Perhaps surprisingly, the shares of medium- and large-sized companies fared better in the UK than in the US, the euro-zone and Japan, in the aftermath of the vote for Brexit. Much of this outperformance was fuelled by the weakness of sterling, which improved the outlook for UK exports and increased the value in sterling of the earnings of UK multinationals’ foreign subsidiaries. This more than trumped a post-referendum fall in the share prices of firms that generate less revenue from abroad, such as those in the consumer discretionary and financial sectors.
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