STANLIB has been quick to reaffirm its view that there is still value to be had in the JSE, and has advised its teams to remain overweight in equities, for the time being.
Paul Hansen, Director, Retail Investing at STANLIB confirms that the 8% JSE correction in the third week of October had caused “some disquiet” among unit trust marketers and their clients.
His key messages to advisers were:
* Within 10 days of the 8% downturn, the JSE All Share Index had bounced 1000 points higher, making up more than three-quarters of recent losses.
* End of October and early November data was positive on indicators as diverse as global economic performance (especially from the US, Europe and China), stock markets, offshore interest rates, commodity demand, local inflation/interest rates, the local economy and company earnings.
* The JSE’s biggest share, Anglo America had reached a new 2005 high at the end of October after rising 10%.
* Many investment professionals continue to believe that our financial and industrial index is undervalued relative to prevailing interest rates and earnings growth, and the resources index – though overstretched at times –may continue to benefit from strong commodity prices and some minor rand weakness.
This article should not be construed to be advice. Brokers should ensure that their clients are invested appropriately, taking all aspects of their profile into account.