News Column

Stocks report weighs worth of 'Scotsie 100'

July 15, 2014

Nick Fletcher



What if instead of Buy Buy Footsie, it was Buy Buy Scotsie?

As the vote on independence approaches, a report shows that a notional index of 100 Scottish companies currently listed on the London Stock Exchange would have grown by 5.7% in real terms (with dividends reinvested) since 1955.

But it would have been outperformed by stocks from the rest of the UK, which rose 6.8% over the same period. The difference is due to the predominance of financial companies in the "Scotsie 100", in particular the near collapse of Royal Bank of Scotland and HBOS in the banking crisis. Without this, it would have outperformed the UK index by a small margin.

The report, by the London Business School and consultancy Walbrook Economics, uses the location of a company's headquarters to judge whether it is Scottish or not. Apart from financial companies such as banks and investment trusts, the Scotsie index is dominated by utilities, and oil and gas companies.

The research was driven by the question of whether Scotland should set up its own stock exchange - something which existed until 1973 - as other countries have done after independence. If all Scotsie 100 stocks chose to list on a new Scottish bourse, it would rank 28th in the world.

But the report concludes: "It will be a tough challenge to attract the Scotsie 100 companies away from the large liquid international London exchange."



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Source: Guardian (UK)


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