Promising forecast for local equity
Survey reveals asset managers expect domestic market to outperform cash over the next 12 months thanks to global growth
Improving global growth will favour SA’s equity market this year, which is looking more attractive than it has for some time, says Old Mutual Investment Group. Synchronised growth across China, the US and Europe was positive for domestic equities, which were less expensive than they had been over the past two years, following the "sideways" move of the JSE all-share index, said Graham Tucker, portfolio manager at Old Mutual MacroSolutions. The Old Mutual balanced fund had, over the past 12 months, reduced its cash holding from about 25% to 7%. The fund now held 64% of its assets in equities, with 41% in local equity, Tucker said. His comments come as jittery South African investors have been tempted to move money out of equities and into cash, fearing a market correction following the country’s credit ratings downgrades and political uncertainty. Yet six out of seven large local asset managers expected equities to outperform cash over the next 12 months, delivering returns above 8%,...
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