At least gold producers are happy
Equities, currencies, oil and bonds all fell Friday as the UK voted to leave the European Union.
As analysts and investors digested the news that was always possible, but not really expected – bookies had odds of 12/1 against Brexit this week – there was great volatility for the markets.
The main index of the TSX closed down 1.69 per cent but that was small compared to its peers; the Dow was off by more than 3 per cent; the Nikkei by more than 7 per cent; and France’s CAC closed more than 8 per cent lower.
Ironically, the UK’s FTSE 100 closed little more than 3 per cent lower than it started and 2 per cent higher than it was at the start of the week, although the broader FTSE 250 revealed sharper losses; down more than 12 per cent earlier in the day but closing at 7.19 per cent down.
Meanwhile, oil prices fell 5 per cent, the loonie was down 1.9 per cent and bond markets were generally lower.
Only gold producers were celebrating as prices gained sharply, up 4.5 per cent as investors ran for shelter.
It was a day with an historic referendum result, a prime minister’s resignation and markets in turmoil.
The S&P/TSX Composite Index closed down 239.5 (1.69 per cent)
The Dow Jones closed down 611.2 (3.39 per cent)
Oil is trending lower (Brent $48.40, WTI $47.60 at 5pm)
Gold is trending higher (1319.00 at 5pm)
The loonie is valued at U$0.7690
Brexit could mean good news for Canadian pension funds
Canada’s pension funds could pick up some bargain investments in UK real estate and infrastructure according to experts.
The funds already have various stakes in the UK which are not equities and have the potential to add more at lower prices with an eye on the long term growth.
It’s at times of dislocation that people often get a really good deal,” OP Trust CEO Hugh O’Reilly told the Globe and Mail.
He said that the long-term outlook for the UK is still good.
Canada’s deal with the EU could be ended by Brexit
The CETA trade deal between Canada and the EU, which has been negotiated over the past 7 years, could be over.
That’s the view of Fen Hampson of the Centre for International Governance Innovation in Waterloo, Ont. who told the CBC that the uncertainty that the leave vote could now mean for the bloc would raise concerns: "I would say CETA is probably dead,” he said.