UK funds feel the Brexit effect, but FX remains best barometer
By International Adviser, 16 Jun 16
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Look for the silver lining – Martin
Regardless of the outcome of the EU Referendum, Mark Martin, manager of the Neptune UK Mid Cap Fund, said he expects to see an uptick in significant M&A activity across the FTSE All Share and FTSE 250, in particular.
If the public returns a Remain verdict, he anticipates a rebound in both UK equities and sterling, as well as a return to corporate activity.
“M&A in the FTSE 250 has lagged both historical averages and those witnessed year to date in the FTSE 100, so I’d expect to see a particularly significant uptick in this area of the market,” Martin said.
Even in the event of a Leave vote, Martin said he believes that an end to speculation will inspire renewed confidence in the UK market.
“While there will be a number of obstacles to negotiate in this scenario, the path for the UK economy will be significantly clearer than it is now, which is likely to encourage companies to be more active. Indeed, lower share prices and weaker sterling could make takeover deals even more attractive, particularly for international buyers.”
Even in the midst of uncertainty, Martin pointed out that the M&A well is far from dried up, as evidenced by large cap deals like Microsoft’s proposed acquisition of LinkedIn and rumours of potential bids by mid-cap entities.
“The appetite for M&A is clearly there, and it could well be that the current trickle of M&A becomes a torrent once a degree of clarity returns to the outlook.”
Tags: Axa | Brexit | Hargreaves Lansdown | Lipper | Neil Woodford
