×
You will be redirected back to your article in seconds

Financial Markets Settle Post Brexit But Market Stabilization Could Be Short-lived

LONDON — Despite continued apprehension over Britain’s vote to exit the European Union, nerves in the world financial markets have begun to settle, with London’s FTSE 100 closing Wednesday above its pre-referendum level for the first time since the historic vote. 

ITV, which suffered an initial 21% share price fall the day after the referendum, wiping almost £2.5 billion ($3.36 billion) off its stock market value, saw prices up by 7% at 177.7p a share. However, the share price remains 20% down from what it was before last week’s referendum.

Sky’s share prices also saw a boost Wednesday, with shares up 4.15% at 853p per share, while pan-European media conglomerate Vivendi, based in France, was up 4.66%. Germany’s ProSiebenSat saw a 2.43% rise.

The British pound gained 1.2% against the dollar to nearly $1.35 as the trading day in Britain ended. The upticks came as a relief after world markets suffered their biggest two-day fall in history following the U.K.’s decision to leave the European Union by a public vote of 52% to 48%. 

But media analyst Claire Enders said that any celebrations were premature, suggesting that the market stabilization would be short as Britain braces for a potential recession. 

“Things have become calmer in the financial markets as no one is pressing the button in the political sphere,” Enders told Variety. “But the reality is we are settling in for a very long-term political crisis with no chance of a common unified position before autumn.” 

She added that it was “very unusual” for a political crisis to cause an economic crisis, as the reverse was normally the case. “We in the business community are doing all we can to calm things down, and that’s working and the wheels are moving,” Enders said. “But it’s a short-term stabilization, and there is no doubt that a 20% drop in the value of ITV is very significant. And overall, the picture indicates a strong chance of recession.”

In a hint of what could come when Britain’s pullout from the E.U. is complete, telecoms giant Vodafone warned that it could move its headquarters from the U.K.

In a statement, Vodafone said it was important for Britain to retain access to the E.U.’s free “movement of people, capital and goods.” While it was too early to make any long-term plans for the firm’s headquarters, Vodafone said  it would “take whatever decisions are appropriate.”

Vodafone employs about 13,000 people in Britain and is headquartered in London. It said that 55% of group profits in the last financial year came from its European operations, with the U.K. providing just 11%. The company is also set to start reporting its financial results in euros instead of pounds. 

“Once the English language is shut out of Europe, we are not a strong position at all, we are in retreat,” says Enders. “The real swing is that all of the media stocks, roughly speaking, will be down 20-30% and that’s pretty significant.”

More Biz

  • iHeartMedia Promotes Angel Aristone to Executive

    iHeartMedia Promotes Angel Aristone to Executive VP of Communications

    Angel Aristone has been promoted to executive vice president of communications for iHeartMedia, the company announced today. According to the announcement, Aristone will continue to position iHeart as a media and entertainment leader through proactive strategic communication efforts on both a local and national level. She will also continue to oversee media relations and external [...]

  • Kevin Tsujihara

    Kevin Tsujihara Out as Warner Bros. Chief Amid Sexual Impropriety Scandal

    Kevin Tsujihara has resigned his post as chairman-CEO of Warner Bros. following an investigation into his relationship with actress Charlotte Kirk and allegations he used his clout to help her find work at the studio. In a statement, Tsujihara said he realized “my continued leadership could be a distraction and an obstacle to the company’s [...]

  • TV Ad Sales Upfronts

    NBCUniversal, Sky Make Joint Ad Offering as TV Upfront Looms

    NBCUniversal and Sky PLC will offer joint packages of advertising services, a new effort to monetize the European satellite broadcaster, which was purchased by parent Comcast Corp. for $39 billion last year. Advertisers will be able to reach customers in sundry international markets as well as the United States, using inventory across NBCU and Sky [...]

  • Robert Iger and Rupert Murdochcredit: Disney

    Wall Street Applauds as Disney Nears Finish Line on Fox Acquisition

    Wall Street is rooting for Disney as the media giant reaches the finish line this week in its 15-month quest to acquire most of Rupert Murdoch’s film and TV empire. Fox shareholders, on the other hand, are being a little more cautious. Disney is poised to close the $71.3 billion deal that took many twists [...]

  • Sony Music Names Amanda Collins Head

    Sony Music Names Amanda Collins Global Head of Corporate Communications

    Amanda Collins has been named executive vice president and global head of corporate communications for Sony Music Entertainment, effective immediately, it was announced today by CEO Rob Stringer. According to the announcement, in this role she will be responsible for the company’s global internal and external communications strategy and its implementation around the world, working [...]

  • Trocadero

    Philadelphia’s Iconic Trocadero Theatre to Close, Owner Confirms (EXCLUSIVE)

    After several days of rumors and a last-minute attempt by local promoters to save it, Philadelphia’s Trocadero Theatre — part of the city’s entertainment skyline since 1870 — is closing at the end of May, owner Joanna Pang confirms to Variety. The last of the city’s mid-sized independent live venues, the 1,200-capacity Chinatown performance palace [...]

  • FilMart: China's Times Vision Steps Into

    FilMart: Arthouse Distributor Times Vision Steps Into Sales (EXCLUSIVE)

    This year’s FilMart marks the international sales debut of Beijing-based distributor Times Vision, which brings to Hong Kong a slate led by crime thriller “Savage” and animated feature “Nezha.” The company will be presenting nine live action films, including one documentary, and seven animated titles. Times Vision is led by CEO Nathan Hao, who co-founded [...]

More From Our Brands

Access exclusive content