Markets around the world, and companies with links to Scotland, welcomed the results of the Scottish referendum Friday, which saw voters come out in record numbers to choose to remain part of the United Kingdom. It was feared that a vote in favor of independence would set off an undesirable domino effect that would destabilize the region and the global economy.
Shares of the Royal Bank of Scotland, or RBS, rose nearly 3 percent, while that of Lloyds Banking Group rose 1.7 percent in early trading Friday as markets gave a thumbs-up to the outcome of the referendum. The Edinburgh-based RBS, which had earlier said that it would move its operations to England if Scotland seceded from the UK, announced on Friday that it was dropping its plans to do so, according to a Reuters report.
“The announcement we made about moving our registered head office to England was part of a contingency plan to ensure certainty and stability for our customers, staff and shareholders should there be a 'yes' vote. That contingency plan is no longer required," a spokesperson for the bank reportedly said.
Lloyds Banking Group also reportedly said that it would maintain a “significant presence” in Scotland.
European stocks rallied on Friday as London’s benchmark FTSE 100 index traded near a 14-year high, according to a Bloomberg report. The FTSE 100 -- an index comprising of 100 blue-chip companies on the London Stock Exchange -- gained 0.7 percent in early-morning trade Friday. The cheer also spread to many European markets as the Euro STOXX 50 index and Germany’s DAX both rose 0.85 percent, while France’s CAC 40 gained 0.56 percent in early morning trade.
A number of business groups, including the Confederation of British Industry, the British Chambers of Commerce and the Federation of Small Businesses also welcomed the vote, stating that it would lead to greater certainty in the markets, BBC reported.
Tom Elliott, an international investment strategist at deVere Group said, in a statement, that the financial markets would continue to rally now that the possibility of a “major upheaval” had diminished. “In the near term, there will be little repercussions from events over the past two weeks on the UK economy.”
However, the pound sterling, which had earlier climbed to $1.65 against the dollar, slipped to $1.64 by mid-morning Friday over political uncertainty over the impact of the vote on UK elections in May 2015, Reuters reported.