Brexit

As the magnitude of political effort needed for the UK to exit the European Union became clearer this week, the investment grade corporate bond market has downed tools.

Equity capital markets bankers who have been hankering after a long holiday know that this summer is the time to take it. While investors are glued to their screens watching the aftershocks of the UK’s Brexit referendum playing havoc with their portfolios, new deals are almost entirely out of the question.

The market reaction to the UK’s surprise decision to leave the European Union has been immediate with stocks falling, the pound weakening and the country downgraded by international rating agencies. But market participants are worried that the worse has yet to come and London could be set to lose its shine as a premium renminbi hub.

Volatility has reigned following the UK’s decision to exit the European Union last Friday. But market participants in Asia are now hopeful that the region’s high yield market will be a new go-to place for investors trying to redeploy their funds away from Europe.

Euro private placement market participants are taking differing stances on the result of the UK's vote to leave the European Union last week, with some seeing opportunity and others more cautious.

Electricité de France has named four banks to lead its €4bn rights issue, of which €3bn will be bought by the French government.

The European investment grade corporate bond market produced a zero-issuance Monday this week, as investors re-assessed their positions after the UK’s surprise vote to leave the EU.

Balanced mutual funds and risk parity funds were among those most wrong-footed by the UK voting reject EU membership last week, according to equity analysts, while leveraged exchange traded funds amplified the market fallout of the vote.

The market fallout from the UK’s decision last week to leave the European Union may have taken public sector syndications off the table for the near future, but there could still be other trades available, said bankers on Monday.

Spain’s 10 year bonds on Monday reversed all their Brexit driven losses, after the country’s voters showed a clear preference for pro-European Union parties at a general election on Sunday.

Loans bankers are holding out for details of the divorce agreement between the UK and the EU to surface before assessing the full impact of Brexit on their market. But in the short term, they expect a hit to already low volumes.

The European Commission is expected to include extra funding for the European Banking Authority in an upcoming budget proposal to help the regulator pay for an expected relocation to the continent.