Guernsey: Long Term Environment Supportive For Materials Companies - Any Setback Will Be Short Lived
Last Updated: 28 June 2007

Materials Update (June 2007) by Richard Saunders, Senior Manager, Investment Management, Butterfield Bank Guernsey:

Materials update – June 2007

  • Our continued outlook for a mid cycle economic slowdown is supportive of a near-term moderation in energy costs, which should provide margin relief within the sector, especially for chemical companies. However, we would view this as a short-term phenomenon, given our view that any setback in energy prices is likely to be relatively short lived.
  • Earnings Revisions have remained very positive for the metals and mining industry, whilst being slightly less encouraging within the chemicals sub-sector.
  • Commodity prices have rallied back from the February sell off, however the strength of the current market still appears underestimated by stock prices.
  • Merger and Acquisition and Private Equity activity are likely to provide additional medium term support to companies within the sector which, in many cases, are cash cows with long life assets.
  • We would see any significant correction as an opportunity to add to holdings

Notes to Editors

Butterfield Bank (Guernsey) Limited is a wholly owned subsidiary of The Bank of N.T. Butterfield & Son Limited, which is regulated by the Bermuda Monetary Authority. The parent bank was established in Bermuda in 1858. In addition to Bermuda and Guernsey, the Group has offices in The Bahamas, Barbados, Canada, Cayman, Switzerland and the United Kingdom. Total Group assets at all of the Bank’s locations as at the 31st December 2006 were US$10 billion.

Butterfield Bank (Guernsey) Limited, has been serving its clients for more than 30 years and offers a comprehensive range of offshore financial services. These include: investment management, fiduciary, private banking, treasury, custody and lending services.

Butterfield Bank (Guernsey) Limited (‘The Bank’), is licensed and regulated by the Guernsey Financial Services Commission under The Banking Supervision (Bailiwick of Guernsey) Law, 1994, as amended, The Protection of Investors (Bailiwick of Guernsey) Law 1987, as amended, The Regulation of Fiduciaries, Administration Business and Company Directors, etc (Bailiwick of Guernsey) Law, 2000, as amended. The Bank is also registered under the Data Protection (Bailiwick of Guernsey) Law 2001.

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