Welcome to Brexit: Here’s what happens next
- Global markets are moving wildly, and currencies are making big moves, but the actual political process will be much, much slower.
- Assuming Cameron respects the democratic process, he will invoke Article 50 of the Lisbon Treaty, which begins the legal process for leaving the EU
- Then a series of negotiations for how to disentangle the UK from EU (could take up to 2 years or more)
- The process of leaving the EU would be irreversible.
- In the more immediate term, markets are going to react in a big way. The Brexit has no historic precedent. No precedent means volatility in markets, probably on a global scale.
- There is currently a global flight to safer assets – gold futures, classic safe-haven asset
- Equities and futures across the globe took a dive.
Opinion / View💡
- There is no certainty of how big the impact will be, meanwhile equities, bonds and commodities already taking a hit
- For selling: Currently KLCI is down 22 pts @ 1617, still above the strong support of 1600 level. Would advise to consider cut loss when stocks are testing a lower support level.
- For buying opportunity: Advice to stay on the side line at the moment as most Malaysian stocks are not at a huge discount currently.
- If you would like to take a long / short position: there are some call and put warrants made available by local banks for the KLCI Index. Although the risk is higher / more volatile