UK could be post-Brexit winner in Asia

Britain could benefit from exiting the European Union if it is successful in negotiating bilateral agreements in the Asia-Pacific region, panellists at the 12th annual FX Week Asia conference told delegates.

While pointing out there is likely to be little question whether Asian investors will pick the EU over the UK due to the size of the monetary union economy, panellists highlighted it might not be necessary to choose.

"If you have to choose, the maths is easy, as the UK is only about 20% [of] the size of the EU, so the choice would in a way be easy, but I don't know if investors need to make that decision," said Richard Jerram, chief economist at the Bank of Singapore.

If you have to choose, the maths is easy, as the UK is only about 20% [of] the size of the EU… but I don't know if investors need to make that decision
Richard Jerram, Bank of Singapore

"Actually, I don't understand why we need to choose," agreed Andrew Ng, group executive and head of treasury & markets at DBS Bank. "The UK has been a financial centre for so many years, they have the skillsets, the infrastructure, to continue being a major hub. I think it will be more a case of the two competing much like the way Hong Kong, Singapore and Japan do."

The UK has also become the largest offshore yuan hub in recent years after Hong Kong – a role that will be difficult to challenge, said Mansoor Mohi-uddin, senior market strategist for the Asia-Pacific region at RBS, although he noted it is difficult to gauge the exact impact of Brexit on the UK as a financial centre until clarity around its new relationship with the EU emerges.

Don't underestimate the UK

Meanwhile, Park Cyn-Young, a director of regional co-operation and integration in the Asian Development Bank, said it is likely the utility of the UK has decreased for China in the wake of Brexit, but in terms of trade relationships with the Asian region, the country should not suffer a major impact.

"Don't underestimate the UK. They have been doing business in Asia for a long time, and I think they could actually benefit from their new position if they are successful in negotiating favourable bilateral trade agreements," countered Ng.