FTSE Fails To Recover After No Vote Takes Lead in Scottish Vote

Despite Scottish shares mounting a mini-revival after a new poll, markets have edged lower as nervousness about the referendum in a week’s time and the global outlook continues.

The poll – for the Daily Record – showed a majority against independence ahead of the vote. Andy McLevey at Interactive Investor said:

Although the latest poll indicates a lead for those opposed to Scottish Independence the uncertainty surrounding the outcome of the referendum vote and potential repercussions continue to be a concern for investors and we can expect a nervy and potentially volatile week ahead.
Even so, companies with Scottish links have rallied. Standard Life has been lifted 11.2p to 418.6p, Royal Bank of Scotland has risen 4.2p to 346.4p and Lloyds Banking Group is up 0.57p to 73.80p. SSE has added 30p to £14.75, helped by RBC analysts raising their target price from £15 to £15.80. RBC said:

SSE is potentially a significant winner from the introduction of the UK capacity market which we forecast will add just over £300m of EBITDA. This positive exposure to the UK capacity market, clarity on regulated networks and actions taken to correct the balance sheet net-off against continued political and retail market risk.

We see limited downside to our conservative assumptions. The double whammy of Scottish Independence and a Labour victory may not ultimately impact longer term profitability at SSE, although we recognise a potential hit to sentiment.

via The Guardian

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza