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UK markets swing towards Scottish ‘No’ - UK
UK markets swing towards Scottish ‘No’ - UK

UK markets swing towards Scottish ‘No’ - UK

MARKETING NEWS

IOL Business - Sep 19th 2014, 10:24

UK Markets were laying bets that Scots would vote “No” on independence yesterday, pushing the pound to a two-year peak against the euro and Scotland-based stocks higher in the final hours of polling. 

Ever since a poll almost two weeks ago showed a surge in support for the “Yes” campaign, worries have been growing that Scotland would vote for independence, sending a shock wave through Britain’s political and financial system.

Nevertheless, as trading rooms got ready for an all-night vigil before the results are known early this morning, the polls started to shift. Sterling added to gains this week when the latest survey showed the “No” vote holding its slender lead.

The poll yesterday, published by London’s Evening Standard newspaper as Scots began to vote, showed 53 percent in favour of the status quo, versus 47 percent for independence. In contrast to previous polls, undecided totalled only 4 percent.

“It seems people are growing reasonably confident of a ‘No’ vote in Scotland,” said Ian Gunner, a portfolio manager at Altana Hard Currency Fund.

Sterling gained 0.7 percent against the dollar to trade at $1.6409. That compared with a 10-month low of $1.6051 struck last week. It gained to 79p per euro, its strongest in two years.

UK government bond yields rose, as traders backed a “No” vote they saw as clearing the way for the Bank of England to raise interest rates before parliamentary elections next May.

Analysts said much market chatter in the past two days had surrounded the short odds given by UK bookmakers on a “No” vote. One of the main online betting platforms, Betfair, has already paid out on a vote against independence.

“Despite the opinions poll being very close, there is a lot of focus on the fact that the analysis done by the bookmakers is much more suggestive of a ‘No’ vote. The market is taking comfort from that,” said Rabobank strategist Jane Foley.

Betfair were offering odds of 4 to 1 for a Scots “Yes” yesterday, versus 1 to 6 for a “No”.

A number of major Scottish-linked companies have suffered from the speculation of a split, worried by the operational costs as well as uncertainty over investment and the future shape of regulation and government in the new state.

Securequity sales trader Jawaid Afsar said he had bought shares in power-generation company Aggreko, which is headquartered in Glasgow.

Aggreko was up 0.5 percent, while Royal Bank of Scotland and Aberdeen Asset Management fared better, rising by 1.3 percent and 2 percent respectively.
From © Independent On-line 2013. All rights reserved. 

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