Brexit could spark ‘land grab’ for Lon­don FX trade: Ex­pert

Kuwait Times - - BUSINESS -

LON­DON: A Bri­tish vote to leave the Euro­pean Union could see Frank­furt make a “land grab” for a slice of Lon­don-based for­eign ex­change trade in the euro, the chief in­vest­ment of­fi­cer of Columbia Thread­nee­dle In­vest­ments EMEA said on Fri­day. Bri­tain is due to vote on EU mem­ber­ship in an in­out ref­er­en­dum by the end of 2017 and some an­a­lysts have said leav­ing could threaten Lon­don’s po­si­tion as a global fi­nan­cial cen­tre.

“It could be very bad news for the fi­nan­cial ser­vices in­dus­try be­cause much of forex trade in the euro that takes place here, were we to be out­side the zone, I think there would be a land grab and I wouldn’t blame Frank­furt for do­ing that,” Mark Burgess told the Reuters Global In­vest­ment Out­look Sum­mit. Some 40 per­cent of daily turnover in the euro is traded in Lon­don, ac­cord­ing to Bank of Eng­land data.

Look­ing to in­vest­ment rec­om­men­da­tions for next year, Burgess said a com­bi­na­tion of cen­tral bank cash and share­holder-friendly ac­tions by com­pa­nies, in­clud­ing share buy­backs and a fo­cus on re­turn on eq­uity, made Ja­panese stocks the top pick. Burgess, whose firm has 311 bil­lion pounds ($473 bil­lion) of as­sets un­der man­age­ment, said he re­mained over­weight eq­ui­ties in Ja­pan, Europe and in the United States but “very un­der­weight” in the rest of Asia and in emerg­ing mar­kets.

“I still have quite high con­vic­tion in the out­look for the Ja­panese eq­uity mar­ket. We do think the com­bi­na­tion of a huge amount of QE plus an in­creas­ing fo­cus on the share­holder is a very heady cock­tail,” he said at the sum­mit in Reuters’ Lon­don of­fice. —AFP

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