Discussion
A major Q. is why so many UK firms end up being sold to foreign owners?
The FT thinks its the regulatory environment that causes UK investors to choose to invest elsewhere.... and so that needs to change.
But, the real issue is why do non-UK investors value UK-corporate assets more highly than UK investors.... its such a pattern that ignorant optimism about the UK seems unlikely, so what we need to know is *why* is there this disparity?
h/t FT
1/2
I have two possible explanations:
1. non-UK investors have a more realistic expectation of returns & can live with long-term 'normal' profits; UK investors are seeking 'super' returns & so seek more risky investments (abroad):
2. UK investors tend to ignore the actualities of specific business & have got caught up in a self-reinforcing negative sentiment about the UK's economy generally (not unwarranted, of course), and so seek to find 'better' investments abroad.
2/2
@ChrisMayLA6 1 and 2 overlap around time frames. Personally, I think 1 is the stronger
Whatever the real reason(s), the idea that the UK's over-regulated financial environment is among them is absurd, since investment flows into many more regulated countries - as well as from them into the UK.
Install bonfire.cafe
Get the full app experience
