Menu Close

Top Investors claim that U.K. Assets Are Unmanageable Right Now

Investment heavyweights have said that investors throughout the globe will continue to neglect the United Kingdom until the twin threat of a Labour government and a strong Brexit directed by Jeremy Corbyn can be entirely discounted. 

All the investors have left the United Kingdom to an amid uncertainty. It might affect the future relationship between the country and the European Union. According to the data of the EPFR, the amount of $ 25.2 billion was invested in the companies of the UK after the referendum vote happened in June of the year 2016. 

Statement of Macdonald

Lucy Macdonald is the Chief Investment Officer for Global equities at Allianz Global Investors. According to him, with the uncertainty surrounding the result of Brexit, the policy proposals of the opposition party led by Jeremy Corbyn also have affected political sympathies. 

He also added that there are other reasons why all the investors have been nervous about the United Kingdom. They are threatened by the left-wing government. Although the polls seem to be far less risky, still always there is a risk. 

The poll tracker of the Britain Elections said that the conservatives have nine lead points. According to him, 33% of the total voters are intended to provide their support against 24% in favour of Labour in the upcoming election. 

Macdonald said that the global investors will not come back until all the risk has been removed. It only can be done through an election. 

The fund’s data company, Calastone, released a report the last October. According to that, the active equity funds in the United Kingdom had their worst 3 month period on the record between July to September. At that time, all the investors pulling a net amount of £3.5 billion worth of assets. It is more than the last 3 quarters combined. 

The investors have spent more than a net amount of £1.2 billion over the companies of the United Kingdom (All the real-estate funds sold to the investors of the United Kingdom). It had a record quarter for outflows that a net amount of £667 million heading for the exit. 

There is some uncertainty in the political condition of the country. There is also the risk that the Labour Govt. could nationalize key industries in the United Kingdom. It has also raised the concern for the global investors. 

Asset Manager Expressed his Views

Asset managers also expressed his concern about Labour proposals. He said to transfer the workers to other companies in the United Kingdom whose share worth is over £300 billion. This was a move that the fund manager warned, that can reduce their existing investments. Moreover, it also leads to businesses fleeing to the United Kingdom. 

But still, most of the global investors have expressed their doubts that the Labourd might win the outright of the election. A poll of 49 global investors was organised to share their opinion in the last week of September. 

According to the poll, a conservative majority was considered the most probable result of a general election. It was followed by the coalition between the Brexit and Tories party. The survey represented a shift in sentiment since July. It was the time when the global investors indicated the most probable result of a general election would be a Labour-led collision. 

Statement of Mark Mobius 

Mark Mobius is the emerging markets veteran. Despite the concerns of the global investor about the Corbyn-led Govt., he told that the fiery rhetoric of the party was improbable to become a reality. 

He also added that after a few times, when these people get back to their work, then they have tapered their talk quite dramatically as well as at any utmost – left or right – they have to move to the centre. Moreover, he also said that it is quite impossible (Corbyn) to apply radical policies because of the bureaucracy or alliance. They just won’t allow it to happen. 

According to him, some of the policies of Labour might be watered down. But still, it can’t be said ahead of an election. 

What Pascal Blanque had to say!! 

Pascal Blanque is the chief investment officer of Amundi. According to him, positive results still have not been appreciated in the market. It includes a trade involving a Brexit deal being scratched as well as Corbyn winning the politics. He also said that according to the Labour, so far there is no assurance of the economic markets. <