• Register
Return to: Home > News > Investment professionals reveal increasing concerns about geopolitical risks

Investment professionals reveal increasing concerns about geopolitical risks

According to a survey by the CFA Institute, there has been increased concern over the effect of geopolitical risk in the investment profession, since the UK’s decision to leave the European Union in July 2016.

The survey of  1,500 investment professionals from around the world revealed that changes to the geopolitical environment is widely expected to have long-term impacts on the financial markets. The majority of respondents (70%), expect investment returns to be compromised by geopolitical uncertainties over the next three to five years.  On the other hand, the risks identified by a large majority of portfolio managers (71%) say that they have not changed their strategy as a result of the Brexit vote.
  
The survey also revealed that nearly three quarters of respondents from continental EU countries expect firms in their market to reduce their presence in the UK as a result of Brexit. Additionally, the results reflect a growing belief that Brexit will spark further exits from the EU. Of respondents, 59% believe that further exits from the EU are likely, a 10% increase since the last CFA election which was carried out in July 2016 and focused on the likely impact of Brexit.

Those who think that EU wholesale disintegration is likely has also risen from 21% to 36%. Also, the UK fragmentation that would be caused by a successful Scottish independence referendum is also considered probable by just over half of respondents (53%).
  
Paul Smith, president and chief executive of CFA Institute (pictured), said: “The current state of political uncertainty ahead of Article 50 being triggered is having a clear impact on investment professionals’ market expectations and it is important to remember that geopolitical risk is by no means new: apart from the 20 years following 1989 and the fall of the Berlin Wall, geopolitical risk has in fact been a constant feature of financial markets. We are enabling our global members and charter holders to understand the potential impacts of such shifts and ensure that they are equipped with the knowledge and skills to safeguard investors’ interests.”

Top Content

    Improving public sector management and performance: the case for accrual accounting

    Public sector management (PSM) is about ensuring that the machinery of the public sector works efficiently and effectively. This is crucial because it can enhance—or undermine—a government’s ability to deliver results across all sectors. Poor public sector management leads to poor public sector performance: the suboptimal provision of public services, in terms of equity, access, and/or quality. This is particularly worrisome for the disadvantaged, as they rely disproportionately on public services.

    read more

    The hunt told from the lion’s perspective

    The opening ceremony of the 4th Africa Congress of Accountants attracted an impressive line-up of speakers. But if Africa’s development objectives are generally agreed and the challenges and opportunities are known, the unaddressed question of how to achieve progress loomed over the audience along with a few cormorants and pied kingfishers. Vincent Huck reports

    read more

    Shattering the taboos

    The Africa Congress for Accountants (ACOA 2017) ended with a bang as Patrick Lumumba, professor of public law and founding dean of Kabarak University School of Law (Kenya), argued for political hygiene and pan-Africanism to be the building blocks for Africa’s development. Vincent Huck reports

    read more

    Editor's letter: African solutions for Africa’s development

    Amongst development professionals there is an anecdote that goes as follows: in Ouagadougou (Burkina Faso) in the 90s there was a man nicknamed “Doc” who had two resources: first skills, he could repair scooters like no one else. And second, he had a toolbox.

    read more
Privacy Policy

We have updated our privacy policy. In the latest update it explains what cookies are and how we use them on our site. To learn more about cookies and their benefits, please view our privacy policy. Please be aware that parts of this site will not function correctly if you disable cookies. By continuing to use this site, you consent to our use of cookies in accordance with our privacy policy unless you have disabled them.