BreXit ~ British Exiting the European Union

Lagi tujuh hari je rakyat Britain nak mengundi untuk memutuskan samada nak stay dalam European Union atau keluar ~ BreXit.

First of, I’m not gonna pretend that I have full comprehension of the subject matter. The best I can do is dig around and start to comprehend the arguments from each side of the BreXit coin.

EuroNews - BreXit voting intention
EuroNews – BreXit voting intention

Berikut adalah petikan daripada email “Summary of Brexit / Bremain (UK’s EU Referendum)” yang aku terime dari FundSuperMart.com, “for your reading pleasure”:

What is happening?

23 June 2016, Britain will have a referendum to decide whether to stay or leave European Union (EU).

Why referendum?

Prime Minister promise to hold one if he won the 2015 general election as some voices saying that Britain had not had a say in EU.

Why UK Leave? (so called Brexit)

They believe Britain is being held back by the EU because of too many rules on business and charges billions of pounds a year in membership fees. They also want Britain to take back full control of its borders and reduce the number of people coming here to live and/or work.

Why UK Stay? (so called Bremain)

Britain has bigger market to sell things to other EU countries easier. They also believe Britain’s status in the world would be damaged by leaving.

Possible outcome

Based on opinion poll is 50:50 (polls can be notoriously unreliable) but no one will know the actual result until 24 June.

I tend to believe in UK Stay as I think it is a rational move at least for business or economy of the country.

If UK Leave

Likely to witness a decline in the British Pound (GBP) against many other currencies, a sell-off in UK equities and a spike in the yields of both UK Government Gilts and corporate bonds as a result of investors demanding an additional risk premium to hold UK-related assets. UK equities that are focused on the domestic market as well as those heavily exposed to the European Union are likely to be worse off given that the former are likely to be hurt by a local economy that is expected to be negatively impacted while the former will be hurt by a cut in their margins due to the rise in trade tariffs. Internationally exposed stocks are likely to benefit from foreign currency effects from the anticipated weaker GBP, while European stocks (non-UK) are unlikely to be permanently impaired although there is the potential for assets to be repriced to factor in the potential for future departures.

If UK Stay

Expect the GBP to rise against many other currencies. UK equities and corporate bonds are likely to benefit from positive price appreciation as well given the aversion of a risk event.

Conclusion

In either case, investors should brace themselves for volatility, given that markets will begin to reprice the eventual outcome.

What you can do

Higher volatility is expected. Remain hold on your portfolio and focus on your long term goals despite the short term market event. Rebalance or cost averaging if it is needed. We do not believe that it will spell the end of the world for investors as markets will likely eventually find their footing.

What if you still uneasy to be inaction

If you are too worry about Brexit, you may be more defensive by fine tuning your European / Global allocation to more fixed income (15%-20% more) but not totally out from market. If the result is Bremain, at least it will not affect you too significantly (But will missed the market rebound)

 

If your guess is right (Brexit) and markets drop, please readjust your allocation to initial allocation to acquire more equities when valuation is attractive.

 

My Opinion

We have been seeing many events such as euro debt crisis, US debt ceiling, Grexit, and etc since few years back but the market closed higher in long term. This will not be the only event in our investment journey going forward. We should be more worry when the markets are too hot if investors blindly chasing high without seeing valuation rather than market volatility like usual.

 

I will encourage investors to set a game plan to build diversified portfolio for long term according to their goals and risk tolerance and have the flexibility to fine-tune the portfolio within the plan. Different markets have their good and bad periods which we hardly predict them accurately every time. Building a diversified portfolio can ease investors to react to the markets with less worries and hassle. You may refer to Our Portfolio Construction Process and Recommended Portfolio

 

Begitulah serba ringkas pendapat daripada FundSuperMart.com

Lies, Damned lies and statistics
British Prime Minister Benjamin Disraeli

Berikut adalah beberapa clip pendek sekitar topik BreXit:

===// 14 April 2016

===// 31st May 2016

===// 1st June 2016

Tapi, bagi yang nak mengethui dan memahami dengan lebih lanjut kenapa ade pihak nakkan Britain keluar dari European Union, this is an very detailed Documentary(a very good one I must say) arguing for BreXit:

===// 7th June 2016

===// June 15, 2016 (Kuala Lumpur) — Phua Lee Kerk, chief strategist at Phillip Capital, says that markets are nervous over a potential Brexit and any sustainable upside may only come after June 23. He tells Bloomberg TV Malaysia Sophie Kamaruddin that his firm is

 

===//20th June 2016

===//23rd June 2016

 

Jika Kamu Bersyukur

M.K. Anwar Rangkuti, AFPM
|| Chief Digital Curator,  http://SolidusDenarius.com
|| Supreme Content Commander,  http://HujanEmas.com
|| FPAM #015579
|| FIMM UTC #043-0-21048 || FIMM PRC #P-043-0-20218
|| Tel: +60-12-7700721 [Telegram/ Whatsapp]

Riba Free Muslim
Riba Free Muslim

Leave a Reply

Your email address will not be published. Required fields are marked *