In a note to investors, AllianceBernstein head of fixed income Ashish Shah said the referendum was indicative of “much bigger issues” facing the global economy.
“It’s a symptom of how global growth remains challenged in the face of significant demographic changes and the accumulation of debt, and it’s a reminder of the significant limitations of monetary policy in dealing with such issues,” he said.
Mr Shah suggested that risk would remain regardless of the outcome of the referendum.
“If the global asset bubble created by central bank bond purchases bursts, that represents a threat to future growth, add to this the fact that China is challenged by debt accumulation and the US has started to raise interest rates, and it’s clear that Brexit is just one of a number of risks,” he said.
These risks extend to Australian investors, Mr Shah added, citing the potential for a real estate market correction and the exposure to Chinese commodities demand as evidence.
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