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Expats shun UK investing PDF Print E-mail
News - Alternative Investments
Tuesday, 11 December 2012 12:43
Expat investors are choosing to invest money in their local economy fearing that UK economic recovery is three to five years away.

Lloyds TSB International said only 7% of expat investors think the UK economy has a positive outlook for the next six months while 14% believed its prospects are positive over the next year.

Only over a three to five year time frame is there a balance of positive over negative sentiment towards the UK economy.

Expats are much more upbeat about their local economies with 29% thinking the outlook is positive in the next six months.

Over a 12 month timeframe expat investors are upbeat on balance about their local economies with 42% saying the outlook is positive, while only 26% say negative.

Britons living in Switzerland, Canada and Germany are most upbeat about their local economies while expats in Spain are overwhelmingly the most downbeat, followed by France and South Africa.

Given their more positive stance on their local economies many expat investors are increasing their local stock market investments with 29% investing more in the past six months, against only 14% who reduced their investments.

Some 13% also increased their US stock market exposure with 6% decreasing it against only 6% who increased their UK stock investments with 7% reducing them.

A further 29% of expat investors plan on buying more local stocks in the next six months with only 8% planning a reduction.

“The UK is starting to pick itself up out of recession and is dusting itself down,” said Richard Musty, Lloyds TSB International private bank director.

“But while the economy is now moving in the right direction it may take time before it hits its stride. Certainly, the majority of expat investors think the UK is treading a long road to recovery and despite deep-seated problems in many popular expat locations like the Eurozone expats do have a more favourable view of their local markets.”  

Ashish Misra, head of investments at Lloyds TSB Private Banking said: “Tellingly expats are also putting their money where their mouth is and investing locally – about five times as many people are investing more in their local markets than those who are investing in Sterling.

“With regards to US equities, the looming ‘fiscal cliff’ – the deadline after which automatic tax increases and spending cuts kick in – is the greatest cause for concern among investors. It is crucial that the Republicans and Democrats agree a deal before the New Year to stave off the threat of recession arising from deadlocked negotiations to balance the government’s books.

“European equities in contrast look relatively better value despite the challenges posed by the sovereign debt crisis. Indeed our current view is that European equities will enjoy a period of outperforming both their UK and US counterparts.”
 

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