Britain falls in in­vest­ment league ta­ble

7 Days in Dubai - - BUSINESS - Busi­ness@7days.ae

Britain has lost its place as one of the top five in­vest­ment des­ti­na­tions in the wake of the coun­try’s de­ci­sion to leave the Euro­pean Union, ac­cord­ing to a sur­vey.

In a half-yearly re­port of busi­ness ex­ec­u­tives, con­sult­ing firm EY said un­cer­tain­ties related to the Brexit vote are dis­cour­ag­ing po­ten­tial in­vestors, par­tic­u­larly from Europe, from plan­ning deals in the coun­try.

Ac­cord­ing to EY, Britain is now ranked sev­enth in terms of in­vest­ment des­ti­na­tion over the com­ing year, be­hind the United States, China, Ger­many, Canada, France and Ja­pan. In the pre­vi­ous sur­vey in April, Britain was sec­ond.

Steve Krouskos, EY’s global head of trans­ac­tions, said there was a “knee-jerk” re­sponse, par­tic­u­larly in the im­me­di­ate af­ter­math of the June 23 vote, but that he is op­ti­mistic that Britain’s rank­ing will im­prove by the time of the next sur­vey in six months.

“In the longer term, we would ex­pect the UK to bounce back as a top M&A des­ti­na­tion of choice but the short-term un­cer­tainty is giv­ing in­vestors pause for thought,” he said. “I don’t see a black­out com­ing.”

His con­fi­dence can to an ex­tent be il­lus­trated by the fact that deal-mak­ing has not so far dried up since the Brexit vote – Britain has seen $88 bil­lion worth of deals ex­clud­ing real es­tate, EY said, cit­ing data from sec­tor spe­cial­ist Dealogic. That’s in line with 2013 and 2014 but be­low the $255 bil­lion reg­is­tered in the same pe­riod of 2015, which was in­flated by the mega-merger of beer com­pa­nies SAB Miller and An­heuser Busch InBev.

Bri­tish firms, ac­cord­ing to EY, con­tinue to be at­trac­tive to foreign buy­ers, es­pe­cially high in­tel­lec­tual prop­erty com­pa­nies in in­dus­tri­als, tech­nol­ogy and health­care. And Britain re­mains the third most sought-af­ter coun­try for in­vest­ment among ex­ec­u­tives sur­veyed in the US – that’s im­por­tant as the States typ­i­cally ac­counts for about 40 per cent of global M&A ac­tiv­ity.

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