Channel Island Shares Show Mixed Performance In First Quarter

by Robert Lee, Tax-News.com, London

21 April 2003

A review of the first quarter performance of the Channel Island markets by stockbroking firm Collins Stewart has revealed mixed results, according to the Jersey Evening Post.

Whilst shares in some of the jurisdictions' largest companies such as Guiton Group, Jersey Electricity Comprop, and Flying Brands fared well, outperforming the FTSE All Share index, others such as International Energy Group and CI Traders saw quite sharp declines in the first three months of this year.

Analyst Russell Wynn put the mixed fortunes down to a number of reasons, including the continuing uncertainty over the EU Savings Tax Directive, a sluggish economy - particularly in the finance sector - rising inflation and an impending budget deficit

"In addition, the surprise decision by Guernsey to opt for a withholding tax rather than exchange of information, as favoured by Jersey, adds a new twist to the future of the Channel Islands," Wynn told the JEP, continuing: "Hindsight will surely tell us which option was the wiser route. However, at this stage it is unclear and raises the prospect of one Channel Island gaining significantly from the other in the battle to compete for offshore investment business. This divergence may give international banks even more reason to defer any increased investment in the Channel Islands."

On the outlook for the Channel Island economies, Mr Wynn sounded a cautious note, predicting that there are likely to be further tough times ahead for the listed companies reviewed.

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