Prescient Investment Management on key financial market trends in 2024

As markets prepare to close off 2024, Bastian Teichgreeber, Chief Investment Officer at Prescient Investment Management, joined CNBC Africa to provide insights on the highs and lows of the year and to discuss what the financial landscape may hold for the year ahead. Teichgreeber shared that their expectations for 2024 were predominantly focused on global growth and low inflation trends, both of which materialized. Despite the positive macroeconomic indicators, there was a challenge with the US equity market showing continued growth despite stretched valuations, which caught them slightly off guard. This led them to emphasize the importance of diversification and looking at different markets and sectors for investment opportunities. Teichgreeber highlighted that although US valuations were at peak levels, there were other areas of value such as the South African equity market and some emerging markets. South African equities performed well, driven by positive sentiment and global growth, aligning with their initial expectations due to attractive valuations at the beginning of the year. When discussing European equities, Teichgreeber emphasized that while the market performance may not have been exceptional, the comparatively cheaper valuations could present future opportunities, despite potential economic headwinds. Client inquiries in 2024 largely revolved around the outcomes of the elections in the United States and South Africa, with both results being viewed positively by the markets. Turning to the potential impact of the Trump administration on trade policies and emerging markets, Teichgreeber acknowledged the significant implications and highlighted the potential volatility associated with changes in tariffs and other policy shifts. To navigate these uncertainties and market fluctuations, Prescient Investment Management has adopted a cautious approach, focusing on a balanced currency exposure strategy and exploring conservative investment opportunities in high-yield instruments in both the US and South Africa. Looking ahead to 2025, the firm is also considering alternative assets, such as infrastructure debt and private equity, to provide diversification and low correlation to traditional asset classes. Geopolitical events, particularly the conflict in Ukraine, remain a key concern for Teichgreeber, as the implications of escalating tensions could have far-reaching effects on global economies. Despite the challenges posed by geopolitical uncertainties, Teichgreeber remains optimistic about the investment opportunities in the evolving financial landscape. Overall, the outlook for 2025 involves a cautious yet diversified approach to investments, with a keen eye on geopolitical developments and potential market shifts.