Brexit| Mihai Nichisoiu (Vanguard Asset Management): Most probably the Bucharest markets will remain dependent in the following period to the global risks

Mihai Nichisoiu, the Tradeville funds division director at Vanguard Asset Management, says that “global markets suffered a great shock this morning with the pound at the minimum of the last 30 years, the stock exchange shares dropped to 10 percent and the gold to USD 1350/ounce.”

This work hypothesis was, according to him, permanently the one according to which UK would decide to stay in EU. He adds that in G7 space, including UK, the financial authorities will regroup and will try to stabilize the financial markets through direct investments and liquidity lines. “We should not forget that there is already a plan for this emergency situation. On the long term, however, the Brexit is added to a list of global risks, for which, ironically Uk’s exit from EU is not on the first position. A more important risk is referring to a possible fall of Chinese economy and a crisis in their financial/banking system. “

Read how Romanian policymakers, economists and analysis reacted to the Brexit vote

Regarding the Romanian shares, from his point of view, this morning showed, once more the tight correlation with the external market, as BVB shares had a fall in European stocks, the most affected being the banks. The interests of local state titles grew, their risk being assimilated to the outskirts and the RON depreciated, especially against USD. “Most probably, the Bucharest markets will remain dependent in the following period to the global risks, while BNR might be tempted to re-take the monetary easing process interrupted last year.”

He adds that the immunity system of stock exchange was already weakened by the trauma of the most severe beginning of the year from history. „Considering that the interests will remain at very low level and in some cases, even negative, and the global risks are abundant, it is very probable that the capital allocations at global level will be headed to gold. In 2016, traditional the shares of reserves, particularly in gold, are the true winners of the circumstances contest.”
Georgiana Bendre