IW Capital and crowdfunding specialist Crowdfinders has published commissioned research on investor sentiment post Brexit. According to their findings, support for SMEs remains strong in the face of uncertainty but confidence towards UK shares, government bonds, and property – has tanked. According to Lloyds Bank, investor sentiment towards property dropped by 35.36% between June and July 2016, while sentiment in relation to UK shares dropped -21.75% and government bonds declined-15.58%.
The research, conducted with the feedback from 2000 UK adults and 1000 UK investors, indicated that 52% will support UK SMEs via “private investment channels”. The authors extrapolate this to mean 12.9 million investors. Younger potential investors (18 to 34) are even more likely to support UK SMEs with 70% showing interest. For investors based in London, 68% are keen to support UK SMEs. The report points towards “mass uncertainty” – 55% of UK adults (28 million people) said they are not confident in the implications of Brexit on the long-term prospects of the FTSE. Nearly the same (52%) said the same about the property market, and 49% said they are not confident in the future value of the pound.
Luke Davis, CEO of IW Capital and co-founder of Crowdfinders, said the UK was in a state of “limbo” following the EU referendum;
“…consumers and investors [are] unsure how the economic landscape will change over the coming months and years. Our research supports this and shows that there is still a great deal of uncertainty surrounding what the result of the EU referendum will mean for the long-term prospects of the FTSE, the property market and the value of the pound. However, what we can take from this research is that there is a silver lining from a business perspective as our nation’s investors are willing to support SMEs in the wake of Brexit, something that cannot be said for other investment classes.”
Davis stated that supporting the private sector, more importantly SMEs, is vital during times of economic uncertainty.
“ [supporting] SMEs who make up 99.9% of all private businesses – is of paramount importance. It is now our job as investment providers, and partly the responsibility of the Government, to ensure investors are equipped with the right tools and information to help them act on their investment decisions and navigate this uncertain period with confidence.”