Brexit costs UK investor confidence Britain has lost its place as one of the top five investment destinations in the wake of the country''s decision to leave the European Union, according to a survey released on Monday.In a half-yearly report of business executives, consulting firm EY said uncertainties related to the Brexit vote are discouraging potential investors, particularly from Europe, from planning deals in the country.
According to EY, Britain is now ranked seventh in terms of investment destination over the coming year, behind the United States, China, Germany, Canada, France and Japan. In the previous survey in April, Britain was second.
Steve Krouskos, EY''s global head of transactions, said there was a “knee-jerk” response, particularly in the immediate aftermath of the June 23 vote, but that he is optimistic that Britain''s ranking will improve by the time of the next survey in six months.
“In the longer term, we would expect the UK to bounce back as a top M&A destination of choice, but the short-term uncertainty is giving investors pause for thought,” he said. “I don''t see a blackout coming.” His confidence can to an extent be illustrated by the fact that deal-making has not so far dried up since the Brexit vote - Britain has seen US$88 billion (N$1.3 trillion) worth of deals excluding real estate, EY said, citing data from sector specialist Dealogic. That''s in line with 2013 and 2014 but below the US$255 billion registered in the same period of 2015, which was inflated by the mega-merger of beer companies SABMiller and Anheuser Busch InBev.
British firms, according to EY, continue to be attractive to foreign buyers, especially high intellectual property companies in industrials, technology and healthcare. And Britain remains the third most sought-after country for investment among executives surveyed in the US - that''s important as the US typically accounts for around 40% of global M&A activity.
The biggest deal since the Brexit vote was the £24 billion takeover of British technology firm ARM Holdings by Japan''s SoftBank Group in July - a month or so after the Brexit vote. Another major deal was the near US$8 billion takeover of Formula One''s commercial arm by American company Liberty Media.