Sunday 18 April 2021
  • :
  • :

Our outlook as a responsible asset manager

In line with our asset allocation philosophy and process we consider major trends that we expect to impact the global and local economy in the foreseeable future.  In this regard we are of the opinion that the end of easy money is in sight that followed the Global Financial Crisis of 2008 with the Federal Reserve in America almost certainly on a tightening pathway and the European Central Bank and Bank of Japan scaling back.  In this respect we anticipate a rise in global rates especially in the USA and have seen the negative rates of the past turn positive for example Switzerland.  We also expect higher inflation for the G7 based on extremely low unemployment numbers from the USA.  We are also seeing a continued recovery in Europe supported by still generally low rates, rising household confidence and falling unemployment coupled with relative political stability in the region going forward.  We generally anticipate fairly solid economic growth from Developed markets furthermore supported by US Fiscal stimulus.  In this environment we anticipate global equities will perform better than international fixed interest.
In general we anticipate the pace of growth in a major emerging economy such as China to continue to slow but remain at generally strong levels impacted by a stronger Renminbi and contraction in their property markets.  Infrastructure spending is expected to support demand for alternative assets such as solar and green water solutions on the back of aging infrastructure and new trends.  We expect the same in Namibian and South Africa with regards to infrastructure spending.  We expect tech stocks and financials to benefit from the ongoing technology revolution that is underway with disruptive technologies leading the way.  This will possibly enhance banking efficiency locally but is a challenging international trend to invest in as Namibians.
We furthermore anticipate that we will see a sort of South African revival and re energization that will be supportive of South African assets and specifically equity.  Lastly for Namibia we anticipate that the higher local asset requirements will support demand for local assets.
In general we think the global environment is one of slowly rising inflation with continued economic growth pointing to the latter stages of the economic recovery that has been in place more or less since 2009.  We see value in Global Equity, followed by Namibian Equity, Alternative Assets followed by Namibian Inflation linked bonds.  We see market sentiment being supportive of Namibian local equity, followed by Namibian and South African Bonds and South African equities.  We see a large rate advantage for Namibian fixed interest relative to South Africa.
In conclusion we prefer Global Equity, Alternative Assets, Namibian and South African Equity and Namibian Fixed Interest.

Leave a Reply

Your email address will not be published. Required fields are marked *