South African equities market outlook for 2025

Prescient Investment Management's Head of Equities, Seeiso Matlanyane, shared an optimistic view on the South African equities market for 2025 in a recent interview with CNBC Africa. Matlanyane discussed the investment strategy employed by Prescient, highlighting their preference for emerging markets over developed markets based on valuations. Despite a strong run in developed markets in 2024, Prescient remains bullish on emerging markets, including South Africa, for the upcoming year. Matlanyane emphasized the importance of being data-driven and systematic in their investment approach, focusing on factors such as economics, sentiment, financial conditions, and valuations. He pointed out that US exceptionalism and pessimism around emerging markets have dominated headlines, but Prescient's analysis leads them to believe in a positive outlook for South African equities compared to the US, Europe, and broader emerging markets. One key factor underpinning Prescient's view is the valuation of South African equities, which they consider to be relatively attractive compared to the US market. Matlanyane noted that while there may be specific sectors within the market showing stronger valuation characteristics, Prescient generally looks at the market from a top-down perspective. Financial conditions and sentiment also play a crucial role in Prescient's analysis, with favorable monetary policies and improving economic output contributing to their moderately positive outlook. Matlanyane highlighted the importance of monitoring key indicators like investor sentiment and implied volatility to quickly adjust their views in response to changing data. When asked about potential risks that could alter their outlook, Matlanyane mentioned geopolitical factors as a key consideration. While current tensions between South Africa and the US raise concerns, Prescient focuses on tracking indicators like implied volatility to anticipate any shifts that may impact their investment strategy. Prescient's approach to finding opportunities in the market involves a comprehensive analysis of regional equity exposure, with a strong emphasis on asset allocation to optimize returns. Matlanyane emphasized the significance of historical data in guiding their decisions while acknowledging the limitations of a backward-looking approach in a forward-looking market. Overall, Prescient Investment Management's positive outlook for South African equities in 2025 is driven by a combination of favorable valuations, improving financial conditions, and systematic analysis of key market indicators. As they continue to navigate global investment prospects, Prescient remains committed to their data-driven approach to capitalize on opportunities in the evolving market landscape.