What Brexit means for NZ investors

In our view, it is important to remember that Britain remains a member of the EU for at least the next two years so there is no need for knee-jerk reactions. Markets had, perhaps complacently, assumed a Remain vote and it is not unexpected that some volatility should arise. In the short term, we can expect this market volatility to continue as uncertainty prevails, but this does not mean that investors should panic.

Negotiating an exit will take time

Over the coming months, Britain will need to negotiate trade agreements not only with Europe but also its other global trading partners. As those negotiations take place, we’ll learn more about what this may mean for business and finance.

The worst case will be that the World Trade Organisation’s minimum rules apply and the best case that all parties negotiate to maintain status quo trading benefits for their mutual advantage. The final outcome is likely to fall somewhere in between these two scenarios, but the precise details will only start to emerge in several months’ time.