The suspense over Brexit, or the United Kingdom leaving the EU (European Union), is finally over. The country has decided to leave the EU. Brexit received 51.9% of votes, and Prime Minister David Cameron resigned. Earlier, he had urged people to vote to remain in the European Union. Before the vote, opinion polls varied, but as voting day neared, the Market consensus was leaning toward a “remain” vote. That’s most likely the reason the markets and the world were shocked when the United Kingdom voted to leave the EU.
Since the “leave” camp won, the process of the United Kingdom exiting the EU will now begin. However, unlike the Market reaction, this process is going to take some time. According to some estimates, it could take more than two years. This unprecedented move could lead to more exits from the European Union. The Bank of England and the International Monetary Fund had warned of the long-term negative effects if the United Kingdom left the EU. However, pro-Brexit supporters argue that Brexit will benefit the United Kingdom in the long term.
In this series, we’ll see how Freeport-McMoRan (FCX) and other mining companies (GNR) such as Southern Copper (SCCO) and Turquoise Hill Resources (TRQ) (RIO) reacted to Brexit. We’ll also look at these companies’ valuation multiples and technical trading parameters to identify any potentially mis-priced bets in the sector following the Brexit carnage.