The current period in the United Kingdom is a period of transition; however, the new year promises to bring with it immense possibilities and new value creation ideas. Brexit not only brought large scale business disruptions but has also brought about new political and business realignments. Economic blocs which were closer earlier have now fallen apart and new economic alliances are being formed, as a consequence industries which were on the decline once now seems to be getting new lease of life and most importantly skill development in the United Kingdom is likely to get a big boost because of this.

Given the changing scenario, below we are discussing five ideas that could give rise to big possibilities in the post-Brexit era followed by five fabulous UK stocks under 100 GBX with immense possibilities and in conditions when you are on a tight budget.

Domestic retailers – The domestic retailing business is going to be the sector to benefit the most from Brexit, during the days of the European Union, cheap consumer goods used to flow into the United Kingdom which meant an eventual decline in production of many types of consumer goods. In the post- Brexit era as new taxes are levied on these imported goods, profitability in domestic production will rise leading to substantial growth in the short to medium term in the fortunes of domestic retailing companies.

Real estate – The real estate market in the United Kingdom during the post-Brexit announcement to the actual withdrawal period has been severely battered on account of the politico-economic uncertainty of the finer details of the process of disengagement. The prices of new as well as old properties especially in the city of London have seen serious weakness during the period, with most of the building construction companies and real estate brokers in the countries reporting their books in the red. In the post-Brexit era, a big boom could very well be expected in the country’s real estate market, as new demand would get a boost with pent up demand from these weak growth periods.

Alcoholic Beverages – The alcoholic beverages market will get a major boost in the post-Brexit period, more importantly, on the premium side of the market. Several east European countries have been exporting premium wines to the advanced markets of London, Paris and such other cities with preferential EU tariffs, now with the preferential era not in place, those items would be expensive to buy in the United Kingdom. This new scenario is a big opportunity for the domestic alcoholic manufacturers and companies in the United Kingdom who would see the demand for their produce shoot up exponentially.

Hi-Tech Engineering goods – In the pre-Brexit era, many of the engineering goods manufacturing companies sourced their components from European Union countries which would provide them with these commodities at a lower price than that could be procured in the United Kingdom locally. Over a period of time, this practice led to a decline in the component manufacturing industry in the United Kingdom. With the enhanced tariffs in place in the post-Brexit era, there will be renewed opportunities for the domestic manufacturers of these components in the United Kingdom leading to a major boom in the prospects of the companies engaged in this business in the short to medium-term time frame.

Tourism Industry – Another industry that will hugely benefit in the short term is the British tourism industry. Two things had happened in the past two years, first, the British Pound Sterling suffered a significant downtrend, and foreign tourists have been avoiding the country on account of the uncertain political environment, same is also the case with British travellers wanting to go outside and postponing their plans on account of the weak Pound Sterling. Post-Brexit in the short run when the Pound Sterling is still trading at a discount and the political situation improving, tourist inflow into the country could get a big boost, ensuing rise in the fortunes of British travel companies.

Five promising stocks for 2020 and beyond.

  1. AA Plc

AA Plc (LON: AA) is the United Kingdom-based company which operates in the roadside assistance and insurance businesses. The company is a leader in the UK roadside assistance market and offers personal and business partnerships, and services like driving lessons training within the Driving Services division. The insurance business of the company operates as a diverse panel of underwriters and focuses primarily on motor and home policies.

Source – Thomson Reuters

At the time of writing of this report at 10.33 GMT on 27 December 2019, the shares of the company were trading at GBX 57.05, higher by 3.17 per cent over the previous day close. In the past one-year period however, the company has given a negative 16.46 per cent return.

  1. UK Commercial Property REIT Limited

UK Commercial Property REIT Limited (LON: UKCM) is St. Peter Port, Guernsey based closed ended Real Estate investment trust company that operates as a part of the Aberdeen Standard Investments Group. The company’s Estimated Net Asset Value cum income as of 31st October 2019 stood at GBX 92.28 per share. The company’s primary investment objective is to provide the ordinary shareholders of the company with an opportunity to generate an attractive income along with the possibility for the growth of their capital and incomes by making investments in a unique and varied United Kingdom based commercial Real Estate portfolio.

Source – Thomson Reuters

At the time of writing of this report at 10.29 GMT on 27 December 2019, the shares of the company were trading at GBX 86.60, higher by 0.79 per cent over the previous day close. In the past one year the stock has given a positive return of 2.49 per cent.

  1. Tullow Oil PLC

Tullow Oil PLC (LON: TLW) is a London-United Kingdom-headquartered leading independent oil exploration and production company which works across all stages of the oil life cycle from exploration to production. The group seeks to draw upon multiple resources and relationships to create value and is focused on finding and monetising oil in Africa and South America, with interests in 80 exploration and production licences across 15 countries.

Source – Thomson Reuters

 At the time of writing of this report at 10.42 GMT on 27 December 2019, the shares of the company were trading at GBX 65.48, higher by 3.95 per cent over the previous day close. The company though have given a negative return of 60.17 per cent in the past one year

  1. Sirius Real Estate Ltd

Sirius Real Estate Ltd (LON: SRE) is the United Kingdom domiciled business of managing branded business parks, providing conventional and flexible workspaces across Germany. The company's main objective is to acquire business parks at attractive yields and integrate them under its own brand. In addition, the company offers reconfiguration and upgradation of vacant and existing spaces to the local market through its asset management and investments. The company aims to generate attractive returns for its shareholders by rental income and capital appreciation.

Source – Thomson Reuters

At the time of writing of this report at 10.40 GMT on 27 December 2019, the shares of the company were trading at GBX 86.00, down by 2.44 per cent over the previous day close. In the past one year the stock has given a positive return of 40.17 per cent.

  1. Premier Oil Plc

Premier Oil Plc (LON: PMO) is a London, the United Kingdom-headquartered multinational oil and gas exploration and production company, with reserves and resources of around 867 million barrels of oil equivalent as at 31 December 2018. The company has oil and gas interests in Latin America, the Falkland Islands, South East Asia and the North Sea, where the group seeks to invest in high quality opportunities.

Source – Thomson Reuters

At the time of writing of this report at 10.45 GMT on 27 December 2019, the shares of the company were trading at GBX 98.04, higher by 3.22 per cent over the previous day close. In the past one year the stock has given a positive return of 77.85 per cent.

The above are only indicative and selective list; several such possibilities exist within the GBX 100 threshold that can be explored by the investors in the ambit of above mentioned 5 ideas.

 

   
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