Let’s face it; no one is sure what will really happen now that the UK has decided to leave the EU. With obvious colours one side is predicting a pretty gloomy future for the UK, while the opposite side is ready to embrace the opportunities that will emerge from the divorce.

For readers familiar to the Maltese political scene this is starting to look similar to the all too familiar context taken from NET and SUPER ONE. UK, you may possibly be leaving the EU, but we welcome you to our ranks.

In this club membership entails that that we are ‘very’ right and the others are ‘very’ wrong. Heaven is achievable only for the winners, otherwise it will be hell.

So just when the Maltese thought that they had reached an unassailable lead in polarisation, here come our old masters to teach us how to go about it.

Staying put

The truth is that nobody knows what will really happen. In risk management language this is uncertainty and uncertainty is just another name for risk. Financial markets just hate uncertainty. If markets are expected to go down, then everyone knows what to do. If Markets are expected to perform, then we all know what to do. It sounds simple and it is.

However, when people have no hint in which direction to travel, especially when you have no idea where you will end up either way, the average guy will tend to stay put. In financial terms this means cash.

Investments have been under pressure because people are hording liquidity and safety because both the opposing side of the argument have been depicting the alternative as hell.

The outlook

The UK appears to be unprepared politically for the outcome. The Conservative Party is left leaderless, and the prospects that are lining up do not portray much confidence. The Labour Party’s leadership has been non-existent during the debate and its fate is now compromised at best. On the opposite front the EU bunch are clueless on how to handle the crisis. Thank God we have Malta Government Stocks.

This article was issued by Antoine Briffa, Investment Manager at Calamatta Cuschieri. For more information visit, www.cc.com.mt. The information, view and opinions provided in this article is being provided solely for educational and informational purposes and should not be construed as investment advice, advice concerning particular investments or investment decisions, or tax or legal advice.  

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