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Trending: Overseas investors circle Britain PLC after Brexit vote

Last updated: 20:12 18 Jul 2016 BST, First published: 15:12 18 Jul 2016 BST

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An irony of the past three weeks is that investors in the UK have begun looking abroad for returns in spite of having voted to leave the European Union and take control back of their nation.

Now that the rhetoric over reclaiming sovereignty has faded and a new government has to decide how to approach the thorny issues around renegotiating Britain’s trade and foreign relations with Europe, it is also a time when investors are looking outside of the UK for their next investment. Or are they?

Certainly, blue-chip FTSE100 index stocks with exposure to European and north American interests have fared better than their smaller UK-centric FTSE 250 index counterparts in London in the past few weeks. Since their close on June 23, the eve of the EU referendum result, the blue-chip stocks have gained nearly 400 points and on Monday were at 6,695, their highest level since early August 2015.

Meanwhile, the FTSE 250 index is around 500 points lower over the same period, at 16,867.

While Israeli Teva Pharmaceutical Industries Ltd. (NYSE:TEVA) might be heading towards one of the year’s largest US corporate bond deals as foreign investors stampede for the debt, it is also evident that – at least in the short-term – overseas investors are circling good value deals, make that bargains, in UK corporate land.

A 15% weaker sterling against the US dollar in a year has led Tokyo’s SoftBank Group Corp's £24.3bn takeover of ARM Holdings PLC (LON:ARM) to become what may be the first of many as the pound falls.

The question everyone is asking is whether it is only sterling which is driving this corporate action. And if it is, how long will sterling remain low before it bounces back stridently, if at all?

Analysts have been quick to explain that sterling’s fall was not the singular catalyst – no one wants to buy a business solely because the home currency has come off – but as ARM’s founder, Hermann Hauser, emotionally told the Financial Times on Monday the takeover was one of the unintended results of Brexit. He maintained that sterling’s fall made his business cheap and while the Japanese company may have been mulling an offer for some time the opportunity to buy now came along.

Following the ARM Holdings announcement Dealogic data showed on Monday that foreign companies’ share of UK Merger & Acquisition deals has hit 81.3% - a fresh record high. It compares with 78.6% in the same period last year, and 37% in the wake of Europe’s huge financial and sovereign debt crisis in the same period of 2010.

Britain’s new finance minister Philip Hammond has vowed not to “stand by and watch British companies be asset stripped by foreign predators” but precisely what the UK government can do about protecting its businesses is open to debate.

For one thing, it would smack of protectionism and as such would complicate efforts to rebuild relations with European trading partners.

With foreign buyers arriving from outside the EU, from north America and from Asia, as their host currencies burgeon against sterling, the remainder of this year could prove to be a watershed for the future of what was once called the economy of shopkeepers.

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