Arno Lawrenz on SA’s investment outlook for 2021

Arno Lawrenz, the newly appointed Chief Investment Officer at Sasfin Asset Managers, brings decades of experience managing fixed income funds to his new role. With a proven track record in some of the largest asset management firms, Lawrenz joins the CNBC Africa studio to share his insights on the current investment landscape and the outlook for South Africa in 2021. Reflecting on the challenges faced by the South African market, Lawrenz acknowledges the economic pressures and uncertainties prevalent in the current environment. Despite these challenges, he remains cautiously optimistic, describing the present moment as one filled with hope for better returns and a resilient economy. Lawrenz emphasizes that while risks persist, many of these factors are already priced into the market. When asked about the impact of ratings downgrades on market valuations, Lawrenz notes that the bond market, in particular, has reflected concerns over government finances. However, he believes that current bond yields are at fair value, suggesting that the market has already factored in the downgrade risks. Looking ahead to 2021, Lawrenz considers the implications of vaccine distribution on asset allocation, highlighting sectors like hospitality that could benefit from economic reopening. Discussing foreign investments in South Africa, Lawrenz adopts a balanced perspective, acknowledging the attractiveness of the country as an investment destination. While he views the government's efforts to attract foreign capital positively, Lawrenz remains pragmatic, stating that some investments may have occurred regardless of these initiatives. As South Africa aims to enhance its economic appeal to global investors, Lawrenz anticipates a sustained influx of foreign capital into the market. In a brief mention of Sasol, Lawrenz highlights the company's need for capital and the importance of its forthcoming plans. While he refrains from giving specific predictions, Lawrenz underscores the significance of capital infusion for Sasol's future prospects. With Arno Lawrenz's seasoned expertise and astute observations, Sasfin Asset Managers is poised to navigate the evolving investment landscape in 2021 and beyond.