In Asia, we’re still counting the likely cost of Brexit. Its ripples will be felt large and wide, even out here. As an expat Brit — albeit with 15 years in Hong Kong — I’m still scratching my head about the decision altogether!
We’re seeing news that Aberdeen Asset Management (ABDNY) — which has a large Asian presence, with £20 billion ($25.8 billion) from Asia-based customers — suspended trading in its U.K. property funds for a day. Of course, property is often the very first place Asia-based investors put their money. But the Aberdeen fund and its feeder, with £3.2 billion in assets, is limited to U.K investors. When I asked, the company said it wouldn’t provide any figures on redemptions.
Aviva, Standard Life and M&G Investments, a subsidiary of Prudential (PUK), also suspended U.K. property funds as well. Those have £9 billion ($12 billion) in assets.
The commercial property brokerage DTZ/Cushman & Wakefield believes that Brexit may actually favor Chinese investors. It has certain raised Britain’s profile in Asia, that’s for sure! Sina Weibo (WB), China’s version of Twitter (TWTR), saw a record 280,000 posts in the 24 hours after the decision, and 890 million views the preceding week. Its shares, under parent Weibo (WB), are at an all-time high. That has already caught the interest of my RealMoney colleague James “Rev Shark” DePorre.
But economists are already cutting expectations out here. Nomura on Thursday now reckons Hong Kong’s economy will slide backwards this year, down 0.2%. The Japanese bank had been expecting growth of 0.8%, but reckons Hong Kong will be the hardest-hit Asian economy. Global banks have already been scaling back their need for space in the world’s most expensive city to place workers.
The impact on Asian real-estate investors and markets is unpredictable. The wave of money that had been heading from Asia toward Britain’s shores will surely take a break, those who have been directing it say.