How Vodafone could give FTSE a lift this year
British markets could be brought out of the doldrums by Vodafone’s selling of its Verizon Wireless stake.
Investors may well start selling the shares they acquired through the $130bn (£79bn) sale of the Verizon Wireless stake to Verizon Communications.
The third-biggest deal in corporate history saw spoils so big – with $84bn to be paid in cash and shares at the end of this month – that many are expecting it to boost the whole economy.
The UK funds that hold a chunk of Vodafone shares are often obliged to invest in UK companies – either actively, or by passively tracking indices.
"For some of these funds, it could be two to three per cent of their fund's AuM (assets under management) returned to them in cash. Their mandates might dictate that this is too much for them not to reinvest it straight away," said Ben Lynch, Citi's global head of centralised risk trading, to Reuters.
It’s hard to get too much of an idea in terms of gains, but a number have estimated that the FTSE 100 could rise up to three per cent, moving it back into profit for the year.