The average cost of a securities trade made in the UK has increased six basis points since last year’s Brexit referendum, according to data published today.
This means that any investment firm trading £200 million (€228 billion) per year will have £120,000 in additional costs compared to before the referendum.
The research, compiled by electronic broker ITG, is based on a database of almost 20% of total institutional trading activity between last June and March 2017.
Andre Nogueira of ITG said: “From compliance to tech upgrades, with so many expenses to absorb right now, the last thing fund managers need is for trading costs to shoot up.
“Not only have equities become costlier to trade since Britain’s vote to cut ties with Brussels, but market conditions in general have become more volatile.”
Meanwhile, new data from Thomson Reuters Lipper also published today, shows that an uptick in market volatility followed the recent UK general election, although it was not as large as the spike in volatility that followed last June’s referendum on UK membership of the EU.
Commenting on the first anniversary of the Brexit vote, Graham Bishop, of Heartwood Investment Management, said: “Sterling’s devaluation in response to the shock UK referendum result has been the most significant market event in recent years.
“It has yet to materially recover from its post-referendum low and now remains vulnerable to even more political and economic uncertainty.
“Uncertain domestic politics, economic cloudiness and more ambiguities around Bank of England policy lead us to maintain an underweight allocation to UK assets.”
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