Investors bank on bookies for Brexit trends

‘Remain’ leads ‘Leave’ by 13 pts Brexit campaigner courts controversy

LONDON, May 24, (RTRS): Investors seeking guidance on whether Britons will vote to leave the European Union are relying as much on bookmakers and punters as the established trackers of political trends, opinion pollsters.

A month before the referendum, bookmakers’ shops on British high streets and betting exchanges on the internet are offering something that the polling industry has failed to provide: a clear trend.

Bookmakers are offering odds of 1/6 — indicating a more than 80 percent probability — that Britain will vote to remain in the EU on June 23. By contrast, opinion polls present a confusing picture of voters’ intentions, with some saying the “remain” camp has a big lead while others have put the two sides neck-and-neck.

“Betting is the market’s attempt to summarise the polls and adjust for all of their fragilities,” said Insight Investment currency fund manager Paul Lambert. He says he looks more at the odds than the polls when deciding how to trade currencies affected by the vote - particularly sterling, but also the euro.

With most economists agreeing that the British economy would take at least a short-term hit from a “Brexit”, financial markets are sensitive to any signals on how the nation will vote, including opinion polls. Sterling strengthened sharply last week after an IPSOS-MORI poll showed 55 percent supported remaining in the EU, with only 37 percent backing Brexit.

But the polls’ fragilities were exposed in last year’s parliamentary elections, when they failed to signal that Prime Minister David Cameron’s Conservatives would win a majority.

Reason

This is one reason why investors are turning to the likes of William Hill and Ladbrokes, betting-shop chains more commonly associated with horse racing and football than politics.

The bookmakers say they can set the odds to incorporate nuances that the polls cannot, such as psychological research suggesting that undecided voters tend to opt in the end for the status quo. In this case, that means voting to keep Britain in a bloc that it joined more than 40 years ago.

Investors also like the fact that the “bookies” and online betting exchanges can adjust the odds in real time to reflect developments that could affect the vote, allowing them to make trading decisions faster.

When President Barack Obama warned last month that Britain would be at the “back of the queue” for a BRUSSELS, May 24, (Agencies): As a former journalist who made his name by bashing Brussels but was sometimes accused of twisting the facts, Boris Johnson knows there’s no easier way to hook readers than to lead with Hitler.

Yet his attempt to blacken the European Union by associating its limited, negotiated supranational powers with attempts by the Nazi German leader or the French Emperor Napoleon to impose their rule on the continent by force was politically perilous.

For one thing, it disregarded the strategic vision of two of his own Conservative heroes, Winston Churchill and Margaret Thatcher, both of whom saw a more united Europe as the answer to Hitlerism, and a way to ensure peace and stability after centuries of bloodshed.

The former mayor of London is not just distorting history — the EU’s 28 democracies freely assented to pooling some of their sovereignty, even creating a voluntary exit clause which Johnson is now urging Britons to use.

His Hitler jibe may backfire on the “Leave” campaign in Britain’s June 23 referendum on EU membership and derail his ambitions to replace

trade deal with the United States if it left the EU, the probability of Brexit on betting website Betfair immediately fell to 31 percent from 33 percent before he began speaking.

“The price is the price that people are paying — it doesn’t get any more live than that, whereas polls have lags,” said Mizuho’s head of hedge fund currency sales, Neil Jones.

While sterling jumped immediately on Obama’s remarks, investors had to wait several days for the first polls incorporating the voters’ reaction to be published. In the end, they suggested Obama’s intervention had little overall effect.

Bookmakers naturally aren’t infallible. For instance, Matthew Shaddick, head of political odds at Ladbrokes, said his firm lost more than 1 million pounds ($1.45 million) on the 2015 election mainly because the Conservatives won an outright majority — an event that few if any bookmakers, pollsters or pundits saw coming.

However, Shaddick said the betting odds had clearly signalled that the Conservatives would be the largest David Cameron as prime minister.

Even Britons who distrust the EU and feel, like many Europeans, that its actions are not sufficiently subject to democratic control are unlikely to equate it with jackbooting dictators or the Holocaust by other means.

Latest opinion polls suggest wavering Conservative supporters are shifting towards voting to remain in the EU when the island nation faces its geopolitical choice next month.

In an interview with the Sunday Telegraph, Johnson said the EU was doomed to fail like all attempts to create a “golden age of peace and prosperity” since the Roman Empire 2,000 years ago.

“Napoleon, Hitler, various people tried this out, and it ends tragically,” he said.

“The EU is an attempt to do this by different methods. But fundamentally what is lacking is the eternal problem, which is that there is no underlying loyalty to the idea of Europe. There is no single authority that anybody respects or understands. That is causing this massive democratic void.”

Johnson also blames Brussels, rather than President Vladimir Putin, for Russia’s 2014 annexation of

party in parliament, whereas the polls implied a very close result.

Meanwhile, the “Remain” camp holds a 13-point lead over “Leave” rivals in Britain’s EU referendum campaign, after winning support for the first time from a majority of men, those aged over 65 and Conservative voters, according to a poll published on Tuesday.

The ORB survey for the Daily Telegraph newspaper found that among those who definitely plan to vote in the June 23 referendum, support for remaining in the union stood at 55 percent while backing for a British exit was at 42 percent.

The three voter groups of men, older people and Tory supporters had all favoured leaving the European Union when they were surveyed in March, the newspaper said, but a majority of each now backed “Remain”.

Pensioners, previously considered to be the most consistent Brexit supporters, now narrowly favoured staying in the union the survey found, with 52 percent of the over-65s intending to vote to “Remain” and 44 percent backing “Leave”.

Crimea and the success of armed Russian-speaking separatists in eastern Ukraine.

“If you want an example of EU foreign policy-making on the hoof, and of the EU’s pretensions to running a defence policy that have caused real trouble, then look at what has happened in Ukraine,” he told a news conference on May 9.

As the author of a biography of Churchill, as well as a book on the Roman Empire, Johnson must know that his favourite statesman passionately advocated a united Europe after World War Two to prevent any return to nationalism and warmongering.

Also: British expats who have lived abroad for more than 15 years will not be able to vote in next month’s EU referendum, the Supreme Court ruled Tuesday. A case was brought by

a 95-year-old Briton who has lived in Italy for 35 years, and

54, a resident of Belgium since 1987.

They argued that the ban on people who have lived abroad for more than 15 years from voting in the June 23 referendum was unlawful.

LONDON:

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Amongst all voters, those wanting to stay in the European Union had a 20-point lead with 58 per cent of voters saying they backed the pro-EU campaign, the survey of 800 voters carried out between May 18 and 22 found.

The proportion of voters undecided or likely to change their minds stood at 16 percent, up one percentage point from its May 16 poll, but down 8 points from March.

ORB pollster Johnny Heald said the undecideds, when pushed, were twice as likely to be considering “Remain” over Brexit.

“Evidence from other referendums in countries such as Ireland and Canada indicate that those who tell pollsters they don’t know how they will vote in the end are significantly more likely to support the status quo as they have not been convinced by the arguments to leave in this case,” he said.

However, he said the Remain campaign needed younger people to turn out to vote, something they were traditionally less likely to do than older people.