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- September 1, 2016: Vol. 10, Number 08

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Brexit vote brings market turmoil and fund closures

by Richard Fleming

1 The United Kingdom voted on 23 June to leave the European Union, by 51.9 percent to 48.1 percent on a turnout of 72.2 percent, 6.1 points higher than in last year’s general election. “Brexit means Brexit,” said Theresa May, the new UK prime minister. Efforts now aim at making Brexit happen, probably toward the end of 2018. The immediate effect of the vote — which came as a surprise to many, but should not have done — was volatility and turmoil in global stock markets and currency markets as investors became “risk-off”. The pound fell to its lowest level against the US dollar in more than 30 years and 10-year UK government bond yields reached a record low. UK-REIT share prices were hit hard. However, stock markets recovered quickly to their pre-vote level. In the currency markets, the pound settled at a new, lower level against major currencies. For some foreign investors this will have the beneficial effect of making the prospective UK property deal that much ch

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