Finance Monthly January 2020 Edition

8 www.finance-monthly.com NEWS - MONTHLY ROUND-UP THE MONTHLY ROUND-UP BORIS JOHNSON COULD SPOOK FINANCIAL MARKETS IN 2020 Boris Johnson could spook financial markets in 2020 and investors must avoid complacency, warns the CEO of deVere Group. The warning from Nigel Green, Chief Executive and Founder of deVere Group, follows the landslide victory for Mr Johnson’s Conserva- tive party in the UK’s general election in which he secured an 80-seat majority, and as stocks rose across Europe on Monday. “On Monday after the elec- tion, European stock mar- kets reached all-time highs. This has been driven in part by investors’ relief that a hung parliament had not been delivered, meaning years of uncertainty and in- decisions over the UK’s way out of the EU is coming to an end. Also, perhaps, because the Conservatives promised a more pro-business agen- da.” He continues: “But Boris Johnson now has the daunt- ing task of turning his power- ful election campaign slogan of ‘Get Brexit Done’ into real- ity. When Britain leaves on 31st January, there will be only 11 months to thrash out the basics of the future rela- tionship with the European Union. “The self-imposed end of December 2020 deadline is a mammoth challenge or Britain will fall through the ‘trap door’ of no-deal Brexit on 1st January 2021.” The Prime Minister could request another extension for the transition period. The government has until 1st UNICREDIT CUTS 8,000 BANKING JOBS PUSHING GLOBAL TOTAL PAST 70,000 Italian global bank Uni- Credit plans on cutting 8,000 jobs pushing the global figure of total job cuts in banks this year be- yond 73,000. Negative interest rates and a slowing economy are forcing lenders, in this case, banks, to reduce costs. In a new four-year strategic plan UniCredit has announced it will be cutting back 8,000 more bank jobs as Chief Ex- ecutive Officer Jean Pierre Mustier rewards investors with € 2 billion (£1.7 billion) worth of share buybacks. UniCredit plans on boost- ing shareholder remu- neration via dividends and share repurchases. The job cuts, which make up around 7% of the bank’s entire workforce, will hap- pen through the closure of around 500 branches worldwide. In a statement, Mustier said the plan’s targets are “pragmatic and achiev- able… They are based on a realistic set of mac- roeconomic assumptions, being more conservative than those assumed by the market.” According to Bloomb- erg’s recent report, these job cuts push the overall banking job losses world- wide, this year, past 73,400, most of which have happened/will happen in Europe (86%). July 2020 to agree with the EU a one-off extension, until the end of 2021 or 2022. But, says Mr Green, this is unlikely. He notes: “I don’t believe that Johnson will use his significant majority to slow down or soften – the Brexit process. “Instead, his assumption from the election outcome will be that people want quick, easy answers. “Indeed, in an interview on Sunday, Michael Gove guaranteed that the Brexit transition period will not be extended.” He goes on to add: “The task ahead is monumental. The time frame in which to com- plete it is narrow. Failure to agree on a free trade deal by the end of next year will mean the UK crashing out of the EU and all the far- reaching negative economic implications, including the likelihood of a recession. “With such uncertainty, fol- lowing the election bounce, in 2020 investor confidence in the UK is likely to remain subdued and Boris John- son’s Brexit stance could be a major source of volatility in financial markets.” The deVere CEO concludes: “Despite the markets cur- rently surging, investors must avoid complacency. “2020 promises to be a year in which political fac- tors – including Boris John- son’s Brexit plan and the US presidential election, amongst others – could potentially spook markets. “Investors should assess and, where necessary, rebal- ance their portfolios to take advantage of the potential opportunities and to mitigate the risks.”