The markets have been left reeling following the announcement that Britain will vote to leave the European Union, with many caught completely off guard by the result of the Referendum. We asked our panel of business leaders from some of the town’s most successful and largest financial firms what they make of the result
CRAIG STRONG – Head of Capital Currencies
Friday’s Referendum result certainly shocked the country and has almost certainly divided it.
The Asian markets had an early run on sterling and it wasn’t until Mark Carney offered a statement saying that the pound would be supported and London traders got back into full swing that it bounced back a few cents across the board.
More uncertainty has been added with David Cameron stating he would step down as the Conservative leader by October, although this was expected should the Remain vote lose.
Despite George Osborne’s statement, following that of Carney in trying to reassure investors and the markets, sterling has come under renewed pressure.
Until some orderly control is taken back, the markets will see opportunities through what are very uncertain times ahead.
I don’t envisage anything changing overnight in our market, apart from the rates.
Needless to say we have had a rush of people who have liquidated their currency positions by taking advantage of the adverse move against the pound.
Others have been locking in forward rates to hedge and protect against any further downwards movement.
As nobody has a crystal ball it’s anyone’s guess as what comes next especially as there are now even more variables involved, but sooner hopefully than later, financial stability will return.
HARVEY WETHERILL – Chairman of United Brokers International – Tunbridge Wells-based insurance underwriters who operate predominantly in France
Following the Referendum result we have been busy implementing our contingency plan to ensure that UBI continues to operate successfully during the transition period and then our country’s final exit from the European Union.
The main challenge for us in the short term is to discourage our clients and partners from switching to competitors domiciled in other EEA countries.
ANDY BELL – Chief Executive of brokers AJ Bell
The Brexit vote will create a period of political and economic instability and this is likely to depress stock markets and economic growth in the short term.
The key now is who becomes Prime Minister and who leads the negotiation of our exit from the EU. The outcome of that process will determine the UK’s growth prospects over the long term.
From a customer perspective we have seen investors taking advantage of the fall in share prices to pick up bargains.
Seventy-three per cent of the trades via our website on Friday were buys, compared to 26 per cent sells. It is certainly not a time to panic sell.
Market movements driven by uncertainty and sentiment are normally short lived. Long-term it is profit and cash flow that drives share prices and that is what investors should be focused on.
RICHARD PHILBIN – Chief Investment Officer at Wellian Investment Solutions
Whilst it is not our position to debate the rights and wrongs of this historic outcome, we are acutely aware of the fact that this verdict has raised many poignant and serious questions.
Of these questions, the ones to have the most immediate impact on our industry include whether or not there will be an interest rate hike, will businesses turn away from the UK market and will the M&A (mergers and acquisitions) market suffer even more than it already has done?
The answers to all of these questions are, at this stage, on the list of the many unknown outcomes of a Brexit.
We have substantial international holdings in most of our portfolios and a ten per cent fall in sterling will immediately boost their values by the same amount.
Many of the UK’s best known companies are very international and a fall in sterling will make their goods and services immediately more competitive overseas.
In the weeks ahead we will be spending lots of time thinking through the implications from an investment point of view.