Clearly, currency and equity index volatility has been very high ahead of today’s UK referendum. I remain of the view that both the outcome of that referendum is a ‘coin toss ‘ as is the market’s reaction to either outcome. On that basis, I remain somewhat on the sidelines and will use whatever happens as an opportunity to increase exposure to the medium-term structural growth themes I believe in.
This is a classic situation of trading versus investing. There will be a trading response to “Brexit” or “Bremain”, and it may not be what we expect. You’ve seen already that markets are basically tracking betting odds, but what happens next is anyone’s guess. That is why I am NOT trading this event, I am looking for INVESTMENT opportunity inside what will be genuine volatility. As I always say, “in volatility there is opportunity”.
My no.1 medium-term structural growth theme remains the rise of the Chinese International Tourist. This is exactly the same as the rise of the Japanese International tourist in the 80’s/90’s. We forecast that 200 million Chinese Nationals will travel internationally annually by 2020, up from 120 million currently.