Brexit shift: UK short exposure in Europe declines by a third this year to lowest in five years while France and Italy take over
The UK’s relative short exposure compared to the rest of Europe has steadily declined by a third to the end of November, its lowest level in over five years.
Meanwhile, France and Italy are gaining ground, according to new data shared with Morning Wire this morning.
The change marks a dramatic shift in the short exposure of European countries since January 2021, nearly a year on from Brexit, the UK’s departure from the EU.
In January, the UK accounted for 38.2 per cent of European countries’ short exposure, according to the data from portfolio intelligence firm SEI Novus.
In February this increased to 44.7 per cent but has declined consistently month on month to just 25.5 per cent in November this year.
France and Italy
Countries like France and Italy have seen an increase in their relative short exposure, with Italy’s increasing from 4.4 per cent to 6.7 per cent, and France increasing from 10.1 per cent to 12.8 per cent.
Discussing the new figures with Morning Wire this morning, Basim El-Shoura of SEI Novus said: “While the UK still retains the greatest European short exposure, the shift is dramatic and marks a departure from relatively consistent levels across Europe since the end of 2016.”
“In contrast, other major European countries have seen increases in their short exposure, such as Italy, which saw an increase by half on the start of the year, and France which saw an increase of a quarter over the same period,” he added.