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Strategic trade
Trade view / 09 June 2016 at 10:44 GMT

#SaxoStrats: How a Brexit could boost healthcare stocks

Head of Equity Strategy / Saxo Bank
Denmark
Instrument: SHP:xlon
Price target:
Market price:
SaxoStrats












Background
 
In a "Leave" scenario, UK healthcare stocks such as GSK, AstraZeneca, and Shire are the winners with a large revenue exposure outside the UK driven by the expected-to-be weaker GBP. 

Shire, with 73% of its revenue from North America, is particularly  sensitive to changes in GBP. 

Another way to play a Brexit is buying ATM put options (15-Jul) on FTSE 100 currently (June 3) priced at 2.5% Given that the FTSE 100 traded 10% lower back in February, the downside is substantial in equities from the uncertainty post a Brexit result.

For more details on this trade, view the related video here.

GlaxoSmithKline:
GSK

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Source: Saxo Bank 

AstraZeneca
Source: Saxo Bank

Shire:
Shire
Source: Saxo Bank 
 
— Edited by Michael McKenna

For more on equities click here.

Non-independent investment research disclaimer applies. Read more

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