Introduction
Amidst a backdrop of political and economic uncertainty, 2018 was a turbulent year for UK capital markets. BDO’s six-monthly analysis of the UK’s key markets (click here to view the AIM insights and the Main Market insights) has demonstrated that as we head towards some sort of conclusion to Brexit talks, the public markets are craving certainty. But what has been the impact on transaction activity since the UK voted to leave the EU in 2016, and what could be in store for the markets for the rest of this year?
Indexed FTSE and AIM all share performance since 2016
Year on year transactional performance on the Main Market and AIM
FTSE indices
Having been rocked by the UK Referendum in 2016, the UK capital markets gradually recovered and climbed to record highs in 2017. This was driven in large part by the ever weakening Pound, with internationally-focused businesses (in particular the constituents of the FTSE 100) significantly benefitting from their foreign-denominated revenues being worth more when translated back into Sterling. AIM also rallied over the same period, its returns actually exceeding those of the broader FTSE market, possibly a reflection of the market’s higher exposure to thriving sectors like technology.