Why Betting on Brexit Could be Great Idea in Asia


At long last, after three years of wrangling, arguments, and division it seems like 2020 will be the year in which Brexit will finally come to pass. That’s because this is one of the very first things that the UK’s newly elected prime minister Boris Johnson has vowed to happen. What’s more, he has promised that it’s going to happen on 31st January 2020, come what may.

In a follow up to this commitment, Johnson has also outlined plans to make extending the negotiation period beyond the end of 2020 illegal, a move which saw an immediate drop in the value of the pound.

The reason for this market reaction was that many think that this will greatly increase the chances of a no deal Brexit should negotiations fail to be concluded by the cut-off date.

While it might seem that this would be of little or no consequence for Asia, and India in particular, a study carried out by the University of Edinburgh and published in January 2019, suggested that a no-deal Brexit, could have a very adverse effect on the relationship with the UK.

It was felt that right now many Asian countries regard the UK as a form of bridge between them and Europe. But if all trade deals between the UK and Europe were to become null and void, Asian countries would then have to focus more of their attention on dealing with EU countries. This would damage the dealings Britain has worked hard to strengthen with Asia since the financial crash of 2008/09.

But there is a glimmer of hope for anyone in Asia looking to benefit from the UK government’s firm stand on when the split with the EU will take place. That’s because, while the Brexit leave date odds on a January departure may be short, with a huge 80 seat majority it seems reasonably certain that the Government will be able to hit the proposed date.

Of course, while this might seem like a fairly sure bet, politics is notoriously unpredictable. So bolder gamblers might like to make the wager that it won’t be before 2022 that links are severed. Yes, it’s a long shot, but nothing’s impossible.

 

Source: Unsplash

For example, a few years ago not many people believed that Donald Trump would become president of the United States and the so-called clever money was on Hilary Clinton being elected as the country’s first-ever female leader.

But it was the gamblers who put their money on Trump who had the greatest triumph, so maybe a longer odds Brexit bet could have the same result.

You also only have to look at the recent election that has delivered the UK Conservative Party’s biggest win since 1987. Most people were betting that it would only be a majority of between 20 and 30 seats, and how wrong they were proved to be.

So now may also be the time to put some money down on the unthinkable becoming all too possible again, and benefiting from an event that may not be such good news for Asia in the long term.