Channel Islands’ investors have confidence in long-term success of local economy

| November 8, 2012 | 0 Comments

GUERNSEY investors have more confidence in the future of the local economy than those in Jersey.

For the first time, the bi-annual Investor Outlook Survey by Lloyds TSB Private Banking included investors in Guernsey and Jersey, and questioned them on their investment strategies, their thoughts on the local, UK and global economy and sought to understand more about their approach to savings.

The research shows that only 22% of investors in Jersey think the outlook for the local economy over the next six months is positive, while 43% think it is negative. In Guernsey, 41% of investors believe the outlook is positive and only 23% believe it is negative. Around a third in each island (35%) think the outlook is neutral.

However, looking to the future, investors in both islands are confident about the local economy with  54% in Jersey and 51% in Guernsey saying the outlook for the next 10 years is positive, while 12% in Jersey and 16% in Guernsey believe it is negative. Around a quarter in Jersey (24%) think the economy has a neutral outlook and the figure for Guernsey is slightly higher at 30%.

In the meantime, the confidence of investors grows the further into the future they look. Within the next 12 months, 33% of investors in Jersey and 43% in Guernsey believe the outlook is positive, compared to 38% in Jersey who think it is negative, and 25% in Guernsey. Around a third, 30% in Jersey and 31% in Guernsey think the outlook is neutral.

More than half in both islands, 55% in Jersey and 51% in Guernsey, believe the outlook for the local economy over the next three to five years is positive and 22% in Jersey and just 12% in Guernsey think it is negative.

‘It is good to see that investor sentiment in both Guernsey and Jersey is quite positive, especially in the medium to long-term.  We have not felt the impact of the global economic crisis as much as others but we have felt the aftershocks, and it is only natural for investors to show a certain level of nervousness,’ said Nicholas Boys Smith, director of Lloyds TSB International Wealth.

‘It was reassuring that the confidence in the local economy was as high as it was, both in the short-term and the long-term. Guernsey investors are slightly more optimistic for the short-term future but the confidence of the Jersey investors soon matches that of the neighbours as we look further ahead.’

Mr Boys Smith said the survey’s findings were good news for the islands’ reputation.

‘This certainly reflects positively on Guernsey plc and Jersey plc,’ he said.

The survey also asked investors for their thoughts on the future of the local property industry and whether they had increased or decreased their exposure to local property as an investment class.

Of those who responded, 10% of Jersey investors have increased their exposure over the last six months compared to 20% in Guernsey. Just 6% in Guernsey have decreased their exposure. Looking ahead to the next six months, 12% in each island said they are likely to increase their local property portfolio with 6% in Jersey and 2% in Guernsey looking to reduce it.

Local property was considered to be a good investment for the future by investors in both islands. In Jersey 39% said the outlook for local property is positive and in Guernsey, the figure is significantly higher at 63%. Just over a quarter of Guernsey investors (27%) and 41% in Jersey felt the outlook is neutral and 20% in Jersey and 10% in Guernsey feel it is negative.

‘In recent years, property in the Channel Islands has been seen as safe investment as prices have continued in an upward trend and don’t appear to have suffered, despite what has happened to property prices elsewhere,’ said Mr Boys Smith.

‘I’m sure many islanders will have questioned whether property prices can continue to increase but looking at the responses in this research , it seems that property will remain a popular investment.’

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Category: Finance & Business

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