the UK from the Brexit vote has been a weaker currency, which impacts investment outside of the UK, but hasn't really hurt the economy, which has held up quite well.

The concern is that a hard Brexit or no deal at all could cause the economy to go into a recession. While a recession would likely slow revenue growth for all British companies, the effect on telecom operators is likely less than on the average firm, in our opinion.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Rating
BT Group PLC105.73 GBX-2.10
Vodafone Group PLC117.95 GBX-1.91

About Author

Allan C. Nichols, CFA  is a senior stock analyst and international investing specialist with Morningstar.

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