SA equities shine globally

OUTLOOK: UNCERTAINTY TOWARDS GLOBAL MARKETS FAVOURS DOMESTIC STOCKS

- Adriaan Kruger

RETURNS. Precious metals have boosted the JSE, though market concentration and volatility remain key risks.

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The question of whether the global bull market will continue came up for discussion in Anchor Asset Management's most recent quarterly market outlook.

"The bull market has been running for some time and we expect it to continue, though with more moderate returns," says Anchor founder and co-CEO Peter Armitage.

"We expect returns to be closer to the average of the past 10 to 20 years, rather than the 20% seen in the last year or two. The weaker dollar, declining interest rates and substantial AI capital expenditure have been highly stimulatory for the US economy.

"Added to that, some of the positive effects of recent Trump policies have also supported economic growth," says Armitage.

"However, we remain cautious with new investments because valuations are high. While we expect earnings to grow by around 10-15% per annum over the next three years, overall market returns are likely to be slightly lower than that.

"Companies are being punished more heavily for earnings misses, largely due to their already elevated valuations," he adds, noting yet again that SA shares offer relatively good value.