1 Singapore Stock That Might Actually Be Impacted If Brexit Happens

Over the past few weeks, the market has been jittery about whether Britain would vote to leave the European Union. Dubbed commonly as “Brexit,” fears of Britain’s departure from the union has caused market volatility.

The issue is getting so much attention that even international political and business leaders are chiming in with their views on how the people of Britain should vote.

Many business leaders in Asia think that their investments in Britain would suffer if British voters choose to remove Britain from the European Union. Asia’s richest man, Li Ka-Shing, had even commented that if Britain does leave the European Union, he would consider cutting down his investments in the country.

Meanwhile, the value of the pound sterling, Britain’s currency, might depreciate in the wake of a Brexit.

As investors in Singapore, it’s important to understand that most companies in our stock market here do not have business interests in Britain or in Europe. These include the blue chips that make up the Straits Times Index (SGX: ^STI). So, for most Singapore-listed stocks, it’s likely that a Brexit, if it does happen, would not really have a significant impact.

But, there are still companies that might be at a disadvantage if Britain votes to leave.

One such firm is real estate developer City Developments Limited (SGX: C09). Over the past few years since Singapore’s property market started slowing down, the company has been actively diversifying its business into other countries. Today, 45% of the company’s assets are located outside of Singapore.

And based on its development pipeline, the United Kingdom is where City Developments has the largest number of international projects. The company has also invested more than £400 million in the UK since 2013 and plans to invest more.

What would happen to all these investments and projects if international investors no longer deem Britain as an attractive investment destination? Does that mean that City Developments might once again need to diversify away from another slowing property market? These are questions investors in the company may want to think about.

For more investing insights and to keep up to date on the latest financial and stock market news, you can sign up for a FREE subscription to The Motley Fool's weekly investing newsletter, Take Stock Singapore

Also, like us on Facebook to follow our latest hot articles. The Motley Fool's purpose is to help the world invest, better.

The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore writer Stanley Lim does not own shares in any companies mentioned above.