Anchor Capital Q4 strategy & asset allocation

Anchor Capital's Co-Chief Investment Officer, Nolan Wapenaar, shared insights on their view of asset allocation for the fourth quarter in a recent interview with CNBC Africa. Wapenaar highlighted the positive changes seen in the last quarter, both locally and globally. South Africa experienced its first interest rate cut, boosting consumer sentiment and investor confidence. The government of national unity, once met with skepticism, has held together and performed reasonably well. In the global arena, the US also saw an interest rate cut and has avoided the feared recession, indicating a stable economy. However, geopolitical issues remain a concern, particularly in the Middle East and Ukraine. Despite these challenges, overall, the outlook for the fourth quarter appears favorable. Anchor Capital's strategy has been adjusted slightly for the upcoming quarter. The firm remains bullish on South African assets, anticipating further growth in the Rand, shares, and bonds. Internationally, they are more cautiously optimistic, considering the significant price run-ups in equities. Wapenaar emphasized a preference for equities over bonds due to anticipated growth in South Africa and consistent returns of US equities. Regarding the upcoming US elections, Wapenaar expects the equity markets to remain robust regardless of the outcome, citing historical positive responses to election years. He acknowledged subtle nuances in equity performance based on individual candidates but overall predicted a good year. Despite being positive on the South African story, Anchor Capital recommends diversifying portfolios into international asset classes as a hedge against risks and to benefit from global opportunities. Within South Africa, the firm is focused on equities and improving consumer sentiment. Stocks like Southern Sun and Famous Brands are considered well-positioned to capitalize on increased consumer spending. In terms of the property market, Wapenaar noted a turnaround in office space and expected rental reversion cycle, signaling potential growth opportunities. While positive on property, Anchor Capital cautioned on high entry prices after recent gains. The firm has successfully avoided sectors like platinum and gold, maintaining underweight positions. In summary, Anchor Capital's strategic approach for the fourth quarter prioritizes equities, both in South Africa and internationally, while keeping an eye on emerging consumer trends and property market dynamics. The positive outlook for asset allocation aligns with the firm's expectations of continued growth and stability in the global and domestic markets.