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Fears that the credit markets will be adversely affected much further by a Brexit are overblown, or at least have been priced in to a certain extent, as fundamentals are unchanged, says portfolio manager Victor Verberk.
‘Uncertainty about FDI flows moving out is over-estimating things’“But we have to remain wary here too, especially about the potential FDI flows out of the UK. FDI flows are incredibly difficult to pinpoint, and if you look at Brazil, the country is in a depression and yet FDIs are still strong. So talking about uncertainty about FDI flows moving out is over-estimating things.”
‘UK banks are really cheap now’“In our credit portfolios we are overweight on UK financials because the UK banks until now were the fastest recovering in cleaning up their balance sheets” he adds. The financials sector has sold off since January, with the UK selling off even more, and the UK banks are really cheap now.”
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