Boris Johnson could spook financial markets in 2020
Boris Johnson could spook financial markets in 2020 and investors must avoid complacency, according to chief executive and founder of deVere Group, Nigel Green.
The warning followed the landslide victory for Johnson’s Conservative party in the UK’s general election last week in which he secured an 80-seat majority a move which caused stocks rise across Europe on Monday.
“This has been driven in part by investors’ relief that a hung parliament had not been delivered, meaning years of uncertainty and indecisions over the UK’s way out of the EU is coming to an end. Also, perhaps, because the Conservatives promised a more pro-business agenda,” Green said.
Following this, it is now expected that the Withdrawal Agreement Bill on leaving the EU could be put before lawmakers as early as Friday, Green said.
According to the firm, when Britain leaves on 31 January, there would be “only 11 months to thrash out the basics of the future relationship with the European Union”
“The self-imposed end of December 2020 deadline is a mammoth challenge or Britain will fall through the ‘trap door’ of no-deal Brexit on 1 January, 2021,” Nigel said.
“The task ahead is monumental. The timeframe in which to complete it is narrow. Failure to agree a free trade deal by the end of next year will mean the UK crashing out of the EU and all the far-reaching negative economic implications, including the likelihood of a recession.
“With such uncertainty, following the election bounce, in 2020 investor confidence in the UK is likely to remain subdued and Boris Johnson’s Brexit stance could be a major source of volatility in financial markets.”
At the same time, he warned that 2020 would be a year in which political factors – including Johnson’s Brexit plan and the US presidential election, amongst others – could potentially spook markets.
“Investors should assess and, where necessary, rebalance their portfolios to take advantage of the potential opportunities and to mitigate the risks,” Green cautioned.
Recommended for you
Platinum Asset Management has put its two closed-end funds under strategic review in a bid to reduce the share price discount to pre-tax NTA and maximise shareholder value.
In the latest Meet the Manager profile, Money Management speaks with Michael Skinner, founder and managing director at Blackwattle Investment Partners.
Perpetual has seen AUM rise 6 per cent in the last quarter but the departure of a longstanding JOHCM fund manager led to outflows of $2.2 billion from his strategy.
Global fixed income fund Bentham Global Opportunities has been added to several major platforms, enabling it to be accessed more easily by financial advisers.
