David Shapiro of Sasfin on what the smart money is doing
23 March 2023 - 05:00
byDavid Shapiro
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Taking a stand in the midst of an unfolding global bank scare requires courage. I believe the US Federal Reserve and other central bankers will either hit pause on raising rates or slow the pace of hikes. Confining my choices to the domestic market, I think equity markets have discounted the worst of the economic news, and an end or slowdown in the central bankers’ tightening cycles will support further gains. I would, therefore, buy the STXNDQ, a locally listed exchange traded fund (ETF) that tracks the Nasdaq 100 index.
Sell: STXFIN
The JSE offers no listed funds that track international banks, so forced to go short, I would sell the STXFIN — a local ETF that tracks a selection of domestic banking and financial counters — as a proxy. Though our banking system is secure and unlikely to be harmed by the crisis gripping US and European banks, the poor growth outlook for South Africa’s economy, linked with increasing pressure on businesses and consumers, will constrain activity, increase bad debts, and weigh on earnings.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
BROKERS’ NOTES: Eat your ETF alphabet soup
David Shapiro of Sasfin on what the smart money is doing
David Shapiro of Sasfin Securities
Buy: STXNDQ
Taking a stand in the midst of an unfolding global bank scare requires courage. I believe the US Federal Reserve and other central bankers will either hit pause on raising rates or slow the pace of hikes. Confining my choices to the domestic market, I think equity markets have discounted the worst of the economic news, and an end or slowdown in the central bankers’ tightening cycles will support further gains. I would, therefore, buy the STXNDQ, a locally listed exchange traded fund (ETF) that tracks the Nasdaq 100 index.
Sell: STXFIN
The JSE offers no listed funds that track international banks, so forced to go short, I would sell the STXFIN — a local ETF that tracks a selection of domestic banking and financial counters — as a proxy. Though our banking system is secure and unlikely to be harmed by the crisis gripping US and European banks, the poor growth outlook for South Africa’s economy, linked with increasing pressure on businesses and consumers, will constrain activity, increase bad debts, and weigh on earnings.
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