City investors ‘want UK to stay in the EU’
MORE than two thirds of investors in Manchester (69%) would choose to remain in the EU when given the vote, according to UBS Wealth Management.
With the EU Referendum now set to take place on June 23, investors are pessimistic in their outlook for the UK economy, with respondents to the UBS survey expecting the UK to be the worst performing equity market over the next 12 months – worse than emerging markets, Europe, Japan and the US.
However, respondents are more positive about economic growth in their own region – three quarters (76%) are feeling the benefits of economic growth in Manchester.
Karan Sejpal, regional head of UBS Wealth Management, North West, said: “Investors and businesses in the region did not seem too concerned about a possible Brexit last year.
“Yet as the Referendum approaches, investors are starting to consider the consequences more carefully. Indeed, uncertainty around Brexit is impacting sentiment towards the UK.
“In spite of this it is encouraging to see confidence in the local economy. Our clients, a combination of business owners and managers, generally had a rosy outlook going into 2016. But this confidence is likely to be undermined with the uncertainty that would accompany a UK exit from the EU.”
Bill O’Neill, head of Investment Office UK, for UBS Wealth Management, said: “In our view, the most likely outcome is that the UK remains in the EU. Yet what most haven’t considered is that even a vote to remain will have significant implications.
“Just as we saw ahead of the General Election last May, we expect sentiment to change as the EU Referendum approaches in the face of increased uncertainty. Our view is that sterling will be particularly exposed to volatility as the Referendum approaches.
“We expect UK markets to be volatile over coming days as the campaigns step up a gear and investors adjust to the prospect of a referendum four months from now, but our base case remains that the UK population will decide to remain in the EU.
“Our Brexit probability remains at 30% as we monitor the public response to the agreement with other EU members.”
In spite of current market volatility Manchester investors remain bullish, with only 11% feeling the urge to pull out of investments in the face of a volatile equity market.
They expect equities and hedge funds to be the best performing asset classes, followed by fixed income.
