How Brexit will affect Malaysians

PETALING JAYA: Britain’s historic vote on whether to remain or exit from the European Union (EU) will have many implications on Malaysians who make up one of the biggest investors of UK property, especially institutional investors that include the Employees Provident Fund, Retirement Fund Inc (KWAP) and Armed Forces Fund Board (LTAT).

Malaysian investors are involved in a number of property development in Britain including the redevelopment of Battersea, and both countries have strong bilateral trade relations.

British colleges and universities are long-time favourite choices for Malaysian parents sending their children for overseas education and this has contributed to Malaysians snapping up property in the major education cities in the UK.

Britain’s property market has been a hotbed for investors from around the world although property demand has become subdued in the period leading up to yesterday’s vote casting.

Industry observers said investors of UK property can take comfort that there is a silver lining behind the European Referendum.

KL-based Cornerstone International Properties director Virata Thaivasigamony said if Brexit occurs, there will be a period of uncertainty and the pound will take a beating.

“The UK will be literally ‘on sale’. This is advantageous to investors, particularly those investing in UK student property because UK education will remain strong regardless of Brexit. Malaysians and other foreigners including those from the EU will not stop sending their children to study in the UK – people still want a degree from a UK university,” he added.

Meanwhile, currency investors continue to be wary, preferring to wait on the sidelines.

Commenting on the potential impact of a Brexit on the local financial markets, Bank Negara said in a statement that Malaysia’s markets are well positioned to face any major volatility over Britain’s referendum on its membership in the EU.

The central bank’s Financial Market Committee is monitoring the situation and would remain vigi­lant to any potential emerging risks and challenges to the domestic financial markets.

The central bank said the committee also cautioned that the impact and volatility could spill over onto the financial markets.

“It should be emphasised that liquidity in the domestic market remains ample and our financial markets are well positioned to face any major volatility.

“Players stand ready to support the orderly functioning and smooth intermediation in the financial markets,” it said.

The results from the referendum over whether Britain should exit (Brexit) or remain in the EU are expected at between 2pm and 4pm Malaysia time today.

Brexit factbox

A referendum was held to decide whether Britain should leave or remain in the European Union. This article is designed to be an easy-to-understand guide. The results are expected between 2pm and 4pm Malaysia time. Read The Star Online for the results.

1. What is a referendum?

A referendum is basically a vote in which everyone (or nearly everyone) of voting age can take part, normally giving a “Yes” or “No” answer to a question. Whichever side gets more than half of all votes cast is considered to have won.

2. Why is a referendum being held?

Prime Minister David Cameron promised to hold one if he won the 2015 general election, in response to growing calls from his own Conservative MPs and the UK Independence Party (UKIP), who argued that Britain had not had a say since 1975, when it voted to stay in the EU in a referendum. Mr Cameron said: “It is time for the British people to have their say. It is time to settle this European question in British politics.”

3. What does Brexit mean?

It is a word that has become used as a shorthand way of saying the UK leaving the EU – merging the words Britain and exit to get Brexit.

4. Who wants the UK to leave the EU?

The British public are fairly evenly split, according to the latest opinion polls. The UK Independence Party, which won the last European elections, and received nearly four million votes – 13% of  those cast – in May’s general election, campaigns for Britain’s exit from the EU. About half of Conservative MPs are also in favour of leaving.

5. Why do they want Britain to leave?

6. Who wants Britain to stay in the EU?

Cameron wants Britain to stay in the EU. Sixteen members of his Cabinet also back staying in. The Conservative Party has pledged to be neutral in the campaign – but the Labour Party, SNP, Plaid Cymru and the Lib Dems are all in favour of staying in. US president Barack Obama also wants Britain to remain in the EU, as do other EU nations such as France and Germany.

7. Why do they want Britain to stay?

Those campaigning for Britain to stay in the EU say it gets a big boost from membership – it makes selling things to other EU countries easier and, they argue, the flow of immigrants, most of whom are young and keen to work, fuels economic growth and helps pay for public services.

8. So would Britain be better in or out?

It depends which way you look at it – or what you believe is important. Leaving the EU would be a big step – arguably far more important than who wins a general election – but would it set the nation free or condemn it to economic ruin?

Source: BBC

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