‘How Brexit would affect the markets’: Coram AM’s Gray
FUND manager Martin Gray has hit out at a lack of cohesion in the European Union, and backed controversial views that a UK exit vote would “not make much difference” to markets.
The former Miton head – now a co-owner/lead fund manager at boutique asset management house Coram Asset Management – is known by advisers for producing positive returns in difficult markets. But despite predictions elsewhere of markets doom and gloom on the horizon if the UK votes to leave the European Union, in a similar vein to Neil Woodford’s recent stance, Gray, pictured, points that being in or out of Europe will not have the type of impact on markets that many are predicting.
“I don’t think that it makes much difference,” he says. “The ends of the spectrum, the ins and the outs, the crazy stats and crazy numbers, I don’t believe them. If anyone thinks that Europe is suddenly going to ban our exports, then they’ve got another think coming.
“Nothing is going to change that much materially that I can see. I think potentially there is more danger to the valuation of the euro than there is to sterling. That’s not been particularly picked up on in the press.”
Gray is particularly concerned at the lack of leadership within the EU and has even questioned the need for the euro.
“It doesn’t seem that anyone is taking control of the destiny of European Union. The Euro has always been a huge mistake. You can’t have a currency union properly without fiscal and political union with it. It is the wrong way round. Is there a chance of it happening? I don’t know.”
“There are some people who will say, and have said, that the UK should get out before it implodes anyway. It is probably a little bit aggressive, because it will probably exist in some form. But it doesn’t seem to be developing and going anywhere, if anything it is going backwards. The shambles over borders and the Syrian crisis? They can’t seem to agree on anything.”
Despite not being concerned about the possibility of the UK leaving the EU, Gray is, however, predicting that another global recession could still be on the cards. He believes that interest rates are lower for longer because interest rates from central banks all around the world and what they are doing is not changing anything.
“They’ve thrown a lot of money at something and it is not changing that. Global growth is on the decline still,” he said.
“We get all these government hopes that GDP is going to pick up, but almost every number is revised downward.
“Slow growth, low interest rates, disinflation, and it wouldn’t take a lot to see one or two areas of the global economy moving into recession. That’s a bit gloomier than a lot of other people are suggesting. I don’t think that we are out of the woods on that one yet. People have got a little bit ahead of themselves.”
To see a video featuring more of Martin Gray’s thoughts on the market and his thoughts on investing during these challenging times, as he explains them to II’s Gary Robinson, click here.
To read more of Gary Robinson’s interview of Martin Gray, see the first re-launched issue of International Investment, coming out in April. To subscribe, click here.