John Wyn-Evans, the head of investment strategy for Investec Wealth and Investment, flew in to impart his encouraging words to Island clients of the firm during a series of presentations last week.
Turning his attention first to geo-politics, he said that China, Japan, the Middle East and Europe had all taken longer to identify the measures that they should take in order to hasten economic recovery.
‘The United States acted early to administer low interest rates and quantitative easing,’ Mr Wyn-Evans said. ‘This set the ground for a a much quicker recovery. Once the value of their homes stops going down, people feel a lot happier. The EU, by contrast, took two and a half years to get around to announcing plans for quantitative easing.’
Revealing Investec’s ‘vision for 2015’, Mr Wyn-Evans said that there was currently a preference for equity over bond investment.
‘If you begin with low starting yields on bonds, future returns are unlikely to be great,’ he said. ‘People are pushed into riskier asset classes in order to maximise income and long-term growth. This way, the value of a portfolio can become more volatile; although, in the right way, volatility can sometimes be a benefit.’
A General Election can always be relied upon to send a nervous shiver through the financial world, and this year, as the UK prepares to go to the polls on 7 May, is no exception. And Mr Wyn-Evans is in no doubt that the country is in for an interesting election.
‘Voters have a distinct choice for the first time since 1992,’ he explained. ‘The policies of the Left and Right are much more clearly defined and further apart – they are now less aligned to the centre.’
And there is also the emergence of the smaller parties – Ukip, and the Greens, for example – to take into consideration.
‘In 1951, 97 per cent of all votes cast in the election went to either Labour or the Conservatives. There is a much greater fragmentation of the vote today.’
Labour, he said, was moving back to a cost-of-living agenda, but the party was also deemed to be anti-wealth and anti-business.
‘A Conservative government should be more business friendly,’ he said. ‘But, on the downside, the Tories have promised a referendum on Europe. Not being part of Europe, were that to be the outcome, would weaken our position on the world stage; sterling would certainly weaken further if we were outside Europe – that is the risk.’
There was little doubt that sterling also felt the jitters when the British were heading for the ballot box. ‘It fell 36 per cent in the run-up to the Scottish independence vote,’ Mr Wyn-Evans recalled, ‘mainly against the dollar.
‘At the moment it looks quite strong against the euro and the yen, but it is still weak against the dollar and the Swiss franc, so it is rather hard to judge the overall strength of sterling.’
Whatever colour is dominating Westminster after 7 May, from a market perspective, certain sectors will be more affected.
‘There is not a big bet to be made on equities or bonds as far as the UK election is concerned,’ Mr Wyn-Evans said. ‘Global conditions provide a far greater influence on such market sectors.’
Investors looking for a hint of good news, however, may just find it in the current trend of falling oil prices. This is a positive factor, in Mr Wyn-Evans’s view.
‘People are worried about the deflationary effect on prices. We say, though, that saving and not spending on fuel will filter through to the wider economy. The money saved by consumers will be spent elsewhere.
‘The price of petrol in the US has almost halved and Europe, Japan and China – two-thirds of the global economy – will benefit from lower oil prices.’
Name: Derek Warwick
Age: 60
Name of business: Derek Warwick Honda
When established: September 1989
Position there: Chairman
Number of employees: 20
What was your first job?
Working in the family business (Warwick Trailers) in the UK as a welder.
Your first break in business?
I loved working at Warwick Trailers and ran the place until coming to Jersey. My first break with my own business was Derek Warwick Honda in 1989, but it wasn’t until after 1991 when I made a few changes that the business took off.
What could the States do to help businesses?
It would be easy for me to say stop being anti-motorist – the motorist is already being over-taxed. But if I had a business in town I would sit outside TTS and ask them one question, which is: ‘When they make changes to traffic systems, lights, zebra crossings etc, do they actually check that they are working? Because I could give them many situations where they have made changes, including in town, and have completely messed up the flow of traffic. Then everyone moans about the traffic, when in fact TTS has not done their job properly.
Advice to anyone setting up in business?
Make sure you have thought through three things:
1. Make sure you are in the right location.
2. Make sure you have thought about the business working in Jersey. We only have 95,000 people to work with (what can work in the UK might not work in Jersey).
3. Make sure you have enough working capital, because it is cash flow that kills most businesses.
Best thing about being in business in Jersey?
Trust, loyalty and feeling safe. Island people are different from the UK and if you treat them right they are very loyal to you and your business.
And the most frustrating?
When I first arrived and had five garages in the UK, I found the pace frustrating. But now I have turned it into a positive.
Family?
Married 39 years. Two gorgeous daughters: Marie (36), Kerry (33). Three adorable and amazing grandchildren: Harrison (3), Benjamin (2) and Daniel (1). Mother and father passed away; three sisters; one brother killed in a racing car; five nieces; and one nephew.
Hobbies/interests outside work?
Motor racing, including motor bikes, golf, fitness and, fortunately, work.
Favourite way to unwind after a hard day at work?
Glass of cold white wine.
If you would like to take part in our business profile, please email business@jerseyeveningpost.com
