Brexit: A First Take At What We Are Watching

Navigator Edition: June/July 2016
By: Omid Tofigh

On June 24th, the Brexit vote in the UK was the shot heard around the world. Shortly after the public vote, the investment community voted and the initial shock was unpleasant. In Figure 1, we show the equity market reaction on June 24th for specific companies and sectors as a proxy of initial Brexit exposure. We have also identified a working list of implications for payments industry stakeholders that we will be monitoring as the situation continues to unfold. To state the obvious, there are more questions than answers at this time, but the implications are potentially far-reaching. It remains to be seen how the Brexit implementation will impact, for example, the FinTech startup community in the UK as a result of loss of access to the EU market, how the regulatory environment affecting payment companies may change, or how the card schemes driving switching, interchange rates, and scheme fees may be forced to adopt new classifications for transactions between the UK and EU.

Figure 1: Impact of the Brexit Vote on Share Price Returns on June 24, 2016

Nav-Fig-1_-Impact-of-the-Brexit-Vote-on-Share-Price-Returns-on-June-24,-2016Source: Yahoo! Finance, Irish Stock Exchange, London Stock Exchange, and Wall Street Journal.

For a more detailed read on our initial perspective, please see our News Bulletin: Brexit and Payments.

For more information, please contact Omid Tofigh, Principal,, specializing in M&A Advisory.

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