London investors brace themselves for a volatile 2020
The majority of London investors feel that the international political landscape is making the markets more volatile, according to new research.
A survey commissioned by trading broker HYCM found that 71 per cent of London investors felt that international politics was increasing volatility. It compares to 57 per cent of all respondents.
As a result, 59 per cent of City investors are looking to restructure their portfolio in 2020 to account for volatility, compared to 36 per cent of all UK investors.
The results come amidst a turbulent landscape with escalating military tensions in the Middle East and the ongoing US-China trade battle.
Giles Coghlan, chief currency analyst at HYCM, said: “Domestic and international political events can have a profound impact on the financial markets, sharply influencing the value of assets and currencies around the world.”
With the UK scheduled to leave the EU by Friday, almost a third (32 per cent) fear Brexit will negatively impact their investment portfolio this year. In London, 43 per cent of respondents thought it would affect their investments.
Coghlan said: “If, as we saw during the Brexit woes of 2019, the UK fails to strike a deal then it will trade with the EU on WTO terms; this represents a hard Brexit, which would be a distinct negative for the GBP.”
He added one of the main reasons investors are planning ahead is because the UK is negotiating two key trade deals at the same time. “This is a major undertaking and, as such, is a source of significant uncertainty.”
It follows research that UK business optimism flatlined following the December general election. A report by accountancy and business advisory firm BDO found that business is in “wait-and-see mode following the general election”.
HYMC surveyed 750 UK investors between 21st and 30th December.