MSCI survey: ‘Significant minority’ think Brexit will be beneficial for UK
A poll by index provider MSCI suggests that a “significant minority” (15%) believe leaving the EU through the so-called Brexit referendum will be beneficial to the UK.
The results are based on the views of some 260 people, surveyed in the past week. About half were asset managers, according to Alvise Munari, head of EMEA Client Coverage at MSCI, who outlined the findings at MSCI’s Annual Conference on Global Investing and Risk Management, held in London this week.
About 40% of the respondents are located in the UK, while 60% are based in the rest of Europe, Munari said.
A majority of those surveyed said that the most worrying consequences of a Brexit on the UK would be economic and political uncertainty, as well as a fall in foreign investment. The survey also shows many respondents (47%) have not made any contingency plans in the face of the Brexit threat.
About 40% of the respondents say the impact of Brexit on the UK GDP and UK equities will be “medium”, while 65% think the impact on sterling will be “high”.
“There will be little impact on the economy, GBP will likely be more volatile and markets react. In the long run it is likely that more companies will domicile in the UK as the gov’t will offer incentive scheme to offset perceived risk,” one surveyed MSCI contact commented.
“Financial assets will likely sell off heavily. Sterling will be the key, since it will deter foreign investors from taking positions in other asset classes until they are sure that their returns will not be wiped out by a falling pound,” another said.
Almost 45% of the respondents think Brexit will not lead other member states to seek to leave the EU, but there could be pressure for votes in other countries, while about 18% think the whole EU could break up if the UK decides to leave.
“I believe the UK experience will show how difficult is to go alone and leave the EU, discouraging other countries to follow that route. If anything, I would expect the UK to disintegrate with Scotland and Wales asking form independence and to stay in the EU, freeing themselves from England,” one respondent commented.