Decision Day.

23rd June 2016

Ian Copelin, Investment Director, my wealth comments “It’s finally here – thank goodness!  Today is the day when British voters head to the voting booths to decide on the UK’s 43-year old membership of the EU.

And the UK has the full attention of financial markets, not just in Europe, but around the world.

The bullish sentiment in both equity and currency markets that I referred to in my last update has not been in short supply, with the FTSE-100 up yet again this morning, currently trading around the 6,350 level (nearly 8% higher than the 5,900 level the FTSE-100 traded at this time last week).

As both campaigns make their last ditch appeal to voters, opinion polls still suggest that it is still too close to call.  However, the bullish market sentiment suggests that investors are basing their decisions on the odds reported by the bookmakers (for example, Ladbrokes currently suggests that there is only a 24% chance of a Brexit).

The case for backing the bookmakers odds over the opinion polls makes logical sense as the bookies did a better job at the last election than opinion polls, while theory would suggest that when people have money at stake they tend to be much better at predicting outcomes.

However, while Ladbrokes has this morning stated that 87% of all the money staked on the referendum yesterday was placed on voters rejecting Brexit, interestingly, Matthew Shaddick, Head of Political Betting at Ladbrokes, is quoted as telling CNBC that the average bet placed on ‘Remain’ was £450 compared with £75 for ‘Leave’ and that more bets had been placed on ‘Leave’ than ‘Remain’!

It’s going to be a sleepless night for me.”