The results of the latest referendum in the UK has surprised political analysts and spooked financial markets the world over. With the so-called ‘Brexit’ now a reality, nowhere are the effects being felt as much as in continental Europe; not to mention within the UK itself, with stock markets across the continent being battered after the country voted to exit the European Union. While London's FTSE 100 recovered somewhat from the lows of the day as trading went on, it still ended in red, as did a bunch of other bellwether stock exchanges in the continent, including the CAC 40 in Paris, the Dax in Frankfurt and the Zurich SMI in Zurich, Switzerland.
With uncertainties about how the whole process of ‘British Independence’ (as the ‘Leave’ campaign put it) is going to pan out over the coming months and years, British companies and those with significant business interests in the region are seeing their stocks getting battered at the bourses on this remarkable day for the British Isles. Most of the sectors are feeling the heat, including technology and telecommunications. Vodafone is one such multinational company that’s based out of the UK and its stock is no exception to the rule either. The company, along with Germany’s Deutsche Telekom, are just two notable examples of prominent European telecommunication firms that are feeling the heat following the declaration of the results of the referendum in Britain.
While the stocks of both companies plummeted 7% in early trade on Friday morning, not all telecom firms are suffering from the ill-effects of Brexit. American telecom giants, AT&T and Verizon Wireless, actually seem to have weathered the storm better than most, with Verizon shares trading flat and AT&T down nominally after the declaration of the referendum results. Japan’s NTT (Nippon Telegraph and Telephone) is another such telecom company that has seemingly managed to walk away from Brexit relatively unscathed. T-Mobile US (owned by Deutsche Telecom AG) however, saw its stock fall 4% on Friday morning trade in the U.S. It remains to be seen how the whole thing pans out for multi-billion dollar businesses as well as for regular UK citizens in the long run, but for now, the ECB (European Central Bank) and the Bank of England have a tough task ahead of them trying to convince investors that they have plans in place to prevent a hard landing for European economies.