Download Market Sentiment Survey Press Release June 2017

Irish Government could be doing more to prepare for Brexit – CFA Society Ireland survey
 Hard Brexit is now less likely as a result of UK general election
 Sterling likely to weaken further putting more pressure on exporters
 Geopolitical risk is the biggest threat to the global economy, ahead of Trump
 Divided views on whether AIB flotation proceeds should be used to reduce debt or
fund capital expenditure.
The majority of investment professionals surveyed by CFA Society Ireland believe that a hard Brexit
is now less likely arising from the results of the recent UK election.
Speaking on the survey results conducted in late June, CFA Society Ireland President Fran Carter
commented that “while 58% of our members believe that a hard Brexit is now less likely due to the
UK election results, there is no room for complacency here. A sizeable one third of our members
believe that it is now more difficult to predict the outcome of the Brexit negotiations.
“Furthermore, the vast majority of those surveyed cite Brexit as the single biggest threat to the Irish
economy over the coming 12 months while almost two thirds believe that a hard Brexit would have
a very serious impact on the Irish economy.”
The survey also revealed that 56% believe that the Irish Government is not making adequate
preparations for Brexit. While this figure is slightly lower than the 65% who expressed this view in
the CFA’s December 2016 survey, Carter takes little comfort.
“It is a major concern to me that a sizeable proportion of our members still believe that the
Government’s preparedness for Brexit is not adequate despite it being a year now since the Brexit
referendum.
“The Government needs to ensure that its voice is heard loud and clear during the Brexit
negotiations and that it is sufficiently prepared to deal with any negative fallout from Brexit.
Hopefully the new administration under Leo Varadkar will heed this message” he added.
After Brexit, the biggest risks to the Irish economy over the coming 12 months according to the
survey were rising public expenditures, a domestic slowdown and the Trump presidency.
There are other storm clouds facing the Irish economy over the next 12 months also, with 62% of
those surveyed saying they believe sterling will weaken further over that period. “If that ends up
being the case, then there’s going to be a lot more pressure on our exporters especially in the food,
drink and tourism sectors as Britain is such an important market” said Carter.
The view of President Trump remains very negative with almost two-thirds of respondents saying
that their view of him has become even more negative since he became President five months ago.
The majority of members cited geopolitical issues in the East and Middle East and terrorism as the
biggest threat to the global economy over the next 12 months closely followed by Trump. Other risks
that ranked highly were the unwinding of easy global monetary policy and Brexit.
Back closer to home, there were divided views on what the Government should do with the
estimated €3 billion proceeds of the AIB flotation, with 42% saying that the proceeds should be used
to pay down national debt and 39% saying that the proceeds should be used to fund capital
expenditure. The remaining 19% said that the proceeds should be used to reduce taxation.
On the domestic political front, 44% said that they expect the Varadkar-led Fine Gael government to
last the next two budgets with almost a third saying they expect the Government to last longer than
two budgets. A quarter of respondents said, however, that they expect to the government to last
just the next budget.
There were also divided views on how long the Conservative government in the UK will last, with
46% giving Theresa May between six and 12 months, while 42% said that they expect her
government to survive for longer.
Ends
Further information:
Brendan McGrath
087-9370266