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The United Kingdom’s shocking vote Thursday to leave the European Union has unleashed panic in capital markets and immeasurable long-term uncertainty that, for the time being, chills any hopes of recovery in Britain's stalled equity-raising environment, experts say.
The British pound tumbled and global stock indexes plunged Friday following the prior day's historic referendum, unsettling U.K. markets that had adopted a “wait-and-see” approach before pursuing new deals. Now that results will usher in unforeseeable change rather than restore the status quo, as a “remain” vote would have done, deal makers are scrambling to make sense of the new landscape.
“In terms of immediate fallout, investment bank clients of ours have said they will not be going on the road with a new IPO for at least two weeks whilst they assess the impact and effect of the decision,” Dechert LLP partner Sean Geraghty said. “In the medium to long term, the outcome is to be proved.”