Rattled by a growing list of worries that could threaten the fragile global economy, including the UK’s shock Brexit vote, investors around the world are amassing cash, favouring bonds over equities and increasing their holdings of gold.
George Osborne broke his silence on Monday in an attempt to soften the blow to sterling and calm markets, but the pound dropped against the dollar to a fresh 31-year low of $1.3218 in morning trade.
In the uncharted territory of the post-Brexit landscape, fund managers are keen to avoid overreacting to the initial devaluation of sterling and take advantage of lower priced shares and sustainable dividend growth.
Chin-up, dear investor. Brexit has not necessarily been the disaster for the FTSE as was predicted, and could actually be a great opportunity for UK-facing active managers.
The UK narrowly voted on Thursday (52:48) to leave the European Union, an unprecedented move with an unclear outcome. What follows will undoubtedly be at least two years of uncertainty, but how will the offshore financial centres fare?
In a joint statement on Friday, the EU leadership urged the UK to start departure processes immediately as “any delay would unnecessarily prolong uncertainty”.
The British pound and FTSE 100 both bounced significantly after record falls during frantic trading in the wake of the United Kingdom’s decision to exit the European Union.
As banking stocks plummeted on Friday morning, Bank of England governor, Mark Carney sought to remind the market that they are in good health and reassure investors the BoE stands ready to do whatever is needed.
Old Mutual Global Investors CEO Richard Buxton has spoken of the “bleakest” prospects for domestically focused UK companies, having recently backed recovery plays in the likes of Tesco, Ladbrokes and Debenhams.
Neil Woodford has wasted no time in offering investors some reassurance over the prospects for UK equities in the wake of the Brexit vote.
Markets were stunned into action on Friday morning after the UK voted narrowly to leave the European Union. Sterling slumped to its lowest level since 1985, safe haven assets jumped and the Nikkei fell almost 8%, while the FTSE opened 6.7% lower.
As the clock ticks ever closer to 7am on Friday, the time slated for the release of the official results of the UK’s referendum on EU membership, the financial world’s focus is being honed to an ever finer point as participants hold cash and their breath ahead of the vote.
