Last week’s British referendum result impacted markets and global geopolitics . . .

What was supposed to be a vote for Britain to confirm its membership to the European Union ended up by a Leave vote.  The U.K. exit just added yet another geopolitical issue into an already heavily strained global news.  The result of that referendum and full ramifications of that ensuing British people’s decision will take long to sink in.  Brexit and the GCC is therefore worth a visit.

There is a lot to get our head about how all that could or would affect each of us whether in our personal finances, work, holidays, etc.

One thing for sure is that in the Arabian Gulf, individuals and officials of certain states came out, saying that they did not anticipate their financial institutions to be greatly affected by Brexit.

Prior to the fatidic referendum day, Saudi Arabia, whilst monitoring the situation in Europe, took the decision to make changes, in anticipation of the vote, as it was made known to the local media this weekend, by taking certain measures of adjustments to its assets held in Sterling and Euros.

Saudi Arabia’s assets are all in the form of securities such as U.S. Treasury bonds and deposits with banks in the UK.

The central bank of neighbouring UAE said in a statement on Saturday that any effect on its financial institutions would be limited due to the relatively low interconnections between the UAE and UK financial systems.  It is to be noted that all GCC’s currencies are pegged to the US Dollar but all construction, industrial, etc. goods and services are on the contrary very much British influenced.

As a matter of fact, UAE based UK estate agencies converged on the fact that Brexit would benefit Middle East investors saying that for those investing in the UK, the predictable overnight drop in the value of Sterling could have wiped away any gains in recent years.

The price of an average prime Central London residential asset would be priced less than it was on 20 June, therefore cheaper for international first time buyers; 31% cheaper than it was during the last market peak in Q3 2007.

This could perhaps be the resumption of another property investment activity in the British capital, particularly as global investors seek out safe haven assets such as gold and London’s bricks and mortar.

Trade Arabia reported that : “The longer term implications are too early to assess, but we may start to see the unlocking of London’s stalled residential property market, with investors both exiting and entering the market as we head towards a period of demand volatility.”

Brexit ‘a boon’ for Mideast property buyers

DUBAI, June 26th, 2016

With Brexit confirmed as the UK’s new reality, investors from the Middle East region, who are looking to buy residential property in London, will now benefit by up to 31 per cent compared to the third quarter of 2007, according to property expert Cluttons.


For further reading, we recommend Dr A. Mebtoul’s article titled UK leaving the EU .