In an unprecedented move, amidst great confusion and speculations Britain decided to exit the European Union owing to the referendum in June 2016 where 52% of its citizens voted in favour of the same, to try its luck in the international business world as an independent economy.
Since the move is a first of its kind, new agreements, protocols and procedures need to be drafted for which negotiations are still underway. The most interesting and exciting feature of such a move is the instability it creates in the financial market worldwide. Therefore, the stock analysts and trade gurus are breaking their heads over the short and long term results of this decision.
Coming to what’s in it for the IT- sector, according to the reports given by National Association of Software and Services Companies (NASSCOM), for the fiscal financial year 2016 out of the $110 billion total IT exports UK contributed 17 per cent and continental Europe contributed 11 per cent. Post Brexit, IT majors like Tech Mahindra, Mind Tree etc. were apprehensive about investing further in UK and the rest of Europe which resulted in many stocks trading in red for a period of time. However, last week saw a rebound in the IT-stocks after having been under pressure in the preceding weeks owing to the concerns that Brexit related fallout will hurt spending among overseas clients and lead to expenditure cuts.
The IT sector, being the most dynamic and volatile sector of the industry, is susceptible to the slightest vibrations in the world economy, hence Brexit will definitely have an impact on the sector as a whole and the Indian IT scenario in particular. Experts, though across various news channels assure us that in the long run, IT industry won’t suffer greatly because IT is an ever-expanding business and continues to be a green pasture for entrepreneurs and employees alike.
Image source: “http://themiddleground.sg/2016/03/17/brexit-for-newbies-what-is-it-and-why-do-we-care/”