Sections

European, Asian companies lower outlook post-Brexit – Fidelity

A significant proportion of analysts across Europe and Asia are expecting a negative impact from Brexit on the companies they cover, according to Fidelity International.

Almost 60% of the asset manager’s European investment analysts said the UK’s departure from the European Union would have a “moderately negative” impact on their companies.

More than one-third (40%) of Japanese analysts said the same.

Of particular concern are firms in the industrial, energy, discretionary consumer goods, financial and IT sectors.

In addition, Fidelity reported that almost half (49%) of European analysts said their companies were “less willing” to invest in the UK over the next two years while the Brexit negotiations took place.

One-quarter of Asian analysts agreed.

The analysts cited a lack of clarity over UK/EU relations, risks to the financial sector in London, risks to the property market and a possible loss of talent as companies choose to relocate.

UK prime minister Theresa May yesterday stated that the country would be giving up access to the EU’s single market when it leaves the union.

Fidelity’s research also covered analysts’ views of Donald Trump, who will be inaugurated as US president on Friday, as well as the wave of national elections across Europe in 2017.

Almost three-quarters (72%) of Fidelity’s analysts said their companies were positive on the two-year outlook under Trump’s presidency.

The Republican party’s dominance of Congress, as well as the president-elect’s stance on areas such as corporate tax, income tax, infrastructure spending, fossil fuels and deregulation, all point to an encouraging future, the analysts said.

European analysts were less bullish, with 39% saying their companies had a positive US outlook.

However, only 12% said the outlook was negative.

Nearly two-thirds (64%) of analysts covering emerging Europe, the Middle East, Africa and Latin America said the impact of Trump was “moderately negative”.

Despite the mixed views of companies, Michael Sayers, director of research at Fidelity, said the research had also shown that “none of these political risks are seen as strong enough to offset upbeat cyclical forces that are evident in all regions and sectors”.

Fidelity claimed their research suggests “concerns over political risk are not enough to disrupt the upbeat cyclical forces evident across all sectors and regions”.

The annual survey questioned 146 of the asset manager’s equity and bond analysts.

Have your say

You must sign in to make a comment

IPE QUEST

Your first step in manager selection...

IPE Quest is a manager search facility that connects institutional investors and asset managers.

  • DS-2382

    Closing date: 2017-12-14.

  • QN-2383

    Asset class: Residential Property.
    Asset region: Ireland.
    Size: EUR 10m.
    Closing date: 2017-12-18.

  • QN-2384

    Asset class: Equities Switzerland (Large Caps).
    Asset region: Switzerland.
    Size: CHF 550 – 600 mn.
    Closing date: 2017-12-15.

  • QN-2385

    Asset class: Liability Driven Investment.
    Asset region: Europe.
    Size: Size: EUR 1 Billion, Liability size: EUR 3 Billion.
    Closing date: 2018-01-08.

  • QN-2386

    Asset class: Fixed income.
    Asset region: Global developed markets.
    Size: CHF 500 -1000m.
    Closing date: 2018-01-15.

  • DS-2392

    Closing date: 2017-12-21.

  • QN-2393

    Asset class: All/Large Cap Equities.
    Asset region: Europe.
    Size: EUR 200m.
    Closing date: 2017-12-21.

  • QN-2394

    Asset class: Real Estate Industrial.
    Asset region: Europe.
    Size: EUR 10m.
    Closing date: 2018-01-04.

Begin Your Search Here