Global equities Q2 review

The second quarter of the year has brought both highs and lows for the South African equity market, with a modest 1.2 percent gain in the FTSE/JSE Capped SWIX index, thanks to a rally in June. This increase has driven the index back into positive territory year-to-date, showing a 3.6 percent gain. Reza Hendrickse, Portfolio Manager at PPS Investment, delved into the biggest movers in the market and provided insights into the market outlook during a recent interview on CNBC Africa. Hendrickse highlighted that industrials such as Nasdaq, Aspen, and Richemont performed well in the quarter, while resources, especially stocks related to iron ore and PGMs, saw some weaknesses. Financials and industrials emerged as the best performers, while iron ore and PGMs faced weaknesses. In terms of portfolio positioning, the focus on foreign equities has been strong, given their standout performance. Despite the success in foreign equities, caution is advised due to the concentration of returns in specific segments like U.S. tech. The preference for fixed interest leans towards cash over bonds, with foreign bonds showing promise as yields become attractive. Dual-listed assets on the JSE have become a significant consideration, especially with the relaxation of exchange controls. While some dual-listed stocks like Ritmon have surged, others like Nasdaq still hold promise. Hendrickse also touched upon NASPERS' recent restructuring for value unlocking, which has been viewed positively by equity and multi-asset managers due to a bullish outlook for the stock. As the market continues to navigate through uncertainties, careful portfolio allocation and a keen eye on global equities remain essential strategies for investors.