Scottish independence will hit oil, insurance and banks worst

Analysts at Liberum said the sectors most affected by the Scottish independence would be oil, life insurance and banking, with utilities, defence and housebuilders all having a mixed effect.

In a note from the broker published on Thursday, the analysts base their call on what happened following the mini-scare of 8 September after a weekend poll showed the yes camp in the lead in the latest Scottish polls.

On that ocassion the stocks which fell the most were: Lamprell, Babcock and Brewin Dolphin.

Liberum also said sterling weakening materially with a winning ‘yes’ vote would hit pension schemes with Scottish beneficiaries as they could be classified as cross-border under EU law. That means that any actuarial deficit – as opposed to that reported under IAS 19 – would need to be eliminated.

“There is a risk that exposed companies would be required to pay a significant cash top-up as a result."

The five largest affected companies due to the pensions hit would be BAE, BT, Tesco, Sainsbury and G4S.

Lloyds and RBS would be the banks more affected by the independence facing net increase in costs but a 'no' vote should see the pair enjoy a relief rally of between 3% and 5%.

The weakened sterling would most benefit chipmaker Imagination Technologies being the company most likely to benefit given its 60% exposure to the US dollar.

Meanwhile, the housing market has been impacted by the referendum, as uncertainties about the future could make people delay the decision of buying a house and undermine confidence in the housing market.

“A no vote should lead to a bounce in housebuilders’ shares as they are all 100% UK exposed, and we suspect that all UK domestics have come under pressure in the run-up to this referendum due to heightened uncertainty and overseas selling,” analyst Charlie Campbell wrote.

Oil and gas companies with ongoing operations should not be affected by the referendum, but the UK North Sea will obviously be impacted by uncertainty over fiscal policy.

With Scotland representing 9.2% of Great Britain’s consumer spending, retail sales trends would also be affected. Debenhams and Poundland have seen their share price fall by 4.5% and 3.1% respectively when the ‘yes’ vote took the lead.

According to the Liberum Consumer Survey, an independent Scotland would favour a larger government, which would mean more spending on road, council housing and less focus on tax cuts.

It would also have a more pro-EU attitude and be more optimistic about the housing market.