10X Investments’ Anton Eser on Q4’24 investment outlook

South Africa's equity market has had a remarkable performance in the third quarter of the year, with the JSE All Share index closing 15 per cent higher. The positive momentum continued with increased foreign interest in the local bond market, driven by optimism surrounding the Government of National Unity's potential actions to stimulate economic growth. To delve deeper into the market outlook for the final quarter of 2024, CNBC Africa interviewed Anton Eser, the Chief Investment Officer at 10X Investments. Eser highlighted key factors impacting the market's performance and shared insights on potential opportunities and risks. Despite a slow start in October, Eser remains optimistic about the market's potential. Eser emphasized that the market was undervalued pre-election, leading to a significant rally post-election. He pointed out that the structural reforms and improving economic conditions are favorable for the equity market. Eser highlighted the importance of local investor participation as a key signal for foreign investors, who are currently taking a 'wait and see' approach. He mentioned that as local investors gain confidence and allocate more to the market, foreign investors are likely to follow suit, indicating a positive trend for market growth. In terms of investment opportunities, Eser discussed the sectors that present potential for growth, including domestically focused industries such as banks, retailers, and properties. He also touched upon the impact of global factors like China on the South African market. Eser explained that 10X Investments is overweight on Chinese equities, primarily through companies listed in Hong Kong, due to attractive valuations and growth potential. When asked about the US market and its impact on global equities, Eser highlighted some headwinds facing the US market, including high valuations and potential shifts in tax policies. While he refrained from predicting short-term outcomes based on the US election, Eser shared a long-term view on the US market, suggesting a potential 'lost decade' ahead with negative real returns. In conclusion, Eser provided valuable insights into the market dynamics and investment strategies amid evolving economic and geopolitical landscapes. His analysis underscored the importance of evaluating long-term trends and staying diversified to navigate market uncertainties effectively. As investors brace for the final quarter of 2024, Eser's perspectives offer a nuanced understanding of the opportunities and challenges that lie ahead.