Anchor Capital’s Q1’24 investment strategy

Anchor Capital, a leading investment house, has forecasted the investment landscape for the first half of 2024. According to their house view, the US markets are expected to outperform, global bonds and cash will remain compelling, the rand is anticipated to weaken, and the national election is likely to keep the Johannesburg Stock Exchange (JSE) on edge. Nolan Wapenaar, Chief Investment Officer at Anchor Capital, shared insights on their investment strategy. Wapenaar highlighted three key factors likely to influence markets this year - earnings, election, and easing. He expressed optimism about the US markets, noting a shift in the outlook following a change in easing measures by the Federal Reserve. Despite expectations of slower earnings growth, the long-term equity outlook remains positive. Wapenaar emphasized the potential for opportunities within US companies beyond the popular ones that drove the market last year. Discussing the impact of upcoming elections, Wapenaar acknowledged the uncertainty surrounding the US election and its potential implications for policy rates and deficits. He indicated that while the market is not yet factoring in the election outcome, closer to the event, investor sentiment may shift based on the election results. Shifting focus to South Africa's election, Wapenaar noted analysts' predictions of reduced ANC representation while maintaining control. He highlighted the expected policy continuity post-election but cautioned about the pre-election uncertainty casting a negative shadow over the market. The period leading up to the election is expected to keep South Africa cautious, with potential market opportunities emerging post-election. In terms of portfolio allocation, Wapenaar discussed Anchor Capital's approach, which includes a focus on property benefiting from interest rate cuts and offshore stocks like NASPAS. He highlighted opportunities in the banking sector and specific growth stories like AFRIMAT. The appeal of domestic income portfolios earning around 9% amid low risk was also emphasized in Anchor Capital's investment strategy. As the conversation concluded, Wapenaar touched on AFRIMAT's recent developments and the pending acquisition approval. He expressed eagerness for future discussions on the evolving investment landscape throughout the year. In summary, Anchor Capital's investment strategy for Q1’24 reflects a positive outlook on the US markets, cautious optimism in South Africa amid election uncertainties, and strategic portfolio allocations to capitalize on emerging opportunities.