Sterling slump turns 13% FTSE jump to 4.5% fall for Irish investors

Currency’s fall following Brexit referendum highlights investor challenge, says expert

London's FTSE 100 stock market index's 13 per cent surge so far this year, driven by exporters such as Guinness's parent Diageo and drugmaker GlaxoSmithKline benefiting from a weaker sterling, looks less impressive when translated into euro or dollars.

Irish investors who committed money to the UK’s blue-chip stock index at the start of this year are now sitting on a 4.5 per cent decline on their investments, driven by sterling’s slump against the euro following the Brexit referendum.

"This highlights the challenge for investors as a result of sharp currency moves," said David Holohan, chief investment officer at Merrion Capital in Dublin. "An [Irish] investor can have a very strong share price performance [in a UK stock] but when converted back to euros the performance can be very different."

Oil and mining companies

While the UK's decision to quit the European Union in June has prompted a swathe of economists to cut their economic forecasts for the country, the dominance of exporters and dollar-exposed oil and mining companies in the FTSE have seen the London benchmark stand out as a strong spot across European markets.


The Iseq index has fallen by more than 10 per cent this year, leaving it on track for its first negative performance in six years.

Joe Brennan

Joe Brennan

Joe Brennan is Markets Correspondent of The Irish Times